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c93aeb144bbceabca3b6a704725eaffcb67f8322 | WILDLIFE AND COUNTRYSIDE ACT 1981 (AS AMENDED)
LICENSE TO KILL OR TAKE CERTAIN WILD BIRDS FOR THE PURPOSE OF PRESERVING PUBLIC HEALTH AND PUBLIC SAFETY
This licence, granted under Section 16(1) (i) 5 and 5(a) of the Wildlife and Countryside Act 1981 (as amended), by the Natural Resource Body for Wales otherwise known as Natural Resources Wales (NRW), being satisfied that as regards the purpose set out at paragraph 1 that there is no other satisfactory solution, permits authorised persons to carry out a range of activities against the birds of the species listed and hereby grants the following licence which applies only in Wales:
1. The purpose for which this licence is granted is preserving public health or public safety.
2. Subject to the terms and conditions below, and for the purpose set out in paragraph 1 this licence permits:
(i) any authorised person (see definition) to kill or take any of the wild birds listed below, to take, damage or destroy their nests or to take or destroy their eggs:
Crow, Carrion\
Dove, Collared\
Jackdaw\
Jay\
Magpie\
Pigeon, Feral\
Rook\
Woodpigeon
by shooting or by use of cage trap or net or by any other method not prohibited by Section 5 of the Act;
(ii) any authorised person to take, damage or destroy the nests or to take or destroy the eggs of the species listed below:
Goose, Canada\
Gull, Lesser Black-backed
Branta canadensis\
Larus fuscus
Licence No: GEN / WCA / 002 / 2015 Valid From: 1st January 2015 Expiry: 31st December 2015 (iii) the use of a semi-automatic weapon by authorised persons acting under paragraph (2)(i) above;
(iv) the use of a cage trap, the dimensions of which do not satisfy the requirements of section 8(1) of the Act, by authorised persons acting under paragraph (2)(i) above;
(v) in relation to the killing or taking of Feral Pigeon (*Columba livia*) only:
a) the use of any device for illuminating a target or any sighting device for night shooting, by authorised persons acting under paragraph (2)(i) above;
b) the use of any form of artificial lighting or any mirror or other dazzling device, by authorised persons acting under paragraph (2)(i) above;
(vi) the use, by authorised persons acting under paragraph (2)(i) above, of any hand held or hand propelled net to take birds whilst not in flight.
The works noted above are licensed for the period as stated above and are granted subject to compliance with the conditions as specified. Anything done otherwise than in accordance with the terms of the licence may constitute an offence.
Signed for and on behalf of Natural Resources Wales
**CONDITIONS**
1. This licence can only be relied on in circumstances where the licensee is satisfied that all appropriate legal, non-lethal methods of control such as scaring and proofing are either ineffective or impracticable.
2. Except as specifically permitted under paragraph (2) above, this licence does not authorise the use of any method of killing or taking, which is prohibited by Section 5 or Section 8 of the Act.
3. Nothing shall be carried out under this licence on a National Nature Reserve (NNR) or Site of Special Scientific Interest (SSSI) except with the prior written permission from NRWs’ Regional Office in which the NNR or SSSI is situated. See note 2 for further information.
4. Any birds killed in accordance with this licence must be killed in a quick and humane manner. Any bird held captive prior to being killed must be killed out of sight of other captive birds.
5. No person convicted of an offence to which this paragraph applies may use this licence unless, in respect of that offence, either (1) they were dismissed with an admonition, or (2) they are a rehabilitated person for the purposes of the Rehabilitation of Offenders Act 1974 and their conviction is treated as spent. A person may also use this licence where, in respect of such an offence, a Court has made an order discharging them absolutely. This paragraph applies to offences under the Wildlife and Countryside Act 1981, the Deer Act 1991, the Wild Mammals (Protection) Act 1996, the Hunting Act 2004, the Conservation of Habitats and Species Regulations 2010, the Protection of Badgers Act 1992 and the Animal Welfare Act 2006 (all as amended).
6. Failure to act within the purpose of this licence as set out in paragraph 1 or failure to comply with the conditions of the licence may mean that the licence cannot be relied upon and an offence could therefore be committed. The maximum penalty available for an offence under the Act is a level 5 fine (£5,000) and/or a six month custodial sentence.
7. Where any cage trap, including a trap authorised under subparagraph (2)(iii) above is used, then only the bird species listed in this paragraph may be used as decoys.
| Bird Species | Scientific Name | |--------------------|--------------------------| | Carrion Crow | *Corvus corone* | | Jackdaw | *Corvus monedula* | | Jay | *Garrulus glandarius* | | Magpie | *Pica pica* | | Rook | *Corvus frugilegus* |
08. All relevant animal welfare legislation must be complied with at all times, including the Animal Welfare Act 2006. This includes providing decoy birds with adequate food, water at all times, appropriate shelter and a suitable perch that does not cause discomfort to the bird’s feet.
09. When in use, every cage trap used pursuant to this licence must be physically inspected at least once every day and at intervals of no more than 24 hours, except where this is not possible because of severe weather conditions. In such cases, every effort must be made to inspect the cage trap as soon as possible. Such an inspection must be sufficient to determine whether there are any live or dead birds or other animals in the trap.
10. Where any live animal, other than a bird included in the list at subparagraph (2)(i) above, has become confined in the cage trap it must be released immediately upon discovery (except for invasive non-native species included in Part 1 of Schedule 9 to the Act e.g. mink *Neovison vison*, grey squirrel *Sciurus carolinensis*, which may only be released under an individual licence from NRW).
11. Any birds killed in accordance with this licence must be killed in a quick and humane manner as soon as reasonably practicable after discovery.
12. At each inspection any dead animal, including any dead bird, caught in the trap must be removed from it.
13. When any cage trap is not in use it must be rendered incapable of holding or catching birds or other animals. In order to render any cage traps incapable of holding or catching birds or other animals, it is necessary either to secure the door with a padlock in a fully open or closed position, or to remove the door completely. When any Larsen trap is not in use, it shall be removed from site and stored in such a manner as to prevent its accidental use.
NOTES
1. Where the licensed action includes the use of firearms, it is the authorised person’s responsibility to ensure that he complies with all relevant legislation.
2. A licence is not permission from NRW for an activity that could damage a Site of Special Scientific Interest (SSSI). The notification documents for each SSSI contain a list of operations that could damage its special features and for which prior permission from NRW is required. Owners and occupiers of SSSIs are required to seek the consent of NRW before beginning any of these operations, or allowing someone else to carry out these activities. A similar process applies for public bodies and statutory undertakers (as defined under Section 28G of the Wildlife and Countryside Act 1981 (as amended) and this obligation applies even where the operations are carried out on land outside of the SSSI.
3. Cage traps should not be used during severe hot or cold weather conditions, or when such conditions can be reasonably anticipated. It is recommended that any cage trap or Larsen trap used under this licence shall carry a tag or sign that gives the number of the local Wildlife Crime Officer for the area. The tag shall also carry a unique code that allows the owner to be identified by the police. The operator of the trap will contact their local Wildlife Crime officer to obtain this code in advance of use of traps. The operator may include other relevant material on the tag or sign.
4. Eggs of species listed in paragraph 2(i) may be replaced by dummy eggs under this licence. The preferred method for egg destruction is to place removed eggs in a freezer for six to eight hours, after which time they can be put back into the nest, if the dummy eggs are required elsewhere.
5. Birds killed or taken under a licence may be eaten, but with the exception of woodpigeon *Columba palumbris*, may not be sold for human consumption.
6. A licence in similar terms has been issued by Natural England in respect of England and by the Scottish Executive in respect of Scotland.
7. This licence may be modified or revoked at any time.
**DEFINITIONS**
1. An "authorised person" means:
a) the owner or occupier, or any person authorised by the owner or occupier, of the land on which the action authorised is taken; b) any person authorised in writing by the local authority for the area within which the action authorised is taken; c) as respects anything done in relation to wild birds, any person authorised in writing by
i) the Welsh Ministers, in relation to things done for purposes relating to fishing or fisheries in the Welsh inshore region (within the meaning of the Marine and Coastal Access Act 2009); ii) any of the following bodies, that is to say, any of the GB conservation bodies, a district board for a fishery district within the meaning of the Salmon Fisheries (Scotland) Act 1862 or an inshore fisheries and conservation authority.
d) any person authorised in writing by Natural Resources Wales, a water undertaker or a sewerage undertaker.
The authorisation of any person for the purposes of this definition shall not confer any right of entry upon any land.
2. A "semi-automatic weapon" means any weapon which is not prohibited by Section 5 of the Firearms Act 1968 (as amended) and which has a magazine capable of holding more than two rounds of ammunition, where the depression of the trigger ejects a single shot, each subsequent shot requiring a further depression of the trigger.
3. “to kill” includes accidentally wounding, whilst attempting to kill in accordance with this licence.
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acb41a8abb7ca6c17421115be1547b49f9928fcf | WILDLIFE AND COUNTRYSIDE ACT 1981 (AS AMENDED)
LICENSE TO PERMIT THE SALE OF CERTAIN CAPTIVE BRED SPECIES OF LIVE BIRD
This licence, granted under Section 16(4) (a), 16(5) and 16(5)(a) of the Wildlife and Countryside Act 1981 (as amended), by the Natural Resource Body for Wales otherwise known as Natural Resources Wales (NRW), being satisfied that as regards the purpose set out at paragraph 1 that there is no other satisfactory solution, permits authorised persons to carry out a range of activities against the birds of the species listed and hereby grants the following licence which applies only in Wales:
1. This licence permits the sale of certain captive-bred live wild birds, subject to paragraph 2 below.
2. For the purposes set out in paragraph 1 above and subject to the conditions below, this licence permits: (i) the sale (which in this licence includes hire, barter or exchange), offer or exposure for sale, possession or transport for the purpose of sale; or (ii) the publication, or the causing to be published, of any advertisement likely to be understood as conveying the buying or selling, or the intention of buying or selling;
of any captive bred (as defined by Condition 3 below), live, wild bird of a species not listed in:
a. Appendix 1 of this licence (birds which may only be sold under an individual licence from Natural Resources Wales); or b. Annex A of Council Regulation (EC) No. 338/97, unless an Article 10 certificate has already been obtained; or c. Schedule 3 Part 1 of the Wildlife and Countryside Act 1981 ('the Act') (which are already permitted to be sold as long as statutory ringing requirements are met, see Note 3).
The works noted above are licensed for the period as stated above and are granted subject to compliance with the conditions as specified. Anything done otherwise than in accordance with the terms of the licence may constitute an offence.
Signed for and on behalf of Natural Resources Wales
Ffôn/Tel 0300 065 4974 / 0300 065 4921 Eboss/Email: [email protected] or [email protected] www.cyfoethnaturiolcymru.gov.uk www.naturalresourceswales.gov.uk Cyfoeth Naturiol Cymru / Natural Resources Wales, Maes y Ffynnon, Penrhos Garnedd, Bangor, Gwynedd, LL57 2DW Croesewir gohebiaeth yn y Gymraeg a’r Saesneg Correspondence welcomed in Welsh and English CONDITIONS
1. Any bird sold under this licence must have been bred in captivity. A bird shall not be treated as bred in captivity unless its parents were lawfully in captivity when the egg from which it hatched was laid. Documentary evidence of captive breeding must accompany any sale, hire, barter or exchange. See Note 3 for details.
2. With the exception of the birds listed in Appendix 2 of this licence (which may be sold without a ring), any bird sold under this licence must be ringed with a legible, individually numbered, metal close ring. This is a ring / band in a continuous circle (without any break, join, or any signs of tampering since manufacture), which cannot be removed from the bird when its leg is fully grown. The ring must meet the ringing requirements of the country in which the bird was bred. For any bird sold under this licence which is on Schedule 4 to the Act, the close ring must meet the marking requirements of CITES.
3. The owner of any bird to be sold under this licence will, if requested by an Official acting on behalf of Natural Resources Wales, or a Police Officer, make the bird available for a sample of blood, tissue or feather to be taken from the bird to be sold. The sample will be taken by a qualified veterinary surgeon. Such a sample may be used to establish the ancestry of the bird.
4. No person convicted of an offence to which this paragraph applies may use this licence unless, in respect of that offence, either (1) they were dismissed with an admonition, or (2) they are a rehabilitated person for the purposes of the Rehabilitation of Offenders Act 1974 and their conviction is treated as spent. A person may also use this licence where, in respect of such an offence, a court has made an order discharging them absolutely. This paragraph applies to offences under the Wildlife and Countryside Act 1981, the Deer Act 1991, the Wild Mammals (Protection) Act 1996, the Hunting Act 2004, the Conservation of Habitats and Species Regulations 2010, the Protection of Badgers Act 1992 and the Animal Welfare Act 2006 (all as amended).
5. Failure to act within the purpose of this licence as set out in paragraph 1 or failure to comply with the terms and conditions of the licence may mean that the licence cannot be relied upon and an offence could therefore be committed. The maximum penalty available for an offence under the Act is a level 5 fine (£5,000) and/or a six month custodial sentence.
NOTES
1. The Wildlife and Countryside (Ringing of Certain Birds) Regulations 1982 (SI 1982/1220) specifies how captive-bred birds should be ringed. Close rings can be obtained from the British Bird Council or the International Ornithological Association.
2. Persons intending to rely on this general licence must be able to demonstrate that birds are legally held and captive-bred, and are advised: only to purchase birds from breeders who are able to satisfactorily demonstrate that they are complying with relevant regulations; to confirm, insofar as they are able, the bird’s identification and age are correct; to check that the bird is correctly ringed, and always to obtain signed and dated written documentary evidence of captive-breeding from the breeder. Documentation should cite the bird’s species, ring number and any other identification mark (eg microchip), hatch date, along with details for the parent birds, and the breeder’s contact details.
3. Bird listed on Schedule 3 Part 1 of the Act are already permitted to be sold under the Act, providing the ringing requirements of SI 1982/1220 are met.
4. A licence in similar terms has been issued by Natural England in respect of England and by the Scottish Executive in respect of Scotland.
5. This licence may be modified or revoked at any time. APPENDIX 1: Birds that cannot be sold under this licence
Mute Swan Cygnus olor Ruddy Duck Oxyura jamaicensis Egyptian Goose Alopochen aegyptiacus
APPENDIX 2: Birds that do not need a ring to be sold under this licence
Mandarin Duck Aix galericulata Carolina / Wood Duck Aix sponsa Pintail Anas acuta American Wigeon Anas americana Shoveler Anas clypeata Common Teal Anas crecca Blue-winged Teal Anas discors Wigeon Anas penelope Mallard Anas platyrhynchos Garganey Anas querquedula Black Duck Anas rubripes Gadwall Anas strepera White-fronted Goose Anser albirostris Greylag Goose Anser anser Pink-footed Goose Anser brachyrhynchos Snow Goose Anser caerulescens Lesser White-fronted Goose Anser erythropus Bean Goose Anser fabalis Ring-necked Duck Aythya collaris Pochard Aythya ferina Tufted Duck Aythya fuligula Scaup Aythya marila Canada Goose Branta canadensis * Barnacle Goose Branta leucopsis Brent Goose Branta bernicla Goldeneye Bucephala clangula Long-tailed Duck Clangula hyemalis Bewick’s Swan Cygnus bewickii Whooper Swan Cygnus cygnus Harlequin Duck Histrionicus histrionicus Velvet Scoter Melanitta fusca Common Scoter Melanitta nigra Surf Scoter Melanitta perspicillata Smew Mergus albellus Hooded Merganser Mergus cucullatus Goosander Mergus merganser Red-breasted Merganser Mergus serrator Red-crested Pochard Netta rufina Stellers Eider Polysticta stelleri Eider Duck Somateria mollissima King Eider Somateria spectabilis Ruddy Shelduck Tadorna ferruginea Shelduck Tadorna tadorna
- except Branta canadensis leucopareia - Aleutian Canada Goose
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ea07727e225781bd454b24c0ea30c6092c5e53de | GENERAL LIGHTHOUSE FUND
Annual Report and Accounts for the Year Ended 31 March 2020 General Lighthouse Fund Annual Report and Accounts 2019-20
(For the year ended 31 March 2020)
Presented to Parliament pursuant to Section 211(5) of the Merchant Shipping Act 1995
Ordered by the House of Commons to be printed 10 December 2020
## Contents
| Section | Page | |------------------------------------------------------------------------|------| | Foreword | 1 | | Performance report | | | - Overview | 2 | | - Performance Analysis | 3 | | - Financial Performance | 4 | | - Aids to Navigation Performance | 6 | | - Long-Term Trends and Sustainability | 8 | | Accountability Report | | | - Directors’ Report | 9 | | - Statement of Accounting Officer Responsibilities | 9 | | - Governance Statement | 10 | | - Head of Internal Audit's Opinion | 14 | | - Remuneration & Staff Report | 15 | | Parliamentary Accountability Disclosures | 25 | | Certificate and Report of the Comptroller and Auditor General to the Houses of Parliament | 26 | | Statement of Comprehensive Net Income | 29 | | Statement of Financial Position | 30 | | Statement of Cash Flows | 31 | | Statement of Changes in Taxpayer Equity | 32 | | Notes to the Accounts: | | | - Accounting Policies | 33 | | - Analysis of Net Income by Segment | 40 | | - Light Dues & Other Income | 40 | | - Staff and related costs | 41 | | - Other expenditure | 41 | | - Interest receivable & payable | 41 | | - Impairments | 42 | | - Property, Plant & Equipment | 43 | | - Right of Use Assets | 45 | | - Investment Property | 46 | | - Intangible Assets | 46 | | - Non-current trade and Other Receivables | 47 | | - Assets Classified as Held for Sale | 48 | | - Inventories | 48 | | - Trade Receivables and Other Current Assets | 48 | | - Cash & Cash Equivalents | 48 | | - Trade Payables and Other Current Liabilities | 49 | | - Provisions for Liabilities and Charges | 49 | | - Financial Liabilities | 50 | | - Non-current Trade Payables and Other Liabilities | 50 | | - Commitments under Leases | 51 | | - Capital Commitments | 53 | | - Pensions | 54 | | - Contingent Liabilities | 54 | | - Related-party Transactions | 55 | | - Third Party Assets | 56 | | - Financial Instruments | 56 | | - Events after the Reporting Date | 57 |
1. Foreword
The majority of 2019-20 was business as usual for both the General Lighthouse Authorities (GLAs) and the Light Dues collection fund which, in aggregate, form these accounts. During this period, the GLAs have completed a number of major modernisation projects at lighthouses and made significant progress on procurements projects to replace two of the six GLA buoy tenders (vessels) and the decommissioning of Royal Sovereign Lighthouse.
Key achievements and events during 2019-20 include:
- the three GLAs contained their running cost expenditure within levels sanctioned by Department for Transport (DfT) Ministers during the year;
- the continuous maintenance of Aids to Navigation (AtoN) availability at, or above, the standards set by the International Association of Marine Aids to Navigation and Lighthouse Authorities (IALA) (see page 7);
- further GLA running cost reductions ahead of efficiency targets set by DfT Ministers;
- income of £4.3m generated from GLA commercial activities;
- continued development of the GLA Joint Strategic Board for good administrative purpose;
- continued funding of Irish Lights’ operations in the Republic of Ireland (IRL) wholly from Irish sources;
- maintenance of an operating surplus sufficient to meet borrowing repayments and maintain GLF cash reserves at a sustainable level; and
- sustained real terms reductions in UK Light Dues rates for the tenth consecutive year.
The arrival of COVID-19 and a national lockdown in March required the GLAs to instigate their crisis management systems and adapt quickly to an unprecedented and rapidly evolving situation whose wide-ranging worldwide impacts could not have been foreseen. The GLAs evaluated the risks and introduced appropriate systems and procedures quickly to ensure there was no break in their essential operations underpinning the safe and continuous flow of food, fuel, medical supplies and all other goods into the UK and Ireland by sea. Light Dues were not impacted by the restrictions during this period, income for the year being almost the same as for 2018-19. In part this is because vessels pay Light Dues for one month in advance, and many are also within scope of a maximum cap of nine paid voyages per year, which generally leads to a reduced monthly income in March each year.
The continued impact of COVID-19, along with some activities which were of necessity paused in March 2020, has forced a reprogramming of capital projects and a delay to routine maintenance which the GLAs will endeavour to recover in the second half of 2020-21 but is likely to have a continued impact into 2021-22 and beyond.
The medium-term impact to General Lighthouse Fund (GLF) income is to be determined and will depend on the length of the COVID-19 pandemic. We have already seen a significant decrease in Light Dues, a loss of GLA commercial income and increased cost pressures on the GLAs. 2020-21 UK Light Dues have been down an average of 15.5% since April 2020 and projections for the year show a shortfall against forecast of around £9m during 2020-21. Although the GLF remains in a good position in terms of cash reserves, which have enabled it to absorb this initial loss of income, these were already being actively managed downwards towards a target reserve. While the excellent work of the GLAs, in delivering efficiency and other savings, has also placed the GLF in a good position and meant that Light Dues have reduced by nearly 40% in real terms over the past decade, longer term, an increase in Light Dues is currently forecast in 2022-23. If income does not recover quickly the GLF will need to agree additional measures to address any funding gap.
The level of Light Dues in the UK is determined by the Secretary of State for Transport under Section 205 of the Merchant Shipping Act 1995. The Irish Government sets the level of Light Dues in IRL under the Merchant Shipping (Light Dues) Act 1983. Performance Report
2.1. Overview
Background, Aims, Objectives and Regulation
The annual report and accounts of the General Lighthouse Fund (GLF) are prepared pursuant to Section 211(5) of the Merchant Shipping Act 1995.
The GLF was created by statute in 1898 to provide funding for the three General Lighthouse Authorities (GLAs): Trinity House (TH), the Commissioners of Northern Lighthouses (known as the Northern Lighthouse Board or NLB) and the Commissioners of Irish Lights (known as Irish Lights or IL).
The GLAs are financed by advances made by the Secretary of State for Transport from the GLF. The principal income of the GLF is derived from Light Dues, a tax on commercial shipping using ports in the United Kingdom (UK) and the Republic of Ireland (IRL). The GLF receives additional income from the IRL Exchequer following an agreement, effective from 1 April 2015, to ensure IRL expenditure is wholly met from IRL income. The GLF also receives income from sundry receipts generated by GLA tender, buoy and property rentals as well as workshop services and asset sales.
The GLAs predate the establishment of the GLF by over 350 years. TH can trace its origins back to 1514 whilst NLB and Irish Lights can both trace their establishment to Acts of Parliament in 1786. Prior to 1836, AtoNs were provided by a mixture of the GLAs and private operators each levying a charge on passing ships. Private operators generally purchased the right to provide AtoNs and levy a charge to do so from HM Treasury or the Crown. In 1836, Parliament decided that the GLAs should have compulsory powers to buy out any remaining private lighthouses. The current funding arrangements were established by the Merchant Shipping (Mercantile Marine Fund) Act of 1898 which separated funding for AtoNs from other marine items and also passed responsibility to the GLF for a number of colonial lighthouses which had previously been funded by HM Treasury grants. As former British colonies subsequently achieved independence, these responsibilities have been passed on to the governments of these countries. Europa Point Lighthouse in Gibraltar remains the responsibility of TH.
Section 195 of the Merchant Shipping Act 1995, and Section 634 of the Merchant Shipping Act 1894 in respect of IRL, state that: responsibility for the provision and management of lighthouses, buoys and beacons on the coasts and seas around the British Isles is vested in the three GLAs:
- Trinity House (TH) in its capacity as a lighthouse service;
- the Commissioners of Northern Lighthouses (known as the Northern Lighthouse Board or NLB); and
- the Commissioners of Irish Lights (known as Irish Lights or IL).
The Marine Navigation Act 2013 amended the Merchant Shipping Act 1995 to introduce statutory powers enabling the GLAs to work outside the 12-nautical mile territorial limit, to mark wrecks electronically and to enhance their ability to tender for commercial work and make the best use of any reserve capacity.
The work of the NLB remains a reserved matter under both Section 30 of, and Schedule 5 to, the Scotland Act 1998. The NLB maintains a close relationship with the Scottish Government as does the DfT under the terms of a concordat. This close relationship was reinforced by the Scotland Act 2016 which made amendments to the Merchant Shipping Act 1995 to give powers to Scottish Ministers to appoint a commissioner to the NLB’s Board and for NLB to lay copies of its annual report and accounts before the Scottish Parliament.
The GLAs are multi-skilled organisations providing a highly technical, specialised and professional service. The primary aim of the GLAs is:
To deliver a reliable, efficient and cost effective ‘AIDS TO NAVIGATION SERVICE’ for the benefit and safety of all mariners
The GLAs’ future vision of marine AtoNs is contained in the document ‘2030 Navigating the Future’, which sets out their joint strategy to:
- continue to provide an appropriate mix of AtoN for general navigation;
- continue to provide a timely and effective response to wreck and AtoN failures; • continue to undertake superintendence and management of all AtoNs in accordance with international standards, recommendations and guidelines; • introduce e-Navigation AtoN components and services in the UK and IRL; • work with users, partners and stakeholders nationally and internationally to promote the safety of marine navigation based on harmonized international standards, recommendations and guidelines; • embrace relevant technologies as they evolve; and • improve the reliability, efficiency and cost-effectiveness of GLA services while ensuring the safety of navigation.
These accounts have been prepared in accordance with the 2019-20 Government Financial Reporting Manual (FReM) issued by HM Treasury. Accounting policies contained within the FReM follow International Financial Reporting Standards (IFRS) to the extent that it is meaningful and appropriate to the public sector. Where the FReM permits a choice of accounting policy, the accounting policy which has been judged to be the most appropriate to the particular circumstances of the GLF for the purpose of giving a true and fair view has been applied. The GLF’s accounting policies have been applied consistently in dealing with items considered material in relation to the accounts.
In addition to the FReM, an Accounts Direction issued by the Secretary of State for Transport on 25 September 2019 applies to the GLF and GLAs for reporting purposes. The GLF accounts consolidate the individual accounts of the three GLAs, the core GLF accounts maintained by DfT and the Light Dues collection accounts maintained by TH on behalf of the three GLAs. The Accounts Direction mandates a consolidated format to meet the requirements of the Merchant Shipping Act 1995 and reflect that overall control, risks and rewards of the GLAs rest with the GLF.
The GLAs have adopted codes of best practice for Commissioners and Board Members which are based on the Model Code of Best Practice for Public Bodies published by HM Treasury and underpinned by the Seven Principles of Public Life set out by the Committee of Standards in Public Life.
2.2. Performance Analysis
GLF income is primarily generated by the collection of Light Dues, a charge on commercial shipping calling at UK and IRL ports. The Secretary of State for Transport has a statutory duty, under the Merchant Shipping Act 1995, to ensure the effective management of the GLF and enable the adequate provision of AtoNs at the minimum cost.
The Government remains committed to recovery of the GLAs’ costs through Light Dues. The Government and the GLAs have worked in partnership to minimise costs and the real-term levels of Light Dues in the UK which have fallen from a historic peak of 43p per Net Tonne in 1993 to 37.5p in 2019-20 (some 38% lower in real terms than they were 10 years ago). DfT Ministers have frozen Light Dues for the past three years with the rate remaining at 37.5p.
All GLA lighthouses were automated by 1998 with controls centralised at each GLA’s headquarters. Floating AtoNs have been solarised and are also centrally monitored. A Differential Global Positioning System has been provided by the GLAs since 1998 but, following a comprehensive review, will be withdrawn in 2022. The GLAs continue to research e-Navigation options to enhance and complement traditional AtoNs through its GLA Research and Development (GRAD) team. The GLAs maintain their focus on reducing costs while enhancing capability through investment in new technology, operating depots and ships. Future Goals
The GLAs and DfT have set out a number of goals for the future including:
- to continue to drive efficiencies in the provision of AtoN where it is safe, proportionate and appropriate to do so, to provide benefit to the industry, leisure users and the GLAs themselves;
- to deliver the strategy contained within ‘2030 Navigating the Future’, the GLAs will continue to co-operate with each other, consult with all users and continuously review all of their AtoNs;
- the GLAs will search for new, cost-effective, technology that can deliver an ever more efficient service to ensure that future AtoN requirements are met;
- to maintain GLF reserves at sufficient levels to mitigate the risk of unexpected financial pressures, to meet GLA funding and GLF borrowing commitments whilst minimising cost to industry; and
- to maintain stability for the payers of Light Dues.
Financial Performance
The GLF Accounting Policies are reviewed every year in accordance with International Accounting Standard (IAS) 8, Accounting Policies, Accounting Estimates and Errors. The review is carried out at the tri-GLA Accounts Format Working Group with reference to FReM and the Accounts Direction issued by the Secretary of State for Transport. The implementation of IFRS 16 in April 2019 has led to some changes to the statements and additional lease notes. No other changes were required for 2019-20.
COVID-19 had no material impact on the GLF during 2019-20, national lockdowns delayed some GLA activity in the last weeks of March but the majority of disruption has been experienced in 2020-21. Light Dues income has fallen 15.5% (£8m) in the months April to October 2020.
Financial results for 2019-20 are set out in the Statement of Comprehensive Net Income (SoCNI) (see page 29) and show net operating income of £6.6m for 2019-20 (£18.8m 2018-19). DfT Ministers froze UK Light Dues rates for the 2019-20 financial year and Light Dues income remained constant.
Other Income increased due to a larger contribution from the IRL Government in proportion to IL spending net of asset disposals. Operating expenditure increased by £12.8m, the main contributors to this variance were new provisions for decommissioning (£11.4m) and staffing costs increases (£2.6m) £1.3m of which was due to an increase in pension contributions. Right of Use (RoU) assets depreciation is a new item in the SoCNI as a result of implementation of IFRS 16 and is broadly offset by reductions in operating lease expenditure recognised in the previous year under IAS 17, and depreciation from owned assets. The introduction of RoU assets is a result of implementing the new reporting standard for leases, IFRS16 which is explained in note 23.
Including Interest and Other Comprehensive Income, the SoCNI reports total comprehensive income for 2019-20 of £15.2m (£15.7m in 2018-19). There was a £9m gain in the value of GLA non-current assets following indexation (full revaluations take place on a five-year cycle) which offset the additional operating expenditure bringing total comprehensive income for the year to a similar value to 2018-19.
Gains reported in the SoCNI increase the net worth of the GLF as shown on the Statement of Financial Position (SoFP) by £15.2m to £210m. Cash reserves decreased in the year by £4.3m in line with expectations following a freeze in Light Dues rate over the past three years.
Looking forward, forecasts for 2020-21 show GLA spending will increase as projects and routine activity, delayed from the beginning of the pandemic, are reprogrammed with COVID-19 safety measures in place. Light Dues income is forecast to fall 11% in 2020-21, a reduction of around £9m compared to 2019-20. The GLF has sufficient cash reserves to manage a short term shortfall provided income returns to normal in 2021-22.
Going Concern
The going concern basis of reporting remains appropriate as the GLF is funded from a tax (Light Dues), the GLAs are NDPBs of the Department and the core GLA functions are statutory. Cash Controls
The three GLAs rely primarily on advances from the GLF for their cash requirements. As a result, Liquidity Risk is controlled within the GLF bank accounts. Total GLA drawdowns from the GLF during the year were as follows:
| GLA | Drawdown (£'000) | |----------------------|------------------| | Irish Lights | £12.8m | | Northern Lighthouse Board | £23.9m | | Trinity House | £35.7m | | **Total** | **£72.4m** |
The principal sources of income for the GLF during the year were:
| Source | Income (£'000) | |------------------------------------|----------------| | Light Dues (UK) | £78.8m | | Light Dues (IRL) | £6.2m | | Irish government contribution | £4.8m | | **Total** | **£89.8m** |
Expenditure on Non-Current Assets
During the year to 31 March 2020 the GLAs’ expenditure on non-current assets was as follows:
| GLA | 2019/20 | 2018/19 | |----------------------|---------|---------| | | £'000 | £'000 | | Irish Lights | | | | Assets in course of construction | 298 | 1,021 | | Buildings | - | 10 | | Buoys & beacons | 17 | - | | Tenders ancillary craft & floating aids | 556 | 92 | | Information technology | 56 | 46 | | Intangible software | 99 | 83 | | Plant & equipment | 670 | 266 | | **Total** | 1,696 | 1,518 | | Northern Lighthouse Board | | | | Assets in course of construction | 1,396 | 598 | | Buildings | 463 | 1,578 | | Buoys & beacons | 6 | 29 | | Tenders ancillary craft & floating aids | - | 776 | | Information technology | 57 | 60 | | Intangible software | 45 | - | | Plant & equipment | 420 | 614 | | **Total** | 2,387 | 3,655 | | Trinity House | | | | Assets in course of construction | 1,566 | 1,568 | | Buildings\* | 135 | 357 | | Buoys & beacons | - | 71 | | Lightvessels | 755 | 430 | | Tenders ancillary craft & floating aids | 63 | 877 | | Information technology | 354 | 220 | | Intangible software | 291 | 102 | | Plant & equipment | 1,086 | 637 | | **Total** | 4,254 | 4,262 |
\*Trinity House London is owned by the Corporation of Trinity House and is not an asset of the GLF. Aids to Navigation (AtoN) availability
AtoN availability is the prime factor to demonstrate compliance with the GLAs’ statutory responsibilities and therefore mitigation of key risks. The standards against which the GLAs measure themselves are those recommended as the minima by IALA:
**Category 1 availability target 99.8%** An AtoN that is considered to be of primary navigational significance. It includes the lighted aids to navigation and Racons (radar beacons) that are considered essential for marking landfalls and primary routes.
**Category 2 availability target 99.0%** An AtoN that is considered to be of navigational significance. It includes lighted AtoN and Racons that mark secondary routes and those used to supplement the marking of primary routes.
**Category 3 availability target 97.0%** An AtoN that is considered to be of less navigational significance than Category 1 and 2.
The method of measurement and the recognised availability standards are set for each category by IALA and are published in its Aids to Navigation Guide (NAVGUIDE – Edition March 2010). Availability is measured by dividing total time (i.e. the sum of the total number of hours in a year multiplied by the number of AtoN in each category) into the difference between total time and the number of hours that the AtoNs were not available to the mariner. This calculation is then expressed as a percentage.
The GLAs’ performance against these standards (see page 7) indicate they have met or exceeded the targets for all AtoN categories and for each of the past five years.
The performance data is provided from software situated in each GLA monitoring centre.
There have been no changes to the data or method of calculation.
An additional Key Performance Indicator (KPI) is in development which will monitor the percentage of time GLA vessels are available to respond to new navigational dangers, AtoN casualties and other risks within the agreed response time for each location. The GLAs’ published Risk Response Criteria will form the basis for assessment of this new KPI. | Trinity House Cat. | IALA Min | Act | Diff | 2016/17 | 2017/18 | 2018/19 | 2019/20 | 2015/16 | |-------------------|---------|-----|------|---------|---------|---------|---------|---------| | Lights 1 | 99.8% | 99.9%| 0.1% | 99.9% | 0.1% | 99.9% | 0.1% | 99.9% | | Racons 1 | 99.8% | 99.9%| 0.1% | 99.9% | 0.1% | 99.9% | 0.1% | 99.9% | | Lights 2 | 99.0% | 99.9%| 0.9% | 99.9% | 0.9% | 99.9% | 0.9% | 99.9% | | Racons 2 | 99.0% | 99.9%| 0.9% | 99.9% | 0.9% | 99.9% | 0.9% | 99.9% | | Lights 3 | 97.0% | 99.9%| 2.9% | 99.9% | 2.9% | 99.9% | 2.9% | 99.9% | | Racons 3 | 97.0% | 99.9%| 2.9% | 99.9% | 2.9% | 99.9% | 2.9% | 99.9% | | Lights 1 | 99.8% | 99.9%| 0.1% | 99.9% | 0.1% | 99.9% | 0.1% | 99.9% | | Racons 1 | 99.8% | 99.9%| 0.1% | 99.9% | 0.1% | 99.9% | 0.1% | 99.9% | | Lights 2 | 99.0% | 99.9%| 0.9% | 99.9% | 0.9% | 99.9% | 0.9% | 99.9% | | Racons 2 | 99.0% | 99.9%| 0.9% | 99.9% | 0.9% | 99.9% | 0.9% | 99.9% | | Lights 3 | 97.0% | 99.9%| 2.9% | 99.9% | 2.9% | 99.9% | 2.9% | 99.9% | | Racons 3 | 97.0% | 99.9%| 2.9% | 99.9% | 2.9% | 99.9% | 2.9% | 99.9% | | Lights 1 | 99.8% | 99.9%| 0.1% | 99.9% | 0.1% | 99.9% | 0.1% | 99.9% | | Racons 1 | 99.8% | 99.9%| 0.1% | 99.9% | 0.1% | 99.9% | 0.1% | 99.9% | | Lights 2 | 99.0% | 99.9%| 0.9% | 99.9% | 0.9% | 99.9% | 0.9% | 99.9% | | Racons 2 | 99.0% | 99.9%| 0.9% | 99.9% | 0.9% | 99.9% | 0.9% | 99.9% | | Lights 3 | 97.0% | 99.9%| 2.9% | 99.9% | 2.9% | 99.9% | 2.9% | 99.9% | | Racons 3 | 97.0% | 99.9%| 2.9% | 99.9% | 2.9% | 99.9% | 2.9% | 99.9% | | Lights 1 | 99.8% | 99.9%| 0.1% | 99.9% | 0.1% | 99.9% | 0.1% | 99.9% | | Racons 1 | 99.8% | 99.9%| 0.1% | 99.9% | 0.1% | 99.9% | 0.1% | 99.9% | | Lights 2 | 99.0% | 99.9%| 0.9% | 99.9% | 0.9% | 99.9% | 0.9% | 99.9% | | Racons 2 | 99.0% | 99.9%| 0.9% | 99.9% | 0.9% | 99.9% | 0.9% | 99.9% | | Lights 3 | 97.0% | 99.9%| 2.9% | 99.9% | 2.9% | 99.9% | 2.9% | 99.9% | | Racons 3 | 97.0% | 99.9%| 2.9% | 99.9% | 2.9% | 99.9% | 2.9% | 99.9% | Long-term trends
A long-term forecast for the GLF’s cash reserves is utilised to manage the GLF and inform DfT Ministers when considering Light Dues rates. Annual GLA expenditure forecasts covering the next five-year period are extrapolated to ten years using inflation and other known commitments. This is added to GLF borrowing commitments and administration costs to determine a total forecast spending. Total spending is then compared to forecast Light Dues and other GLF income to determine a cash reserves forecast. This forecast was updated October 2020 to reflect latest GLA spending profiles and Light Dues income projections. Chargeable Light Due tonnage is forecast to remain suppressed for 2020-21 and slowly recover thereafter.
The DfT aims to maintain GLF cash reserves at £15m with a lower and upper tolerance of £11m & £18.75m respectively.
The forecast above shows high initial cash reserves will steadily reduce until 2024 when current GLF borrowing repayments have concluded. From 2024 the forecast assumes Light Dues rates will be adjusted accordingly to maintain GLF cash reserves within desired levels.
Non-financial information
During 2019-20, the GLF and the GLAs had no reportable incidents relating to anticorruption and anti-bribery matters. Issues of social matters and respect for human rights are addressed through this report’s separate disclosures on diversity and equality.
Sustainability Reporting
The GLAs are exempt from mandatory sustainability reporting due to the size and nature of their operations. However, wherever practicable, they seek to develop their environmental management policies in a manner fully consistent with Government initiatives and public opinion. Thus, measures to protect the environment and ensure sustainable development feature strongly within the GLAs’ consideration of modernisation, improvement and the use of appropriate future technologies at all of their establishments and facilities.
The GLAs are leaders in the use of renewable energy sources for AtoNs, principally through the installation of solar-electric power systems occasionally supplemented by wind power. The implementation of these technologies has considerably reduced the GLAs’ dependence upon carbon-based energy.
The GLAs are continually reviewing all issues affecting environmental considerations which take account of the sensitive coastline and environments in which they work and the occasionally hazardous nature of some of the operations they have to undertake.
Bernadette Kelly 08 December 2020 Permanent Secretary and Accounting Officer Department for Transport Great Minster House 33 Horseferry Road London SW1P 4DR 3. Accountability report
3.1. Directors’ report
Structure The core GLF is the responsibility of the Secretary of State for Transport with management being delegated to officials. Details of the DfT’s Ministers, Non-Executive and Executive Board members are published in the Department’s Annual Report and Accounts. The GLAs are part of the DfT family; they deliver services to the public at arm’s length from Ministers and are classed as Non-Departmental Public Bodies (NDPBs).
GLA board membership Disclosure of the serving directors for 2019-20 is available in the Governance Statements of each GLA. Directors make an annual declaration of all third-party interests that may conflict with their Board duties. No significant interests were reported.
Tri-GLA board The GLAs have their own boards and governance structures which are described in the Governance Statements of their respective Annual Report and Accounts. In addition, a Joint Strategic Board, consisting of representatives from all three GLAs, fosters tri-GLA co-operation and co-ordination to maximise efficiencies and realise savings.
GDPR During 2018-19 the General Data Protection Regulation (GDPR) came into force. The Regulation provides an increased level of protection to individuals whose data is held/processed by organisations. The GLAs have enhanced their data protection policies and procedures in order to ensure compliance with the new legislation.
Personal data related incidents There were no data related incidents reportable to the Information Commissioners during 2019-20 (2018-19, nil).
Payment of Creditors Policy All payments by TH are made in accordance with the Public Contract Regulations 2015 (Chapter 9, Section 113-2a), NLB seeks to adopt the British Standard BS 7890 and IL seeks to comply with the Prompt Payment of Accounts Act 1997. Payment of all Accounts Payable are arranged by the date stipulated within the contract or other agreed terms of credit. Exceptions to this are as follows:
1. Payment within a shorter timescale where a discount may be available; and
2. Where there is a genuine dispute in respect of the invoice concerned; in all cases the supplier is immediately informed of the details of the query and that the payment will be withheld pending resolution.
Suppliers are informed of this policy via a supplementary notice within contracts and are asked to provide any comments on this issue to Directors with financial responsibility. The average credit taken from trade payables during the year was: TH 10 days, NLB 13 days & IL 21 days (2018-19 TH 9 days, NLB 13 days & IL 20 days).
Auditor The Comptroller and Auditor General (C&AG), as head of the National Audit Office (NAO), is the appointed auditor for the GLF. The audit work for the 2019-20 accounts cost £118k (2018-19 £90k). The higher audit costs in 2019-20 related to the NAO’s audit work on the implementation of IFRS 16 leases along with unbudgeted additional assurance work on provisions and inventories. Auditor remuneration reflects only the costs of the statutory financial audit on these accounts, NAO did not perform any additional non-audit related work for the GLF during the year.
3.2. Statement of the Responsibilities of the General Lighthouse Authorities’ Boards, the Secretary of State for Transport and the Accounting Officer
Under Section 218 of the Merchant Shipping Act 1995, and Section 664 of Merchant Shipping Act 1894 in relation to IRL, the GLAs are each required to prepare a statement of accounts in such form, and at such times, as instructed by the Secretary of State for Transport. The accounts of the GLF, which consolidate the GLAs’ accounts, the core GLF accounts and Light Dues income, are prepared annually on an accruals basis and must give a true and fair view of the GLF affairs at the year-end; and of its income, expenditure, cash flows and changes in equity for the financial year. Section 211(5) of the Merchant Shipping Act 1995 requires the Secretary of State for Transport to lay the GLF accounts before Parliament; the DfT prepares these accounts. HM Treasury appointed DfT’s Permanent Secretary, Bernadette Kelly CB, as Principal Accounting Officer with effect from 18 April 2017. In preparing these accounts, the Accounting Officer is required to comply with the requirements of the FReM in particular to:
- observe the requirements of the Merchant Shipping Act 1995 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, as set out by the FReM, and disclose and explain any material departures in the financial statements; and
- prepare the financial statements on a going concern basis.
The Accounting Officer for the DfT is also the Accounting Officer for the GLF. The responsibilities of Accounting Officers, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, and for keeping proper records and for safeguarding the GLF assets, are set out in the Accounting Officers’ Memorandum issued by HM Treasury and published in its ‘Managing Public Money’ guidance.
As far as the Accounting Officer is aware there is no relevant audit information which the auditor has not been provided with and the Accounting Officer has taken all reasonable steps to provide relevant audit information to the auditor.
As far as the Accounting Officer is concerned, the GLF annual report and accounts as a whole is fair, balanced and understandable, and she takes personal responsibility for the annual report and accounts and the judgments required for determining that it is fair, balanced and understandable.
3.3. Governance Statement
Accounting Officer’s introduction The Governance Statement explains the approach to corporate governance in the bodies whose activities are financed by the GLF and certain functions of DfT. Good governance is vital to effective financial and risk management.
The bodies whose activities are financed by the GLF are the following GLAs:
- Trinity House (in its capacity as a lighthouse service);
- the Northern Lighthouse Board; and
- Irish Lights.
The Governance Statements of each GLA are available from their respective web sites and together form an integral part of the GLF’s Governance Statement describing the governance arrangements operating within the three GLAs:
https://www.trinityhouse.co.uk/about-us/governance/report-and-accounts https://www.nlb.org.uk/who-we-are/publications-policies-and-guides/ https://irishlights.ie/who-we-are/publications.aspx
HM Treasury’s ‘Managing Public Money’ guidance summarises the purpose of the Governance Statement as being to record the stewardship of the organisation to supplement the accounts. The Governance Statement should provide a sense of how successfully the organisation has coped with the challenges it faces, and how vulnerable its performance is, or might be.
The Governance Statements describe how each GLA Board and their supporting governance structures work, how they have performed and provide an assessment of how the GLAs and the GLF has been managed including an assessment of the effectiveness of the systems of internal control, risk management and accountability.
Accounting Officer’s scope of responsibilities As GLF Accounting Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of the GLAs and the GLF’s policies, aims and objectives, whilst safeguarding the public funds and GLF assets for which I am personally responsible in accordance with the responsibilities assigned to me in HM Treasury’s ‘Managing Public Money’ guidance. I carry out this responsibility in conjunction with the boards of the individual GLAs. Each of the GLA Boards has vested their Chief Executive with the responsibility for ensuring that a sound system of internal control is maintained and operated. These responsibilities were set out in a letter from myself to each Chief Executive.
The system of internal control is designed to manage risk to a reasonable level, rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can, therefore, only provide reasonable and not absolute assurance of effectiveness. It is an on-going process designed to identify and prioritise the risks to the achievement of GLA/GLF’s policies, aims and objectives. The system is designed to evaluate the likelihood and impact of those risks being realised, and to manage them efficiently and effectively.
In addition to ensuring a sound system of internal control, it is my responsibility to provide effective and efficient delivery of the policy objectives and, where appropriate, advise Ministers on the most efficient allocation of resources. It is also my responsibility to ensure that the organisational capability of the GLF is continuously improved and that the GLF and the GLA’s policy objectives are aligned with those of the DfT.
The GLAs are classified as Central Government Bodies and therefore fall within the DfT’s group departmental accounting boundary. The core GLF accounts, although maintained by DfT, are not part of DfT’s departmental group accounts. As a separate fund, the core GLF is maintained at arms-length from DfT finances.
As a result of their legislative powers and duties, the GLAs assume responsibility for positive discharge of the Government’s obligations under the Safety of Life at Sea Convention 1974 (Chapter V, Regulation 13) for the provision and maintenance of AtoNs within their respective areas of jurisdiction. To assist this process, the GLAs take steps to:
- observe and record developments at the International Maritime Organization (IMO);
- actively participate at Council and Committee level at IALA;
- observe and record maritime developments within the European Union and elsewhere; and
- maintain links with the International Telecommunications Union through the national radio licensing authority and IALA, regarding the allocation of radio frequencies in North West Europe.
**Governance**
The statutory basis for the GLF can be found in section 211 of the Merchant Shipping Act 1995 which also gives the Secretary of State for Transport statutory responsibility for its administration. This responsibility is delegated to officials within DfT’s Maritime Directorate.
HM Treasury’s Managing Public Money guidance requires that the Governance Statement describes the Board structure, including the Board Committees and report on Board performance. Due to its nature, the GLF does not have a separate Board with an associated formal committee structure; however, it has in place arrangements to comply with the best practice contained in ‘Managing Public Money’ and is managed by DfT officials.
Information concerning the GLAs’ board structures, committees, meetings and effectiveness can be found in their respective annual reports and accounts.
A Framework Document sets out the relationship between the Secretary of State for Transport and the GLAs in matters of business and finance. The framework provides a clear understanding of respective duties and responsibilities according to Part VIII & IX of the Merchant Shipping Act 1995, as amended by the Merchant Shipping and Marine Security Act 1997, and Part XI of the Merchant Shipping Act 1894 as amended by the Merchant Shipping (CIL) Act, 1997 in respect of the activity of IL in IRL.
A comprehensive budgeting system exists with GLA Corporate Plans incorporating five-year budgets which are reviewed and endorsed by the GLA Boards and the Lights Finance Committee (see below) for submission to the Secretary of State for Transport. Budgets are delegated to the individual GLAs and are reviewed by DfT officials. The GLAs also have set performance targets and indicators which are monitored on a monthly basis. The GLAs are nearing completion of a second five-year budget period that limits increases in running costs to no more than general price inflation (as measured by the retail prices index) less a percentage value set by DfT Ministers.
The Governance, Organisational and Committee structure in place within the three GLAs is discussed in greater detail in each GLA’s Governance Reports, but in addition, the following are relevant to the GLF: Lights Finance Committee The Lights Finance Committee (LFC) includes representatives of the shipping industry, convened via the Chamber of Shipping, the GLAs and DfT officials. The LFC meets at least annually and considers GLA budgetary and GLF funding requirements and their implications for Light Dues rates. The LFC’s deliberations inform recommendations to DfT Ministers with regard to the setting of Light Dues rates for the coming financial year.
Joint Strategic Board The Joint Strategic Board (JSB), consisting of representatives from all three GLAs, has as its main purpose the co-ordination of tri-GLA co-operation with the aim of realising the resultant savings. The JSB maintains a strategic road map to track key areas of focus, significant issues and initiatives which affect the GLAs.
Republic of Ireland Government The work of IL covers the whole of the island of Ireland and DfT officials work closely with their counterparts from the Department of Transport (DoT) in Ireland.
Isle of Man Government The work of the NLB also covers the Isle of Man and, as a result, NLB has a relationship on AtoN matters with the Department of Transport of the Isle of Man Government.
Revenue Commissioners (Republic of Ireland) Light Dues in IRL are collected by the Revenue Commissioners and transferred to the GLF on a monthly basis. The Revenue Commissioners are paid a fee for this service.
DfT Group Audit Committee In consultation with the chair of this committee, reviewing and recommending signing of the GLF Annual Report and Accounts is delegated to the Director of Group Finance taking into account reports from the Government Internal Audit Agency and the National Audit Office.
Risk Assessment In line with the requirements of the GLA Framework Document, the GLAs are required to, “jointly carry out a comprehensive risk management review, which shall include the key risks faced by the GLAs and a review of requirements at least every three years.” This is addressed via the work of Inter GLA Committee (IGC) 6 (Legal and Risk) who manage the Triennial Risk Management Review process on behalf of the GLAs. The process is further underpinned by the provision of Annual Internal Risk Management and Insurance Scrutiny reviews, all of which are reported to the respective Audit and Risk Committee and the Tri-GLA Chief Executives Committee.
In 2018 Tri-GLA Triennial Risk Management Review included an extensive independent study completed by Marsh Risk Consulting. The study covered the GLAs’ existing risk profile, effectiveness of current risk management controls, level of risk management maturity in existence across the organisations, in addition to examining the existing levels of insurance cover and the appropriateness of the GLF contingency reserve relating to self-insured losses. The associated Marsh Report found that, in summary, “a high level of risk management maturity exists across the GLAs within which their processes clearly demonstrate a high level of performance in comparison to other marine-based organisations.”
DfT officials maintain a separate risk register for specific GLF risks. The register describes risks to the GLF such as currency fluctuations, GLA cost/income variances, legislative risks, Light Dues, wreck removal and uninsured loss risk, and political risk, together with actions in place to manage these identifiable risks. DfT officials review the risk register on a regular basis, including an evaluation of the probability of the risk event occurring and the impact that the occurrence would have both before and after controls have been put in place. The review also determines whether the risks have altered from the very high, high, medium, low, or very low probability and impact categories that they have previously been allocated to. At each review officials also consider whether additional controls should be applied to further reduce the residual risk.
There are no specific risks material to the GLF group which require disclosure. Material GLA risks are contained within the individual GLAs’ annual reports and accounts. Review of the effectiveness of the system of internal control
As Accounting Officer, I have responsibility for reviewing the effectiveness of the system of internal control that exists within the GLF and the bodies funded by the GLF. My review is primarily informed by the work of internal audit and by the management assurance reporting of the GLA Chief Executives who act as Accounting Officers within their respective organisations and are responsible for the development and maintenance of the internal control framework and by comments made by the external auditors in their management letter and other reports.
DfT has established a number of procedures to monitor and forecast the operation of the activities of the GLF, including:
- utilising Government Banking Services provided by HM Treasury;
- providing monthly and quarterly reports detailing cashflow activity and forecasts;
- monthly financial reporting of data on Light Dues income, trends and projections;
- GLA spending is included in the monthly DfT budget workbooks provided to HM Treasury to monitor spending against departmental budgets. GLAs also report monthly spending against delegated cash spending limits to monitor spending against sanctioned GLF budget limits;
- twelve-week cash forecasts provided by the GLAs on a weekly basis to facilitate GLF cash reserves forecasting;
- five-year forecasts of GLA income and expenditure revised annually including progress toward agreed expenditure reduction targets, such as the RPI-X targets set by DfT Ministers; and
- an annual report to DfT Ministers and the Lights Advisory Committee, which represents Light Dues payers, covering the operation of the GLF over the preceding year and forecasts for medium term GLF cash reserves in support of the required level of Light Dues.
Key elements of the on-going review of controls at the GLAs include:
- regular meetings of strategic committees to decide policy and review progress against plans;
- audit committees which operate in line with the 'Audit Committee Handbook';
- third party certification audits for example for ISO standards accreditation;
- regular reports from managers on the steps they are taking to manage risks in their areas of responsibility; and
- annual reviews of key business risks and how they are managed.
Extra Territorial Waters
In order to meet their responsibilities with regard to AtoNs and wreck marking, the GLAs may sometimes be required to operate outside of UK Territorial Waters. The statutory powers of the GLAs in this respect are found in the amendment to the Merchant Shipping Act 1995 made by the Marine Navigation Act 2013.
Internal Audit
The GLAs use the independent internal audit services of the Government Internal Audit Agency (GIAA). This operates to the standards defined in Government Internal Audit Standards. The work of GIAA is informed by an analysis of the risk to which the body is exposed and annual internal audit plans are based on this analysis. The analysis of risk and the internal audit plans are endorsed by the bodies’ Audit Committees and approved by their Boards. At least annually, the Head of Internal Audit for the GLAs provides me, as Accounting Officer, with a report on internal audit activity within the GLAs. The report includes the GIAA’s independent opinion on the adequacy and effectiveness of the GLAs’ systems of internal control. Summary of Internal Audit Reports
The report of the Head of Internal Audit stated the following:
‘On the basis of the evidence obtained during 2019-20, the assurance opinions provided for the General Lighthouse Authorities (GLAs) are summarised in the table below:
| Authority | Opinion | RAG | |----------------------------|----------------------------------------------|-----| | Trinity House | Substantial | Green | | | In my opinion, the framework of governance, risk management and control is adequate and effective. | | | Northern Lighthouse Board | Substantial | Green | | | In my opinion, the framework of governance, risk management and control is adequate and effective. | | | Irish Lights | Substantial | Green | | | In my opinion, the framework of governance, risk management and control is adequate and effective. | |
Overall, the opinion across the GLAs is Substantial, reflecting what I consider to be an improved overall control environment. Internal control processes in the areas reviewed during the year were generally found to be effective, although there were a few areas where control weaknesses and areas for improvement were identified. Corrective action plans have been agreed with management to address the control weaknesses identified.
Management responses to our findings continue to be positive and action to strengthen controls are agreed across all three GLAs. Prompt action is often taken by the GLAs in implementing our recommendations. I can therefore report that control weaknesses identified are addressed promptly and effectively across the three GLAs.
There were no reported cases of fraud or impropriety to GIAA during 2019-20 at any of the GLAs. Whilst our work during 2019-20 identified a need to strengthen controls in a few areas in the GLAs, there is nothing specific which I would deem significant or material which warrants mention in this report’
Conclusion
The GLAs have in place robust systems of internal control which I can rely on as Accounting Officer. I am pleased to note the improved opinion of the Head of Internal Audit as substantial across all three GLAs. This system allows me to provide the assurance that GLF spends its money in line with the principles set out in Managing Public Money and the Merchant Shipping Act 1995.
Having reviewed the evidence provided to me by GLF & GLA management, compliance functions, the Head of Internal Audit’s opinion and the external audit of the GLF, I am satisfied that the GLF has maintained a sound system of internal control during the financial year 2019-20. 3.4. Remuneration and staff report
The officials who manage the GLF are appointed by the Secretary of State for Transport and are remunerated in accordance with the relevant Civil Service pay scale. The costs incurred by DfT, in relation to the management of the GLF, are charged to the GLF on an annual basis. The directors of the three GLAs are remunerated as set out below.
3.4.1. Trinity House
Remuneration strategy TH operates a remuneration strategy based on spot rate salaries informed by job evaluation and market testing.
TH operates a performance-related pay system to incentivise staff. The current system is designed to increase staff awareness and understanding of corporate level objectives and ensure that personal objectives link to departmental and strategic objectives. An annual staff bonus is linked to the appraisal cycle. Every individual’s performance and achievements are assessed in relation to objectives and behavioural and technical competencies. Bonus allocation is determined by individual performance and organisational level success against the year’s corporate strategic objectives.
Director pay rates are determined using the same methodology as that which is applied to staff.
Service contracts Executive Directors’ contracts are permanent, subject to satisfactory performance, and require a twelve-month written notice period. Non-Executive Directors are employed on fixed term contracts for a period of up to 3 years, although their terms may be extended where appropriate.
The remuneration of TH Directors and their pension entitlements are shown below:
Remuneration of Trinity House directors (audited)
| Name | Salary 2019/20 | Salary 2018/19 | Bonus 2019/20 | Bonus 2018/19 | Benefits in Kind 2019/20 | Benefits in Kind 2018/19 | Pension benefits 2019/20 | Pension benefits 2018/19 | Total 2019/20 | Total 2018/19 | |---------------|----------------|----------------|---------------|---------------|--------------------------|--------------------------|--------------------------|--------------------------|----------------|----------------| | I McNaught | 125 - 130 | 120 - 125 | 10 - 15 | 10 - 15 | 1,600 | 1,500 | 52 | 52 | 190 - 195 | 185 - 190 | | A Damen | 85 - 90 | 85 - 90 | 5 - 10 | 5 - 10 | 900 | 800 | 38 | 37 | 135 - 140 | 130 - 135 | | R Barker | 90 - 95 | 90 - 95 | 5 - 10 | 5 - 10 | 1,500 | 1,400 | 27 | 22 | 130 - 135 | 120 - 125 | | R W Dorey | 90 - 95 | 85 - 90 | 5 - 10 | 5 - 10 | 1,200 | 1,100 | 25 | 19 | 125 - 130 | 75 - 80 | | P Matthews² | - | 5 - 10 | - | - | - | - | - | - | - | 5 - 10 | | N Palmer³ | 15 - 20 | 20 - 25 | - | - | - | - | - | - | 15 - 20 | 20 - 25 | | D Ring | 15 - 20 | 15 - 20 | - | - | 1,100 | 900 | - | - | 15 - 20 | 15 - 20 | | M Amos | 15 - 20 | 15 - 20 | - | - | 1,800 | 3,300 | - | - | 20 - 25 | 20 - 25 | | V Owen⁴ | 15 - 20 | 10 - 15 | - | - | 1,400 | 700 | - | - | 15 - 20 | 10 - 15 | | A Massey⁵ | 5 - 10 | - | - | - | - | - | - | - | 5 - 10 | - |
¹ The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to a transfer of pension rights. ² Retired 19 July 2018 (2018-19 full year equivalent salary £15,000 - £20,000) ³ Retired 22 January 2020 (2019-20 full year equivalent salary £20,000 - £25,000) ⁴ Commenced 14 September 2018 (2018-19 full year equivalent salary £15,000 - £20,000) ⁵ Commenced 22 January 2020 (2019-20 full year equivalent salary £15,000 - £20,000)
Salary Salary includes gross salary; overtime; recruitment and retention allowances; and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by TH and thus recorded in the accounts. Benefits in kind Benefits include any benefits provided by TH and treated by HM Revenue and Customs as a taxable emolument. These have been rounded to the nearest £100.
Bonuses Performance Related Pay (PRP) is based on attained performance levels and is awarded as part of the appraisal process. Bonuses relate to the performance in the year in which they are made to the individual.
Fair pay disclosure (audited) Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the median remuneration of the organisation’s workforce.
The banded remuneration of the highest-paid director in TH in the financial year 2019-20 was £135,000-140,000 (2018-19, £135,000-140,000). This was 4.2 times (2018-19, 4.2) the median remuneration of the workforce, which was £33,508 (2018-19, £32,851).
In 2019-20, no (2018-19, nil) employees received remuneration in excess of the highest-paid director. Excluding the highest paid director, remuneration ranged from £16,276 to £100,000-105,000 (2018-19, £15,483 to £100,000-105,000).
Total remuneration includes salary, non-consolidated performance-related pay and benefits-in-kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.
Non-executive director
| Name | Contract Start | Expiry Date | |---------------|----------------|-------------------| | N Palmer | 1 February 2012| 22 January 2020 | | D Ring | 1 December 2013| 30 November 2020 | | M Amos | 16 May 2017 | 15 May 2023 | | V Owen | 14 September 2018| 13 September 2021| | A Massey | 22 January 2020| 21 January 2023 |
Pensions (audited) Pension benefits are provided through the Civil Service pension arrangements explained on page 23.
| Name | Real increase in pension | Real increase in lump sum | Accrued pension | Accrued lump sum | CETV 31 March 19 | CETV 31 March 20 | Real increase in pension | Real increase in lump sum | Employer contribution partnership pension account | |---------------|--------------------------|---------------------------|-----------------|------------------|------------------|------------------|--------------------------|---------------------------|-----------------------------------------------| | I McNaught | 2.5 - 5.0 | - | 25 - 30 | - | 462 | 523 | 47 | - | - | | A Damen | 0.0 - 2.5 | - | 5 - 10 | - | 69 | 97 | 18 | - | - | | R Barker | 0.0 - 2.5 | - | 20 - 25 | - | 412 | 440 | 25 | - | - | | R Dorey | 0.0 - 2.5 | 0.0 - 2.5 | 45 - 50 | 135 - 140 | 958 | 1023 | 18 | - | - |
Cash Equivalent Transfer Values This 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 pension benefits they have accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total service, not just their current appointment.
The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost. CETVs are worked out in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken. Real increase in CETV This reflects the increase in CETV that is funded by the employer. It does not include 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.
3.4.2. Northern Lighthouse Board
Remuneration strategy The NLB believes long-term effectiveness depends on the talents, contribution and commitment of all employees so NLB must be able to attract and retain people of high quality. It is essential that the remuneration structure should be competitive with those of comparable organisations whilst remaining compliant with UK Government Pay Policy.
The remuneration of the NLB Chief Executive and Directors is determined by the Remuneration Committee consisting of the Chairman and Vice Chairman of the Board and two other Commissioners, under powers delegated by the Board of Commissioners.
The Committee consults the Chief Executive about its proposals, other than in relation to his own remuneration, and has access to professional advice from inside and outside the Board.
NLB received a 2 year pay settlement covering 2019-20 and 2020-21 which was approved by Ministers and implemented February 2020 and August 2020 respectively. The significant strategic risk to the delivery of operations has now been effectively mitigated.
Service contracts Executive Directors’ contracts are permanent, subject to satisfactory performance, and require a three-month written notice period.
The remuneration of the NLB Directors and their pension entitlements are shown below:
Remuneration of executive directors (audited)
| Name | Salary 2019/20 £000 | Salary 2018/19 £000 | Bonus 2019/20 £000 | Bonus 2018/19 £000 | Benefits in Kind 2019/20 £ | Benefits in Kind 2018/19 £ | Pension benefits 2019/20 £000 | Pension benefits 2018/19 £000 | Total 2019/20 £000 | Total 2018/19 £000 | |--------|---------------------|---------------------|--------------------|--------------------|-----------------------------|-----------------------------|-----------------------------|-----------------------------|---------------------|---------------------| | M Bullock | 125 - 130 | 125 - 130 | - | - | - | - | 50 | 49 | 175 - 180 | 170 - 175 | | M Rae | 90 - 95 | 90 - 95 | - | - | - | - | 33 | 35 | 125 - 130 | 125 - 130 | | P Day | 100 - 105 | 95 - 100 | - | - | - | - | 42 | 50 | 140 - 145 | 150 - 155 |
1 The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to a transfer of pension rights.
Salary Salary includes gross salary; overtime; recruitment and retention allowances; and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by NLB and thus recorded in the accounts.
Benefits in kind Benefits include any benefits provided by NLB and treated by HM Revenue and Customs as a taxable emolument. These have been rounded to the nearest £100. Bonuses Entitlement to bonus payments were consolidated into basic pay following a review in 2017.
Fair pay disclosures (audited) Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the median remuneration of the organisation’s workforce.
The banded remuneration of the highest-paid director in NLB in the financial year 2019-20 was £130,000-135,000 (2018-19, £125,000-130,000). This was 3.9 times (2018-19, 4.0) the median remuneration of the workforce, which was £34,085 (2018-19, £31,192).
In 2019-20, no (2018-19, nil) employees received remuneration in excess of the highest-paid director. Excluding the highest paid director, remuneration ranged from £10,663 to £100,000-£105,000 (2018-19, £10,299 to £100,000-£105,000).
Total remuneration includes salary, non-consolidated performance related pay, benefits-in-kind as well as severance payments. It does not include employer pension contributions and the cash equivalent transfer value of pensions. Includes commissioners for which the full time equivalent remuneration is equal to the annual remuneration.
Executive directors’ pensions (audited) Pension benefits are provided through the Civil Service pension arrangements explained on page 23.
| Real increase in pension | Real increase in lump sum | Accrued pension | Accrued lump sum | CETV 31 March 19 | CETV 31 March 20 | Real increase CETV | Employer contribution partnership pension account | |--------------------------|---------------------------|-----------------|------------------|------------------|------------------|-------------------|-----------------------------------------------| | M Bullock | 2.5 - 5.0 | - | 15 - 20 | 264 | 211 | 35 | - | | M Rae | 0.0 - 2.5 | - | 20 - 25 | 291 | 246 | 22 | - | | P Day | 0.0 - 2.5 | - | 45 - 50 | 629 | 573 | 24 | - |
Remuneration of commissioners (audited) Commissioners:
1. Elected by the NLB Board under, and subject to, the proviso set forth in Paragraphs 2 and 3 of Schedule 8 to the Merchant Shipping Act 1995 (the “Co-opted Commissioners”); or
2. Nominated by the Lieutenant-Governor of the Isle of Man and appointed by the Secretary of State for Transport and Transport Scotland.
Commissioners are paid a basic remuneration per annum and with the exception of the Chairman and Vice Chairman who are eligible for an additional daily payment for each day exceeding 20 days in the year.
The annual amounts payable are:
| | 2019/20 | 2018/19 | |--------------------------------------|---------|---------| | - Basic annual remuneration | 10,593 | 10,299 | | - Additional daily payment | 533 | 500 | | - Chairman’s remuneration | 21,192 | 20,604 | | - Vice Chairman’s remuneration | 14,124 | 13,732 | | Total amount paid including National Insurance | 88,942 | 79,665 |
Co-opted Commissioners’ remuneration is set by the NLB as a whole on the advice of the DfT. Co-opted Commissioners are appointed for three years but may be re-appointed for further terms up to a normal limit of 10 years. Ex-Officio Commissioners hold office for the duration of their qualifying office.
Commissioners are not members of the Principal Civil Service Pension Scheme and are not entitled to receive compensation for loss of office. Commissioners are entitled to reclaim travel and subsistence costs at the same rates, and under the same regulations that apply to employees. The remuneration of the NLB Commissioners (excluding NI) is analysed as follows:
| Name | 2019/20 | 2018/19 | |-----------------------------|---------|---------| | M Brew (Chairman) | 21,192 | 13,732 | | A Beveridge (Vice Chairman) | 14,124 | 10,299 | | G Crerar (Retired 31/03/2020)| 10,593 | 20,604 | | R Woodward (Appointed 27/09/2017) | 10,593 | 10,299 | | E Wilkinson (Appointed 01/10/2017) | 10,593 | 10,299 | | H Shaw (Appointed 01/08/2018) | 10,593 | 6,866 | | A Mackenzie (Retired 31/07/2018) | - | 3,433 |
3.4.3. Irish Lights
Remuneration strategy The Board of IL sets and approves pay policy and pay scales for all posts including senior management salary levels (incl. Chief Executive and Directors). The Board updated its pay policy and set new pay scales for all positions below Chief Executive in March 2016. With respect to the scale for Directors, the Board agreed that this would be reviewed every 5 years to assess its appropriateness or earlier if there is significant movement in equivalent public sector scales. In the interim, pay increases will be in line with relevant pay agreements in the Irish public sector.
The Chief Executive and Executive Management Team (Heads of Department) are members of the Principal Civil Service Pension Scheme (PCSPS).
Service contracts The contracts of the Chief Executive and Heads of Department are permanent. Co-opted and ex-officio Commissioners of the IL Board are not remunerated.
Remuneration of Chief Executive and Heads of Departments (audited) These figures are converted to pounds sterling from euros at an average exchange rate for the years reported of 1.1438 for 2019-20 and 1.1342 for 2018-19.
Single total figure of remuneration
| Name | Salary 2019/20 | Salary 2018/19 | Bonus 2019/20 | Bonus 2018/19 | Benefits in Kind 2019/20 | Benefits in Kind 2018/19 | Pension benefits 2019/20 | Pension benefits 2018/19 | Total 2019/20 | Total 2018/19 | |------------|----------------|----------------|---------------|---------------|--------------------------|--------------------------|--------------------------|--------------------------|----------------|----------------| | Y Shields | 125 - 130 | 125 - 130 | - | - | 51 | 50 | 180 - 185 | 175 - 180 | | | | O’connor | 105 - 110 | 105 - 110 | - | - | 2 | (3) | 110 - 115 | 105 - 110 | | | | R McCabe | 115 - 120 | 110 - 115 | - | - | 55 | 53 | 170 - 175 | 165 - 170 | | | | J Burke | 105 - 110 | 105 - 110 | - | - | 42 | 42 | 150 - 155 | 150 - 155 | | | | H Roe | 95 - 100 | 15 - 20 | - | - | 38 | 5 | 130 - 135 | 15 - 20 | | |
1 The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to a transfer of pension rights.
2 Commenced 5th February 2019 (2018-19 full year equivalent salary £95,000 - £100,000)
Salary Salary includes gross salary; overtime; recruitment and retention allowances; and any other allowance to the extent that it is subject to taxation. This report is based on accrued payments made by IL and thus recorded in the accounts. Benefits in kind Benefits include any benefits provided by IL and treated as a taxable emolument. These have been rounded to the nearest £100.
Bonuses IL does not operate a Performance Related Pay system.
Fair pay disclosures (audited) The banded remuneration of the highest-paid director in IL in the financial year 2019-20 was £125,000-130,000 (2018-19, £125,000-130,000). This was 3.2 times (2018-19, 3.1) the median remuneration of the workforce, which was £40,585 (2018-19, £40,928).
In 2019-20, no (2018-19, nil) employee received remuneration in excess of the highest-paid director. Excluding the highest paid director, remuneration ranged from £16,594 to £115,000-£120,000 (2018-19, £16,237 to £110,000-£115,000).
Total remuneration includes salary, non-consolidated performance related pay, benefits-in-kind as well as severance payments. It does not include employer pension contributions and the cash equivalent transfer value of pensions.
Pension Entitlements of Chief Executive and Heads of Departments (Audited) Pension benefits are provided through the Civil Service pension arrangements explained on page 23.
| Real increase in pension | Real increase in lump sum | Accrued pension | Accrued lump sum | CETV 31 March 19 | CETV 31 March 20 | Real increase in pension | Employer contribution partnership pension account | |--------------------------|---------------------------|-----------------|------------------|------------------|------------------|--------------------------|-----------------------------------------------| | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | | Y Shields | | | | | | | | | O’connor | 2.5 - 5.0 | - | 25 - 30 | - | 312 | 362 | 30 | | R McCabe | 0.0 - 2.5 | 2.5 - 5.0 | 45 - 50 | 145 - 150 | 1078 | 1093 | 3 | | J Burke | 2.5 - 5.0 | - | 50 - 55 | - | 790 | 865 | 33 | | H Roe | 2.5 - 5.0 | - | 15 - 20 | - | 254 | 303 | 32 | | R Boyle | 0.0 - 2.5 | - | 0 - 5 | - | 4 | 30 | 19 |
3.5. Staff report
Total staff costs\* (audited)
| | Total 2019/20 | Total 2018/19 | |----------------------|---------------|---------------| | | £’000 | £’000 | | Wages & salaries | 26,720 | 25,537 | | Social security costs| 2,600 | 2,437 | | Employers pension | 6,478 | 5,206 | | | 35,798 | 33,180 | | Other pension costs | 45 | 42 | | Redundancy costs ¹ | 173 | 138 | | **Sub total** | **36,016** | **33,360** | | Capitalised costs | (446) | (408) | | **Total net costs** | **35,570** | **32,952** |
¹ includes pay in lieu of notice and liquidated leave
- Further detail available at Note 5 to the accounts Employee involvement The GLAs are committed to effective communications which they maintain through formal and informal briefings, internal magazines, newsletters and electronic media, including their own Intranet services. Consultation with employees is undertaken using a long-established, but continually developing, mechanism and include joint committees covering all staff. Employees are informed of matters of concern to them; they are consulted frequently and regularly so that account may be taken of their interests.
Equal opportunities The GLAs are equal opportunity employers and at every stage of recruitment, staff transfer and promotion, they carefully ensure that the selection processes used in no way give any preference on the basis of gender, age, race, disability, sexual orientation or religion.
Disabled employees The policy of the GLAs towards the employment of disabled people is that a disability is no bar to recruitment or advancement. The nature of the duties at lighthouses imposes some limitations on the employment of disabled staff. When dealing with employee absence, compliance with the Equality Act 2010 is ensured by always seeking advice through Occupational Health Services utilised by the GLAs.
Training There is a comprehensive training plan throughout the GLAs that aims to give staff the skills and knowledge required to perform efficiently. Staff are encouraged to develop through performance and development systems, whereby personal development plans are produced on an annual basis for every member of staff. In addition, skill gaps are identified through careful strategic analysis and organisational wide development initiatives have been introduced as a result.
Tri-GLA staff TH hosts three inter-GLAs functions: the GLA Research and Development Directorate (GRAD); the collection of Light Dues and out-of-hours AtoN monitoring. Light Dues collection is achieved using an internet-based collection system with members of the Institute of Chartered Shipbrokers acting as Light Dues collectors in each port. Other arrangements exist in IRL and the Isle of Man for the collection of Light Dues.
Average number of persons employed (audited) The average number of whole-time equivalent persons employed during the year was:
| | 2019/20 | 2019/20 | 2019/20 | 2018/19 | 2018/19 | 2018/19 | |----------------------|---------|---------|---------|---------|---------|---------| | | Permanent | Others | Total | Permanent | Others | Total | | Directly employed | 577 | 8 | 585 | \*573 | 11 | 584 | | Other | - | 23 | 23 | - | 18 | 18 | | Staff engaged on capital projects | 10 | - | 10 | 9 | - | 9 | | | 587 | 31 | 618 | 582 | 29 | 611 |
- restated to include additional five posts omitted in error in 2018/19
Expenditure on consultancy
| | TH | NLB | Irish Lights | 2019/20 | 2018/19 | |----------------------|----|-----|--------------|---------|---------| | Expenditure on consultancy | - | - | 55 | 55 | 83 |
IL utilised consultants to assist with creating a new organisational strategy for the organisation.
Expenditure on temporary staff/contingent labour Included in Note 5 to the accounts as “other”.
General Lighthouse Fund Annual Report and Accounts 2019-20 Reporting of compensation scheme exit packages (audited)
The number and value of compulsory redundancies and other departures agreed during the year was:
| Exit package cost band | 2019/20 | 2018/19 | 2019/20 | 2018/19 | 2019/20 | 2018/19 | |------------------------|---------|---------|---------|---------|---------|---------| | Less than £10,000 | - | - | - | - | - | - | | £10,000-£25,000 | - | - | 1 | 1 | 1 | 1 | | £25,000-£50,000 | - | - | 2 | 1 | 2 | 1 | | £50,000-£100,000 | - | - | - | - | - | - | | £100,000-£150,000 | - | - | - | - | - | - | | £150,000-£200,000 | - | - | - | - | - | - | | Greater than £200,000 | - | - | - | - | - | - | | **Total number of exit packages** | - | - | 3 | 3 | 3 | 3 | | **Total cost (£)** | - | - | 155,948 | 138,479 | 155,948 | 138,479 |
Redundancy and other departure costs have been paid in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972. Exit costs are accounted for in full in the year of departure. Where the GLAs have agreed early retirements, any additional costs are met by the GLA and not by the Civil Service pension scheme. Ill-health retirement costs are met by the pension scheme and are not included in the table above.
Diversity information
Number of persons of each gender who were employed by the GLAs as of 31 March 2020 was
(Number of whole time equivalents on 31 March 2020):
| | 2019/20 | 2019/20 | 2018/19 | 2018/19 | |------------------|---------|---------|---------|---------| | | Female | Male | Female | Male | | Commissioner/NED | 10 | 28 | 10 | 27 | | Director | 2 | 10 | 2 | 10 | | Manager | 5 | 32 | 4 | 29 | | Employee | 136 | 462 | 118 | 455 | | **Total** | 153 | 532 | 134 | 521 |
Sickness absence
Sickness absence in the three GLAs during the year was:
| | 2019/20 | 2018/19 | |------------------|---------|---------| | **Trinity House**| | | | Total number of days sickness | 3,329 | 2,934 | | Average number of days lost per employee | 11.0 | 9.9 | | **Northern Lighthouse Board** | | | | Total number of days sickness | 2,321 | 1,941 | | Average number of days lost per employee | 13.0 | 11.4 | | **Irish Lights** | | | | Total number of days sickness | 730 | 1,256 | | Average number of days lost per employee | 6.4 | 11.4 |
Average number of days lost per employee is based on total number employed of 595 (577 2018-19) which excludes lighthouse attendants & casual staff. Staff relations
There were no instances of industrial action at NLB or IL during the year (2018-19, nil). At Trinity House the Unite Union took one day of industrial action during the year in pursuit of their claim for a pay award in excess of civil service pay guidance (2018-19, nil).
Pension scheme
Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme (CSOPS) or alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s State Pension Age (or 65 if higher). From that date all newly appointed staff and the majority of those already in service joined alpha.
Before that date, staff participated in the Principal Civil Service Pension Scheme (PCSPS).
The PCSPS has four sections: three providing benefits on a final salary basis (classic, premium or classic plus) with a normal pension age of 60 and one providing benefits on a whole career basis (nuvos) with a normal pension age of 65. These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with Pensions Increase legislation. Existing members of the PCSPS, who were within 10 years of their normal pension age on 1 April 2012, remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and 5 months from their normal pension age on 1 April 2012 will switch into alpha sometime between 1 June 2015 and 1 February 2022. All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes. Members joining from October 2002 could opt for either the appropriate defined benefit arrangement or ‘money purchase’ stakeholder pension with an employer contribution (partnership pension account, see below).
Employee contributions are salary-related and range between 4.6% and 8.05% of Classic, Premium, Classic Plus, Nuvos and alpha. Benefits in Classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to three years’ initial 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. Classic plus is essentially a hybrid, with benefits for service before 1 October 2002 calculated broadly as per Classic and benefits for service from October 2002 worked out as in premium. In Nuvos, a member builds up a pension based on their pensionable earnings during the period when they were a member of the scheme. At the end of the scheme year (31 March), the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with pensions increase legislation. Benefits in alpha build up in a similar way to Nuvos, except that the accrual rate is 2.32%. In all cases, members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.
The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of Classic, Premium and Classic Plus; 65 for members of Nuvos; and the higher of 65 or state pension age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha, as appropriate. Where the official has benefits in both the PCSPS and alpha, the figure quoted is the combined value of their benefits in the two schemes, but note that part of that pension may be payable from different ages).
Further details can be found at https://www.civilservicepensionscheme.org.uk
Employer contributions for 2019-20 were:
| | TH £000 | NLB £000 | Irish Lights £000 | 2019/20 £000 | 2018/19 £000 | |------------|---------|----------|-------------------|--------------|--------------| | Employer PCSPS contributions | 3,067 | 1,860 | 1,551 | 6,478 | 5,206 |
In addition, employer contributions of £686, 0.5% (2018-19: £633, 0.5%) of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service and ill health retirement of these employees. Employer contributions are payable to the PCSPS at one of four rates in the range 26.6% to 30.1% (2018-19, 20% to 24.5%) of pensionable pay based on salary bands. The scheme’s Actuary reviews employer contributions every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2019-20 to be paid when the member retires and not the benefits paid during this period to existing pensioners.
**Partnership pensions** Employees can opt to open a partnership pension account, which is a stakeholder pension with an employer contribution. Employers’ contributions paid to one or more of a panel of four appointed stakeholder pension providers were:
| | TH £000 | NLB £000 | Irish Lights £000 | 2019/20 £000 | 2018/19 £000 | |----------------------|---------|----------|-------------------|--------------|--------------| | Employer partnership pension contributions | 10.6 | 16.4 | 0.0 | 27.0 | 17.1 |
Employer contributions are age-related and ranged from 8% to 14.75% of pensionable pay. Employers also match employee contributions up to 3% of pensionable pay.
**Ensign Retirement Plan** The NLB is a participating employer in the Ensign Retirement Plan, a scheme created on 1 April 2016 to replace the previous defined benefit Merchant Navy Officers Pension Fund. From 1 April 2018 the Ensign Retirement Plan (for the MNOPF) became part of the Ensign Retirement Plan. During 2019-20 contributions of £12,697 (2018-19, £11,893) were made relating to one member.
**Off-payroll arrangements** There were no off-payroll arrangements during the year. 3.6. Parliamentary accountability disclosures (audited)
Regularity of expenditure The GLF has complied with the regularity of expenditure requirements as set out in HM Treasury Guidance.
Losses & special payments There were no losses or special payments that are required to be disclosed per HM Treasury guidance (2018-19, £nil).
Fees and Charges Light Dues, the principal source of income to the GLF, is a tax set annually in the UK by the Maritime Minister in accordance with the Merchant Shipping Act 1995. The rates are set at a level aimed to balance income with expenditure; any surplus generated remains in the GLF to fund navigational safety in a future period.
The GLAs also charge for some commercial activities to utilise reserve capacity. GLAs’ commercial activities are charged at market rates.
None of these income streams are considered to represent a fee or charge within the scope of Managing Public Money
Remote contingent liabilities There are no remote contingent liabilities (2018-19, £nil).
EU Withdrawal On 29 March 2017, the UK Government submitted its notification to leave the EU in accordance with Article 50. On 31 January 2020, the Withdrawal Agreement between the UK and the EU became legally binding and the UK left the EU. The future relationship between the EU and the UK will be determined by negotiations taking place during a transition period ending 31 December 2020. Any subsequent changes in legislation, regulation and funding arrangements are subject to the outcome of the negotiations. As a result, an unquantifiable contingent liability is disclosed. In accordance with accounting standards, no contingent assets can be recognised.
Coronavirus In November 2019 a novel strain of coronavirus was detected and spread rapidly, leading the World Health Organisation to declare a pandemic on 11 March 2020. The pandemic caused significant economic disruption just before the financial year end. The ongoing disruption caused by the pandemic has created significant economic uncertainty, and this uncertainty is expected to continue throughout 2020. As a result, an unquantifiable contingent liability is disclosed, relating to likely increased operating costs across all GLA activities and reduced Light Dues income as a result of fewer ships calling into UK and Irish ports. This is reported as an unquantified contingent liability for the purposes of HM Treasury’s PES requirements.
Bernadette Kelly 08 December 2020 Permanent Secretary and Accounting Officer Department for Transport Great Minster House 33 Horseferry Road London SW1P 4DR 4. THE CERTIFICATE AND REPORT OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSES OF PARLIAMENT
Opinion on financial statements
I certify that I have audited the financial statements of The General Lighthouse Fund for the year ended 31 March 2020 under the Merchant Shipping Act 1995. The financial statements comprise: the Statements of Comprehensive Net Expenditure, Financial Position, Cash Flows, Changes in Taxpayers’ Equity; and the related notes, including the significant accounting policies. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration and Staff Report and the Parliamentary Accountability disclosures that is described in that report as having been audited.
In my opinion:
- the financial statements give a true and fair view of the state of the General Lighthouse Fund’s affairs as at 31 March 2020 and of surplus for the year then ended; and
- the financial statements have been properly prepared in accordance with the Merchant Shipping Act 1995 and Secretary of State directions issued thereunder.
Opinion on regularity
In my opinion, in all material respects the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.
Basis of opinions
I conducted my audit in accordance with International Standards on Auditing (ISAs) (UK) and Practice Note 10 ‘Audit of Financial Statements of Public Sector Entities in the United Kingdom’. My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my certificate. Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2016. I am independent of The General Lighthouse Fund in accordance with the ethical requirements that are relevant to my audit and the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Conclusions relating to going concern
I have nothing to report in respect of the following matters in relation to which the ISAs (UK) require me to report to you where:
- the General Lighthouse Fund use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
- the General Lighthouse Fund have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the General Lighthouse Fund’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Responsibilities of the Boards, Secretary of State and Accounting Officer for the financial statements
As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Board and the Accounting Officer are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Auditor’s responsibilities for the audit of the financial statements
My responsibility is to audit, certify and report on the financial statements in accordance with the Merchant Shipping Act 1995.
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs (UK), I exercise professional judgment and maintain professional scepticism throughout the audit. I also:
- identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the General Lighthouse Authorities’ internal control.
- evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Conclude on the appropriateness of the General Lighthouse Fund’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the General Lighthouse Fund’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my report. However, future events or conditions may cause the General Lighthouse Fund to cease to continue as a going concern.
I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.
In addition, I am required to obtain evidence sufficient to give reasonable assurance that the income and expenditure reported in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.
Other Information
The Board and Accounting Officer are responsible for the other information. The other information comprises information included in the annual report but does not include the parts of the Accountability Report described in that report as having been audited, the financial statements and my auditor’s report thereon. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.
Opinion on other matters
In my opinion:
- the parts of the Remuneration & Staff Report and the Parliamentary Accountability disclosures to be audited have been properly prepared in accordance with Secretary of State directions made under the Merchant Shipping Act 1995; • in the light of the knowledge and understanding of the General Lighthouse Fund and its environment obtained in the course of the audit, I have not identified any material misstatements in the Performance Report or the Accountability Report; and
• the information given in the Performance Report and Accountability Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which I report by exception
I have nothing to report in respect of the following matters which I report to you if, in my opinion:
• adequate accounting records have not been kept or returns adequate for my audit have not been received from branches not visited by my staff; or
• the financial statements and the parts of the Remuneration & Staff Report and the Parliamentary Accountability disclosures to be audited are not in agreement with the accounting records and returns; or
• I have not received all of the information and explanations I require for my audit; or
• the Governance Statement does not reflect compliance with HM Treasury’s guidance.
Report
I have no observations to make on these financial statements.
Gareth Davies 09 December 2020 Comptroller and Auditor General
National Audit Office 157-197 Buckingham Palace Road Victoria London SW1W 9SP 5. **Financial Statements**
**Statement of Comprehensive Net Income** for the period ended 31 March 2020
| Notes | 2019/20 £'000 | 2018/19 £'000 | |-------|---------------|---------------| | **Income** | | | | Light dues | 3 | 85,032 | 85,160 | | Other income | 4 | 9,873 | 9,115 | | **Total Income** | | 94,905 | 94,275 | | **Expenditure** | | | | Staff costs | 5 | (35,570) | (32,952) | | Amortisation | 13 | (373) | (344) | | Depreciation (owned assets) | 10 | (10,006) | (13,550) | | Depreciation (RoU assets) | 11 | (3,897) | - | | Gain/(loss) on revaluation of property, plant and equipment | 10 | (985) | (1,085) | | Wreck removal | - | - | (64) | | Other expenditure | 6 | (37,434) | (27,475) | | **Total Expenditure** | | (88,265) | (75,470) | | **Net operating income/(expenditure)** | | 6,640 | 18,805 | | Interest receivable | 7 | 279 | 265 | | Interest payable | 8 | (2,455) | (2,814) | | Revaluation of investment property | 12 | 16 | (200) | | **Income / (expenditure) for the financial year** | | 4,480 | 16,056 | | **Other comprehensive income** | | | | Items that will not be classified to net operating costs: | | | | Gain/(loss) on revaluation of property, plant and equipment | 10 | 9,620 | 401 | | Items that may be classified to net operating costs: | | | | Translation of euro reserves | | 1,102 | (721) | | **Total comprehensive income / (expenditure)** | | 15,202 | 15,736 |
Notes on pages 33 to 57 form part of these accounts
## Statement of Financial Position
as at 31 March 2020
| Notes | 2019/20 £'000 | 2018/19 £'000 | |-------|---------------|---------------| | **Assets** | | | | **Non-current assets** | | | | Property, plant and equipment (owned) | 10 | 241,219 | 260,498 | | Right of use assets (leased) | 11 | 32,899 | - | | Investment assets | 12 | 1,385 | 1,290 | | Intangible assets | 13 | 1,186 | 1,104 | | Non-current receivables | 14 | 67 | 40 | | **Total assets** | | | 276,756 | 262,932 | | **Current assets** | | | | Assets classified as held for sale | 15 | 378 | 278 | | Inventories | 16 | 4,614 | 4,202 | | Trade and other receivables | 17 | 4,837 | 5,285 | | Cash & cash equivalents | 18 | 53,801 | 58,073 | | **Total assets** | | | 63,630 | 67,838 | | **Liabilities** | | | | **Current liabilities** | | | | Trade and other payables | 19 & 23 | (14,890) | (14,104) | | Provisions | 20 | (453) | (415) | | Financial liabilities | 21 | (20,914) | (21,117) | | **Total assets less total liabilities** | | | (36,257) | (35,636) | | **Non-current liabilities** | | | | Provisions | 20 | (11,574) | (171) | | Leases & other liabilities | 22 & 23 | (12,198) | (9,905) | | Financial liabilities | 21 | (70,000) | (90,000) | | **Total assets less total liabilities** | | | (93,772) | (100,076) | | **Reserves** | | | | General fund | | 40,637 | 29,687 | | Revaluation reserve | | 169,720 | 165,371 | | **Total equity** | | | 210,357 | 195,058 |
Bernadette Kelly 08 December 2020 Permanent Secretary and Accounting Officer Department for Transport Great Minster House 33 Horseferry Road London SW1P 4DR
Notes on pages 33 to 57 form part of these accounts Statement of Cash Flows for the period ended 31 March 2020
| Cash flows from operating activities | 2019/20 | 2018/19 | |-------------------------------------|---------|---------| | Net income/(expenditure) after interest | 4,480 | 16,056 | | Loss/(profit) on disposal of property plant and equipment | 6 | 33 | | Depreciation | 10 & 11 | 14,162 | 13,550 | | Amortisation | 13 | 373 | 344 | | Impairments | 9 | 569 | 1,125 | | Revaluation of PPE, RoU and HfS assets * | 10, 11 & 15 | 985 | 1,085 | | (Increase)/decrease in trade and other receivables | 14 & 17 | 421 | 552 | | (Increase)/decrease in inventories | 16 | (412) | (40) | | Increase/(decrease) in trade payables | 19 & 22 | (408) | 1,198 | | Increase/(decrease) in accrued borrowing costs | 21 | (203) | (203) | | Increase/(decrease) in provisions | 20 | 11,441 | 113 | | Revaluation of investment properties * | 12 | (16) | 200 | | Foreign exchange translation | 8 | 23 | | | **Net cash outflow from operating activities** | 31,433 | 34,072 |
| Cash flow from investing activities | 2019/20 | 2018/19 | |-------------------------------------|---------|---------| | Purchase of property, plant & equipment | 10 | (7,902) | (9,250) | | Purchase of right of use assets | 11 | (2,432) | - | | Purchase of intangible assets | 13 | (435) | (185) | | Purchase of Investments | 12 | - | (47) | | Proceeds from disposal of property, plant & equipment | 130 | 105 | | | **Net cash outflow from investing activities** | (10,639) | (9,377) |
| Cash flows from financing activities | 2019/20 | 2018/19 | |-------------------------------------|---------|---------| | Financing repaid | 21 | (20,000) | (20,000) | | Capital element of payments in respect of leases liabilities | 23 | (5,066) | (3,436) | | **Net cash flow from financing activities** | (25,066) | (23,436) |
| **Net cash flow from all activities** | 2019/20 | 2018/19 | |-------------------------------------|---------|---------| | Net increase in cash and cash equivalents in the period | 18 | (4,272) | 1,259 | | Cash and cash equivalents at the beginning of the period | 18 | 58,073 | 56,814 | | Cash and cash equivalents at the end of the period | 18 | 53,801 | 58,073 |
- 2018/19 restated to move held for sale revaluation loss (£7k) from investment properties to PPE.
## Statement of Changes in Taxpayer Equity
for the period ended 31 March 2020
| General Fund | Revaluation Reserve | Total Reserves | |--------------|---------------------|----------------| | £'000 | £'000 | £'000 | | Balance at 31 March 2018 | 7,937 | 171,386 | 179,323 | | Income / (expenditure) for the financial year | 16,056 | - | 16,056 | | Net gain/ (loss) on revaluation of property, plant and equipment | - | 401 | 401 | | Release of revaluation reserve to the general fund re depreciation | 6,016 | (6,016) | - | | Release of revaluation reserves to the general fund re disposals | 35 | (35) | - | | 1 Foreign translation of euro reserves | (357) | (365) | (722) | | Balance at 31 March 2019 | 29,687 | 165,371 | 195,058 | | Balance at 31 March 2019 | 29,687 | 165,371 | 195,058 | | Income / (expenditure) for the financial year | 4,480 | - | 4,480 | | 2 First time adoption of IFRS 16 | 94 | - | 94 | | Net gain/ (loss) on revaluation of property, plant and equipment | - | 9,620 | 9,620 | | Release of revaluation reserve to the general fund re depreciation | 5,772 | (5,772) | - | | Release of revaluation reserves to the general fund re disposals | 17 | (17) | - | | Release of revaluation reserves to the general fund re reclasifications | 42 | (42) | - | | 1 Foreign translation of euro reserves | 545 | 560 | 1,105 | | Balance at 31 March 2020 | 40,637 | 169,720 | 210,357 |
1 The cumulative foreign translation of euro reserves is £-3.47m as measured from the inception of the Statement of Changes in Equity on 1 April 2009.
2 IFRS 16 adoption has resulted in an additional £9.1m of lease liabilities disclosed on the SoFP (£22.1 less existing finance leases of £13m). RoU assets of £9.2m are recognised leaving a £94k reserves adjustment (gain) arising from RoU assets leased at below market values (peppercorn leases). 6. Notes to the accounts for the year ended 31 March 2020
Notes to the financial statements provide additional information required by statute and accounting standards to explain a particular feature of the financial statements. The notes which follow will also provide explanations and additional disclosures to assist readers’ understanding and interpretation of the financial statements.
1 Accounting policies
a) Accounting convention
These accounts have been prepared in accordance with the 2019-20 Government Financial Reporting Manual (FReM) issued by HM Treasury. The accounting policies contained in the FReM follow International Accounting Standards as adopted or interpreted for the public sector. Where the FReM permits a choice of accounting policy, the accounting policy which has been judged to be the most appropriate to the particular circumstances of the GLF for the purpose of giving a true and fair view has been selected. The GLF’s accounting policies have been applied consistently in dealing with items considered material in relation to the accounts. In addition, the accounts have been prepared in accordance with the accounts direction issued by the Secretary of State for Transport.
Many of the material balances and transactions in these statements, such as property, plant and equipment, are underpinned by surveyors’ valuations. Surveyors have reported that COVID-19 is a source of “material valuation uncertainty” as defined by the Royal Institute of Chartered Surveyors (RICS) Valuation – Global Standards, effective 31 January 2020. The following inference is made: that this does not mean that their valuations cannot be relied upon, but rather that less certainty should be attached to those valuations. The GLF does not consider the limit of uncertainty on the total value of these balances to be material.
b) Basis of consolidation
In accordance with the accounts direction issued by the secretary of State for Transport 25 September 2019, these financial statements comprise a consolidation of the core GLF administration accounts, the Light Dues collection accounts along with the accounts of the Trinity House Lighthouse Service, the Commissioners of Northern Lighthouses (the Northern Lighthouse Board) and the Commissioners of Irish Lights (Irish Lights).
c) Basis of preparation
These financial statements have been prepared on a going concern basis under the historical cost convention modified to account for the revaluation of property, plant and equipment. The going concern basis is considered appropriate as the GLF is funded from a tax (Light Dues), the GLAs are NDPBs of the Department and the core GLA functions are statutory.
Figures are presented in pounds sterling and are rounded to the nearest £1,000. Cash transactions between pounds sterling and a foreign currency are recorded using the exchange rate applicable on the day or that applied to the transaction by the bank. Euro payments and receipts are recorded in pounds sterling using the average rate for the preceding month, for all other in year transactions requiring translation to pounds sterling the average rate for the year is used £1=€1.1438 (2018-19 £1=€1.1342). Assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at 31 March 2020 £1=€1.1306 (31 March 2019 £1=€1.1605). Translation differences are recognised in the Statement of Comprehensive Net Income.
d) New standards and interpretations adopted early
IFRS 16 (Leases) has been adopted for the first time in these financial statements. The Secretary of State for transport issued the GLF and the GLAs with an accounts direction mandating early adoption to ensure accounting policy is aligned across the transport group which also adopted early. This standard is adopted by the cumulative catch-up method, as such, the comparatives for 2018-19 reflect the requirements of IAS 17 (Leases).
e) New standards and interpretations not yet adopted
The standards listed below are not yet effective for the year ended 31 March 2020 and have not been applied in preparing these financial statements.
IFRS 17 Insurance Contracts requires a discounted cash flow approach to accounting for insurance contracts. Subject to adoption, it may become effective for accounting periods commencing on, or after, 1 January 2021 and should be included in the 2023-24 FReM at the earliest. The GLF considers that it has no contracts which meet the definition of insurance contracts. The GLF does not consider that any other new, or revised standards, or interpretation will have a material impact
f) Income In accordance with the Merchant Shipping Act 1995, the GLAs are permitted to sell reserve capacity. Income from these activities is recognised in the period contractual obligations are met in accordance with IFRS 15. The principal source of income for the GL is Light Dues, a tax on ships entering the UK or the Republic of Ireland. Revenue from Light Dues is recognised at the point a vessel arrives into port i.e. the vessel arrival is treated as the contractual/taxable event as required by the FReM. In addition to IRL Light Dues the GLF receives a contribution from the Irish Government towards the work of Irish Lights in the Republic of Ireland.
g) Intangible assets Computer Software has been capitalised at cost and is amortised on a straight-line basis over the estimated useful economic life of between 3 to 5 years dependent on the expected operating life of the asset. Intangible Assets are held at cost less amortisation. Intangible licences have been capitalised at cost and are amortised over the life of the licence. Amortisation is calculated on a monthly basis and is commenced in the month after original purchase or when the asset is brought into use and is continued up to the end of the month prior to disposal. Intangibles are subsequently valued using the revaluation model, as described in IAS 38. Any increases in value are taken to the revaluation reserve. Any decreases are taken initially to the revaluation reserve (insofar as there is a balance for that specific asset) and otherwise to the Statement of Comprehensive Net Income. If an intangible asset cannot be revalued because there is no active market for assets of that type these intangible assets are expressed at their current value through the application of Modified Historical Cost Accounting as a proxy for fair value less any accumulated amortisation or impairment losses.
h) Pension benefits Past and present employees are covered by the provisions of the Principal Civil Service Pension Scheme (PCSPS) and or alpha a new pension scheme introduced in 1 April 2015 and described in Note 25. The defined schemes are unfunded and are mostly contributory except in respect of dependants’ benefits. The GLAs recognise the expected cost of these elements on a systematic and rational basis over the period during which it benefits from employees’ services. It does this by payment to the PCSPS of amounts calculated on an accruing basis. Liability for payment of future benefits is a charge on the PCSPS. In respect of the defined contribution schemes, the GLAs recognise the contributions payable for the year.
The GLAs recognise liabilities for short-term employee benefits (which fall due within twelve months of the period in which they are earned). In practice, all material short-term employee benefits are settled during the period in which they are earned. The GLAs are required to pay, as termination benefits, the additional cost of benefits, beyond the normal PCSPS benefits, in respect of employees who retire early, unless the retirements are on approved medical grounds.
i) Capitalisation Non-Current assets are recognised where the economic life of the item of property, plant and equipment exceeds one year; the cost of the item can be reliably measured, and the original cost is greater than £5,000 (€8,000).
Assets are recognised initially at cost, which comprises purchase price, any costs of bringing assets to the location and condition necessary for them to be capable of operating in the intended manner, and initial estimates of the costs of dismantling and removing the assets where an obligation to dismantle or remove the assets arises from their acquisition or usage.
Subsequent costs of day-to-day servicing are expensed as incurred. Where regular major inspections of assets are required for their continuing operation, the costs of such inspections are capitalised and the carrying value of the previous inspection is derecognised, for example Dry Dock and Repair (DD&R) of ships.
Expenditure on renewal of structures is capitalised when the planned maintenance spend enhances or replaces the service potential of the structure. All routine maintenance expenditure is charged to the Statement of Comprehensive Net Income.
Internal staff and other costs that can be attributed directly to the construction of an asset, including renewals of structures that are capitalised, are capitalised.
Operating software, without which related hardware cannot operate, is capitalised, with the value of the related hardware, as property, plant and equipment. Application software, which is not an integral part of the related hardware, is capitalised separately as an intangible non-current asset. Any gains or losses on the eventual disposal of property, plant and equipment are recognised in the Statement of Comprehensive Net Income when the asset is derecognised. Gains are not classed as revenue.
j) Valuation After recognition, the item of Property, Plant and Equipment is carried at Fair Value in accordance with IAS16 as adapted for the public sector in the current FReM. The assets are expressed at their current value at regular valuation or through the application of Modified Historic Cost Accounting. For assets of low value and/or with a useful life of 5 years or less, Depreciated Historic Cost (DHC) is considered as a proxy for Fair Value.
| Asset Class | Valuation Method | Valued by | |-------------------------------------------------|-------------------------------------------------------|---------------------------------------------------------------------------| | Non Specialised Land & Buildings | Fair Value, using Existing Use Valuation principles | RICS Valuation Statement (UKVS) 1.1 Professional valuation every 5 years. Value plus indices in intervening years. | | Specialised Property | Fair Value using Depreciated Replacement Cost principles (DRC) | RICS Valuation Statement (UKVS) 1.1 Professional valuation every 5 years. Value plus indices in intervening years. | | Non-Operational Property\* | Market Value (MV) | Specified as Obsolete, Assets Held for Sale or Investment Assets. Professional Valuation annually | | Tenders, Ancillary Craft & Lightvessels | Fair Value | Professional Valuation Annually | | Buoys | Fair Value | Internally using MV of recent purchases, then on an annual basis using MV of recent purchases, or recognised indices, as appropriate. | | Beacons | Fair Value | RICS Valuation Statement (UKVS) 1.1 (valued at DRC if specialised and defined as such under the RICS Red Book) valuation every 5 years, Value plus indices in intervening years. | | Plant, Machinery & IT Equipment - Low Value and short life | Depreciated Historic Cost | N/A | | Plant & Machinery – Not included above | Fair Value | RICS Valuation Statement (UKVS) 4.1 & 4.3 Professional valuation as base cost, plus indices annually thereafter. | | Plant and Machinery at Lighthouses | FV using Depreciated Replacement Cost principles (DRC) | UKVS 1.1 (valued at DRC if specialised and defined as such under the RICS Red Book) Professional valuation every 5 years, Value plus indices in intervening years. |
\*Non-Operational in this context relates to property that is not required for the GLA to carry out its statutory function.
Where assets are re-valued through professional valuation or through the use of indices, the accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount restated to the re-valued amount of the asset. If the assets carrying amount is increased as a result of revaluation, the increase is recognised in other comprehensive income and accumulated in equity in the Revaluation Reserve. However, the increase shall be recognised in the statement of Comprehensive Net Income to the extent that it reverses a revaluation decrease of that class of asset previously recognised in profit and loss. If the assets carrying amount is decreased as a result of revaluation, the decrease is recognised in the statement of Comprehensive Net Income. However, the decrease shall be recognised in other comprehensive income to the extent of any credit balance existing in the revaluation reserve. The decrease recognised in other comprehensive income reduces the amount held in the revaluation reserve in respect of that asset. k) Depreciation Depreciation is calculated on an annual basis and it is commenced in the financial year after original purchase and continued up to the end of the financial year in which the sale or disposal takes place. Assets in the course of construction are not depreciated.
Depreciation is charged on a straight-line basis having regard to the estimated operating lives as follows:
| Categories | Depreciation lives | Categories | Depreciation lives | |-----------------------------------|--------------------|-----------------------------------|--------------------| | Land and buildings | | Steel buoys | Up to 50 years | | Land | Not Depreciated | Beacons | Up to 100 years | | Lighthouses (Building Structure) | 25 - 150 years | Plastic buoys | 10 years | | Lighthouse Improvements | 25 years | Super structures | 5 - 15 years | | or remaining Life if less | 50 years | Solarisation costs | 10 years | | Other Buildings | | | | | Tenders and ancillary craft | | Plant and machinery | | | Tenders\* | 25 years | Lighthouses | 15 - 25 years | | Tenders (Dry Dock and Repair) | Up to 5 Years\*\* | Automation equipment | 15 - 25 years | | Workboats | Up to 25 years | Racons & Radio Beacons | 15 – 25 years | | Lightvessels | | Depots and Workshops | 10 - 25 years | | Lightvessel (hulls) | 50 years | Office Equipment | Up to 10 years | | Lightvessel (hull conversions) | 15 years | Vehicles | 5 - 15 years | | Lightvessel (Dry Dock and Repair) | 7 years\*\* | Computers - Major systems | 5 years | | Intangible | | Computers – Other | 3 years | | Software | 3 to 5 years | AIS Equipment | 7 - 10 Years | | Licences | Term of licence | DGPS | 10 Years |
- Tenders held under finance leases are depreciated over 25 years, being the expected useful life. The primary lease period is less than this but a secondary period sufficient to cover the balance is available. \*\* Depending on Dry Docking Schedule.
l) Leases Scope and classification In accordance with IFRS 16, contracts, or parts of a contract that convey the right to use an asset in exchange for consideration are accounted for as leases. The FReM expands the scope of IFRS 16 to include arrangements with nil consideration.
Contracts for services are evaluated to determine whether they convey the right to control the use of an identified asset, as represented by rights both to obtain substantially all the economic benefits from that asset and to direct its use. In such cases, the relevant part is treated as a lease.
Low-value items are excluded from lease treatment, defined as items costing less than £5,000 when new, provided they are not highly dependent on or integrated with other items. Contracts with a term shorter than twelve months are also excluded.
The lease term comprises the non-cancellable period, together with any extension options it is reasonably certain will be exercised and any termination options it is reasonably certain will not be exercised.
Initial recognition At the commencement of a lease (or the IFRS 16 transition date, if later), the GLF recognises a right-of-use asset and a lease liability.
The lease liability is measured as the sum of payments, net of value added tax, for the remaining lease term (as defined above), discounted either by the rate implicit in the lease, or, where this cannot be determined, the incremental cost of government borrowing provided by HMT (1.99% from 1 April 2019 to 31 December 2019, 1.27% thereafter). The payments included in the liability are those that are fixed or in-substance fixed, excluding changes arising, for example, from future rent reviews or changes in an index.
The right-of-use (RoU) asset is measured at the value of the liability, adjusted for: any payments made before the commencement date; lease incentives received; incremental costs of obtaining the lease; and any disposal costs at the end of the lease. However, where the lease requires nominal consideration (a type of arrangement often described as a “peppercorn” lease), the asset is measured at its existing use value. Subsequent Measurement RoU assets are subsequently measured using the fair value model. The GLF considers that the cost model is a reasonable proxy for the fair value model for leases of items other than land and property, and for leases of land and property with regular rent reviews. For other leases, the asset is carried at a revalued amount. The liability is adjusted for the accrual of interest, repayments, reassessments and modifications. Reassessments and modifications are measured by re-discounting the revised cash flows; the impact is reflected in the liability and either in the asset valuation or expenditure.
Lease Expenditure Expenditure includes interest, straight-line depreciation, any asset impairments and any change in variable lease payments not included in the measurement of the liability during the period in which the triggering event occurred. Lease payments are debited against the liability. Rental payments for leases of low-value items or for those shorter than twelve months are expensed.
Leases as the Lessor Where the GLF acts as lessor, it assesses whether those leases are finance or operating leases. For finance leases, it derecognises the asset and recognises a receivable. Interest is accrued throughout the financial year and is recognised in income. For operating leases, rental income is recognised on a systematic basis, usually straight-line, over the lease term.
Transitional arrangements The following arrangements have been applied to transition from IAS 17 to IFRS 16.
- Adoption of IFRS 16 using the cumulative catch up method i.e. without restatement of comparative balances. Consequently, the Statement of Comprehensive Net Expenditure and the Statement of Financial Position for 2018-19 reflect the requirements of IAS 17;
- No reassessment of the classification of contracts previously classified as leases or service contracts under IAS 17 and IFRIC 4. However, new contracts have been classified using the IFRS 16 criteria;
- For leases previously treated as operating leases:
- To measure the liability at the present value of the remaining payments, discounted by the incremental cost of borrowing as at the transition date;
- To measure the asset at an amount equal to the liability, adjusted for any prepayment or accrual balances previously recognised for that lease;
- To exclude leases whose term ends within twelve months of first adoption;
- To use hindsight in assessing remaining lease terms;
- For leases previously treated as finance leases:
- To use the carrying amount of the lease asset and liability measured immediately before first adoption under IAS 17 as the carrying value of the right-of-use asset and lease liability as at first adoption.
Estimates and judgements For embedded leases, the GLF determines the amounts to be recognised as the right-of-use asset and lease liability based on the stand-alone price of the lease component and the non-lease component or components. This determination reflects the prices for leases of the underlying asset, where these are observable; otherwise, it maximises the use of other observable data, including the fair values of similar assets, or prices of contracts for similar non-lease components.
Some contracts cover both a lease of land which the lessee controls and rights of access through adjacent land which the lessee does not control. In more remote locations, where stand-alone prices are not readily observable, the GLF has elected to take the practical expedient of treating the entire contract as a lease. The FReM requires that right-of-use assets held under “peppercorn” leases should be measured at existing use value. These leases include historic, long-term leases as well as more recent arrangements. The GLF has distinguished these from leases in which the consideration is low, but proportionate to the asset’s value (for example, the lease of a small area of land with few alternative uses). This distinction reflects, so far as possible, recent, observable market arrangements for comparable assets (for example, current rentals).
When an existing use value is required for low values or peppercorn leases, this is calculated based on similar arrangements within the estate i.e. using current rentals for similar property as a proxy. If similar arrangements are not available a professional valuation is sought.
Leases under IAS 17 (2018/19 only) Arrangements conveying the right to use an asset are treated as leases, regardless of their legal form. Leases are classified as finance leases if the risks and rewards of ownership are transferred to the lessee. Finance leases are capitalised at the commencement of the lease term at the lower of the fair value of the leased item or the present value of the minimum lease payments. Finance charges are allocated between periods to achieve a constant rate of interest on the remaining liability balance and are charged directly against operating expenditure. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
Other leases are classified as operating leases. Operating lease payments are recognised as an expense in Net Operating Expenditure on a straight-line basis over the lease term.
m) Inventories As per the FReM, Inventories should be valued by using the Average Cost method. TH value Inventories on a First in-First-Out basis. This departure does not have a material effect on the Inventory values reported.
n) Research and Development Research and Development work is co-ordinated by the GLA Research and Development (GRAD) Policy Committee for Major Research and Development. Direct expenditure incurred via this channel or any other research and development activity is charged to the Statement of Comprehensive Net Income.
o) Taxation The fund is exempt from Corporation Tax under provisions of Section 221 of the Merchant Shipping Act 1995. The GLA are liable to account for VAT on charges rendered for services and are able to reclaim VAT on all costs under the provisions of the Value Added Tax Act 1983.
p) Provisions Provisions are made for liabilities and charges in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets where, at the reporting date, a legal or constructive liability (i.e. a present obligation from a past event) exists, the transfer of economic benefits is probable and a reasonable estimate can be made.
q) Government Grants Government Grants are recognised in full in the Statement of Comprehensive Net Income in the year in which they are received.
r) Investment properties The GLAs hold a small number of properties that are considered surplus to requirements and are currently held for their income generation potential. It has been agreed that this alternative use is in the best interests of the GLA and the General Lighthouse Fund. These properties are treated in accordance with IAS 40: Accounting for Investment Properties and are accordingly valued to open market value each year.
s) Financial assets and liabilities Financial instruments are contractual arrangements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets are typically cash or rights to receive cash or equity instruments in another entity. Financial liabilities are typically obligations to transfer cash. A contractual right to exchange financial assets or liabilities with other entities will also be a financial asset or liability, depending on whether the conditions are potentially favourable or adverse to the reporting entity.
Financial assets Loans, trade receivables and accrued income are covered by the financial instruments standards IFRS 9. Loans and receivables are recognised initially at fair value, plus transaction costs. Fair value is usually the contractual value. Thereafter, these assets are held at amortised cost. Credit loss allowances for trade receivables and similar arrangements are measured at the lifetime expected credit loss where material. No credit loss allowances are recognised for arrangements with other central government bodies.
Financial liabilities Financial liabilities are recognised initially at fair value and are subsequently measured at amortised cost using the effective interest rate. Where the effective interest rate is not materially different from the actual interest rate the actual interest rate is used instead. Financial liabilities are derecognised when extinguished.
Embedded derivatives Some hybrid contracts contain both a derivative and a non-derivative component. In such cases, the derivative component is termed an embedded derivative. Where the economic characteristics and risks of the embedded derivatives are not closely related to those of the host contract, and the host contract itself is not carried at fair value through profit or loss, the embedded derivative is split out and reported at fair value with gains and losses being recognised in the Income and Expenditure Account. As at 31 March 2020 no contracts contained embedded derivatives.
**Determining fair value**
Fair value is defined as the amount for which an asset is settled or a liability extinguished, between knowledgeable parties, in an arm’s length transaction. This is generally taken to be the transaction value, unless, where material, the fair value needs to reflect the time value of money, in which case the fair value would be calculated from discounted cash flows.
**t) Estimates**
The GLF may be liable as described in Note 25 for any shortfall in the MNOPF pension fund. The GLF takes advice from qualified actuaries in determining the extent of any shortfall and whether it may be required to make further contributions.
Provisions are estimated based on the best information available at time of reporting see note 20 for further details.
Aside from this, key estimates in the GLF accounts related to asset valuations. A number of qualified surveyors are engaged to provide professional valuations of different elements of the asset base as disclosed in Notes 10, 11 & 12. Specific estimation uncertainty arises in respect of the valuation of the lighthouse estate, the Depreciated Replacement Cost of which constitutes the largest element of the buildings category in Note 10. Key assumptions are made in the following areas:
- For each lighthouse, the GLF selects a modern equivalent asset (MEA) based on the navigation requirement at the asset’s location. This selection is based on a decision tree common to each of the GLAs which draws on key considerations for construction strategy such as whether a structure is onshore or offshore; and the degree of challenge posed by wave patterns at the location. The analysis of available construction techniques draws on the professional expertise of suitable expert GLA staff and the options emerging from recent case studies into possible rebuild or refurbishment work following market engagement. The design of this decision tree is a matter of professional judgement since more prudent engineering assumptions will tend towards the selection of more expensive MEAs, risking overvaluation, while more aggressive engineering assumptions will tend towards less expensive ones, risking undervaluation through optimism bias. GLF has followed the principal of neutrality in any judgements arising and considered the results of the decision tree based on a number of actual locations.
- Costing rates are determined for the gross replacement cost of each MEA, establishing a standard valuation to apply to each lighthouse in that category rather than costing each lighthouse individually. This portfolio approach is permitted by the FReM and RICS ‘Red Book’. These are determined based on the most recent available data from case studies, with a consideration of indexation. Adjustment factors are applied based on location and physical characteristics of the site, to reflect the varying difficulty and cost of construction, e.g. for remote islands.
- As required by the FReM, a discount is made to the gross replacement cost to reflect the GLF’s assessment of the proportion of each lighthouse’s useful life which has been expended. Condition point estimates which drive the measurement of this discount are based on the available data in respect of asset condition (including age), combined with professional judgement which considers the type of construction for the asset in use.
## 2 Analysis of operating segments
| | TH | NLB | Irish Lights | GLF | 2019/20 | 2018/19 | |----------------------|-----|-----|--------------|------|---------|---------| | | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | | Light dues income | - | - | - | 85,032 | 85,032 | 85,160 | | GLA drawdowns | 35,740 | 23,930 | 12,781 | (72,451) | - | - | | Other income | 2,635 | 1,246 | 1,220 | 4,772 | 9,873 | 9,115 | | Total income | 38,375 | 25,176 | 14,001 | 17,353 | 94,905 | 94,275 | | Gross expenditure | (46,659) | (23,637) | (15,740) | (2,229) | (88,265) | (75,470) | | Net expenditure | (8,284) | 1,539 | (1,739) | 15,124 | 6,640 | 18,805 | | Total assets | 134,473 | 104,950 | 47,214 | 53,749 | 340,386 | 330,770 |
For a further breakdown please refer to the individual GLA accounts.
## 3 Light dues
| | 2019/20 | 2018/19 | |----------------------|---------|---------| | | £'000 | £'000 | | Light dues collected in United Kingdom | 78,826 | 79,057 | | Light dues collected in Republic of Ireland | 6,206 | 6,103 | | | 85,032 | 85,160 |
## 4 Other income
| | Tri GLA | TH | NLB | Irish Lights | GLF | 2019/20 | 2018/19 | |----------------------|---------|-----|-----|--------------|------|---------|---------| | | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | | Buoy rental | - | 776 | 261 | 163 | - | 1,200 | 1,331 | | Property rental | - | 304 | 147 | 592 | - | 1,043 | 1,050 | | Other commercial income | - | - | 301 | - | - | 301 | 63 | | Tender hire | - | 803 | 475 | 434 | - | 1,712 | 2,422 | | Republic of Ireland contribution | - | - | - | 4,772 | 4,772 | 3,228 | | Grant income | 6 | 44 | 38 | - | - | 88 | 76 | | Sundry receipts | 57 | 645 | 24 | 31 | - | 757 | 945 | | | 63 | 2,572 | 1,246 | 1,220 | 4,772 | 9,873 | 9,115 | 5 Staff costs
| | TH Permanent | TH Others | NLB Permanent | NLB Others | Irish Lights Permanent | Irish Lights Others | Total 2019/20 | Total 2018/19 | |----------------------|--------------|-----------|---------------|------------|------------------------|---------------------|---------------|---------------| | Wages & salaries | 11,879 | 323 | 7,667 | 668 | 5,843 | 340 | 26,720 | 25,537 | | Social security costs| 1,302 | - | 865 | - | 418 | 15 | 2,600 | 2,437 | | Employers pension | 3,067 | - | 1,860 | - | 1,530 | 21 | 6,478 | 5,206 | | **Sub total** | **16,248** | **323** | **10,392** | **668** | **7,791** | **376** | **35,798** | **33,180** | | Other pension costs | 11 | - | 33 | - | - | 1 | 45 | 42 | | Redundancy costs | - | - | 173 | - | - | - | 173 | 138 | | **Sub total** | **16,259** | **323** | **10,598** | **668** | **7,791** | **377** | **36,016** | **33,360** | | Capitalised costs | (175) | - | - | - | (271) | - | (446) | (408) | | **Total net costs** | **16,084** | **323** | **10,598** | **668** | **7,520** | **377** | **35,570** | **32,952** |
1 includes pay in lieu of notice and liquidated leave
6 Other expenditure
| | TH £'000 | NLB £'000 | Irish Lights £'000 | GLF & Tri-GLA £'000 | 2019/20 £'000 | 2018/19 £'000 | |----------------------|----------|-----------|--------------------|----------------------|---------------|---------------| | Running costs | 13,126 | 6,433 | 4,165 | 554 | 24,278 | 23,006 | | Operating leases rentals (IAS17) | - | - | - | - | - | 2,739 | | Variable lease costs (IFRS16) | 375 | 14 | 169 | - | 558 | - | | Auditors remuneration | - | - | - | 118 | 118 | 90 | | Research and development | - | - | - | 490 | 490 | 446 | | Impairments | 569 | - | - | - | 569 | 1,125 | | Loss/(profit) on disposal of HFS1 | - | - | - | - | - | - | | Loss/(profit) on disposal of PPE2 | (27) | 3 | 57 | - | 33 | 69 | | Loss/(profit) on disposal of Int3 | - | - | - | - | - | - | | Provision provided in the year4 | 10,605 | 783 | - | - | 11,388 | - | | **Total** | **24,648**| **7,233** | **4,391** | **1,162** | **37,434** | **27,475** |
1 Held for sale assets, 2 Property plant & equipment, 3 Intangible assets, 4 Provisions are detailed in note 20
7 Interest receivable
| | TH £'000 | NLB £'000 | Irish Lights £'000 | GLF £'000 | 2019/20 £'000 | 2018/19 £'000 | |----------------------|----------|-----------|--------------------|-----------|---------------|---------------| | Bank interest receivable | 1 | 2 | - | 276 | 279 | 265 |
8 Interest payable
| | TH £'000 | NLB £'000 | Irish Lights £'000 | GLF £'000 | 2019/20 £'000 | 2018/19 £'000 | |----------------------|----------|-----------|--------------------|-----------|---------------|---------------| | Interest on DfT loan | - | - | - | 1,929 | 1,929 | 2,335 | | Interest on finance leases (IAS17) | - | - | - | - | - | 479 | | Interest on leases (IFRS16) | 203 | 271 | 52 | - | 526 | - | | **Total** | **203** | **271** | **52** | **1,929** | **2,455** | **2,814** | 9 Impairments
Assets which have decreased in value as a result of revaluations have been separately identified as revaluation losses on the Statement of Comprehensive Net Income. Other impairments are as follows:
2019-20 During the year a number of TH capital projects were completed including work to THV Patricia, Portland Bill Lighthouse & visitor centre and storage buildings in Harwich. As of 31 March 2020, the costs of these projects exceeded the Depreciated Replacement Cost valuation by £569,000 and in line with the requirements of FReM, these have been treated as impairments and transferred to the Statement of Comprehensive Net Income.
No impairments were reported at NLB or IL in the period to 31 March 2020.
2018-19 During the year a number of TH capital projects were completed including work to Lightvessel 10, THV Alert, Start Point and Sark Lighthouses. As of 31 March 2019, the costs of these projects exceeded the Depreciated Replacement Cost valuation by £1,125,000 and in line with the requirements of FReM, these have been treated as impairments and transferred to the Statement of Comprehensive Net Income.
No impairments were reported at NLB or IL in the period to 31 March 2019.
## 10 Property plant and equipment
### Current year
| | Land £000 | Buildings £000 | Vessels £000 | Light-IT Vessels £000 | IT Equip. £000 | Plant & Mach. £000 | AUC\* £000 | Total £000 | |----------------------|-----------|----------------|--------------|-----------------------|----------------|-------------------|-----------|------------| | **Cost or valuation**| | | | | | | | | | 1 April 2019 | 11,441 | 152,094 | 31,460 | 9,360 | 16,042 | 2,805 | 41,426 | 2,678 | 267,306 | | Additions | - | 602 | 619 | 755 | 23 | 467 | 2,176 | 3,260 | 7,902 | | Donations | - | - | - | - | - | - | - | - | - | | Disposals | - | (12) | (415) | - | (6) | (77) | (1,043) | - | (1,553) | | Impairments | - | (125) | - | - | - | - | (139) | - | (264) | | Reclassifications | - | (44) | (26,596) | - | - | - | - | (26,640) | | | Revaluations | (127) | 4,462 | (1,648) | 545 | (594) | (242) | (2,214) | - | 182 | | Transfers | - | 605 | 108 | - | 36 | - | 897 | (1,663) | (17) | | Foreign exchange | 94 | 636 | 111 | - | 79 | 7 | 228 | 28 | 1,183 | | **At 31 March 2020** | 11,408 | 158,218 | 3,639 | 10,660 | 15,580 | 2,960 | 41,331 | 4,303 | 248,099 |
### Depreciation
| | Land £000 | Buildings £000 | Vessels £000 | Light-IT Vessels £000 | IT Equip. £000 | Plant & Mach. £000 | AUC\* £000 | Total £000 | |----------------------|-----------|----------------|--------------|-----------------------|----------------|-------------------|-----------|------------| | **1 April 2019** | - | 9 | 322 | - | 652 | 917 | 4,908 | - | 6,808 | | Charged in year | - | 3,253 | 602 | 648 | 869 | 495 | 4,139 | - | 10,006 | | Disposals | - | (1) | (415) | - | - | (77) | (909) | - | (1,402) | | Impairments | - | (16) | - | - | - | - | - | (16) | | Reclassifications | - | - | (45) | - | - | - | - | (45) | | Revaluations | - | (3,235) | (464) | (648) | (277) | (242) | (3,701) | - | (8,567) | | Transfers | - | - | - | - | - | - | - | - | - | | Foreign exchange | - | - | 4 | - | 3 | 4 | 85 | - | 96 | | **At 31 March 2020** | - | 10 | 4 | - | 1,247 | 1,097 | 4,522 | - | 6,880 |
### NBV at 31 March
| | Land £000 | Buildings £000 | Vessels £000 | Light-IT Vessels £000 | IT Equip. £000 | Plant & Mach. £000 | AUC\* £000 | Total £000 | |----------------------|-----------|----------------|--------------|-----------------------|----------------|-------------------|-----------|------------| | **At 31 March 2019** | 11,441 | 152,085 | 31,139 | 9,360 | 15,390 | 1,888 | 36,518 | 2,678 | 260,498 | | **At 31 March 2020** | 11,408 | 158,208 | 3,635 | 10,660 | 14,333 | 1,863 | 36,809 | 4,303 | 241,219 |
### Asset Financing
| | Land £000 | Buildings £000 | Vessels £000 | Light-IT Vessels £000 | IT Equip. £000 | Plant & Mach. £000 | AUC\* £000 | Total £000 | |----------------------|-----------|----------------|--------------|-----------------------|----------------|-------------------|-----------|------------| | **Owned** | 11,408 | 158,208 | 3,635 | 10,660 | 14,333 | 1,863 | 36,809 | 4,303 | 241,219 | | **On balance sheet PFI** | - | - | - | - | - | - | - | - | - | | **Total** | 11,408 | 158,208 | 3,635 | 10,660 | 14,333 | 1,863 | 36,809 | 4,303 | 241,219 |
\*Assets under Construction and Payments on Account.
The net revaluation gain for PPE is £8,749,000 (increase of £8,567,000 from restated depreciation less £182,000 decrease in gross value).
Asset revaluation gains and losses have been recognised as follows:
| | TH £000 | NLB £000 | CIL £000 | Total £000 | |----------------------|---------|----------|----------|------------| | Net revaluation gains/(losses) on property plant & equipment | 5,659 | 3,692 | (602) | 8,749 | | Net revaluation gains/(losses) on RoU assets (see note 11) | 255 | (476) | - | (221) | | Net revaluation gains/(losses) on held for sale assets (see note 15) | - | - | 107 | 107 | | **Total gains / (losses)** | 5,914 | 3,216 | (495) | 8,635 |
Of which:
| | TH £000 | NLB £000 | CIL £000 | Total £000 | |----------------------|---------|----------|----------|------------| | Revaluation gains/(losses) charged to SoCNE | 122 | 168 | (1,275) | (985) | | Net revaluation gains/(losses) posted to revaluation reserve | 5,792 | 3,048 | 780 | 9,620 | | **Total gains / (losses)** | 5,914 | 3,216 | (495) | 8,635 | Prior year
| Cost or valuation | Land £000 | Buildings £000 | Vessels £000 | Light Vessels £000 | Buoys £000 | IT Equip. £000 | Plant & Mach. £000 | AUC\* £000 | Total £000 | |-------------------|----------|----------------|-------------|-------------------|-----------|--------------|------------------|----------|-----------| | 1 April 2018 | 11,503 | 154,525 | 34,375 | 9,340 | 16,065 | 2,779 | 42,188 | 2,799 | 273,574 | | Additions | - | 1,945 | 1,745 | 430 | 100 | 326 | 1,517 | 3,187 | 9,250 | | Donations | - | - | - | - | - | - | - | - | - | | Disposals | - | - | - | - | - | - | - | - | - | | Impairments | - | - | (367) | (311) | - | - | (173) | (500) | (673) | | Reclassifications | (44) | 632 | - | - | - | - | (149) | - | 439 | | Revaluations | 43 | (5,032) | (4,514) | (355) | (145) | (260) | (2,398) | - | (12,661) | | Transfers | - | 436 | 300 | 256 | 73 | 137 | 1,493 | (3,288) | (593) | | Foreign exchange | (61) | (412) | (79) | - | (51) | (4) | (150) | (20) | (777) | | **At 31 March 2019** | **11,441** | **152,094** | **31,460** | **9,360** | **16,042**| **2,805** | **41,426** | **2,678**| **267,306**|
Depreciation
| Cost or valuation | Land £000 | Buildings £000 | Vessels £000 | Light Vessels £000 | Buoys £000 | IT Equip. £000 | Plant & Mach. £000 | AUC\* £000 | Total £000 | |-------------------|----------|----------------|-------------|-------------------|-----------|--------------|------------------|----------|-----------| | 1 April 2018 | - | 8 | 4 | 63 | 923 | 4,940 | - | 5,937 | - | | Charged in year | - | 3,613 | 4,179 | 658 | 861 | 424 | 3,815 | - | 13,550 | | Disposals | - | - | - | - | - | - | (166) | (333) | (499) | | Impairments | - | - | (49) | (79) | - | - | - | - | (128) | | Reclassifications | - | - | - | - | - | - | (14) | - | (14) | | Revaluations | - | (3,612) | (3,806) | (579) | (270) | (261) | (3,442) | - | (11,970) | | Transfers | - | - | - | - | - | - | - | - | - | | Foreign exchange | - | - | (6) | - | (2) | (3) | (57) | - | (68) | | **At 31 March 2019** | **-** | **9** | **322** | **-** | **652** | **917** | **4,909** | **-** | **6,808** |
NBV at 31 March 2018 | 11,503 | 154,517 | 34,372 | 9,340 | 16,002 | 1,856 | 37,248 | 2,799 | 267,637 |
NBV at 31 March 2019 | 11,441 | 152,085 | 31,138 | 9,360 | 15,390 | 1,888 | 36,517 | 2,678 | 260,498 |
Asset Financing
| Cost or valuation | Land £000 | Buildings £000 | Vessels £000 | Light Vessels £000 | Buoys £000 | IT Equip. £000 | Plant & Mach. £000 | AUC\* £000 | Total £000 | |-------------------|----------|----------------|-------------|-------------------|-----------|--------------|------------------|----------|-----------| | Owned | 11,441 | 152,085 | 4,938 | 9,360 | 15,390 | 1,888 | 36,517 | 2,678 | 260,498 | | Finance leased | - | - | 26,200 | 9,360 | 15,390 | 1,888 | 36,517 | 2,678 | 234,298 | | On balance sheet PFI | - | - | - | - | - | - | - | - | - | | **Total** | 11,441 | 152,085 | 31,138 | 9,360 | 15,390 | 1,888 | 36,517 | 2,678 | 260,498 |
\*Assets under construction and payments on account.
Valuations
Professional valuations were obtained from the following:
| Asset | Valuer | Organisation | Date of last full valuation | |--------------------------------------------|---------------------------------------------|-------------------------------------|-----------------------------| | TH land, buildings & beacons | Mr Richard Bryan MRICS & Mr Stephen Jones MRICS | DVS Property Specialists\* | 31st March 2018 | | TH plant, machinery & lightvessels | Mr Andrew Lloyd MRICS | DVS Property Specialists\* | 31st March 2018 | | NLB land, buildings, beacons, lighthouses, plant & machinery | Mr Joun Mcclimens MRICS. | DVS Property Specialists\* | 31st March 2018 | | IL (Rol) land, building & beacons | Mr Niall Deegan MRICS | Irish Valuation Office | 31st March 2018 | | IL (NI) land, building & beacons | Mr Sean Daly MRICS | LPS Mapping & Valuation services | 31st March 2018 | | IL (Rol) lighthouse AtoN plant | Mr Niall Deegan MRICS | Irish Valuation Office | 31st March 2018 | | IL (NI) lighthouse AtoN plant | Mr Sean Daly MRICS | LPS Mapping & Valuation services | 31st March 2018 | | IL (Rol & NI) plant & machinery | Robert McKay MScsi MRICS | McKay Asset Valuers & Auctioneers | 31st March 2018 | | All GLA Vessels | Charles Cundall (Director) | Braemar ACM Valuations Ltd | 31st March 2020 | | Navigation buoys | Internally valued based on recent purchases taking into account age | 31st March 2018 | |
- DVS Property Specialist is the commercial arm of the Valuation Office Agency 11 Right of Use Assets
| | Land £000 | Buildings £000 | Vessels £000 | Plant & Mach. £000 | Total £000 | |----------------------|-----------|----------------|--------------|--------------------|------------| | **Cost or valuation**| | | | | | | 1 April 2019 | | | | | | | Recognition | 3,836 | 187 | | 5,193 | 9,216 | | Reclassifications | - | - | 26,595 | - | 26,595 | | Additions | 504 | - | 1,928 | - | 2,432 | | Disposals | - | - | (101) | - | (101) | | Impairments | - | - | (321) | - | (321) | | Revaluations | - | - | (2,485) | - | (2,485) | | Remeasurements | (676) | - | | 38 | (638) | | Foreign exchange | 40 | - | | 4 | 44 | | **At 31 March 2020** | 3,704 | 187 | 25,616 | 5,235 | 34,742 |
| | Land £000 | Buildings £000 | Vessels £000 | Plant & Mach. £000 | Total £000 | |----------------------|-----------|----------------|--------------|--------------------|------------| | **Depreciation** | | | | | | | 1 April 2019 | | | | | | | Recognition | - | - | | - | - | | Reclassifications | - | - | | 45 | 45 | | Charged in year\* | 121 | 30 | 2,588 | 1,417 | 4,156 | | Disposals | - | - | (101) | - | (101) | | Revaluations | - | - | (2,266) | - | (2,266) | | Foreign exchange | - | - | | 9 | 9 | | **At 31 March 2020** | 121 | 30 | 266 | 1,426 | 1,843 |
| | Land £000 | Buildings £000 | Vessels £000 | Plant & Mach. £000 | Total £000 | |----------------------|-----------|----------------|--------------|--------------------|------------| | **NBV at 31 March 2019** | | | | | | | | | | | | | | **NBV at 31 March 2020** | 3,583 | 157 | 25,350 | 3,809 | 32,899 |
No prior year comparator figures are provided for RoU assets. IFRS 16 was adopted on 1 April 2019 using the cumulative catch up method in accordance with the 2019-20 FReM.
RoU assets include five of the six GLA vessels operated by GLA staff (along with one smaller vessel operated by a third party). These leases are subject to fixed term and cover the majority of the vessels estimated lives. The five vessels were previously treated as finance leases under IAS 17 and have been reclassified from PPE.
Plant & Machinery relates solely to tri-GLA helicopter leasing to the extent that the leasing costs are fixed. There is an option to extend the helicopter lease, by up to three years, beyond its initial contract period which ends in December 2022, this option has not been included in the above figures.
Land and building includes depots, remote offices, forward operating stations, pier/quay facilities and various small pieces of land required for AtoN operations. These are predominantly long term leases.
Variable lease costs are charged directly to the SOCNE see note 23 for further detail.
\*Where helicopter flying hours are separately identified as supporting capital projects, such as lighthouse modernisations, a portion of the depreciation for the year has been charged to capital additions as permitted by IAS 16 in cases where lease costs directly contribute to bringing another asset into use.
| | TH £000 | NLB £000 | Irish Lights £000 | 2019/20 £000 | |----------------------|---------|----------|-------------------|--------------| | RoU depreciation charged to SOCNI | 1,695 | 1,916 | 286 | 3,897 | | RoU depreciation charged to capital additions | 31 | 163 | 65 | 259 | | **Total** | 1,726 | 2,079 | 351 | 4,156 | 12 Investment property
| | TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | 2018/19 £'000 | |----------------------|----------|-----------|--------------------|---------------|---------------| | At 1 April | - | - | 1,290 | 1,290 | 1,826 | | Additions | - | - | - | - | 47 | | Disposals | - | - | - | - | - | | Transfers | - | - | 44 | 44 | (360) | | Revaluations | - | - | 16 | 16 | (200) | | Foreign exchange | - | - | 35 | 35 | (23) | | At 31 March | - | - | 1,385 | 1,385 | 1,290 |
IL hold a number of non-operational properties from which commercial income is derived.
Investment properties are professionally revalued annually by the same valuers used for property, plant and equipment disclosed at Note 10 above.
13 Intangible assets
Current year
| | Software £'000 | Licences £'000 | Assets in progress £'000 | Total £'000 | |----------------------|---------------|---------------|--------------------------|-------------| | Cost or valuation | | | | | | At 1 April 2019 | 3,675 | 165 | - | 3,840 | | Additions | 435 | - | - | 435 | | Donations | - | - | - | - | | Disposals | (9) | - | - | (9) | | Transfers | 16 | - | - | 16 | | Impairments | - | - | - | - | | Reclassifications | - | - | - | - | | Revaluation | - | - | - | - | | Foreign exchange | 10 | - | - | 10 | | At 31 March 2020 | 4,127 | 165 | - | 4,292 |
Amortisation
| | | | | | |----------------------|---------------|---------------|--------------------------|-------------| | At 1 April 2019 | 2,639 | 97 | - | 2,736 | | Charged in year | 366 | 7 | - | 373 | | Disposals | (9) | - | - | (9) | | Impairments | - | - | - | - | | Reclassifications | - | - | - | - | | Revaluation | - | - | - | - | | Foreign exchange | 6 | - | - | 6 | | At 31 March 2020 | 3,002 | 104 | - | 3,106 |
NBV at 31/3/19 | 1,036 | 68 | - | 1,104 | NBV at 31/3/20 | 1,125 | 61 | - | 1,186 | Intangible assets - Prior year
| Software | Licences | Assets in progress | Total | |----------|----------|--------------------|-------| | £'000 | £'000 | £'000 | £'000 |
Cost or valuation
At 1 April 2018 3,288 165 - 3,453 Additions 185 - - 185 Donations - - - - Disposals (11) - - (11) Transfers 219 - - 219 Impairments - - - - Reclassifications - - - - Revaluation - - - - Foreign exchange (6) - - (6)
At 31 March 2019 3,675 165 - 3,840
Amortisation
At 1 April 2018 2,316 90 - 2,406 Charged in year 337 7 - 344 Disposals (11) - - (11) Impairments - - - - Reclassifications - - - - Revaluation - - - - Foreign exchange (3) - - (3)
At 31 March 2019 2,639 97 - 2,736
NBV at 31/3/18 972 75 - 1,047 NBV at 31/3/19 1,036 68 - 1,104
14 Non-current trade and other receivables
| TH | NLB | Irish Lights | GLF | 2019/20 | 2018/19 | |----|-----|--------------|-----|---------|---------| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
Amounts falling due after one year:
Trade receivables - - - - - - Deposits and advances - - - - - - Other receivables - - - - - - Prepayments and accrued income - 67 - - 67 40 VAT recoverable - - - - - -
- 67 - - 67 40 15 Assets classified as held for sale
| | TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | 2018/19 £'000 | |------------------|----------|-----------|--------------------|---------------|---------------| | At 1 April | 15 | - | 263 | 278 | - | | Additions | - | - | - | - | - | | Disposals | (15) | - | - | (15) | - | | Transfers | - | - | - | - | 277 | | Depreciation | - | - | - | - | - | | Revaluations | - | - | 107 | 107 | 7 | | Impairment | - | - | - | - | - | | Foreign exchange | - | - | 8 | 8 | (6) | | **At 31 March** | - | - | 378 | 378 | 278 |
16 Inventories
| | TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | 2018/19 £'000 | |------------------|----------|-----------|--------------------|---------------|---------------| | Marine fuel and stores | 3,416 | 838 | 360 | 4,614 | 4,202 |
17 Trade receivables and other current assets
| | TH £'000 | NLB £'000 | Irish Lights £'000 | GLF £'000 | 2019/20 £'000 | 2018/19 £'000 | |--------------------------------|----------|-----------|--------------------|-----------|---------------|---------------| | Trade receivables | 400 | 193 | 129 | 525 | 1,247 | 1,526 | | Deposits and advances | - | 14 | - | - | 14 | 18 | | Other receivables | 49 | - | 273 | 1,128 | 1,450 | 1,409 | | Prepayments and accrued income | 799 | 136 | 170 | 11 | 1,116 | 1,483 | | VAT recoverable | 524 | 441 | 45 | - | 1,010 | 849 | | **Total** | 1,772 | 784 | 617 | 1,664 | 4,837 | 5,285 |
18 Cash and cash equivalents
| | 2019/20 £'000 | 2018/19 £'000 | |--------------------------------|---------------|---------------| | Balance at 1 April | 58,073 | 56,814 | | Net changes in cash and cash equivalent balances | (4,272) | 1,259 | | **Balance at 31 March** | 53,801 | 58,073 |
The following balances were held at:
| | 2019/20 £'000 | 2018/19 £'000 | |--------------------------------|---------------|---------------| | Government banking service | 41,366 | 42,449 | | Commercial banks and cash in hand | 12,435 | 15,624 | | **Balance at 31 March** | 53,801 | 58,073 | 19 Trade payables and other current liabilities
| | TH | NLB | Irish Lights | GLF | 2019/20 | 2018/19 | |--------------------------|-----|-----|--------------|-----|---------|---------| | | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | | Amounts falling due within one year: | | | | | | | | Other taxation and social security | 409 | - | 245 | - | 654 | 915 | | Trade payables | 943 | 1,620 | 411 | - | 2,974 | 3,313 | | Other payables | 432 | - | 283 | 111 | 826 | 643 | | Accruals and deferred income | 2,774 | 836 | 1,587 | - | 5,197 | 5,681 | | Finance leases (IAS17)\* | - | - | - | - | - | - | | Leases (IFRS16)\* | 2,234 | 2,665 | 340 | - | 5,239 | - | | **Total** | **6,792** | **5,121** | **2,866** | **111** | **14,890** | **14,104** |
- for leases see note 23
20 Provisions for liabilities and charges
| Retirement | Litigation | \*DGPS | \*Royal Sov. | Other | Total | |------------|------------|-------|-------------|-------|-------| | £’000 | £’000 | £’000 | £’001 | £’000 | £’000 | | **Balance at 1 April 2019** | 199 | 69 | - | - | 318 | 586 | | Reclassified from trade payables | - | - | - | - | - | - | | Provided in the year | 10 | 77 | 1,741 | 9,647 | 283 | 11,758 | | Provision written back | - | (18) | - | - | (53) | (71) | | Provisions utilised | (19) | (23) | - | - | (218) | (260) | | Unwinding of discount | - | - | - | - | - | - | | Foreign exchange | 5 | 2 | - | - | 7 | 14 | | **Balance at 31 March 2020** | 195 | 107 | 1,741 | 9,647 | 337 | 12,027 |
Analysis of expected of discounted flows
| In one year or less or on demand | 28 | 69 | - | - | 318 | 415 | | Between one and five years | 37 | - | - | - | - | 37 | | Later than five years | 134 | - | - | - | - | 134 | | **Balance at 31 March 2019** | 199 | 69 | - | - | 318 | 586 |
| In one year or less or on demand | 13 | 107 | - | - | 333 | 453 | | Between one and five years | 48 | - | 958 | 9,647 | 4 | 10,657 | | Later than five years | 134 | - | 783 | - | - | 917 | | **Balance at 31 March 2020** | 195 | 107 | 1,741 | 9,647 | 337 | 12,027 |
- Decommissioning projects.
The GLAs have provided for:
Retirement costs - Irish lighthouse attendants accrued earning payable on retirement.
Litigation – IL disputed claim from a contractor.
DGPS – the three GLA have given notice to withdraw their Differential GPS system from March 2022. Provision is made to dismantle and remove transmitters at seven locations.
Royal Sovereign – TH has given notice to discontinue the Royal Sovereign lighthouse. Accordingly, this offshore concrete structure, which has reached the end of its design life, will require removal by a specialist marine salvage contractor. The provision is calculated based on professional advice provided to TH by marine specialists. Key estimates include market rates for marine assets and personnel, along with the number of days estimated to complete the project and remove the structure. TH is currently in the early stages of a formal tender progress, this provision will be updated as the project progress.
Other – IL provision to repair storm damage to Irish property and for responsible withdrawal at remote sites. Other – IL & NLB have provided for asbestos related works.
Provisions provided and written back during the year have been charged to staff costs or other expenditure in the SoCNI.
21 Financial liabilities
The GLF received a loan from DfT which was used to fund the transfer of GLA pension liabilities to the PCSPS on 1 April 2014. The loan is for a fixed term of 10 years commencing 1 April 2014 and has a fixed interest rate of 2.03%. Repayments are due every 6 months on 1 April and 1 October whilst interest is calculated based on the outstanding balance at each repayment point.
| | 2019/20 £’000 | 2018/19 £’000 | |----------------------|---------------|---------------| | **Balance at 1 April** | | | | Principal repaid | 20,000 | 20,000 | | Interest paid | 2,132 | 2,538 | | Interest accrued | (1,929) | (2,335) | | **Balance at 31 March** | (90,914) | (111,117) | | Amount due within 12 months | (20,914) | (21,117) | | Amount due after 12 months | (70,000) | (90,000) |
22 Non-current trade payables and other liabilities
| | TH £’000 | NLB £’000 | Irish Lights £’000 | GLF £’000 | 2019/20 £’000 | 2018/19 £’000 | |----------------------|----------|-----------|--------------------|-----------|---------------|---------------| | **Amounts falling due after one year:** | | | | | | | | Payables, accruals and deferred income | - | - | 474 | - | 474 | 456 | | Finance leases (IAS17)\* | - | - | - | - | - | 9,449 | | Leases (IFRS16)\* | 4,658 | 4,972 | 2,094 | - | 11,724 | - | | **Total** | 4,658 | 4,972 | 2,568 | - | 12,198 | 9,905 |
- for leases see note 23 23 Leases
The GLF has implemented IFRS 16 (leases) as at 1 April 2019 using the cumulative catch up method. Prior year figures remain reported using IAS 17 (leases) and follow the disclosures below.
23.1 First-time adoption of IFRS 16
| TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | |----------|-----------|-------------------|---------------| | Adjustments from IAS 17 to IFRS 16 | | Operating lease commitments disclosed as at 31 March 2019 | 4,854 | 2,905 | 3,935 | 11,694 | | (Add): finance lease liabilities | 5,467 | 7,534 | - | 13,001 | | Impact of discounting | (750) | (108) | (1,162) | (2,020) | | Less: short-term leases not recognised as a liability | (281) | (59) | - | (340) | | Less: low-value leases not recognised as a liability | (45) | (15) | (8) | (68) | | (Add)/less: adjustments re different treatment of extension & termination options | 24 | (62) | - | (38) | | (Add)/less: adjustments re changes in the index or rate affecting variable payments | (57) | - | (50) | (107) | | IFRS 16 opening balance lease liability recognised as at 1 April 2019 | 9,212 | 10,195 | 2,715 | 22,122 |
Of which:
| TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | |----------|-----------|-------------------|---------------| | Current | 2,179 | 2,574 | 330 | 5,083 | | Non-current | 7,033 | 7,621 | 2,385 | 17,039 | | Total | 9,212 | 10,195 | 2,715 | 22,122 |
The above table reconciles the amount of operating lease commitments as at 31 March 2019 to lease liabilities as at 1 April 2019, immediately following adoption of IFRS 16. The material reconciling items are an adjustment for the impact of assessing leases under IFRS 16 compared to IAS 17.
23.2 Lease liabilities (lessee)
| TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | |----------|-----------|-------------------|---------------| | Lease liabilities (at 31 March 2020) | | Current | 2,234 | 2,665 | 340 | 5,239 | | Non-current | 4,658 | 4,972 | 2,094 | 11,724 | | Total | 6,892 | 7,637 | 2,434 | 16,963 |
Amounts falling due:
| TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | |----------|-----------|-------------------|---------------| | Not later than one year | 2234 | 2665 | 340 | 5239 | | Later than one year and not later | 3,208 | 4,944 | 616 | 8,768 | | Later than five years | 1,450 | 28 | 1,478 | 2,956 | | Total | 6,892 | 7,637 | 2,434 | 16,963 |
### Amounts recognised in expenditure
| Description | TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | |--------------------------------------------------|----------|-----------|--------------------|---------------| | Depreciation expense | 1,695 | 1,916 | 286 | 3,897 | | Interest expense | 202 | 271 | 52 | 525 | | Rental on leases of low-value | 5 | 9 | 6 | 20 | | Rental of leases expiring within 12 months | 26 | 5 | 0 | 31 | | Variable Leasing costs | 344 | 371 | 170 | 885 | | **Total** | **2,272**| **2,572** | **514** | **5,358** |
### Cash flows
| Description | TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | |--------------------------------------------------|----------|-----------|--------------------|---------------| | Interest | 202 | 271 | 52 | 525 | | Repayment of lease liability | 2,160 | 2,574 | 332 | 5,066 | | **Total** | **2,362**| **2,845** | **384** | **5,591** |
### 23.3 Lease income (lessor)
The GLF has no income from subleasing right of use assets
The GLF has no income from finance leases
| Description | TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | |--------------------------------------------------|----------|-----------|--------------------|---------------| | Lessor income from operating leases | | | | | | Lease income | 748 | 183 | 553 | 1,484 | | Variable income not depend on an index or rate | 153 | - | 62 | 215 | | **Total** | **901** | **183** | **615** | **1,699** |
Maturity analysis of operating lease payments receivable
| Amounts due: | TH £'000 | NLB £'000 | Irish Lights £'000 | 2019/20 £'000 | |--------------------------------------------------|----------|-----------|--------------------|---------------| | Within 1 year | 668 | 183 | 567 | 1,418 | | Between 1 and 2 years | 642 | 39 | 412 | 1,093 | | Between 2 and 3 years | 622 | 17 | 383 | 1,022 | | Between 3 and 4 years | 609 | 17 | 362 | 988 | | Between 4 and 5 years | 608 | 8 | 302 | 918 | | After 5 years | 2,466 | 44 | 1,783 | 4,293 | | **Total** | **5,615**| **308** | **3,809** | **9,732** | 23.4 Prior year IAS 17 obligations under operating leases
| | 2019/20 £'000 | 2018/19 £'000 | |----------------------|---------------|---------------| | **Land** | | | | Not later than one year | - | 214 | | Later than one year and not later than five years | - | 756 | | Later than five years | - | 4,636 | | **Total** | - | 5,606 | | **Buildings** | | | | Not later than one year | - | 39 | | Later than one year and not later than five years | - | 149 | | Later than five years | - | 70 | | **Total** | - | 258 | | **Other** | | | | Not later than one year | - | 1,755 | | Later than one year and not later than five years | - | 4,075 | | Later than five years | - | - | | **Total** | - | 5,830 |
23.5 Prior year IAS 17 obligations under finance leases
Obligations under finance lease relate exclusively to five of the GLA vessels. At the completion of the primary lease period, a secondary period commences at a nominal rental. When a vessel is sold, or reaches end of life, the proceeds are apportioned between the lessor and the GLA.
| | 2019/20 £'000 | 2018/19 £'000 | |----------------------|---------------|---------------| | **Other** | | | | Not later than one year | - | 3,953 | | Later than one year and not later than five years | - | 9,431 | | Later than five years | - | 586 | | **Sub - Total** | - | 13,970 | | Less interest element | - | (969) | | **Total** | - | 13,001 |
Included within trade and other payables
- 3,552
Included within non-current liabilities
- 9,449
24 Capital Commitments
Contracted capital commitments at 31 March 2020 not otherwise included in these financial statements.
| | 2019/20 £'000 | 2018/19 £'000 | |----------------------|---------------|---------------| | Property plant and equipment | 1,184 | 775 | | Intangible assets | 339 | 94 | | **Total** | 1,523 | 869 | 25 Pension Commitments
GLA employees are members of the Principal Civil Service Pension Scheme (PCSPS) or alpha - details are included in the Remuneration and Staff reports.
Merchant Navy Officers’ Pension Fund & the Ensign retirement plan
The GLAs were participating employers of the Merchant Navy Officers Pension Fund (MNOPF), a defined benefit scheme providing benefits based on final pensionable salary. The MNOPF was a funded multi-employer scheme but the GLA boards are unable to identify their share of the underlying assets and liabilities. Previously, officers who started employment with the GLAs and were members of the MNOPF were given the option of continuing MNOPF membership or joining the GLA Pension Scheme. This option is no longer available as the MNOPF closed on 31 March 2016. The assets of the scheme are held separately from the GLF, specifically in separate funds managed by trustees of the scheme. Contributions to the scheme (20.0% of pensionable salaries) were charged to the Statement of Comprehensive Net Expenditure when they were paid.
No contributions were paid to the MNOPF in the year (2018-19, £nil).
On 1 April 2016 the Ensign retirement plan was created to replace the MNOPF. During 2019-20 contributions of £12,697 (2018-19, £11,893) were made relating to one member.
The rules of the MNOPF state that participating employers may be called to make lump sum payments to make up deficits. The rules state that an employer will not be regarded as ceasing to be a participating employer as a result of ceasing to employ active members or other eligible employees. No lump sum payments were made during the year (2018-19, £nil).
Following a presentation by the trustees of the MNOPF (Ensign Pension Plan) on the 4th June 2020 it has been confirmed that the scheme has continued to progress positively. The scheme has maintained a high level of paid up employers and in insuring some of the liabilities to try to ensure the pensions are fully funded has resulted in a position as at 30 April 2020 of a funding level of 98.7% (£3,411m). Ensign have confirmed that due to their low level of held equities (c.7%) the scheme has been protected to a large extent from the current global pandemic. There are still contributions of £26.9m to be collected (c.1% of fund) which despite the impact of COVID-19 on the shipping industry it is anticipated this will still be collected. Ensign anticipate that there should be no requirement for further contributions from employers, however this cannot yet be guaranteed. Ensign plan to insure the remaining liabilities through 2024-25 and would hope that they would be in a position to wind up the scheme shortly thereafter which would allow NLB to dispense with the contingent liability.
26 Contingent liabilities
Merchant Navy Officers Pension Fund
An actuarial valuation carried out as at 31 March 2018 (see Note 25) resulted in no further calls for employer contributions. The next valuation is due at 31 March 2021 with publication expected in 2022. It is impractical to estimate any potential financial effect.
Lighthouse Estate
As a result of regular surveys, the GLAs recognise that there is a raised degree of risk at a number of lighthouse stations that may demand some of the liabilities to try to ensure the pensions are fully funded has resulted in a position as at 30 April 2020 of a funding level of 98.7% (£3,411m). Ensign have confirmed that due to their low level of held equities (c.7%) the scheme has been protected to a large extent from the current global pandemic. There are still contributions of £26.9m to be collected (c.1% of fund) which despite the impact of COVID-19 on the shipping industry it is anticipated this will still be collected. Ensign anticipate that there should be no requirement for further contributions from employers, however this cannot yet be guaranteed. Ensign plan to insure the remaining liabilities through 2024-25 and would hope that they would be in a position to wind up the scheme shortly thereafter which would allow NLB to dispense with the contingent liability.
Employers’ Liability
Prior to February 1988, NLB was self-insured for Employers’ Liability risks under a Certificate of Exemption from the then Board of Trade. Marine staff have been covered since 1965 under Protection & Indemnity insurance. Therefore, should a claim materialise (and liability/causation be established) in respect of matters arising prior to the date that Employers’ liability or P&I insurance came into effect, there may be a period for which the NLB is responsible for damages and costs as part of any settlement.
Prior to February 1988, TH was self-insured for Employer’s Liability risks under a Certificate of Exemption from the then Board of Trade. Marine staff have been covered since 1962 under Protection & Indemnity insurance. Therefore, should a claim materialise (and liability/causation be established) in respect of matters arising prior to the date that Employers’ Liability or P&I insurance came into effect, there may be a period for which TH is responsible for damages and costs as part of any settlement.
It is impractical to estimate any potential financial effect.
**Royal Sovereign Light Structure**
Provision has been made, see Note 20, to remove the Royal Sovereign Lighthouse structure, removing the base of the structure from the seabed is considered a contingent liability. The lease of the seabed requires removal of the base at the end of the lease, the lease has a remaining term of 113 years and there appears to be little appetite from the Landlord, Crown Estates, to enforce this removal at this stage. Since this removal of the base element could take place up to the year 2133, assuming it remains necessary over the long passage of time, there is significant uncertainty on the method and timing of its removal, as well as the effect of discounting, which means it is not possible to arrive at a reliable estimate of this element of the removal costs despite the decommissioning announcement. As a result, this is accounted for as a contingent liability rather than as a provision under IAS 37.
**27 Related-party transactions**
The GLF is administered by DfT who sponsor the three GLAs. For governance purposes, each GLA is considered to be a Non-Departmental Public Body (NDPB).
The GLAs and DfT are regarded to be related parties. Neither the Secretary of State for Transport nor any key officials with responsibilities for the GLF or any of the GLA board members, key managerial staff or other related parties have undertaken any material transactions with the GLF during the year.
**Trinitas Services Ltd**
TH has entered into an agreement to lease lighthouse cottages to Trinitas Services Limited (TSL), a wholly owned subsidiary of the Corporation of Trinity House. The agreement provides for some 37 lighthouse cottages at 13 locations, to be leased to Trinitas for 25 years (the lease expires in 2032). Trinitas has refurbished the cottages and has a contract with Rural Retreats to let 32 of these as holiday cottages.
The freehold interest in the properties remains with TH. The potential uplift in value at the end of the lease period arising from the refurbishments is uncertain. A ground rent is payable during the currency of each lease but there is no premium.
M Amos, Non-Executive Director of the Trinity House Lighthouse Service (THLS) Lighthouse Board, is appointed to the Board of TSL as a nominee of the Corporate Board responsible for Trinity House Charities. Commodore R Dorey is appointed to the Board of TSL as a nominee of the Corporate Board responsible for Trinity House charities. Both are members of the THLS Lighthouse Board. Commodore M Atherton, A Groom and M Glaister are appointed to the Board of TSL as nominees of the Corporate Board responsible for Trinity House charities, none of whom are members of the THLS Lighthouse Board.
**Corporation of Trinity House**
The Corporation of Trinity House owns Trinity House Tower Hill and provides accommodation for the use of TH. TH reimburses the Corporation for service charges in proportion to the floor area occupied. During 2019-20 THLS paid £307,791 to The Corporation of Trinity House in respect of service charges incurred in using office space and facilities at Trinity House, London (2018-19, £300,294).
Conversely, the Corporation of Trinity House reimburses THLS for the provision of services during the year. The Corporation paid £73,619 to THLS in respect of these services during the year (2018-19, £71,336).
**The North Ronaldsay Trust**
The North Ronaldsay Trust is a company limited by guarantee and registered in Scotland. The Trust has been established to promote the island and, in particular, both the built and natural heritage. The Trust has six nominated members including the NLB. The former NLB Director of Finance and Administration, Douglas Gorman, is currently a Director of the Company. The NLB’s liability to the Trust is limited to £1, there have been no transactions in the year and there are no outstanding balances at 31 March 2020.
**Scotland’s Lighthouse Museum Ltd** Scotland’s Lighthouse Museum (SLM) Ltd is a registered charity, whose primary purposes are to advance and promote the education of the general public, to establish and preserve a museum of the history and operation of the lighthouses in Scotland and to aid their physical preservation. The NLB Director of Engineering was a SLM Board Member until September 2016 and was succeeded by the Chief Executive. There have been no transactions between the Trust and NLB in the financial year and there are no outstanding balances at 31 March 2020.
James Coats, Junior, ‘Ferguslie’ Paisley Memorial Fund (formerly referred to as the Black Bequest) The James Coats, Junior, ‘Ferguslie’ Paisley Memorial Fund is a registered charity whose primary purpose is to provide support to former lighthouse keepers and their dependants. A decision was made in 2018-19 to close the Trust. There were no transactions of value between the NLB and the Trust, however, the use of an NLB room was given of nil consideration for the event celebrating the 20th Anniversary of the automation of the last lighthouse which was attended by former lighthouse keepers and their families. The remaining funds of £1,719.62 in the Trust were donated to the Civil Service Benevolent Fund in 2019-20.
The Northern Lighthouse Heritage Trust - Charity number SCO40872 The Northern Lighthouse Heritage Trust is a registered charity whose primary purpose is to support the preservation and conservation of lighthouse heritage. During the year a total of £1,652 was transferred in from the sale of books and prints sold by the Northern Lighthouse Board on behalf of the Trust (2018-19, £850).
28 Third Party Assets
There are other assets held by NLB on behalf of the Commissioners. These assets are a collection of furniture, books, maps, paintings and silver and do not form part of the GLF.
| | 2019/20 | 2018/19 | |----------------------|---------|---------| | Cash and investments | - | 2 | | Heritage collection | 228 | 228 | | | 228 | 230 |
29 Financial Instruments
Due to the largely non-trading nature of their activities and the method of funding from the GLF, the GLAs are not exposed to the degree of financial risk faced by other business entities. The GLAs have borrowing powers under the Merchant Shipping Act 1995 but limited powers to invest in surplus assets or funds.
Aside from trade and other receivables (Note 17) and trade and other payables (Note 19) the only financial instruments held by the GLAs are leases described in Note 23. The core GLF holds a loan from the DfT described in Note 21.
The GLF has no publicly traded derivatives or trading and available for sale securities.
All financial assets and liabilities are measured at amortised cost.
Liquidity risk Liquidity risk for all three GLAs resides with the GLF through the operation of cash funds held with the Government Banking Service and is largely dependent on the flow of Light dues levied on ships calling at UK and IRL ports.
GLA cash requirements are managed through weekly and monthly management reporting, in addition to annual forecasts for GLA requirements. A ten-year GLF funding model is refreshed bi-annually to ensure adequate financing is available. Short-term and medium-term financing issues are addressed by holding sufficient cash reserves in the GLF, whilst longer-term GLA budgets and/or the Light dues tariff would be considered when reviewing the ten-year forecast.
Credit risk Credit risk is the risk of suffering financial loss should any customers or counterparties fail to fulfil their contractual obligations to the GLF or GLAs. There are no loans receivable in the GLF accounts and the main income source is Light Dues, a tax payable on arrival into port. UK Light Dues collection is via a network of TH collectors, most of which are also members of the Institute of Chartered Shipbrokers. Collectors must pass an approval process and sign up to payment by Direct Debit. IRL Light dues are collected via Irish Revenues and Customs offices. Light Dues credit risk is considered to be very low. Interest rate risk
GLAs The GLAs have leases on vessels THV Galatea, THV Alert, THV Patricia, NLV Pole Star and NLV Pharos. It is not considered that these present any exposure to interest rate risk because the rates are fixed.
The GLAs hold working funds in a money market accounts and actively managed the balances to ensure they are at the minimum required to meet short-term cash requirements. Interest on these deposits is not material.
GLF The GLF has no liabilities that will lead to an exposure to rising interest rates. However falling or low interest rates impact on the returns the GLF earns from cash reserves held in an HSBC Liquidity Fund and GBS Deposit Account.
Currency Risks Due to the operating currency of Irish Lights being in Euros, and partially funded by the GLF from Light Dues received in the UK in sterling, the GLF has an exposure to movements in the Euro/Sterling exchange market.
Euro income from IRL Light dues and contributions from the Irish Government are retained in a Lloyds euro account until needed for Irish Lights GLF advances. The balance at 31 March 2020 was £1.92m (€1.17m).
Market Risk The GLF has no investment market risk.
Fair Values The carrying value of GLF financial assets and liabilities as at 31 March 2020 is equivalent to their Fair Value.
30 Events after reporting period
There are no events after the reporting period requiring disclosure.
Authorised for issue These financial statements are laid before the Houses of Parliament by the Secretary of State for Transport. The Accounting Officer has authorised these financial statements to be issued on the same day as the Comptroller and Auditor General signs the audit certificate.
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3ccd902d621886e98eac94162d98769bea7a5cef | DECC today publishes provisional 2011 estimates of UK greenhouse gas emissions, together with final estimates of 2010 UK greenhouse gas emissions by fuel type and end-user.
Greenhouse gas emissions – 2011 headline results
- In 2011, UK emissions of the basket of six greenhouse gases covered by the Kyoto Protocol were provisionally estimated to be 549.3 million tonnes carbon dioxide equivalent. This was 7.0 per cent lower than the 2010 figure of 590.4 million tonnes.
- Carbon dioxide (CO₂) is the main greenhouse gas, accounting for about 84 per cent of total UK greenhouse gas emissions in 2010, the latest year for which final results are available. In 2011, UK net emissions of carbon dioxide were provisionally estimated to be 456.3 million tonnes (Mt). This was 8.0 per cent lower than the 2010 figure of 495.8 Mt.
- Between 2010 and 2011, there were decreases in CO₂ emissions from most of the main sectors. The provisional estimates show decreases in emissions of 22.0 per cent (19.1 Mt) from the residential sector, 6.1 per cent (11.8 Mt) from the energy supply sector, and 8.0 per cent (6.0 Mt) from the business sector. Emissions from the transport sector were down by 1.4 per cent (1.7 Mt) since 2010. All these sectoral breakdowns are based on the source of the emissions, as opposed to where the end-user activity occurred. Emissions related to electricity generation are therefore attributed to power stations, the source of these emissions, rather than homes and businesses where electricity is used.
- The decrease in CO₂ emissions between 2010 and 2011 resulted primarily from a decrease in residential gas use, combined with a reduction in demand for electricity accompanied by lower use of gas and greater use of nuclear power for electricity generation. These results are shown in Table 1 and Figure 1 below. The time series since 1990 is shown in Table 7 towards the end of this statistical release.
**Table 1: Emissions of greenhouse gases (MtCO$\_2$e)**
| | 2010 | 2011 (p) | Change | |--------------------------|-------|----------|--------| | Total greenhouse gas emissions | 590.4 | 549.3 | -7.0% | | Net carbon dioxide emissions | 495.8 | 456.3 | -8.0% |
(p) 2011 estimates are provisional
CO$\_2$ emissions figures are for the UK and Crown Dependencies; Greenhouse gas emissions figures also include some Overseas Territories.
Carbon dioxide emissions are reported as net emissions, to include removals from the atmosphere by carbon sinks.
**Figure 1: Emissions of greenhouse gases, 1990-2011 (provisional)**
Coverage of emissions reporting
The basket of greenhouse gases covered by the Kyoto Protocol consists of six gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. In accordance with international reporting and carbon trading protocols, each of these gases is weighted by its global warming potential (GWP), so that total greenhouse gas emissions can be reported on a consistent basis. The GWP for each gas is defined as its warming influence relative to that of carbon dioxide. Greenhouse gas emissions are then presented in carbon dioxide equivalent units.
Carbon dioxide is reported in terms of net emissions, which means total emissions minus total removals of CO$\_2$ from the atmosphere by carbon sinks. Carbon sinks are incorporated within the Land Use, Land Use Change and Forestry (LULUCF) sector, which covers afforestation, reforestation, deforestation and forest management. They are defined by the United Nations Framework Convention on Climate Change (UNFCCC) as “any process, activity or mechanism which removes a greenhouse gas, an aerosol or a precursor of a greenhouse gas from the atmosphere”.
Source: AEA, DECC Unless otherwise stated, any figures included in this release represent emissions within the UK and its Crown Dependencies (Jersey, Guernsey, and the Isle of Man).
Reporting of greenhouse gas emissions under the Kyoto Protocol is based on emissions in the UK, its Crown Dependencies, and those Overseas Territories (Bermuda, Cayman Islands, Falkland Islands, Gibraltar and Montserrat) that are party to the UK ratification of the Kyoto Protocol. The Kyoto Protocol also uses a narrower definition of carbon sinks than that applied for domestic UK CO₂ reporting, which therefore results in a slightly different total. These adjustments mean that the greenhouse gas basket reported for Kyoto differs slightly from the sum of the individual gases as shown.
**Basis of the provisional 2011 estimates**
Provisional estimates of carbon dioxide emissions are produced by DECC, based on provisional inland energy consumption statistics which are being published today in DECC’s quarterly *Energy Trends* publication. Details of the provisional energy consumption statistics which have been used to estimate emissions can be found in *Energy Trends*.
Carbon dioxide accounts for the majority of the basket of UK greenhouse gas emissions (84 per cent in 2010). However, in order to give an indication of what the latest provisional carbon dioxide emissions estimates imply for the basket total, we need to also produce an estimate of emissions of the remaining gases in the basket. This estimate is based on a simple approach which assumes that the trend for these gases will be half way between ‘no change’ on 2010 and a repeat of the trend indicated by the last 11 years’ data (2000-2010).
Finally, in order to establish an estimate of total emissions which is consistent with the Kyoto Protocol definition for the basket as a whole, a further adjustment is made in respect of emissions from Overseas Territories and the narrower definition of carbon sinks used by the Protocol.
These provisional emissions estimates will be subject to revision when the final estimates are published in early 2013; however, they provide an early indication of emissions in the most recent full calendar year. The majority of provisional estimates are within 1.5 per cent of the final figures.
To ensure consistency with other National Statistics publications on UK greenhouse gas emissions, the sectoral breakdowns in this statistical release are based on National Communication sectors.
**2011 carbon dioxide emissions by source sector**
Carbon dioxide (CO₂) accounted for about 84 per cent of the UK’s man-made greenhouse gas emissions in 2010.
In 2011, an estimated 40 per cent of carbon dioxide emissions were from the energy supply sector, 26 per cent from transport, and 15 per cent from each of the business and residential sectors. Between 2010 and 2011, provisional estimates indicate that CO₂ emissions decreased in the residential sector by 22 per cent (19 Mt), 6 per cent (12 Mt) from the energy supply sector, 8 per cent (6 Mt) from the business sector, and 1 per cent (2 Mt) in the transport sector.
Since 1990, there has been a decrease in UK carbon dioxide emissions of around 23 per cent. This fall in emissions has been accompanied by a decrease in overall energy consumption over the period, of around 5 per cent. On a temperature corrected basis, energy consumption has fallen by around 6 per cent between 1990 and 2011. A number of factors explain this effect, such as changes in the efficiency in electricity generation and switching from coal to less carbon intensive fuels such as gas.
Table 2 and Figure 2 below show the breakdown of carbon dioxide emissions into the main source sectors.
**Table 2: Sources of carbon dioxide emissions, 1990-2011 (provisional) (Mt)**
| Source | 1990 | 1995 | 2000 | 2005 | 2007 | 2008 | 2009 | 2010 | 2011 (p) | |-----------------|------|------|------|------|------|------|------|------|----------| | Energy Supply | 242 | 211 | 203 | 218 | 219 | 213 | 190 | 196 | 184 | | Transport | 119 | 120 | 125 | 129 | 131 | 126 | 121 | 121 | 119 | | Business | 111 | 104 | 104 | 94 | 89 | 87 | 76 | 76 | 70 | | Residential | 79 | 81 | 87 | 84 | 78 | 80 | 75 | 87 | 67 | | Other | 39 | 36 | 31 | 27 | 24 | 22 | 16 | 17 | 16 | | Total | 590 | 552 | 550 | 551 | 542 | 529 | 478 | 496 | 456 |
(p) 2011 estimates are provisional. All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
**Figure 2: Carbon dioxide emissions by source, 1990-2011 (provisional)** Energy supply
The energy supply sector was the second biggest contributor to the decrease in CO₂ emissions between 2010 and 2011. Emissions from this sector were provisionally estimated to be 183.8 Mt in 2011, a decrease of around 6 per cent compared to 2010.
The decrease in emissions from this sector since 2010 can almost entirely be attributed to power stations. Demand for electricity was 3 per cent lower in 2011 than in 2010, and there was also a change in the fuel mix used at power stations for electricity generation. The technical problems which had been experienced at some nuclear power stations in 2010 were resolved, and there was therefore more nuclear power available for electricity generation in 2011. Consequently, there was a 17 per cent decrease in gas use for generation, alongside an 11 per cent increase in the use of nuclear power. Together, these changes resulted in a decrease of around 7 per cent in emissions from electricity generation. In 2011, CO₂ emissions from power stations, at 146.0 Mt, accounted for just under a third of all CO₂ emissions.
Figure 3 below shows the impact on emissions of the change in the fuel mix for electricity generation between 2010 and 2011.
Figure 3: Carbon dioxide emissions from electricity generation, 2010-2011 (provisional)
Emissions from the energy supply sector were estimated to be around 24 per cent lower in 2011 than they were in 1990. Between 1990 and 2011, final consumption of electricity increased by around 15 per cent; domestic electricity consumption in particular was just over 20 per cent higher in 2011 than in 1990. However, emissions from electricity generation have decreased by 28 per cent over the same period. Since 1990, there has been an upward trend throughout the period to 2010 in gas usage for electricity generation. However the sharp decrease observed in 2011 puts gas usage at power stations at its lowest level since 1998. Coal use in generation has roughly halved since 1990.
Figure 4 below shows the actual level of CO₂ emissions from electricity generation at power stations, together with the relative impact on total CO₂ emissions. The decrease in emissions from power stations since 1990 has resulted from a combination of changes in the fuel mix over the period together with greater efficiency due to improvements in technology. It is difficult to assess the relative impacts of the two, but it is likely that the majority of the saving since 1990 will have been due to fuel switching from coal to gas.
**Figure 4: Carbon dioxide emissions from electricity generated at power stations, 1990-2011 (provisional)**
**Transport**
In 2011, CO₂ emissions from the transport sector, at 119 Mt, accounted for just over a quarter of all CO₂ emissions. Between 2010 and 2011, transport emissions decreased by 1.4 per cent (1.7 Mt); lower petrol consumption outweighed the small increase in diesel consumption.
Emissions from this sector are roughly unchanged from 1990 levels (down 0.4 per cent, or 0.5 Mt). There has been a general increase in these emissions throughout the period up to 2007, but they are now at their lowest since 1992.
It should be noted that these estimates do not include emissions from international aviation and shipping; domestic aviation and shipping, however, are included.
**Residential**
In 2011, the residential sector, with emissions of 67 Mt, accounted for around 15 per cent of all CO₂ emissions. Between 2010 and 2011 there was a 22 per cent decrease in emissions from this sector, the highest decrease for any single sector, resulting from a decrease in the use of all fossil fuels, gas in particular.
Residential emissions are heavily influenced by external temperatures, and 2011 was a warmer than average year; in particular, it was significantly warmer than 2010. In the first and last quarters, 2011 was warmer than 2010 by 2.2 and 4.1 degrees Celsius respectively. This heavily contributed to the significant reduction (of 23 per cent) in the use of natural gas for space heating, which was therefore reflected by a similar fall in emissions. In 2011, emissions from this sector were estimated to be around 15 per cent lower than in 1990. This is only the third year in which emissions from this sector are below 1990 levels.
It should be noted that emissions from this sector do not include emissions from power stations related to domestic electricity consumption.
**Business**
Carbon dioxide emissions from the business sector, at 70 Mt, accounted for around 15 per cent of all CO₂ emissions in 2011. This was 8 per cent (6 Mt) lower than in 2010. Emissions from this sector were provisionally estimated to be 37 per cent below 1990 levels in 2011.
**Industrial process**
In 2011, CO₂ emissions from the industrial process sector were estimated to be 9 Mt, a reduction of around 4 per cent compared with 2010. Between 1990 and 2011, emissions from this sector are provisionally estimated to have decreased by around 47 per cent.
**Public sector**
Carbon dioxide emissions from the public sector, at 8 Mt, decreased by around 6 per cent between 2010 and 2011. It has been provisionally estimated that there has been an overall reduction of 39 per cent in emissions from this sector between 1990 and 2011.
**Agriculture, waste management and land use, land use change and forestry**
Emissions estimates for these sectors are not yet available for 2011, so the 2010 estimate has been used for this component of total UK CO₂ emissions in 2011.
On this basis, 2011 emissions from the agriculture sector, at 4 Mt, are estimated to have been 21 per cent (1 Mt) lower than in 1990. Emissions from waste management were estimated to be 0.3 Mt in 2011, while in 1990 they were estimated to be 1.2 Mt. Net land use, land use change and forestry emissions have changed from emissions of 3 Mt in 1990 to removals of 5 Mt in 2011.
**Carbon dioxide emissions by fuel type**
The amount of carbon dioxide released by the consumption of one unit of energy depends on the type of fuel consumed. For example, more CO₂ emissions result from burning one unit of coal than from one unit of gas. Emissions per unit of electricity supplied by major power producers from fossil fuels are estimated to have been 582 tonnes of carbon dioxide per GWh in 2011 overall; within this, emissions from electricity generated from coal (887 tonnes of carbon dioxide per GWh electricity supplied) were over two times higher than for electricity supplied by gas (363 tonnes of carbon dioxide per GWh). For all sources of electricity, (including nuclear, renewables and autogeneration) the average amount of carbon dioxide emitted in 2011 amounted to 428 tonnes per GWh of electricity supplied, compared to 425 tonnes per GWh in 2010.
In 2011, carbon dioxide emissions from the use of fossil fuels, including fuel used for generating electricity, were estimated at 447 Mt. This was 8 per cent lower than the 2010 figure of 486 Mt. The biggest decrease was in emissions from the use of gas, down 16 per cent (35 Mt) from 226 Mt in 2010 to 191 Mt in 2011. This largely resulted from reduced use of gas for both domestic combustion and for electricity generation at power stations.
Over the period 1990 to 2011, CO₂ emissions from fossil fuels decreased by 21 per cent. Over the same period, overall primary consumption of fossil fuels was broadly unchanged. The relatively higher decrease in emissions has been due to an increase in the use of gas accompanied by a decrease in the use of coal and other solid fuels; gas consumption as a proportion of all fossil fuels has increased from 26 per cent in 1990 to 42 per cent in 2011, whilst the proportion used of coal and other solid fuels has decreased from 34 per cent to 16 per cent over the same period. Oil use, as a proportion of all fossil fuels, has remained relatively stable over the period; this accounted for almost 40 per cent of all fossil fuels used in 1990 and 45 per cent in 2011.
Figure 5 below shows CO₂ emissions by fossil fuel between 1990 and 2011. The time series since 1990 is shown in Table 8 towards the end of this statistical release.
*Figure 5: Carbon dioxide emissions by fossil fuels: 1990-2011 (provisional)* Other results published today: 2010 greenhouse gas emissions by end-user sector
Also published today is the breakdown of 2010 greenhouse gas emissions by end-user. These results are based on, and consistent with, the breakdown of 2010 emissions by source which was published on 7th February 2012. The end-user breakdown reallocates the emissions by source in accordance with where the end-use occurred. The results shown in this breakdown are based on a number of assumptions, and we would therefore expect them to be subject to a wider margin of error than the breakdown by source.
The affect across all sectors of reallocating 2010 greenhouse gas emissions from source to end-user is shown in Figure 6 below.
Figure 6: Allocation of 2010 greenhouse gas emissions from source sectors to end-user sectors
A summary of the changes in the end-user breakdown for each gas between 2009 and 2010 can be found in Table 9 towards the end of this statistical release. This also shows a comparable summary of the breakdown of emissions by source, which was published in February.
The full end-user breakdown by National Communications category, from 1990 to 2010, can be found on the Climate Change Statistics section of the DECC website.
Emissions by gas and end-user sector
Total greenhouse gases
In 2010, three main sectors accounted for 81 per cent of all end-user greenhouse gas emissions; the business sector (31 per cent), the residential sector (27 per cent), and the transport sector (24 per cent). The largest increases in end-user emissions between 2009 and 2010 were found in the residential sector, followed by the business sector (up 9 and 2 per cent respectively). Emissions from all the other sectors were relatively unchanged compared to 2009 levels, with the exception of the waste management sector which experienced the biggest decrease of around 3 per cent.
Since 1990, emissions from all the main sectors have decreased; business by 27 per cent, residential by 7 per cent and agriculture by 20 per cent. Emissions from the transport sector have remained at the same level as they were in 1990.
Table 3 and Figure 7 below show the breakdown of greenhouse gas emissions into the main source sectors.
**Table 3: Greenhouse gas emissions by end-user, 1990-2010 (MtCO₂e)**
| Sector | 1990 | 1995 | 2000 | 2006 | 2007 | 2008 | 2009 | 2010 | |----------------------|------|------|------|------|------|------|------|------| | Energy Supply | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | Business | 245.4| 212.9| 211.4| 208.3| 205.0| 203.0| 175.2| 179.4| | Residential | 169.8| 156.8| 159.2| 163.6| 156.7| 155.1| 144.1| 157.2| | Transport | 139.9| 143.7| 147.2| 149.8| 151.4| 145.5| 139.7| 139.3| | Agriculture | 66.9 | 65.0 | 60.7 | 56.0 | 54.3 | 53.6 | 52.6 | 53.2 | | Public | 30.9 | 28.3 | 23.7 | 20.7 | 20.2 | 20.0 | 17.9 | 17.8 | | Waste Management | 45.9 | 40.0 | 29.3 | 18.6 | 18.2 | 17.6 | 17.1 | 16.5 | | Exports | 9.5 | 13.9 | 13.6 | 16.6 | 17.1 | 15.6 | 16.0 | 16.3 | | Industrial Process | 57.1 | 47.3 | 26.5 | 17.6 | 18.8 | 17.0 | 11.2 | 11.7 | | LULUCF | 3.9 | 2.5 | 0.4 | -3.1 | -3.5 | -3.9 | -4.2 | -3.8 | | Total | 769.4| 710.4| 672.0| 647.9| 638.1| 623.6| 569.6| 587.8|
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
**Figure 7: Greenhouse gas emissions by end-user, 1990-2010** **Carbon dioxide**
Total carbon dioxide (CO$\_2$) emissions in 2010 were 495.8 million tonnes, an increase of 4 per cent from 2009 (477.8 million tonnes). On an end-user basis, 91 per cent of this total was accounted for by three sectors: business, residential and transport, which represented 33 per cent, 30 per cent and 28 per cent of the total respectively.
Since 2009, there have been significant increases in emissions from the residential and business sectors (of 10 and 3 per cent respectively). Emissions from all the other sectors were estimated to be around the same level in 2010 as they were in 2009.
Since 1990, there have been notable reductions in emissions from both the business and residential sectors (down 29 and 4 per cent respectively). Emissions from transport were relatively unchanged between 1990 and 2010.
Table 4 and Figure 8 below show the breakdown of carbon dioxide emissions into the main end-user sectors.
**Table 8: Carbon dioxide emissions by end-user, 1990-2010 (Mt)**
| | 1990 | 1995 | 2000 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |--------|------|------|------|------|------|------|------|------|------| | Business | 229 | 199 | 197 | 191 | 192 | 189 | 186 | 159 | 163 | | Residential | 157 | 147 | 150 | 156 | 156 | 150 | 148 | 137 | 151 | | Transport | 137 | 140 | 144 | 148 | 147 | 149 | 143 | 138 | 137 | | Other | 68 | 67 | 59 | 57 | 54 | 54 | 51 | 44 | 45 | | Grand Total | 590 | 552 | 550 | 551 | 549 | 542 | 529 | 478 | 496 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
**Figure 8: Carbon dioxide emissions by end-user, 1990-2010**
Source: AEA Methane
Weighted by global warming potential, methane (CH₄) emissions in 2010 totalled 41.3 Mt carbon dioxide equivalent (MtCO₂e), a 2 per cent decrease from 2009 (42.0 MtCO₂e). On an end-user basis, 44 per cent of these emissions were from agriculture and 36 per cent were from landfill waste. Of these two largest contributing sectors, emissions from agriculture were at the same level in 2010 as they were in 2009, while emissions from landfill waste decreased by 4 per cent over the same period.
Since 1990, emissions from landfill waste have reduced by 66 per cent and emissions from agriculture by 20 per cent.
Table 5 and Figure 9 below show the breakdown of methane emissions into the main end-user sectors.
Table 5: Methane emissions by end-user, 1990-2010 (MtCO₂e)
| | 1990 | 1995 | 2000 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |--------|------|------|------|------|------|------|------|------|------| | Agriculture | 22.7 | 21.8 | 20.1 | 19.4 | 19.1 | 18.7 | 18.3 | 18.0 | 18.1 | | Landfill | 43.1 | 37.5 | 27.2 | 17.0 | 16.7 | 16.3 | 15.8 | 15.3 | 14.7 | | Residential | 12.2 | 9.0 | 6.0 | 4.0 | 3.7 | 3.4 | 3.3 | 3.4 | 3.4 | | Business | 13.3 | 10.2 | 6.9 | 4.2 | 3.9 | 3.4 | 3.4 | 3.1 | 3.0 | | Other | 6.2 | 5.4 | 3.8 | 2.6 | 2.4 | 2.4 | 2.2 | 2.2 | 2.0 | | Total | 97.4 | 84.0 | 64.0 | 47.1 | 45.8 | 44.2 | 43.0 | 42.0 | 41.3 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
Figure 9: Methane emissions by end-user, 1990-2010 Nitrous oxide
Weighted by global warming potential, emissions of nitrous oxide (N\\textsubscript{2}O) were 35.6 MtCO\\textsubscript{2}e in 2010, a 1 per cent increase from 2009 (35.1 MtCO\\textsubscript{2}e). On an end-user basis, emissions from agriculture, which accounted for 80 per cent of the total, increased slightly (by 1 per cent) compared with the previous year, although they were 20 per cent lower than in 1990.
In 2010, emissions from industrial process, which made up around 4 per cent of the total, were very similar to 2009 levels, but 95 per cent lower than in 1990. This reduction in the industrial process sector is largely due to the effect of adipic acid production, emissions from which fell by 95 per cent between 1998 and 1999 alone.
Table 6 and Figure 10 below show the breakdown of nitrous oxide emissions into the main source sectors.
**Table 6: Nitrous oxide emissions by end-user, 1990-2010 (MtCO\\textsubscript{2}e)**
| | 1990 | 1995 | 2000 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |----------|------|------|------|------|------|------|------|------|------| | Agriculture | 35.5 | 34.9 | 33.3 | 31.2 | 29.9 | 28.8 | 28.6 | 28.3 | 28.6 | | Business | 2.7 | 2.3 | 2.1 | 2.1 | 2.0 | 2.0 | 1.9 | 1.6 | 1.6 | | Transport | 1.6 | 2.2 | 2.0 | 1.7 | 1.6 | 1.6 | 1.4 | 1.4 | 1.4 | | Industrial Process | 24.7 | 14.9 | 5.6 | 3.0 | 2.4 | 2.8 | 2.5 | 1.2 | 1.4 | | Other | 3.2 | 3.1 | 3.0 | 2.8 | 2.8 | 2.8 | 2.6 | 2.6 | 2.6 | | Total | 67.8 | 57.4 | 46.0 | 40.9 | 38.8 | 38.1 | 37.1 | 35.1 | 35.6 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
**Figure 10: Nitrous oxide emissions by end-user, 1990-2010** Revisions to the estimates of end-user emissions
It should be noted that the historical time series of emissions by end-user is revised each year to reflect any revisions made to either the estimates of emissions by source or the other energy consumption data used in the end-user emissions calculation. In this publication, this has resulted in revisions to some end-user emissions figures for all years up to and including 2009. Further details of these revisions can be found in the National Statistics release of 7th February 2012, which covered 2010 UK greenhouse gas emissions by source.
UK performance against emissions reduction targets
The UK has a number of targets, both international and domestic, for reducing greenhouse gas emissions. These are essentially the Kyoto Protocol target and the Carbon Budgets set out under the UK Climate Change Act.
In reporting emissions reductions against these targets, the UK is required to take account of emissions trading through the various flexible mechanisms which have been established, including the European Union Emissions Trading System (EU ETS).
DECC reported on performance against these targets in detail in the National Statistics release of 7th February 2012, which covered 2010 UK greenhouse gas emissions final figures. Performance was reported so as to take account of the latest available EU ETS results, also covering the 2010 calendar year. Since these are still the latest available results from the EU ETS, it is not possible to produce a further update showing performance against targets based on the provisional 2011 emissions estimates – we will not be able to do so until after the 2011 EU ETS results become available in May 2012.
Future updates to emissions estimates
Final estimates of UK greenhouse gas emissions for 2011 will be published as National Statistics in early February 2013. These estimates will be based on the UK’s National Atmospheric Emissions Inventory for 2011, to be produced for DECC and the Devolved Administrations by AEA.
Further information and feedback
Any enquiries or comments in relation to this statistical release should be sent to DECC’s UK Greenhouse Gas Emissions Statistics and Inventory Team at:
[email protected]
Contact telephone: 0300 068 6563
The lead statistician for this publication is John Mackintosh.
Further information on climate change statistics, including Excel downloads of all the data used to compile this statistical release, can be found on the DECC website at: http://www.decc.gov.uk/en/content/cms/statistics/climate_change/climate_change.asp Notes for Editors
1. A full set of data tables can be accessed via the Climate Change Statistics pages of the DECC website.
2. The figures for 1990 to 2010 in this statistics release are from the National Atmospheric Emissions Inventory (NAEI), produced for DECC and the Devolved Administrations by AEA. Additional results will be released as they become available, including a full report to be published in April. For further information on the UK Greenhouse Gas Inventory, see the NAEI web site.
3. There are uncertainties associated with all estimates of greenhouse gas emissions. Although for any given year considerable uncertainties may surround the emissions estimates for a pollutant, it is important to note that trends over time are likely to be much more reliable. It is also important to note that the provisional 2011 estimates are subject to a greater range of uncertainty than the final figures for earlier years. For more information on these uncertainties see the Climate Change Statistics section of the DECC website.
4. The headline measure included in this statistical release has previously been reported as one of the indicators supporting the UK Government's Sustainable Development Strategy. The full Sustainable Development indicator set was last updated in 2010, and a new set of indicators are currently under development to support the Government's approach to mainstreaming Sustainable Development, with reporting requirements to be confirmed in due course.
5. Further details of the European Union Emissions Trading System can be found at the EU ETS section of the DECC website.
6. Detailed UK temperature data can be found on both the Met Office website and the Energy Statistics section of the DECC website.
ISSUED BY: Department of Energy and Climate Change 3 Whitehall Place London SW1A 2AW
TELEPHONE: Press Enquiries: 0300 068 5219
General Enquiries: 0300 060 4000
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A National Statistics publication
National Statistics are produced to high professional standards set out in the National Statistics Code of Practice. They undergo regular quality assurance reviews to ensure they meet customer needs. Table 7: UK Greenhouse Gas Emissions 1990-2011 (provisional), headline results
Greenhouse gas emissions: weighted by global warming potential (million tonnes carbon dioxide equivalent)
| Net CO₂ emissions (emissions minus removals) | 1990 | 1995 | 2000 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 (p) | |---------------------------------------------|-------|-------|-------|-------|-------|-------|-------|-------|-------|----------| | Energy supply | 242.5 | 211.5 | 203.4 | 217.6 | 223.4 | 219.3 | 212.8 | 189.8 | 195.7 | 183.8 | | Business | 110.6 | 104.5 | 104.2 | 94.1 | 91.0 | 89.3 | 87.5 | 76.0 | 75.6 | 69.6 | | Transport | 119.4 | 119.6 | 124.6 | 128.8 | 129.2 | 130.9 | 126.4 | 120.9 | 120.6 | 118.9 | | Public | 13.0 | 12.7 | 11.5 | 11.0 | 10.0 | 9.3 | 9.3 | 8.2 | 8.4 | 7.9 | | Residential | 79.0 | 80.8 | 87.1 | 84.3 | 81.7 | 78.1 | 79.9 | 74.7 | 86.5 | 67.5 | | Agriculture | 5.2 | 5.3 | 4.8 | 4.6 | 4.3 | 4.1 | 4.1 | 4.1 | 4.1 | 4.1 | | Industrial process | 16.3 | 15.0 | 14.8 | 14.2 | 13.3 | 14.6 | 13.3 | 8.6 | 9.0 | 8.7 | | Waste Management | 1.2 | 0.9 | 0.5 | 0.4 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | | LULUCF | 3.1 | 1.6 | -0.4 | -3.7 | -3.8 | -4.2 | -4.6 | -4.9 | -4.5 | -4.5 | | Total CO₂ | 590.3 | 552.0 | 550.5 | 551.2 | 549.4 | 541.8 | 529.0 | 477.8 | 495.8 | 456.3 | | Other greenhouse gases | 179.0 | 158.4 | 121.6 | 101.3 | 98.5 | 96.3 | 94.6 | 91.8 | 92.0 | 90.4 | | Kyoto greenhouse gas basket | 766.4 | 708.4 | 671.5 | 654.7 | 650.3 | 640.9 | 626.7 | 572.5 | 590.4 | 549.3 |
Notes
1. Figures shown for 2011 are provisional.
2. Provisional 2011 CO₂ emissions for the agriculture, waste and LULUCF sectors have not been estimated; 2010 estimates have been used for this component of the provisional estimates of total UK emissions.
3. Kyoto basket total differs slightly from sum of individual pollutants above as the basket uses a narrower definition for LULUCF, and includes emissions from UK Overseas Territories.
4. Emissions are presented as carbon dioxide equivalent in line with international reporting and carbon trading. To convert carbon dioxide into carbon equivalents, divide figures by 44/12.
5. The entire time series is revised each year to take account of methodological improvements in the UK emissions inventory.
6. Figures shown do not include any adjustment for the effect of the EU Emissions Trading System (EUETS), which was introduced in 2005. Table 8: UK Carbon Dioxide Emissions by fuel, 1990-2011 (provisional)
| Fuel | 1990 | 1995 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011(p) | |-----------------|------|------|------|------|------|------|------|------|------|------|------|------|------|---------| | Gas | 143.7| 186.4| 237.8| 235.6| 230.8| 234.2| 239.2| 232.0| 223.0| 226.4| 232.2| 211.3| 225.8| 190.8 | | Oil | 191.0| 178.5| 165.9| 170.2| 167.3| 165.7| 167.8| 169.7| 165.8| 165.5| 160.4| 151.7| 152.0| 147.3 | | Coal | 217.7| 151.4| 116.7| 129.0| 120.5| 129.7| 124.4| 124.7| 136.5| 126.0| 115.4| 96.5 | 100.2| 101.0 | | Other solid fuels| 15.2 | 12.4 | 11.7 | 9.8 | 10.1 | 9.1 | 8.8 | 10.0 | 10.2 | 9.8 | 9.2 | 8.9 | 8.0 | 7.5 | | Non-fuel | 22.7 | 23.3 | 18.4 | 17.4 | 16.3 | 15.8 | 14.8 | 14.8 | 13.9 | 14.0 | 11.7 | 9.5 | 9.8 | 9.7 | | Total | 590.3| 552.0| 550.5| 562.1| 544.9| 554.6| 555.0| 551.2| 549.4| 541.8| 529.0| 477.8| 495.8| 456.3 |
Notes
1. Figures shown for 2011 are provisional. Table 9: UK emissions of all greenhouse gases, carbon dioxide, methane and nitrous oxide, 2009-10, by source and end-user, National Communication categories
| Greenhouse Gas | NC Category | 2009 | 2010 | % change | 2009 | 2010 | % change | |----------------|-------------|------|------|----------|------|------|----------| | All Greenhouse gases (million tonnes carbon dioxide equivalent) | Energy Supply | 198.7 | 204.3 | 2.8 | - | - | - | | | Business | 89.0 | 89.0 | 0.0 | 175.2 | 179.4 | 2.4 | | | Transport | 122.2 | 121.9 | -0.2 | 139.7 | 139.3 | -0.3 | | | Public | 8.3 | 8.5 | 2.4 | 17.9 | 17.8 | -0.1 | | | Residential | 78.1 | 89.9 | 15.1 | 144.1 | 157.2 | 9.1 | | | Agriculture | 50.2 | 50.7 | 0.9 | 52.6 | 53.2 | 1.2 | | | Industrial Process | 10.2 | 10.9 | 6.5 | 11.2 | 11.7 | 4.6 | | | Land Use Change | -4.2 | -3.8 | -8.7 | -4.2 | -3.8 | -8.7 | | | Waste Management | 17.1 | 16.5 | -3.4 | 17.1 | 16.5 | -3.4 | | | Exports | - | - | - | 16.0 | 16.3 | 2.1 | | | Total | 569.6 | 587.8 | 3.2 | 569.6 | 587.8 | 3.2 | | Carbon dioxide (million tonnes) | Energy Supply | 189.8 | 195.7 | 3.1 | - | - | - | | | Business | 76.0 | 75.6 | -0.5 | 158.7 | 162.7 | 2.5 | | | Transport | 120.9 | 120.6 | -0.2 | 137.7 | 137.4 | -0.2 | | | Public | 8.2 | 8.4 | 2.4 | 17.4 | 17.4 | 0.1 | | | Residential | 74.7 | 86.5 | 15.8 | 137.5 | 150.5 | 9.5 | | | Agriculture | 4.1 | 4.1 | 1.5 | 6.4 | 6.6 | 3.2 | | | Industrial Process | 8.6 | 9.0 | 4.8 | 9.4 | 9.7 | 3.0 | | | Land Use Change | -4.9 | -4.5 | -7.6 | -4.9 | -4.5 | -7.6 | | | Waste Management | 0.3 | 0.3 | 1.6 | 0.3 | 0.3 | 1.6 | | | Exports | - | - | - | 15.3 | 15.7 | 2.5 | | | Total | 477.8 | 495.8 | 3.8 | 477.8 | 495.8 | 3.8 | | Methane (thousand tonnes) | Energy Supply | 356.6 | 345.7 | -3.0 | - | - | - | | | Business | 10.5 | 10.6 | 0.5 | 149.9 | 143.2 | -4.5 | | | Transport | 4.6 | 3.9 | -14.4 | 29.0 | 25.9 | -10.8 | | | Public | 0.8 | 0.8 | 2.6 | 19.3 | 17.9 | -7.0 | | | Residential | 21.6 | 23.7 | 9.5 | 159.6 | 163.8 | 2.6 | | | Agriculture | 852.1 | 856.9 | 0.6 | 855.1 | 859.7 | 0.5 | | | Industrial Process | 5.0 | 4.9 | -1.6 | 15.7 | 14.6 | -6.5 | | | Land Use Change | 1.1 | 1.4 | 19.0 | 1.1 | 1.4 | 19.0 | | | Waste Management | 745.4 | 717.4 | -3.7 | 745.4 | 717.4 | -3.7 | | | Exports | - | - | - | 22.6 | 21.2 | -5.9 | | | Total | 1997.7 | 1965.3 | -1.6 | 1997.7 | 1965.3 | -1.6 | | Nitrous oxide (thousand tonnes) | Energy Supply | 4.5 | 4.6 | 1.3 | - | - | - | | | Business | 3.5 | 3.5 | -0.9 | 5.2 | 5.3 | 1.1 | | | Transport | 3.8 | 3.8 | 0.7 | 4.5 | 4.4 | -0.3 | | | Public | 0.0 | 0.0 | 1.9 | 0.2 | 0.2 | -0.8 | | | Residential | 0.4 | 0.4 | 10.3 | 1.7 | 1.8 | 4.9 | | | Agriculture | 91.1 | 92.1 | 1.1 | 91.2 | 92.2 | 1.1 | | | Industrial Process | 3.9 | 4.4 | 11.1 | 3.9 | 4.4 | 11.1 | | | Land Use Change | 2.1 | 2.0 | -1.7 | 2.1 | 2.0 | -1.7 | | | Waste Management | 3.9 | 3.9 | -0.4 | 3.9 | 3.9 | -0.4 | | | Exports | - | - | - | 0.6 | 0.6 | -5.5 | | | Total | 113.2 | 114.7 | 1.3 | 113.2 | 114.7 | 1.3 |
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b50993353c1c08c94d1d83314c48f2ab2c176f2a | DECC today publishes provisional 2012 estimates of UK greenhouse gas emissions, together with final estimates of 2011 UK greenhouse gas emissions by fuel type and end-user.
Greenhouse gas emissions – 2012 headline results
- In 2012, UK emissions of the basket of six greenhouse gases covered by the Kyoto Protocol were provisionally estimated to be 571.6 million tonnes carbon dioxide equivalent. This was 3.5 per cent higher than the 2011 figure of 552.6 million tonnes.
- Carbon dioxide (CO₂) is the main greenhouse gas, accounting for about 83 per cent of total UK greenhouse gas emissions in 2011, the latest year for which final results are available. In 2012, UK net emissions of carbon dioxide were provisionally estimated to be 479.1 million tonnes (Mt). This was 4.5 per cent higher than the 2011 figure of 458.6 Mt.
- Between 2011 and 2012, there were increases in CO₂ emissions from most of the main sectors. The provisional estimates show increases in emissions of 5.5 per cent (9.9 Mt) from the energy supply sector, 11.8 per cent (7.8 Mt) from the residential sector, and 4.8 per cent (3.6 Mt) from the business sector. Emissions from the transport sector were down by 1.2 per cent (1.4 Mt) from 2011. All these sectoral breakdowns are based on the source of the emissions, as opposed to where the end-user activity occurred. Emissions related to electricity generation are therefore attributed to power stations, the source of these emissions, rather than homes and businesses where electricity is used.
- The increase in CO₂ emissions between 2011 and 2012 resulted primarily from lower use of gas and greater use of coal for electricity generation at power stations, combined with an increase in residential gas use. The headline results are shown in Table 1 and Figure 1 below. The time series for selected years since 1990 is shown in Table 17 towards the end of this statistical release.
**Table 1: Emissions of greenhouse gases (MtCO$\_2$e)**
| | 2011 | 2012(p) | Change | |--------------------------|------|---------|---------| | Total greenhouse gas emissions | 552.6 | 571.6 | +3.5% | | Carbon dioxide emissions | 458.6 | 479.1 | +4.5% |
(p) 2012 estimates are provisional Carbon dioxide emissions figures are for the UK and Crown Dependencies; Total greenhouse gas emissions figures also include some Overseas Territories. Emissions are reported as net emissions, to include removals from the atmosphere by carbon sinks.
**Figure 1: Emissions of greenhouse gases, 1990-2012 (provisional)**
**Coverage of emissions reporting**
The basket of greenhouse gases covered by the Kyoto Protocol consists of six gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. In accordance with international reporting and carbon trading protocols, each of these gases is weighted by its global warming potential (GWP), so that total greenhouse gas emissions can be reported on a consistent basis. The GWP for each gas is defined as its warming influence relative to that of carbon dioxide. Greenhouse gas emissions are then presented in carbon dioxide equivalent units.
Carbon dioxide is reported in terms of net emissions, which means total emissions minus total removals of CO$\_2$ from the atmosphere by carbon sinks. Carbon sinks are incorporated within the Land Use, Land Use Change and Forestry (LULUCF) sector, which covers afforestation, reforestation, deforestation and forest management. They are defined by the United Nations Framework Convention on Climate Change (UNFCCC) as “any process, activity or mechanism which removes a greenhouse gas, an aerosol or a precursor of a greenhouse gas from the atmosphere”.
Unless otherwise stated, any figures included in this release represent emissions within the UK and its Crown Dependencies (Jersey, Guernsey, and the Isle of Man).
Reporting of greenhouse gas emissions under the Kyoto Protocol is based on emissions in the UK, its Crown Dependencies, and those Overseas Territories (Bermuda, Cayman Islands, Falkland Islands, Gibraltar and Montserrat) that are party to the UK ratification of the Kyoto Protocol. The Kyoto Protocol also uses a narrower definition of carbon sinks than that applied for domestic UK CO₂ reporting, which therefore results in a slightly different total. These adjustments mean that the greenhouse gas basket reported for Kyoto differs slightly from the sum of the individual gases as shown.
**Basis of the provisional 2012 estimates**
Provisional estimates of carbon dioxide emissions are produced based on provisional inland energy consumption statistics which are being published today in DECC’s quarterly *Energy Trends* publication. Details of the provisional energy consumption statistics which have been used to estimate emissions can be found in *Energy Trends*.
Carbon dioxide accounts for the majority of the basket of UK greenhouse gas emissions (83 per cent in 2011). However, in order to give an indication of what the latest provisional carbon dioxide emissions estimates imply for the basket total, we need to also produce an estimate of emissions of the remaining gases in the basket. This estimate is based on a simple approach which assumes that the trend for these gases will be half-way between no change on 2011 and a repeat of the trend indicated by the last 12 years’ data (2000-2011).
Finally, in order to establish an estimate of total emissions which is consistent with the Kyoto Protocol definition for the basket as a whole, a further adjustment is made in respect of emissions from Overseas Territories and the narrower definition of carbon sinks used by the Protocol.
These provisional emissions estimates will be subject to revision when the final estimates are published in early 2014; however, they provide an early indication of emissions in the most recent full calendar year. The majority of provisional estimates are within 1.5 per cent of the final figures.
To ensure consistency with other National Statistics publications on UK greenhouse gas emissions, the sectoral breakdowns in this statistical release are based on the UK’s *National Communication* sectors, by which we report our greenhouse gas emissions to the UNFCCC. 2012 carbon dioxide emissions by source sector
Carbon dioxide (CO₂) accounted for about 83 per cent of the UK’s anthropogenic (man-made) greenhouse gas emissions in 2011.
In 2012, an estimated 40 per cent of carbon dioxide emissions were from the energy supply sector, 24 per cent from transport, 17 per cent from business and 15 per cent from the residential sector.
Between 2011 and 2012, provisional estimates indicate that CO₂ emissions increased by 5.5 per cent (9.9 Mt) in the energy supply sector, 11.8 per cent (7.8 Mt) in the residential sector and 4.8 per cent (3.6 Mt) in the business sector. Emissions from the transport sector were down by 1.2 per cent (1.4 Mt) from 2011.
Since 1990, there has been a decrease in UK carbon dioxide emissions of around 19 per cent. This fall in emissions has been accompanied by a decrease in overall energy consumption over the period, of around 3 per cent. If this figure is adjusted to allow for the effect of temperature, energy consumption has fallen by around 6 per cent between 1990 and 2012. A number of factors explain this effect, such as changes in the efficiency in electricity generation and switching from coal to less carbon intensive fuels such as gas.
Table 2 and Figure 2 below show the breakdown of carbon dioxide emissions into the main source sectors.
Table 2: Sources of carbon dioxide emissions, 1990-2012 (provisional) (Mt)
| | 1990 | 1995 | 2000 | 2005 | 2008 | 2009 | 2010 | 2011 | 2012 (p) | |----------|------|------|------|------|------|------|------|------|----------| | Energy Supply | 241 | 210 | 203 | 216 | 213 | 190 | 195 | 182 | 192 | | Transport | 120 | 120 | 125 | 129 | 125 | 121 | 119 | 117 | 116 | | Business | 113 | 107 | 107 | 97 | 90 | 79 | 79 | 76 | 79 | | Residential | 79 | 81 | 87 | 84 | 80 | 75 | 87 | 66 | 74 | | Other | 39 | 36 | 31 | 27 | 23 | 17 | 18 | 17 | 18 | | Total | 592 | 554 | 553 | 554 | 531 | 481 | 498 | 459 | 479 |
(p) 2012 estimates are provisional. All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories. Energy supply
The energy supply sector was the largest contributor to the increase in CO₂ emissions between 2011 and 2012. Emissions from this sector were provisionally estimated to be 192.1 Mt in 2012, an increase of around 5 per cent compared to 2011.
The increase in emissions from this sector since 2010 can almost entirely be attributed to power stations. Although demand for electricity was broadly unchanged, there was a substantial change in the fuel mix used at power stations for electricity generation, with significantly less gas and significantly more coal being used. There was a 31 per cent decrease in gas use for generation, alongside a 31 per cent increase in the use of coal. Together, these changes resulted in an increase of around 8 per cent in emissions from electricity generation. In 2012, CO₂ emissions from power stations, at 156.1 Mt, accounted for just under a third of all CO₂ emissions.
Figure 3 and figure 4 below shows the impact on emissions of the change in the fuel mix for electricity generation between 1990 and 2012. Emissions from the energy supply sector were estimated to be around 20 per cent lower in 2012 than they were in 1990. Between 1990 and 2012, final consumption of electricity increased by around 16 per cent; domestic electricity consumption in particular was around 21 per cent higher in 2012 than in 1990. However, emissions from electricity generation have decreased by 23 per cent over the same period. Between 1990 and 2010, there was an upward trend in gas usage for electricity generation. However the sharp decreases observed in 2011 and 2012 now put gas usage at power stations around 44 per cent below the 2008 peak level. Conversely, there was a 31 per cent increase in coal use at power stations between 2011 and 2012, although coal use in 2012 was still around 55 per cent lower than 1990 levels.
Figure 5 below shows the actual level of CO₂ emissions from electricity generation at power stations, in relation to total CO₂ emissions. The decrease in emissions from power stations since 1990 has resulted from a combination of changes in the fuel mix over the period together with greater efficiency due to improvements in technology. It is difficult to assess the relative impacts of the two, but it is likely that the majority of the saving since 1990 will have been due to fuel switching from coal to gas for electricity generation.
**Figure 5: Carbon dioxide emissions from electricity generated at power stations, 1990-2012 (provisional), (Mt)**
**Transport**
In 2012, CO₂ emissions from the transport sector, at 116 Mt, accounted for just under a quarter of all CO₂ emissions. Between 2011 and 2012, transport emissions decreased by 1.2 per cent (1.4 Mt), with lower petrol consumption outweighing an increase in diesel consumption.
Emissions from this sector are down slightly from 1990 levels (down 3 per cent, or 3 Mt). There has been a general increase in these emissions throughout the period up to 2007, but they are now at their lowest since 1988.
It should be noted that these estimates do not include emissions from international aviation and shipping; domestic aviation and shipping, however, are included. Residential
In 2012, the residential sector, with emissions of 74 Mt, accounted for around 15 per cent of all CO₂ emissions. Between 2011 and 2012 there was a 12 per cent increase in emissions from this sector, the highest increase for any single sector in percentage terms, resulting from an increase in the use of all fossil fuels, gas in particular.
Residential emissions are heavily influenced by external temperatures, and 2012 was cooler than 2011. In particular, the last quarter in 2012 was cooler than the equivalent quarter of 2011 by 2.3 degrees Celsius. This heavily contributed to the significant (15 per cent) increase in the use of natural gas for space heating, which was therefore reflected by a similar increase in emissions.
In 2012, emissions from this sector were estimated to be around 6 per cent lower than in 1990. Since 1990, emissions have only been at a lower level on one occasion, in 2011.
It should be noted that emissions from this sector do not include emissions from power stations related to domestic electricity consumption.
Business
Carbon dioxide emissions from the business sector, at 79 Mt, accounted for around 17 per cent of all CO₂ emissions in 2012. This was 5 per cent (4 Mt) higher than in 2011. Emissions from this sector were provisionally estimated to be 30 per cent below 1990 levels in 2012.
Industrial process
In 2012, CO₂ emissions from the industrial process sector were estimated to be 10 Mt, an increase of around 3 per cent compared with 2011. Between 1990 and 2012, emissions from this sector are provisionally estimated to have decreased by around 41 per cent.
Public sector
Carbon dioxide emissions from the public sector, at 7 Mt, were up by around 4 per cent from 2011. It has been provisionally estimated that there has been an overall reduction of 43 per cent in emissions from this sector between 1990 and 2012.
Agriculture, waste management and land use, land use change and forestry
Emissions estimates for these sectors are not yet available for 2012, so the 2011 estimate has been used for this component of total UK CO₂ emissions in 2012.
On this basis, 2012 emissions from the agriculture sector, at 4 Mt, are estimated to have been 20 per cent (1 Mt) lower than in 1990. Carbon dioxide emissions from waste management were estimated to be 0.3 Mt in 2012, down from 1.3 Mt in 1990. Net land use, land use change and forestry emissions have changed from emissions of 3 Mt in 1990 to removals of 4 Mt in 2012. Carbon dioxide emissions by fuel type
The amount of carbon dioxide released by the consumption of one unit of energy depends on the type of fuel consumed. For example, since coal has a higher carbon content than gas, more CO₂ emissions result from burning one unit of coal than from one unit of gas.
Emissions per unit of electricity supplied by major power producers from fossil fuels are estimated to have been 660 tonnes of carbon dioxide per GWh in 2012 overall; within this, emissions from electricity generated from coal (886 tonnes of carbon dioxide per GWh electricity supplied) were over two times higher than for electricity supplied by gas (355 tonnes of carbon dioxide per GWh). For all sources of electricity (including nuclear, renewables and autogeneration), the average amount of carbon dioxide emitted in 2012 amounted to 457 tonnes per GWh of electricity supplied, compared to 415 tonnes per GWh in 2011.
In 2011, carbon dioxide emissions from the use of fossil fuels, including fuel used for generating electricity, were estimated at 468 Mt. This was 5 per cent higher than the 2011 figure of 447 Mt. The biggest change in emissions was from the use of coal, up 28 per cent (28 Mt) from 101 Mt in 2011 to 129 Mt in 2012. This largely resulted from increased use of coal for electricity generation at power stations.
Over the period 1990 to 2012, CO₂ emissions from fossil fuels decreased by 18 per cent. Over the same period, overall primary consumption of fossil fuels was broadly unchanged. The relatively higher decrease in emissions has been due to an increase in the use of gas accompanied by a decrease in the use of coal and other solid fuels; gas consumption as a proportion of all fossil fuels has increased from 26 per cent in 1990 to 40 per cent in 2012, whilst the proportion used of coal and other solid fuels has decreased from 34 per cent to 23 per cent over the same period. Oil use, as a proportion of all fossil fuels, has remained relatively stable over the period; this accounted for almost 40 per cent of all fossil fuels used in 1990 and 37 per cent in 2012.
Figure 6 below shows CO₂ emissions by fossil fuel between 1990 and 2012. The time series for selected years since 1990 is shown in Table 18 towards the end of this statistical release. Figure 6: Carbon dioxide emissions by fossil fuels: 1990-2012 (provisional), (Mt) 2011 greenhouse gas emissions by end-user sector
Also published today is the breakdown of 2011 greenhouse gas emissions by end-user sector. These results are based on, and consistent with, the breakdown of 2011 emissions by source which was published on 5th February 2013.
The end-user breakdown reallocates emissions by source in accordance with where the “end-use” occurred. The primary effect this has is to reallocate emissions which have the energy supply sector as their source to other sectors, the business and residential sectors in particular. Amongst other things, this therefore reallocates emissions occurring at power stations in generating electricity to the place where the electricity is actually consumed. It should be noted that the results shown by this breakdown are based on a number of assumptions, and we would therefore expect them to be subject to a wider margin of error than the breakdown of emissions by source.
The affect across all sectors of reallocating 2011 greenhouse gas emissions from source to end-user is shown in Figure 7 below.
Figure 7: Allocation of 2011 greenhouse gas emissions from source sectors to end-user sectors (MtCO₂e)
Greenhouse gas emissions are reported here in two ways: by gas, and by the end-user sector of the emissions. Looking at the breakdown by end-user sector, in 2011 32 per cent of greenhouse gas emissions were from the business sector, 24 per cent from transport, 24 per cent from the residential sector and 10 per cent from agriculture. The other 10 per cent were attributable to the remaining sectors; waste management, industrial process, the public sector, exports and LULUCF.
Figure 8 below shows the breakdown of 2011 UK greenhouse emissions by end-user sector. Note that this does not include emissions from the LULUCF sector, since in 2011 this sector acted as a net sink, and emissions were therefore effectively negative.
**Figure 8: Greenhouse gas emissions by end-user sector, 2011 (excluding LULUCF)**
Table 3 below shows the two-way breakdown of 2011 emissions by gas and end-user sector, in absolute terms. Table 4 then shows how these figures translate into percentages of the UK’s total emissions. Note that emissions from the LULUCF sector have been excluded from Table 4, since in 2011 these were effectively negative.
**Table 3: Breakdown of 2011 UK greenhouse gas emissions by gas and end-user sector (MtCO$\_2$e)**
| Sector | Carbon dioxide | Methane | Nitrous oxide | Fluorinated gases | Total | |-----------------------|----------------|---------|---------------|-------------------|--------| | Business | 157.9 | 3.2 | 1.5 | 12.4 | 175.0 | | Transport | 133.1 | 0.6 | 1.2 | 0.0 | 134.8 | | Residential | 124.1 | 3.2 | 0.5 | 2.7 | 130.5 | | Agriculture | 6.5 | 17.9 | 29.2 | 0.0 | 53.6 | | Waste Management | 0.3 | 15.8 | 1.3 | 0.0 | 17.3 | | Public | 15.5 | 0.4 | 0.1 | 0.0 | 15.9 | | Exports | 15.1 | 0.5 | 0.2 | 0.0 | 15.8 | | Industrial Process | 10.1 | 0.3 | 0.2 | 0.4 | 11.1 | | LULUCF | -3.9 | 0.0 | 0.6 | 0.0 | -3.3 | | **Total** | **458.6** | **41.9**| **34.7** | **15.5** | **550.7**|
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories. Table 4: Breakdown of 2011 UK greenhouse gas emissions by gas and end-user sector (% of total UK emissions, excluding LULUCF)
| Sector | Carbon dioxide | Methane | Nitrous oxide | Fluorinated gases | Total | |-------------------|----------------|---------|---------------|-------------------|--------| | Business | 28.5% | 0.6% | 0.3% | 2.2% | 31.6% | | Transport | 24.0% | 0.1% | 0.2% | 0.0% | 24.3% | | Residential | 22.4% | 0.6% | 0.1% | 0.5% | 23.6% | | Agriculture | 1.2% | 3.2% | 5.3% | 0.0% | 9.7% | | Waste Management | 0.0% | 2.8% | 0.2% | 0.0% | 3.1% | | Public | 2.8% | 0.1% | 0.2% | 0.0% | 2.9% | | Exports | 2.7% | 0.1% | 0.0% | 0.0% | 2.8% | | Industrial Process| 1.8% | 0.1% | 0.0% | 0.1% | 2.0% | | Total | 83.5% | 7.6% | 6.2% | 2.8% | 100.0% |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
A summary of the changes in the end-user breakdown for each gas between 2010 and 2011 can be found in Table 19 towards the end of this statistical release. This also shows a comparable summary of the breakdown of emissions by source, which was published in February 2013.
The full end-user breakdown by National Communications category, from 1990 to 2011, can be found on the UK Greenhouse Gas Emissions Statistics section of the Gov.uk website. Emissions by end-user sector
Table 5 and Figure 9 below show the breakdown of greenhouse gas emissions into the main source sectors for selected years between 1990 and 2011.
Table 5: Greenhouse gas emissions by end-user sector, 1990-2011 (MtCO$\_2$e)
| Sector | 1990 | 1995 | 2000 | 2005 | 2009 | 2010 | 2011 | |-------------------|-------|-------|-------|-------|-------|-------|-------| | Business | 247.7 | 215.0 | 214.2 | 210.1 | 178.2 | 183.0 | 175.0 | | Transport | 139.3 | 143.0 | 146.5 | 148.9 | 138.6 | 136.8 | 134.8 | | Residential | 169.7 | 156.5 | 158.9 | 164.0 | 144.7 | 157.8 | 130.5 | | Agriculture | 67.6 | 65.7 | 61.9 | 58.2 | 53.1 | 53.7 | 53.6 | | Waste Management | 47.4 | 41.4 | 30.8 | 20.4 | 18.5 | 17.9 | 17.3 | | Public | 30.8 | 28.2 | 23.6 | 22.2 | 17.9 | 17.9 | 15.9 | | Exports | 9.2 | 13.3 | 13.1 | 16.2 | 15.4 | 15.9 | 15.8 | | Industrial Process| 57.3 | 47.4 | 26.6 | 19.5 | 11.8 | 12.6 | 11.1 | | LULUCF | 4.0 | 3.3 | 0.4 | -2.6 | -3.8 | -3.7 | -3.3 | | Total | 772.9 | 713.8 | 675.9 | 657.0 | 574.3 | 591.7 | 550.7 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
Figure 9: Greenhouse gas emissions by end-user sector, 1990-2011 (MtCO$\_2$e)
Details of changes over time for each sector are set out in the following sections of this statistical release. In each case, information about the trend between 1990 and 2010 provides some context, followed by details of the changes since 2010 now seen in the 2011 estimates. **Business**
The business sector was responsible for 32 per cent of UK greenhouse gas emissions in 2011, with carbon dioxide being the most prominent gas. Emissions from this sector primarily relate to fossil fuel combustion in industry and commerce, although emissions of F-gases from the use of fluorinated compounds in certain applications, particularly refrigeration and air-conditioning, are not insignificant.
**Context – 1990 to 2010**
Between 1990 and 2010, there was an overall downward trend in greenhouse gas emissions from the business sector, resulting in a decrease of around 26 per cent. This has been largely due to a reduction in emissions from industrial combustion (including iron and steel) over the period. Although emissions of carbon dioxide have reduced over the period (by 28 per cent), emissions from F-gases have increased significantly. This has mainly been due to an increase in emissions from refrigeration and air-conditioning; between 1993 and 2002, hydrofluorocarbons (HFCs) were used to replace other, ozone depleting, substances which were previously used as refrigerants. This increasing trend has since slowed, as tighter controls on emissions leakages have been introduced.
**2011 results**
Between 2010 and 2011 emissions from business fell by 4.4 per cent (8.0 MtCO$\_2$e). This decrease was mainly driven by a fall in carbon dioxide emissions across industry and commerce as a whole.
The breakdown of emissions by gas for selected years since 1990 is shown in Table 6 below. The trend in emissions over the period is shown in Figure 10.
**Table 6: Business sector emissions by gas, 1990-2011 (MtCO$\_2$e)**
| | 1990 | 1995 | 2000 | 2005 | 2008 | 2009 | 2010 | 2011 | |----------|-------|-------|-------|-------|-------|-------|-------|-------| | Carbon dioxide | 231.1 | 200.9 | 200.5 | 194.5 | 189.7 | 161.6 | 166.1 | 157.9 | | Methane | 13.3 | 10.0 | 6.4 | 4.2 | 3.6 | 3.3 | 3.2 | 3.2 | | Nitrous oxide | 2.6 | 2.2 | 1.9 | 2.0 | 1.8 | 1.5 | 1.6 | 1.5 | | F-gases | 0.7 | 1.9 | 5.3 | 9.5 | 11.3 | 11.7 | 12.1 | 12.4 | | Total | 247.7 | 215.0 | 214.2 | 210.1 | 206.4 | 178.2 | 183.0 | 175.0 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories. Transport
The transport sector was responsible for around 24 per cent of UK greenhouse gas emissions in 2011, with carbon dioxide being by far the most prominent gas. Emissions of CO₂ are closely related to the amount of fuel used, whilst nitrous oxide and methane emissions are influenced more by the vehicle type and age.
Context – 1990 to 2010
Between 1990 and 2010, there was very little overall change in the level of greenhouse gas emissions from the transport sector (emissions were around 2 per cent lower in 2010 than in 1990), although emissions did in fact increase up to 2007 and then fall again from 2008 onwards. Between 2007 and 2010 there was a 9 per cent decrease in emissions.
Road transport is the most significant source of emissions in this sector, passenger cars in particular, and the changes which have been seen over the period were heavily influenced by this category. Whilst there has been a decrease in emissions from passenger cars over the period, this was partially offset by an increase in emissions from light duty vehicles. Although there has been an increase in both the number of passenger vehicles and the vehicle kilometres travelled, the decrease in emissions from passenger cars has been due to lower petrol consumption outweighing an increase in diesel consumption.
2011 results
Between 2010 and 2011 emissions from transport fell by 1.4 per cent (2.0 MtCO₂e). This decrease was primarily due, again, to a decrease in petrol consumption alongside a relatively smaller increase in diesel consumption. The breakdown of emissions by gas for selected years since 1990 is shown in Table 7 below. The trend in emissions over the period is shown in Figure 11.
**Table 7: Transport sector emissions by gas, 1990-2011 (MtCO₂e)**
| Year | Carbon dioxide | Methane | Nitrous oxide | F-gases | Total | |------|----------------|---------|---------------|---------|-------| | 1990 | 136.1 | 1.7 | 1.5 | 0.0 | 139.3 | | 1995 | 139.5 | 1.5 | 2.0 | 0.0 | 143.0 | | 2000 | 143.7 | 1.0 | 1.8 | 0.0 | 146.5 | | 2005 | 146.8 | 0.7 | 1.4 | 0.0 | 148.9 | | 2008 | 141.8 | 0.6 | 1.2 | 0.0 | 143.5 | | 2009 | 136.9 | 0.6 | 1.1 | 0.0 | 138.6 | | 2010 | 135.1 | 0.5 | 1.1 | 0.0 | 136.8 | | 2011 | 133.1 | 0.6 | 1.2 | 0.0 | 134.8 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
**Figure 11: Greenhouse gas emissions from transport, 1990-2011 (MtCO₂e)**
**Residential**
The residential sector was responsible for around 24 per cent of UK greenhouse gas emissions in 2011, with carbon dioxide being the most prominent gas for this sector.
It should be noted that, unlike emissions by source, which only cover activities related to residential fossil fuel use, emissions reported by end-user do also include residential electricity use which have been re-allocated from the energy supply sector.
**Context – 1990 to 2010**
Between 1990 and 2010, there was considerable variation in greenhouse gas emissions from year to year in the residential sector. However, since 2004 there has been a general downward trend, although 2010 was an exception to this due to the particularly cold weather experienced in that year. Emissions of F-gases in this sector, which have increased slightly since 1990, are related to the use of aerosols and metered dose inhalers. 2011 results
Between 2010 and 2011 there was a decrease of around 17 per cent (27.2 MtCO$\_2$e) in emissions from this sector, the highest decrease for any single sector in both absolute and percentage terms. In general, carbon dioxide emissions from this sector in particular are heavily influenced by external temperatures. Compared with the long term average, 2011 was a warm year; in particular, it was significantly warmer than 2010. In the first and last quarters, 2011 was warmer than 2010 by 2.2 and 4.1 degrees Celsius respectively. This heavily contributed to a significant reduction in the use of both natural gas and electricity for space heating, which was reflected by a similar fall in emissions.
Emissions from this sector are now at their lowest level since 1990, and are 27 per cent below the 1991 peak.
The breakdown of emissions by gas for selected years since 1990 is shown in Table 8 below. The trend in emissions over the period is shown in Figure 12.
Table 8: Residential sector emissions by gas, 1990-2011 (MtCO$\_2$e)
| Year | Carbon dioxide | Methane | Nitrous oxide | F-gases | Total | |------|----------------|---------|---------------|---------|-------| | 1990 | 156.5 | 12.2 | 1.0 | 0.0 | 169.7 | | 1995 | 146.5 | 8.8 | 0.7 | 0.4 | 156.5 | | 2000 | 150.5 | 5.5 | 0.6 | 2.2 | 158.9 | | 2005 | 156.4 | 4.0 | 0.6 | 3.0 | 164.0 | | 2008 | 148.8 | 3.5 | 0.6 | 2.9 | 155.7 | | 2009 | 138.0 | 3.5 | 0.5 | 2.8 | 144.7 | | 2010 | 150.9 | 3.6 | 0.6 | 2.7 | 157.8 | | 2011 | 124.1 | 3.2 | 0.5 | 2.7 | 130.5 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
Figure 12: Greenhouse gas emissions from the residential sector, 1990-2011 (MtCO$\_2$e) Agriculture
The agriculture sector was responsible for 10 per cent of UK greenhouse gas emissions in 2011. Emissions of methane and nitrous oxide dominate this sector. The most significant sources here are emissions of methane due to enteric fermentation from livestock, particularly cattle, and nitrous oxide emissions related to the use of fertilisers on agricultural soils.
Context – 1990 to 2010
Between 1990 and 2010, there was a general downward trend in greenhouse gas emissions from this sector, resulting in an overall decrease of around 20 per cent. This reduction has been driven by a fall in animal numbers over the period, together with a decrease in synthetic fertiliser use.
2011 results
Between 2010 and 2011 there was virtually no change in emissions from the agriculture sector.
The breakdown of emissions by gas for selected years since 1990 is shown in Table 9 below. The trend in emissions over the period shown in Figure 13.
Table 9: Agriculture sector emissions by gas, 1990-2011 (MtCO₂e)
| | 1990 | 1995 | 2000 | 2005 | 2008 | 2009 | 2010 | 2011 | |----------|------|------|------|------|------|------|------|------| | Carbon dioxide | 8.7 | 8.3 | 7.3 | 7.2 | 6.7 | 6.4 | 6.6 | 6.5 | | Methane | 22.7 | 21.8 | 20.6 | 19.1 | 18.3 | 17.9 | 18.0 | 17.9 | | Nitrous oxide | 36.1 | 35.7 | 34.0 | 31.9 | 29.1 | 28.7 | 29.1 | 29.2 | | F-gases | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | Total | 67.6 | 65.7 | 61.9 | 58.2 | 54.1 | 53.1 | 53.7 | 53.6 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories. Waste management
For the waste management sector, emissions measured by end-user are the same as those measured by source, since no emissions from the energy supply sector are reallocated to waste management.
This sector was responsible for around 3 per cent of UK greenhouse gas emissions in 2011, with methane being by far the most prominent gas. The vast majority of these emissions are from landfill sites.
Context – 1990 to 2010
Between 1990 and 2010, there was a significant reduction in greenhouse gas emissions from the waste management sector, resulting in an overall decrease of around 62 per cent. This has been due to a combination of factors, including improvements in the standards of landfilling, changes to the types of waste going to landfill (such as reducing the amount of biodegradable waste), and an increase in the amount of landfill gas being used for energy. Emissions of methane alone have reduced by 64 per cent over the period.
2011 results
Between 2010 and 2011 emissions from waste management fell by just over 3 per cent (0.6 MtCO$\_2$e), reflecting a continuation of the same trend seen in recent years, due to the same reasons.
The breakdown of emissions by gas for selected years since 1990 is shown in Table 10 below. The trend over the period is shown in Figure 14. Table 10: Waste management sector emissions by gas, 1990-2011 (MtCO$\_2$e)
| Year | Carbon dioxide | Methane | Nitrous oxide | F-gases | Total | |------|----------------|---------|---------------|---------|-------| | 1990 | 1.3 | 44.9 | 1.2 | 0.0 | 47.4 | | 1995 | 0.9 | 39.3 | 1.2 | 0.0 | 41.4 | | 2000 | 0.5 | 29.0 | 1.3 | 0.0 | 30.8 | | 2005 | 0.4 | 18.8 | 1.2 | 0.0 | 20.4 | | 2008 | 0.3 | 17.7 | 1.2 | 0.0 | 19.2 | | 2009 | 0.3 | 17.0 | 1.2 | 0.0 | 18.5 | | 2010 | 0.3 | 16.3 | 1.3 | 0.0 | 17.9 | | 2011 | 0.3 | 15.8 | 1.3 | 0.0 | 17.3 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
Figure 14: Greenhouse gas emissions from waste management, 1990-2011 (MtCO$\_2$e)
Public sector
The public sector was responsible for around 3 per cent of UK greenhouse gas emissions in 2011, with carbon dioxide representing almost the entirety of these emissions.
Context – 1990 to 2010
Between 1990 and 2010, there was a general downward trend in greenhouse gas emissions from the public sector, with an overall decrease of around 42 per cent. This has been largely driven by a reduction in the use of oil in this sector.
2011 results
Between 2010 and 2011 emissions from the public sector fell by just under 11 per cent (1.9 MtCO$\_2$e), largely due to a reduction in natural gas use.
The breakdown of emissions by gas for selected years since 1990 is shown in Table 11 below. The trend over the period is shown in Figure 15. Table 11: Public sector emissions by gas, 1990-2011 (MtCO₂e)
| Year | Carbon dioxide | Methane | Nitrous oxide | F-gases | Total | |------|----------------|---------|---------------|---------|-------| | 1990 | 28.9 | 1.8 | 0.2 | 0.0 | 30.8 | | 1995 | 26.7 | 1.4 | 0.1 | 0.0 | 28.2 | | 2000 | 22.7 | 0.8 | 0.1 | 0.0 | 23.6 | | 2005 | 21.6 | 0.5 | 0.1 | 0.0 | 22.2 | | 2008 | 19.6 | 0.4 | 0.1 | 0.0 | 20.1 | | 2009 | 17.4 | 0.4 | 0.1 | 0.0 | 17.9 | | 2010 | 17.4 | 0.4 | 0.1 | 0.0 | 17.9 | | 2011 | 15.5 | 0.4 | 0.1 | 0.0 | 15.9 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
Figure 15: Greenhouse gas emissions from the public sector, 1990-2011 (MtCO₂e)
Exports
The exports sector represents emissions associated with the production of fuels within the UK (for example, from a refinery or a coal mine) which are subsequently exported or sent to bunkers for use outside the UK. Since these fuels are ultimately used for activities which occur outside the UK, it would not be appropriate to allocate the emissions from their production to any of the National Communication sectors, so they are reported under a separate, additional sector.
The exports sector was responsible for just under 3 per cent of UK greenhouse gas emissions in 2011, with carbon dioxide representing almost the entirety of these emissions.
Context – 1990 to 2010
Between 1990 and 2010, there was a general upward trend in greenhouse gas emissions from the exports sector, with an overall increase of around 72 per cent. This has largely been driven by changes in throughput at refineries, which have fed through to increased exports rather than increased deliveries to the domestic market.
2011 results
Between 2010 and 2011 emissions from the exports sector remained at around the same level.
The breakdown of emissions by gas for selected years since 1990 is shown in Table 12 below. The trend over the period is shown in Figure 16.
Table 12: Exports sector emissions by gas, 1990-2011 (MtCO₂e)
| Year | Carbon dioxide | Methane | Nitrous oxide | F-gases | Total | |------|----------------|---------|---------------|---------|-------| | 1990 | 8.5 | 0.6 | 0.1 | 0.0 | 9.2 | | 1995 | 12.5 | 0.7 | 0.1 | 0.0 | 13.3 | | 2000 | 12.4 | 0.5 | 0.2 | 0.0 | 13.1 | | 2005 | 15.5 | 0.4 | 0.2 | 0.0 | 16.2 | | 2008 | 14.3 | 0.4 | 0.2 | 0.0 | 14.9 | | 2009 | 14.7 | 0.5 | 0.2 | 0.0 | 15.4 | | 2010 | 15.2 | 0.4 | 0.2 | 0.0 | 15.9 | | 2011 | 15.1 | 0.5 | 0.2 | 0.0 | 15.8 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
Figure 16: Greenhouse gas emissions from the exports sector, 1990-2011 (MtCO₂e)
Industrial process
The industrial process sector was responsible for 2 per cent of UK greenhouse gas emissions in 2011, with carbon dioxide being the most prominent gas. The main source of emissions is cement production, with other processes such as sinter and lime production also worth mentioning. Context – 1990 to 2010
Between 1990 and 2010, there was a significant reduction in greenhouse gas emissions from the industrial process sector, with an overall decrease of around 78 per cent. This was most notably due to a large reduction in emissions from adipic acid production and halocarbon production between 1998 and 1999 (combined emissions of which are now almost zero), although there has been a general downward trend in emissions over the period.
2011 results
Between 2010 and 2011 emissions from the industrial process sector fell by around 12 per cent (1.5 MtCO₂e). This was largely driven by a reduction in nitrous oxide emissions from nitric acid production, with abatement technology being installed at all three UK nitric acid production plants during the year.
The breakdown of emissions by gas for selected years since 1990 is shown in Table 13 below. The trend over the period is shown in Figure 17.
Table 13: Industrial process sector emissions by gas, 1990-2011 (MtCO₂e)
| Year | Carbon dioxide | Methane | Nitrous oxide | F-gases | Total | |------|----------------|---------|---------------|---------|-------| | 1990 | 17.7 | 1.7 | 24.7 | 13.1 | 57.3 | | 1995 | 16.3 | 1.4 | 14.9 | 14.8 | 47.4 | | 2000 | 16.0 | 0.9 | 5.6 | 4.0 | 26.6 | | 2005 | 15.2 | 0.4 | 3.0 | 0.9 | 19.5 | | 2008 | 14.5 | 0.4 | 2.5 | 0.4 | 17.7 | | 2009 | 10.0 | 0.4 | 1.2 | 0.3 | 11.8 | | 2010 | 10.5 | 0.3 | 1.4 | 0.4 | 12.6 | | 2011 | 10.1 | 0.3 | 0.2 | 0.4 | 11.1 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories.
Figure 17: Greenhouse gas emissions from industrial processes, 1990-2011 (MtCO₂e) **Land Use, Land Use Change and Forestry (LULUCF)**
For the LULUCF sector, emissions measured by end-user are the same as those measured by source, since no emissions from the energy supply sector are reallocated to LULUCF.
The LULUCF sector acted as a net sink of UK greenhouse gas emissions in 2011, dominated by carbon dioxide.
**Context – 1990 to 2010**
Between 1990 and 2010, the UK went from being a net source of LULUCF emissions to a net sink. This was largely due to changes in land use over the period. In general, land being converted to cropland is the dominant source of CO₂ emissions, and forest land which remains as forest land is the dominant sink. The downward trend in net emissions over the period has largely been driven by forest land, with an increasing uptake of CO₂ by trees as they reach maturity, in line with the historical planting pattern. There has also been some reduction in emissions since 1990 due to less intensive agricultural practices.
**2011 results**
Between 2010 and 2011, net emissions from the LULUCF sector increased slightly, by around 0.4 MtCO₂e, largely due to the fact that forest land which has until now acted as a sink has now passed maturity, resulting in a lower uptake of CO₂ by trees.
The breakdown of emissions and removals by gas for selected years since 1990 is shown in Table 14 below. The trend over the period is shown in Figure 18.
**Table 14: LULUCF sector emissions by gas, 1990-2011 (MtCO₂e)**
| | 1990 | 1995 | 2000 | 2005 | 2008 | 2009 | 2010 | 2011 | |----------|------|------|------|------|------|------|------|------| | Carbon dioxide | 3.1 | 2.4 | -0.4 | -3.4 | -4.5 | -4.5 | -4.3 | -3.9 | | Methane | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | Nitrous oxide | 0.8 | 0.9 | 0.8 | 0.7 | 0.7 | 0.7 | 0.6 | 0.6 | | F-gases | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | Total | 4.0 | 3.3 | 0.4 | -2.6 | -3.8 | -3.8 | -3.7 | -3.3 |
All figures are for the UK and Crown Dependencies only, and exclude Overseas Territories. Figure 18: Greenhouse gas emissions from the LULUCF sector, 1990-2011 (MtCO$\_2$e) Uncertainties around the 2011 estimates
We are now also able to publish the uncertainty ranges associated with the final 2011 emissions estimates by source, as published on 5th February 2013.
Table 15 below shows the uncertainty ranges by gas, and table 16 shows the ranges by sector. As can be seen, the greatest certainty we have is in relation to our estimates of carbon dioxide emissions, largely due to the low level of uncertainty around the underlying energy data. By contrast, the uncertainty around nitrous oxide emissions, particularly from the agriculture sector, is very high.
Table 15: Uncertainties by gas, 2011 (MtCO₂e)
| 2011 emissions | Uncertainty around 2011 estimate, expressed as a 95% confidence interval | |----------------|-------------------------------------------------------------------------| | | Lower bound | Upper bound | | Carbon dioxide | 460.7 | 453.0 | 468.2 | | Methane | 42.1 | 36.3 | 49.3 | | Nitrous Oxide | 34.4 | 7.7 | 103.8 | | Hydrofluorocarbons | 14.6 | 13.9 | 15.4 | | Perfluorocarbons | 0.33 | 0.28 | 0.37 | | Sulphur hexafluoride | 0.61 | 0.52 | 0.69 | | Total | 552.7 | 521.8 | 622.4 |
Figures include emissions for the UK, Crown Dependencies and the Overseas Territories.
Table 16: Uncertainties by sector, 2011 (MtCO₂e)
| 2011 emissions | Uncertainty around 2011 estimate, expressed as a 95% confidence interval | |----------------|-------------------------------------------------------------------------| | | Lower bound | Upper bound | | Energy Supply | 192.1 | 187.8 | 195.2 | | Transport | 119.1 | 116.6 | 121.6 | | Residential | 69.9 | 68.6 | 71.4 | | Business | 89.2 | 86.6 | 93.5 | | Public | 7.1 | 7.1 | 7.2 | | Industrial Process | 10.2 | 10.0 | 10.5 | | Agriculture | 51.0 | 24.5 | 120.1 | | Land Use Change | -3.3 | -10.1 | 3.2 | | Waste Management | 17.3 | 11.6 | 25.0 | | Total | 552.8 | 522.0 | 622.5 |
Figures include emissions for the UK, Crown Dependencies and the Overseas Territories. Revisions to the estimates of end-user emissions
It should be noted that the historical time series of emissions by end-user is revised each year to reflect any revisions made to either the estimates of emissions by source or the other energy consumption data used in the end-user emissions calculation. In this publication, this has resulted in revisions to some end-user emissions figures for all years up to and including 2010. Further details of these revisions can be found in the National Statistics release of 5th February 2013, which covered 2011 UK greenhouse gas emissions by source.
UK performance against emissions reduction targets
The UK has both international and domestic targets for reducing greenhouse gas emissions; these are the Kyoto Protocol target and the Carbon Budgets set out under the UK Climate Change Act respectively.
In reporting emissions reductions against these targets, the UK is required to take account of emissions trading through the various flexible mechanisms which have been established, including the European Union Emissions Trading System (EU ETS).
DECC reported on performance against these targets in detail in the National Statistics release of 5th February 2013, which covered 2011 UK greenhouse gas emissions final figures. Performance was reported so as to take account of the latest available EU ETS results, also covering the 2011 calendar year. Since these are still the latest available results from the EU ETS, it is not possible to produce a further update showing performance against targets based on the provisional 2012 emissions estimates – we will not be able to do so until after the 2012 EU ETS results become available in May 2013. Future updates to emissions estimates
Final estimates of UK greenhouse gas emissions for 2012 will be published as National Statistics in early February 2014. These estimates will be based on the UK’s National Atmospheric Emissions Inventory for 2012, to be produced for DECC and the Devolved Administrations by Ricardo-AEA.
Further information and feedback
Any enquiries or comments in relation to this statistical release should be sent to DECC’s UK Greenhouse Gas Emissions Statistics and Inventory Team at:
[email protected]
Contact telephone: 0300 068 6563
The lead statistician for this publication is John Mackintosh.
Further information on climate change statistics, including Excel downloads of all the data used to compile this statistical release, can be found on the UK Greenhouse Gas Emissions Statistics section of the Gov.uk website. Notes for Editors
1. A full set of data tables can be accessed via the UK greenhouse gas emissions pages of the Gov.uk website.
2. The figures for 1990 to 2011 in this statistical release are from the National Atmospheric Emissions Inventory (NAEI), produced for DECC and the Devolved Administrations by Ricardo-AEA. Additional results will be released as they become available, including a full report to be published in April. For further information on the UK Greenhouse Gas Inventory, see the NAEI web site.
3. There are uncertainties associated with all estimates of greenhouse gas emissions. Although for any given year considerable uncertainties may surround the emissions estimates for a pollutant, it is important to note that trends over time are likely to be much more reliable. It is also important to note that the provisional 2012 estimates are subject to a greater range of uncertainty than the final figures for earlier years. For more information on these uncertainties see the page on the UK greenhouse gas inventory on the Gov.uk website.
4. Further details of the European Union Emissions Trading System can be found at the EU ETS section of the Gov.uk website.
5. Detailed UK temperature data can be found on both the Met Office website and the DECC Energy Statistics section of the Gov.uk website.
6. When emissions are measured on this basis, UK emissions account for around 2 per cent of the global total, based on a range of estimates produced by the UN, the IEA, the World Resources Institute and the EIA, amongst others.
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### Table 17: UK Greenhouse Gas Emissions 1990-2012 (provisional), headline results
Greenhouse gas emissions: weighted by global warming potential (million tonnes carbon dioxide equivalent)
| Net CO2 emissions (emissions minus removals) | 1990 | 1995 | 2000 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 (p) | |---------------------------------------------|------|------|------|------|------|------|------|------|------|------|----------| | Energy supply | 241.5| 210.0| 203.0| 216.5| 222.4| 217.2| 212.5| 189.5| 195.3| 182.2| 192.1 | | from power stations | 203.5| 163.4| 158.5| 172.8| 182.0| 177.8| 172.7| 151.1| 156.6| 144.2| 156.1 | | other Energy supply | 38.0 | 46.6 | 44.5 | 43.7 | 40.5 | 39.4 | 39.8 | 38.4 | 38.7 | 37.9 | 36.0 | | Business | 112.8| 106.6| 107.0| 97.1 | 94.0 | 92.3 | 90.1 | 78.5 | 78.5 | 75.6 | 79.2 | | Transport | 119.5| 119.8| 124.8| 128.9| 129.8| 131.1| 125.5| 120.7| 119.1| 117.4| 116.0 | | Public | 13.0 | 12.7 | 11.5 | 11.0 | 10.0 | 9.3 | 9.3 | 8.2 | 8.4 | 7.1 | 7.4 | | Residential | 79.0 | 80.8 | 87.1 | 84.3 | 81.7 | 78.1 | 79.9 | 74.7 | 86.5 | 66.4 | 74.2 | | Agriculture | 5.2 | 5.3 | 4.8 | 4.6 | 4.3 | 4.1 | 4.1 | 4.1 | 4.1 | 4.2 | 4.2 | | Industrial process | 16.6 | 15.2 | 15.0 | 14.8 | 14.1 | 15.3 | 14.0 | 9.2 | 9.9 | 9.5 | 9.8 | | Waste Management | 1.3 | 0.9 | 0.5 | 0.4 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | | LULUCF | 3.1 | 2.4 | -0.4 | -3.4 | -3.7 | -4.1 | -4.5 | -4.3 | -3.9 | -3.9 | -3.9 | | Total CO2 | 592.0| 553.8| 553.1| 554.1| 552.7| 543.6| 531.2| 480.7| 497.8| 458.6| 479.1 | | Other greenhouse gases | 180.9| 160.0| 122.8| 102.9| 100.2| 98.6 | 96.7 | 93.6 | 93.9 | 92.1 | 90.7 | | Kyoto greenhouse gas basket | 769.7| 711.0| 675.2| 659.0| 655.0| 644.7| 630.5| 576.8| 594.0| 552.6| 571.6 |
A correction has been made to the figures in red.
**Notes**
1. Figures shown for 2012 are provisional.
2. Provisional 2012 CO₂ emissions for the agriculture, waste and LULUCF sectors have not been estimated; 2011 estimates have been used for this component of the provisional estimates of total UK emissions.
3. Kyoto basket total differs slightly from sum of individual pollutants above as the basket uses a narrower definition for LULUCF, and includes emissions from UK Overseas Territories.
4. Emissions are presented as carbon dioxide equivalent in line with international reporting and carbon trading. To convert carbon dioxide into carbon equivalents, divide figures by 44/12.
5. The entire time series is revised each year to take account of methodological improvements in the UK emissions inventory.
6. Figures shown do not include any adjustment for the effect of the EU Emissions Trading System (EUETS), which was introduced in 2005. Table 18: UK Carbon Dioxide Emissions by fuel, 1990-2012 (provisional)
| Carbon dioxide emissions (million tonnes) | 1990 | 1995 | 2000 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012(p) | |------------------------------------------|------|------|------|------|------|------|------|------|------|------|---------| | Gas | 145.0| 187.3| 240.4| 234.5| 226.5| 228.8| 234.2| 213.3| 227.6| 193.2| 187.1 | | Oil | 191.0| 178.6| 166.0| 169.8| 166.4| 165.7| 159.6| 151.6| 150.9| 145.0| 143.5 | | Coal | 217.7| 151.4| 116.7| 124.6| 136.4| 125.9| 115.2| 95.8 | 100.0| 100.7| 129.0 | | Other solid fuels | 15.2 | 12.4 | 11.7 | 9.3 | 8.4 | 8.0 | 9.3 | 9.2 | 8.1 | 8.0 | 8.3 | | Non-fuel | 23.1 | 24.1 | 18.3 | 16.0 | 15.1 | 15.2 | 12.9 | 10.8 | 11.2 | 11.7 | 11.3 | | Total | 592.0| 553.8| 553.1| 554.1| 552.7| 543.6| 531.2| 480.7| 497.8| 458.6| 479.1 |
Notes
1. Figures shown for 2012 are provisional. Table 19: UK emissions of all greenhouse gases, carbon dioxide, methane and nitrous oxide, 2010-11, by source and end-user, National Communication categories
| Greenhouse Gas | NC Category | 2010 | 2011 | % change | 2010 | 2011 | % change | |----------------|-------------|------|------|----------|------|------|----------| | All Greenhouse gases (million tonnes carbon dioxide equivalent) | Energy Supply | 204.3 | 190.9 | -6.5 | - | - | - | | | Business | 91.9 | 89.1 | -3.0 | 183.0 | 175.0 | -4.4 | | | Transport | 120.1 | 118.5 | -1.4 | 136.8 | 134.8 | -1.4 | | | Public | 8.4 | 7.1 | -15.2 | 17.9 | 15.9 | -10.9 | | | Residential | 89.9 | 69.7 | -22.5 | 157.8 | 130.5 | -17.2 | | | Agriculture | 51.2 | 51.2 | 0.0 | 53.7 | 53.6 | -0.2 | | | Industrial Process | 11.7 | 10.2 | -12.8 | 12.6 | 11.1 | -11.9 | | | Land Use Change | -3.7 | -3.3 | -9.7 | -3.7 | -3.3 | -9.7 | | | Waste Management | 17.9 | 17.3 | -3.3 | 17.9 | 17.3 | -3.3 | | | Exports | - | - | - | 15.9 | 15.8 | -0.4 | | | Total | 591.7 | 550.7 | -6.9 | 591.7 | 550.7 | -6.9 | | Carbon dioxide (million tonnes) | Energy Supply | 195.3 | 182.2 | -6.7 | - | - | - | | | Business | 78.5 | 75.6 | -3.7 | 166.1 | 157.9 | -5.0 | | | Transport | 119.1 | 117.4 | -1.4 | 135.1 | 133.1 | -1.5 | | | Public | 8.4 | 7.1 | -15.2 | 17.4 | 15.5 | -11.0 | | | Residential | 86.5 | 66.4 | -23.3 | 150.9 | 124.1 | -17.8 | | | Agriculture | 4.1 | 4.2 | 1.3 | 6.6 | 6.5 | -0.8 | | | Industrial Process | 9.9 | 9.5 | -4.1 | 10.5 | 10.1 | -3.6 | | | Land Use Change | -4.3 | -3.9 | -8.8 | -4.3 | -3.9 | -8.8 | | | Waste Management | 0.3 | 0.3 | -2.5 | 0.3 | 0.3 | -2.5 | | | Exports | - | - | - | 15.2 | 15.1 | -1.0 | | | Total | 497.8 | 458.6 | -7.9 | 497.8 | 458.6 | -7.9 | | Methane (thousand tonnes) | Energy Supply | 359.7 | 349.5 | -2.8 | - | - | - | | | Business | 11.3 | 11.3 | -0.3 | 151.9 | 154.3 | 1.6 | | | Transport | 3.8 | 3.4 | -11.6 | 25.2 | 27.4 | 8.9 | | | Public | 0.8 | 0.7 | -15.3 | 18.5 | 17.5 | -5.6 | | | Residential | 24.3 | 22.2 | -8.8 | 169.2 | 150.4 | -11.1 | | | Agriculture | 854.8 | 850.6 | -0.5 | 857.8 | 853.6 | -0.5 | | | Industrial Process | 5.4 | 4.7 | -12.8 | 16.3 | 14.5 | -11.1 | | | Land Use Change | 1.2 | 1.4 | 16.0 | 1.2 | 1.4 | 16.0 | | | Waste Management | 778.2 | 750.5 | -3.6 | 778.2 | 750.5 | -3.6 | | | Exports | - | - | - | 21.3 | 24.6 | 15.6 | | | Total | 2039.5 | 1994.1 | -2.2 | 2039.5 | 1994.1 | -2.2 | | Nitrous oxide (thousand tonnes) | Energy Supply | 4.6 | 4.7 | 2.9 | - | - | - | | | Business | 3.2 | 3.0 | -6.4 | 5.1 | 4.9 | -3.0 | | | Transport | 3.0 | 3.1 | 3.1 | 3.6 | 3.7 | 3.9 | | | Public | 0.0 | 0.0 | -6.0 | 0.2 | 0.2 | -0.5 | | | Residential | 0.4 | 0.4 | -12.0 | 1.8 | 1.7 | -5.4 | | | Agriculture | 94.0 | 94.1 | 0.2 | 94.0 | 94.2 | 0.2 | | | Industrial Process | 4.4 | 0.8 | -82.2 | 4.4 | 0.8 | -81.7 | | | Land Use Change | 2.0 | 1.9 | -4.2 | 2.0 | 1.9 | -4.2 | | | Waste Management | 4.1 | 4.0 | -0.4 | 4.1 | 4.0 | -0.4 | | | Exports | - | - | - | 0.5 | 0.6 | 13.8 | | | Total | 115.7 | 112.1 | -3.1 | 115.7 | 112.1 | -3.1 |
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1e8bd01319165c012e19609cdb083bee02145cc0 | Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015
For the cultural sector
Practical Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015 (SI 2015 No. 1415) which implement European Directive 2013/37/EU
Version control: v1.2 – January 2019
The National Archives
© Crown copyright 2019
You may use and re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence v3.0. This Guidance was produced by:
Information Policy The National Archives Bessant Drive Kew TW9 4DU [email protected]
This Guidance is designed to help cultural sector bodies comply with requirements for the re-use of public sector information. To read the relevant legislation for free, go to www.legislation.gov.uk and search for ‘public sector information regulations’.
If the 2015 Regulations or our interpretations of them change, we will publish updated information on our website www.nationalarchives.gov.uk where this Guidance is available for download. Contents
Welcome........................................................................................................................................... 4 Key aspects ........................................................................................................................................... 5 Scope at a glance................................................................................................................................. 6 What is public sector information? .................................................................................................... 6 What is re-use? .................................................................................................................................... 7 Key aspects for the cultural sector ..................................................................................................... 7 Exceptions for the cultural sector ....................................................................................................... 8 What do the 2015 Regulations mean for different sectors? ............................................................... 8 Libraries (including university libraries), museums and archives ..................................................... 8 Other public sector bodies ................................................................................................................ 9 Re-users of cultural sector information ............................................................................................. 9 Context of the 2015 Regulations ......................................................................................................... 9 Principles and Objectives .................................................................................................................. 9 Access and re-use ............................................................................................................................... 10 Jurisdiction ......................................................................................................................................... 13 Links with other UK legislation ......................................................................................................... 13 Copyright ............................................................................................................................................ 15 Open data ........................................................................................................................................... 17 Scope of the 2015 Regulations ........................................................................................................... 18 Bodies in scope ................................................................................................................................... 18 Bodies out of scope ............................................................................................................................ 18 Information in scope .......................................................................................................................... 19 Information out of scope .................................................................................................................... 20 Public task .......................................................................................................................................... 20 Cultural sector obligations ................................................................................................................ 21 Information asset lists ......................................................................................................................... 21 Permitting re-use ............................................................................................................................... 22 Responding to a request for re-use ..................................................................................................... 22 Requests to re-use readily available information ............................................................................. 23 Requests to re-use previously unreleased information ..................................................................... 23 Processing requests for re-use ........................................................................................................... 23 Notification of refusal to allow re-use ............................................................................................... 24 Non-discrimination ............................................................................................................................ 24 Non-restrictive conditions for re-use ............................................................................................... 25 Licensing re-use .................................................................................................................................. 25 Different licence types ....................................................................................................................... 26 Exclusive licences ............................................................................................................................... 26 Charging for re-use ............................................................................................................................ 27 Complaints process ........................................................................................................................... 29 Initial complaints process ................................................................................................................ 29 Complaints to the ICO ....................................................................................................................... 30 Transitional arrangements ................................................................................................................ 30 Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015 for the cultural sector
Who should read this Guidance?
Staff of libraries (including university libraries), museums (including galleries), and archives who are responsible for:
- copyright and licensing
- data production and protection
- IT and web content
- access to and protection of information
- information/records
- communications and press
- finance and commercial development
Welcome
Welcome to the Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015 (SI 2015 No. 1415) (the '2015 Regulations'). The 2015 Regulations are in force from 18 July 2015.
A major change from the previous Regulations is that cultural sector bodies – libraries (including university libraries), museums and archives – are brought into scope.
This Guidance is written for cultural sector bodies and will explain the changes being introduced by European Directive 2013/37/EU (the 'Amending Directive') and how these are transposed in the 2015 Regulations.
As anticipated by the Amending Directive, the European Commission has also published non-binding guidance for Member States on best practices on standard licences, datasets and charging for the re-use of information.
## Key aspects
| 2015 Regulations | |-------------------| | **Scope** extends to include cultural sector: libraries (including university libraries), museums and archives | | Cultural sector bodies not required to permit re-use, unless the information is already available for re-use (even by themselves) | | Make information and metadata available through standard licences and machine-readable formats whenever possible | | Facilitate cross-linguistic searches whenever possible | | Cultural sector bodies (libraries, museums and archives) may charge to cover the cost of collection, production, reproduction, preservation and rights clearance, together with a reasonable return on investment | | Licences must be standard and as non-restrictive as possible | | No exclusive licences unless to provide a public service that could not otherwise be provided, or for digitising cultural resources | | Information asset lists must be published | | If a complaint cannot be resolved by a cultural sector body’s internal process, it may be escalated to the Information Commissioner’s Office which can make binding decisions on most issues, and it may be potentially escalated to the First-Tier Tribunal |
### Scope at a glance
| Bodies in scope | Bodies out of scope | Information in scope | Information out of scope | |-----------------|---------------------|-----------------------|--------------------------| | Libraries (including university libraries) Museums Galleries Archives | Public sector broadcasters | Information in any form – including print, visual, digital, electronic, and sound recordings – that is produced, held or disseminated within the cultural sector body’s public task | Information produced, held or disseminated outside public task | | Central government | Educational and research establishments | | Information that is not accessible | | Local government | Cultural and performing arts establishments (other than libraries, museums and archives) | | Information restricted or excluded, for example under access legislation | | Public corporations | Parts of higher education institutions not otherwise in scope | | Information whose copyright does not belong to the cultural sector body | | Scottish Government and Parliament | Private utility companies | | Crests, logos, insignia | | Welsh Government and Assembly | | | Personal data that must be protected | | Northern Ireland Executive and Parliament | | | | | Other bodies outlined in Regulation 3 (e.g. police forces) | | | |
### What is public sector information?
Any information whatever its medium (form) – including print, visual, digital or electronic, and sound recordings – produced, held or disseminated by a cultural sector body is considered public sector information. This includes an enormous range: corporate information such as reports and financial data, codes of practices, raw data, public records, statistics, still and moving images, press releases, publication schemes, and so on.
There is no distinction between works of art, artefacts and other information in the 2015 Regulations. If a cultural sector body holds the copyright for information it produces, holds or disseminates, then that information is in scope of the 2015 Regulations.
Information with third-party copyright is excluded from the 2015 Regulations.
Information produced, held or disseminated outside public task is excluded from the 2015 Regulations.
The 2015 Regulations have been developed from the Amending Directive which updated the 2005 Regulations on re-use. While the Amending Directive refers to public sector information as documents, this Guidance uses the term 'information' to reflect the variety of public sector bodies (including cultural bodies) and the types of information they produce, hold or disseminate. It aligns to the government’s focus on open data and information as understood in access legislation (such as the Freedom of Information Act 2000 and the Environmental Information Regulations 2004).
What is re-use?
Re-use means using information for a purpose different to the one for which it was initially produced, held, collected or disseminated.
Key aspects for the cultural sector
Cultural sector public bodies are expected to make information available to other users for re-use. They will be required to do so for information produced, or held or disseminated as part of their public task and where that information has already been made available for re-use (including by itself).
Libraries, museums and archives hold a significant amount of information with third-party copyright, which is excluded from the 2015 Regulations.
Cultural sector bodies must be transparent about what information can be re-used, any charges for it, and the terms and conditions on which that re-use can take place.
Licences, terms and conditions must be non-discriminatory.
The complaints process will include binding decision-making body. Exceptions for the cultural sector
- permission to re-use is not always mandatory
- may charge above marginal cost for re-use
- may enter into exclusive arrangements (generally up to 10 years) with third parties if in the public interest or for digitising a cultural resource
What do the 2015 Regulations mean for different sectors?
Libraries (including university libraries), museums and archives
Many cultural sector bodies are already complying with the 2015 Regulations by making the information they produce, hold and disseminate available for re-use. Although giving permission to re-use is not mandatory, it is encouraged.
For some libraries, museums and archives with particular types and ages of collections, re-use may affect different proportions of their accessible holdings.
Cultural sector bodies need to be clear what their public task is, because this determines what information falls within scope of the 2015 Regulations. Collecting policies are key when defining public task; information relating to parts of collections not covered by the collecting policy will be held outside public task and therefore likely to be outside the scope of the 2015 Regulations.
Cultural sector bodies may charge re-users to cover the costs of collection, production, reproduction, dissemination, preservation and rights clearance of the information, plus a reasonable return on their investment.
Some exclusive licensing will be permitted, especially where the museum, archive or library is working with a partner on a digital access project or when they cannot otherwise provide a service in the public interest.
Cultural sector bodies retain the right to decline requests for re-use unless the information has already been made available for re-use, including by themselves. Such refusals of permission may not be discriminatory. They may also set terms and conditions on re-use, for example using a standard licence to permit re-use.
Note that these decisions may be challenged by the requester. Other public sector bodies
For public sector information which is already available for re-use under the Open Government Licence or a standard licence, the 2015 Regulations will mean business as usual.
Two important points for public sector bodies are:
- accessible information must be made available for re-use (unless it is otherwise restricted or excluded)
- marginal cost pricing is the default model.
Public sector bodies, such as many information traders, that are ‘required to generate revenue to cover a substantial part of their costs relating to the performance of their public task’ will be able to charge for the cost of collection, production, reproduction and dissemination of public sector information, together with a reasonable return on investment.
Re-users of cultural sector information
The 2015 Regulations should make re-use of cultural sector information easier. In general, information that is accessible (because it has been published or been released under access legislation) should be available for re-use.
Any information that the cultural sector body has made available for re-use, even by itself, must be made available for others to re-use.
Context of the 2015 Regulations
The 2015 Regulations transpose Directive 2003/98/EC as amended by Directive 2013/37/EC on the re-use of public sector information, and establish the UK framework for the re-use of public sector information. The purpose is to make information easier to re-use, resulting in economic, social and civil benefits.
Cultural sector public bodies are required to be transparent about what information can be re-used, the pricing of it, and the terms and conditions on which that re-use can take place.
Principles and Objectives
The 2015 Regulations are based on the principles of fairness, transparency, non-discrimination and consistency of application.
The 2015 Regulations deliver the following:
- encouraging proactive publication of information that is easy to re-use
- encouraging re-use permission for all information produced, held or disseminated within public task unless re-use is otherwise restricted or excluded • the easy identification of information that is available for re-use • transparency of terms, conditions and licences • clarity of any charges to be made for re-use (with explanation of the basis of the charge) • use of standard licences that are as non-restrictive as possible for re-use, including through use of the Open Government Licence (OGL) for information for which no charge is made • processing of requests for re-use in a timely, open and transparent manner • enhancement of an accessible complaints process including a body to make binding decisions • protection of personal data
Access and re-use
There is a distinction between access to, and re-use of, information.
Information is made accessible in various ways including:
• displaying or holding information (e.g., artefacts on display in a museum, records in an archive) • publishing the information on websites of cultural sector bodies • free leaflets, pamphlets and books • priced publications (often through private sector publishers who publish information on behalf of the cultural sector body) • in statutory registers or provided for a fee • on mobile platforms and through social media • through an access to information request • through a re-use request • through a publication scheme under the Freedom of Information Act
Re-use means using cultural sector information for a purpose other than the initial purpose for which it was produced, held or disseminated.
For cultural sector bodies re-use permission is mandatory if it has already allowed the information to be re-used for a similar purpose (including by itself).
Example: transfer of information from a museum to its commercial trading arm is considered re-use; therefore the information must be made available to all other re-users on the same terms and conditions (non-discrimination).
Example: transfer of local government archival information to a cultural sector archive (such as the local authority’s archive) is not considered re-use, as receiving archival transfers is part of the archive’s public task. Information which is re-usable while it is in custody of a cultural sector body should remain re-usable under the 2015 Regulations, regardless of any transfer to an archive or other public sector body.
If information is not under an open licence, a request for re-use should be made to the cultural sector body that holds the information.
**Restrictions on re-use**
Common examples of restrictions and exclusions include third-party copyright exclusion and protection of personal data. However the cultural sector may have additional considerations for re-use of certain information.
| Cultural sector bodies retain the right to decline a request or require terms and conditions of re-use if the end-use is deemed unsuitable. |
In some cases, such as with collections of culturally sensitive information, re-use might be considered to be inappropriate and the cultural sector body can decline a request for re-use. Alternatively they may allow it for restricted uses such as non-commercial research re-use, but decline it for commercial re-use.
| Cultural sector bodies should make clear when granting access to information if there are any restrictions on re-use. |
| Re-use: Regulations 4 and 5 | |-----------------------------| | Release information in existing format, preferably electronically | | Consider permitting re-use of information | | Consider making information available for re-use in response to a Freedom of Information Act (FOIA) request |
**Resources:** From The National Archives:
- How to manage your information
- Re-using public sector information
- Links between access and re-use
**University libraries**
Although the Amending Directive does not define 'university library' it is taken to mean a library attached to a higher education body. It is not merely a physical building as many are now also digital repositories. Therefore, 'university library' refers not only the library itself, but can also refer to the parts of a university with library collections management functions, and to the information service that controls and disseminates information from within the higher education parent body. There will be overlaps for many university libraries with archival and museum information, for example where:
- archives and museums are part of a library
- 'special collections' in a library hold archives
- archives and museums hold rare books
When such overlaps occur, university museums and archives should follow guidance for other public sector bodies.
Information produced, held or disseminated by a university library must not be reclassified as non-library information in order to avoid compliance with the 2015 Regulations.
Research in cultural sector bodies
Cultural sector bodies that carry out research functions must take care when identifying what information can be re-used.
The 2015 Regulations bring cultural sector bodies into scope, but continue to exclude research establishments. This exclusion is designed to prevent re-use requests for ongoing, raw research data which might be exploited and which in turn could undermine the research.
Cultural or other public sector bodies that carry out research activities, and the resulting research information, are in scope.
Research work of cultural sector bodies is generally in scope.
Example: A public museum carries out research work, but is not a research establishment itself. As a public sector body, it is definitely within scope, and its research work is also within scope. The type of research is not relevant.
The museum decides to release its research results under an open licence, as the work aligns to its public task. It also decides to release the raw data supporting the research after it is completed, but via a licence and on a case-by-case basis for re-use requests.
If the museum is paid to conduct research on a contract basis by a non-public sector body, then that research would fall outside scope.
As part of carrying out research, cultural and other public sector bodies frequently share their information with partner institutions. In such cases, the information sharing is not considered to be re-use under the 2015 Regulations if the sharing is part of either body’s public task. The Freedom of Information Act has a specific exemption in Section 22A (Research (prejudice based qualified exemption)) for information obtained in the course of, or derived from, a programme of research. The exemption has a wide scope that includes information not necessarily intended for publication itself. A cultural or other public sector body may use more than one exemption to protect sensitive information or premature release.
**Resources:**
- Information Commissioner’s Office – Guide to Freedom of Information
- Ministry of Justice – Section 22 Research exemption guidance
- The Intellectual Property Office – Exceptions to copyright: Copyright material held by public bodies
- The Intellectual Property Office – Exceptions to copyright: libraries, archives and museums
- The Intellectual Property Office – How to apply for a licence to use an orphan work
From The National Archives:
- How to manage your information
- Overview of Crown copyright for governmental departments
- Re-using public sector information
**Jurisdiction**
The Amending Directive applies only to EU member states. It does not permit discrimination against re-users based on their location. The 2015 Regulations which implement the Amending Directive apply in the UK. Other member states have transposed the Amending Directive into their own legal systems.
**Links with other UK legislation**
The 2015 Regulations link to other legislation, and seek to balance re-use of cultural and other public sector information with protection of copyright and personal information.
Access to cultural sector information is provided for under different regimes which are collectively referred to in this Guidance as ‘access legislation’. The 2015 Regulations provide a framework for re-use of information once access has been obtained.
If information is obtained under access legislation, the 2015 Regulations presume the re-usability of the information unless it is otherwise excluded or restricted (for example by third-party copyright).
However, permission may still have to be sought for re-use unless information is provided under an open licence.
**Freedom of Information Act**
In 2012, the government amended the Freedom of Information Act 2000 (FOIA) to create a ‘right to data’ comprising new duties for certain public authorities to provide datasets of factual management information in a re-usable form and with a licence permitting re-use, in response to requests, and to continue to publish them. These provisions were inserted into sections 11A, 11B and 19 of FOIA by the Protection of Freedoms Act 2012. The new rights to re-use under the 2015 Regulations have been consolidated with the FOIA provisions where a dataset is within the scope of the Regulations. For datasets or public authorities out of scope of the 2015 Regulations, there is no change. The access and means of communication requirements of FOIA, including sections 1, 11, 11A and 19, remain the same.
The 2015 Regulations amend sections 11A and 19 of FOIA regarding release of datasets or portions of datasets for re-use. These changes mean that where a dataset is covered by the 2015 Regulations, then it is the 2015 Regulations and not FOIA which will govern the re-use of such dataset information and their entry on a publication scheme. This is an important change for the large number of public authorities which are also public sector bodies. Re-use of their datasets that are relevant copyright works will be dealt with under the 2015 Regulations, not FOIA.
Resources:
- Environmental Information Regulations 2004 and Environmental Information (Scotland) Regulations 2004 (as amended)
- EC Guidance on recommended standard licences, datasets and charging for re-use
- Freedom of Information Act 2000 and Freedom of Information (Scotland) 2002 (as amended)
- Information Commissioner’s Office – Guide to EIR and – Guide to FOI
- Local Government Act 2010 and Local Government Access to Information Act 1985
- Openness of Local Government Bodies Regulations 2014
- Protection of Freedoms Act 2012
Data Protection Act
The 2015 Regulations do not reduce the protections of the Data Protection Act 1998 (DPA). They do not apply to any personal data that is not available under access legislation, nor to personal data that may be accessible but cannot be re-used due to data protection.
Personal data may be accessible (for example, in a public register or by a request under access legislation) but that does not automatically make it re-usable. Any subsequent use or re-use of any personal data must be lawful under the DPA, which controls how personal information is used.
The cultural sector body is responsible for complying with the DPA when making information available for re-use. After permission to re-use has been given, the re-user is responsible for complying with the DPA.
Resources: From the Information Commissioner:
- Data Protection Principles
- Data protection and privacy and electronic communications
- Guide to Data Protection for organisations
- The National Archives – Data Protection Act for archives, including a code of practice
Examples: The National Archives - Privacy Policy and Information Charter Cabinet Office – Personal Information Charter (includes Twitter policy) Public Records Act
The National Archives has published guidance on complying with the provisions of the Public Records Act.
Resource: The National Archives – Public Records Act
Copyright
Copyright and re-use
Copyright protects material such as literary works, artistic works, software and databases, and stops others from using such material without permission.
The relaxation of copyright assertion when possible by cultural sector bodies facilitates re-use.
However, cultural sector bodies may not infringe on the copyright of others, including copyright in information they hold or disseminate but which belongs to someone else.
The 2015 Regulations do not change copyright law, or its protections or exceptions.
Cultural sector bodies may not infringe others’ copyright.
They may not give permission to re-use information for which they do not hold copyright.
Copyright in re-used information does not grant copyright in the original information, even if that information is in the public domain or otherwise out of copyright. This principle applies to all re-use, even if it has been granted under an open licence.
Example: if you publish a new digital edition of Shakespeare’s collected works, you hold only copyright for the typographical arrangement of your edition (covering aspects such as format, editorial notes and design) but you do not hold and cannot claim copyright in the underlying literary work.
Local authority libraries, museums and archives in particular may produce, hold or disseminate information that is under the copyright of their parent authorities (as well as holding third-party copyright information). These bodies should work together to establish the appropriate copyright status and any re-use licensing terms for re-use of their information. Where archives provide an archive service for a number of local authorities it will be particularly important to manage this aspect.
Cultural sector bodies should be very clear in any contractual relationships where copyright belongs. Crown copyright
There are several cultural sector bodies that also hold Crown copyright materials and information in their collections, including the Imperial War Museum, the Government Art Collection, and other bodies with delegations of authority to licence copyright on behalf of the Crown.
For most Crown copyright information, the Open Government Licence is compulsory as it liberalises re-use of public sector information.
The National Archives itself is a Crown body as well as a cultural sector body. The Keeper of Public Records at The National Archives administers Crown copyright and database rights.
Note that the Crown does not share copyright with external or other public sector bodies. Crown copyright will take precedent over other copyright so other bodies may be asked to assign their copyright to the Crown.
Third-party copyright
Re-use permission can be given by a cultural sector body only for information for which it holds the associated copyright. Large portions of cultural public sector libraries, museums and archive collections will include third-party copyright which is out of scope of the 2015 Regulations.
Copyright in re-used information does not grant copyright in the original, even if that information is in the public domain.
In cases where the copyright owner is unknown, copyright protection still applies and the cultural sector body cannot give permission to re-use.
Resources: Legislation: Copyright, Design and Patents Act 1988 Copyright and Rights in Databases Regulations 1997
Intellectual Property Office: Copyright (links to a variety of resources) Copyright material held by public bodies Exceptions to copyright: Libraries, museums and archives Overview of intellectual property Suite of guidance on orphan works
The National Archives: Copyright Copyright and publishing Copyright and re-use statements Copyright guidance Duration of copyright (Crown and non-Crown) How copyright applies Overview of Crown copyright for governmental departments Re-use and copyright Open data
Under Regulation 11, cultural sector bodies should make information and related metadata available through standard licences and, where appropriate and possible, through open and machine-readable formats using formal open standards.
Cultural and other public sector bodies may re-use open data they have published, or which has been published by another body, for activities inside and outside their own public task.
A machine-readable format is structured so that software applications can easily identify, recognise and extract specific data from it. The format should be standardised through an open process and approved by the Open Standards Board. This ensures interoperability with other programs and licences, such as the environmental framework in INSPIRE.
Cultural sector bodies may hold information that may be unsuitable to be released as open data, for example if it includes personal or sensitive information. In such cases, publishing statistical summaries or metadata about the information in open format would be an alternative and promote re-use. This may be sourced in part from catalogues and other collections management data.
Resources:
- 5 star open data step diagram
- Department of Justice – Code of Practice (Datasets)
- GOV.UK – Open Data
- Government Service Design Manual
- INSPIRE Regulations 2009
- INSPIRE Amendment Regulations 2012
- INSPIRE (Scotland) Regulations 2009
- INSPIRE (Scotland) Amendment Regulations 2012
- Open Data Institute and Open Data Certificates
- OpenGLAM
- Scottish Government Open Data Strategy
- Standards Hub (includes Open Standards Board)
- The National Archives – Open Government Licence
- The National Archives – Copyright and publishing
- www.data.gov.uk
For cultural sector bodies new to open data principles, a non-governmental explanation of open data licensing has been produced by the Open Educational Resources Intellectual Property Rights Support Project. Scope of the 2015 Regulations
Bodies in scope
Most public sector bodies are in scope of the 2015 Regulations, which bring libraries, university libraries, museums and archives into scope.
Cultural sector bodies range from large national galleries and museums to local archives and public libraries to libraries that are part of universities. The National Archives is itself in scope.
Resources: From the Cabinet Office: – Categories of Public Bodies – Openness and Accountability – Public Bodies 2014 Office of National Statistics – Classification of Public Sector Bodies (updated regularly)
From The National Archives: – How to identify a public records body: determination and change of status – List of Crown bodies – Scope flowchart
Bodies out of scope
Regulation 5(3) excludes the following types of bodies:
- public sector broadcasters and their subsidiaries and other bodies or their subsidiaries for the fulfilment of a public service broadcasting remit, for example the BBC
- educational and research establishments including organisations established for the transfer of research results (such as research councils), schools and universities (except for university libraries which are in scope)
- cultural and performing arts establishments such as orchestras, operas, ballets and theatres (other than libraries, museums and archives which are in scope)
The 2015 Regulations also do not apply where a person must prove an interest in order to gain access to information. Information in scope
The 2015 Regulations define information by relating it to ‘content’ which is information in any form – including print, visual, digital, electronic, and sound recordings. Examples of public sector information in scope include:
- primary and secondary legislation
- official records of the Proceedings of the UK and Scottish Parliaments, the Northern Ireland Assembly and the National Assembly for Wales
- codes of practice
- geospatial data produced by organisations such as Ordnance Survey and the UK Hydrographic Office
- meteorological data produced by the Met Office
- consultation and policy documents
- statistics produced by the Office for National Statistics
- financial and performance data
- annual reports published by government departments, agencies and local authorities
- statutory registers such as those for birth, death and marriage, and land titles
- patent information collected and produced by the Intellectual Property Office
- health and safety guidance and reports published by the Health and Safety Executive
- forms issued by local and central government such as tax forms
- press notices
- still and moving images
- technical reports
- local planning information
- publication schemes (required under FOIA legislation)
- information produced, held or disseminated by libraries, museums and archives (where they hold the copyright)
The 2015 Regulations apply only to information produced, held or disseminated within a cultural sector body’s public task and for which they hold copyright.
Information produced, held or disseminated by a cultural sector body must not be reclassified as outside its public task in order to avoid compliance with the Amending Directive or the 2015 Regulations.
If the information is a dataset that is defined as a ‘relevant copyright work’ under the Freedom of Information Act (FOIA), and the 2015 Regulations do not apply, then the re-use provisions in FOIA still apply and permission to re-use may be given.
Example: if a cultural sector body is excluded from the 2015 Regulations, but is a FOIA ‘authority’, then the right to re-use datasets comes from FOIA. Information out of scope
Some information is excluded regardless of the body that produces, holds or disseminates it. This is set out in Regulation 5 and includes:
- information that falls outside the scope of the public task of the cultural sector body
- information in which the relevant copyright is owned or controlled by a different person or organisation that is not in scope (third-party copyright)
- parts of documents containing only logos, crests or insignia
- information that contains personal data that must be protected
- information exempt from release under access legislation, including where a person or company has to show a particular interest to access it
An exception to this is where section 21 of the Freedom of Information Act 2000 or section 25 of the Freedom of Information (Scotland) Act 2002 applies. These sections cover information which is ‘reasonably accessible’ to the requester. For example, information published on a cultural sector body’s website would be exempt from an access request by virtue of being already reasonably accessible. This information would normally be available for re-use.
Information is out of scope if it is transferred within a cultural or other public sector body, or to another cultural or other public sector body, in order for either body to carry out its public task.
If a cultural sector body shares research information with a research partner institution, that sharing is not considered re-use and is therefore out of scope.
Public task
Public sector bodies should ensure that the scope of their public task is transparent and subject to review, and publish a description of what their public task is.
Information within public task is that which a cultural sector body must produce, hold, collect or disseminate to fulfil its core role and functions, whether statutory or established through common administrative practice.
Cultural sector bodies must define and publish what their public task is.
Cultural sector bodies may not define information they produce, hold or disseminate as outside their public task in order to avoid the 2015 Regulations.
Archives and museums often have a collection policy, whether published or unpublished. Collection information and items held by a cultural sector body which are outside its collection policy may also be outside public task. Resources: From The National Archives:
- General information on public task
- Guide to drawing up a statement of public task
- Public task principles
Examples: Environment Agency - Public Task Statement Ordnance Survey - Public Task The National Archives - Public task
Cultural sector obligations
Information asset lists
Cultural sector bodies must already publish their publication schemes under sections 19-20 of the Freedom of Information Act. Under the 2015 Regulations, they must also publish asset lists of their cultural public sector information. Information asset lists include both published and unpublished information.
An information asset is information that a cultural sector body produces, holds or disseminates that is of interest or value to itself and potentially to re-users. It includes information within the public task.
An information asset list is simply a register of these information assets, usually categorised using a standard classification method.
Cultural sector bodies may already have information asset lists in the form of catalogues, guides to holdings and collections databases.
| Information asset lists: Regulation 16 | |---------------------------------------| | Publish a detailed list of main information within public task including: | | • what is available for re-use (published and unpublished) with relevant metadata | | • how the information can be obtained | | • any terms or conditions for re-use (e.g., through a licence) |
Resources: From The National Archives:
- Asset Lists
- Information Assets and Business Requirements
- Information Asset Register (model IAR) Examples: Department for Transport – Information Asset Register Home Office Information – Asset Register
Permitting re-use
Cultural sector bodies are not required to permit re-use of their public sector information. Regulations 11 to 16 describe the requirements and exclusions for permitted re-use. However refusals to give permission to re-use may not be discriminatory, and such decisions may be challenged.
Where re-use is permitted for more than one party, including by the cultural sector body itself, it must be on the same terms and conditions (non-discriminatory).
Terms and conditions may vary for different types of re-use, but they must not discriminate among different types of re-users (e.g., commercial, non-commercial, educational, charity).
| Permitting re-use: Regulations 7, 11-16 | |----------------------------------------| | Cultural sector bodies are not required to allow the re-use of the information they produce, hold or disseminate within their public task | | They must allow re-use of information if it has already been made available for re-use, including by itself | | Be open, transparent and fair in processing requests for re-use |
Resource: The National Archives – Template form for requesting re-use of public sector information
Responding to a request for re-use
Response means one of the following in writing (print or email):
- indicating if the information is already available and re-usable
- explaining to the requester where they can obtain the information
- supplying the information to the requester, if it has not already been supplied (including under access legislation)
- notifying the requester if it will take longer than 20 working days to reply
- explaining if there is any charge for information
- offering terms and conditions for re-use, often in the form of a licence
- declining to give permission to re-use and the grounds for the decision
- explaining the complaints process in case the requester wants to appeal a refusal Responding to a request for re-use: Regulations 6 and 8
| Respond within 20 working days, including finalising any licence offer | |---------------------------------------------------------------------| | Any extension past 20 days must be reasonable | | The cultural sector body must tell the requester their expected timeframe and reasons for the delay | | Any licences offered should be standard wherever possible and appropriate | | Protection of personal data still applies |
Resource: The National Archives – Template form for requesting re-use
Requests to re-use readily available information
Information produced, held or disseminated by a cultural sector body within its public task may already be accessible and available for re-use, for example on its website, or in www.data.gov.uk, www.local.gov.uk or www.gov.uk (or on-site in the case of some cultural sector bodies).
Where information is already available, including by publishing it or identifying it as being available for re-use (e.g., on an information asset list), a request for re-use must be answered within 20 working days.
Information made available for re-use under an Open Government Licence (OGL) does not require a request to re-use, but the re-user must meet licence conditions.
Requests to re-use previously unreleased information
Permission to re-use previously unreleased information is subject to access issues being resolved. Requests for access and re-use may be made simultaneously so that the 20 working day response times are concurrent.
If a request for access (for example under a FOIA request) and re-use is combined, cultural sector bodies may begin preparing their re-use response ahead of access being given, so they can respond quickly once access has been resolved.
Processing requests for re-use
Cultural sector bodies must respond to requests for re-use within 20 days.
If more time is needed, for example for a high-volume or complex request, then a response must still be made within 20 days but it may explain why more time is needed to fulfil the request, and indicate a reasonable timeline. Cultural sector bodies are not required to:
- create or adapt information to comply with a request for re-use. The emphasis is on the re-use of existing information, rather than creating new or changing existing information
- provide extracts of information where this would require disproportionate effort
- continue producing, storing or disseminating information purely for re-use by others. This means that once information is no longer useful or needed to meet the policy and public task aims of a cultural sector body, it may stop producing it. The cultural sector body should alert re-users if such a decision is made
| Processing a request for re-use: Regulations 10 and 11 | |-------------------------------------------------------| | Respond to a request within 20 days, including telling a requester if you need more time to fulfil their request | | Make information available in existing format |
**Notification of refusal to allow re-use**
Regulation 9 outlines the required refusal process:
- response must be in writing
- reasons for refusal must be given
- the cultural sector body should explain the complaints processes open to the requester, both internal and external
- in cases where refusal is based on copyright being owned by a third party, the owner of the relevant copyright should be identified, where known. The same principle applies where the copyright in the information is held jointly by the cultural sector body and a third party. If the copyright owner is not known, this should be stated
- where the owner of the third-party copyright is not known, then the name of the person from whom the information was obtained should be provided, where known and lawful under the Data Protection Act 1998. If that person is not known, this should be stated
Regulation 17 provides for a complaints process if a cultural sector body refuses permission to re-use.
**Non-discrimination**
Regulation 13 states that cultural sector bodies must not discriminate in the conditions applied among requesters who re-use information for similar purposes. The emphasis is on the type of re-use, rather than the re-user.
Example: a private sector company and a charity must be treated in the same way for re-use requests, whether the re-use is for commercial gain or not. The only exception to this is where a particular user or groups of users have a statutory right to re-use information.
When a cultural sector body decides to use information beyond the purpose for which it was originally produced, held or disseminated, it must apply the same terms to itself, or to any associated body such as a trading arm, as to any other re-user.
Cultural sector bodies should make an appropriate cost-reflective charge regardless of whether the information is provided to an external re-user or for their own re-use.
**Non-restrictive conditions for re-use**
Regulation 12 allows cultural sector bodies to set conditions on re-use of information, where appropriate through a licence.
It may also set other conditions, for example requiring a disclaimer that the re-use may not be construed as approval by the cultural sector body that is permitting the re-use.
Conditions may not restrict competition or discriminate among re-users.
**Licensing re-use**
Licences should be as open and non-restrictive as possible.
The [Open Government Licence](https://www.nationalarchives.gov.uk/doc/open-government-licence/version/2/) is an example of a non-restrictive licence. It is the default for most Crown bodies, and preferred for all public sector bodies in cases where information is supplied for re-use and for which no charge is made.
If a cultural sector body makes some information available under an open licence (such as the OGL) but licenses other information under a different licence, it should clearly indicate what information comes under which licence.
Libraries, museums and archives are permitted to have exclusive licences in certain circumstances, such as where there is no alternative to provide a public task service, or to continue a digitisation programme.
Where a cultural sector body has a deposit agreement for information held within its public task that allows it to sub-licence that information, the terms and conditions of the sub-licence must comply with the 2015 Regulations. Licensing re-use: Regulations 12 – 14
| Licences are not required | |---------------------------| | Use a standard licence which is as non-restrictive as possible | | Apply fairly and openly to all requesters - must not be anti-competitive or discriminatory | | Exclusive licences for providing information in the public interest must be reviewed at least once every three years and must be published if entered into after 31 December 2003 | | Exclusive licences for digitising cultural resources normally must not be longer than 10 years and must be reviewed in the 11th year and every seven years after that | | All exclusive licences must terminate by 18 July 2043 | | Indicate any third-party copyright information not covered by the licence | | Protection of personal data still applies |
Resources: The National Archives – Re-use and licensing UK Government Licensing Framework
Different licence types
Open Government Licence
The Open Government Licence (OGL) is the default for central government departments and agencies, and the preferred licence for all other public and cultural sector bodies, for use in cases where information is supplied for re-use and no charge is made.
Non-Crown bodies may also use the OGL.
Personal data cannot be re-used under the OGL.
Non-commercial Government Licence
The Non-Commercial Government Licence is an acceptable alternative when the OGL is not suitable. Crown bodies may use this only if approved by The National Archives.
Charged licence
The National Archives has produced the Charged licence which is recommended for use by cultural sector bodies that have a valid reason under the 2015 Regulations to charge for the re-use of the information they produce, hold or disseminate.
Exclusive licences
Exclusive licences are usually prohibited for any public sector body because they prevent others from re-using information and inhibit competition. However the Amending Directive recognises some circumstances where a cultural sector body may need to enter into an exclusive arrangement, for example to provide a public task service not otherwise possible, or for digitising cultural resources. Exclusive arrangements: Regulation 14
| Exclusive arrangements are permitted when a public task service cannot be provided otherwise | | These arrangements must be reviewed at least once every three years to ensure the reason(s) for exclusivity remain valid | | Details of any such arrangement entered into on or after 31/12/2003 must be published |
Exclusive arrangements are permitted to digitise cultural resources
| These arrangements should not exceed 10 years. If it does exceed 10 years, the duration must be reviewed in the 11th year and every 7 years after, if applicable | | Details of any such arrangement must be published | | The cultural sector body must have access to the information during the term of the agreement, and it must receive one free copy of a digitised resource at the end of the agreement |
Any other exclusive arrangements existing on 17 July 2013 must be terminated no later than 18 July 2043
Charging for re-use
Regulation 15 on Charging, like the 2015 Regulations of which it forms part, only applies to information which a cultural sector body produces, holds or disseminates within its public task.
Marginal cost is the default when charging for re-use of such public sector information. There are certain exceptions to this default:
(a) bodies required to generate revenue to recover a substantial part of the costs incurred in fulfilling their public task (b) information for which a public sector body is required to generate sufficient revenue in order to cover costs associated with production, collection, reproduction and dissemination (c) the cultural sector – libraries (including university libraries), museums and archives
For (a) and (b), the total income for the accounting period must not exceed the cost of collection, production, reproduction and dissemination of the information, together with a reasonable return on investment.
For cultural sector bodies, the total income for the accounting period must not exceed the cost of collection, production, reproduction, dissemination, preservation and rights clearance of the information, together with a reasonable return on investment.
The 2015 Regulations do not define a reasonable return on investment (ROI) and the rate of return on capital employed in service provision to be applied will depend on whether that service provision competes with private sector provision of similar services. Normally the standard cost of capital, currently 3.5% in real terms, will apply. However, in cases where provision competes with private sector provision of similar services, the rate should be in line with rates achieved by comparable businesses facing a similar level of risk.
Charges may be challenged.
| Charging: Regulations 15 and 16 | |---------------------------------| | Marginal cost is the default for public sector bodies | | Limited to recovering the marginal cost of reproduction, provision and dissemination of information | | Public sector bodies required to generate revenue are not subject to the marginal cost default when charging for supplying information for re-use | | For these bodies, charges are limited to recovering the cost of collection, production, reproduction or dissemination of information, plus a reasonable return on investment | | For a cultural sector body, charges are limited to recovering the cost of collection, production, reproduction, dissemination, preservation and rights clearance, together with a reasonable return on investment |
Where a standard charge is established, provide information on:
- any conditions for re-use
- what the charges are and what each charge is for
- basis on which charges are calculated
Where a standard charge has not been established, provide information on:
- the factors taken into account in the calculation of the charge for re-use in question
- if requested, set out in writing the way in which the charge is calculated in relation to the specific request for re-use
All re-users must be charged the same cost-reflective rate for the same type of re-use (e.g., commercial publishing), regardless of what type of re-user they are (e.g., commercial, educational or charity)
For public sector bodies permitted to charge (including cultural sector bodies), the charge for information supplied in response to a request for re-use must not exceed the sum of:
A. the direct costs B. a reasonable apportionment of indirect and overhead costs, and C. a reasonable return on investment
No charging if costs already recovered to supply information for re-use (e.g., through registration fees)
No double-charging for access to information under access legislation, and for re-use of the same information Complaints process
Complaints can be made about whether a cultural sector body is complying with any aspect of the 2015 Regulations, for example on issues of charging or what information falls within public task, subject to the exclusions below.
The complaints process does not apply to the re-use of information produced, held or disseminated outside a cultural sector body’s public task. It also does not apply to information for which the cultural sector body does not hold the copyright.
The complaints process will only apply to issues of re-use, and will not consider complaints about access, which are dealt with under access legislation.
Initial complaints process
The cultural sector body must first try to resolve the complaint through its internal complaints process.
Complaints must:
- be in writing (email is acceptable)
- state the nature of the complaint – what sections of the 2015 Regulations are at issue and how
- what the complainant would like the cultural sector body to do in order to resolve the complaint
- provide the complainant’s full contact details
| Initial complaints process: Regulation 17 | |------------------------------------------| | Cultural sector bodies must attempt to resolve the complaint using their internal complaint process | | Respond within 20 working days | | If the 20 day timeframe cannot be met, contact the complainant to explain why | | Response to the complaint must be in writing | | Response to the complaint must give reasons for the decision and set out options if the re-user wishes to escalate (appeal) | Complaints to the ICO
If the cultural sector body's internal complaints process could not resolve the complaint, the complainant can escalate it to the Information Commissioner's Office (ICO), for example if it relates to the following:
- marginal cost pricing
- non-charging re-use complaints (e.g., refusal of permission to re-use)
The ICO has guidance on their role in the complaints process and the procedures that cultural sector bodies and complainants must follow when a complaint is escalated. The process is summarised below.
After reviewing the complaint, the ICO will issue a binding decision via a decision notice. Either the complainant or the cultural sector body may appeal this decision to the General Regulatory Chamber of the First-tier Tribunal, information rights jurisdiction (the First-tier Tribunal).
The ICO will notify the Scottish Information Commissioner (SIC) if the complaint relates to a Scottish cultural sector body and the ICO and the SIC may share relevant information.
| Escalation of complaints: Regulations 18-22 | |-------------------------------------------| | Cultural sector bodies must comply with an ICO decision unless they decide to appeal | | Cultural sector bodies must comply with the decision of the First-tier Tribunal, subject to their right to appeal to the Upper Tribunal and higher courts |
Resources:
- Courts and Tribunals Judiciary
- Information Commissioner’s Office (covering England, Wales and Northern Ireland)
- Scottish Information Commissioner
- General Regulatory Chamber (First-tier Tribunal is a part of this)
- General Regulatory Chamber – forms and guidance
- General Regulatory Chamber – guidance for policy makers (public sector bodies)
Transitional arrangements
Under Regulation 22, the previous 2005 Regulations will apply to any complaints about re-use still in process during the three months after 18 July 2015 (the in-force date of the 2015 Regulations), up to and including 17 October 2015.
If the complaint concerns a 'dataset' (see Links to other Legislation/Freedom of Information Act) that was requested prior to the 2015 Regulations coming into force, then the relevant FOIA provisions will continue to apply. If the complaint concerns a dataset that was requested after the 2015 Regulations came into force, then the 2015 Regulations will apply where the dataset is held by a public sector body.
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3c761b8a01e5516f5180b6468713ed5d2f36938f | Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015
For public sector bodies
Practical Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015 (SI 2015 No. 1415) which implement European Directive 2013/37/EU
Version control: v1.1 – January 2019
The National Archives
© Crown copyright 2019
You may use and re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence v3.0 This Guidance was produced by:
Information Policy The National Archives Bessant Drive Kew TW9 4DU [email protected]
This Guidance is designed to help public sector bodies comply with requirements for the re-use of public sector information. To read the relevant legislation for free, go to www.legislation.gov.uk and search for ‘public sector information regulations’.
If the 2015 Regulations or our interpretations of them change, we will publish updated information on our website www.nationalarchives.gov.uk where this Guidance is available for download. Contents
Welcome ........................................................................................................................................... 4 Key changes ....................................................................................................................................... 4 Comparison of key aspects ............................................................................................................. 5 Scope at a glance ............................................................................................................................. 6 What is public sector information? .................................................................................................. 7 What do the Regulations mean for different parts of the public sector? ........................................ 7 Public sector bodies ....................................................................................................................... 7 Libraries, museums and archives .................................................................................................. 8 Re-users of public sector information .......................................................................................... 8 Context of the 2015 Regulations ..................................................................................................... 9 Principles and Objectives .............................................................................................................. 9 Access and re-use ............................................................................................................................ 9 Jurisdiction ....................................................................................................................................... 10 Links with other UK legislation ...................................................................................................... 11 Copyright ......................................................................................................................................... 12 Open data ......................................................................................................................................... 14 Scope of the 2015 Regulations ......................................................................................................... 15 Bodies in scope .............................................................................................................................. 15 Bodies out of scope ....................................................................................................................... 15 Information in scope ..................................................................................................................... 16 Information out of scope .............................................................................................................. 17 Public task ......................................................................................................................................... 17 Public sector obligations .................................................................................................................. 18 Information asset lists .................................................................................................................. 18 Permitting re-use ............................................................................................................................. 19 Responding to a request for re-use ............................................................................................. 19 Requests to re-use readily available information ....................................................................... 20 Requests to re-use previously unreleased information ............................................................... 20 Processing requests for re-use ..................................................................................................... 20 Notification of refusal to allow re-use ......................................................................................... 21 Non-discrimination .......................................................................................................................... 21 Non-restrictive conditions for re-use ............................................................................................. 21 Licensing re-use .............................................................................................................................. 22 Different licence types ..................................................................................................................... 22 Open Government Licence .............................................................................................................. 22 Non-commercial Government Licence .......................................................................................... 22 Charged licence ............................................................................................................................... 23 Exclusive arrangements prohibited ................................................................................................. 23 Charging for re-use .......................................................................................................................... 24 Complaints process .......................................................................................................................... 26 Initial complaints process ............................................................................................................ 26 Complaints to the ICO .................................................................................................................. 27 Transitional arrangements ............................................................................................................... 28 Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015 for public sector bodies
Who should read this Guidance?
Staff of public sector bodies defined in the Regulations – including central, regional, devolved and local government and agencies – who are responsible for:
- copyright and licensing
- data production and protection
- IT and web content
- access to and protection of information
- information/records
- communications and press
- finance and commercial development
Welcome
Welcome to the Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015 (SI 2015 No. 1415) (the ‘2015 Regulations’). The 2015 Regulations are in force from 18 July 2015.
This Guidance is written for public sector bodies and will explain the changes being introduced by European Directive 2013/37/EU (the ‘Amending Directive’) and how these are transposed in the 2015 Regulations.
As anticipated by the Amending Directive, the European Commission has also published non-binding guidance for Member States on best practices on standard licences, datasets and charging for the re-use of information.
Key changes
- cultural sector now in scope: libraries (including university libraries), museums and archives
- obligation to allow re-use of most public sector information – optional for cultural bodies unless the information is already available for re-use, even by themselves
- marginal cost pricing is the default (with certain exceptions)
- standard licensing required; licences should be as non-restrictive as possible
- redress (complaints) arrangements with an authority that can issue binding decisions and potential to appeal to a First Tier-Tribunal
## Comparison of key aspects
| 2005 Regulations | 2015 Regulations | |------------------|-------------------| | Regulations apply to public sector bodies, including local government | Scope extends to include cultural sector: libraries (including university libraries), museums and archives | | Only accessible information is re-usable | Information produced, held or disseminated within a public sector body’s public task must be re-usable (unless restricted or excluded) | | Make information available | Make information and metadata available through standard licences and machine-readable formats whenever possible | | | Facilitate cross-linguistic searches whenever possible | | No obligation to allow re-use | Obligation to allow re-use of information unless restricted or excluded, or from a cultural sector body (which may decline permission to re-use) | | Standard licences encouraged | Encourages standard, non-restrictive licences | | Permits charging for re-use | Charging at marginal cost is the default | | | For public bodies outside the cultural sector, this is subject to certain exceptions (e.g., many information traders) which permit charging to cover the cost of collection, production, reproduction and dissemination, together with a reasonable return on investment | | | The marginal cost default does not apply to bodies in the cultural sector (libraries, museums and archives) which may charge to cover the cost of collection, production, reproduction, preservation and rights clearance together with a reasonable return on investment | | Prohibits exclusive licences | Same, unless to provide a public service that could not otherwise be provided, or for digitising cultural resources | | Complaints process established | If a complaint cannot be resolved by a public sector body’s internal system, it may be escalated to the Information Commissioner’s Office which can make binding decisions on most issues, and potentially to the First-Tier Tribunal for Information Rights |
## Scope at a glance
| Bodies in scope | Bodies out of scope | Information in scope | Information out of scope | |-----------------|---------------------|----------------------|--------------------------| | Central government | Public sector broadcasters | Information in any form – including print, visual, digital, electronic, and sound recordings – that is produced, held or disseminated within the public sector body’s public task | Information produced, held or disseminated outside public task | | Local government | Educational and research establishments | Information that is not accessible | | | Public corporations | Cultural and performing arts establishments (other than libraries, museums and archives) | Information restricted or excluded, for example under access legislation | | | Libraries (including university libraries) Museums Archives | Private utility companies | Information whose copyright does not belong to the public sector body | | | Scottish Government and Parliament | Parts of higher education institutions not otherwise in scope | Crests, logos, insignia | | | Welsh Government and Assembly | | | | | Northern Ireland Executive and Parliament | | | | | Other bodies outlined in Regulation 3 (e.g. police forces) | | | | What is public sector information?
Any information (content) whatever its medium (form) – including print, digital or electronic, and sound recordings – produced, held or disseminated by a public sector body is considered public sector information. This includes an enormous range: corporate information such as reports and financial data, codes of practices, public records, statistics, still and moving images, press releases, publication schemes, and so on.
If a public sector body holds the copyright for information it produces, holds or disseminates within its public task, then that information is in scope of the 2015 Regulations.
Information with third-party copyright is excluded from the 2015 Regulations.
Information produced, held or disseminated outside a public sector body’s public task is excluded from the 2015 Regulations.
The 2015 Regulations have been developed from the Amending Directive which updated the 2005 Regulations on re-use. While the Amending Directive refers to public sector information as documents, this Guidance uses the term ‘information’ to reflect the variety of public sector bodies and the types of information they produce, hold or disseminate. It aligns to the government’s focus on open data and information as understood in access legislation (such as the Freedom of Information Act 2000 and the Environmental Information Regulations 2004).
What do the Regulations mean for different parts of the public sector?
Public sector bodies
For public sector bodies that already make their information available for re-use under an open licence such as the Open Government Licence, the 2015 Regulations will largely mean business as usual.
Accessible information which is produced, held or disseminated by the public sector body must be made available for re-use (unless it is otherwise restricted or excluded).
The default is to set charges at marginal cost. In some cases, for example for online or digital information, this cost may be nil. There are certain exceptions to the marginal cost default (e.g., many information traders). In such cases, public sector bodies may charge re-users to cover the costs of collection, production, reproduction and dissemination of information, together with a reasonable return on their investment.
Public sector bodies need to be clear what their public task is, because this determines what information falls within scope of the 2015 Regulations.
The 2015 Regulations continue to give public sector bodies a means to express their transparency, fairness, and non-discrimination.
**Libraries, museums and archives**
Many cultural sector bodies are already complying with the 2015 Regulations through their best-practice approach to the information they produce, hold or disseminate. Essentially this means making their information re-usable.
They will be able to charge re-users to cover the costs of collection, production, reproduction, dissemination, preservation and rights clearance of the information, plus a reasonable return on their investment.
Some exclusive licensing will be permitted, especially where the museum, archive or library is working with a partner on a digital access project.
They also retain the right to decline requests for re-use (although such decisions may be challenged).
**Re-users of public sector information**
For re-users, the 2015 Regulations should make re-use easier. In general, information that is accessible, either because it has been published or because it has been released under access legislation, should be available for re-use under a standard licence.
For most re-use, charges will be at marginal cost. In some cases, this cost may be nil. Context of the 2015 Regulations
The 2015 Regulations transpose Directive 2003/98/EC as amended by Directive 2013/37/EC on the re-use of public sector information and establish the UK framework for the re-use of public sector information. The purpose is to make information easier to re-use, resulting in economic, social and civil benefits.
Principles and Objectives
The 2015 Regulations are based on the principles of fairness, transparency, non-discrimination and consistency of application. The 2015 Regulations deliver the following:
- encouraging proactive publication of information that is easy to re-use
- mandatory re-use permission for all information produced, held or disseminated within public task unless re-use is otherwise restricted or excluded (with some exceptions for the cultural sector)
- the easy identification of public sector information that is available for re-use
- transparency of terms, conditions and licences
- the availability of public sector information for re-use at marginal cost as the default
- clarity of any charges to be made for re-use (with explanation of the basis of the charge)
- use of standard licences that are as non-restrictive as possible, including through the Open Government Licence (OGL) for information for which no charge is made
- processing of requests for re-use in a timely, open and transparent manner
- enhancement of an accessible complaints process including a body to make binding decisions
- retains protection of personal data
Access and re-use
There is a distinction between access to, and re-use of, public sector information.
Information is made accessible in various ways including:
- publishing the information on websites of public sector bodies
- free leaflets, pamphlets and books
- priced publications (often through private sector publishers who publish information on behalf of the public sector body)
- in statutory registers or provided for a fee
- on mobile platforms and through social media
- through an access to information request
- through a re-use request
- displaying or holding information (e.g., artefacts on display in a museum, records in an archive)
- through a publication scheme under the Freedom of Information Act Re-use means the use of public sector information for a purpose different from the initial purpose for which it was produced, held or disseminated.
Public sector body information within public task is presumed to be re-usable once access is obtained, unless the information is otherwise restricted or excluded.
Common examples of restrictions and exclusions include third-party copyright exclusion and protection of personal data. All public sector bodies should make clear when granting access to information if there are any restrictions on re-use.
Access issues must be resolved by the public sector body holding the information before any re-use can be made.
Information which is re-usable while it is in the custody of a public sector body such as a local authority should remain re-usable under the 2015 Regulations, regardless of any transfer to an archive or other public sector body.
If information is not under an open licence, a request for re-use should be made to the public sector body that holds the information.
| Re-use: Regulations 4 and 5 | |-----------------------------| | Release information in existing format, preferably electronically | | Permit re-use of information (unless restricted or excluded) | | Consider making information available for re-use in response to a Freedom of Information Act (FOIA) request |
Resources: From The National Archives: – How to manage your information – Re-using public sector information – Links between access and re-use
Jurisdiction
The Amending Directive applies only to EU member states. It does not permit discrimination against re-users based on their location. The 2015 Regulations which implement the Amending Directive apply in the UK. Other member states have transposed the Amending Directive into their own legal systems. **Links with other UK legislation**
The 2015 Regulations have links with other legislation, and seek to balance re-use of public sector information with protection of copyright and personal information.
Access to public sector information is provided for under different regimes which are collectively referred to in this Guidance as 'access legislation'. The 2015 Regulations provide a framework for re-use of information once access has been obtained.
If information is obtained under access legislation, the 2015 Regulations presume the re-usability of the information unless it is otherwise excluded or restricted (for example by third-party copyright).
However, permission may still have to be sought for re-use unless information is provided under an open licence.
**Freedom of Information Act**
In 2012, the government amended the Freedom of Information Act 2000 (FOIA) to create a 'right to data' comprising new duties for certain public authorities to provide datasets of factual management information in a re-usable form and with a licence permitting re-use, in response to requests, and to continue to publish them. These provisions were inserted into sections 11A, 11B and 19 of FOIA by the Protection of Freedoms Act 2012.
The new rights to re-use under the 2015 Regulations have been consolidated with the FOIA provisions where a dataset is within the scope of the Regulations. For datasets or public authorities out of scope of the 2015 Regulations, there is no change. The access and means of communication requirements of FOIA, including sections 1, 11, 11A and 19, remain the same.
The 2015 Regulations amend sections 11A and 19 of FOIA regarding release of datasets or portions of datasets for re-use. These changes mean that where a dataset is covered by the 2015 Regulations, then it is the 2015 Regulations and not FOIA which will govern the re-use of such dataset information and their entry on a publication scheme. This is an important change for the large number of public authorities which are also public sector bodies. Re-use of their datasets that are relevant copyright works will be dealt with under the 2015 Regulations, not FOIA.
**Resources:**
- Environmental Information Regulations 2004 and Environmental Information (Scotland) Regulations 2004 (as amended)
- Freedom of Information Act 2000 and Freedom of Information (Scotland) 2002 (as amended)
- EC Guidance on recommended standard licences, datasets and charging for re-use
- Information Commissioner’s Office – Guide to EIR
- Information Commissioner’s Office – Guide to FOI
- Local Government Act 2010
- Local Government Access to Information Act 1985
- Openness of Local Government Bodies Regulations 2014
- Protection of Freedoms Act 2012 Data Protection Act
The 2015 Regulations do not reduce the protections of the Data Protection Act 1998 (DPA). They do not apply to any personal data that is not available under access legislation, nor to personal data that may be accessible but cannot be re-used due to data protection.
Personal data may be accessible (for example, in a public register or by a request under access legislation) but that does not automatically make it re-usable. Any subsequent use or re-use of any personal data must be lawful under the DPA, which controls how personal information is used.
The public sector body is responsible for complying with the DPA when making information available for re-use. After permission to re-use has been given, the re-user is responsible for complying with the DPA.
Resources: From the Information Commissioner’s Office: – Data Protection Principles – Guide to Data Protection for organisations – Data protection and privacy and electronic communications – Privacy Notices Code of Practice
The National Archives – Data Protection Act for archives, including a code of practice
Examples: The National Archives – Privacy Policy and Information Charter Cabinet Office – Personal Information Charter (includes Twitter policy)
Public Records Act
The National Archives has published guidance on complying with the provisions of the Public Records Act.
Resource: The National Archives – Public Records Act
Copyright
Copyright and re-use
Copyright protects material such as literary works, artistic works, software and databases, and stops others from using such material without permission. It prevents people from:
- copying it
- distributing copies of it, whether free of charge or for sale
- renting or lending copies of it
- performing, showing or playing it in public
- making an adaptation of it
- putting it on the internet The relaxation of copyright assertion by public sector bodies facilitates re-use.
Public sector bodies may not infringe on the copyright of others, including copyright in information they hold or disseminate but which belongs to someone else.
The 2015 Regulations do not change copyright law, or its protections or exceptions.
Copyright in re-used information does not grant copyright in the original information, even if that information is in the public domain or otherwise out of copyright. This principle applies to all re-use, even if it has been granted under an open licence.
Example: if you publish a new digital edition of Shakespeare's collected works, you hold only copyright for the typographical arrangement of your edition (covering aspects such as format, editorial notes and design) but you do not hold and cannot claim copyright in the underlying literary work.
Public sector bodies should be very clear in any contractual and licensing relationships where copyright belongs.
Crown copyright
Most information produced, held or disseminated by Crown bodies (most of central government) is covered by Crown copyright. Most Crown copyright information is available under the Open Government Licence, which liberalises re-use of public sector information.
The Keeper of Public Records at The National Archives administers Crown copyright and database rights. In some cases Crown copyright licensing responsibility is delegated to government departments, notably information traders, provided they confirm that Crown copyright information will be licensed in accordance with the 2015 Regulations and the principles set out by HM Treasury in Managing Public Money (or the relevant equivalent for devolved administrations).
Note that the Crown does not share copyright with external or other public sector bodies. Crown copyright will take precedent over other copyright; other bodies may be asked to assign their copyright to the Crown.
Resources: Copyright, Design and Patents Act and Copyright and Rights in Databases Regulations Intellectual Property Office – Copyright (links to a variety of resources) and – Exceptions to copyright: Copyright material held by public bodies
From The National Archives: – Copyright and publishing – Copyright and re-use statements – Copyright guidance – How copyright applies – Open Government Licence – Overview of Crown copyright for governmental departments Open data
Under Regulation 11, public sector bodies should make information and related metadata available through standard licences and, where appropriate and possible, through open and machine-readable formats using formal open standards.
A machine-readable format is structured so that software applications can easily identify, recognise and extract specific data from it. The format should be standardised through an open process and approved by the Open Standards Board. This ensures interoperability with other programs and licences, such as the environmental framework in INSPIRE.
Public sector bodies may re-use open data they have published, or which has been published by another body, for activities inside and outside their own public task.
Some public sector bodies may hold information that may be unsuitable to be released as open data, for example if it includes personal or commercially-sensitive information. In such cases, publishing statistical summaries or metadata about the information in open format would be an alternative and promote re-use.
Resources: 5 star open data step diagram Cabinet Office – Open Standards for Government Cabinet Office - Improving the transparency and efficiency of government and its services Department of Justice – Code of Practice (Datasets) GOV.UK – Open Data Government Service Design Manual INSPIRE Regulations 2009 INSPIRE Amendment Regulations 2012 INSPIRE (Scotland) Regulations 2009 INSPIRE (Scotland) Amendment Regulations 2012 The National Archives – Open Government Licence The National Archives – Copyright and publishing Open Data Institute and Open Data Certificates Scottish Government Open Data Strategy Standards Hub (includes Open Standards Board) The National Archives – Open Government Licence The National Archives – Copyright and publishing www.data.gov.uk
For public sector bodies new to open data principles, a non-governmental explanation of open data licensing has been produced by the Open Educational Resources Intellectual Property Rights Support Project. Scope of the 2015 Regulations
Bodies in scope
Most public sector bodies are within the scope of the 2015 Regulations, which also bring the cultural sector (libraries, including university libraries, museums and archives) into scope.
Examples of public sector bodies are: agencies, government departments, local government, and devolved institutions including the Scottish Parliament, the National Assembly for Wales Commission, and the Northern Ireland Assembly Commission.
If a public sector body carries out research activities (but is not a research establishment) it and the resulting research information are in scope.
Resources: Cabinet Office – Categories of Public Bodies Cabinet Office – Openness and Accountability Cabinet Office – Public Bodies 2014 Office of National Statistics – Classification of Public Sector Bodies (updated regularly) The National Archives – Determination and change of status The National Archives – List of Crown bodies The National Archives – Scope flowchart
Bodies out of scope
Regulation 5(3) excludes the following types of public sector bodies:
- public sector broadcasters and their subsidiaries and other bodies or their subsidiaries for the fulfilment of a public service broadcasting remit, for example the BBC
- educational and research establishments including organisations established for the transfer of research results (such as research councils), schools and universities (except for university libraries which are in scope)
- cultural and performing arts establishments such as orchestras, operas, ballets and theatres (other than libraries, museums and archives which are in scope)
The 2015 Regulations also do not apply where a person must prove an interest in order to gain access to information. Information in scope
The 2015 Regulations define information by relating it to ‘content’ which is information in any form – including print, visual, digital, electronic, and sound recordings. Examples of public sector information in scope include:
- primary and secondary legislation
- official records of the Proceedings of the UK and Scottish Parliaments, the Northern Ireland Assembly and the National Assembly for Wales
- codes of practice
- geospatial data produced by organisations such as the Ordnance Survey and the UK Hydrographic Office
- meteorological data produced by the Met Office
- consultation and policy documents
- statistics produced by the Office for National Statistics
- financial and performance data
- annual reports published by government departments, agencies and local authorities
- statutory registers such as those for birth, death and marriage, and land titles
- patent information collected and produced by the Intellectual Property Office
- health and safety guidance and reports published by the Health and Safety Executive
- forms issued by local and central government such as tax forms
- press notices
- still and moving images
- technical reports
- local planning information
- publication schemes (required under Freedom of Information Act legislation)
- information held by libraries, museums and archives where they hold the copyright
The 2015 Regulations apply only to information produced, held or disseminated within a public sector body's public task and for which they hold copyright.
If the information is a dataset that is defined as a 'relevant copyright work' under the Freedom of Information Act (FOIA), and the 2015 Regulations do not apply, then the re-use provisions in FOIA still apply and permission to re-use should be given.
Example: if a public sector body is excluded from the 2015 Regulations, but is a FOIA ‘authority’, then the right to re-use datasets comes from FOIA.
Information produced, held or disseminated by a public sector body must not be reclassified as outside its public task in order to avoid compliance with the 2015 Regulations.
| Public sector information | |---------------------------| | Information produced, held or disseminated within public task must be re-usable (unless restricted or excluded) | | Do not reclassify information as outside public task to avoid compliance | Information out of scope
Some public sector body information is excluded regardless of the body that produces, holds or disseminates it. This is set out in Regulation 5 and includes:
- information that falls outside the scope of the public task of the public sector body
- information in which the relevant copyright is owned or controlled by a different person or organisation that is not in scope (third-party copyright)
- parts of documents containing only logos, crests or insignia
- information that contains personal data that must be protected
- information exempt from release under access legislation, including where a person or company has to show a particular interest to access it
An exception to this is where section 21 of the Freedom of Information Act 2000 or section 25 of the Freedom of Information (Scotland) Act 2002 applies. These sections cover information which is ‘reasonably accessible’ to the requester. For example, information published on a public sector body’s website would be exempt from an access request by virtue of being already reasonably accessible. This information would normally be available for re-use.
Information is out of scope if it is transferred within a public sector body or to another public sector body in order for either body to carry out its public task.
If a public sector body shares research information with a research partner institution, that sharing is not considered re-use and is therefore out of scope.
Public task
Public sector bodies should ensure that the scope of their public task is transparent and subject to review, and publish a description of what their public task is.
Information within public task is that which a public sector body must produce, hold, collect or disseminate to fulfil its core role and functions.
If the 2015 Regulations do not apply, then permission to re-use datasets may still be possible if the public sector body is an ‘authority’ under the Freedom of Information Act.
The 2015 Regulations do not apply to information outside the scope of the public task of the public sector body.
Public sector bodies may not define information as outside their public task in order to avoid compliance with the 2015 Regulations.
Resources: From The National Archives:
- General information on public task
- Guide to drawing up a statement of public task
- Public task principles Examples: Environment Agency – Public Task Statement Ordnance Survey – Public Task The National Archives – Public task
Public sector obligations
Information asset lists
Public sector bodies must already publish their publication schemes under sections 19-20 of the Freedom of Information Act. Under the 2015 Regulations, they must also publish an information asset list. Asset lists include both published and unpublished information.
An information asset is information that a public sector body produces, holds or disseminates that is of interest or value to itself and potentially to re-users. It includes information within the public task.
An information asset list is simply a register of these information assets, usually categorised using a standard classification method.
| Information asset lists: Regulation 16 | |---------------------------------------| | Publish a detailed list of main information within public task including: | | • what is available for re-use (published and unpublished) with relevant metadata | | • how the information can be obtained | | • any terms or conditions for re-use (e.g., through a licence) |
Resources: From The National Archives: – Assets List – Information Assets and Business Requirements – Information Asset Register (model IAR)
Examples: Department for Transport – Information Asset Register Home Office Information – Asset Register Permitting re-use
Permission to re-use public sector information is mandatory in most cases. Regulations 11 to 16 describe the requirements and exclusions for permitted re-use.
Where re-use is permitted for more than one party, including by the public sector body itself, it must be on the same terms and conditions (non-discriminatory).
Terms and conditions may vary for different types of re-use, but they must not discriminate among different types of re-users (e.g., whether commercial, non-commercial, educational or charity).
| Permitting re-use: Regulations 7, 11-16 | |----------------------------------------| | Public sector bodies must allow the re-use of the information they produce, hold or disseminate within their public task (unless it is restricted or excluded) | | Be open, transparent and fair in processing requests for re-use | | No exclusive licences (with exceptions for certain cases) |
Resource: The National Archives – Template form for requesting re-use of public sector information
Responding to a request for re-use
Response means one of the following in writing (print or email):
- indicating if the information is already available and re-usable
- explaining where a requester can obtain the information
- supplying the information to the requester, if it has not already been supplied (including under access legislation)
- notifying the requester if it will take longer than 20 working days to reply
- explaining if there is any charge for information
- offering terms and conditions for re-use, often in the form of a licence (including an open licence)
- declining to give permission to re-use and the grounds for the decision
- explaining the complaints process in case the requester wants to appeal a refusal
| Responding to a request for re-use: Regulation 8 | |-----------------------------------------------| | 20 working days to respond, including finalising any licence offer | | Any extension past 20 days must be reasonable | | The public sector body must tell the requester their expected timeframe and reasons for the delay | | Licences should be standard wherever possible and appropriate | | Protection of personal data still applies | Requests to re-use readily available information
Information produced, held or disseminated by a public sector body within its public task may already be available, for example on its website, or in www.data.gov.uk, www.local.gov.uk or www.gov.uk
If a requester can show that it already has access to the information, then re-use generally should be permitted.
Where information is already available, including by publishing it or identifying it as being available for re-use (e.g., on an information asset list), a request for re-use must be answered within 20 working days.
Information made available for re-use under the Open Government Licence (OGL) does not require a request to re-use, but the re-user must meet licence conditions.
Requests to re-use previously unreleased information
Permission to re-use previously unreleased information is subject to access issues being resolved. Requests for access and re-use may be made simultaneously so that the 20 working day response times are concurrent.
If a request for access and re-use is combined, public sector bodies may begin preparing their re-use response ahead of access being granted, so they can respond quickly once access has been resolved.
Processing requests for re-use
There is no obligation for public sector bodies to:
- create or adapt information to comply with a request for re-use. The emphasis is on the re-use of existing information, rather than creating new or changing existing information
- provide extracts of information where this would require disproportionate effort
- continue producing, storing or disseminating information purely for re-use by others. This means that once information is no longer useful or needed to meet the policy and public task aims of a public sector body, it may stop producing it. The public sector body should alert re-users if such a decision is made
| Processing a request for re-use: Regulations 10 and 11 | |--------------------------------------------------------| | Respond to a request within 20 working days | | Make information available in existing format | Notification of refusal to allow re-use
Regulation 9 outlines the required process for refusing a request for re-use:
- response must be in writing
- reasons for refusal must be given
- the public sector body should explain the complaints processes to the requester
- in cases where refusal is based on copyright being owned by a third party, the owner of the relevant copyright should be identified, where known (data protection still applies). The same principle applies where the copyright in the information is held jointly by the public sector body and a third party
- where the owner of the third-party copyright is not known, then the name of the person from whom the information was obtained should be provided, where known and lawful under the Data Protection Act 1998. If it is not known, this should be stated
Non-discrimination
Regulation 13 requires that public sector bodies must not discriminate in the conditions applied among requesters who re-use information for similar purposes. The emphasis is on the re-use of the information, rather than the type of re-user.
Example: a private sector company and a charity should be treated in the same way for re-use of information, whether the re-use is for commercial gain or not.
The only exception to this is where a particular user or groups of users have a statutory right to re-use information.
If a public sector body decides to use information itself, beyond the purpose for which the information was originally produced, held or disseminated, it must apply the same terms and conditions of re-use to itself (and to any associated body) as it would to any other re-user.
Public sector bodies should make an appropriate cost-reflective charge regardless of whether the information is provided to an external re-user or for their own re-use.
Non-restrictive conditions for re-use
Regulation 12 allows public sector bodies to set conditions on re-use of information, often through a licence. For example it may require acknowledgement of source and indication of whether or not the information has been modified by the re-user.
Conditions may not restrict competition or discriminate among re-users. **Licensing re-use**
Licences should be as open and non-restrictive as possible.
The [Open Government Licence](#) is an example of a non-restrictive licence. It is the default for most Crown bodies, and preferred for all public sector bodies in cases where information is supplied for re-use and no charge is made.
| Licensing re-use: Regulations 12 – 14 | |--------------------------------------| | Licences are not required | | Exclusive licences prohibited unless a public service (information) cannot be provided without one. Exclusive licences for providing information in the public interest must be reviewed at least once every three years and must be published if entered into after 31 December 2003 | | Use a standard licence or as non-restrictive a licence as possible | | Must not be anti-competitive and must not discriminate among re-users | | Cannot infringe third-party copyright | | Protection of personal data still applies |
**Resources:**
- [The National Archives – Re-use and licensing](#)
- [UK Government Licensing Framework](#)
- [Open Government Licence](#)
**Different licence types**
**Open Government Licence**
The [Open Government Licence](#) (OGL) is the default for central government departments and agencies, and the preferred licence for all other public sector bodies, in cases where information is supplied for re-use and no charge is made.
Non-Crown bodies may also use the OGL.
Personal data cannot be re-used under the OGL.
**Non-commercial Government Licence**
The [Non-Commercial Government Licence](#) is an acceptable alternative when the OGL is not suitable.
Crown bodies may use this only if approved by The National Archives. Charged licence
The National Archives has produced the Charged licence which is recommended for use by public sector bodies that have a valid reason under the 2015 Regulations to charge for the re-use of the information they produce, hold or disseminate.
Crown bodies may use this only if approved by The National Archives.
Exclusive arrangements prohibited
Public sector bodies may not enter into exclusive arrangements (e.g., licences) for re-use because they prevent others from re-using information and inhibit competition.
There are two important exceptions: first, if there are no alternatives to providing a public task service, and second, for digitising cultural resources.
| Exclusive arrangements prohibited: Regulation 14 | |------------------------------------------------| | Exclusive arrangements are permitted when a public task service cannot be provided otherwise | | These arrangements must be reviewed at least once every three years to ensure the reason(s) for exclusivity remain valid | | Details of any such arrangement entered into on or after 31/12/2003 must be published | | Exclusive arrangements are permitted to digitise cultural resources | | These arrangements should not exceed 10 years. If it does exceed 10 years, the duration must be reviewed in the 11th year and every 7 years after, if applicable | | Details of any such arrangement must be published | | The public sector body must have access to the information during the term of the agreement, and it must receive one free copy of a digitised resource at the end of the agreement | | Any other exclusive arrangements existing on 17 July 2013 must be terminated no later than 18 July 2043 | Charging for re-use
Regulation 15 on Charging, like the 2015 Regulations of which it forms part, only applies to information which a public sector body produces, holds or disseminates within its public task.
Marginal cost is the default when charging for re-use of such public sector information.
There are certain exceptions to this default:
(a) bodies required to generate revenue to recover a substantial part of the costs incurred in fulfilling their public task (b) information for which a public sector body is required to generate sufficient revenue in order to cover costs associated with production, collection, reproduction and dissemination (c) the cultural sector – libraries (including university libraries), museums and archives
For (a) and (b), the total income for the accounting period must not exceed the cost of collection, production, reproduction and dissemination of the information, together with a reasonable return on investment.
In the case of (c), the total income for the accounting period must not exceed the cost of collection, production, reproduction, dissemination, preservation and rights clearance of the information, together with a reasonable return on investment.
The 2015 Regulations do not define a reasonable return on investment (ROI) and the rate of return on capital employed in service provision to be applied will depend on whether that service provision competes with private sector provision of similar services.
Normally the standard cost of capital, currently 3.5% in real terms, will apply. However, in cases where provision competes with private sector provision of similar services, the rate should be in line with the rates achieved by comparable businesses facing a similar level of risk.
Charges may be challenged.
### Charging: Regulations 15 and 16
**Marginal cost is the default**
Limited to recovering the marginal cost of reproduction, provision and dissemination of information
| Public sector bodies required to generate revenue are not subject to the marginal cost default when charging for supplying information for re-use | |---| | For these bodies, charges are limited to recovering the cost of collection, production, reproduction or dissemination of information, plus a reasonable return on investment | | For a cultural sector body, charges are limited to recovering the cost of collection, production, reproduction, dissemination, preservation and rights clearance, together with a reasonable return on investment |
Where a standard charge is established, provide information on:
- any conditions for re-use
- what the charges are and what each charge is for
- basis on which charges are calculated
Where a standard charge has not been established, provide information on:
- the factors taken into account in the calculation of the charge for re-use in question
- if requested, set out in writing the way in which the charge is calculated in relation to the specific request for re-use
All re-users must be charged the same cost-reflective rate for the same type of re-use (e.g., commercial publishing), regardless of what type of re-user they are (e.g., commercial, educational or charity)
For public sector bodies permitted to charge (including cultural sector bodies), the charge for information supplied in response to a request for re-use must not exceed the sum of:
- A. the direct costs
- B. a reasonable apportionment of indirect and overhead costs, and
- C. a reasonable return on investment
No charging if costs already recovered to supply information for re-use (e.g., through registration fees)
No double-charging for access to information under access legislation, and for re-use of the same information Complaints process
Complaints can be made about whether a public sector body is complying with any aspect of the 2015 Regulations, for example on issues of charging or what information falls within public task, subject to the exclusions below.
The complaints process does not apply to the re-use of information produced, held or disseminated outside a public sector body’s public task. It also does not apply to information for which the public sector body does not hold the copyright.
The complaints process will only apply to issues of re-use, and will not consider complaints about access, which are dealt with under access legislation.
Complaints must:
- be in writing (email is acceptable)
- state the nature of the complaint – what sections of the 2015 Regulations are at issue and how
- what the complainant would like the public sector body to do in order to resolve the complaint
- provide the complainant’s full contact details
Initial complaints process
The public sector body must first try to resolve the complaint through its internal complaints process.
| Initial complaints process: Regulation 17 | |------------------------------------------| | Public sector bodies must attempt to resolve the complaint using their internal complaint process | | Respond within 20 working days | | If the 20-day timeframe cannot be met, contact the complainant to explain why | | Response to the complaint must be in writing | | Response to the complaint must give reasons for the decision and set out options if the re-user wishes to escalate (appeal) | Complaints to the ICO
If the public sector body’s internal complaints process could not resolve the complaint, the complainant can escalate it to the Information Commissioner’s Office (ICO), for example if it relates to the following:
- marginal cost pricing
- non-charging re-use complaints (e.g., refusal of permission to re-use)
The ICO has guidance on their role in the complaints process and the procedures that public sector bodies and complainants must follow when a complaint is escalated. The process is summarised below.
After reviewing the complaint, the ICO will issue a binding decision via a decision notice. Either the complainant or the public sector body may appeal this decision to the General Regulatory Chamber of the First-tier Tribunal, information rights jurisdiction (the First-tier Tribunal).
The ICO will notify the Scottish Information Commissioner (SIC) if the complaint relates to a Scottish public sector body and the ICO and the SIC may share relevant information.
There are exceptions to this process where the ICO will make a recommendation instead of a binding decision. If a complaint alleges that a public sector body has not followed the required calculation method when charging above marginal cost, or has incorrectly applied the provisions which allow public sector bodies with a requirement to generate revenue to cover a substantial part of their costs to charge above marginal cost, the recommendation will be sent back to the public sector body for it to consider and then make its final decision.
A public sector body must:
- decide what action it will take on the recommendation, including complying, changing its response, or no action
- by what date it will carry out the action
- notify the ICO and the complainant of its response in writing within 20 days
If the complainant is dissatisfied with the public sector body’s confirmed or changed re-use decision, or the public sector body does not comply with any of the above points, the complainant may appeal to the First-tier Tribunal.
The First-tier Tribunal will hear the appeal and then make a ruling.
| Complaints: Regulations 18-22 | |--------------------------------| | Public sector bodies must comply with an ICO decision unless they decide to appeal | | If the public sector body is subject to an ICO recommendation, it must reply within 20 days | | Public sector bodies must comply with the decision of the First-tier Tribunal, subject to their right to appeal to the Upper Tribunal and higher courts | Resources: Courts and Tribunals Judiciary Information Commissioner’s Office (covering England, Wales and Northern Ireland) Scottish Information Commissioner General Regulatory Chamber (First-tier Tribunal is a part of this) General Regulatory Chamber – forms and guidance General Regulatory Chamber – guidance for policy makers (public sector bodies)
Transitional arrangements
Under Regulation 24, the previous 2005 Regulations will apply to any complaints about re-use still in process during the three months after 18 July 2015 (the in-force date of the 2015 Regulations), up to and including 17 October 2015.
If the complaint concerns a 'dataset' (see Links to other Legislation/Freedom of Information Act) that was requested prior to the 2015 Regulations coming into force, then the relevant FOIA provisions will continue to apply. If the complaint concerns a dataset that was requested after the 2015 Regulations came into force, then the 2015 Regulations will apply where the dataset is held by a public sector body.
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32e510810f481eecd8b6aedc64a618564bbe2f70 | Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015
For re-users
Version control: v1.1 – January 2019
The National Archives
© Crown copyright 2019
You may use and re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence v3.0. This Guidance was produced by:
Information Policy The National Archives Bessant Drive Kew TW9 4DU [email protected]
This Guidance is designed to help you comply with requirements for the re-use of public sector information. To read the relevant legislation for free, go to www.legislation.gov.uk and search for ‘public sector information regulations’.
If the 2015 Regulations or our interpretations of them change, we will publish updated information on our website www.nationalarchives.gov.uk where this Guidance is available for download. Contents
Welcome........................................................................................................................................4 Key changes....................................................................................................................................4 What is public sector information? .................................................................................................5 What is re-use? ................................................................................................................................5 Scope at a glance ..............................................................................................................................6 Comparison of key aspects .............................................................................................................7 What do the 2015 Regulations mean for different parts of the public sector? .........................8 Re-users of public sector information.............................................................................................8 Libraries, museums and archives ....................................................................................................8 Public sector bodies .......................................................................................................................8 Context of the 2015 Regulations ....................................................................................................9 Access and re-use ..........................................................................................................................9 Jurisdiction .....................................................................................................................................10 Links with other UK legislation .....................................................................................................10 Copyright .........................................................................................................................................12 Copyright and re-use .....................................................................................................................12 Crown copyright ............................................................................................................................12 Open data .........................................................................................................................................13 Scope of the 2015 Regulations .........................................................................................................14 Bodies in scope ...............................................................................................................................14 Bodies out of scope ........................................................................................................................14 Information in scope .......................................................................................................................15 Information out of scope ...............................................................................................................16 Public task .........................................................................................................................................16 Public sector obligations ...............................................................................................................17 Information asset lists ....................................................................................................................17 Permitting re-use ............................................................................................................................17 Responding to a request for re-use ...............................................................................................17 Making a request for re-use ...........................................................................................................18 Requests to re-use readily available information .........................................................................18 Requests to re-use previously unreleased information .................................................................19 Public sector body processing of requests for re-use ....................................................................19 Notification of refusal to allow re-use ...........................................................................................19 Non-discrimination .......................................................................................................................20 Conditions for re-use ....................................................................................................................20 Licensing re-use .............................................................................................................................21 Types of licences ............................................................................................................................21 Exclusive arrangements ................................................................................................................21 Charging for re-use .......................................................................................................................22 Complaints process .......................................................................................................................24 Initial complaints process .............................................................................................................24 Complaints to the ICO ..................................................................................................................24 Transitional arrangements ............................................................................................................25 Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015 for re-users
Who should read this Guidance?
Current and potential re-users of public sector information, such as:
- commercial and non-commercial re-users
- academic and education sectors
- app developers
- third sector
- civil society
- community-based organisations
- public sector bodies that re-use information from other public sector bodies
- researchers
Welcome
Welcome to the Guidance on the implementation of the Re-use of Public Sector Information Regulations 2015 (SI 2015 No. 1415) (the ‘2015 Regulations’). The 2015 Regulations are in force from 18 July 2015.
This Guidance explains the changes being introduced by European Directive 2013/37/EU (the ‘Amending Directive’) and how these are transposed in the 2015 Regulations.
As anticipated by the Amending Directive, the European Commission has also published non-binding guidance for Member States on best practices on standard licences, datasets and charging for the re-use of information.
Key changes
- cultural sector now in scope: libraries (including university libraries), museums and archives
- obligation for most public sector bodies to allow re-use – optional for cultural bodies unless the information is already available for re-use, even by themselves
- marginal cost pricing is the default (with certain exceptions)
- standard licensing required; licences should be as non-restrictive as possible
- redress (complaints) arrangements with an authority that can issue binding decisions and potential to appeal to a First Tier-Tribunal What is public sector information?
Any information (content) whatever its medium (form) – including print, digital or electronic, and sound recordings – produced, held or disseminated by a public sector body is considered public sector information. This includes an enormous range: corporate information such as reports and financial data, codes of practices, public records, statistics, still and moving images, press releases, publication schemes, and so on.
If a public sector body holds the copyright for information it produces, holds or disseminates within its public task, then that information is in scope of the 2015 Regulations.
Information for which a public sector body does not hold the copyright is excluded from the 2015 Regulations.
Information produced, held or disseminated outside a public sector body’s public task is excluded from the 2015 Regulations.
The 2015 Regulations have been developed from the Amending Directive which updated the 2005 Regulations on re-use. While the Amending Directive refers to public sector information as documents, this Guidance uses the term ‘information’ to reflect the variety of public sector bodies and the types of information they produce, hold or disseminate. It aligns to the government’s focus on open data and information as understood in access legislation (such as the Freedom of Information Act 2000 and the Environmental Information Regulations 2004).
What is re-use?
Re-use means the use of public sector information for a purpose other than the initial purpose for which it was produced, held, collected or disseminated.
## Scope at a glance
| Bodies in scope | Bodies out of scope | Information in scope | Information out of scope | |-----------------|---------------------|----------------------|--------------------------| | Central government | Public sector broadcasters | Information in any form – including print, visual, digital, electronic, and sound recordings – that is produced, held or disseminated within the public sector body’s public task | Information produced, held or disseminated outside public task | | Local government | Educational and research establishments | | Information that is not accessible | | Public corporations | Cultural and performing arts establishments (other than libraries, museums and archives) | | Information restricted or excluded, for example under access legislation | | Libraries (including university libraries) Museums Archives | Private utility companies | | Information whose copyright does not belong to the public sector body | | Scottish Government and Parliament | Parts of higher education institutions not otherwise in scope | | Crests, logos, insignia | | Welsh Government and Assembly | | | Personal data that must be protected | | Northern Ireland Executive and Parliament | | | | | Other bodies outlined in Regulation 3 (e.g. police forces) | | | |
## Comparison of key aspects
| 2005 Regulations | 2015 Regulations | |------------------|------------------| | Regulations apply to public sector bodies, including local government | Scope extends to include cultural sector: libraries (including university libraries), museums and archives | | Only accessible information is re-usable | Information produced, held or disseminated by within a public sector body’s public task must be re-usable (unless restricted or excluded) | | Make information available | Make information and metadata available through standard licences and machine-readable formats whenever possible | | | Facilitate cross-linguistic searches whenever possible | | No obligation to allow re-use | Obligation to allow re-use of information unless access is restricted or excluded, or from a cultural sector body (which may decline permission to re-use) | | Standard licences encouraged | Encourages standard, non-restrictive licences | | Permits charging for re-use | Charging at marginal cost is the default | | | For public bodies outside the cultural sector, this is subject to certain exceptions (e.g., many information traders) which permit charging to cover the cost of collection, production, reproduction and dissemination, together with a reasonable return on investment | | | The marginal cost default does not apply to bodies in the cultural sector (libraries, museums and archives) which may charge to cover the cost of collection, production, reproduction, preservation and rights clearance together with a reasonable return on investment | | Prohibits exclusive licences | Same, unless to provide a public service that could not otherwise be provided, or for digitising cultural resources | | Complaints process established | If a complaint cannot be resolved by a public sector body’s internal system, it may be escalated to the Information Commissioner’s Office which can make binding decisions on most issues, and potentially to the First-Tier Tribunal for Information Rights | What do the 2015 Regulations mean for different parts of the public sector?
Re-users of public sector information
For re-users, the 2015 Regulations should make re-use easier. In general, information that is accessible, either because it has been published or because it has been released under access legislation, should be available for re-use under a standard or non-restrictive licence.
For most re-use, charges will be at marginal cost. In some cases this will be nil.
Libraries, museums and archives
Cultural sector bodies may charge re-users to cover their costs of collection, production, reproduction, dissemination, preservation and rights clearance of the information, plus a reasonable return on their investment.
Restricted exclusive licensing will be permitted in two circumstances: where a museum, archive or library is digitising cultural resources, or where a public sector body cannot otherwise provide information.
They also retain the right to decline requests for re-use unless this is discriminatory (and such decisions may be challenged).
Public sector bodies
For public sector bodies that already make their information available for re-use under an open licence such as the Open Government Licence, the 2015 Regulations will largely mean business as usual.
Accessible information within public task which is produced, held or disseminated by a public sector body must be made available for re-use (unless it is restricted or excluded).
Public sector bodies need to be clear what their public task is, because this determines what information falls within scope of the 2015 Regulations.
The default is for public sector bodies to set charges at marginal cost.
Public sector bodies, such as many information traders, that are 'required to generate revenue to cover a substantial part of their costs relating to the performance of their public task' will be able to charge for the cost of collection, production, reproduction and dissemination of public sector information, together with a reasonable return on investment.
Public sector bodies will also need to produce information asset lists so re-users know what is available for re-use.
The 2015 Regulations continue to give public sector bodies a means to express their transparency, fairness, and non-discrimination. Context of the 2015 Regulations
The 2015 Regulations transpose Directive 2003/98/EC as amended by Directive 2013/37/EC (the ‘Amending Directive’) on the re-use of public sector information and establish the UK framework for re-use. The purpose is to make information easier to re-use, resulting in economic, social and civil benefits.
Access and re-use
There is a distinction between access to, and re-use of, public sector information.
Information is made accessible in a variety of ways including:
- publishing the information on websites of public sector bodies
- free leaflets, pamphlets and books
- priced publications (often through private sector publishers who publish information on behalf of the public sector body)
- in statutory registers or provided for a fee
- on mobile platforms and through social media
- through an access to information request
- through a re-use request
- displaying or holding information (e.g., artefacts on display in a museum, records in an archive)
- through a publication scheme under the Freedom of Information Act
Access issues must be resolved by the public sector body holding the information before a decision on re-use can be made.
All public sector bodies should make clear when granting access to information if there are any restrictions on re-use.
Public sector body information is presumed to be re-usable once access is obtained, unless the information is otherwise restricted or excluded.
Common examples of restrictions and exclusions include third-party copyright exclusions and protection of personal data. Cultural sector bodies are permitted to decline requests for re-use (unless the information has already been made available for re-use, including by itself).
Information which is re-usable while it is in the custody of a public sector body such as a local authority should remain re-usable under the 2015 Regulations, regardless of any transfer to an archive or other public sector body.
If information is not under an open licence, you must make a request for re-use to the public sector body that holds the information. To facilitate re-use, public sector bodies must:
| Requirement | |------------------------------------------------------------------------------| | Release information in existing format, preferably electronically | | Use a standard licence that is as non-restrictive as possible | | Permit re-use of information within its public task (unless restricted or excluded) | | Consider allowing re-use of information made available under an FOI request | | Cultural sector bodies should consider permitting re-use of information within public task |
Resources:
- Information Commissioner’s Office – How to access information from a public body
- The National Archives – Re-using public sector information
Jurisdiction
The Amending Directive applies only to EU member states. It does not permit discrimination among re-users based on their location. The 2015 Regulations apply in the UK. Other member states have transposed the Amending Directive into their own legal systems.
Links with other UK legislation
The 2015 Regulations link to other legislation, and seek to balance re-use of public sector information with protection of copyright and personal information.
Access to public sector information is provided for under different regimes which are collectively referred to in this Guidance as ‘access legislation’. The 2015 Regulations provide a framework for re-use of information once access has been obtained.
If information is obtained under access legislation, the 2015 Regulations presume the re-usability of the information unless it is otherwise excluded or restricted (for example by third-party copyright).
However, permission may still have to be sought for re-use unless information is provided under an open licence.
Freedom of Information Act
In 2012, the government amended the Freedom of Information Act 2000 (FOIA) to create a ‘right to data’ comprising new duties for certain public authorities to provide datasets of factual management information in a re-usable form and with a licence permitting re-use, in response to requests, and to continue to publish them. These provisions were inserted into sections 11A, 11B and 19 of FOIA by the Protection of Freedoms Act 2012.
The new rights to re-use under the 2015 Regulations have been consolidated with the FOIA provisions where a dataset is within the scope of the Regulations. For datasets or public authorities out of scope of the 2015 Regulations, there is no change. The access and means of communication requirements of FOIA, including sections 1, 11, 11A and 19, remain the same. The 2015 Regulations amend sections 11A and 19 of FOIA regarding release of datasets or portions of datasets for re-use. These changes mean that where a dataset is covered by the 2015 Regulations, then it is the 2015 Regulations and not FOIA which will govern the re-use of such dataset information and their entry on a publication scheme. This is an important change for the large number of public authorities which are also public sector bodies. Re-use of their datasets that are relevant copyright works will be dealt with under the 2015 Regulations, not FOIA.
Resources:
- Environmental Information Regulations 2004 and Environmental Information (Scotland) Regulations 2004 (as amended)
- EC Guidance on recommended standard licences, datasets and charging for re-use
- Freedom of Information Act 2000 and Freedom of Information (Scotland) 2002 (as amended)
- Information Commissioner’s Office – Access information from a public sector body
- Local Government Act 2010
- Local Government Access to Information Act 1985
- Openness of Local Government Bodies Regulations 2014
- Protection of Freedoms Act 2012
Data Protection Act
The 2015 Regulations do not reduce the protections of the Data Protection Act 1998 (DPA). They do not apply to any personal data that is not available under access legislation, nor to personal data that may be accessible but cannot be re-used due to data protection.
Personal data may be accessible (for example, in a public register or by a request under access legislation) but that does not automatically make it re-usable. Any subsequent use or re-use of any personal data must be lawful under the DPA, which controls how personal information is used.
The public sector body is responsible for complying with the DPA when making information available for re-use. After permission to re-use has been given, you are responsible for complying with the DPA.
Resources:
- Eight data protection principles
- Information Commissioner – Accessing personal data (for the public)
Public Records Act
The National Archives has published guidance on complying with the provisions of the Public Records Act.
Resource:
- The National Archives – Public Records Act Copyright
Copyright and re-use
The 2015 Regulations do not change copyright law, or its protections or exceptions.
Copyright protects material such as literary works, artistic works, software and databases, and stops others from using such material without permission. It prevents people from:
- copying it
- distributing copies of it, whether free of charge or for sale
- renting or lending copies of it
- performing, showing or playing it in public
- making an adaptation of it
- putting it on the internet
Copyright in re-used information does not grant copyright in the original information, even if that information is in the public domain or otherwise out of copyright. This principle applies to all re-use, even if it has been given under an open licence.
Example: if you publish a new digital edition of Shakespeare's collected works, you hold only copyright for the typographical arrangement of your edition (covering aspects such as format, editorial notes and design) but you do not hold and cannot claim copyright in the underlying literary work.
Large portions of public sector libraries, museums and archive collections will include information with third-party copyright. Public sector bodies may not infringe on the copyright of others, including copyright in information they hold or disseminate but which belongs to someone else.
Crown copyright
Most information produced, held or disseminated by Crown bodies (most of central government) is under Crown copyright. Most Crown copyright information is available under the Open Government Licence (OGL), with attribution of source. The OGL liberalises re-use of public sector information.
If Crown copyright information is not under an Open Government Licence, and no re-use licence or conditions are apparent, you can seek permission to re-use through The National Archives at [email protected]
The Keeper of Public Records at The National Archives administers Crown copyright and database rights.
In some cases Crown copyright licensing responsibility is delegated to government departments, notably information traders, provided they confirm that Crown copyright information will be licensed in accordance with the 2015 Regulations and the principles set out by HM Treasury in Managing Public Money (or the relevant equivalent for devolved administrations).
Note that the Crown does not share copyright with external or other public sector bodies. Crown copyright will take precedent over other copyright; other bodies may be asked to assign their copyright to the Crown.
Resources:
- Copyright, Design and Patents Act 1988
- Copyright and Rights in Databases Regulations 1997
- Intellectual Property Office – Copyright (links to a variety of resources)
- Intellectual Property Office – Exceptions to copyright: Copyright material held by public bodies
- Intellectual Property Office – Exceptions to copyright: Libraries, archives and museums
- The National Archives – Copyright and publishing
- The National Archives – Copyright and re-use statements
- The National Archives – Copyright guidance
Open data
Under Regulation 11, public sector bodies should publish information and related metadata available through standard licences and in machine-readable formats using formal open standards whenever possible.
A machine-readable format is structured so that software applications can easily identify, recognise and extract specific data from it. The format should be standardised through an open process and approved by the Open Standards Board. This ensures interoperability with other programs and licences, such as the environmental framework in INSPIRE.
Public sector bodies may hold information that may be unsuitable to be released as open data, for example if it includes personal or commercially-sensitive information. In such cases, they may publish statistical summaries or metadata about the information in open format as an alternative and to promote re-use.
Resources:
- 5-star Open Data step diagram
- Cabinet Office – Open Standards for Government
- Cabinet Office - Improving the transparency and efficiency of government and its services
- Department of Justice – Code of Practice (Datasets)
- GOV.UK – Open Data
- INSPIRE Regulations 2009
- INSPIRE Amendment Regulations 2012
- INSPIRE (Scotland) Regulations 2009
- INSPIRE (Scotland) Amendment Regulations 2012
- Open Data Institute and Open Data Certificates
- Scottish Government Open Data Strategy
- Standards Hub – How we select standards
- The National Archives – Open Government Licence Scope of the 2015 Regulations
Bodies in scope
Most public sector bodies are within the scope of the 2015 Regulations, which also bring the cultural sector (libraries, including university libraries, museums and archives) into scope. The National Archives itself is in scope.
Examples of public sector bodies are: agencies, government departments, local government, and devolved institutions including the Scottish Parliament, the National Assembly for Wales Commission, and the Northern Ireland Assembly Commission.
Resources: From the Cabinet Office:
- Categories of Public Bodies
- Openness and Accountability
- Public Bodies 2014
Office of National Statistics – Classification of Public Sector Bodies (updated regularly)
From The National Archives:
- How to identify a public records body: determination and change of status
- List of Crown bodies
- Scope flowchart
Bodies out of scope
Regulation 5(3) excludes the following types of public sector bodies:
- public sector broadcasters and their subsidiaries and other bodies or their subsidiaries for the fulfilment of a public service broadcasting remit, for example the BBC
- educational and research establishments including organisations established for the transfer of research results (such as research councils), schools and universities (but not university libraries which are in scope)
- cultural and performing arts establishments such as orchestras, operas, ballets and theatres (other than libraries, museums and archives which are in scope)
The 2015 Regulations also do not apply where a person must prove an interest in order to gain access to information. Information in scope
The 2015 Regulations define information by relating it to ‘content’ which is information in any form – including print, visual, digital, electronic, and sound recordings. Examples of public sector information in scope include:
- primary and secondary legislation
- official records of the Proceedings of the UK and Scottish Parliaments, the Northern Ireland Assembly and the National Assembly for Wales
- codes of practice
- geospatial data produced by organisations such as the Ordnance Survey and the UK Hydrographic Office
- meteorological data produced by the Met Office
- consultation and policy documents
- statistics produced by the Office for National Statistics
- financial and performance data
- annual reports published by government departments, agencies and local authorities
- statutory registers such as those for birth, death and marriage, and land titles
- patent information collected and produced by the Intellectual Property Office
- health and safety guidance and reports published by the Health and Safety Executive
- forms issued by local and central government such as tax forms
- press notices
- still and moving images
- technical reports
- local planning information
- publication schemes (required under FOIA legislation)
- information held by libraries, museums and archives where they hold the copyright
The 2015 Regulations apply only to information produced, held or disseminated within a public sector body’s public task and for which they hold copyright.
If the information is a dataset that is defined as a ‘relevant copyright work’ under the Freedom of Information Act (FOIA), and the 2015 Regulations do not apply, then the re-use provisions in FOIA still apply and permission to re-use should be given.
Example: if a public sector body is excluded from the 2015 Regulations, but is a FOIA ‘authority’, then the right to re-use datasets comes from FOIA. Information out of scope
Some public sector body information is excluded regardless of the body that produces, holds or disseminates it. These are set out in Regulation 5 and include:
- information that falls outside the scope of the public task of the public sector body
- information in which the relevant copyright is owned or controlled by a different person or organisation that is not in scope (third-party copyright)
- parts of documents containing only logos, crests or insignia
- information that contains personal data which must be protected
- information exempt from release under access legislation, including where a person or company has to show a particular interest to access it
An exception to this is where section 21 of the Freedom of Information Act 2000 or section 25 of the Freedom of Information (Scotland) Act 2002 applies. These sections cover information which is 'reasonably accessible' to the requester. For example, information published on a public sector body’s website would be exempt from an access request by virtue of being already reasonably accessible. This information would normally be available for re-use.
Public task
Public sector bodies should ensure that the scope of their public task is transparent and subject to review, and publish a description of what their public task is.
Information within public task is that which a public sector body must produce, hold, collect or disseminate to fulfil its core role and functions.
The 2015 Regulations do not apply to information outside the scope of the public task of the public sector body.
Public sector bodies may not define information they produce, hold or disseminate as outside their public task in order to avoid the 2015 Regulations.
If the 2015 Regulations do not apply, then permission to re-use datasets may still be possible if the public sector body is an 'authority' under the Freedom of Information Act.
Resources: The National Archives – General information on public task The National Archives – Public task principles Public sector obligations
Information asset lists
Public sector bodies must already publish their publication schemes under sections 19-20 of the Freedom of Information Act. Under the 2015 Regulations, they must also publish an information asset list. Information asset lists include both published and unpublished information.
An information asset is information that a public sector body produces, holds or disseminates that is of interest or value to itself and potentially to re-users. It includes information within the public task.
An information asset list is simply a register of these information assets, usually categorised using a standard classification method.
Resources: The National Archives – Asset Lists
Permitting re-use
Most public sector bodies must permit re-use of the information they produce, hold or disseminate within their public task (unless it is restricted or excluded). Regulations 11 to 16 describe the requirements and exclusions for permitted re-use.
Where re-use is permitted for more than one party, including by the public sector body itself, it must be on the same terms and conditions (non-discriminatory).
Terms and conditions may vary for different types of re-use, but they must not discriminate among different types of re-users (e.g., commercial, educational, charity).
They must be open, transparent and fair in processing requests for re-use.
Generally, exclusive licences are not permitted but there are limited exceptions, such as when information cannot otherwise be made available, and for cultural sector bodies that are digitising cultural resources.
Responding to a request for re-use
Response by a public sector body means one of the following in writing (print or email):
- indicating if the information is already available and re-usable, for example under an open licence
- explaining where re-users can obtain the information
- supplying the information to the requester, if it has not already been supplied (including under access legislation)
- explaining if there is any charge for information • offering terms and conditions for re-use, often in the form of a licence • declining to give permission to re-use and the grounds for the decision • explaining the complaints process
Public sector bodies must respond to requests within 20 working days, including finalising any licence offer.
Any extension past 20 days must be reasonable, and the public sector body must tell the requester their expected timeframe and reasons for the delay.
Data protection still applies to information made available for re-use.
**Making a request for re-use**
If public sector information is not provided under an Open Government Licence, you need to request re-use from the public sector body that produces, holds or disseminates the information. They should have information on how to make a request on their website.
Make your request:
• in writing (paper, email, or via online form where provided) • clear and specific about what information you want to re-use • describe how you intend to re-use the information • reasonable in volume and complexity
Information may be supplied to you in the form the public sector body originally produced, held or disseminated it (e.g., in paper or film rather than machine-readable digital format). Public sector bodies are not required to reformat the information to suit a request.
The standard reply timeframe for re-use requests is 20 working days. For high-volume or complex requests, the public sector body may take longer although they must tell you if this is the case.
You may be required to have a licence agreement with the public sector body, but the terms and conditions should be as non-restrictive as possible.
**Resource:** [The National Archives – Template form for requesting re-use of public sector information](#)
**Requests to re-use readily available information**
Information produced, held or disseminated by a public sector body within its public task may already be accessible, for example on its website, or in [www.data.gov.uk](http://www.data.gov.uk), [www.local.gov.uk](http://www.local.gov.uk) or [www.gov.uk](http://www.gov.uk)
If you can show that you already have access to the information, then re-use should generally be permitted. Information made available for re-use under an Open Government Licence (OGL) does not require a request to re-use, but licence conditions must be met. Where information is already available, including by a public sector body publishing it or identifying it as being available for re-use (e.g., on an information asset list), the public sector body must reply to your request for re-use within 20 working days.
**Requests to re-use previously unreleased information**
Permission to re-use previously unreleased information is subject to access issues being resolved. You may make a re-use request at the same time as an access request so that the 20 working day response times are concurrent.
The 2015 Regulations require public sector bodies to respond to a request for re-use within 20 working days unless there are special circumstances such as a very complex or high-volume request. They must inform you if processing your request will take longer than 20 working days.
While most public sector bodies are required to make their information re-usable (unless restricted or excluded), cultural sector bodies may refuse to give permission to re-use (although they may be challenged).
**Public sector body processing of requests for re-use**
Where public sector bodies are required to make their information available, they are allowed to provide it in its existing format. However, public sector bodies are being encouraged to make their information and metadata available in open format, machine-readable, and under a standard licence that is as non-restrictive as possible.
There is no obligation for public sector bodies to:
- create or adapt information to comply with a request for re-use. The emphasis is on the re-use of existing information, rather than creating new or changing existing information
- provide extracts of information where this would require disproportionate effort
- continue producing, storing or disseminating information purely for re-use by others. This means that once information is no longer useful or needed to meet the policy and public task aims of a public sector body, it may stop producing it. The public sector body should alert re-users if such a decision is made
**Notification of refusal to allow re-use**
Public sector bodies are expected to make most of their information re-useable. However, some information may be restricted or excluded, or deemed unsuitable for re-use and requests may be declined. Public sector bodies must follow Regulation 9 if they refuse a re-use request:
- response must be in writing
- reasons for refusal must be given
- the public sector body should explain the internal and external complaints processes open to the requester
- in cases where refusal is based on copyright or other relevant intellectual property rights being owned by a third party, the owner of the relevant intellectual property rights should be identified, where known (data protection principles still apply). The same principle applies where the copyright in the information is held jointly by the public sector body and a third party
- where the owner of the third-party copyright is not known, then the name of the person from whom the information was obtained should be provided, where known and lawful under the Data Protection Act 1998. If it is not known, this should be stated
**Non-discrimination**
Regulation 13 requires that public sector bodies must not discriminate in the conditions applied among requesters who re-use information for similar purposes. The emphasis is on the re-use of the information, rather than the re-user.
Example: a private sector company and a charity should be treated in the same way and be offered the same terms and conditions to re-use information, whether the re-use is for commercial gain or not.
The only exception to this is where a particular user or groups of users have a statutory right to re-use information.
If a public sector body decides to use information itself, beyond the purpose for which the information was originally produced, held or disseminated, it must apply the same terms and conditions of re-use to itself (and to any associated body such as a trading arm) as it would to any other re-user.
Public sector bodies should make an appropriate cost-reflective charge regardless of whether the information is provided to an external re-user or for their own re-use.
**Conditions for re-use**
Regulation 12 allows public sector bodies to set conditions on re-use of information, where appropriate through a licence, but they must be as non-restrictive as possible. For example it may require acknowledgement of source and indication of whether or not the information has been modified by the re-user.
Conditions for re-use may not restrict competition among re-users. **Licensing re-use**
All licences should be as open and non-restrictive as possible.
The [Open Government Licence](#) is an example of a non-restrictive licence. It is the default for most Crown bodies, and preferred for all public sector bodies in cases where information is supplied for re-use and no charge is made.
Data protection still applies to information licensed for re-use.
**Types of licences**
**Open Government Licence and the Non-commercial Government Licence**
The [Open Government Licence](#) (OGL) is the default for central government departments and agencies, and the preferred licence for all other public sector bodies, in cases where information is supplied for re-use and no charge is made.
Personal data cannot be re-used under the OGL.
The [Non-Commercial Government Licence](#) is an acceptable alternative when the OGL is not suitable. Crown bodies may use this only if approved by The National Archives.
**Charged licence**
The National Archives has produced the [Charged licence](#) that is recommended for use by public sector bodies that have a valid reason under the 2015 Regulations to charge for the re-use of the information they produce, hold or disseminate.
**Exclusive arrangements**
Regulation 14 prohibits public sector bodies from exclusive arrangements for re-use because it prevents others from re-using information and inhibits competition.
There are two important exceptions: first, when a public service cannot be provided without an exclusive licence, and second, for enabling or continuing the digitisation of cultural resources.
The terms and duration of any exclusive licences are restricted. Details of arrangements must be published by the public sector body. Charging for re-use
Regulation 15 on Charging, like the 2015 Regulations of which it forms part, only applies to information which a public sector body produces, holds or disseminates within its public task.
Marginal cost is the default when charging for re-use of such public sector information.
There are certain exceptions to this default:
(a) bodies required to generate revenue to recover a substantial part of the costs incurred in fulfilling their public task (b) information for which a public sector body is required to generate sufficient revenue in order to cover costs associated with production, collection, reproduction and dissemination (c) the cultural sector – libraries (including university libraries), museums and archives
For (a) and (b), the total income for the accounting period must not exceed the cost of collection, production, reproduction and dissemination of the information, together with a reasonable return on investment.
In the case of (c), the total income for the accounting period must not exceed the cost of collection, production, reproduction, dissemination, preservation and rights clearance of the information, together with a reasonable return on investment.
The 2015 Regulations do not define a reasonable return on investment (ROI) and the rate of return on capital employed in service provision to be applied will depend on whether that service provision competes with private sector provision of similar services.
Normally the standard cost of capital, currently 3.5% in real terms, will apply. However, in cases where provision competes with private sector provision of similar services, the rate should be in line with the rates achieved by comparable businesses facing a similar level of risk.
Charges may be challenged.
### Charging: Regulations 15 and 16
**Marginal cost is the default for public sector bodies**
Limited to recovering the marginal cost of reproduction, provision and dissemination of information
| Public sector bodies required to generate revenue are not subject to the marginal cost default when charging for supplying information for re-use | |---| | For these bodies, charges are limited to recovering the cost of collection, production, reproduction or dissemination of information, plus a reasonable return on investment | | For a cultural sector body, charges are limited to recovering the cost of collection, production, reproduction, dissemination, preservation and rights clearance, together with a reasonable return on investment |
Where a standard charge is established, public sector bodies must provide information on:
- any conditions for re-use
- what the charges are and what each charge is for
- basis on which charges are calculated
Where a standard charge has not been established, they must provide information on:
- the factors taken into account in the calculation of the charge for re-use in question
- if requested, set out in writing the way in which the charge is calculated in relation to the specific request for re-use
All re-users must be charged the same cost-reflective rate for the same type of re-use (e.g., commercial publishing), regardless of what type of re-user they are (e.g., commercial, educational or charity)
For public sector bodies permitted to charge (including cultural sector bodies), the charge for information supplied in response to a request for re-use must not exceed the sum of:
- A. the direct costs
- B. a reasonable apportionment of indirect and overhead costs, and
- C. a reasonable return on investment
No charging if costs already recovered to supply information for re-use (e.g., through registration fees)
No double-charging for access to information under access legislation, and for re-use of the same information Complaints process
You can complain about whether a public sector body is complying with any aspect of the 2015 Regulations, for example on issues of charging or what information falls within public task, subject to the exclusions below.
The complaints process does not apply to the re-use of information produced, held or disseminated outside a public sector body’s public task.
It also does not apply to information for which the public sector body does not hold the copyright.
The complaints process will only apply to issues of re-use, and will not consider complaints about access, which are dealt with under access legislation.
Initial complaints process
The public sector body must first try to resolve your complaint through its internal complaints process.
Complaints must:
- be in writing (email is acceptable)
- state the nature of the complaint – what sections of the 2015 Regulations are at issue and how
- what you would like the public sector body to do in order to resolve your complaint
- provide your full contact details
Complaints to the ICO
If the public sector body’s internal complaints process could not resolve your complaint, you can escalate it to the Information Commissioner’s Office (ICO), for example if it relates to the following:
- marginal cost pricing
- non-charging re-use complaints (e.g., refusal of permission to re-use)
The ICO has guidance on their role in the complaints process and the procedures that you and public sector bodies must follow when a complaint is escalated. The process is summarised below.
After reviewing the complaint, the ICO will issue a binding decision via a decision notice. Either you or the public sector body may appeal this decision to the General Regulatory Chamber of the First-tier Tribunal, information rights jurisdiction (the First-tier Tribunal).
The ICO will notify the Scottish Information Commissioner (SIC) if the complaint relates to a Scottish public sector body and the ICO and the SIC may share relevant information. There are exceptions to this process where the ICO will make a recommendation instead of a binding decision. If a complaint alleges that a public sector body has not followed the required calculation method when charging above marginal cost, or has incorrectly applied the provisions which allow public sector bodies with a requirement to generate revenue to cover a substantial part of their costs to charge above marginal cost, the recommendation will be sent back to the public sector body for it to consider and then make its final decision.
A public sector body must:
- decide what action it will take on the recommendation, including complying, changing its response, or no action
- by what date it will carry out the action
- notify you and the ICO of its response in writing within 20 days
If you are dissatisfied with the public sector body’s confirmed or changed re-use decision, or the public sector body does not comply with any of the above points, you may appeal to the First-tier Tribunal.
The First-tier Tribunal will hear the appeal and then make a binding decision.
Resources:
- Courts and Tribunals Judiciary
- Information Commissioner’s Office (covering England, Wales and Northern Ireland)
- Scottish Information Commissioner
- General Regulatory Chamber (First-tier Tribunal is a part of this)
- General Regulatory Chamber – forms and guidance
Transitional arrangements
Under Regulation 22, the previous 2005 Regulations will apply to any complaints about re-use still in process during the three months after 18 July 2015 (the in-force date of the 2015 Regulations), up to and including 17 October 2015.
If your complaint concerns a ‘dataset’ (see Links to other Legislation/Freedom of Information Act) that you requested prior to the 2015 Regulations coming into force, then the relevant FOIA provisions will continue to apply.
If your complaint concerns a dataset that you requested after the 2015 Regulations came into force, then the 2015 Regulations will apply where the dataset is held by a public sector body.
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6b2251cc1995b45641251bab1a06a1f8a9449c9c | Scope of the Re-use of Public Sector Information Regulations 2015
**TYPE OF BODY**
Are you:
- a public sector body already in scope of the 2005 Regulations
- listed in s. 3(1) of the 2015 Regulations
- a body that acts to meet needs in the general interest, and is not industrial or commercial
- a public sector museum, gallery, library, university library or an archive?
**TYPE OF INFORMATION**
Does the public sector information within your public task come from:
- a public service broadcaster
- an educational or research establishment
- a cultural establishment (other than a library (including a university library), museum or archive)
- only a logo, crest or insignia
- personal data that must be protected?
Does your information come from:
- a public sector body already in scope of the 2005 Regulations
- listed in s. 3(1) of the 2015 Regulations
- a library (including a university library), a museum or an archive
- a dataset for which you hold copyright?
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271eeb766ac10bbdd8605d2fa6a76e0ebea2ba22 | Understanding PSR: Public Service Reform What is PSR?
• a new directorate that brings together our considerable commissioning, transformation, strategy and change management capability • deliver **whole system reform** that equips H&F to fundamentally rethink how we serve and support those who depend upon us at every stage of their lives. PSR Values
• Focusing on outcomes and impact
• Being aspirational, creative and dissatisfied with the status quo
• Ensuring operational excellence and efficiency
• Demonstrating a pedigree in delivery and innovation
• Collaborating and co-producing
• Balancing the need for a strong evidence base with the potential from experimentation
Hammersmith & Fulham Council PSR Business Areas
- Commercial
- Procurement & Contract Management
- Business Intelligence & Management Information
- Policy & Strategy
- Commissioning
- Reform & Transformation
- Community Investment
- CHS, ASC, PH, Corporate wide Opportunities from PSR
- Improving commissioning wide activities and partnerships
- Think differently about how we deliver services
- Improved outcomes for our residents
- Drive forward system wide change
- New collaborations, shared services and shared resources
- Integrated strategies with other public sector bodies
- Financial savings and efficiencies
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e7326e06cc458d6c34871171683e1003e83f9cb1 | Get in on the Act Psychoactive Substances Act 2016 Get in on the Act Psychoactive Substances Act 2016
Background
The Psychoactive Substances Act (the Act) was introduced in the House of Lords on 28 May 2015, following an announcement made in the Queen’s Speech to bring forward legislation to ‘ban the new generation of psychoactive drugs’. The legislation completed its passage through Parliament in January 2016 and received Royal Assent on 28 January 2016 to bring it into law.
The Act creates a blanket ban on the production, distribution, sale and supply of psychoactive substances in the United Kingdom. It is a short piece of legislation that contains 63 sections and five schedules. Provisions in the Act are split into the following titles, some of which this document will cover in further detail:
1. Overview (an introduction to the Act)
2. Psychoactive substances (their definition and the exemptions as set out in schedule 1)
3. Offences (producing; supplying; possession; importing or exporting; penalties; exemptions as set out in schedule 2)
4. Powers for dealing with prohibited activities (prohibition and premises notices; prohibition and premises orders)
5. Powers of entry, search and seizure (further provision on search warrants is set out in schedule 3)
6. Retention and disposal of items
7. Supplementary and final provisions
The general provisions in sections 59 and 61 to 63, along with the regulation-making powers in sections 3 (2) and 11 (1) came into force on Royal Assent. At the time of writing the commencement date for the remaining provisions of the Act (to come into force by means of commencement regulations made by the Secretary of State) will be 26 May 2016.
This publication provides the reader with an introduction to the Act and further information on the Local Government Association (LGA) campaign work. Further information is available by contacting [email protected]
The role of local government and the LGA in calling for the legislation
Before the introduction of the Act, the LGA consistently argued that existing legislation to tackle legal highs was not fit for purpose. We called for an outright ban on legal highs to enable the closure of ‘head shops’ and to protect the public from the consequences of psychoactive substances.
In September 2014, councils and the LGA called on Government to outlaw the sales of legal highs, with the publication of accompanying research showing that the 18 councils across the country most affected by legal highs were all aware of such substances being sold. At the time the statement was published, councils were spending 30 per cent, or £830 million, of their public health budget each year on tackling drug and alcohol misuse. Following this the Conservative Party included a commitment in its 2015 General Election manifesto stating that it would ‘create a blanket ban on all new psychoactive substances, protecting young people from exposure to so-called ‘legal highs’’. The Labour Party and the Liberal Democrats also pledged action on legal highs in their 2015 General Election manifestos.
The call for an outright ban on legal highs was again made by councils and the LGA in early May 2015, with Councillor Ann Lucas OBE, then Chair of the LGA Safer and Stronger Communities Board, saying: “Legal highs are untested, unpredictable and a potential death sentence. Nobody can be sure of their contents or the effects that they could have. At the moment, as soon as one is outlawed, another one with a slightly different chemical composition appears. We can’t allow this to continue.”
A number of media outlets, including the Huffington Post, Daily Mail and BBC online, reported on the LGA’s renewed public call, which was made a week before the Government confirmed its legislative programme for the 2015-16 parliamentary session.
Following this, new powers were announced in the Queen’s Speech on 28 May 2015 stating that the Government would bring forward legislation to ban psychoactive substances. In response to this LGA spokesperson Councillor Peter Fleming OBE said: “Whilst council trading standards teams have performed an excellent job of tackling the issue of legal highs, the LGA has long argued that the current legislation is not fit for purpose.”
Our call for action was referenced on the floor of the House of Lords at Committee Stage in June 2016, with Home Office Minister Lord Bates saying “Are we supposed to stand idly by when the Local Government Association is telling us that and when the police are telling us that they lack the powers to act?”.
Supporting Government on the Bill, our work in Parliament
Ahead of the first general debate on the Act in the House of Lords we briefed peers to welcome the move by Government to ban the production, distribution, sale and supply of psychoactive substances. Background information, which included local authority case studies, provided by the LGA to peers, and MPs at later stages in the process, was used widely throughout debates in both Houses of Parliament.
Our parliamentary briefings put on record to parliamentarians that the legislation provides a clear, simple approach and outlines a range of powers that will enable the police, supported by councils, to take proportionate but decisive action to prevent the production and sale of psychoactive substances. We also highlighted that existing legislation was not sufficient to protect the public from the consequences of legal highs, which has long been reported by trading standards teams; also stating that such a ban would help to support councils to use public health budgets to tackle other priorities.
At all stages of the progress of the Bill we made clear that once the Act is in place we would encourage continued monitoring of the impact of the ban to ensure a solid evidence base is readily available for future reviews of the legislation. We raised the important need for the provision of education programmes designed to reduce misuse of all drugs, not just psychoactive substances; and that there is concern in local government about the use of psychoactive substances by younger people in particular. The LGA also made these points in a written submission to the Home Affairs Committee, which was submitted to assist the Committee in its inquiry into psychoactive substances.
Outside of Parliament, the LGA held meetings with Government, including with the Home Office Minister Lord Bates, to discuss the Bill and provide vital information in support of the legislation. Further to one such meeting Lord Bates wrote an article especially for the LGA’s ‘first’ magazine (September 2015) in which he argued:
‘For too long, so called ‘legal highs’ – potentially lethal substances that evade existing drug controls – have been sold openly in our communities. Our Psychoactive Substances Bill will put an end to this reckless trade, by introducing a blanket ban on these harmful drugs and giving the police and local authorities greater powers. The LGA has long supported such an approach and I am grateful for their continued support. I also admire the innovative and determined action from local authorities up and down the UK to tackle these traders, often using powers that were designed for different purposes.’
In the rest of his article in ‘first’ magazine and on the floor of the House of Lords, Lord Bates committed to the Home Office working with the LGA and its members to ensure the successful implementation of the legislation. The key provisions and their implications for local government
The Act contains 63 sections and five schedules. Set out below is the explanation of those provisions which are important to councils.
Section 1 introduces the Act
Section 2 (meaning of “psychoactive substances”) defines “psychoactive substances” for the purposes of the Act. We support the wide definition, which will ensure that as new substances are developed with different chemical compounds they will continue to be caught by the legislation.
Section 3 (exempted substances) defines an “exempted substance” for the purposes of the Act as a substance listed in schedule 1; which includes medicinal products, alcohol, nicotine and tobacco products, caffeine and food. These substances are capable of producing a psychoactive effect in an individual when consumed, but do not constitute psychoactive substances for the purpose of provisions in the Act. In our lobbying we warned that if the definition of psychoactive substances in the legislation could capture unintended materials, like incense, then consideration should be given to adding those substances to schedule 1.
Section 4 covers producing a psychoactive substance; section 5 covers supplying, or offering to supply, a psychoactive substance; section 6 covers aggravation of an offence under section 5; section 7 covers possession of a psychoactive substances with intent to supply; section 10 sets out maximum penalties for the offences in sections 4 to 8.
Section 12 (meaning of “prohibited activity”) defines the term “prohibited activity” for the purposes of the Act.
Section 13 (prohibition notices) enables a senior officer or local authority (the definition of a local authority in section 59 covers county, district and unitary councils) to issue a prohibition notice to a person if certain conditions are met.
Section 14 (premises notice) provides a further means to tackle prohibited activity from taking place from premises, such as a head shop, through a premises notice. A senior officer or local authority would be required to form a reasonable belief that prohibited activity is being carried out on a particular premises, which would enable the issuing officer to deal with such activity.
Section 15 (prohibition notices and premises notices: supplementary) sets out information that must be included in a prohibition notice or premises notice.
Section 16 (further provision about giving notices under sections 13 to 15) makes further provision about the service of a prohibition notice or premises notice, or the withdrawal of such a notice.
Section 17 (meaning of “prohibition order”) defines a prohibition order for the purposes of the Act. Section 18 (prohibition orders on application) enables the appropriate court to make a prohibition order against a person if conditions are met.
Section 19 (prohibition orders following conviction) enables a criminal court, when sentencing an offender for an offence under sections 4 to 8, to make a prohibition order in addition to any custodial or non-custodial sentence. Section 20 (premises order) enables the court to make a premises order if certain conditions are met.
Section 21 (applications for prohibition orders and premises orders) makes provision about the persons who may apply for a prohibition order or a premises order (including a local authority), and the form of such an application.
Section 22 (provision that may be made by prohibition orders and premises orders) provides that a prohibition order and premises order may contain other prohibitions, restrictions or requirements as the court considers appropriate.
Section 23 (enforcement of access prohibitions) makes further provision on enforcement of a prohibition order or a premises order, which includes an access prohibition under section 22 (6).
Section 24 (access prohibitions: reimbursement of costs) enables the agency (including a local authority) managing any premises subject to an access restriction to apply to the court for reimbursement of costs incurred from clearing, securing or maintaining the premises.
Section 26 (offence of failing to comply with a prohibition order or premises order) makes it an offence to fail to comply with a prohibition order or premises order.
Section 27 (offence of failing to comply with an access prohibition, etc) makes it an offence to contravene an access prohibition order.
Section 28 (variation and discharge on application) provides the courts with a power to vary or discharge a prohibition order or a premises order.
Section 30 (appeals against making of prohibition orders and premises orders) sets out appeals available to a respondent against a prohibition or premises order made.
Section 36 (power to stop and search persons) confers powers to stop and search persons on a police or customs officer. Section 37 (power to enter and search vehicles) confers powers to stop and search vehicles on a police or customs officer. Section 38 (power to board and search vessels or aircraft) confers powers to board and search a vessel or aircraft. Section 39 (power to enter and search premises) provides for prior judicial authorisation of a warrant to search premises for evidence of an offence.
Section 41 (powers of examination, etc) enables a relevant enforcement officer, when conducting a search under sections 37-39 to examine anything in it. Section 42 (power to require production of documents, etc) provides a relevant enforcement officer when searching under sections 37-39 to require any person in or on the premises to produce any document or record in the person's possession or control.
Section 43 (powers of seizure, etc) enables a relevant enforcement officer to seize and detain any substance found in the course of a search which the officer believes to be a psychoactive substance. Section 49 (retention of seized items) authorises the retention of items seized under section 43 for as long as is necessary.
Section 50 (power of police, etc to dispose of seized psychoactive substances) provides for the disposal of psychoactive substances seized during a search.
Section 58 (review) places a duty on the Secretary of State to review the operation of the Act and lay a report of the review before Parliament within 30 months of the coming into force of section 4 to 8. The LGA called for continued monitoring of the impact of the ban, both in the UK and Ireland, to ensure a solid evidence base is readily available for future reviews of the legislation. A note of thanks
Throughout the passage of the Act through Parliament we worked closely with our President and Vice-Presidents, as well as other MPs and Peers, briefing them ahead of debates and suggesting amendments. On behalf of local government, we are grateful to the Government for briefing forward this important legislation and all those parliamentarians who supported us.
Useful links
For the full text of the Act and the explanatory notes please refer to www.legislation.gov.uk/ukpga/2016/2/contents/enacted/data.htm
For the LGA’s briefings on the legislation please visit www.local.gov.uk/briefings-and-responses/-/journal_content/56/10180/7321401/ARTICLE
For a previous LGA guide to councillors on tackling new psychoactive substances please go to www.local.gov.uk/documents/10180/6869714/A+councillors’%20guide+to+tackling+new+psychoactive+substances.pdf/c2055374-dff2-4717-8aed-94b1d1e08d7a
Endnotes
1 https://www.gov.uk/government/speeches/queens-speech-2015 2 www.local.gov.uk/media-releases/-/journal_content/56/10180/6516886/NEWS 3 https://s3-eu-west-1.amazonaws.com/manifesto2015/ConservativeManifesto2015.pdf - p52 4 www.labour.org.uk/page/-/BritainCanBeBetter-TheLabourPartyManifesto2015.pdf - p52 5 https://d3n8a8pro7vhmx.cloudfront.net/libdems/pages/8907/attachments/original/1429028133/Liberal_Democrat_General_Election_Manifesto_2015.pdf?1429028133 – p124 6 www.local.gov.uk/media-releases/-/journal_content/56/10180/7284270/NEWS 7 www.huffingtonpost.co.uk/2015/05/23/legal-highs-banned-local-government-association_n_7426964.html 8 www.dailymail.co.uk/news/article-3096762/All-legal-highs-banned-Ministers-close-loophole-let-lethal-drugs-flourish.html 9 www.bbc.co.uk/news/uk-england-32844191 10 www.local.gov.uk/media-releases/-/journal_content/56/10180/7296347/NEWS 11 http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/home-affairs-committee/psychoactive-substances/written/20218.pdf 12 https://issuu.com/lgapublications/docs/first_online_september_2015_issue_5?e=16807299/15012537
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182feffb87e48a915d23944bc66f4752000595c2 | Dropping Out of School in Southern Ghana: The Push-out and Pull-out Factors
Eric Ananga
CREATE PATHWAYS TO ACCESS Research Monograph No. 55
January 2011 The Consortium for Educational Access, Transitions and Equity (CREATE) is a Research Programme Consortium supported by the UK Department for International Development (DFID). Its purpose is to undertake research designed to improve access to basic education in developing countries. It seeks to achieve this through generating new knowledge and encouraging its application through effective communication and dissemination to national and international development agencies, national governments, education and development professionals, non-government organisations and other interested stakeholders.
Access to basic education lies at the heart of development. Lack of educational access, and securely acquired knowledge and skill, is both a part of the definition of poverty, and a means for its diminution. Sustained access to meaningful learning that has value is critical to long term improvements in productivity, the reduction of inter-generational cycles of poverty, demographic transition, preventive health care, the empowerment of women, and reductions in inequality.
The CREATE partners
CREATE is developing its research collaboratively with partners in Sub-Saharan Africa and South Asia. The lead partner of CREATE is the Centre for International Education at the University of Sussex. The partners are:
The Centre for International Education, University of Sussex: Professor Keith M Lewin (Director) The Institute of Education and Development, BRAC University, Dhaka, Bangladesh: Dr Manzoor Ahmed The National University of Educational Planning and Administration, Delhi, India: Professor R Govinda The Education Policy Unit, University of the Witwatersrand, South Africa: Dr Shireen Motala The Universities of Education at Winneba and Cape Coast, Ghana: Professor Jerome Djangmah, Professor Joseph Gharney Ampiah The Institute of Education, University of London: Professor Angela W Little
Disclaimer
The research on which this paper is based was commissioned by the Consortium for Research on Educational Access, Transitions and Equity (CREATE http://www.create-rpc.org). CREATE is funded by the UK Department for International Development (DFID) for the benefit of developing countries and is coordinated from the Centre for International Education, University of Sussex. The views expressed are those of the author(s) and not necessarily those of DFID, the University of Sussex, or the CREATE Team. Authors are responsible for ensuring that any content cited is appropriately referenced and acknowledged, and that copyright laws are respected. CREATE papers are peer reviewed and approved according to academic conventions. Permission will be granted to reproduce research monographs on request to the Director of CREATE providing there is no commercial benefit. Responsibility for the content of the final publication remains with authors and the relevant Partner Institutions.
Copyright © CREATE 2011 ISBN: 0-901881-62-7
Address for correspondence: CREATE, Centre for International Education, Department of Education School of Education & Social Work Essex House, University of Sussex, Falmer BN1 9QQ United Kingdom Tel: + 44 (0) 1273 877984 Fax: + 44 (0) 1273 877534 Author email: [email protected] / [email protected] Website: http://www.create-rpc.org Email [email protected]
Please contact CREATE using the details above if you require a hard copy of this publication. Dropping Out of School in Southern Ghana: The Push-out and Pull-out Factors
Eric Ananga
CREATE PATHWAYS TO ACCESS Research Monograph No. 55
January 2011 Contents
Preface........................................................................................................................................... vii Summary........................................................................................................................................ viii
1. Introduction.................................................................................................................................. 1 1.1 Purpose of the study .................................................................................................................. 2 1.2 Background .............................................................................................................................. 2 1.3 Organisation of the Study ......................................................................................................... 3
2. Dropout Literature: Reasons Why Children Drop out of School .............................................. 4 2.1 Demand Factors: Socio-economic background and the Dropout ........................................... 4 2.1.1 Household Poverty .............................................................................................................. 4 2.1.2 Fees and Indirect Costs of Schooling .................................................................................. 5 2.1.3 Structure and arrangement in the household and dropping out ........................................ 6 2.1.4 Child Labour/Work and Dropping out .............................................................................. 6 2.2 Supply Factors: Conditions within the School as Factors in the Dropout Process ............... 7 2.2.1 Quality of Education: Processes and Practices ................................................................. 8 2.2.2 Education Resources ......................................................................................................... 8 2.2.3 Conditions within the School: Practices and Processes .................................................... 9 2.2.4 Academic Performance ..................................................................................................... 9 2.2.5 Overage Enrolment, Health Status and Dropout ............................................................... 10 2.2.5.1 Overage in Grade and Dropout .................................................................................... 10 2.2.5.2 Poor Health and Dropout ............................................................................................ 11
3. Research Problem and Questions ............................................................................................... 12 3.1 Study Context and Methods of the study ............................................................................... 12 3.2 Data collection and analysis .................................................................................................. 13
4. Discussion of Results .................................................................................................................. 14 4.1 The Socio-economic Context as a Push and/or Pull Factor in the Dropout Process ............ 14 4.1.1 Household Poverty ............................................................................................................ 14 4.1.2 Family, Parenting Style and Dropout .............................................................................. 16 4.1.3 Household Obligations: The Opportunity Cost of Schooling ........................................ 19 4.1.4 Child Labour and School Dropout .................................................................................... 23 4.1.5 Seasonal Child Migration .................................................................................................. 25 4.1.6 Networks, Economic Survival Strategies and Dropout .................................................... 28 4.2 School Context as a Push and Pull Factor in the Dropout Process ....................................... 30 4.2.1 The Influence of Teachers on Dropout ............................................................................. 30 4.2.1.1 Teacher Unavailability or Absenteeism and Dropout .................................................. 30 4.2.1.2 Teacher Attitude towards Pupils and Dropout .............................................................. 33 4.2.1.3 School Practices and Processes, and Dropout: Repetition and Readmission ............ 35 4.2.1.4 The use of Child Labour at School .............................................................................. 36 4.2.1.5 Discipline and Corporal Punishment ............................................................................ 38
5. Returning to School: Conditions that Encourage Children to Drop in ..................................... 40 5.1 Motivation to Return to School: Children’s Views ................................................................. 40 5.2 The School’s Reaction to Children Who Drop in: Pupils’ Experiences ................................. 43 5.3 Returning to Complete School: The Perceptions of Drop-in Children ............................... 44
6. Conclusion and Implications for Policy ..................................................................................... 46 6.1 Implications for Education Policy on Access ....................................................................... 46 References ....................................................................................................................................... 48 Appendix 1 ...................................................................................................................................... 55 List of Tables
Table 1: Children’s Daily Activities by Age, Gender and Hour of Day.................................20
List of Figures
Figure 1: School Calendar, Migration and the Economic Activities of School Children........26 **List of Acronyms**
| Acronym | Description | |---------|-------------| | CSS | Children’s School Supplies | | CREATE | Consortium for Research on Educational Access, Transitions and Equity | | EFA | Education for All | | GMR | Global Monitoring Report | | GoG | Government of Ghana | | GPRS | Ghana Poverty Reduction Strategy | | GSS | Ghana Statistical Service | | JHS | Junior high school | | MOESS | Ministry of Education Science and Sports | | PTA | Parent Teacher Association | | SMC | School Management Committee | | UNESCO | United Nations Educational, Scientific and Cultural Organisation | | UNICEF | United Nations Children Education Fund | | USAID | United States Agency for International Development | Acknowledgements
This article is based on data for my doctoral thesis and I would like to express my sincere gratitude to all the persons who participated in the study in various ways. I thank both of my supervisors, Professor Keith Lewin and Dr. Kwame Akyeampong for their comments and support throughout data collection and writing process. I am grateful to the Government of Ghana and CREATE for financial support. I am grateful to all the sources I contacted for information for this paper, especially Dr. Fran Hunt whose paper on dropout was very useful. I am grateful to Dr. Benjamin Zeitlyn for his editorial work, comments and suggestions for improving this paper and also Justine Charles for helping bring this paper to its final state. Preface
Drop out is endemic in much of Sub-Saharan Africa. The largest number of children out of school in most countries not experiencing civil unrest are drop outs who enrolled but failed to complete their primary and junior high schooling. Disproportionately those dropping out are over age. Many will have a life history of late enrolment, irregular attendance and low achievement coupled with poverty and dislocated childhoods with insecure family relationships.
Many surveys report the main causes of drop out as reported by children and teachers. These usually highlight costs and irrelevance of the curriculum, child labour amongst older children, pregnancy amongst girls, and other factors including distance to school, teacher absenteeism, disability and violence at school. This monograph goes beyond the first level attributions of drop out to delve under the surface and explore the dynamics of decision making and actions that lead to drop out, profile the forms it takes, and encourage or discourage re-entry into school. This generates a rich tapestry of insight into the life histories of different children who have dropped out. This shows how both factors on the supply and demand side are influential and may interact. It also illustrates how important action at the local level may be and how the actions of “significant others” may determine if drop out occurs and if it become permanent.
The evidence presented is enough to establish that drop out is in important part generated by characteristics of schools and teachers, and by complicity within communities about child labour. The insights presented offer sharp challenges to schools, teachers and local education officials to re-examine their culpability in premature termination of the school careers of many children from poor households. They are also a reminder that though households and parents of course have responsibilities to encourage and support the schooling of their children, where this fails to happen, the state will remain the only guarantor of the right to education and needs to live up to the realities and obligations of being the provider of last resort.
Keith Lewin Director of CREATE Centre for International Education University of Sussex Summary
Addressing school dropout has been one of the most controversial elements of policy since the introduction of free compulsory universal basic education (FCUBE) in Ghana. However, research that utilises qualitative biographical detail surrounding irregular attendance and the critical events in the process that lead to dropout in Ghana is limited. I argue that in order to achieve the target of universal basic education by 2015, education policy should focus more directly on addressing dropout. This paper provides an in-depth analysis of the critical events pupils experience as they cross the threshold from being enrolled to being out of school in southern Ghana. This paper provides fresh insights into drop outs’ life worlds and educational needs; opportunities to re-cross the threshold back into basic education, whether into school or complementary provision. The findings presented in this paper show that conditions both external to the school environment – poverty and the opportunity cost of schooling – and within the school – the teacher factor, and school practices and processes – conspire to compromise retention and push and/or pull children out of school. Dropping Out of School in Southern Ghana: The Push-out and Pull-out Factors
1. Introduction
This monograph presents an analysis of children’s accounts of the causal factors that influence the decision to drop out of school. The paper reveals the various issues and events that influence children’s patterns of attendance and attitudes towards schooling. The paper focuses on socio-economic factors outside school and conditions within the school environment that compromise attendance. I identify the factors that influence schooling behaviour from children’s accounts and exemplify the analytical claims with relevant interview excerpts from the field study. Data was gathered by means of in-depth interviews with children and observation of their activities.
In the 2008 Education for All (EFA) Global Monitoring Report (GMR), the question is raised: “Education for all by 2015: will we make it?” Although it is a very simple and straightforward enquiry, the answers are highly complex. Ensuring that children enrol in school is one thing, but whether they will complete their education is another issue altogether. It has been argued that most children in Africa are enrolled in school, but that the real problem concerns children dropping out of school (Dumas et al., 2004; Lewin, 2007). The Consortium for Research on Educational Access Transitions and Equity (CREATE) identifies six zones of exclusion (see Lewin, 2007) and children who participated in this study fall within zones 2, 3, 4, 5 and 6 (Ananga, forthcoming) (see Appendix for an explanation of CREATE’s zones of exclusion).
In the literature on school dropout, factors such as the cost of education and other socio-cultural issues are cited as causes. Most researchers attribute the reasons why pupils are unable to complete basic education in developing countries to structural factors at household, school and society levels (Colclough et al., 2003; Eie, 2003 cited in Wikan n.d.; Hunt, 2008).
Children’s accounts of their reasons for dropping out of school are analysed in the light of such research findings. The analysis examines the causes of dropout from three points of view: first, children’s accounts of their family, socio-economic and societal circumstances; second, conditions within the school; and third, accounts of dropout children who have returned to school. It thus balances structural analyses of dropout with an account emphasising children’s agency in events.
The finding of the study presented in this monograph show that some supply and demand conditions act as push and or pull factors to incite children to drop out of school. The main argument in the study is that unless the nature and characteristics of the critical events in the dropout process are understood and clarified to inform policy, any policy intervention intended to prevent dropout and/or encourage drop-in is a waste of scarce resources that Ghana cannot afford to squander. This paper therefore highlights the fact that in addition to the poor socio-economic conditions of children’s backgrounds that shape school attendance and retention, certain critical conditions within the school are found to interact with the poor socio-economic background of children to result in dropping out of school. 1.1 Purpose of the study
The purpose of this study is to highlight the causes of dropout from the accounts of children who experienced drop out. This monograph highlights the conditions that create the processes that led to dropout. The study relied on intensive in-depth interviews that specifically focused on exploring the experiences of dropout children to capture their views on the risk factors, trajectories and the critical point of dropping out. Major strengths of this qualitative study are its depth of coverage of the experiences of dropouts located in context for both boys and girls and the wide range of issues it covers including socio-economic background; grade of dropping out, age and related daily activities of children and how these shape children’s school attendance patterns.
This study highlights the stories of dropout children on a range of within and outside school conditions that pushed and/or pulled children to drop outs in a new way. Although the problem of dropout is very prevalent, it remains an under-researched area particularly from the view of the ‘victims’ of drop out. Any new information that sheds light on the complexities surrounding dropout will be useful in informing policy towards the achievement of EFA and MDGs targeting access to education.
1.2 Background
In Ghana, access to primary education has grown over the years and Gross Enrolment Rates are now above 95% (MOESS, 2007). According to official statistics, 85% of children of school going age went to school (86.3% boys and 83.6% girls) in 2001 and between that period and 2006, gross enrolments is reported to have reached 90% (MOESS, 2006). Basic education (grades 1-9) is compulsory in Ghana’s education system and the compulsory age for basic education is 6-15 years (UNESCO, 2005). While basic school enrolment in Ghana has improved significantly in recent years, one major challenge facing it has been high levels of drop out (MOESS, 2007). Many children enrol over age, some repeat grades and only two-thirds reach the last grade for completion (USAID, 2007). In Ghana, over 20% of school going children have either dropped out or never enrolled in school at primary level (Ampiah & Adu-Yeboah, 2009). Reports on the state of education in Ghana by Akyeampong et al., (2007) and other studies confirm the reality of school dropout in Ghana’s basic school system (GSS, 2003; Hashim, 2004; MOESS, 2007; 2008). In 2006, non-completion rates stood at 15% and 35% for primary and junior high school (JHS1) levels respectively (MOESS, 2007).
In a description of the details of dropout in Ghana’s basic education system, the multi-indicator cluster survey (MICS) 2006, reports that dropout rates across all grades in Ghana are similar (4% per year) except for grade three, which is 5% (GSS, 2006). Considering gender, males have higher dropout rates than females in almost all grades. From grades 1, 3 and 6, dropout rates in rural areas stood at 3.9%, 4.6%, and 3.9% respectively compared with 3.3%, 5.5%, and 4.5% in urban areas. There are however, wide regional variations in dropout rates. The regions with the worst rates are the Upper West, Northern, and Central regions. In the Central region, where this study was located, dropout rates from Grades 1 to 6 stood at 7.3%, 8.2%, 10.7%, 8.5%, 8.6% and 6.2% respectively (GSS, 2006). To achieve universal basic education by 2015 in Ghana, policy attention needs to focus more on addressing dropout.
______________________________________________________________________
1 Lower secondary education is now called junior high school in Ghana, but when research for this paper started these schools were still called junior secondary schools. Several factors, particularly direct educational costs to households and some socio-cultural practices including child labour are alleged to be responsible for children dropping out of school. Basic education has been free since 1987, though schools continue to charge maintenance fees which many believed were responsible for children dropping out or staying entirely out of school. In 2005, the Government of Ghana (GoG) introduced a capitation grant scheme(^2) to replace all fees charged by the school. The capitation scheme is reported to have attracted both unenrolled children and drop outs into school (MOESS, 2006). Despite this, dropout continues to occur in some basic schools in Ghana, which threatens the achievement of universal basic education by 2015 (Akyeampong et al, 2007).
1.3 Organisation of the Study
This paper is organised into six sections. Section one focuses on the background and purpose of the study. The second section highlights literature on the factors that influence dropout. The third section presents the context and methods of the study. Section four is organised into two parts around the research questions, with part one focussing on conditions outside school that pushed and/or pulled children out of school; part two on conditions within the school that led to dropout. The fifth section addresses the final research question about the motivations behind children’s’ decision to drop back in to school or not and finally, views from children who return to school about their chances of staying and completing school. In both part one and two, excerpts from the interview data are used to support emerging themes from children’s accounts of conditions that push and or pulled children to drop out of school. Based on the evidence of children’s accounts I argue that conditions within the school appear to be critical in influencing children’s decision to drop out of school. In a sixth section conclusions are drawn from the findings, that certain conditions within and outside the school—supply and demand related push and or pull children to drop out of school and the paper ends with policy recommendations.
(^2) The capitation scheme pays $3 per school child to the schools to defray the costs schools previously charged children. 2. Dropout Literature: Reasons Why Children Drop out of School
Although there is a growing body of research on the role of the individual and influence of household conditions on children’s schooling in Africa, there have been relatively few empirical studies focusing on school dropout (Fuller et al., 1995; Fuller & Liang, 1999). Understanding why children drop out of school is the key to addressing this major education problem; yet, identifying the causes of dropout is extremely difficult because the phenomenon is influenced by a range of proximal and distal factors.
Research into the causes of dropout focuses on the influence of a series of interrelated demand and supply factors that interact in a complex way to incite children to drop out of school (Hunt, 2008). I draw on these perspectives in conceptualising dropout as an outcome of contextual conditions setting a process in motion that pushes and/or pulls children until they eventually drop out of school. The several causal factors of dropout are related to the family background the child; the community in which his or her school is located; and conditions within the school environment. See Hunt (2008) for a more comprehensive analysis of the factors are either demand or supply-driven.
Supply and demand factors that cause dropout to occur are contextual, since they are variously located in the family, school and community. The influence of the child’s attributes – his or her values, attitude and behaviour pattern in terms of education – are dictated by contextual variables. These are, on the one hand, demand factors, which include the socio-economic conditions of the child’s background; and, on the other hand, supply factors, which relate to conditions within the school setting that shape the child’s decisions in terms of his or her education.
Empirical research into dropout has identified a number of supply and demand factors in the child’s family background, the community in which the school is located, and the school itself that can be utilised as predictors of dropout. In a study of dropout in northern Ghana, the complexity of the causes of the phenomenon is illustrated by the variety of at-risk factors cited as reasons for withdrawal from school (Ampiah & Adu-Yeboah, 2009).
In spite of the fact that supply and demand factors that interact in a complex fashion to encourage children to drop out of school often function simultaneously, I attempt to explore them separately, although there is necessarily a degree of overlap between them. The next section discusses the demand factors. In the next two sections I review the literature on a range of push and/or pull supply and demand factors that were found to be linked and in some cases provoked school children to terminate their schooling.
2.1 Demand Factors: Socio-economic background and the Dropout
2.1.1 Household Poverty
The characteristics of the household influence whether a child will enrol in school or not, the frequency of attendance, and the likelihood of suspending schooling or dropping out permanently (Croft, 2002 cited in Hunt, 2008).
The link between poverty and school dropout is highlighted in a number of studies (e.g. Birdsall et al., 2005; Boyle et al., 2002; Brown & Park, 2002; Bruneforth, 2006; Cardoso & Dropping Out of School in Southern Ghana: The Push-out and Pull-out Factors
Verner, 2007; Dachi & Garrett, 2003; Hunter & May, 2003; Porteus et al., 2000; Ranasinghe & Hartog, 2002; UIS & UNICEF, 2005; Vavrus, 2002).
According to Hunter and May (2003), poverty is regarded as the likely explanation of school disruption; and in describing the link between wealth and school retention, Colclough et al. (2000) found that:
... amongst those out-of-school, the mean wealth index for school drop-outs was generally higher than for those who had never enrolled ... children at school were, on average, from better-off households than those who had dropped out, who were, in turn, from richer backgrounds than school-age children who had never enrolled (Colclough et al. 2000:16).
In its analysis of poverty in Ghana, the Ghana Poverty Reduction Strategy 1 (GPRS) captures the effects of poverty in three dimensions – income or consumption poverty, lack of access to basic services, and as an impediment to human development. All three dimensions are considered to negatively affect the demand for education by people from poor households, which results in low levels of participation in education. Poverty is considered to be a major factor in the impediment of enrolment and retention in Ghanaian schools (Akyeampong et al., 2007; Canagarajah & Coloumbe, 1997; Chao & Apler, 1998; GSS, 2003).
In Ghana, most out-of-school children – both those who have never enrolled and those who have dropped out – come from economically deprived households. According to a Ghana child labour survey report, child workers claimed to be working to raise the money to go to school (GSS, 2003).
Children from low socio-economic households, and those that are vulnerable and prone to income shocks, commonly face some form of demand to withdraw from school if their parents cannot afford the direct cost of education (Gubert & Robilliard, 2006). The payment of school fees therefore acts as a barrier to enrolment and retention (Colclough et al., 2000; Hunter & May, 2003; Liu, 2004; Mukudi, 2004).
Household poverty may be regarded as affecting dropout through its interactive effects with other factors that that trigger events that result in dropping out from school. In exploring the conditions outside school that influence dropout, this study sought to highlight how poverty shapes school attendance and dropout in the study area. The next section looks at how the costs of school —direct and indirect, affect schooling.
2.1.2 Fees and Indirect Costs of Schooling
In the literature on determinants of school participation the direct and indirect costs of schooling are found to affect enrolment and attendance especially amongst poor households (e.g. Dachi & Garrett, 2003; Fentiman, Hall and Bundy, 1999). As mentioned earlier, some studies suggest that the cost of school fees was the reason why poor households withdraw their children from school (Carnagarajan and Coloumbe, 1997) and evidence exists that other indirect costs of schooling also affect demand for schooling.
Payment of school tuition fees may not be the main reason behind dropping out in those educational systems that do not charge children any fees, as is now the case in Ghana. However, it often appears to be the case that other fees apart from tuition are charged and other direct costs – e.g. uniforms, transport, food etc remain. Research shows that poor households sometimes withdraw their children from school in order to work as part of a coping strategy to meet costs and generate resources to support the costs of schooling (see Hunt, 2008). There is therefore a relationship between poverty, structure and arrangement in the household and dropout. The next section looks at structure and arrangement in the household and dropout.
2.1.3 Structure and arrangement in the household and dropping out
The household composition, arrangement, interaction and support play crucial roles in retention and completion. Structures in the home play very key roles that encourage and promote children’s participation in schooling or conspire against it. The composition and structure of the household, (gender, size, education, health, and income of members, etc.), shapes access and retention (Al Samarrai and Peasgood, 1998).
A study on education access in South Africa on participation and dropping out reported that children who live with their biological mothers are not very likely to drop out of school when compared with those pupils whose mothers were living somewhere or who were bereaved (Grant and Hallman, 2006). Also, households that are headed by females place more emphasis on the education of their children (Al Samarrai and Peasgood, 1998).
Also, the number of children that live in a household also affects retention. For example, where there are more children in the household with many of them being less than five years old, it negatively affects the regular school attendance of girls (Glick and Sahn, 2000). Nekatibeb (2002) showed that household size and compositions interact with other factors to shape access and retention to confirm this,
Ersado (2005) argues that parents’ education is the most consistent determinant of a child participation in education. It has been documented that the higher the education of the parent or the household head, the greater the chances of increased access, regular attendance and lower dropout rates (Ainsworth et al., 2005; Connelly and Zhen, 2003; Duyear, 2003).
Poor health of household members affects school attendance. For instance a pupil may be asked to stay at home to take care of parents, guardians and sibling should they fall ill. Girls are most affected which results in them staying out of school for long periods taking care of relatives to the detriment of their studies (Case and Ardington, 2004; Kadzamira and Rose, 2001). Apart from this, death of parent(s) does have effects that reduce schooling for children (Chipfakacha, 1999).
2.1.4 Child Labour/Work and Dropping out
In addition to household interaction and support on dropout, poverty, location, gender and age of children often interact with seasonal factors and child labour to influence a child’s access to education and dropout. Specific work-related tasks, for example, full time child care and work in peak agricultural times often clashes with schooling times. Child labour is described as the main reason behind absenteeism, repetition and drop out cases in Tanzania (Dachi & Garrett, 2003).
While poverty is often cited as creating an enabling environment that encourages child labour (Blunch & Verner, 2000; Duryea, 2003) and leads to drop out, Duryea (2003) highlights the pull of the labour market (as opposed to the push of poverty) as a main factor in children dropping out of school in urban Brazil. Also, studies show that rural children are more likely to work than urban or peri-urban children (Blunch & Verner, 2000; Canagarajah & Coulombe, 1997; Ersado, 2005).
The PROBE Team (1999) in India sees agricultural activities as clashing with school times and because such activities take place in rural areas and are seasonal, they lead to seasonal withdrawals from school. Children who combine child labour with schooling often suffer and cannot attend regularly. Working children therefore attend school intermittently and irregular attendance predisposes pupils to dropping out (Hunt, 2008). Rural children’s work is influential in drop out Ghana (see Hashim, 2005).
In relation to gender, studies show that girl children drop out of school to look after younger siblings (e.g. Brock & Cammish, 1997). Girls are found to be engaged in more duties that take them out of school than boys (Kane, 2004). In many contexts, girls take on a heavier workload within domestic/household settings, whereas boys are more likely to be involved in agricultural duties and the formal labour market though it can also be the case that girls are employed in traditional agriculture. (Canagarahaj & Coulombe, 1997).
In rural areas of Cote D’Ivoire, the relatively high wages that male child labourers are able to earn has the effect of increasing the probability that boys will drop out, and decreasing the likelihood that girls will drop out (Appleton, 1991 cited in Bredie & Beeharry, 1998). In addition, Rose and Al Samarrai (2001) state that in the case of Ethiopia while boys may be the first to be enrolled in school, in times of economic crisis, if waged employment is available, they may also be the first to be withdrawn. A study of education access in Ghana between 1994 and 1996, in two circuits in the south (Ziope and Amankwa) and one in the north (Fumbisi), reveals that child labour is the main reason that older pupils drop out of school (Fentiman et al., 1999).
The influence of child labour on dropout notwithstanding, is it is argued that the school has the potential to implement protective mechanisms and provide incentives that attract children, increase attendance levels and discourage pupils from dropping out (UNESCO, 2007). The next section examines the influence of the school environment itself on dropout.
2.2 Supply Factors: Conditions within the School as Factors in the Dropout Process
It is widely acknowledged that the school exerts a powerful influence on children’s achievement, and its characteristics have an impact on the dropout rate. In a study in Ghana, a wide variety of school-related causes of dropout are cited. Specifically, factors such as teacher attitude; grade repetition; corporal punishment; difficulty in learning; and being overage for grade are posited as the reasons behind dropout (Ampiah & Adu-Yeboah, 2009).
Research also points to distance to school being an important determinant of educational access. For example, in cases in which there are more primary schools than junior high schools in the locality, and in which the only available secondary school is further away (Fentiman et al., 1999), the distance to the latter may be considered too far for younger children, especially girls (Juneja, 2001). This is also true in the cases of older girls and those children regarded by parents as vulnerable to sexual harassment (Colclough et al., 2000; Nekatibeb, 2002; PROBE, 1999). Parents are afraid of the safety of their children when they have to travel longer distances to school. Thus, according to Ainsworth et al. (2005), the likelihood of children attending primary school decreases the greater the distance to the nearest secondary school. Other factors on the supply side are discussed below.
2.2.1 Quality of Education: Processes and Practices
The level of school performance; its institutional configuration; its processes and practices; and relationships within school between teachers and students all influence access. These factors within the school have been found to interact with other factors outside to cause children to drop out, although in some cases, a single positive or negative experience at school can be the main determinant of whether a child stays in school or withdraws (Akyeampong et al., 2007; Hunt, 2008).
Real and perceived educational quality has been raised by many researchers as a major factor influencing schooling access (e.g. Ackers et al., 2001; Boyle et al., 2002; Brock & Cammish, 1997; PROBE, 1999). Improved access to education as a result of EFA and universal primary education (UPE) programmes has highlighted the importance of quality as a requirement for ensuring sustained access. It has been argued that quality has been compromised by rapid expansion and increased access (Boyle et al., 2002), although the meaning of exactly what constitutes quality remains unclear (PROBE, 1999; UNESCO, 2004). There are varying definitions of what quality actually means. There seems to be a dearth of empirical studies establishing the link between quality of education and dropout. Such shortcomings notwithstanding, the following section considers the influence of resources and facilities, as well as the practices and process that are linked to quality of education and dropout.
2.2.2 Education Resources
Education facilities are linked to quality in terms of human resources and in-school resources. Availability of resources such as textbooks, desks and blackboards has been found to influence dropout (Brock & Cammish, 1997; Molteno et al., 2000), as have various aspects of teaching and learning processes. Teaching practice and behaviour can particularly influence a pupil’s decision to drop out. Smith (2003) found that in some schools in Zimbabwe’s Southern Province teachers did not prepare lessons, had no schemes of work, and left pupils’ assignments unmarked. Such classroom practices and implicit lack of in-service teacher development has serious implications for retention.
The prevalence of teacher absenteeism is noted in the works of Alcazar et al., (2006) and Banerjee and Duflo, (2006); and the global teacher absence project reports cases of public primary school teacher absence (Chaudhury et al., 2005). Although much is still unknown about how teacher absence leads to dropout, it clearly implies that pupils’ education – and by extension, interest in school – suffers as a result.
From research in Peru, Alcazar et al. (2006) found that teacher absence was concentrated in poor and rural communities. Working in such localities decreases teacher motivation, and a poor community may also be unable to hold teachers accountable. Posts in remote areas that lack basic amenities such as passable roads, a reliable water supply and mains electricity, may be unattractive to teachers. As a result, pupils are more likely to drop out of school on account of the higher rates of teacher absence. To compound this situation, it has been found that certain practices and processes within the school are also linked to dropout. Ghuman and Lloyd (2007) and Hunt (2007) describe the lack of accountability and monitoring mechanisms in some schools, arguing that once teachers are in post, it is usually difficult to dismiss them. Ghuman and Lloyd (2007) note how meaningful performance and attendance are difficult to guarantee. Hunt (2007) focuses on the lack of monitoring of policy in practice, in particular the corporal punishment ban in South Africa. The author argues that there has been little research into how these factors directly correlate with dropout rates. This is one of the key issues explored in the present study, which is based on children’s views of how conditions within the school – including the behaviour of teachers towards pupils, and corporal punishment among other things – lead to dropout.
2.2.3 Conditions within the School: Practices and Processes
Research shows that teacher attitudes towards pupils are linked to dropout. From their research in Ethiopia and Guinea, Colclough et al. (2000) found that teachers were more positive about the participation, interest and intelligence of boys rather than girls. In some cases, this is because they believe that girls will drop out early, an attitude that can then become a self-fulfilling prophecy (Ames, 2004). In their study of Guinea, Glick and Sahn (2000) argue that the school environment and classroom conditions in general seem to be less conducive to effective learning of girls than boys. However, in other contexts, education practices have been found to be more likely to exclude boys (Hunter & May, 2003).
Although few researchers make the direct link, there are issues related to the preservation of an appropriate teacher–student relationship and dropout. For example, the use of corporal punishment or violence is practiced by teachers in many countries (Boyle et al., 2002; Humphreys, 2006 cited in Hunt, 2008; Hunt, 2007; Seidu and Adzahlie-Mensah, 2010). While it has been outlawed in some contexts, it is legal in others, although with varying degrees of restriction. Boyle et al. (2002) suggest that beating and intimidation “affect children’s motivation to attend school.” As a result of the caning and accompanying humiliation pupils suffer at the hands of their teachers, the former gradually become less motivated to go to school (PROBE, 1999).
The issue of bullying from fellow pupils may also exacerbate the precarious situation of children already suffering from corporal punishment by teachers, inciting them to drop out. In some studies, gender based violence in school has also been negatively correlated with educational access, although it has not been directly linked to dropout (Dunne et al., 2010; Human Rights Watch, 2001; Leach et al, 2003).
2.2.4 Academic Performance
Poor academic results are associated with higher levels of grade repetition and dropout, and with lower progression ratios to higher levels of the education system (Colclough et al., 2000). This is reflected in the way in which the household perceives education quality in relation to its own context; which is often regarded in terms of the expectations of children, the perceived relevance of the education children are receiving, and their ability to meet parental aspirations. Household expectations of education quality affect decision-making around schooling access and retention. Based on their research in rural Ghana, Pryor and Ampiah (2003) found that parents did not consider the education available in their community to be worthwhile because the quality of the village school was not high enough to warrant the investment of time, energy and economic resources. While pupils who perform exceptionally well academically at an early age are often given preferential treatment by teachers in order to pass exams, others who perform poorly are made aware how slim their chances are of rising very high in the education system; and pupils who feel left out very quickly become disheartened (Liu, 2004). In a study that interviewed parents about children’s dropout rates in Mongolia (Batbaatar et al., 2006), responses revealed that in schools where great emphasis was placed on the maintenance of very high academic standards, children with poor academic results were ‘allowed’ to drop out. In effect, pupils were encouraged to leave school because it was considered that they were not able to survive for much longer in a competitive education system (Batbaatar et al., 2006).
2.2.5 Overage Enrolment, Health Status and Dropout
2.2.5.1 Overage in Grade and Dropout
The age of the pupil at the time of enrolment is an important determinant of retention and completion. Overage enrolment predisposes pupils to dropout (Ersado, 2005). In instances where children start schooling later than the official entry age, they are not very likely to complete the basic school cycle (UIS & UNICEF, 2005). Late enrolment may be attributable to the child’s poor health or nutritional status; gender; household conditions; or, in certain cases, distance to school (Brock & Cammish, 1997; Pridmore, 2007).
Late enrolment creates the phenomenon of overage in grade, a situation in which pupils may find schooling unappealing owing to the pressure of feeling inferior to younger classmates. In addition, an unfriendly classroom environment is sometimes created by the teacher’s attitude to overage pupils. These two conditions, together with the use of a curriculum that is not designed for teaching pupils of varying ages, can conspire to push children out of school.
With children from poor backgrounds, the older they are in school, the greater the pressure on them to engage in socio-economic activities (Ersado, 2005); and this together with an unappealing school environment pushes pupils to drop out of school. Being from a poor background, overage and unmotivated at school, pupils who gain access to a viable market for their labour are attracted (pulled) to drop out and earn a living.
An overage pupil from a low-income household often starts working to make some money to support the family income (GSS, 2003), and this results in irregular attendance. As children work, they initially interrupt their education when they withdraw temporarily and/or stay away from school on a seasonal basis. This is an indication that the pupil is losing interest in schooling and on the path to long-term dropout. Studies have shown that in Ghana, by the age of 13, children from economically poorer households have dropped out of school to migrate to areas in which there is a viable labour market, such as Accra or Kumasi (Hashim, 2005).
In addition to late enrolment, grade repetition also produces overage pupils; and as children grow older and progress through the grades; the likelihood that they will drop out before completing the school cycle increases (UIS & UNICEF, 2005). Thus, in some cases, a hostile school environment and lack of support for pupils (PROBE, 1999) results in weak performance. As pupils perform poorly, they tend to stay away from school more frequently; weak academic performance often leads to grade repetition; repeaters and underachievers attend school intermittently; and this somewhat circular chain of events is eventually broken when pupils drop out of the education system (Hunt, 2008). 2.2.5.2 Poor Health and Dropout
Deprived circumstances and – the sometimes related – poor physical condition of children have been positively correlated with late enrolment, irregular attendance and dropout. For example, the health and nutritional status of children is one such condition, which, according to Pridmore (2007), has a marked impact on a pupils’ ability to learn and/or remain in school.
Pupils who suffer from ill health and poor nutrition are inclined to attend school irregularly, are more likely to repeat grades, and eventually drop out. Poor health makes it impossible for children to maintain motivation and sufficiently high levels of concentration; and has also been found to result in poor cognitive function (Grantham-McGregor & Walker, 1988; Pollit, 1990; Roso & Marek, 1996).
Studies of children in Ghanaian schools have shown that poor health negatively affects pupils’ education; and reports show that anaemia, malnutrition, stunted growth, and delayed enrolment are correlated (Fentiman, Hall & Buny, 2001; Glewwe & Jacoby, 1995; Pridmore, 2007). In some instances, irregular school attendance – which has been identified as a precursor of dropout (Hunt, 2008) – has been found to be caused by the poor health of children (Batbaatar et al., 2006; Boyle et al., 2002).
Another dimension of the connection between health and dropout is disability, which interacts with other factors to restrict access. According to Rousso (2003), disabled girls are more likely to have restricted access to school; and when disabled children are enrolled, user-unfriendly school facilities and a hostile school environment have the potential to push such children out of school. 3. Research Problem and Questions
In this study, the problem under investigation is the causes of dropout from Ghanaian basic schools. Few studies in Ghana have actually elicited the views of the children concerned, particularly in terms of why dropout occurs. In a study by Ampiah and Adu-Yeboah (2009) citing Akyeampong et al. (2007), it is argued that much research into dropout dwells only on its causes through listing critical events. It is argued by Hunt (2008) that dropout is a process and understanding the causal factors in the course of its progress has significant policy implications (Ampiah and Adu-Yeboah, 2009; Hunt, 2008).
This study therefore engaged children who had dropped out of school in order to gain an in-depth understanding of the process and causes of dropout and unmask the various critical events that pushed and/or pulled them out of school.
The findings presented in this paper specifically focussed on the following questions:
- What causal factors within and external to the school environment are responsible for pushing and/or pulling children to dropout?
- Why is it that some dropout children return to school while others do not?(^3)
- How does the school respond to the learning needs of dropout children who have returned to school, and how do such children rate their chances of completing school?
3.1 Study Context and Methods of the study
This study is located in the Mfantseman municipality in the Central Region of Ghana. The municipality was selected for the study because of the demographic characteristics that pose challenges to schooling and its accessibility with regards to location. Mfantseman is one of the communities in Ghana where further qualitative and quantitative research for CREATE is focussed. One of the challenges facing effective attendance in the area includes the incidence of child labour/work, independent child migration and seasonal withdrawals from school.
Ghana has over 20 million people unevenly distributed over ten administrative regions. The coastal and forest regions are more densely settled than the northern savannah regions. According to the 2000 population census, the Ashanti Region has the largest share of the national population (19.1%) followed by the Greater Accra Region (15.4%), Eastern (11.1%) and Western (10.2%). The remaining six regions of which the Central Region is one have less than 10% each of Ghana’s population (Ghana Statistical Service, 2002).
The Central Region is divided into 17 administrative districts of which Mfantseman municipality is one. Mfantseman municipality has 168 settlements of which 148 are rural. The total population of Mfantseman is 152,264 comprising 69,670 males and 82,594 females. The participants in this study are selected from two schools located in two educational circuits out of the eight circuits in the municipality. The selected circuits are Narkwa and Dominase. I selected these circuits in order to compare the slightly different economic activities (fishing and farming) engaged in by children in these circuits. The two circuits are located in the rural settlements. At Narkwa and Dominase circuits, Narkwa and Kyeakor townships are selected respectively. Narkwa has a population of 5,859 with 2,721 males and
(^3) In this monograph, a pupil who has dropped out of school but has subsequently returned to continue his or her education is sometimes referred to as a ‘drop-in’. 3,138 females while Kyeakor has a total population of 2,231 with 1,023 males and 1,208 females. In these two communities, fishing (in Narkwa) and subsistence farming and trading are the main occupations. There is high migration of males and seasonal migration of children from these communities to fishing towns such as Half Assini, Axim, Fasu, la Cote d’Ivoire and other towns along the West African coast. The selected communities are typical of other communities in the municipality in terms of economic activities.
The municipality’s total school age population in 2003 was 40,624, out of which 22,360 children enrolled, leaving 18,264 (45%) out of school (MOEYS/GES, 2005). For primary school age population (6-11 years old), which totalled 28,962, only 17,995 enrolled. The male – female enrolment ratio stood at 51:49 in favour of boys. The school age population (12-14 years old) of 11,662 had a total of 8,523 enrolled at the junior high school (JHS) in the ratio of 53:47 for boys and girls. The gross enrolment ratio (GER) for primary school was 87.2% and for JSS was 73.1%. The NER for primary and JSS were 60.4% and 37.4% respectively. Drop out in primary and JSS schools stood at 2.2% and 1.2% respectively per annum (MOESS, 2005). These dropout figures may reveal only a fraction of the real levels of drop out because of poor record keeping in schools.
Interviews were conducted with 18 children who dropped out of schools. Although the focus of this study is to highlight the voices of dropout children, I also interviewed some school teachers and parents for their views on dropout to highlight the ambiguity surrounding the definition of dropout.
3.2 Data collection and analysis
This paper attempts to bring out the influence of context as a factor that leads to dropout based on the experiences of individual children (aged 7—17 years). It uses the interpretive research approach focusing on real life experiences of children who dropped out of school to highlight the reasons behind school dropout.
To identify dropout children who participated in this study, I made initial contact with three school pupils who previously dropped out but had returned to school. I spent time in the town during school hours to identify children not in school. After contacting these children, I negotiated access by seeking consent from parents and children before engaging them in the study. The first contacts with the children who had returned to school and those I met loitering in town during school hours led me to identify other children who participated in the study. During the period of data collection, I conducted and recorded in-depth interviews with 18 children who had dropped out of school. I examined the previous attendance records of all the participating children. I gave all the children disposable cameras to take photographs of activities that affected their regular school attendance (see Appendix for pictures). I observed activities in the school and community that children mentioned to have incited them to drop out of school. I followed 12 of the children who seasonally migrate to understand how migration shapes attendance. The data was collected in two phases within a period of 11 months: from May to October and November to March. I analysed the data by looking for emerging themes.
The evidence presented in this report is important but caution is needed when generalising to Ghana as a whole for several reasons. The focus of this study is only on selected cases of dropout of children rural setting. I am careful in drawing conclusions about urban school dropout. In the next section the results and discussion of the study is presented. 4. Discussion of Results
This section is devoted to children’s views of contextual circumstances external to the school that influence the decision to terminate schooling. It is important to note that these factors are not independent of each other; rather, they often exert their influences concurrently, and an understanding of the relative importance of such factors in affecting children’s schooling decisions can only be obtained if they are studied simultaneously.
Field Notes Mensah told me that he seldom had breakfast before going to school, and that he bought food on credit at break time because he did not have any pocket money. When he could not get anything on credit, he borrowed money from his friends. He had been skipping classes to go to the beach to earn money to pay his debts; but he eventually stopped attending school because he made enough to live on at the beach.
Field Notes In my conversation with Ekow, he told me that his parents could not afford to get him a school uniform, so he attended school irregularly in order to work and buy one. He also told me of the transfer of his teacher without a replacement, which meant that he did not bother to turn up early when school reopened. Consequently, he had to dig up tree stumps as a punishment before being allowed to return to classes; but because he refused to carry out the task, his teachers told him not to set foot in the classroom.
These two examples illustrate the conflict and complexity surrounding children’s decisions to drop out of school, which appear to encompass several contextual issues. To shed light on such issues, I explored contributory family, socio-economic and societal factors in detail.
4.1 The Socio-economic Context as a Push and/or Pull Factor in the Dropout Process
4.1.1 Household Poverty
When I asked children about the conditions outside school that prompted them to drop out, their answers appeared to encompass several factors. However, almost without exception, household poverty and the need for economic survival was cited as a major cause that pulled children out of school; and, specifically, the lack of children’s school supplies (CSS)(^4), arising from the family’s inability to purchase them, was a significant determinant of the desertion of school. The following complaints are typical:
You have to go to school without food, and [then] staying in school till home time becomes difficult ... you cannot go for lunch with your friends because you do not have any money; meanwhile, you are hungry.
Sometimes, there is no breakfast in the house and my parents are not able to give me any pocket money to take to school either; so, I have to skip school to work to make money to support myself.
Children who do not eat breakfast may not want to stay in class, preferring to look for opportunities to find food. Hungry children are more likely to drop out of school because they are unable to concentrate in class.
(^4) CSS includes breakfast, a school uniform, shoes, stationery and a school bag. Lack of CSS is likely to have influenced most of children under study to drop out of school. Those who had withdrawn from primary grades three and four emphasised that they had stopped attending school because they did not have a school uniform. This leads me to suspect that the abolition of school fees is not enough to ensure retention.
Gacer⁵, a 12 year-old girl who had dropped out of class four and stayed at home for two years, told me:
I did not have a school uniform; that is why I stopped going to school.
Yet, interestingly, school authorities did not prevent children who had not got a school uniform from attending class. One teacher said:
Nobody prevents children without uniform from coming to school.
Nevertheless, it appears that pupils felt singled out from their classmates if they went to school in different clothes. Such children therefore chose to stay out of school until they were able to acquire the official uniform.
Most parents were well aware of their children’s reluctance to attend school if they did not have a uniform. For example, one parent, Lawife, complained that school uniform amounted to barrier to access, because children who did not have one refused to go to school, explaining:
This school uniform thing is really affecting children’s attendance ... When we were kids, we wore any old clothes to school, so nobody really worried about not having the official uniform. But now, because most children wear the same school uniform, a child without it won’t want to go.
The practice of collecting unofficial footwear from children may have forced some pupils to drop out of school. One child told me:
I don’t go to school because I don’t have the official shoes.
Based on this account, it is apparent that although teachers claimed that pupils were not turned away from school for wearing unofficial clothes, the practice of collecting children’s flip-flops and punishing them seems to have prevented some of them from attending school regularly.
It appears that due to household poverty, many parents could not afford to provide their children with a school uniform or shoes. When the harvest was poor, children’s education became a luxury that many parents could not afford, since a low yield compounded existing low socio-economic status, leading to further household privation and disruption to children’s
⁵ All the names used in this paper are pseudonyms and not participants real names schooling. Consequently, some – though not all – pupils chose to find a job in order to buy their CSS themselves.
Oodia, who had not been able to make the transition from class three to four, said:
My father could not afford to buy my school uniform to start the new academic year because the harvest was poor.
Oodia’s father told me:
Last year, we did not get any good catches during the fishing season; therefore, I could not buy his school uniform so he stopped attending school.
These quotations clearly demonstrate the effects of seasonality on children’s schooling, a view shared by Gubert and Robilliard (2006). Owing to the already low socio-economic conditions of the poor, households become vulnerable and suffer income shocks when the fish catch or harvest is poor. Thus, children from such households are faced with some form of demand to withdraw from school (Gubert and Robilliard, 2006).
Dropping out of school owing to lack of a school uniform was probably mentioned as extensively as it was because by the time most children in Narkwa and Kyeakor made the transition from class three to four, their parents had stopped providing them with their basic schooling needs.
One child told me:
Your parents tell you that you should try and buy the things you need to go to school yourself because they do not have money.
According to one teacher:
These children look after themselves at school because parents in this village are poor.
Therefore, in many ways, it seems that one of the major causes of school dropout in Narkwa and Kyeakor was household poverty exacerbated by demands to acquire uniforms and other school necessities. Based on children’s accounts, it may be argued that there is a correlation between poor harvests and school desertion. In this regard, it is important to note that the harvest season in Narkwa and Kyeakor fell between September and late October (see Figure 1), months that coincided with the beginning of the academic year.
The evidence shows that at times of poor harvest, household poverty is exacerbated and children are obliged to drop out of school. This may be why sporadic dropout cases (see Ananga, forthcoming) occurred in the month following a poor harvest; and also why dropout children who intended to return were pushed to stay away from school for longer. Most long-term dropout cases and some overage instances are traceable to these kinds of conditions.
4.1.2 Family, Parenting Style and Dropout
Interviews with children also revealed that poor parenting/fostering practices played a critical role in terms of pushing children away from school. For example, the education of a child whose father or mother was absent from the household was disrupted because the child had at least partly to make up for work that had hitherto been carried out by the missing parent. Hun, a 15 year-old boy who had dropped out of class 4, told me:
I was going to school until my mother passed away, and my father also travelled ... I stopped school to work for money to take care of my brothers and sisters.
I gained insight into the nature and influence of parenting on pupils’ school attendance when I spoke with foster children and those who had been neglected. Joe, a 15 year-old boy, shed light on how his experience as a foster child pushed him to drop out of school:
My parents had travelled to Cote d’Ivoire and I was staying with my aunt. She was very busy and often went to Accra to buy goods. When the money for food ran out, my aunt was sometimes not around to give me more, so I had to stop schooling and earn some money.
Another girl, Etty, 16 years, also told me:
My mother had travelled to Accra and I went to live with my stepfather ... I had some problems at school, but my stepfather said that he was busy and could not help me solve the problem. All I do now is take care of my younger sibling.
These accounts of foster children reveal that they were obliged to drop out of school because they were not living with their parents. In the case of Joe, it appears that his decision to stop attending school was prompted by lack of parental control. Realising that nobody was showing interest in supporting his schooling and faced with no money to buy food at school, he decided to drop out and earn some money instead.
However, I got the impression from Etty’s account that she had not made her decision unilaterally. Rather, it seems that her stepfather’s unconcerned attitude, which may have been a deliberate ploy to keep her out of school so that she would take on her mother’s responsibility of looking after her sibling, was what pushed her out of school.
The accounts of Joe and Etty suggest that the probable reason behind their dropping out was the unconcerned attitude of foster parents towards their schooling. It is likely that drop out associated with particular events may occur because of such indifference towards children’s schooling.
However, it should be noted that living with biological parents did not guarantee that pupils would stay in school. During my fieldwork, one category of children I interviewed told me that they had dropped out because their parents neglected them. In my discussions with other interested parties, Nyaminpa, a head teacher, told me:
We all know that parents in this village are poor, but some of them use poverty as an excuse to stop taking care of their children ... and when children feel neglected by their parents, they drop out of school.
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6 I refer to this type of dropout as ‘event dropout’, see Ananga, forthcoming, and next footnote. Given the poor socio-economic conditions of the community, I was sceptical about the issue of child neglect being a cause of dropout until I heard the story of Abu, a 14 year-old boy, who explained:
My father disowned me and drove me away from the house as a punishment for supporting my mother in an argument with him.
Yet, interestingly, Abu’s father could not be counted among the poor parents of Narkwa since, according to Abu:
He owns two fishing canoes and has over 16 workers. He also runs a bar with my mother.
Abu’s father refused any plea for reconciliation on Abu’s behalf, even from his class teacher, so the boy went to live with a friend. I regularly saw Abu at the beach rather than in school; and I suspected that he may have been finding it difficult to come to terms with his predicament, and had dropped out of school out of frustration. It thus emerged that child neglect in Narkwa and Kyeakor was sometimes overt, as in Abu’s case; or it could be covert, as in instances in which parents shirked responsibility towards older children.
Child neglect manifested itself covertly in cases in which children lived with their biological parents but were left to fend for themselves when they reached the upper grades of primary school. One parent informed me that:
In this village, there are opportunities for children to work and some children are able to make more money than adults ... with the poverty that faces us, at least they can support themselves.
One probable explanation for this development is that in the past, some parents resorted to child neglect as a survival strategy in the face of difficult economic conditions, and the practice had subsequently become an acceptable way of raising children after they reached a certain stage in their lives. This is because children in the study area were perceived to be capable of earning a living by the time they reached the age of about ten. A further explanation of why children were neglected by their parents is that some of them may have believed that support required by pupils was only in terms of the provision of their schooling needs. As such, where opportunities to earn an income from child labour existed, children could be left to their own devices and expected to complete school without dropping out.
However, by the time they reach the age of ten, most pupils are making the transition from lower to upper primary school, a level at which parental support in the form of monitoring attendance is very important. Parental decisions do affect retention and children whose parents monitor and regulate their activities; provide emotional support; encourage independent decision-making; and are generally more involved in their sons and daughters’ schooling, are less likely to drop out (Okumu et al., 2008). In respect of the types of dropout(^7) (see Ananga forthcoming), it can be seen from these explanations that some cases of sporadic dropout and event dropout are manifestations of parental neglect and lack of interest in children’s schooling.
### 4.1.3 Household Obligations: The Opportunity Cost of Schooling
The opportunity cost of schooling and the gendered identity of a child operate in complex ways to influence both his and her ability to stay in school and attitude towards attendance. According to some children, parents and teachers I spoke to, engaging in certain activities pulled children out of school.
Talking to children about their experiences revealed divisions between boys and girls. It emerged from the accounts of the girls that household duties, such as taking care of family member, affected their schooling; but boys’ narratives revealed that engaging in economic activities was what pulled them out of school. Attendance was influenced by the opportunity cost of schooling because some girls did housework and some boys engaged in economic activities, both of which made regular school attendance difficult.
A teacher, Hamid, mentioned that:
> In this village, children drop out of school because they have to help at home or work to earn income instead of schooling.
This statement clearly shows that school dropout results from the precedence that household chores and economic activities take over schooling.
Girls told me that it was boys who usually dropped out of school on account of the opportunity cost of schooling. A possible explanation for this is that the socio-economic activities children engaged in were gendered. Miyoc, a female teacher, told me:
> Girls do not drop out of school as often as boys in this village. This is because girls are not allowed to go fishing or work for hours on the farm ... fishing and farming are for males. Normally, girls sell things when school is over ... so they are able to attend school more regularly than boys are.
> Boys are affected more because, although most children look after themselves at school, boys have to support their households as well. Boys make money by fishing and farming, but they cannot combine these things with schooling because these activities start in the morning, which clashes with school hours. So, boys have to choose between
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(^7) The five types of dropout include:
- **Sporadic Dropout:** Dropping out of school temporarily (short term) for about three months due to economic survival needs.
- **Event dropout:** Terminating schooling temporarily in response to one or more critical events, such as the death of a parent, sickness, conflict with school authorities, etc.
- **Long-term Dropout:** Deserting school for two to four years, but with the possibility of returning to school; that is, falling out of one’s cohort group.
- **Unsettled Dropout:** Permanently dropping out of school with no prospect of any particular economic activity or apparent means of survival.
- **Settled Dropout:** Dropping out of school permanently but engaged in a vocation, trade or other economic activity for survival. attending school and dropping out to work for money instead, because they cannot combine activities like girls can.
Table 1 confirms Miyoc’s view that there is a necessary correlation between gendered household chores and the economic activities children engage in, their age and irregular school attendance. In comparing boys to girls, it is notable that owing to the gendered nature of economic activities, boys were more susceptible to those activities that resulted in dropout than was the case with girls. It seems that older girls in particular were not pulled out of school as readily as boys because most of the domestic and economic activities that girls engaged in were practiced outside school hours; thus, they were able to combine them with schooling.
Table 1: Children’s Daily Activities by Age, Gender and Hour of Day
| Gender | Age | Non School hours | School Hours | Non Schooling hours | |--------|------|------------------|--------------|---------------------| | | | 5:30 | 7:30 | 9:30 | 11:30 | 13:30 | 15:30 | 17:30 | 19:30 | 20:30 | 21:30 | | Boys | 7-11 | Fishing/Farming | Hustling/Farming | Playing | Play Cinema | Bed | | | 12-17| Fishing/Farming | Hustling/Farming/Selling | Play & Cinema | Bed | | Girls | 7-11 | Household Chores | At school or Caring for family member | Household Chores and Selling | Play | Bed | | | 12-17| Household Chores | At School or Caring for family member | Household Chores and Selling | Bed |
Source: Field data.
In terms of the effect of the opportunity cost of schooling on girls’ education, in cases in which her mother was employed, it was a female child who was relied upon to do general housework such as cooking, washing, fetching water, and, in some cases, taking care of a sibling, or sick or elderly relatives.
It emerged that the extent to which household activities pulled a girl out of school was also dependent on other factors such as her age, the nature of the household activity, and other arrangements at the school level. With regard to the nature of domestic work, most girls seemed to be able to combine routine housework with their schooling without dropping out. It was when issues such as taking care of a relative arose that the girl’s age became a key determinant of whether she was able to combine activities or dropped out of school.
In order to gain an insight into the effect that looking after a relative had on girls’ schooling, I analysed them in two groups of younger and older children respectively. The findings imply that younger girls (7–11 years) dropped out of school due to extra domestic, non-economic work. For example, Don, a nine year-old girl who had dropped out of class two, told me:
I stopped school to take care of my younger sister so that my mother could go to the farm.
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8 Hustling is a local jargon used in the community to describe socio-economic activities of children at the beach. In this practice, children assist adults to offload fish from the canoes during which children are given some fish as wages. It was likely that when girls were requested to free their mothers by taking care of siblings, they would be pulled out of school because such services were often required at times when girls were supposed to be at school.
However, I noticed that some older girls were not forced to drop out when looking after younger siblings. It appears that owing to the relative maturity (11–17 years) of the girl, and the pre-school age (3–4 years) of the sibling, the former was able to combine schooling with assisting her mother without necessarily being pulled out of school. Taking a younger sibling to school seemed to be possible as long as the girl’s teacher was a woman. I got the impression that a female teacher weighed the relevance of girls’ schooling against a pupil’s physical and mental capacity to combine both tasks before allowing her to take her young sibling to school.
A female teacher, Hamatu, told me:
Although it is a difficult arrangement, I permit some girls to come to school with their siblings if taking care of them is the reason they are dropping out of school. But I always make sure the girl is old enough to handle the situation before I allow it.
As to whether she would allow younger girls to bring their brothers or sisters to class, Hamatu said:
no, because they are too young to combine schooling with taking care of a young sibling.
This means that only older girls who were physically strong and mentally alert were allowed to combine schooling with taking care of siblings, since younger girls were not considered to be sufficiently mature to possess such qualities.
Another probable explanation for allowing an older girl to take her sibling to school is the teacher’s better understanding of the social milieu in which the domestic activities of girls took place. The teacher’s familiarity with the girl’s family may be another factor that influenced her decision to permit such informal arrangements in her class. It is important to note that such a practice emphasises the importance of good school–community relations for retention. Such an arrangement, and the ability of older girls to effectively combine housework with schooling, could be the reason that dropout cases involving girls in Narkwa and Kyeakor seemed to be particularly affecting younger pupils between the ages of 7–11 years in the lower grades of primary school.
My interviews with some older girls also revealed that the relative age of the person they were taking care of was a significant factor in determining whether they stayed in school. For example, in the case of Etty, the girl whose foster parent made no effort to help her return to school, it is likely that another key reason she dropped out was to take care of three of her siblings. She told me:
My mother is now working in Accra so I am taking care of my brothers and sisters till she comes back.
Etty cooked breakfast for her siblings; washed up; went to the farm to fetch vegetables; and then prepared the family’s evening meal. By the time she had finished all the housework and ensured that her siblings had been fed and were ready for school, she was herself too tired and too late to go to school. Another girl, Hesta, had lost both parents, and dropped out of school because she was left alone to take care of a sick grandmother.
Interestingly, girls’ schooling in the sample was not directly disrupted by their engagement in economic activities. From Table 1, it can be seen that girls did not pursue economic activities during school hours. As mentioned earlier by Miyoc the female teacher, girls’ economic survival activities tended to be pursued after class and during the school holidays. These arrangements notwithstanding, it could still be argued that there is a necessary correlation between girls’ dropout rates and the opportunity cost of schooling, which depends on various factors such as a girl’s age and the nature of the work she is obliged to undertake.
On the other hand, it is often argued that boys’ education suffers from disruptions brought about by the opportunity cost of schooling because they engage in vital economic activities at the expense of attendance; and it is clear how such economic activities coincide with school hours (see Table 1). Most boys in the study area were obliged to shoulder the responsibility of supplementing the household income in addition to working to support themselves at school. The evidence shows that the strain of attempting to meet such demands might have been so great that they ended up being pulled out of school.
In terms of age, some older boys (12 years and over) dropped out of school because they worked long hours. Mensah told me:
I work hard to make money because if I do not give money to my mother there will be no food in the house.
It seems that the pressure on boys to contribute to household income was one of the main reasons for the high rates of sporadic dropout among them in Narkwa and Kyeakor. Unlike the case with girls, owing to the gendered nature of boys’ economic activities and the manner in which they clashed with the school timetable, they were unable to combine work with schooling.
When I asked why they did not combine schooling with work like the girls, Joe told me:
When I am going fishing, I leave home early in the morning – around 3:00 a.m. – and return after 1:00 p.m.
Oodia, who did farm work, said:
By 6:30 a.m. at the latest, I must be on my way to the farm to avoid being docked pay; and I return in the afternoon, around 3:00 p.m.
These accounts of children’s work patterns confirm the fact that there were invariably clashes between the school timetable and boys’ hours of work. It is likely that boys who engaged in economic activities might therefore have come under pressure to drop out of school in order to be able to go to work. This may explain why the number of sporadic dropout cases amongst boys increased dramatically when they entered the 12–17 years cohort groups. By this age, most of them were likely to have started working in the informal labour market in order to support themselves and their families. Second, boys may also have dropped out of school because their parents expected them to contribute to household income in times of economic difficulty. In a context of strong cultural constraint and the discriminatory treatment of girls within a culture of prevailing machismo, boys might have been more capable than girls of making such a contribution.
From the above discussion of the opportunity cost of schooling, it may be concluded that there is a link between the work children do and the processes leading to school dropout. In respect of the gendered economic activities of children, it seems that the influence of the opportunity cost of schooling as a push or pull factor depends to a large extent on the socio-cultural context; a child’s age and gender; and the available labour market opportunities for children to secure employment.
4.1.4 Child Labour and School Dropout
Local labour market opportunities appeared to prompt children to pursue income-generating activities instead of going to school. I noticed that children participated enthusiastically in economic activities in Narkwa and Kyeakor, even competing amongst themselves for work in the local and external informal labour markets.
The informal labour market structure gave children the opportunity to gain employment by taking part in fishing expeditions, ‘hustling’ at the beach, and working on farms; as well as to sell various items ranging from farm produce to provisions. It is thus likely that children were pulled out of school by the attraction and accessibility of such an informal labour market structure.
Younger children’s school attendance might have been more regular because the distractions of the informal labour market that might influence their school attendance seemed to be minimal. However, older children might have found that they were not able to concentrate fully on their schoolwork because by the age of 12, it was becoming more difficult to postpone immediate financial reward in order to pursue temporally remote but more valuable academic goals.
For example, instead of attending school, some children in Narkwa, particularly older boys, joined groups of adults who left home early in the morning to go fishing, or sometimes waited at the beach for the fishing canoes to dock; while a larger number of younger children joined them later in the afternoon when school was over in order to ‘hustle’ at the beach. The extent to which children were motivated to seek avenues for pursuing economic activities instead of going to school is illustrated by the field notes extract below.
**Field Notes**
What was most interesting was that Joe [a 15 year-old boy] and Hun [a 14 year-old boy], neither of whom had completed primary school, were sitting under coconut trees on the sandy beach playing cards at around 9:00 a.m. in the morning while most of their age mates were in school learning. Apparently, they had stopped going to school and went to the beach early every day to wait for the canoes to dock, which usually took place by mid-afternoon. I suspect that they might have been waiting at the beach this early because of the opportunity to make more money if they started hustling before other children from school joined in to compete with them.
This no doubt reflects the extent to which boys in particular were attracted to seek employment in the informal local labour market instead of going to school. It seems that children from poor socio-economic backgrounds and the indifferent attitude of the community towards schooling were the reasons why some children considered selling their labour to be attractive. Lawife, a parent, told me:
Because of the money they make from fishing activities, some of the children in this village are not willing to stay in school, and most of the adults in this community are not worried that children are not staying in school.
It appears that children’s attraction to the informal labour market was supported by covert ‘collective communal support’ for them to sell their labour. It thus seems that the community condoned dropping out of school and approved of finding a job. It is likely that such collective communal support created an enabling environment that acted as a driving force, pulling children out of school to sell their labour in the informal labour market. It may be argued that such a collective communal support compromises children’s school attendance and that this was the overt manifestation of a structural devaluation of schooling which otherwise is not visible.
For example, upon the arrival of the canoes at around 1:00 pm, all other activity in the village ground to a halt and both children and adults converged on the beach to do brisk trade. Some pupils even ran away from school so as not to miss out if the boats docked early. Apparently, adults needed child labour, a point that became clear when Hun told me:
We [children] have to be at the beach to help unload the fish, and our parents expect us to bring fish and money home.
It can be argued that children engage in economic activities because of the existence of a market for child labour. This view is corroborated by Duryea (2003), who found that a buoyant job market acted as the main force pulling children out of school in Brazil. Similarly, Okumu et al. (2008) emphasise how communities can influence dropout rates by providing employment opportunities during school hours.
Apparently, the labour market in Narkwa and Kyeakor shaped children’s schooling behaviour and attendance patterns because although most children enrolled, they only attended classes until fishing and farm work were available, after which they dropped out in order to earn money. In effect, this may explain the issue of the seasonality of dropout. The attendance records of older children who dropped out of school reveal that almost all of them withdrew from school for at least a month. Moreover, it appears that children who previously attended school irregularly, especially to pursue economic activities, easily dropped out of school again. Often older children migrate independently to work while younger children are withdrawn to accompany migrating parents. Smita (2008) highlights the influence of seasonal migration on educational access in India. The next section highlights evidence of the overlap between seasonal migration and school academic calendar in the study area. 4.1.5 Seasonal Child Migration
Field Notes It was exactly 8:15 am in Narkwa Methodist School and the children had marched from the morning assembly ground to their classrooms. The register was being marked and the children were responding to their names. For any child that was absent, the choral response “Half Assini” was shouted amid laughter from the children present; laughter because they were now aware that I was working with school dropouts. What was most interesting was that about a quarter of the children were not in school that day, having already left on the routine migration to Half Assini. At the lorry station, I met a couple of schoolchildren boarding buses with their parents who were migrating to other fishing communities in Western Region.
Seasonal migration came up in my interviews with children as one of the critical factors that pulled children out of school. The effect of seasonal migration on regular school attendance was twofold. On the one hand, parents migrated with their children even before schools broke up for the holidays; and on the other hand, some children independently migrated seasonally to work in other fishing communities (see Figure 1). Figure 1 illustrates the clash between school times and seasonal migration, which provide evidence that corroborate other studies on seasonality (see Smita, 2008; Hadley, 2010).
Some younger boys aged between 6 and 11 years dropped out of school because they migrated with their parents. A child’s education was disrupted when he or she was withdrawn from school to accompany his or her parents on the seasonal migration. I was told by Abu, the 14 year-old boy who had dropped out on account of parental neglect:
I was in class two by then and school hadn’t yet broken up, but my mother took me to accompany her to Cote d’Ivoire; and she left me there with my aunt for eight months.
Thus, taking a child out of school before the end of term obviously resulted in disruption to his or her schooling. In confirmation of this point, a teacher, Hamid, explained:
Some children drop out of school because their parents migrate with them. In some cases, the child is left behind but they later migrate to join their parents. However, when school reopens, some of these children do not report early and this disrupts their schooling.
Considering such migration, disruption of school attendance could be overcome if the schools adapted their timetables to it. I asked teachers why the school calendar could not be adapted to accommodate this inevitable seasonal activity. One teacher told me:
All schools in Ghana follow the same timetable for reopening, writing exams and holidays ... We don’t have the authority to change any aspect of the school calendar.
There was no provision to allow for adjustment to the school calendar in order to suit local variations in seasonal activities that potentially disrupted school attendance. In my informal discussion with the Parent Teacher Association (PTA) chairman and a school management committee (SMC) member, they told me that they wished they had the power to change the school times in order to avoid clashes with harvest periods. They believe that such changes may be useful in ensuring that school children remain in school.
Educators seemed to be unaware of the strong effect that the incidence of seasonal activities had on children’s attendance and academic performance. Therefore, a better understanding of local seasonal variation may be useful in optimising the school calendar.
For most children in the study area, seasonal migration began in mid-June, that is, about five weeks before the end of the third term. Children who migrated often stopped attending classes at this point, a practice that could have been prevented by adapting the school calendar to the local seasonal activities that clashed with it.
Furthermore, the younger the pupil, the more likely it seemed that the child’s parents would withdraw him or her from school to accompany them when they migrated. In an interview with one mother, when I inquired why she withdrew her younger child from school, she told me:
He is too young to be left behind ... my son will go back to school when we return. I got the impression that some of these migratory parents were unaware of the effect of such a decision on their children’s schooling, as they may have been under the impression that such children were too young to be engaged in any vital learning.
It appears some parents believed that children needed to reach a certain degree of maturity before they started any serious learning. Another mother told me:
> When children are very young and you send them to school, they may not be able to learn anything ... Sometimes, they feel restless and cry all day at school, only to come home feeling ill.
In response to my question of when in her opinion a child should start school, one mother said:
> The best age to enrol a child is when you think he or she can adjust and play with other children at school without crying and falling sick.
These opinions also indicate that some parents might have deliberately delayed the enrolment of their children or withdrawn them from school because they believed they knew the right time to enrol a child to start learning. Moreover, considering the mother’s view that a child may:
> cry all day at school and come home ill.
Such a belief might have been an indication of her distrust in the school’s ability to take good care of her child, a reservation that could have prompted some mothers to delay enrolment.
The period of migration in the third term was the time of the school year when children sat their graduation examinations; thus, non-participation in such assessment meant grade repetition. Therefore, in addition to late enrolment, it is probable that seasonal migration partly explained the cases of overage in grade, given that grades were most frequently repeated in lower primary school.
From another angle, it appears that older children who did not accompany their parents migrated during the school holidays to join them then, but that such pupils did not return home early enough for the beginning of the new academic year. Such cases may manifest as sporadic and event dropout. It seems that boys in the upper primary grades were the most affected category of children whose schooling was disrupted by seasonal migration. Although these older boys migrated during the school holidays, they were often unable to return early enough to register at the beginning of the new academic year and thus continue their schooling. Ekow told me:
> During the vacation, I travelled to Half Assini to fish, but when school re-opened I had not made enough money to go back to school ... So, I travelled further, to the Gambia, in the company of other children to fish.
Taking the duration of the third term as being from May to July, and the beginning of the first term as being in early September into consideration, it appears that seasonal migration from mid-June to early October might have been largely responsible for temporary dropout cases. It could be argued that the clash between the school calendar and seasonal migration created recurrent cases of school dropout and drop-in during the academic year. This correlation between seasonality and disruption of schooling is corroborated by Colclough et al. (2000):
... many children, who enrol in September, at the beginning of the school year, leave ... because demands on their labour during harvest time are so great. In some cases, they re-enrol the following year ... but, again, are unable to complete the year (Colclough et al., 2000).
In the cases of children in Narkwa and Kyeakor, it seems that the influence of seasonal migration on their schooling was so strong that some pupils’ education spanning two academic years might have been marked by sporadic dropout and/or event dropout, punctuated by subsequent drop-in episodes.
4.1.6 Networks, Economic Survival Strategies and Dropout
During interviews with children who had dropped out of school to engage in economic activities and those who independently migrated seasonally, it transpired that some of them – especially boys – had dropped out due to peer pressure. It is further probable that advice about economic survival strategies was passed among pupils through their association with those who had already dropped out, especially older children.
In Narkwa and Kyeakor, there was a strong informal network that bound children together whose influence extended to the school level. For example, boys often met socially at food stalls and video cinemas in the evenings; and during such interaction, working children bought food, sweets and cinema tickets for their friends who could not afford them because they attended school and so did not work. It appears that this display of wealth by working children might have enticed school children to seek avenues for making money as well. Indeed, some children told me that their friends kept them informed about how much money they made from their jobs.
For children from poor socio-economic backgrounds, information on economic survival strategies is often keenly sought. In recounting his experience, Hun told me:
When we meet to play, my friends sometimes show as much as five Cedis(^9) [USD 3.6] cash that they make a day from hustling at the beach … I need money to buy food, so I borrow from them ... but the only way to pay it back is to join them in hustling at the beach.
(^9) One Ghana Cedi is equivalent to USD 0.72 (April 2009 exchange rate). Another boy, Michel said:
Some of my friends who had dropped out came back to school with money, and they could buy anything they needed ... They told me that they got the money from working on the farms ... I needed money too, so I followed them to work on the farms.
These narratives illustrate how children’s social networks in a context in which some of them attend school while others do not may be a threat to pupils’ school attendance.
It appears that peer pressure pulled more boys out of school than it did girls; and it affected older boys (12–17 years) to a greater extent than it did younger boys (7–11 years). Older children might have been more susceptible to dropout in this respect because most of them were overage in grade; thus, sitting in the same class to learn with younger children might have made schooling an embarrassing and unattractive prospect.
Another reason why some of these older children dropped out of school could be due to a correlation between their relative maturity and household poverty. Their parents tended to neglect them and leave them to support themselves at school, while the informal labour market attractions of work were condoned by the ‘collective communal support for child labour’. Indeed, although community members in Narkwa and Kyeakor complained about the way children dropped out of school, it is interesting to note that they did not appear to object to their children abandoning their education to engage in economic activities.
It appears that community members’ unconcerned attitude towards children’s irregular school attendance and dropout might be due to the value they placed on education. One parent maintained:
School is good, but only when it gives our children opportunities.
Another parent observed:
My eldest son has completed school but, like most other children from this village, he is still here, fishing and farming.
This indicates that if parents did not appreciate the benefits of education, they might have been reconsidering the whole notion of enforcing their children to attend school regularly.
The influence of socio-economic conditions on the decision to send children to school appears to encompass several interlinked – sometimes, contradictory – issues that nevertheless play a critical role in the dropout process because they are among the determinants that can disadvantage children’s schooling. For example, the background of poverty and parental neglect that often incites children to pursue economic survival strategies facilitated by the informal labour market are critical issues affecting their education.
It is important to note here that owing to social network peer pressure on children in school, and collective communal support in the pursuit of economic survival strategies, the children in this study seemed to be comparing the opportunity costs of schooling with the apparent merits of education. Yet, although the children’s narratives point to the fact that some conditions at home and in the wider community contributed in diverse ways to pull them out of school, other issues raised suggest that the critical determinants that often forced children to terminate their education lay beyond the influences of the socio-economic sphere.
In light of existing evidence showing that children from similar socio-economic backgrounds to the study area tend to remain in school, the findings of the present study suggest that socio-economic influence notwithstanding, the critical determinant of who drops out is the school itself. I therefore argue that although the socio-economic context may be a contributory factor to the generation of a process that ultimately leads to the premature termination of a child’s education, it seems to be only one element of the several causal factors that push pupils out of school. In the next section, evidence based on children’s accounts that supports this argument is analysed.
4.2 School Context as a Push and Pull Factor in the Dropout Process
Interviews with many of the children who had dropped out showed that conditions at the school level had a critical influence on their decision to terminate schooling. Most of the pupils in the sampled schools experienced difficulties on account of the poor socio-economic background they came from, which challenged regular school attendance; but the school still retained the potential to act as protective mechanism to prevent dropout from occurring (UNESCO, 2007).
In terms of the majority of dropout cases in Narkwa and Kyeakor, it emerged that children abandoned their education at the point when the school system and conditions within it failed them. In my interviews with children and school observations, I gathered that some issues at the school level had critical implications that resulted in dropout. These are what I term the ‘teacher factor’, ‘school-related child labour’, and school policy on ‘repetition, readmission and discipline’.
4.2.1 The Influence of Teachers on Dropout
Teachers play a critical role in the lives of schoolchildren; and it appears that in schools in Narkwa and Kyeakor, the lack of teachers, teacher absenteeism, and teachers’ attitudes to those pupils who may have been at risk of dropping out of school all conspired to incite the termination of pupil attendance. In this study, I refer to such teacher issues that push children out of school as the ‘teacher factor’. In addition to insufficient teacher numbers, teachers who were supposed to be at post were often not, sometimes for no apparent reason. From interviews with children, it seems that there is a strong correlation between dropout and the teacher factor.
4.2.1.1 Teacher Unavailability or Absenteeism and Dropout
In the case of some older children who had dropped out of school, it appears that they withdrew because there was no regular teacher for their classes. Gacer, the 13 year-old girl who had dropped out of class four because she did not have a school uniform, told me:
There was no teacher for our class, so teachers from other classes came to teach us; but there were times when we went to school and for three days, no teacher came to our class to teach – sometimes other teachers came to cane us for making a noise ... It is just a waste of time and it is better to stay at home and do something else. Another child noted that:
Our teacher does not live in this village so sometimes she is not in school for a whole week … we only go to school to play.
These accounts show insufficient staff and teacher absenteeism may affect children. In the study area, it seems that when no class teacher was available, children attempted to transfer to another school in the neighbourhood, or stopped going to school altogether. One child told me:
The teacher did not come to school regularly and that is why I got a transfer; but at this school too, I got to class four and there was no teacher, so I stopped for some time.
It is likely that the lack of teachers and teacher absenteeism provided the critical impetus to push children already at risk of dropping out.
In cases in which either due to insufficient staff or absenteeism, there was no class teacher available, children were sometimes engaged to take the class. The two field extracts below exemplify this phenomenon.
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**Field Notes**
I arrived at one of the schools around 7:00 a.m. to witness the daily routine of morning assembly. Pupils were busy sweeping rubbish from the classrooms and school compound; but at exactly 8:00 a.m., the bell rang for morning assembly and they ran from wherever they happened to be to assemble in the open yard where the assembly was held. Three out of the nine teaching staff of the school were present at the assembly. By 8:30 a.m., when the children had settled in their classrooms, only four teachers had arrived and were beginning their lessons. As of 10:50 a.m. a total of five teachers, including the head, were in school.
In classes in which there was no teacher, the children were present after morning assembly, but an hour later (at 9:30), most of the children had left and the classrooms were almost empty. After the first break, the remaining children from the classes for which there were no teachers spent a little longer playing in the field until the head teacher drove them to their classes; although some children left school and went home.
Later in the afternoon, I strolled down to the beach and found some of the boys playing football. Apparently, since their teachers were not in school, these boys preferred to find something more interesting to do.
I returned to the school, which was about 200 meters from the beach, and found that one of the teachers had moved from class five to occupy a classroom in which children had been idle since the morning. Then, the class five children moved to other classes that did not have teachers. I noticed that one of the older boys from class five was calling the class three attendance register. In the other lower primary class, another two pupils (a boy and a girl) from class five were busy teaching a Ghanaian language lesson. The engagement of staff in nationwide exercises that took them away from the classroom seemed to exacerbate a precarious situation in which there were hardly sufficient teachers in the first place. It appears that both the secondment of teachers for other official duties and teacher absenteeism – even for a day – may have led to a loss of teaching time that significantly diminished children’s achievements; damaged the reputation of the school; and induced pupil absenteeism. One parent told me:
The teachers sometimes don’t come to school, and the children learn from their example, so they also attend school when they like ... can the teachers say they are punishing these children for being absent from school when they are guilty themselves?
During discussions with teachers about staff absenteeism and children spending the whole day at school without a teacher, one teacher, Miyoc, told me:
The bright children among the class teach when teachers are absent.
Commenting on the lack of teachers, a school head said:
When other teachers are done with their classes, they move to those classes without teachers to teach the children.
Such an arrangement had attendant problems because it meant leaving a set of children unattended in one class to teach another. When this occurred, children from the upper classes move to unattended lower classes to teach them. It is likely that the school authorities did not object to pupils teaching their peers because it was better to encourage this practice than to allow children to make noise and play all day. Additionally, when their teachers abandoned the class to go and teach another class, some children left their classrooms during school hours to go and play while others went to work.
Children withdraw from school when there are no teachers. They may then weigh up the pros and cons of completing their education and earning a living. It appears that the attractions of the informal local labour market coupled with the problems of teacher absenteeism prompt some children to opt to pursue economic activities instead of remaining idle in school when there is no one to teach them.
It may be argued that lack of teachers and teacher absenteeism is one of the major contributions to dropout. All primary school level classes in Ghana are assigned a class teacher, so if that teacher is no longer available, this is likely to push children to drop out of school.
In Narkwa and Kyeakor, lack of teachers and, in some instances, frequent teacher absenteeism at the primary level could explain why most of the dropout cases identified in this study occurred when children were at primary school rather than JSS. Another reason might have been that because most primary schoolchildren were overage in grade, their services were needed in support of the household; thus, instead of sitting in the classroom without a teacher, termination of schooling might have been the more attractive choice.
4.2.1.2 Teacher Attitude towards Pupils and Dropout
Another teacher-related issue that incited pupils to drop out of school was the attitude of teachers towards children at risk(^\\text{10}) of withdrawal. It appears that children who underachieved, repeated grades, or attended school irregularly were pushed to drop out because of the unsupportive attitude of teachers towards them.
For example, Fiifi was at risk of dropping out because he had repeated class six, was performing poorly, and attended school irregularly. He told me how the teachers referred to him as woabon(^\\text{11}). One girl, Esi, also told me:
> The teacher always insisted that I write at school but I am no good at writing. I enjoyed games and needlework but they called me names; that was why I stopped going to school.
This evidence shows that some children find some aspects of the curriculum difficult, and in cases in which teachers place emphasis only on such subject areas, affected pupils may find school uninteresting and therefore drop out.
Another child who was attending school irregularly mentioned that he had withdrawn because the teachers encouraged his classmates to call him kobolo.(^\\text{12}) It appears that children who were called names were likely to receive hostile treatment from teachers whenever they reported being taunted. One at-risk child, Ebo, who expressed his frustrations prior to dropping out of school told me:
> When I go to school, children call me names like ‘kobolo’ ... I even overheard some teachers referring to me as ‘kobolo’. Whenever I hit a child for calling me names, the teachers punish me ... I think they are encouraging children to tease me.
In another example, Oodia mentioned that:
> The teacher refused to call on me to ask or answer questions in class. Even when I raised my hand, the teacher always made me feel that I didn’t belong to the class; so I felt that I was just wasting my time in school.
(^{10}) According to CREATE’s conceptual model of ‘zones of exclusion’, at-risk children are defined as those pupils who attend school irregularly, perform low academically, repeat grades, or are overage in grade (Lewin, 2007).
(^{11}) Literally, ‘rotten’. In this context, it implies ‘good for nothing’.
(^{12}) An irregular school attendee or someone who is known for frequently dropping out of school. I got the impression that whilst teachers were aware of the problems of at-risk children, instead of supporting them, they adopted an attitude of indifference, sometimes even reacting in a way that further isolated such pupils. The field notes extract below illustrates my firsthand experience of a case in point.
**Field Notes**
This was the third day of my second month in the school. I arrived at around 10:45 am, immediately after the mid-morning break, and all the pupils had returned to their classrooms. I had spent the previous two weeks tracking the attendance records of pupils at the school. Tired and bored of going through the dusty worn out class registers, I decided to observe one of the classes. A female teacher was taking science with class five and I stood at the window at the back of the classroom, and observed.
In the middle of the lesson, there was a scuffle between a boy and two girls. The teacher called the boy over and asked what the problem was, and he responded that the girls were teasing him. The teacher asked him to sit down and that ended the quarrel.
After about 20 minutes, the teacher assigned some class work, but this boy did not participate. He sat there unconcerned, staring at the blackboard and sometimes at the ceiling. I got curious and inquired of the teacher why he was not working as everybody else in the class was doing. According to the teacher, the boy, had been behaving that way since he dropped-in after staying away from school for eight weeks. The teacher thought that the best solution was to ignore him.
When I spoke with this boy later, he told me how the teacher and the head of the school had informed him that he would have to repeat the same grade even if he performed well academically. Thus, as far as he was concerned, there was no point in participating in a lesson that he was going to have to repeat the following year.
It appears that children who performed poorly and attended school irregularly might have been dropping out on account of name-calling by peers and teachers. Some teachers and parents I spoke with felt that it was an agreeable practice, but that it was a means of discouraging children from becoming lazy or attending school irregularly. One school head perhaps denied the tolerance of name-calling altogether in claiming that:
> children who do so are punished as soon as we get to know about it.
Nevertheless, Razak, who doubled as a subject teacher at the local JHS and a class teacher for class five, admitted that name-calling did go on:
> You see, children can become lazy, stubborn and play truant, but with the fear of being teased or called names, discipline is instilled in them.
Commenting on the practice, one parent said:
> Sometimes name-calling discourages children from misbehaving; it is all right to use it ... After all, we all experienced it when we were at school.
Such views suggest that name-calling occurred in the classroom on a daily basis, although the school head may have been unaware of the extent of it. However, given the general acceptance of the practice as a means of discouraging children from misbehaving, it appears that name-calling and labelling was at least semi-officially adopted as a punitive measure for managing children’s unruly behaviour. Based on the accounts of children who had been victimised and had dropped out of school, this practice might have achieved some short-term results but in many ways, it was not an effective long-term strategy for the management of pupils already at risk of dropping out. This was because in reacting to being called names, the victims – children already at risk of dropping out – were pushed into terminating their schooling.
Moreover, teachers’ attitudes in ignoring children at risk of dropping out might have been due to the large class sizes that they found difficult to manage. For example Miyoc, who had been teaching classes five and six for the past five years, said;
Sometimes, it is difficult teaching all these children together; and if you tried to cater for every child’s special needs, you’d never finish the syllabus.
Teachers might have ignored the cries for help from children at risk, considering such outbursts to be petty, since, aside from the large classes the former were already obliged to teach, they were also burdened with concomitant piles of homework assignments and tests to mark; as well as all the continuous assessment reports they were required to complete. It appears that some teachers had also developed their own opinions and prejudices about at-risk children, given that most of them seemed to be overage in grade and tended to perform poorly academically. As a result of all these demands, teachers might have ignored such children entirely in class; thus, deliberately but politely pushing them out of school.
It is important to note that this ‘teacher factor’ has several dimensions, which together constitute one of the key factors at school level – combining with other causal factors external to the school environment – that incite children to eventually drop out. First, the unavailability of teachers and teacher absenteeism may cause children to attend school intermittently. Second, children who perform poorly academically and attend school irregularly may be labelled as such in a humiliating manner. Third, these children may receive little or no attention from teachers while in class, which ultimately pushes them out of school.
4.2.1.3 School Practices and Processes, and Dropout: Repetition and Readmission
School administrative policy on repetition and readmission appears to be one of the most decisive factors at this level that incited children to drop out. During interviews with children, I noticed how repeating the same grade three times or more could push a child out of school. One boy told me that he had dropped out of school because:
the headmaster said that even if I passed my exams, I could not graduate because I had not attended school regularly in the term.
Ama, a 17 year-old girl who had dropped out of school, told me:
I did not report early when the school term began, and the headmaster asked me to stay at home and come back next year; but I got pregnant, so I could not go again.
It seems that insisting that children should repeat a grade or asking them to wait until the following academic year, actually pushed children to stay away from school for a longer period, which might have made their chances of returning to school slimmer. Adopting measures to discourage irregular attendance and reporting late for the reopening of school could save both teachers and children a lot of time that is otherwise lost on repeating grades, but such measures should be designed to help children stay in school rather than push them to drop out, which, as the above examples demonstrate, was the case.
It appears that children who disliked certain things about school found the education process uninteresting and consequently attended irregularly, which resulted in eventual dropout. Such children might have been interested in subjects the school did not consider to be of great importance. For example, Mustaf told me;
I like sports and athletics, but at school, these things are only organised once a term. But I always join in during sports and athletics periods.
Most teachers I spoke with confirmed that some children tended to be more interested in subjects such as sports and athletics whose assessment did not form part of the graduation process.
Moreover, it seems that children did not report early for the reopening of school because they realised that teaching and learning did not really get underway until the third or even fourth week of term. When I asked why they did not start lessons as soon as term began, the teachers said that it was a school custom to spend about two weeks preparing the school compound before beginning formal activities.
As a Ghanaian teacher, I am aware of the delay in teaching and learning in rural schools at the beginning of term in order to prepare the school compound. Often, school authorities also use such periods to assist community members who have requested the use of pupils’ labour. Accordingly, at this time, schoolchildren work on local farms, and collect sand and stones, which the teachers sell to generate income for the school.
4.2.1.4 The use of Child Labour at School
Field notes I was on my way back to the school in the afternoon after finishing an interview with a child, when I met several pupils carrying bowls of sand and stones on their heads. This scene reminded me of my own primary school days in the late 1970s, when we had to take sand and stones to school every week. However, I thought that with the introduction of the capitation grant scheme, there was now no need for schools to look for alternative means of raising money. As an indigenous teacher, I am also aware of the position the Ghana Education Service (GES) has taken against the use of child labour by the school. The children told me they were taking the sand and stones to somebody’s building site.
The reality is that the use of child labour is common in most rural schools. Sometimes, it occurs throughout the term, although not on a daily basis. In my discussions with children, some of them made it clear that they had dropped out of school on account of the incessant pressure teachers put on them to work in order to earn money to run the school. Sometimes, pupils were sent to labour on local farms for the benefit of the school. During my school visits, I noted that some older children – boys in particular – avoided attendance every time pupils were engaged in income-generating activities at school. One child voiced the general consensus of opinion amongst pupils:
It is wrong for the teachers to ask us to engage in income-generating activities for the school.
It appears that children were of the conviction that if they could stay at home, work and make money for themselves, it made no sense to go to school on days when they were expected to labour and the teachers collect the money.
One older boy told me:
I do not like it when the teachers require us to bring sand and stones to school. We don’t know what they do with the money ... I also need money, so I prefer to work and make money for myself instead of making it for the teachers.
Judging from these accounts, it appears that children might have formed the impression that teachers exploited child labour for their own ends; and it seems that such children preferred to stay away from school instead.
For the eleven months of data collection, I observed that at least once a week, pupils were expected to engage in some form of income-generating activity for the school. That some children opted to avoid school at these times demonstrates that they were making a rational decision about their education and economic survival; and it appears that older boys in particular dropped out of school with the express purpose of pursuing personal economic survival as a viable alternative to working at school for their teachers.
Although the Ghana Education Service (GES) has prohibited the use of child labour for school profit, the practice is still endemic, especially in rural areas where education directives are late to take effect and officials seldom visit. One head teacher justified the use of child labour thus:
We are all aware that it is unlawful to engage schoolchildren in any form of income-generating activity but you see, the capitation grant is not released early, and sometimes we get to the third term before funds for the administration of the first term are released; meanwhile, we have to run the school. It is the earnings from children’s work that we rely on to keep the school running until the capitation grant is released.
It appears that this explanation by the head teacher had convinced the parent teacher association but it is not clear how the capitation grant allocated for running the school is spent when it is finally released to the schools. If the school’s argument for engaging child labour is to mobilise funds to run the school, then when the government’s capitation grant allocation for the running the school is released, children may be justified in complaining that the money from their labour goes to the teachers. Children’s view that when they worked, the money goes to the teachers is likely a valid conclusion children may be drawing.
The use of child labour by the school seems to have affected children’s education decisions in two ways. One probable effect was that children who felt that they were not making good use of the school day if they had to spend it in income-generating activities decided to drop out of school in order to utilise their time more profitably. Second, in considering the prospects for earning money for themselves, some children might have preferred to avoid expending their energy for the benefit of their teachers, so they dropped out of school.
For most dropout children, their real problems emerged when they declined to attend school at times when their labour was required there. Teachers invariably punished those who would not work in order to help the school; but older children tended to consider such punishment unjustified and did not comply with it. This generated conflict between pupils and the school authorities, and teachers often presented such children with an ultimatum: they could either conform to the school’s penal system immediately, or they would be required to withdraw from school altogether. Accordingly, conflict between teachers and children over pupil’s refusal to engage in labour at school was the cause of most cases of dropout. This finding corroborates the work of Seidu and Adzahlie-Mensah (2010).
4.2.1.5 Discipline and Corporal Punishment
The practice of corporal punishment was understandably highly unpopular with most schoolchildren. It emerged from interviews that corporal punishment led to several cases of dropout, and children believed that some teachers’ approach to discipline contributed directly to withdrawal. Caning as a punitive measure to instil discipline could also have damaging psychological effects. I observed that children who came to school late were caned. As a result, some latecomers promptly ran away from school again to avoid punishment. In the case of older children, this practice generated conflict between teachers and pupils when they refused to comply, which resulted in children terminating their schooling.
For example, some children who had dropped out of school mentioned that they had done so on account of the prevalence of corporal punishment. In describing the frequency and severity with which some teachers used the cane, Yao, a boy who had dropped out of class three, told me that:
Teacher Jones [not his real name] does not mess about with the cane at all. If he uses it lightly on a child, then that child will receive about six strokes. Sometimes, you can’t sit down for a whole week after those strokes. So, you stay out of school, but when you show up later, he canes you again.
This account illustrates the dilemma that some children faced, which was likely to make school an unattractive prospect to them.
It is notable that while some children like Yao refused to comply with corporal punishment and thus stopped attending school in order to avoid being caned, other children internalised the situation, often quoting the saying:
suku ye de nso aba wom (meaning: school is good, but caning is part and parcel of it).
I got the impression that younger children – and also girls in general – chose to endure corporal punishment as part of school life and did not readily drop out owing to the penal system alone.
Older children, particularly boys, most likely thought that corporal punishment was unfair, abusive and inappropriate treatment of children; since by their age, and on account of their socio-economic responsibility, they might have viewed punishment in the presence of younger children as humiliating and embarrassing. Coupled with the available opportunities to work, older boys might have been incited to stop attending school because there were other attractions from the informal labour market to engage them.
In another example, Ekow withdrew from school because he was punished for not reporting early when school reopened. He told me:
The head teacher asked me to remove tree stumps from the field, but I am too small to do that kind of work. When I complained that I couldn’t do it, I was told not set foot in the classroom until I had completed the punishment.
It seems that because Ekow was repeating Basic Five, he was already at risk of dropping out, which he demonstrated when meting out punishment under such circumstances only pushed him out of school.
Another boy, Mensah, told me that he had dropped out of school on account of the punishment he had received:
The teacher confiscated my flip-flops and caned me for wearing them to school … but I do not have any other shoes and cannot walk to school barefoot.
Indeed, the issue of punishment emerged in some children’s accounts as one of the critical events that informed their decision to terminate schooling.
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13 Boys earned an income to support their households and sometimes, to fund the education of their younger siblings. 5. Returning to School: Conditions that Encourage Children to Drop in
One of the research questions outlined in this paper sought to discover what dropouts do when they terminate their schooling. Analysis of the data reveals that some dropout children do return to school, the frequency of drop-in being confirmed by the various means by which data was collected on the dropout phenomenon. In this section, I analyse children’s accounts of their motivation to return to school. The section is in two parts: first, children’s views on the conditions that make returning to school possible or impossible; and second, challenges confronting children after dropping back in.
5.1 Motivation to Return to School: Children’s Views
As a method of discovering the reasons behind children’s decision to return to school, I interviewed ten dropout children who had dropped back in. Data from these ten children show that their decision to return to school was motivated by certain incentives brought about by changes in the household; improvements in socio-economic status; children’s hope for improvement in the situation at school that caused dropout to occur; and the influence of peer pressure.
For three of the children who had returned to school, motivation arose from changes in household arrangements. Hun, the 15 year-old boy who had stayed out of school for about three years, told me that:
I was not attending school because my father was away; but now my father has returned from his journey, I am back in school.
Another child, Hesta, who dropped out of school because she had lost both parents and did not have anybody to take care of her said:
I came back to school because my cousin now takes care of me ... I don’t have to work to take care of myself and my grandmother, so I am now back in school.
For some other children, it was a parent/guardian’s visit to the school or a teacher’s visit to their home that encouraged drop-in. Ekow, a 15 year-old boy who was a sporadic dropout, told me:
I went back to school after my grandmother came and spoke with the headmaster on my behalf.
Another three dropout children who had returned to school did so on account of their teachers’ influence on them. The high esteem in which some teachers were held, often as the result of their commendable attitude to work and personal relationships with community members, was a key influence on several children’s decisions.
The case of Gacer, the 13 year-old girl, is an example. She was won over by her teacher’s visits to her home and interaction with her mother, which persuaded her to return to school. She had dropped out because she did not have a uniform but there had also been no regular teacher for her class. However, after the teacher’s visit, she returned to school, even though she still could not afford a new uniform. Gacer confirmed: I started going back to school after our class teacher came to my house and talked with me and my mother.
A child may drop out of school because he or she feels disadvantaged and/or disaffected, but a good relationship between the school authorities and the child’s family could help prevent dropout and motivate children to return. Ekow and Gacer were able to return to school because of the direct contact between their guardians and teachers. These examples show that collaboration between parents and teachers can prevent dropout and encourage drop-in.
According to some teachers, children dropped back in when the problem that pushed or pulled them out of school was resolved. These teachers believed that as soon as the critical events that disadvantaged the child and led to dropout had improved, he or she quickly returned to school. Yet, a critical review of this belief shows that teachers might have only been looking at the cause of dropout from the perspective of the influence of socio-economic background. The evidence of children’s accounts shows that teachers themselves are commonly part of the problem, and that children will only drop back in when such teacher-related issues are resolved. In their study on teachers Seidu and Adzahlie-Mensah (2010) found the same lack of reflection on the part of teachers as affecting access.
In the case of the three dropout children who had returned to school, the decision to drop back in was motivated by peer influence. These children were sporadic dropouts who had retained contact with their classmates still in school, and it was their friends who persuaded them to return. One day during fieldwork, I observed a scene in which some pupils persuaded another child who had been missing classes to return (see field notes below).
Field Notes Phase II, 2009 It was a Monday afternoon after school and I was walking home in the company of some pupils. I noticed a boy of about nine standing by the roadside as I walked past with the other children. I heard one of them say to him, “You have not been coming to school these days ... shame.” The boy said nothing. Later, I learnt from the other children that he was in class two. The following week when I went to the school, I saw him in class. I asked him why he was now in school and he said, “My friends have been teasing me, saying that I’ve stopped coming to school ... but I haven’t.”
From this observation, a glimpse of how peer pressure can encourage drop-in is revealed. Likewise, according to Joe, a 15 year-old boy, he returned to school because:
Friends and teachers were always asking me to go back to school ... Sometimes, I avoided my friends when I saw them coming from school because they teased me for not going.
Such influence of peers is a strong incentive that shapes attendance. However, the influence of peer pressure on drop-in depends on where it is coming from. For example, while peer pressure from other dropouts potentially influences pupils to withdraw (see section 4.1.5), the influence of children in regular attendance can also encourage some dropouts back to school.
Although the accounts of 10 out of 18 dropout children show that they dropped in again on account of improved household conditions, and encouragement from teachers and peers, I sought to learn what prevented the other eight dropout children from returning to school; and also why four of the 10 children who had dropped-in, dropped out again. Based on data from the 18 children, I found that a child’s personal aspirations in terms of education, work and economic well-being was a very important determinant of whether he or she dropped in, dropped out again, or never dropped back in.
The accounts of the 10 dropout children who had returned to school reveal that education had not lost its value for them. Yet, for the remaining eight children who had not dropped back in, the value of education had been replaced by the attraction of work and economic well-being.
The perceived value of education is a critical motivating factor of children’s aspirations with regard to schooling. In the case of children who had dropped back in, Gacer, the 13 year-old girl who had dropped out of class four, told me:
I want to complete school because I am still young and nobody will employ me if I don’t have a certificate ... nobody will even take me on for an apprenticeship.
Similarly, Mensah the 15 year-old boy who had also dropped out of class four, said:
These days, without completing basic school, nobody is willing to give you a job ... People insult you as illiterate because you did not complete school.
The views of these children indicate that their decision to return to school could be motivated more from a consideration of their prospects for the future – as envisioned in terms of what they do or do not achieve at school – and the social stigmatisation they may suffer for non-completion of schooling, rather than the mere influence of context. Indeed, in some Ghanaian communities, it is common to hear derogatory remarks directed at people who have not completed school.
The views of those children who had not returned to school clearly indicate that they had lost interest in schooling. A 16 year-old girl, Amina, told me:
I am not going back. After all, when you finish school, it is money you are looking for ... With my rice business, I am making enough money to keep me going so why should I go back?
A 17 year-old boy, Mustaf, said:
We go to school in the hope that when we finish, we can find some work to do ... But if you are not doing well [at school] and by chance, you find some work to do now, why waste your time?
In contrast, other children may fail to drop back in owing to feelings of rejection at the hands of the school. Etty, the 16 year-old girl, said:
I can’t go back ... What school would take me now? When they refuse to put my name in the register, I feel they are telling me I should leave; so I have left.
These views show that children’s loss of interest in school may be the result of any combination of poor academic performance; the school’s inability to meet their learning needs; and the subtle rejection of the pupil by the school. 5.2 The School’s Reaction to Children Who Drop in: Pupils’ Experiences
For children who drop in but drop out again, interviews and classroom observations show that – with the exception of Etty, who was openly rejected by her school – certain conditions within the academic environment may compromise children’s efforts to drop in. For example, no provision was made in the study area to cater for the particular learning needs of children who returned to school. According to Hun the 15 year-old boy who had dropped out of his cohort group but dropped back in after three years, the teacher does not answer my questions and he won’t even ask me any questions in class.
From my classroom observation of teachers’ approach to dealing with children like Hun who had dropped back in alongside other children who had been attending school regularly, I noticed that classroom instruction was approached without any provision for children who may have had special needs. The account of one boy, Joe, sheds light on why a child might drop in and then drop out again:
When I went back to school, I didn’t understand most of the things being taught … I am just in the class … the teacher teaches over you as if you are not there … When I couldn’t take it any longer, I stopped again.
In my observations of four other children who had returned to school, I noticed that they appeared to be out of place and disorientated during lessons. One of them, Ekow, said:
Sometimes, you just sit there in class and you don’t understand a word being said to you.
Teachers appeared to have a developed particular attitude towards children who had returned to school after a period of withdrawal. The message they put across suggested that the school was not interested in those pupils who dropped out and then dropped in again. According to Ekow’s class teacher, Miyoc:
There is nothing we can do about these children … We can’t go back and start teaching the class all over again on their account … we can’t go back to re-teach … If you did that, there is no way we would ever finish the syllabus.
Another class teacher said:
These children are not serious. Even if you give them attention, they will still fall behind … It may even encourage other children to drop out, knowing that if they return, they will be given extra attention.
In support of some of her class teachers’ policy of ignoring drop-ins, Nyaminpa, the school head, said:
We don’t even have enough teachers for all the classes … There are over 60 pupils per class, so there is nothing special we can do for those who drop out and drop in … If children who drop in are able to cope with the class, all well and good; but if they can’t, you aren’t able to do anything. As a Ghanaian teacher, I am aware of the manner in which teachers ignore truancy and dropout cases. As a result of overwhelmingly large class sizes, teachers may be compelled to ignore children they do not consider to be conscientious pupils. Moreover, the Ghana Education Service (GES) does not implement a particular programme to support children who drop in.
From the views of teachers, it appears that retention, dropout and drop-in together constituted something of a ‘survival of the fittest’ contest. In particular, children who returned to school intending to complete their education were expected to manage on their own. Schools did not make any special provision for children who dropped back in. Pupils might return to school but this did not necessarily mean that they benefited from any meaningful learning. For example, Joe, in particular, dropped out again as a result of difficulty in readjusting to school and picking up from the point at which he had withdrawn.
The only strategy schools universally adopted to help dropout children when they returned was to start them afresh by making them repeat their last grade. One teacher said:
Children who stop school and come back repeat because we want them to start anew.
Yet, with classes of over 50 children on average, compulsory grade repetition might not have achieved the desired outcomes. Moreover, children’s views suggest that they needed some form of one-to-one attention that addressed the individual’s specific learning needs when he or she returned to school.
5.3 Returning to Complete School: The Perceptions of Drop-in Children
Owing to the general attitude of teachers towards children who dropped in, I interviewed the remaining 6 out of the 10 children who had returned to school after a period of withdrawal, and were still in school at the time of the study, in order to discover their opinions about staying on to complete their education. It is possible that such children dropped out again too. Nevertheless, findings on the likelihood of completing school show that for one set of children, continuation of schooling was achieved through the efforts of teachers who considered them to be valuable members of the school sports and athletics teams. Other children survived repeated dropout due to their determination to complete school, which was based on the perceived value of education for future prospects.
In the case of drop-in children whose continued stay in school depended on their usefulness to the school, a boy, who was a keen footballer, told me:
I will definitely complete basic school. I don’t think I will drop out of school again. I will reach senior high school and play football for the school team ... In the future, I will become a professional footballer.
His teacher asserted that his performance in class was average. However, unlike other children who suffered a policy of being ignored by staff, a deliberate effort from this boy’s teacher in encouraging him to stay in school on account of his talents – sports and athletics – prevented a second dropout. Two other children who had dropped in were also active members of the school football team; thus, after returning, they were constantly monitored and supported by the sports teacher and the head in order to prevent another period of dropout. Other drop-in children who had survived repeated dropout in spite of being ignored by teachers were sustained by their determination. Hesta, the 13 year-old girl who lost both parents, said:
I think I will complete school because if you don’t then you will become a useless person ... Nobody will even accept you as an apprentice if you don’t have a certificate.
Her statement suggests that such children considered their chances of completing school to be high on account of the perceived prospects and benefits to be enjoyed when they obtained a leaving certificate. 6. Conclusion and Implications for Policy
The children’s accounts discussed above highlight the influence of context – both within and external to the school environment – on dropout. It appears that children drop out of school when contextual factors such as socio-economic background and their situation at school disadvantage them. The data show that pupils who are disadvantaged become disaffected in terms of the educational institution. Evidence of disaffection is indicated in children’s accounts of how they had to withdraw from school in order to work for economic survival, a situation exacerbated by an unsupportive school environment; and disaffected children soon drop out on a long term basis.
Yet, as school attendance and behaviour patterns show, some of these children return to school while others do not. The motivation to make the decision depends on changes occurring in the context that pushes or pulls them out of school. Children who repeatedly drop in and out again could break this cycle if the school provided adequate support for them. Moreover, effective support for dropouts can potentially prevent other children from dropping out, as well as helping dropouts who return from repeated episodes of withdrawal.
6.1 Implications for Education Policy on Access
In order to prevent dropout and encourage drop-in, education policy should focus at the outset when children first enrol on the contextual issues that disadvantage pupils and incite them to drop out of school.
With the loose family structures and parenting styles that are characteristic of children who drop out of school, policy on the locus of responsibility for pupils at risk of dropping out and those who have already dropped out is required. An effective parent teacher association (PTA) and school management committee (SMC) could address at the micro level and go a long way to remedying many of these issues. Teachers, school management committees and community members, as well as pupils themselves, could team up and work together to encourage children on the verge of dropping out to remain in school.
Although the study did not find any concrete locus of responsibility for dropout children, there appear to have been some elements of responsibility for the phenomenon diffused throughout both the community and the school. At one level, credit must be given to pupils who through peer pressure encouraged their dropout classmates to return to school. Additionally, teachers sometimes followed up cases of children who had dropped out and persuaded them to return. There were also instances in which community members articulated their concerns about instances of dropout. Therefore, policy on the locus of responsibility could revolve around what I term ‘pillars of retention’ at the school, community and school–community levels.
At the school level, pupils and teachers could team up to form the first pillar of retention – the ‘peer and teacher-led pillar’ – in order to monitor children’s school attendance and support those who may be at risk of dropping out. The peer and teacher-led pillar could also encourage children who have already dropped out to return to school. Often, children who regularly attend school and those out of school interact and play together, which presents a good opportunity for teachers to encourage pupils to try and persuade their friends to return to school. The second pillar of retention – the ‘peer and adult-led pillar’ could operate at the community level to monitor children’s attendance. This pillar would be responsible for finding out why a child was not in class during school hours; in a sense, it would police school attendance.
The third and final pillar, which would bring together pupils, the school and the community, is the ‘peer–teacher–adult-led pillar’, and would involve collaboration with the PTA and school management committee (SMC) in matters of children’s school attendance.
These pillars of retention might operate as the points of a triangle, which together could address contextual issues both within and external to the school environment that push and/or pull children to drop out; and work together to resolve them.
Policy should consider introducing multi-grade teaching and learning techniques in schools in which there are cases of overage enrolment, such as when cohort dropouts return to school.
In respect of the clash between the arrangement of the academic year and seasonal activities that pull children out of school, policy on the school calendar should be reformed to adapt it to local seasonal activities. Children who migrate temporarily at certain times would then have the opportunity to stay in school throughout the academic year without their schooling being disrupted by seasonal migration. School calendars must be flexible if the authorities are to address persistent irregular attendance and temporary withdrawal caused by the seasonality of economic and agricultural activities that encourage sporadic dropout.
Alternative school programmes may also be useful in providing lessons for children who are overage in grade, and those for whom schooling has lost its value but may yet be willing to improve their literacy and numeracy skills.
Overage children who migrate seasonally and engage in child labour could benefit from school programmes designed to suit their itinerancy, such as mobile schools and flexible timetables planned to make use of periods when they are not working.
Policy on compulsory universal basic education should be localised, thus empowering regional authorities to ensure that children are enrolled and attend school regularly. Where communities condone child labour, school authorities and others stakeholders working in the education arena to ensure that the goals of education for all are met need to work closely with community leaders in order to institute measures that will discourage parents and other community members from exploiting child labour.
Parents should be encouraged to get involved in their children’s education because this can make the difference between academic success and failure. Pupils do better when their parents show concern; when parents ensure their children go to school and are progressing well; and when parents communicate their expectations with regard to schooling. If problems arise, parents who have made the effort to keep abreast of school developments have laid a solid foundation for dealing with them. References
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Wikan, G. n.d., *Non-enrolled, drop-outs and pupils: The State of Education for All in Namibia*. Available from [www.pef.uni-lj.si/978-961-6637-06-0/261-269.pdf](http://www.pef.uni-lj.si/978-961-6637-06-0/261-269.pdf) accessed on July 10, 2009. Appendix 1
Definition of Educational Access
CREATE views access to basic education to include admission and progression at appropriate age\\textsuperscript{14} in grade, children need to attend school regularly, satisfactory levels of national curriculum achievement and equitable opportunity to progress to post-secondary educational levels and learn. Children who never enroll as well as others who gained initial access but are unable to progress due to low achievement, irregular attendance and dropout are regarded as being excluded from access. The six ‘zones of exclusion’ in the CREATE analytic model which relates with Ghana’s basic education system is described in the text box.
CREATE identifies 6 zones of exclusion. Figure 1 shows a cross sectional model by grade of participation which locates those who are being excluded and those excluded from access to conventional education systems. The model illuminates how typically enrolments decline steeply through the primary grades in low enrolment countries, and how those attending irregularly and achieving poorly fall into “at risk” zones. In the hypothetical model more than half of all children leave before completing primary school, and about half of the primary completers are selected into lower secondary school where attrition continues.
- **Zone 0**- children experience little or no pre-school access.
- **Zone 1**- children who never enroll and attend school.
- **Zone 2**- primary dropout children who after initial entry have been excluded. Depending on the age at enrolment and dropping out, the dropout status of children in Zone 2 may be temporary because of the possibility of returning to school.
- **Zone 3**- over age children, irregular attenders and low-achievers at the primary level who are ‘silently excluded’ and learn little. These children are in school but at risk of dropping out permanently.
- **Zone 4**- primary leavers who are not entering lower secondary; In the Ghanaian context, some children may enter Zone 4 because they could not make the transition from primary (grade six) to lower secondary school (grade seven).
- **Zone 5**- lower secondary dropouts, these children are also characterised by over age in grade, recurrent intermittent attendance and child labour.
- **Zone 6**- overage children, irregular attenders, low-achievers and those silently excluded at lower secondary level. These children are at risk of dropping out from lower secondary school. They are intermittent attendees and low achievers resulting in the risk of dropping out permanently.
Source: Adapted from Lewin 2007
\\textsuperscript{14} 6 to 14 years is the official age for completing basic education in Ghana The first graphic below presents a schematic illustration of the ‘zones of exclusion’. In this paper, the children who are pushed and or pulled out of school are confined to Zones 2, 3, 4, 5 and 6 in the Ghanaian context.
**CREATE Zones of exclusion**
Source: Lewin, 2009
The second graphic below illustrates the location of Ghanaian children in CREATE exclusion model.
**Zones of Exclusion in Ghana**
Source: Lewin, 2009 Report summary: Addressing school dropout has been one of the most controversial elements of policy since the introduction of free compulsory universal basic education (FCUBE) in Ghana. However, research that utilises qualitative biographical detail surrounding irregular attendance and the critical events in the process that lead to dropout in Ghana is limited. I argue that in order to achieve the target of universal basic education by 2015, education policy should focus more directly on addressing dropout. This paper provides an in-depth analysis of the critical events pupils experience as they cross the threshold from being enrolled to being out of school in southern Ghana. This paper provides fresh insights into drop outs’ life worlds and educational needs; opportunities to re-cross the threshold back into basic education, whether into school or complementary provision. The findings presented in this paper show that conditions both external to the school environment – poverty and the opportunity cost of schooling – and within the school – the teacher factor, and school practices and processes – conspire to compromise retention and push and/or pull children out of school.
Author notes: Eric Daniel Ananga has a background in Education and Development Planning and Management. He is currently a final year DPhil student from Ghana studying at the Centre for International Education (CIE), University of Sussex. He is a CREATE research associate. His thesis explores the dropout experiences of basic school children in Ghana, and its implications for universalising basic education. His research interest is marginalised and excluded children, focusing particularly on rural children in Ghana.
Address for Correspondence: CREATE, Centre for International Education Department of Education, School of Education & Social Work Essex House, University of Sussex, Falmer, BN1 9QQ, UK. Website: http://www.create-rpc.org Email: [email protected]
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861ed137f59c2da9772a9f3edb66245e5cc7b625 | LGA Special Interest Group Annual Report to LGA Board
**SIG Name:** Public Transport Consortium\
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**Lead Officer:** John Pope
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**Aim**
The Consortium aims to:
- act as a forum for discussion and promotion of public transport issues affecting local authorities outside metropolitan areas;
- promote the exchange of experience and good practice between member authorities and in liaison with other bodies;
- advise appropriate committees or other executive bodies of the LGA on public transport issues;
- represent interests of member authorities to Government, the Local Government Association, operators and other organisations involved in public transport; and
- provide advice and guidance to member authorities concerning Passenger Transport policy and operations. Key Activities / Outcomes of work undertaken
The Consortium has responded to the following consultations: Taxi & private hire licensing; DfT Pay as you go rail fare consultation; Rail industry review (Williams); East West rail; Legislative changes to the operator licensing system; Carbon offsetting in transport; Home to school transport guidance; responded to HoC Transport Committee;
Liased with: Department for Transport:
- topics such as Bus Open Data; the use of Section 19 & 22 permits and the short distance exemption for community transport; the Inclusion Leaders Transport Scheme; updates on the implementation of the Bus Services Act 2017; Public Service Vehicle Accessibility Regulations.
LGA Transport Officers Transport Focus: research Confederation of Passenger Transport:
- Trends in English Bus Patronage
- Moving forward together – the future’s better with bus
Bus Users UK: Rural Buses – reversing the decline Rail Delivery Group – fares reform Network Rail – building a stronger working relationship Transport Knowledge Hub, including representation on the Board.
Arranged a regional meeting and study tour to Blackpool, reviewing their use of transport as part of local regeneration.
In addition to six planned meetings, the Consortium maintains contacts with members through regular and timely news updates. Due to the lockdown, the final meeting in the programme for 2019-20 had to be cancelled, but the business of the Consortium has continued through liaison with the Executive committee.
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c0e8c6476ba1097ba22459a3f41710cd98fa98c5 | CROWN PROSECUTION SERVICE
PRE-TRIAL WITNESS INTERVIEWS
CODE OF PRACTICE 1 Introduction
1.1 In December 2004 the Attorney General published a report which concluded that Prosecutors should be able to speak to witnesses for the purpose of clarifying or assessing the reliability of the evidence they could give. The report also concluded that the interview process should be supported by a Code of Practice. This Code of Practice, issued by the Director of Public Prosecutions, provides guidance to prosecutors conducting pre-trial interviews with witnesses.
2 Interviews to which this Code of Practice Applies
2.1 This Code of Practice applies to interviews for the purpose of assisting a prosecutor to assess the reliability of a witness's evidence or to understand complex evidence (referred to throughout this document as a pre-trial interview). It does not apply to other meetings with witnesses such as special measures meetings, court familiarisation visits or meetings to explain a decision to discontinue a case or to significantly alter a charge.
2.2 A Crown Prosecutor may conduct a pre-trial interview with a witness when he considers that it will enable him to reach a better informed decision about any aspect of the case. Pre-trial Interviews must not be held for the purpose of improving a witness's evidence or performance although a prosecutor conducting a pre-trial interview may answer a witness's questions about court procedure.
2.3 Where a prosecutor conducts a pre-trial interview to assess the reliability of a witness's evidence, the witness may be asked about the content of his/her statement or other issues that relate to reliability. This may include taking the witness through his/her statement, asking questions to clarify and expand evidence, asking questions relating to character, exploring new evidence or probing the witness's account.
2.4 A pre-trial interview may take place at any stage of the proceedings (including pre-charge) until the witness starts to give evidence at trial. However, no interview should be conducted until the witness has provided to the police a signed witness statement or has taken part in a visually recorded evidential interview. Once a prosecutor has decided that a pre-trial interview is appropriate it should be conducted as soon as reasonably practicable.
2.5 Before a pre-trial interview takes place the prosecutor should consult the Senior Investigating Officer (or the officer in the case if there is no SIO). The prosecutor will require confirmation that the person to be interviewed is not, and is not likely to become, a suspect in the case. If there is any possibility that the witness may come under suspicion the interview must not take place until that possibility ceases to exist.
2.6 If, during an interview, the witness comes under suspicion, whether in relation to the offence then under investigation or another offence the prosecutor must terminate the interview immediately. The prosecutor can also terminate the interview for other reasons (such as hostility) at any time.
3 Persons who may conduct an interview
3.1 A pre-trial interview may be conducted by a Crown Prosecutor designated by the Chief Crown Prosecutor for their area or Head of Division to conduct such interviews, or by an independent advocate on the authority of a designated Crown Prosecutor.
4 Persons present at interview
4.1 The presence of a police officer will not normally be necessary but exceptionally the prosecutor or other designated person conducting the interview may request the presence of a police officer if they deem this necessary. The officer attending the interview must be familiar with the case but if possible he or she should not be the officer who obtained the witness's original statement. An officer attending an interview under these circumstances should play no part in the questioning of the witness. If, as a result of something said in interview, the officer and prosecutor need to confer about an evidential point, the interview should be suspended and the discussion take place in the absence of the witness.
4.2 An interview may be conducted by more than one prosecutor or by a prosecutor and an independent advocate. However, where this is done, the interview process should be led by one person.
4.3 Other CPS staff may also be present to provide administrative support to the prosecutor.
4.4 In any case where the prosecutor considers it necessary for the witness to have the assistance of an interpreter or intermediary, (whether or not the original statement was taken in such manner), the prosecutor shall arrange for the attendance of a suitably qualified person to attend the pre-trial interview. Persons who may themselves be potential witnesses must not act in the role of interpreter or intermediary but a person who assisted in the taking of a witness statement may assist at a pre-trial interview. Prosecutors should refer to existing guidance on the selection of interpreters. 5 **Witness support**
5.1 The witness may be accompanied by a supporter. The prosecutor must satisfy him/herself that the supporter has no actual or potential involvement in the case and has no personal knowledge of the matters likely to be discussed. The prosecutor conducting the interview has discretion as to whether the supporter should be permitted to be present at, or remain in, the interview. If the proposed supporter is, in the view of the prosecutor, unsuitable to act as a supporter then the witness should be given an opportunity to arrange for an alternative suitable supporter and the interview should be rearranged for this purpose.
5.2 The prosecutor must outline the supporter’s role and ensure that he or she does not prompt, influence or inhibit the witness in any way.
6 **The interview**
6.1 The attendance of a witness at a pre-trial interview is voluntary and cannot be compelled. If a witness declines to attend a pre-trial interview, this fact and any reasons advanced by the witness should normally be disclosed to the defence in accordance with the prosecutor’s disclosure obligations.
6.2 The prosecutor must remain objective and dispassionate at all times during the interview. He/she shall explain to the witness his/her statutory role, having regard to the duties of the prosecutor set out in the Code for Crown Prosecutors and this code of practice. He/she should also explain in advance to the witness in clear terms the purpose of the interview and deal with any questions that the witness may have in relation to the process.
6.3 A witness must not be interviewed in the presence of any other witness in the case (except the officer in the case where he or she is present at the invitation of the person conducting the interview).
6.4 The witness should see copies of his or her witness statement(s) before or during the interview. Where the witness has participated in a visually recorded interview, he/she should be given an opportunity of viewing it again. Where the prosecutor considers it to be necessary the witness should be given an opportunity of commenting on the contents of his/her statement or visually recorded interview.
6.5 If the witness has seen a copy of their written statement, or has viewed their visually recorded statement in advance of the interview then this fact should be confirmed at the start of the interview.
6.6 Where the prosecutor considers it to be necessary, the witness may be shown items or documents exhibited by him/her. 7 **Questioning**
7.1 Training or coaching for witnesses is not permitted (see R v Momodou and Limani (2005) EWCA Crim 177). Prosecutors must not under any circumstances train, practise or coach the witness or ask questions that may taint the witness's evidence. Leading questions should be avoided.
7.2 Where there is significant conflict between witnesses that cannot be resolved by careful questioning, alternative accounts may be put to the witness for comment so long as any source of the alternative account is not attributed. If this is done, it should never be suggested to the witness that they adopt the alternative account.
7.3 Prosecutors should remain dispassionate about the responses that a witness gives. In particular they must never suggest to the witness that he/she might be wrong, indicate approval or disapproval in any way to any answer given by the witness. To depart from this standard carries with it the risk of allegations that the witness has been led or coached in their evidence.
8 **Recording and Disclosure**
8.1 A comprehensive audio recording of the interview must be made. If a witness has previously given a visually recorded evidential interview the pre-trial interview may also be video recorded.
8.2 Where, in the course of an interview, the witness provides further evidence which is material to the case, a further witness statement should be taken (or visual interview conducted) by a police officer and served upon the defence.
8.3 The disclosure officer will be notified of any unused material generated through this process and will record it on the appropriate disclosure schedule.
8.4 The record of a pre-trial interview will generally be unused material and disclosure should be determined by the application of the appropriate statutory test(s). A record of a pre-trial interview will normally meet these tests and, subject to the application of Public Interest Immunity, the recording of the interview will be supplied automatically to the defence as unused material. When a recording is supplied to the defence a transcript will not be prepared. 9 Children and other vulnerable witnesses
9.1 Special care will be taken in making a decision to hold a pre-trial interview with a child. The purpose of video recording the evidence in chief of children and other vulnerable witnesses is to preserve their evidence at an early stage and to protect them from the necessity to continually repeat their account during the course of the criminal prosecution process. Further, in cases where children and other vulnerable witnesses are victims of abuse, therapy may have commenced following the video recording of their testimony.
9.2 It will only be in exceptional cases, therefore, that pre-trial interviews are considered for children and vulnerable witnesses. Prosecutors will have the benefit of the video recording in order to assess the witness and if there are areas that require further clarification, consideration will be given to asking the original interviewer to explore these by way of an additional video recorded interview. The investigative interviewers will have already built a rapport with the witness and have the special skills required to gently probe the issue in a simple and non-suggestive way.
9.3 In reaching a decision to hold a pre-trial interview consideration will be given to the age, degree of vulnerability and status of the witness. Where the original statement was video recorded the pre-trial interview will also be video recorded. The venue must be appropriate for the witness and in most cases the police video interview suite will be used. The witness must have appropriate support and the prosecutor will take advice from the trained police interviewer as to the type and level of questions to be put. The prosecutor must also be conversant with the practice guidance 'Achieving Best Evidence in Criminal Proceedings'.
10 Witness Expenses
10.1 A witness will be reimbursed for any expense reasonably incurred in attending the place at which the pre-trial interview is held. This may include the expenses of a supporter. Payment will be in accordance with standard witness allowances.
11 Remote Interviewing
11.1 In order to provide the greatest opportunity to assess the reliability or credibility of a witness's evidence, a pre-trial interview should, wherever practicable, involve face to face contact between the prosecutor and the witness. Face to face contact affords greater opportunities to the witness to raise issues of concern and to be put at their ease about the process of giving evidence.
11.2 However, a prosecutor may at his or her discretion conduct a pre-trial interview by indirect means including (but not limited to) telephone or video-link. In such cases the prosecutor must make arrangements for a record of the interview to be made in compliance with the requirements set out above.
KEN MACDONALD QC Director of Public Prosecutions
22 February 2008
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f62ed6b0deed1b7aa5714e1d778e2493d06f222f | Corporate governance in central government departments:
code of good practice
April 2017 Corporate governance in central government departments: code of good practice
## Contents
| Chapter | Title | Page | |-----------|--------------------------------------|------| | Foreword | | 3 | | Chapter 1 | Parliamentary accountability | 11 | | Chapter 2 | Role of the board | 13 | | Chapter 3 | Board composition | 17 | | Chapter 4 | Board effectiveness | 21 | | Chapter 5 | Risk management | 25 | | Chapter 6 | Arm's length bodies | 27 | Foreword
Good corporate governance is fundamental to any effective and well-managed organisation – be it private or public sector – and is the hallmark of any corporate entity that is run accountably and with the long-term interest clearly in mind. Ensuring that central government departments are run as efficiently and effectively as possible is central to this goal. By holding our public servants to the highest standards and providing them with strong, robust frameworks in which they can thrive while delivering public service, we can build a government that operates as smoothly as possible for the everyday citizen.
This updated code of good practice builds on the last code published in 2011, and reflects the steps we have taken since then to make government as efficient and effective as possible for the taxpayer. Since 2011, there has been a step change in the governance of central government departments. Secretaries of state now chair departmental boards, bringing a high level of focus on issues such as performance, risk management, talent and the challenge and scrutiny of major projects.
This departmental board model is now embedded as a key element of the fabric of corporate governance across central government departments. Boards help departments and the government succeed in achieving their aims by encouraging good planning, managing performance regularly and raising delivery capability. They also help foster a culture of openness and good governance by providing a clear oversight structure.
There are now over eighty non-executive board members across central government departments, bringing diverse experience from senior positions in large and complex organisations outside government. The introduction of the new role of Government Lead Non-Executive, supported by a team in the Cabinet Office, has helped to co-ordinate this network and encourage successful collaboration between departments.
Indeed, as the Prime Minister has recognised, the departmental board model has been “an overall success, bringing useful external expertise and challenge into the running of departments”. That is why it is important that the code supports the departmental board model as it continues to embed further in all departments across Whitehall.
We are determined that this code will continue to support good governance within the public sector – supporting the government’s commitment to build a country that works for everyone and where everyone plays by the same rules.
RT HON BEN GUMMER MP Minister for the Cabinet Office and Paymaster General
RT HON DAVID GAUKE MP Chief Secretary to the Treasury Departmental board model: summary
Government departments are not the same as for-profit corporations, but they face many similar challenges. They need to be business-like. They can do this by tapping into the expertise of senior leaders with experience of managing complex organisations. These experts will provide challenge and support through their membership of departmental boards, which will provide the collective strategic and operational leadership of government departments.
Box 1.A: Extract from the Ministerial Code
“Secretaries of state should chair their departmental board. Boards should comprise other ministers, senior officials, a Lead Non-Executive and non-executive board members, (largely drawn from the commercial private sector and appointed by the Secretary of state in accordance with Cabinet Office guidelines). The remit of the board should be performance and delivery, and to provide the strategic leadership of the department.”
Source: Ministerial Code, Cabinet Office, December 2016, paragraph 3.5
Composition and remit
The boards will be balanced, with roughly equal numbers of ministers, senior civil servants, and non-executives from outside government. They will be chaired by the Secretary of state and meet on at least a quarterly basis. However, best practice is that boards should meet more frequently.
Boards are advisory in the sense that they will provide advice to the department on issues within their remit, such as strategy and the deliverability of policies. They are supervisory in the sense that they scrutinise reporting from the department on performance, and challenge the department on how well it is achieving its objectives.
Policy will be decided by ministers alone, with advice from officials. Boards will give advice and support on the operational implications and effectiveness of policy proposals, focusing on getting policy translated into results. They will operate according to recognised precepts of good corporate governance in business: leadership, effectiveness, accountability and sustainability.
Boards advise on, and supervise, five main areas: strategic clarity, commercial sense, talented people, results focus, and management information.
The board may choose for its committees to carry out some of its activities. As a minimum, there should be committees responsible for audit and risk assurance (the responsibilities of which will include reviewing the comprehensiveness of assurances and integrity of financial statements), and nominations (the responsibilities of which will include ensuring there are satisfactory systems for identifying and developing leadership and high potential, scrutinising the incentive structure and succession planning for the board and the senior leadership of the department). The board should also ensure that governance arrangements are sufficiently scrutinised; this responsibility may be discharged by the board itself or by a board sub-committee (such as the audit and risk assurance committee or a nominations committee), as the board sees fit.
1 www.gov.uk/government/publications/ministerial-code Board members’ roles and responsibilities
Principles of public life
All board members should uphold the seven principles of public life (the Nolan principles): selflessness, integrity, objectivity, accountability, openness, honesty and leadership.
Chair of the board
The chair of the board will normally be the Secretary of state (the lead non-executive board member, or another ministerial board member, may occasionally deputise if necessary). He or she will maintain a high standard of discussion and debate, helping to steer the department by facilitating collective working and ensuring that systems are in place to provide board members with the support they need to carry out their role effectively, such as providing them with timely, relevant evidence on which to base their decisions.
Lead non-executive board member
Each board will have a lead non-executive board member, who will meet regularly with other non-executive board members to ensure their views are understood and that the Secretary of state is made aware of any concerns (including through ensuring that the non-executive board members meet alone with the Secretary of state from time to time). The lead non-executive board member will support the Secretary of state in his or her role as chair of the board and liaise with the Government Lead Non-Executive.
Non-executive board members
Non-executive board members, appointed by the Secretary of state, will be experts from outside government. They will come primarily from the commercial private sector, with experience of managing large and complex organisations. In order to achieve representative boards with broad-based experience, departments will aim as far as possible to ensure that there is at least one non-executive board member with substantial experience in the public and/or not-for-profit sectors, in addition to members with strong commercial expertise. Departments should aim to achieve boards which are diverse – for example, they should include at least one female non-executive board member. These considerations will also be kept in mind when planning for succession.
They will exercise their role through influence and advice, supporting as well as challenging the executive. They will advise on performance (including agreeing key performance indicators), operational issues (including the operational / delivery implications of policy proposals), and on the effective management of the department. They will also provide support, guidance and challenge on the progress and implementation of the single departmental plan, and in relation to recruiting, appraising and ensuring appropriate succession planning of senior executives. They will form committees responsible for audit and risk assurance, and nominations. To share best practice and to ensure departments learn from the successes and failures of comparable organisations, they will meet regularly with other non-executive board members across government and the Government Lead Non-Executive.
Departments will support this work by providing appropriate management information and direct access to officials outside of board meetings.
Non-executive board members will report their views in their own section of the department’s annual report. Through the network of lead non-executive board members, led by the Government Lead Non-Executive, they will also be able to feed their views back to the Prime Minister. As a last resort, if non-executive board members judge that the permanent secretary is an obstacle to effective delivery, they will be able to recommend to the Prime Minister, Secretary of state and the Cabinet Secretary and Head of the Civil Service that the permanent secretary should be removed from his or her post.
**Government Lead Non-Executive**
The Government Lead Non-Executive will meet regularly with departmental lead non-executive board members, individually and as a collective, and feed their views back to the Prime Minister; Cabinet Secretary and Head of the Civil Service; and the Chief Executive of the Civil Service. The Government Lead Non-Executive will report to Parliament through an annual report to the Public Administration and Constitutional Affairs Committee. This report will include the key concerns of the non-executive board member network and provide feedback on policy implementation. It will also collate examples of best practice in the work of boards and non-executive board members. The report will also be provided to the Prime Minister; Secretaries of State; Cabinet Secretary and Head of the Civil Service; and Chief Executive of the Civil Service. About this code
Why corporate governance?
Corporate governance is the way in which organisations are directed, controlled and led. It defines relationships and the distribution of rights and responsibilities among those who work with and in the organisation, determines the rules and procedures through which the organisation’s objectives are set, and provides the means of attaining those objectives and monitoring performance. Importantly, it defines where accountability lies throughout the organisation.
Accountabilities and role of the board
This code does not change existing responsibilities and accountabilities of ministers and accounting officers to Parliament. Central government is a difficult environment to manage well and can benefit from the introduction of outside expertise. But it has many unique characteristics and it would not be appropriate to import governance arrangements directly from other sectors.
Governance arrangements in central government departments are intended to support, help and challenge the way departments are run and how they deliver. Departmental boards are therefore advisory bodies to support and challenge ministers and accounting officers.
The code is drafted to offer flexibility in the way a board behaves, particularly to foster a sense of equal status and collective corporate behaviour amongst board members. In particular it may be appropriate in certain areas for the board to assume the characteristics of a supervisory body, in order to provide governance oversight to support the accounting officer.
Each department needs to be pragmatic in the way they implement the principles of the code. One size never fits all, but the ‘comply or explain’ mechanism enables departments to deviate from the principles and supporting provisions if justifiable for the good governance of the department.
Good governance is central to the effective operation of government departments. Government departments are not the same as for-profit corporations, but they need to be business-like and operate according to recognised precepts of good governance in business:
- **Leadership** – articulating a clear vision for the department and giving clarity about how policy activities contribute to achieving this vision, including setting risk appetite and managing risk
- **Effectiveness** – bringing a wide range of relevant experience to bear, including through offering rigorous challenge and scrutinising performance
- **Accountability** – promoting transparency through clear and fair reporting
- **Sustainability** – taking a long-term view about what the department is trying to achieve and what it is doing to get there
This code is the primary reference and overview of good practice for corporate governance in central government departments. It should be cascaded to management throughout central government. There is further guidance on various aspects of corporate governance in government in a number of other publications, including *Managing Public Money*, the *Audit* and risk assurance committee handbook, the Ministerial Code, the Civil Service Code, the Code of conduct for board members of public bodies, and Partnerships between departments and arm’s length bodies: code of good practice.
Codifying the requirements for good governance can only go so far. To maximise the effectiveness of an organisation, people within the governance structure need to adopt appropriate behaviour too. Compliance with this code cannot guarantee good performance but it does make it more likely. The principles, policy and provisions outlined in this code provide a framework designed to facilitate good decision-making by departments. In order to foster good decision-making, the board needs to adopt open and transparent behaviours.
This code
This is a refreshed version of the previous code, which was published in 2011. This revised edition of the code does not contain fundamental changes, but brings certain aspects of the 2011 code up to date. The code is intended to be a living document, which will evolve in line with best practice.
Relevant government policy on how the principles should be implemented is clearly identified throughout the code, with departments expected to apply the principles and supporting provisions to suit their business needs as appropriate. In addition to central government departments, the principles in the code generally hold across other parts of central government, including departments’ arm’s length bodies (ALBs), which are encouraged to adopt the principles in the code wherever relevant and practical. Arrangements for ALBs may depend on statute. Generally, ministers do not chair ALBs, nor non-ministerial departments where statute sets out the applicable governance.
The devolved administrations have different structures. The principles remain relevant and devolved administrations may want to consider how to identify and adopt them. In ALBs and non-ministerial departments, in line with other good practice guidance, such as the UK corporate governance code issued by the Financial Reporting Council, it is good practice to operate a board with a non-executive chair and a chief executive, adopting the other principles of this code, as appropriate.
Comply or explain
This code is based on principles. Departments should apply the principles of the code to meet their business needs. The code needs to be considered in its entirety to ensure a comprehensive perspective of good practice. The code focuses on the role of boards, since these provide leadership. Departures from this code may be justified if good governance can be achieved by other means. Reasons for departure should be explained clearly and carefully in the governance statement accompanying its annual resource accounts. In providing an explanation, a department should aim to illustrate how its practices are both consistent with the principle to which the particular provision relates and contribute to good governance. Guidance issued by HM Treasury and the Cabinet Office sets out a suggested approach for departments on how the principles may be applied.
______________________________________________________________________
1 Non-Ministerial Departments (NMDs) which have a relationship with their sponsor department similar to its other ALBs should apply this code as an ALB. Other NMDs should apply the code as central departments. 2 www.frc.org.uk 3 The governance statement includes: the areas formerly covered by the statement on internal control; an account of how the code has been complied with or an explanation of reasons for departure from the code; and disclosure of attendance at board meetings. 4 Corporate governance in central government departments: code of good practice – guidance note, available on www.gov.uk Parliamentary accountability
Principles
1.1 The minister in charge of the department is responsible and answerable to Parliament for the exercise of the powers on which the administration of that department depends. He or she has a duty to Parliament to account, and to be held to account, for all the policies, decisions and actions of the department, including its ALBs.
1.2 The departmental accounting officer is personally responsible and accountable to Parliament for the organisation and quality of management in the department, including its use of public money and the stewardship of its assets.
Supporting provisions
1.3 The lead minister in a department may devolve to his or her junior ministers responsibility for a defined range of departmental work, including parliamentary business.
1.4 In non-ministerial departments, there should be an agreement as to which minister(s) should answer for the department’s affairs in Parliament.
1.5 Generally speaking, civil servants working for a departmental minister may exercise powers of the minister in charge of the department. Ministers remain accountable to Parliament for decisions made under their powers.
1.6 The official at the head of the department is normally appointed as its accounting officer. The duties of the post are outlined in chapter 3 of Managing Public Money.
1.7 Parliament grants resources to departments for specified purposes. HM Treasury administers these resources on behalf of Parliament and appoints the accounting officers who are charged with ensuring resources are used as Parliament intends. The accounting officer of a central government department may look to the Cabinet Secretary and the Head of the Civil Service for support in this role.
1.8 The accounting officer should establish and document a clear allocation of responsibilities amongst officials in the department, but he or she retains overall personal responsibility and accountability to Parliament for:
- regularity and propriety
- prudent and economical administration
- avoidance of waste and extravagance
- ensuring value for money, judged for the Exchequer as a whole, not just for the department
- efficient and effective use of available resources
- the organisation, staffing and management of the department 1.9 Accounting officers should routinely scrutinise significant policy proposals or plans to start or vary major projects and then assess whether they measure up to the standards set out in Chapter 3 of *Managing Public Money*, so that they can identify any discrepancy. The accounting officer should draw any such problems to the attention of the responsible minister to see whether they can be resolved. If the minister decides to continue with a course the accounting officer has advised against (whether or not supported by the collective decision of the board), the accounting officer should ask for a formal written direction to proceed. An accounting officer may not rely on a departmental board minute as an alternative to a formal written direction.
1.10 The accounting officer should disclose all ministerial directions to the board at the next board meeting, and arrange for the existence of any direction to be published, no later than in the governance statement of the next Annual Report and Accounts, unless the matter must be kept confidential. Directions should not be kept confidential from the board.
1.11 The principal accounting officer, at his or her discretion, may appoint other senior officials in the department as additional accounting officers for certain accounts, requests for resources, or distinct parts of an estimate, and normally appoints the permanent heads of executive agencies and other ALBs as accounting officers for these bodies. The principal accounting officer retains overall responsibility to Parliament for ensuring a high standard of financial management in the departmental family as a whole. Role of the board
Principles
2.1 Each department should have an effective board, which provides leadership for the department’s business, helping it to operate in a business-like manner. The board should operate collectively, concentrating on advising on strategic and operational issues affecting the department’s performance, as well as scrutinising and challenging departmental policies and performance, with a view to the long-term health and success of the department.
Government policy
2.2 The board forms the collective strategic and operational leadership of the department, bringing together its ministerial and civil service leaders with senior non-executives from outside government, helping the department to operate in a business-like manner. The board’s role includes appropriate oversight of ALBs.
2.3 The board does not decide policy or exercise the powers of the ministers. The department’s policy is decided by ministers alone on advice from officials. The board advises on the operational implications and effectiveness of policy proposals. The board will operate according to recognised precepts of good corporate governance in business:
- **Leadership** – articulating a clear vision for the department and giving clarity about how policy activities contribute to achieving this vision, including setting risk appetite and managing risk
- **Effectiveness** – bringing a wide range of relevant experience to bear, including through offering rigorous challenge and scrutinising performance
- **Accountability** – promoting transparency through clear and fair reporting
- **Sustainability** – taking a long-term view about what the department is trying to achieve and what it is doing to get there
2.4 The board should meet on at least a quarterly basis; however, best practice is that boards should meet more frequently. It advises on five main areas:
- **Strategic Clarity** – setting the vision and/or mission and ensuring all activities, either directly or indirectly, contribute towards it; long-term capability and horizon scanning, ensuring strategic decisions are based on a collective understanding of policy issues; using outside perspective to ensure that departments are challenged on the outcomes
- **Commercial Sense** – approving the distribution of responsibilities; advising on sign-off of large operational projects or programmes; ensuring sound financial management; scrutinising the allocation of financial and human resources to achieve the plan; ensuring organisational design supports attaining strategic objectives; setting the department’s risk appetite and ensuring controls are in place to manage risk; evaluation of the board and its members, and succession planning
- **Talented People** – ensuring the department has the capability to deliver and to plan to meet current and future needs • **Results Focus** – shaping the single departmental plan, including strategic aims and objectives; monitoring and steering performance against plan; scrutinising performance of ALBs; and setting the department’s standards and values
• **Management Information** – ensuring clear, consistent, comparable performance information is used to drive improvements
2.5 Some activities may be exercised by committees of the board. As a minimum, this will include committees responsible for audit and risk assurance (the responsibilities of which will include reviewing the comprehensiveness of assurances and integrity of financial statements), and nominations (the responsibilities of which will include ensuring there are satisfactory systems for identifying and developing leadership and high potential, scrutinising the incentive structure and succession planning for the board and the senior leadership of the department). The board should also ensure that governance arrangements are sufficiently scrutinised; this responsibility may be discharged by the board itself or by a board sub-committee (such as the audit and risk assurance committee or a nominations committee).
**Supporting provisions**
2.6 The board supports ministers and senior officials in directing the business of the department in as effective and efficient way as possible, with a view to the long-term health and success of the department.
2.7 The board also supports the accounting officer in the discharge of obligations set out in *Managing Public Money* for the proper conduct of business and maintenance of ethical standards.
2.8 The board and its members should:
• collectively affirm and document its understanding of the department’s purpose and document the board’s role and responsibilities in a board operating framework. This document should include a formal schedule of matters reserved for board discussion, i.e. those which should not be delegated to committees. The board operating framework should be reviewed and updated from time to time, and at least every two years
• act corporately and objectively when discharging its responsibilities
• act in the public interest in keeping with the Nolan principles of public life: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. Board members should act in accordance with the *Code of conduct for board members for public bodies*[^2]
• support actions to ensure that officials comply with the *Civil Service Code*[^3]
• ensure that the department’s reporting obligations to the Treasury, Cabinet Office and Parliament are met effectively and efficiently
2.9 The board’s activities should be recorded and communicated as appropriate within the department. Boards may permit certain members of the department to observe all or part of their meetings.
2.10 Board committees should only exercise governance functions and not stray into the executive management of the department which is the role of officials. The nominations committee and the audit and risk assurance committee should each be chaired by a non-executive board member and have clear terms of reference agreed by the board. The board should ensure that it receives adequate and timely feedback on the work of those committees and is able to consider their decisions formally. A schedule of agreed delegations to committees of the board, and the mechanisms for feedback and assurance, should be documented in the board operating framework.
2.11 The permanent secretary is responsible for the executive management of the department. The permanent secretary should set out annually for the board a structure for discharging this responsibility.
2.12 Where board members have concerns, which cannot be resolved, about the running of the department or a proposed action, they should ensure that their concerns are recorded in the minutes. This might occur, for example, in the rare circumstance in which the lead minister, as chair of the board, considers it necessary to depart from the collective view of the board. 3 Board composition
Principles
3.1 The board should have a balance of skills and experience appropriate to fulfilling its responsibilities. The membership of the board should be balanced, diverse and manageable in size.
3.2 The roles and responsibilities of all board members should be defined clearly in the department’s board operating framework.
Government policy
3.3 The board should be balanced, with approximately equal numbers of ministers, senior officials and non-executive board members. It should comprise:
- the department’s lead minister, who should chair
- other departmental ministers
- the permanent secretary
- the finance director, who should be professionally qualified
- other senior officials
- at least four non-executive board members, the majority of whom should be senior people from the commercial private sector, with experience of managing complex organisations. Non-executive board members should be appointed in accordance with the relevant sections of the guidance
3.4 The chair of the board, who will normally be the lead minister, will maintain a high standard of discussion and debate, helping to steer the department by facilitating collective working and ensuring that systems are in place to provide board members with the support they need to carry out their role effectively.
3.5 Non-executive board members will exercise their role through influence and advice, supporting as well as challenging the executive, and covering such issues as:
- support, guidance and challenge on the progress and implementation of the single departmental plan
- performance (including agreeing key performance indicators), operational issues (including the operational and delivery implications of policy proposals), adherence to relevant standards (e.g. commercial, digital), and on the effective management of the department
- the recruitment, appraisal and suitable succession planning of senior executives, as appropriate within the principles set out by the Civil Service Commission
______________________________________________________________________
1 Annex 4.1 of Managing Public Money explains this requirement and sets out the main duties and responsibilities of the finance director. The term ‘finance director’ is used in this code to refer to the qualified finance professional who sits on the board with management responsibility for the finance function. It is government policy that all departments should have professional finance directors reporting to the permanent secretary with a seat on the departmental board, at a level equivalent to other board members. 3.6 Non-executive board members will also take an active role in:
- forming an audit and risk assurance committee
- forming a nominations committee
- meeting other non-executive board members across government and the Government Lead Non-Executive from time to time to share best practice and to ensure departments learn from the successes and failures of comparable organisations
- reporting their views in their own section of the department’s annual report
- feeding their views back to the Prime Minister and the Government Lead Non-Executive, through the network of lead non-executive board members
3.7 In each department, one of the non-executive board members should be designated as the lead non-executive board member. This person should:
- support the lead minister as chair of the board
- meet the other non-executive board members regularly, ensuring that their views are given due weight on the board and the lead minister is aware of any concerns
- ensure that the non-executive board members collectively meet the lead minister alone from time to time
- liaise with the Government Lead Non-Executive (see paragraph 3.9 below)
- play an active role in the cross-government network of lead non-executive board members
3.8 If the non-executive board members believe that the permanent secretary is a barrier to effective delivery, in extreme cases they can recommend that the Prime Minister, lead minister and Cabinet Secretary and Head of the Civil Service, should remove him or her from post.
3.9 The Government Lead Non-Executive, appointed by the Prime Minister, should:
- meet departmental lead non-executive board members, individually and as a collective, regularly
- report to Parliament through an annual report to the Public Administration and Constitutional Affairs Committee. This report will include the key concerns of the non-executive board member community and provide feedback on policy implementation. It will also collate examples of best practice in the work of boards and non-executive board members. The report will also be provided to the Prime Minister; Secretaries of State; Cabinet Secretary and Head of the Civil Service; and Chief Executive of the Civil Service
- act as a non-executive board member of the Cabinet Office board
Supporting provisions
3.10 The board should provide collective strategic and operational leadership to the departmental family, helping it to operate in a business-like manner.
3.11 The board should include people with a mix and balance of skills and understanding to match and complement the department’s business and its strategic aims, typically including: • leadership • management of change in complex organisations • process and operational delivery • knowledge of the department’s business and policy areas • corporate functions, such as finance, human resources, digital, commercial and project delivery
3.12 The mix and balance of skills and understanding should be reviewed periodically, at least annually as part of the board effectiveness evaluation (see paragraph 4.12 below), to ensure they remain appropriate for the department’s board.
3.13 The search for board candidates should be conducted, and appointments made, on merit, with due regard for the benefits of diversity on the board, including gender, on which the Government has an aspiration that half of all new appointees made to public bodies are women. This includes non-executive appointments to departmental boards. However, this is not just about gender; diversity is about encouraging applications from candidates with the widest range of backgrounds.
3.14 The lead minister, taking into account the views of the board, should decide whether the next most senior minister or the lead non-executive board member should chair the board in his or her absence.
3.15 The board should agree and document in its board operating framework a de minimis threshold and mechanism for board advice on the operation and delivery of policy proposals.
3.16 The board should be informed of government-wide policies and initiatives and challenge officials on the department’s compliance.
3.17 Non-executive board members should provide advice, support and informal ongoing feedback to the department’s permanent secretary and other civil service board members.
3.18 In consultation with the chair and the department’s lead non-executive board member, non-executive board members may take the lead on some of the board’s activities. These should be set out in the board operating framework.
3.19 In consultation with the permanent secretary and the lead non-executive board member, the chair may appoint board members who are senior officials or other board members from any of the department’s ALBs. Such appointments would be part of the board structure set out in 3.3 and subject to the same selection criteria applied to other board members who are officials or non-executive board members. 4 Board effectiveness
Principles
4.1 The board should ensure that arrangements are in place to enable it to discharge its responsibilities effectively, including:
- formal procedures for the appointment of new board members, tenure and succession planning for both board members and senior officials
- allowing sufficient time for the board to discharge its collective responsibilities effectively
- induction on joining the board, supplemented by regular updates to keep board members’ skills and knowledge up-to-date
- timely provision of information in a form and of a quality that enables the board to discharge its duties effectively
- a mechanism for learning from past successes and failures within the departmental family and relevant external organisations
- a formal and rigorous annual evaluation of the board’s performance and that of its committees, and of individual board members
- a dedicated secretariat with appropriate skills and experience
Supporting provisions
4.2 An effective board requires the effective discharge of the chair’s responsibilities. The lead non-executive board member will support the chair to help him or her carry out the role effectively, particularly given the competing demands on the chair’s time.
4.3 All boards should have a nominations committee, which will advise the board on key elements of effectiveness, including ensuring there are satisfactory systems for identifying and developing leadership and high potential, scrutinising the incentive structure and succession planning for the board and the senior leadership of the department.
4.4 The nominations committee will be advisory; it will advise on whether the department’s systems (e.g. for rewarding senior executives) are effective in helping the department achieve its goals. It will not have a role in deciding individual cases (for example the level of reward of a particular senior executive). These functions will continue to be carried out by the executive; under the scrutiny of the nominations committee.
4.5 The terms of reference for the nominations committee will include at least the following three central elements:
- scrutinising systems for identifying and developing leadership and high potential
- scrutinising plans for orderly succession of appointments to the board and of senior management, in order to maintain an appropriate balance of skills and experience
- scrutinising incentives and rewards for executive board members and senior officials, and advising on the extent to which these arrangements are effective at improving performance 4.6 The attendance record of individual board members should be disclosed in the governance statement and cover meetings of the board and its committees held in the period to which the resource accounts relate.
4.7 The permanent secretary should support the chair to ensure that board members have the skills, knowledge and familiarity with the department required to fulfil their role on the board and its committees. Through the board secretariat, the department should provide the necessary resources for developing and updating the knowledge and capabilities of board members, including access to its operations and staff.
4.8 Board members’ time is a finite resource. The permanent secretary should support the chair, through the board secretary, to ensure that board members receive accurate, timely and clear information. Board information should be concise and fit for purpose, setting out comprehensive, relevant evidence, and avoiding duplication of data collection efforts. It should cover the main areas of the board’s activities (set out in 2.4 above), along with background on the department’s policy portfolio.
4.9 Wherever possible, the information presented to the board should enable comparison with other departments or relevant organisations.
4.10 Where necessary, board members should seek clarification or amplification on board issues or board papers through the board secretary. The board secretary will consider how officials can best support the work of board members; this may include providing board members with direct access to officials where appropriate.
4.11 An effective board secretary is essential for an effective board. Under the direction of the permanent secretary, the board secretary’s responsibilities should include:
- developing and agreeing the agenda for board meetings with the chair and lead non-executive board member, ensuring all relevant items are brought to the board’s attention
- ensuring good information flows within the board and its committees and between senior management and non-executive board members, including:
- challenging and ensuring the quality of board papers and board information
- ensuring board papers are received by board members according to a timetable agreed by the board
- providing advice and support on governance matters and helping to implement improvements in the governance structure and arrangements
- ensuring the board follows due process
- providing assurance to the board that the department:
- complies with government policy, as set out in the code
- adheres to the code’s principles and supporting provisions on a comply or explain basis (which should form part of the report accompanying the resource accounts)
- acting as the focal point for interaction between non-executive board members and the department, including arranging detailed briefing for non-executive board members and meetings between non-executive board members and officials, as requested or appropriate • recording board decisions accurately and ensuring action points are followed up • arranging induction and professional development of board members (including ministers)
4.12 The lead non-executive board member should support the chair to ensure a board effectiveness evaluation is carried out annually, and with independent input at least once every three years.
4.13 The lead non-executive board member should ensure the chair acts on the results of the performance evaluation by recognising the strengths and addressing the weaknesses of the board and, where appropriate, recommending new members be sought for the board (subject to the open appointments process) or seeking the resignation of board members.
4.14 Evaluations of the performance of individual board members should show whether each continues to contribute effectively and corporately and demonstrates commitment to the role (including commitment of time for board and committee meetings and other duties).
4.15 All potential conflicts of interest for non-executive board members should be considered on a case by case basis. Where necessary, measures should be put in place to manage or resolve potential conflicts. The board should agree and document an appropriate system to record and manage conflicts and potential conflicts of interest of board members. The board should publish, in its governance statement, all relevant interests of individual board members and how any identified conflicts, and potential conflicts, of interest of board members have been managed. 5 Risk management
Principles
5.1 The board should ensure that there are effective arrangements for governance, risk management and internal control for the whole departmental family. Advice about and scrutiny of key risks is a matter for the board, not a committee. The board should be supported by:
- an audit and risk assurance committee, chaired by a suitably experienced non-executive board member
- an internal audit service operating to Public Sector Internal Audit Standards
- sponsor teams of the department’s key ALBs
5.2 The board should take the lead on, and oversee the preparation of, the department’s governance statement for publication with its resource accounts each year.
Government policy
5.3 The board’s regular agenda should include scrutinising and advising on risk management.
5.4 The key responsibilities of non-executive board members include forming an audit and risk assurance committee.
Supporting provisions
5.5 The head of internal audit should periodically be invited to attend board meetings, where key issues are discussed relating to governance, risk management processes or controls across the department and its ALBs.
5.6 The board should assure itself of the effectiveness of the department’s risk management system and procedures and its internal controls. The board should give a clear steer on the desired risk appetite for the department and ensure that:
- there is a proper framework of prudent and effective controls, so that risks can be assessed, managed and taken prudently
- there is clear accountability for managing risks
- departmental officials are equipped with the relevant skills and guidance to perform their assigned roles effectively and efficiently.
5.7 The board should also ensure that the department’s ALBs have appropriate and effective risk management processes through the department’s sponsor teams.
5.8 The board should ensure an ALB makes effective arrangements for internal audit. It is good practice to work with a group or shared internal audit provision, for example covering a department and its ALBs. In any case, the board should ensure it provides for internal audit access to its ALBs.
1 www.gov.uk/government/publications/public-sector-internal-audit-standards 2 www.gov.uk/government/publications/orange-book 5.9 The board and accounting officer should be supported by an audit and risk assurance committee, comprising at least three members. The chair of the committee should be a non-executive board member of the board with relevant experience. There should be at least one other non-executive board member of the board on the committee; the committee may also choose to seek further non-executive membership from non-members of the board in order to ensure an appropriate level of skills and experience. At least one, but preferably more, of these committee members should have recent and relevant financial experience.
5.10 Advising on key risks is a role for the board. The audit and risk assurance committee should support the board in this role.
5.11 An audit and risk assurance committee should not have any executive responsibilities or be charged with making or endorsing any decisions. It should take care to maintain its independence. The audit and risk assurance committee should be established and function in accordance with the Audit and risk assurance committee handbook.³
5.12 The board should ensure that there is adequate support for the audit and risk assurance committee, including a secretariat function.
5.13 The annual governance statement (which includes areas formerly covered by the statement on internal control) is published with the resource accounts each year. In preparing it, the board should assess the risks facing the department and ensure that the department’s risk management and internal control systems are effective. The audit and risk assurance committee should normally lead this assessment for the board.
5.14 The terms of reference of the audit and risk assurance committee, including its role and the authority delegated to it by the board, should be made available publicly. The department should report annually on the work of the committee in discharging those responsibilities.
5.15 All boards should ensure the scrutiny of governance arrangements, whether at the board or at one of its subcommittees (such as the audit and risk assurance committee or a nominations committee). This will include advising on, and scrutinising the department’s implementation of, corporate governance policy.
³ www.gov.uk/government/publications/audit-committee-handbook 6 Arm's length bodies
Principle
6.1 Where part of the business of the department is conducted with and through arm’s length bodies (ALBs), the department’s board should ensure that there are robust governance arrangements with each ALB board.
6.2 These arrangements should set out the terms of their relationship in accordance with the principles and standards set out in Partnerships between departments and arm’s length bodies: code of good practice, and explain how they will be put in place to set clear objectives and promote high performance. Appropriate arrangements should also be put in place to safeguard regularity and propriety.
Government policy
6.3 The regular agenda of the departmental board should include scrutiny of the performance of the department’s ALBs, as part of general performance management against the department’s single departmental plan.
Supporting provisions
6.4 ALBs are publicly accountable, whether funded directly from Parliament, a central government department, or through a government sponsored commercial structure that enables the body to generate its own revenue. Therefore, ALBs are accountable to their host department for performance and the use of their resources (as set out in paragraph 1.8 above), within the established arm’s length relationship as set out in the framework document.
6.5 Each central government department is accountable to Parliament, through the minister responsible for the department as set out in Chapter 1. This accountability includes the performance of the department’s ALBs.
6.6 The board should ensure that the department has a written agreement (in accordance with Chapter 7 of Managing Public Money and the principles set out in Partnerships between departments and arm’s length bodies: code of good practice) with each of its ALBs, which defines clearly how the relationship should work.
6.7 Each departmental agreement with an ALB should be drawn up to reflect the:
- purpose and responsibilities of the ALB
- legal framework (if any) of the ALB
- environment in which it operates (e.g. commercial, judicial, advisory)
- partnership model adopted between the ALB and the department
______________________________________________________________________
1 The term “arm’s length bodies” includes executive agencies, non-departmental public bodies and non-ministerial departments. There may also be value in considering the department’s governance arrangements for other organisations, such as public corporations and strategic partners e.g. public-private partnerships and private finance initiatives partners.
2 Partnerships between departments and arm’s length bodies: code of good practice describes the four key principles for effective partnerships between departments and ALBs (purpose, assurance, value and engagement). 6.8 The written agreement should be reviewed and updated periodically. Certain events may trigger such a review, such as the appointment of a new chair or chief executive officer in an ALB, changes of senior personnel in the sponsor team in the host department or a significant change in government policy relating to the ALB’s business. Written agreements should be reviewed formally every three to five years.
6.9 The agreement should include clear information about:
- the shared aims and mutual responsibilities, including a management framework and agreed tolerances for meeting performance targets, and actions to be taken where these are not achieved
- the arrangements for reporting and consultation in order to ensure that the departmental board receives information enabling it to monitor the areas specified in paragraph 2.4 above
- the mechanisms to provide the department with assurance on information provided by ALBs on their performance
- the roles and responsibilities of both the department and ALB, along with expectations of support from the other party
- the process for making board and senior management appointments in the ALB
6.10 Departments may want the agreement to specify reporting relationships along professional lines, in addition to that of the department’s accounting officer and the ALB’s accounting officer. In particular, the relationship between the departmental finance director and the ALB’s finance director should be specified, to support the relationship between accounting officers.
6.11 Guidance on the framework documents between departments and ALBs is included in Chapter 7 of Managing Public Money.³
6.12 Departments should ensure that their relationship with their ALB partners is in accordance with the principles set out in Partnerships between departments and arm’s length bodies: code of good practice.⁴ Where appropriate, departments may also choose to adopt a variety of supplementary arrangements to manage these relationships. For example, senior members of ALBs may be members or observers of departmental boards in their capacity as stakeholders; similarly, departmental board members may be members of the boards of ALBs.
6.13 The department’s relationship with ALBs should reflect the board’s assessment of each ALB’s ability to manage its risks, including those relating to delivery and financial management, and its performance. The aim should be to ensure that the department’s monitoring, and support, is proportionate to the size and type of its ALBs and concentrated on those with the most significant risks.
6.14 The department should report annually on the arrangements it has in place for promoting sound working partnerships with its ALBs, which should include an assessment against the principles and standards of Partnerships between departments and arm’s length bodies: code of good practice. Periodically, there should be an external review of the governance arrangements between the department and its ALBs, which may be incorporated within other external reviews whether commissioned by the department or the centre of government.
³ www.gov.uk/government/publications/managing-public-money ⁴ www.gov.uk/government/publications/partnerships-with-arms-length-bodies-code-of-good-practice 6.15 The department should periodically review the effectiveness of its portfolio of ALBs and whether or not they are:
- delivering in line with departmental single departmental plans
- effective and provide value-for-money
- the most appropriate mechanism for implementing policy objectives
- well governed and accountable for what they do HM Treasury contacts
This document can be downloaded from www.gov.uk
If you require this information in an alternative format or have general enquiries about HM Treasury and its work, contact:
Correspondence Team HM Treasury 1 Horse Guards Road London SW1A 2HQ Tel: 020 7270 5000 Email: [email protected]
[^2]: www.gov.uk/government/publications/board-members-of-public-bodies-code-of-conduct
[^3]: www.gov.uk/government/publications/civil-service-code
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cbc5d1bef215cd87f1368968f1da09a934822c97 | Copyright
Greater London Authority November 2014
Published by Greater London Authority City Hall The Queen’s Walk London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458
ISBN 978-1-84781-586-6
All images © Shutterstock
For more information about this publication, please contact: GLA Economics telephone 020 7983 4922 e-mail [email protected]
GLA Economics provides expert advice and analysis on London’s economy and the economic issues facing the capital. Data and analysis from GLA Economics form a basis for the policy and investment decisions facing the Mayor of London and the GLA group.
GLA Economics uses a wide range of information and data sourced from third party suppliers within its analysis and reports. GLA Economics cannot be held responsible for the accuracy or timeliness of this information and data.
The GLA will not be liable for any losses suffered or liabilities incurred by a party as a result of that party relying in any way on the information contained in this report. This factsheet provides information on the export statistics from the London Business Survey (LBS) 2014 and accompanies the main report ‘London Business Survey 2014: Main findings’.
The LBS measured trade by combining data on:
- The total value of goods and services sold and purchased by business units in London.
- The percentage of sales to and purchases from customers in four geographical areas: London, UK, Europe and the rest of the world.
Around a third of London business units are exporters… 32 per cent of business units in London – 141,000 – exported goods or services in the year to mid-2014. Meanwhile, 26 per cent of business units in London – 116,000 – imported goods or services from suppliers based outside the UK.
Figure 1: Proportion of business units in London trading internationally
Source: London Business Survey (2014)
…and this is true for SMEs and large businesses but differs widely across sectors. SME business units were statistically as likely to export as units belonging to large firms in the year to mid-2014.
More than 1 in 2 London business units in retail (excluding motor trades) are exporters. In contrast, fewer than 1 in 20 London business units in the construction sector are exporters. Both Europe and the rest of the world are markets for the exports of London business units…
Overall, around four fifths of London exporters sold goods and services to customers based elsewhere in Europe, while around two thirds of exporters made sales to the rest of the world.
Business units in London, on average, generated 8 per cent of their sales from customers based elsewhere in Europe, and 6 per cent from sales to the rest of the world. On average, 82 per cent of sales were to customers based in London and the rest of the UK.
Figure 2: Export orientation of London business sales in the year to mid-2014
Source: London Business Survey (2014) Note: The average proportions sold to the four geographical areas do not total 100 per cent due to non-response or misreporting by some respondents.
…but the relative importance of exports is greater for SMEs and retail business units.
Export sales account for a greater overall share of the sales of SMEs than is the case for large firms; on average, export sales represent an estimated 15 per cent of the value of sales for SME business units compared to 8 per cent for units belonging to large firms.
In terms of export destination, micro-enterprises export a larger share of sales to Europe than business units in other SMEs or large firms; on average, an estimated 9 per cent of sales of micro-enterprises went to Europe. Retail business units, on average, generated 22 per cent of the value of their sales from customers based overseas – more than any other sector. For this sector, 17 per cent of the value of sales was earned from customers based in Europe, and 5 per cent from those in the rest of the world.
While business units traded slightly more with Europe than the rest of the world overall, this is not true of all sectors. In particular, for business units in transport and storage, and accommodation, food, travel and tourism sectors, markets in the rest of the world account for a relatively greater share of sales than markets in Europe. London business units are net exporters of goods and services… Based on GLA Economics calculations, London business units exported around £147 billion worth of goods and services to customers based outside the UK, with net exports (exports minus imports) in the year to mid-2014 worth around £28 billion.
Figure 5: Value of exports and imports of London business units by size of enterprise
Source: GLA Economics calculations based on the London Business Survey (2014). Note: due to instances of non-response and misreporting, the London totals and the figures for large firms are likely to be underestimates. As such the estimated values of exports and imports for SME business units, those in large firms, and London as a whole, are not directly comparable.
…with SMEs exporting around £110 billion… Combined with imports of £91 billion, this indicates that SMEs (including micro-enterprises) had net exports of around £19 billion in the year to mid-2014.
…and the high value business support sector driving net exports. Wholesale (including motor trades) and high value business support were the two sectors that generated the highest value of exports. Export revenues for these sectors in the year to mid-2014 were worth around £41 billion and £37 billion respectively. However, while the wholesale sector is a net importer – the value of imports purchased is greater than the value of exports sold – the high value business support sector is a net exporter of goods and services. Endnotes
1. The estimates from the London Business Survey (LBS) 2014 are experimental statistics. The survey was designed and carried out by the Office for National Statistics (ONS). Following an initial pilot, the main stage of the survey took place in May-July 2014.
- The GLA Economics report, London Business Survey 2014: Main findings and the ONS Methodology report are available at: www.london.gov.uk/priorities/business-economy/publications/gla-economics/london-business-survey-2014
- The supporting data files are available at: http://data.london.gov.uk/london-business-survey-2014
As with any survey, the LBS 2014 is based on a sample and as such is subject to variability in the results. Care should therefore be taken in interpreting the survey findings. To assist in interpretation, where possible, we have limited the analysis in this report to comparisons that are statistically significant at the 95% confidence interval; that is to say that if the sample was repeated 100 times, in 95 of those times the results would not be different. In cases of doubt, wording such as ‘around’ is used to indicate that the findings are less precise.
2. ‘Business units’ are whole businesses or, in the case of multi-site firms, their London sites (workplaces). The sample for the survey is drawn from the Inter-Departmental Business Register (IDBR), which includes all businesses registered for Value Added Tax (VAT), a Pay As You Earn (PAYE) scheme, and/or registered at Companies House. The survey covers registered business units in Greater London; it does not cover unregistered businesses.
3. Exporters are businesses which sell goods and/or services to customers based outside the UK – those who reported sales to the rest of Europe and/or rest of the world. It does not consider the value of the goods and services being traded, only the counts of business units exporting (to the nearest thousand).
4. The LBS enterprise size bands are:
- Micro enterprises: 0 to 9 employees
- Other SMEs: 10-249 employees
- Large enterprises: 250+ employees
Note that enterprise size is defined at the level of the business as a whole (in the UK). Therefore businesses will be classed as ‘large’ even if a particular site belonging to this business in London employs only a small number of people.
5. LBS estimates cover the business economy in London, which includes production, distribution, construction and services. It does not cover public administration or education. Very small sectors in London including agriculture, mining and quarrying and utilities (electricity, gas, water supply, sewerage and waste management) have been excluded from the survey. The industry sectors covered by the LBS are:
| LBS industry sector | SIC07 Section/division | |----------------------------------------------------------|------------------------------------------------------------| | 1 Manufacturing | Section C | | 2 Construction | Section F | | 3 Wholesale (including motor trades) | Section G: divisions 45 and 46 | | 4 Retail (excluding motor trades) | Section G: division 47 | | 5 Transport and storage | Section H | | 6 Accommodation, food, travel and tourism | Section I plus division 79 | | 7 Information, communication, arts, entertainment and recreation | Sections J and R | | 8 Financial and insurance activities | Section K | | 9 Real estate, architecture and engineering services, services to buildings and landscape activities | Section L plus division 71 plus division 81 | | 10 High value business support including legal, accounting, head office, management, advertising and market research | Section M excluding divisions 71, 72 and 75 | | 11 Other administrative and support services including employment agencies and security services; and other service activities | Section N excluding divisions 79 and 81; plus Section S | | 12 Human health and social work activities, scientific R&D and veterinary activities | Section Q plus divisions 72 and 75 |
6. Export orientation is measured by the proportion of sales by geographic destination. This may not reflect the full impact of international trade on the London economy as the underlying supply chain is often complex. For example, proportions exported do not include sales of goods or services to other companies for the purpose of export.
7. The value of exports and imports are estimated by multiplying the total reported value of goods and services sold by the business unit in the year to mid-2014 by the proportion of sales to Europe and the rest of the world for that business unit. The results under-estimate the true value of total exports due to instances of non-response or misreporting by some respondents. Though included in the totals exported and imported for London, the data on proportions sold/purchased for financial and insurance services and administrative and support services are incomplete. As a result, the London totals and the figures for large firms are likely to be underestimates. The same is the case for imports.
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5630c42f2705b51a31cc198bc289eae847c0c4a0 | Copyright
Greater London Authority June 2015
Published by Greater London Authority City Hall The Queen’s Walk London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458
ISBN 978-1-84781-604-7
All images © Daryl Rozario
For more information about this publication, please contact: GLA Economics telephone 020 7983 4922 e-mail [email protected]
GLA Economics provides expert advice and analysis on London’s economy and the economic issues facing the capital. Data and analysis from GLA Economics form a basis for the policy and investment decisions facing the Mayor of London and the GLA group.
GLA Economics uses a wide range of information and data sourced from third party suppliers within its analysis and reports. GLA Economics cannot be held responsible for the accuracy or timeliness of this information and data.
The GLA will not be liable for any losses suffered or liabilities incurred by a party as a result of that party relying in any way on the information contained in this report. This factsheet provides information on foreign ownership statistics from the London Business Survey (LBS) 2014 and accompanies the main report ‘London Business Survey 2014: Main findings’.
The LBS looked at the level of UK and foreign ownership of businesses in London. The LBS only considered the immediate ownership of the business as a whole, i.e. the location of the immediate parent company. It will not include any enterprises where the ultimate owner or top enterprise in the ‘chain of ownership’ is foreign, if the immediate owner is based in the UK.
In mid-2014, around 8 per cent of business units in London (35,570) were foreign owned (including those in joint UK and foreign ownership).
Where respondents answered that the business was not solely UK-owned, the LBS asked in which country its immediate parent company was based. The European Economic Area (EEA) was the region with the highest number of foreign-owned business units (10,400), followed by USA and Canada (5,470).
Figure 1: Foreign-owned London business units by country/region of ownership, 2014
Source: London Business Survey 2014. Notes: Percentages are calculated excluding non-response. The European Economic Area includes the 28 Members of the European Union plus Iceland, Liechtenstein, and Norway. Crown dependencies include the Isle of Man and the Channel Islands.
Almost a quarter of all business units in large firms in London were foreign owned, a higher share than those in SMEs...
24 per cent of business units in London (8,350) belonging to large firms (250 or more employees) were foreign owned, compared with 11 per cent of other SMEs (10-249 employees) and 6 per cent of microenterprises (0-9 employees).
...with a smaller proportion of foreign-owned business units in microenterprises
61 per cent of foreign-owned business units (21,710) in London belonged to firms that had fewer than 10 employees compared with 82 per cent of UK-owned business units. Foreign-owned business units in London were more likely to belong to more established firms.
- At the time of the survey, around 73 per cent of foreign-owned business units (24,100) were established before 2009, compared with 13 per cent (4,400) of ‘start-ups’ (established between 2012 and mid-2014).
Foreign ownership was highest in the financial and insurance sector…
- In terms of the LBS industrial sectors, around 25 per cent of business units in London in the financial and insurance sector were foreign-owned (3,460), followed by around 19 per cent in retail (8,120) and around 16 per cent in wholesale (4,330). Foreign-owned businesses rate London positively as a capital of world business...
- The LBS asked about a number of factors which affect perceptions of London as a place to do business. In line with responses from UK-owned businesses, foreign-owned business units in London rated the capital very positively in terms of the international/diverse environment, the availability of skilled staff, and proximity to businesses and customers, with more than 7 out of 10 foreign-owned businesses rating London as good/excellent in these areas.
Figure 4: How UK and foreign-owned business units rated London as a business location, 2014
...but identified areas in need of improvement.
- Compared to business units in UK ownership, foreign-owned businesses rated London slightly less favourably in terms of transport infrastructure and digital and communications infrastructure, though less than 1 in 10 foreign-owned businesses rated London poorly in this regard. Relative to UK-owned business units, foreign-owned business units were however slightly less inclined to rate London as poor/very poor in terms of housing affordability and the cost of living.
The LBS also provides evidence of foreign-owned businesses contribution to London
While it is not possible to get information from the LBS on employment, turnover and sales figures by ownership status (since these questions were asked at site level to only capture London activity), the LBS can shed light on the extent to which foreign-owned businesses in London are: planning to grow, innovating, and accessing external finance. Foreign-owned business units tend to have ambitions for growth
- While only a small proportion of business units in London were foreign-owned, they tend to have ambitions for growth. When asked “Over the next 12 months, is this business planning to grow?” around 85 per cent of foreign-owned business units in London said the business was planning to grow, compared to around 61 per cent of UK-owned business units. This difference is likely to be driven, at least in part, by the relatively high proportion of foreign-owned business units belonging to large firms as we know that London business units in large firms were significantly more likely to be planning to grow compared to those in smaller firms, irrespective of business ownership.
In line with UK-owned businesses, around half are also engaged in innovation activity...
- Around half of foreign-owned business units in London were ‘innovation active’ in the year to mid-2014. One in four foreign-owned business units have introduced new or significantly improved processes for supplying goods and services, and more than a third of foreign-owned businesses have made changes to organising work responsibilities and decision-making.
...and around a half also made investments in innovation in the year to mid-2014
- Further, in line with UK-owned business units, around half of foreign-owned business units reported making investments in innovation. The most popular area for investment for foreign-owned business units was training. One in four foreign-owned business units in London reported investing in training.
Foreign-ownership of business in London is also associated with relative success in accessing external finance.
- Around 40 per cent of the total number of foreign-owned business units reported to have attempted to access external finance in the 12 months to mid-2014. Of these, 85 per cent reported that they were successful in their attempt, receiving either full financing or at least partial financing.
Foreign-owned businesses tend to use the same primary channels for accessing finance as UK-owned businesses...
- In line with UK-owned business units, bank loans, overdrafts and mortgages were most commonly used by foreign-owned business units attempting to access external finance, with around one in four foreign-owned business units in London attempting to access external finance in this way in the 12 months to mid-2014.
...but peer-to-peer lending channels are more commonly sought by foreign-owned businesses...
- Around 15 per cent of foreign-owned business units in London had attempted to access external peer-to-peer finance in the 12 months to mid-2014, compared to 3 per cent of UK-owned business units. Endnotes
1. The estimates from the London Business Survey (LBS) 2014 are experimental statistics. The survey was designed and carried out by the Office for National Statistics (ONS) on behalf of the GLA. Following an initial pilot, the main stage of the survey took place in May-July 2014.
- The GLA Economics Main Findings Report of the LBS 2014 and the ONS Methodology Report are available at: https://www.london.gov.uk/priorities/business-economy/publications/gla-economics/london-business-survey-2014
- The supporting data files are available at: http://data.london.gov.uk/london-business-survey-2014/
As with any survey, the LBS 2014 is based on a sample and as such is subject to variability in the results. Care should therefore be taken in interpreting the survey findings. To assist in interpretation, where possible, we have limited the analysis in this report to comparisons that are statistically significant at the 95 per cent confidence interval; that is to say that if the survey was repeated 100 times, in 95 of those times the results would not be different. In cases of doubt, wording such as ‘around’ is used to indicate that the findings are less precise. In this sense, we have been careful only to make comparisons with UK-owned and foreign-owned business units where there are significant differences (at the 95 per cent confidence interval).
2. The LBS asked if the business was UK or foreign-owned. Respondents were asked to consider immediate ownership only and were given three options: UK-owned, foreign-owned, or joint UK and foreign-owned. ‘Foreign-owned’ in this definition includes business units in joint (UK and foreign) ownership, and those owned in the Channel Islands, Isle of Man and British Overseas Territories.
3. The term ‘business units’ refers to individual units of a whole business. In the case of single-site businesses, this one unit comprises the entire business, whereas in the case of multiple site businesses, we are interested in only those sites/workplaces physically located in London. The sample for the survey is drawn from the Inter-Departmental Business Register (IDBR), which includes all businesses registered for Value Added Tax (VAT), and/or those paying employees through a Pay As You Earn (PAYE) scheme, and/or businesses registered at Companies House. The survey covers registered business units in Greater London; it does not cover unregistered businesses.
4. The LBS enterprise size bands are:
- Micro enterprises: 0 to 9 employees
- Other SMEs: 10-249 employees
- Large enterprises: 250+ employees
Note that enterprise size is defined at the level of the business as a whole (in the UK). Therefore business units will be classed as ‘large’ even if a particular site belonging to this business located in London employs only a small number of people.
5. LBS estimates cover the business economy in London, which includes production, distribution, construction and services. It does not cover public administration or education. Very small sectors in London including agriculture, mining and quarrying and utilities (electricity, gas, water supply, sewerage and waste management) have been excluded from the survey. The industry sectors covered by the LBS, and their relationship to the 2007 Standard Industrial Classifications (SIC07), are as follows: | LBS industry sector | SIC07 Section/division | |---------------------------------------------------------|------------------------------------------------------------| | 1 Manufacturing | Section C | | 2 Construction | Section F | | 3 Wholesale (including motor trades) | Section G: divisions 45 and 46 | | 4 Retail (excluding motor trades) | Section G: division 47 | | 5 Transport and storage | Section H | | 6 Accommodation, food, travel and tourism | Section I plus division 79 | | 7 Information, communication, arts, entertainment and recreation | Sections J and R | | 8 Financial and insurance activities | Section K | | 9 Real estate, architecture and engineering services, services to buildings and landscape activities | Section L plus division 71 plus division 81 | | 10 High value business support including legal, accounting, head office, management, advertising and market research | Section M excluding divisions 71, 72 and 75 | | 11 Other administrative and support services including employment agencies and security services; and other service activities | Section N excluding divisions 79 and 81; plus Section S | | 12 Human health and social work activities, scientific R&D and veterinary activities | Section Q plus divisions 72 and 75 |
6. Overall 63 per cent of London business units said the business was planning to grow – 58 per cent in micro-enterprises, 80 per cent in other SMEs and 95 per cent in large firms. Source: London Business Survey, table BPM3.
7. The LBS collected information about businesses’ involvement in innovation activity. If a business is engaged in any one of the following activities, it is defined as ‘innovation active’: new business practices; new methods of organisation; changes to marketing concepts or strategies; product innovation; process innovation.
8. The LBS asked if the business was investing in any of the following types of innovation: internal research and development; acquisition of research and development; acquisition of advanced machinery; equipment and software for innovation; acquisition of existing knowledge; training for innovative activities; all forms of design; market introduction of innovations. If a business is engaged in any one of these activities, it is considered to be making investments in innovation.
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fbc7f62ddfb1a3b6c9ba9e0c0c34c21f252cf36f | London Business Survey 2014: Main findings Copyright
Greater London Authority November 2014
Published by Greater London Authority City Hall The Queen’s Walk London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458
ISBN 978-1-84781-585-9
Front cover © Shutterstock
For more information about this publication, please contact: GLA Economics telephone 020 7983 4922 e-mail [email protected]
GLA Economics provides expert advice and analysis on London’s economy and the economic issues facing the capital. Data and analysis from GLA Economics form a basis for the policy and investment decisions facing the Mayor of London and the GLA group.
GLA Economics uses a wide range of information and data sourced from third party suppliers within its analysis and reports. GLA Economics cannot be held responsible for the accuracy or timeliness of this information and data.
The GLA will not be liable for any losses suffered or liabilities incurred by a party as a result of that party relying in any way on the information contained in this report.
## Contents
| Section | Page | |------------------------------------------------------------------------|------| | Summary of main findings | 4 | | Introduction | 7 | | About the survey | 7 | | Main findings | 11 | | Business profile | 11 | | London as a place to do business | 12 | | London as a business location | 12 | | Local facilities | 13 | | Factors affecting businesses | 14 | | The workforce | 14 | | Employment patterns | 14 | | Changes in employee numbers and recruitment | 16 | | Business performance and outlook | 17 | | International trade | 19 | | Support for SMEs | 22 | | Business support | 22 | | Access to finance | 23 | | Investing in the future and developing the workforce | 24 | | Innovation | 24 | | Training and developing the workforce | 26 | | Apprentices and STEM staff | 27 | | Appendix 1 (list of tables) | 28 | | Business profile | 28 | | London as a place to do business | 28 | | The workforce | 28 | | Business performance and outlook | 28 | | International trade | 29 | | Support for SMEs | 29 | | Investing in the future and developing the workforce | 29 | | Appendix 2 (useful contacts) | 30 | | Appendix 3 (glossary of terms) | 31 | | Endnotes | 33 | Summary of main findings
This report presents the findings of the London Business Survey (LBS) 2014. The survey covers private sector businesses (including not-for-profit organisations) only and results are presented in terms of numbers (or proportions) of business units, where a business unit is a site/workplace, which can also be a head office if the head office is located in London.
Introduction and business profile
- Although over 80% of business units in the LBS 2014 are microenterprises (0-9 employees), they account for only 20% of London’s private sector employees; other SMEs (10-249 employees) employ one-third of London’s private sector employees and large firms (250+ employees) employ nearly half.
- Most business units in London (92%) belong to UK firms, but 8% are in foreign or joint (UK and foreign) ownership.
- 63% of business units belong to firms established before 2009, while 17% belong to ‘start-ups’ (established between 2012 and mid-2014).
London as a place to do business
- Businesses rate London positively in terms of the availability of skilled staff, the international/diverse environment, proximity to businesses and customers, transport infrastructure and digital and communications infrastructure.
- Satisfaction is lower around the availability of suitable and affordable workspace, the availability/cost of housing and other living costs.
- When asked about the impact on their business of leaving the EU (but remaining part of the single market), 64% of respondents said ‘neither positive nor negative’; of those who did expect an impact, around three-quarters thought it would be negative.
- Over 85% of business units are satisfied with their local facilities with the exception of safety and cleanliness of the local environment, where satisfaction is lower at 74%. The workforce
- In line with official statistics, the LBS found that the total number of employees in London’s private sector business economy was 3.6 million.
- While the majority of employees in London’s private sector workplaces are men, women are dominant in the health, social work, scientific R&D and veterinary services sector and in the retail sector. These sectors also have the highest proportion of part-time workers.
- In the 12 months to mid-2014, three-quarters of business units in London experienced no change in employee numbers; 12% reported a decrease and 13% saw an increase.
- Some 29% of London business units recruited employees in the 12 months to mid-2014, but while 78% of those in large firms recruited staff, only 25% in SMEs did so.
- The survey also found that 9% of business units in London used Jobcentre Plus for recruitment, ranging from 6% of units in SMEs to 18% in large firms.
Business performance and outlook
- Total turnover in London’s private sector business economy was estimated at some £1.1 trillion (million million), of which nearly two-thirds was associated with large firms; microenterprises accounted for only 12% of turnover.
- In the 12 months to mid-2014, 35% of business units reported an increase in turnover, 37% reported that turnover had remained the same and 29% reported a decrease.
- When asked “Over the next 12 months, is this business planning to grow?”, 63% of respondents said the business was planning to grow; however, less than one-quarter expected numbers of employees to increase.
- Just over half of business units expect the economic situation in London to improve in the next 12 months.
International trade
- An estimated 32% of business units in London export goods and services to Europe or beyond, ranging from 4% in construction to 56% in the retail sector.
- Around one-quarter (26%) of business units in London import goods and services from outside the UK.
- London’s total exports in the year to mid-2014 were worth an estimated £147 billion, while imports were worth some £118 billion (although these figures are likely to be underestimates). This indicates that London had net exports of around £28 billion. Support for SMEs
- SMEs relied most on accountants/auditors for advice, with 42% of SME business units seeking advice only sometimes and 34% doing so often; by contrast, only 12% used the Gov.uk website (formerly Business Link) sometimes or often for advice.
- The survey found that 35% of SME business units attempted to access external finance in the 12 months to mid-2014; nearly half of those needing finance obtained all of the money they needed, while 30% obtained partial financing and 22% were unsuccessful or their cases had not yet been resolved.
Investing in the future and developing the workforce
- An estimated 58% of London business units were ‘innovation active’ in the year to mid-2014, with 50% investing in innovation.
- The survey found that 41% of business units had engaged in upskilling, training or development of their workforce over the 12 months to mid-2014. This ranged from 33% of microenterprises to 85% of units in large firms.
- In the 12 months to mid-2014, 38,050 business units (or 9% of the total) employed apprentices, while 62,050 business units (14%) employed staff with Science, Technology, Engineering and Maths (STEM) skills. Introduction
This report presents the main findings of the London Business Survey (LBS) 2014. The aim of the survey was to collect information from businesses on a variety of topics of interest to the Mayor of London, the Greater London Authority (GLA), the London Enterprise Panel (LEP) and London & Partners. Such topics include: how London is rated as a business location, ease of access to finance for Small-and Medium-Sized Enterprises (SMEs), employment, skills and training, the economic outlook, trade and innovation.
The report begins with a brief overview of the survey in order to assist in understanding and interpreting the survey findings (a more detailed description of the survey and the methodology is available in the ONS’s LBS 2014 Methodology Report). The main findings are subsequently presented, divided into seven sections:
- Business profile
- London as a place to do business
- The workforce
- Business performance and outlook
- International trade
- Support for SMEs
- Investing in the future and developing the workforce
A list of supporting data tables, useful contacts and glossary of terms are provided in appendices to this report.
About the survey
A key requirement of the LBS 2014 was that it should be representative of London businesses, specifically of private sector businesses (including not-for-profit organisations). To achieve this, the GLA asked the Office for National Statistics (ONS) to design and carry out the survey.
The design of the survey presented many challenges for ONS, the greatest of which was to draw a sample of businesses in the specific geographical area required. Whereas the ONS’s UK Annual Business Survey draws a sample at national level and then apportions the results to each region using a regression model, in this case the aim was to collect business information specifically for London. This would be straightforward for a household survey, which would select as a sample of households with London postcodes. However, businesses have complex structures, and head offices may be in a different place from where much of the activity of the business takes place. ONS produced an innovative survey design to address this issue and ensure the sample could be weighted up to produce representative results for London businesses. Figure 1 shows that the ‘business population’ of interest (within the grey box) comprises all business sites/workplaces in London, some of which are also head offices. Within this report members of the business population are referred to as ‘business units’.
In the survey design the treatment of single site enterprises was simple: a random sample of sites was selected and sent out questionnaires. Most SMEs are single site enterprises.
Multi-site businesses (mainly large enterprises) are more complex, as illustrated in the example in Figure 1: the business on the left-hand side of the illustration has two sites in London but its head office is in Sheffield, while the business on the right-hand side has a head office site in London but most of its activity takes place outside London (in Reading and Crawley).
If ONS had decided to draw a sample of whole businesses and send questionnaires to head offices, as UK/GB business surveys do, there would have been two problems:
- Unit A would not have been selected because it is in Sheffield, so Units B and C (which are in London) would have been left out of the estimates.
- Unit F would have been selected because it is in London, and would have reported results for all of its business (including Reading and Crawley, which should not be included in our estimates).
As our aim was to survey London businesses, it was necessary to draw a sample at site level instead of head office level. This approach meant that in the former example, even though the head office is based in Sheffield, the multi-site enterprise’s London units B and C are included in the estimates. In the latter example, only the business activity conducted at unit F would be included, not that of its non-London sites (units G and H).
However, this created a difficulty: sites are not able to answer questions on all of the topics that the LBS is interested in. Therefore for multi-site enterprises it was necessary to send questionnaires to their head offices asking for responses to ‘head office type questions’ as well as sending questionnaires with ‘site type questions’ to the selected sites. When the responses to head office questionnaires were collected, they were assigned to the sites selected for the survey and used to estimate results for the LBS population. The use of the term respondent in this report means the person who responded on behalf of the London business unit, even if this person works at a head office which is not in London. For example, respondents to the LBS 2014 include those based at Unit A responding to head office type questions on behalf of units B and C, as well as all those units within the LBS 2014 population.
**Figure 1: Illustration of the LBS 2014 population** Following an initial pilot in March-April 2014, the survey took place in May-July 2014. It covered the ‘LBS industry sectors’ shown in Table 2. These were created using the ONS Standard Industrial Classification 2007 (SIC07), which were re-grouped to reflect the nature of London’s private sector business economy.
Table 2: The LBS industry sectors
| LBS industry sector name | SIC07 Section/division | |--------------------------------------------------------------|-------------------------------------------------------------| | 1 Manufacturing | Section C | | 2 Construction | Section F | | 3 Wholesale (including motor trades) | Section C: divisions 45 and 46 | | 4 Retail (excluding motor trades) | Section C: division 47 | | 5 Transport and storage | Section H | | 6 Accommodation, food, travel and tourism | Section I plus division 79 | | 7 Information, communication, arts, entertainment and recreation | Sections J and R | | 8 Financial and insurance activities | Section K | | 9 Real estate, architecture and engineering services, services to buildings and landscape activities | Section L plus division 71 plus division 81 | | 10 High value business support including legal, accounting, head office, management, advertising, market research | Section M excluding divisions 71, 72 and 75 | | 11 Other administrative and support services including employment agencies and security services, and other service activities | Section N excluding divisions 79 and 81; plus Section S | | 12 Human health and social work activities, scientific R&D and veterinary activities | Section Q plus divisions 72 and 75 |
Note: Sections A, B, D, E and T of SIC07 are excluded because they are a very small part of the London business economy. Sectors O and P were excluded because they are predominantly public sector.
The LBS industry sectors represent around 98% of London’s business economy in terms of gross value added (GVA) and around 99% in terms of London’s workforce.
The survey was also designed to be representative (and thus analysed) by size of enterprise. The LBS enterprise size bands are:
- Micro enterprises: 0 to 9 employees
- Other SMEs: 10-249 employees
- Large enterprises: 250+ employees
Enterprise size is defined at the level of the UK business as a whole. For example, a store belonging to a supermarket chain which employs thousands of people across the UK is considered to be part of a ‘large enterprise’ even if that particular store employs fewer than 250 people. Thus, although the LBS 2014 sample was drawn at site level, the enterprise size band of each selected business unit was defined by the enterprise to which it belonged. On the other hand, industry sector classification was defined at the level of the selected business unit (the store in the example of the supermarket chain).
The LBS 2014 sample was drawn from the Inter-Departmental Business Register (IDBR), which is the sampling frame used for most official business surveys. The IDBR has information for businesses as a whole (the enterprise/firm) and for business units within them. Table 3 shows that there were 400,510 businesses in the LBS ‘population’ in May 2014, with a total of 444,870 business units. For microenterprises, the ratio of units to enterprises was 1:1, indicating that most of these enterprises had only one site (‘single site enterprises’); but most large enterprises were ‘multi-site enterprises’ with, on average, almost 12 sites per enterprise. Table 3: The LBS population, by size of enterprise
| | Number of enterprises | Number of business units | Ratio of business units to enterprises | |----------------|-----------------------|--------------------------|---------------------------------------| | Microenterprises | 357,560 | 358,850 | 1.0 : 1.0 | | Other SMEs | 39,910 | 50,180 | 1.3 : 1.0 | | Large enterprises | 3,040 | 35,840 | 11.8 : 1.0 | | TOTAL | 400,510 | 444,870 | 1.1 : 1.0 |
Source: IDBR, May 2014
Table 3 also shows that over 80% of business units in London’s private sector business economy were microenterprises. However, the results of the LBS 2014 suggest that microenterprises employ only 20% of London’s private sector employees and account for 12% of turnover, while other SMEs account for 33% of its private sector employees and 24% of turnover and large firms account for 47% of its private sector employees and 64% of turnover (see below: The workforce; Business performance and outlook).
For the LBS 2014, a sample of some 10,142 business units in London was drawn from the IDBR. The survey achieved a response rate of 33% (3,326 business units) for head office type questions and 26% (2,620 business units) for site type questions. Some of the findings in this report are based on the former, and some on the latter. For instance, the Access to finance section is based on responses to head office type questions and the Employment patterns and International trade sections are based on responses to site type questions. However, irrespective of where the responses came from, all results presented in this report are treated as being for the sites in our sample and are used to produce results for the London business population as shown in Figure 1.
In this Main Findings report, results are presented in terms of numbers (or proportions) of business units. In the case of multi-site (mainly large) enterprises, business units are parts of the business (e.g. a workshop, factory, warehouse, office or retail outlet), not the business as a whole.
Such estimates are helpful in many ways – not least in understanding the needs and views of business owners and managers – but some caution is needed in interpreting them because they are not weighted to reflect relative contributions to economic activity or employment. For example, microenterprises carry more weight in the ‘all London’ results than the responses of business units in other SMEs or large firms because there are many of them, but they account for a relatively small proportion of turnover and employment.
The methodology of the survey is described in greater detail in the ONS’s LBS 2014 Methodology Report. This also contains copies of the questionnaires and further details on head office level questions and site level questions. Main findings
This part of the report presents the initial findings of the LBS 2014. This is seen as the first step in exploring the results of the survey, which has potential for further analysis on a variety of topics.
The tables which we refer to below are detailed in Appendix 1 and can be downloaded from the London Datastore (http://data.london.gov.uk/london-business-survey-2014/). Readers should note that survey estimates vary in their precision, in particular that detailed breakdowns (e.g. by industry sector) tend to be less reliable than results for London as a whole or breakdowns by size of enterprise. The tables in Appendix 1 include the Confidence Intervals (upper and lower confidence limits) for each estimate, and it is recommended that readers check these when using the results.
Business profile The London Business Survey (LBS) 2014 looks at whether businesses in London are owned by UK or foreign owners. Table 4 shows that most business units in London (92%) belong to UK firms. However, 8% of units are in foreign or joint (UK and foreign) ownership. The single most important region of foreign ownership is the European Economic Area (EEA) with 10,400 business units, while the USA and Canada own 5,470 units.
Table 4: Country/region of ownership of London businesses
| Country/region of ownership | Count of records | Number of business units | Percentage of units | |---------------------------------------------|------------------|--------------------------|---------------------| | UK | 2,833 | 405,910 | 91.9 | | Channel Islands and Isle of Man | 20 | 890 | 0.2 | | British Overseas Territories | 18 | 1,640 | 0.4 | | EEA | 163 | 10,400 | 2.4 | | - France | 44 | 3,320 | 0.8 | | - Netherlands | 33 | 770 | 0.2 | | - Denmark | 22 | 570 | 0.1 | | - Germany | 26 | 2,130 | 0.5 | | USA and Canada | 85 | 5,470 | 1.2 | | Asia | 47 | 2,300 | 0.5 | | Rest of the World | 42 | 4,810 | 1.1 | | - Switzerland | 16 | 1,640 | 0.4 | | Owned by more than one country | 64 | 7,990 | 1.8 | | Foreign-owned, country not specified | 16 | 2,060 | 0.5 | | No response | 38 | 3,390 | n/a |
Source: London Business Survey (2014) Notes: 1. Percentages are calculated excluding non-response. 2. Businesses owned by more than one country may be partly owned in the UK. Table BPR2 (see Appendix 1) shows that foreign ownership is higher for business units in large firms than those in SMEs: 24% compared with 7%. In terms of the LBS industry sectors, foreign ownership is highest in the financial and insurance sector (25%).
The survey also looked at the age of firms in London (Table BPR5, see Appendix 1). It estimated that 63% of business units belonged to firms that were established before 2009, while 17% were ‘start-ups’ (established between 2012 and the time of the survey in mid-2014). Around one-fifth of microenterprises were start-ups, compared with only 4% of business units in large enterprises. Start-ups were most common in the high value business support sector and administrative and support services.
**London as a place to do business**
**London as a business location**
The LBS asked about a number of factors which affect people’s perceptions of London as a place to do business. Figure 5 summarises how respondents rated London in terms of these factors. It shows that ratings for London were very positive in terms of the availability of skilled staff, the international/diverse environment, proximity to businesses and customers, transport infrastructure and digital and communications infrastructure. The majority of respondents also felt that safety and security was either adequate or good/excellent. However, respondents were less satisfied with London in terms of the availability of suitable and affordable workspace, the availability/cost of housing and other living costs.
**Figure 5: How businesses rate London as a business location in terms of various factors**
Source: London Business Survey (2014)
Notes:
1. Percentages are calculated excluding non-response.
The LBS asked “If the UK were to leave the EU, but remained part of the single market, what impact would it have on this business?” Nearly two-thirds of respondents (64%) thought that the impact would be neither positive nor negative. Of those who did expect it to have an impact on their business, around three-quarters thought that the impact would be negative or very negative while around one-quarter expected it to be positive or very positive. Feeling about leaving the EU (but not the single market) was least negative among micro-enterprises and most negative in large firms (Figure 6).
**Figure 6: Impact on the business of leaving the EU (but not the single market), by size of enterprise**
*Source: London Business Survey (2014)*
*Notes:*
1. Percentages are calculated excluding non-response.
**Local facilities**
The survey asked about the importance of local facilities for businesses. Specifically it asked about local amenities such as cafes, restaurants and shops; cultural activities such as museums, cinemas and theatres; parks, sporting and recreational facilities; safety and cleanliness of the local environment; and attractiveness of the workspace and work environment. The survey found that cultural activities and parks, sporting and recreational facilities were the least valued, while safety and cleanliness of the local environment and attractiveness of the workspace and work environment were considered most important (Table LF1, see Appendix 1).
In London as a whole over 85% of business units were satisfied or very satisfied with their local facilities with the exception of safety and cleanliness of the local environment, where the satisfaction level was 74% (Table LF2, see Appendix 1). Satisfaction with safety and cleanliness of the local environment was lowest (55%) in the retail (excluding motor trades) sector and highest (88%) in high value business support which includes legal, accounting, head office, management and advertising and market research activities. This may be associated with differences between these sectors in terms of location, with high value business support tending to be concentrated in central London and retailers widely spread around London. Factors affecting businesses
Respondents were asked about a series of factors affecting businesses, and what level of impact these had had on the business in the 12 months to mid-2014. Figure 7 and Table FAB1 (see Appendix 1) show how people responding on behalf of business units in London viewed the impact of these factors.
Figure 7: Factors affecting businesses
Source: London Business Survey (2014) Notes:
1. Percentages are calculated excluding non-response.
The factors most often rated as having a positive or very positive impact were demand for products and/or services (50% of respondents) and technology/IT/connectivity/digital infrastructure (30% of respondents). The factors most often rated as having a negative or very negative impact were taxes and business rates (50% of respondents) and staff costs/cost of living (41%). Cost of energy and materials, government regulations, availability of affordable business space and availability and/or cost of finance were also seen as negative or very negative by 30% or more of respondents.
The workforce
Employment patterns
The survey estimated that the total number of employees in business units (workplaces) in London’s private sector business economy was 3.6 million. This is in line with the figure reported by ONS’s Business Register and Employment Survey (BRES), which is the recommended official source for such statistics.
The LBS 2014 estimated that 1.7 million employees worked for large firms, while 0.7 million worked for microenterprises and 1.2 million worked for other SMEs (Table WF1, see Appendix 1). Figure 8 shows the breakdown of numbers of employees by sector and work pattern (full-time vs. part-time). There are more full-time employees than part-time employees in every LBS industry sector, but in the retail (excluding motor trades) sector almost half (48%) of all employees work part time and in health, social work, scientific R&D and veterinary services 41% work part time. The LBS 2014 also collected information on the gender breakdown of employees in London businesses, which is shown in Figure 9. This is not available from the BRES. While the majority of employees in most sectors are men, women are dominant in the health, social work, scientific R&D and veterinary services sector and in the retail (excluding motor trades) sector. These are also the sectors with the highest proportion of part-time workers (Figure 8). Changes in employee numbers and recruitment
In the 12 months to mid-2014, three-quarters of business units in London experienced no change in numbers of employees while 12% of business units reported a decrease and 13% saw an increase. Around one-third (34%) of business units in other SMEs (enterprises with 10-249 employees) experienced an increase compared with 30% of units in large firms and only 8% in microenterprises (Table R1, see Appendix 1).
The industry sector with the largest proportion of business units reporting an increase in the 12 months to mid-2014 (21%) was financial and insurance activities (Table R1, see Appendix 1). The two main reasons given for the increase in the financial and insurance sector were increases in demand and business expansion/restructuring (Table R3, see Appendix 1). Meanwhile 30% of units in the accommodation, food, travel and tourism sector experienced a decrease in employee numbers; the two main reasons for this were a fall in demand and pressures on cash flow (Table R4, see Appendix 1).
Some 29% of London business units recruited employees in the 12 months to mid-2014. The pattern of recruitment in London revealed by the survey differs considerably according to the size of the enterprise to which the business unit belongs. While 78% of business units associated with large firms reported recruiting staff in the 12 months to mid-2014, only 25% of those in SMEs did so. However there was a big difference between microenterprises and other SMEs: 18% of business units with fewer than 10 employees recruited, compared with 75% of units with 10 to 249 employees (Table R5, see Appendix 1).
Moreover, patterns of recruitment varied considerably by industry sector, as shown in Figure 10. It is worth noting that some sectors with high levels of recruitment – such as the accommodation, food, travel and tourism sector and retail (excluding motor trades) – have seasonal employment patterns, so the high levels of recruitment reported for these sectors may be partly explained by their recruitment of temporary staff every year for the ‘peak’ season.
Figure 10: Businesses that have recruited employees in the last 12 months
Source: London Business Survey (2014) Note: Lack of response to the recruitment question was interpreted as “not recruited”.
Percent of business units
0 10 20 30 40 50 60
Manufacturing Construction Wholesale (inc. motor trades) Retail (exc. motor trades) Transport and storage Accommodation, food, travel and tourism Information, communications, arts, entertainment and recreation Financial and insurance activities Real estate, architecture, engineering and building services High value business support Administrative and support services Health, social work, scientific R&D and veterinary services The survey also asked respondents whether they had recruited any employees from Jobcentre Plus (JCP). It found that 9% of business units in London had used JCP for recruitment, ranging from 6% of units in SMEs to 18% of units in large firms (Table R6, see Appendix 1).
**Business performance and outlook**
The LBS 2014 collected data on the turnover of business units in London. Total turnover was estimated at £1.1 trillion (million million), of which nearly two-thirds was associated with large firms and almost half was in the wholesale (including motor trades) sector (Table BPM1, see Appendix 1). Microenterprises accounted for only 12% of total turnover.
The survey asked about whether turnover had increased, remained the same or decreased in the 12 months to mid-2014 (Table BPM2, see Appendix 1). For London as a whole, 35% of business units reported an increase, 37% reported that turnover had remained the same and 29% reported a decrease. However, less than one-third of respondents from microenterprises reported an increase compared with over half of respondents from other SMEs and large firms. The industry sectors with the largest proportion of business units reporting an increase in turnover were manufacturing, construction, and health, social work, scientific R&D and veterinary services (Figure 11).
**Figure 11: Businesses reporting an increase in turnover compared with 12 months ago, by industry sector**
When asked “Over the next 12 months, is this business planning to grow?”, respondents were generally ambitious: 63% said the business was planning to grow – 60% in SMEs and 95% in large firms (Table BPM3, see Appendix 1). On the anticipated economic situation for the business in the next 12 months, just under half expected an improvement and less than one-fifth expected deterioration, with little difference between SMEs and large firms (Table BPM4, see Appendix 1). Similarly, just over half of respondents expected the economic situation in London to improve in the next 12 months (Table BPM5, see Appendix 1). However, many businesses that were ambitious about growing were not planning increases in staff numbers (Table R2, see Appendix 1). Overall, 22% of business units said that they expected the number of employees to increase in the next 12 months, while 74% expected it to remain the same. The most optimistic enterprise size band was other SMEs, where 38% of business units expected an expansion in employee numbers over the coming year (Figure 12).
**Figure 12: Expected changes over the next 12 months, by size of enterprise**
Source: London Business Survey (2014)
Notes:
1. Respondents who did not answer the ‘planning to grow’ question were assumed to have responded “no”.
2. For other two questions, percentages were calculated excluding non-response.
**Box 1: Note on turnover, sales and purchases data in LBS 2014**
Estimates of the value of turnover, sales and purchases in LBS 2014 are experimental. The survey estimates this information in a new way, as explained in the LBS 2014 Methodology Report. Instead of collecting information from head offices and ‘regionalising’ it through regression modelling, as is the case with ONS’s Annual Business Survey, in the LBS information is collected directly from sites located in the area of interest (London). This means that results are not directly comparable with those of the Annual Business Survey.
The fact that the LBS collects turnover, sales and purchases data from sites rather than from head offices means that it avoids the need to ‘regionalise’. However, the LBS results may suffer from overestimation because some sites in multi-site firms are unable to report the values for the selected site and instead report the values for the business as a whole. Much of this is resolved by data editing, but a degree of overestimation of such values remains likely for multi-site firms. International trade
Table 13 shows percentages of London business units selling goods and services to four geographical areas: London, the rest of the UK, the rest of Europe and the rest of the world. The figures do not add to 100% because business units frequently sell to more than one area.
The survey was able to calculate the percentage of business units selling to the rest of Europe and/or the rest of the world. These were classified as ‘exporters’. An estimated 32% of business units in London were exporters, but the results differed widely between industry sectors, ranging from 4% in construction to 57% in the retail (excluding motor trades) sector.
Similarly, Table TRD3 (see Appendix 1) shows that around one-quarter (26%) of business units in London import goods and services from outside the UK and there were wide variations by industry sector. The sectors with the largest proportions of ‘importers’ were wholesale including motor trades (60%) and retail excluding motor trades (52%).
The LBS 2014 collected data on the value of goods and services sold by business units in London in order to attempt to estimate the value of exports and imports. Total sales of goods and services were estimated at £1.1 trillion and purchases of goods and services at £0.8 trillion. Tables 14 and 15 show the value of sales and purchases and the average proportions sold to and purchased from specified locations.
Table 13: Proportion of London businesses that sell goods and services to specified locations, 2014 (% of business units)
| Category & sub-category | to London | to the rest of the UK | to the rest of Europe | to the rest of the world | Exporters | |-------------------------|-----------|----------------------|----------------------|-------------------------|-----------| | London total | 83 | 47 | 26 | 21 | 32 | | Size of enterprise | | | | | | | Micro | 81 | 44 | 24 | 19 | 31 | | Other SME | 89 | 59 | 32 | 30 | 38 | | Large | 97 | 60 | 33 | 32 | 34 | | Industrial category | | | | | | | Manufacturing | 87 | 68 | 20 | 18 | 26 | | Construction | 86 | 37 | 2 | 4 | 4 | | Wholesale (inc. motor trades) | 78 | 60 | 28 | 19 | 34 | | Retail (exc. motor trades) | 87 | 52 | 55 | 40 | 57 | | Transport and storage | 86 | 63 | 21 | 22 | 31 | | Accommodation, food, travel and tourism | 90 | 41 | 21 | 24 | 27 | | Information, communications, arts, entertainment and recreation | 84 | 60 | 34 | 31 | 41 | | Financial and insurance activities | 70 | 52 | 24 | 20 | 31 | | Real estate, architecture, engineering and building services | 84 | 33 | 15 | 11 | 18 | | High value business support | 80 | 55 | 26 | 24 | 37 | | Administrative and support services | 78 | 25 | 31 | 9 | 32 | | Health, social work, scientific R&D and veterinary services | 92 | 31 | 7 | 11 | 12 |
Source: London Business Survey (2014)
Notes: 1. This table reports on the percentage of businesses that have any sales (sales > zero) to the specified locations. 2. Exporters are businesses which sell goods and/or services outside the UK, i.e. those who reported sales to the rest of Europe and/or rest of the world. Table 14: Total value of goods and services sold by London businesses and average proportion sold to specified locations
| | Total sales (£ billion) | Average proportion sold (mean %) | |------------------------------|-------------------------|----------------------------------| | | | to London | to the rest of the UK | to the rest of Europe | to the rest of the world | | London total | 1,133 | 66 | 16 | 8 | 6 | | Size of enterprise | | | | | | | Micro | 138 | 65 | 16 | 9 | 6 | | Other SME | 271 | 64 | 19 | 7 | 7 | | Large | 724 | 79 | 12 | 4 | 4 | | Industrial category | | | | | | | Manufacturing | 20 | 61 | 31 | 4 | 4 | | Construction | 60 | 77 | 17 | 0 | 2 | | Wholesale (inc. motor trades)| 543 | 50 | 26 | 10 | 9 | | Retail (exc. motor trades) | 51 | 67 | 11 | 17 | 5 | | Transport and storage | 40 | 67 | 20 | 4 | 8 | | Accommodation, food, travel and tourism | 77 | 76 | 12 | 4 | 6 | | Information, communications, arts, entertainment and recreation | 69 | 60 | 19 | 11 | 9 | | Financial and insurance activities | 70 | 49 | 17 | 11 | 10 | | Real estate, architecture, engineering and building services | 41 | 75 | 12 | 5 | 3 | | High value business support | 102 | 61 | 21 | 8 | 9 | | Administrative and support services | 40 | 64 | 9 | 14 | 2 | | Health, social work, scientific R&D and veterinary services | 19 | 85 | 8 | 0 | 2 |
Source: London Business Survey (2014)
Note: The average proportions sold to the four geographical areas do not add to 100% because of non-response or misreporting by some respondents. Table 15: Total value of goods and services purchased by London businesses and average proportions purchased from specified locations
| | Total purchases (£ billion) | Average proportion purchased (mean %) | from London | from the rest of the UK | from the rest of Europe | from the rest of the world | |--------------------------|-----------------------------|--------------------------------------|-------------|-------------------------|-------------------------|---------------------------| | London total | 833 | | 60 | 23 | 6 | 6 | | Size of enterprise | | | | | | | | Micro | 87 | | 60 | 22 | 6 | 6 | | Other SME | 198 | | 58 | 27 | 7 | 6 | | Large | 548 | | 60 | 30 | 3 | 3 | | Industrial category | | | | | | | | Manufacturing | 13 | | 44 | 38 | 9 | 8 | | Construction | 42 | | 73 | 20 | 3 | 1 | | Wholesale (inc. motor trades) | 500 | | 27 | 26 | 19 | 22 | | Retail (exc. motor trades) | 41 | | 52 | 15 | 19 | 13 | | Transport and storage | 31 | | 63 | 30 | 3 | 4 | | Accommodation, food, travel and tourism | 22 | | 73 | 20 | 2 | 2 | | Information, communications, arts, entertainment and recreation | 43 | | 58 | 28 | 5 | 8 | | Financial and insurance activities | 27 | | 55 | 23 | 2 | 6 | | Real estate, architecture, engineering and building services | 21 | | 78 | 15 | 3 | 0 | | High value business support | 60 | | 59 | 25 | 5 | 5 | | Administrative and support services | 23 | | 59 | 20 | 2 | 1 | | Health, social work, scientific R&D and veterinary services | 9 | | 63 | 29 | 0 | 1 |
Source: London Business Survey (2014)
Note: The average proportions purchased from the four geographical areas do not add to 100% because of non-response or misreporting by some respondents.
Although the average proportions sold to the four geographical areas do not add to 100% because of non-response or misreporting by some respondents, in the case of exports, for London as a whole and for each enterprise size band the average proportions add to over 95%. We consider that this is enough to estimate proportions exported, although the results (in Table 16) may slightly underestimate the true value of exports. The same is the case for imports. The same calculations can also be made for most industry sectors, but we have not calculated any results for financial and insurance services or for administrative and support services because the data collected for these sectors is not robust enough. Of the LBS industry sectors for which we can make such calculations, high value business support is the biggest net exporter and wholesale (including motor trades) is the biggest net importer.
Table 16 shows that London’s total exports in the year to mid-2014 were worth an estimated £147 billion, while imports were worth an estimated £118 billion. This indicates that London is a net exporter of goods and services, with exports minus imports in the year to mid-2014 worth around £28 billion. As noted above the information for some industry sectors in the LBS 2014 is incomplete, so these London totals are likely to be underestimates. The figures for large enterprises are also likely to be underestimates. Table 16: Estimates of exports and imports of London businesses
| | Total exported (£ billion) | Total imported (£ billion) | Net exports: exports minus imports (£ billion) | |--------------------------|---------------------------|---------------------------|-----------------------------------------------| | London total | 147 | 118 | 28 | | Size of enterprise | | | | | Micro | 38 | 26 | 12 | | Other SME | 71 | 65 | 6 | | Large | 37 | 27 | 10 | | Industrial category | | | | | Manufacturing | 4 | 6 | -2 | | Construction | 4 | 2 | 2 | | Wholesale (inc. motor trades) | 41 | 57 | -16 | | Retail (exc. motor trades) | 13 | 12 | 1 | | Transport and storage | 5 | 3 | 2 | | Accommodation, food, travel and tourism | 6 | 4 | 2 | | Information, communications, arts, entertainment and recreation | 12 | 10 | 2 | | Financial and insurance activities | .. | .. | .. | | Real estate, architecture, engineering and building services | 3 | 0 | 2 | | High value business support | 37 | 15 | 23 | | Administrative and support services | .. | .. | .. | | Health, social work, scientific R&D and veterinary services | 1 | 1 | 1 |
Source: GLA Economics calculations based on London Business Survey (2014)
Notes:
1. To calculate the figures shown in this table, the proportions sold to/purchased from rest of Europe + rest of the world are multiplied by total value of goods and services sold/purchased. This is done for each business unit, producing the total exported/imported by that unit. Results are then aggregated to totals.
2. Results for financial and insurance services and administrative and support services are suppressed with ‘..’ because the data on proportions sold/purchased is incomplete. The information that we have for these sectors is included in totals exported and imported for London, but, as it is incomplete, the London totals and the figures for large firms are likely to be underestimates.
Support for SMEs
Business support This section and the following one focus on SMEs, as they are most likely to need business support and access to finance.
The survey asked whether respondents had sought advice or information from external organisations or people in the 12 months to mid-2014. It found that SMEs relied most on accountants/auditors for external advice, with 42% of SME business units seeking their advice sometimes and 34% doing so often (Table BS1, see Appendix 1). By contrast, only 12% used the Gov.uk website (formerly Business Link) sometimes or often for advice and 25% sought advice sometimes or often from a trade association or professional body. The topics for which advice was most commonly sought by SMEs were regulations/taxes (with 51% of SME business units seeking such advice sometimes or often) and IT/computing (41% of business units) (Table BS2, see Appendix 1). Respondents from one-quarter of SME business units in London were aware of the existence of Incubator, Accelerator and Co-working Spaces (IACS). Awareness was highest in the ‘other SME’ category (businesses with 10-249 employees) (Table BS3, see Appendix 1). The survey also found that 14,090 SME business units (14% of those that were aware of the existence of IACS and 3% of all SME business units in London) had used IACS (Table BS4, see Appendix 1).
**Access to finance**
The survey found that 35% of SME business units attempted to access external finance in the 12 months to mid-2014 (Table AF2, see Appendix 1). Some 48% of SMEs needing finance obtained all of the money they needed, while 30% obtained partial financing and 22% were unsuccessful or their cases had not yet been resolved (Table AF5, see Appendix 1). Figure 17 shows numbers of SMEs seeking external finance over the 12 months to mid-2014 by the type of finance they were seeking; it should be noted that the ratio of microenterprises to other SMEs in the population is 7:1 (see above: About the survey).
**Figure 17: SMEs seeking external finance by size of enterprise and type of finance sought**
*Source: London Business Survey (2014)*
*Note: Businesses may have approached multiple sources of external finance, so business units may appear in more than one category.* The survey also found that access to finance differed considerably by the size and age of the business and by industry sector:
- Almost all units belonging to large firms obtained all of the finance they required, while only 45% of microenterprises were able to do so.
- 63% of units belonging to businesses established before 2009 were able to access all the finance they required, compared with 32% of start-ups (businesses established in 2012 or after).
- Over 70% of business units in the financial and insurance sector and the information, communications, arts, entertainment and recreation sector met their full financing requirements, compared with around 40% of units in the construction sector and in administrative and support services.
**Investing in the future and developing the workforce**
**Innovation**
The LBS 2014 collected information about businesses’ involvement in two main groups of innovation activity:
1. New business practices; new methods of organisation; and changes to marketing concepts or strategies
2. Product or process innovation
The proportion of London business units that were engaged in these activities in 2013-14 is shown in Table 18. If a business is engaged in any one of these activities, it is defined as ‘innovation active’; 58% of business units in London were innovation active in the year to mid-2014.
**Table 18: London businesses that are actively innovating by type of innovation activity (number of business units)**
| Innovation activity | Actively innovating | Not actively innovating | No response | Percentage actively innovating | |-------------------------------------------------------------------------------------|---------------------|-------------------------|-------------|-------------------------------| | New business practices; new methods of organisation; and changes to marketing concepts or strategies | | | | | | New business practices | 86,420 | 358,450 | 0 | 19 | | Work responsibilities and decision making | 102,330 | 342,540 | 0 | 23 | | Organisation of external relationships | 67,350 | 377,520 | 0 | 15 | | Marketing concepts or strategies | 100,720 | 344,150 | 0 | 23 | | Product or process innovation | | | | | | New or significantly improved goods | 36,090 | 401,480 | 7,310 | 8 | | New or significantly improved services | 124,080 | 313,480 | 7,310 | 28 | | New or significantly improved processes | 111,450 | 326,120 | 7,310 | 26 | | Innovation Active (undertaking at least 1 activity) | 242,030 | 173,700 | 29,140 | 58 | | Innovating in at least 1 activity under each heading | 136,130 | 268,130 | 40,610 | 34 |
*Source: London Business Survey (2014)*
*Note: Percentages are calculated excluding non-response* The survey also asked about investment in innovation activities. Table 19 shows the proportion of London business units investing in innovation; half of business units in London reported making investments in innovation in 2013-14.
Table 19: London businesses that are investing in innovation by type of investment (number of business units)
| Type of innovation | Investing | Not investing | No response | Percentage investing | |---------------------------------------------------------|-----------|--------------|-------------|----------------------| | Internal Research and Development | 91,470 | 353,400 | 0 | 21 | | Acquisition of Research and Development | 23,100 | 421,780 | 0 | 5 | | Acquisition of advanced machinery, equipment and software for innovation | 69,780 | 375,090 | 0 | 16 | | Acquisition of existing knowledge | 27,930 | 416,940 | 0 | 6 | | Training for innovative activities | 69,820 | 375,050 | 0 | 16 | | All forms of design | 67,380 | 377,490 | 0 | 15 | | Market introduction of innovations | 78,280 | 366,590 | 0 | 18 | | Actively investing in at least one type of innovation | 208,110 | 211,220 | 25,540 | 50 |
Source: London Business Survey (2014)
Figure 20 shows the number of business units in London that were innovation active and invested in innovation by enterprise size. Large firms were the most innovation active and also the most likely to be investing in innovation. However, innovation activity was also high for other SMEs, with three-quarters of units in other SMEs claiming to be innovation active.
Figure 20: London businesses that are Innovation Active and investing in innovation, by size of enterprise
Source: London Business Survey (2014) Training and developing the workforce
The LBS also looked at how businesses in London were investing in the future of the workforce. The survey found that 41% of business units had engaged in upskilling, training or development of their workforce over the 12 months to mid-2014. The number of business units where such training took place varied considerably by enterprise size and industry sector (Table TRN1a, see Appendix 1):
- In large firms, 85% of business units engaged in upskilling, training or development compared with 33% for microenterprises and 69% for other SMEs.
- The proportion of units where upskilling, training or development took place ranged from a low of 27% in the manufacturing sector to a high of 74% in the health, social work and scientific R&D sector.
The proportion of employees engaging in training is different from the proportion of business units engaging in training because over 80% of business units are microenterprises, but employment is concentrated in other SMEs and large firms (see above: The workforce). The survey was unable to ask about the training experiences of individual employees, but it found that over three-quarters of employees worked for businesses that had engaged in training in the 12 months to mid-2014. The proportions varied according to size of enterprise, ranging from 43% in microenterprises to 81% in other SMEs and 89% in large firms. Figure 21 shows the proportion of employees working for businesses that engaged in upskilling, training or development in the 12 months to mid-2014 by industry sector.
Figure 21: Employees working for businesses that did upskilling, training and development of employees in the last 12 months, by industry sector
Source: London Business Survey (2014)
Note: Lack of response to this question was interpreted as “not upskilling, training or developing”. Apprentices and STEM staff The LBS 2014 also provides estimates of the number of businesses with apprentices. In 12 months to mid-2014, 38,050 business units employed one or more apprentices (Table AP1, see Appendix 1). This represents 9% of all business units. The survey also found that 62,050 business units in London employed staff with Science, Technology, Engineering and Maths (STEM) skills or qualifications (Table STEM1, see Appendix 1). This represents 14% of all business units. One-third of these business units had engaged in upskilling, training or development of their STEM employees over the 12 months to mid-2014 (Table TRN1, see Appendix 1). Appendix 1 (list of tables)
All the tables for the LBS 2014 are available on the London Datastore. This appendix lists these tables and links to the London Datastore (http://data.london.gov.uk/london-business-survey-2014).
**Business profile**
- Table BPR1: Country/region of ownership of London businesses, 2014
- Table BPR2: UK versus foreign ownership of London businesses, 2014
- Table BPR3: What London businesses provide: goods, services and intellectual property, 2014
- Table BPR4: Customers of London businesses, 2014
- Table BPR5: Age of London businesses, 2014
**London as a place to do business**
- Table LBL1: How businesses rate London as a location for business in terms of various factors, 2014
- Table LBL2: Businesses’ views on how London compares with cities outside the UK in terms of availability of visas for non-European employees, 2014
- Table LBL3: Impact on the business of leaving the EU (but not the single market), 2014
- Table LF1: Importance placed on local facilities, 2014
- Table LF2: Satisfaction with local facilities, 2014
- Table FAB1: Factors affecting businesses over the last 12 months, 2014
**The workforce**
- Table WF1: Number of employees working in London businesses, 2014
- Table R1: Change in number of employees over the last 12 months, 2014
- Table R2: Projected change in number of employees over the next 12 months, 2014
- Table R3: Reasons for a rise in employment over the last 12 months, 2014
- Table R4: Reasons for a fall in employment over the last 12 months, 2014
- Table R5: Whether businesses have recruited any employees over last 12 months, 2014
- Table R6: Whether businesses have recruited any employees through Jobcentre Plus over last 12 months, 2014
- Table R7: Whether candidates from Jobcentre Plus are suitable for business needs, 2014
**Business performance and outlook**
- Table BPM1: Turnover of London businesses over the last 12 months, 2014
- Table BPM2: Change in turnover compared with 12 months ago, 2014
- Table BPM3: Whether planning to grow over the next 12 months, 2014
- Table BPM4: Expectation of the economic situation for your business over the next 12 months, 2014
- Table BPM5: Expectation of the economic situation in London over the next 12 months, 2014 International trade Table TRD1 Value of goods and services traded by London businesses, 2014 Table TRD2 London businesses with sales to specified locations, 2014 Table TRD3 London businesses with purchases from specified locations, 2014 Table TRD4 Average sales (mean %) of London businesses to specified locations, 2014 Table TRD5 Average purchases (mean %) of London businesses from specified locations, 2014
Support for SMEs Table BS1 How often businesses seek external advice from selected sources, 2014 Table BS2 How often businesses seek external advice on selected topics, 2014 Table BS3 Awareness of Incubator, Accelerator or Co-working spaces, 2014 Table BS4 Have used Incubator, Accelerator or Co-working spaces, 2014 Table AF1 Level of awareness of sources of finance, 2014 Table AF2 London businesses that have attempted to access finance over the last 12 months, 2014 Table AF3 Approached external finance over the last 12 months, by type of finance approached, 2014 Table AF4 Reason for seeking external finance over the last 12 months, 2014 Table AF5 Obtained the external finance required, 2014 Table AF6 Anticipate requiring external finance over next 12 months, 2014 Table AF7 Planned use of external finance over the next 12 months, 2014
Investing in the future and developing the workforce Table IOV1 London businesses that are actively innovating by type of innovation activity, 2014 Table IOV2 London businesses that are investing in innovation by type of investment, 2014 Table IOV3 London businesses that are Innovation Active, 2014 Table IOV4 London businesses that are investing in innovation, 2014 Table TRN1a Businesses that did upskilling, training and development of employees over the last 12 months, 2014 Table TRN1b Employees working for businesses that did upskilling, training and development over the last 12 months, 2014 Table TRN2 Sources of training over the last 12 months, 2014 Table TRN3 External providers of long courses, 2014 Table AP1 London businesses employing apprentices in the last 12 months, 2014 Table AP2 Awareness of grants available for apprentices, 2014 Table AP3 Use of grants available for apprentices over the last 12 months, 2014 Table STEM1 London businesses employing STEM employees, 2014 Appendix 2 (useful contacts)
To find out more about the work that the Mayor is doing to support businesses in London, please visit: http://www.london.gov.uk/priorities/business-economy/for-business
If you are seeking advice or support for your business, please contact the London Business Support Helpline on 0300 456 3565, available Monday to Friday 9-6pm.
To find out more about how Apprenticeships can benefit your business, please contact the National Apprenticeship Service on 08000 150 600.
For further information and insight on London’s economy:
- GLA Economics, http://www.london.gov.uk/priorities/business-economy/publications/gla-economics
- GLA Intelligence Unit, http://www.london.gov.uk/mayor-assembly/mayor/publications/gla-intelligence
- London Datastore: http://data.london.gov.uk/
- Jobs and Growth Plan for London: http://www.london.gov.uk/sites/default/files/Jobs%20%26%20Growth%20Plan%20for%20London.pdf Appendix 3 (glossary of terms)
**Apprenticeship** – Apprenticeships are defined as paid jobs that incorporate on and off the job training leading to nationally recognised qualifications. They are open to anyone aged 16 or over and not in full-time education.
**Business economy** – The business economy includes production, distribution, construction and services. It does not cover public sector activities or education.
**Business unit** – A business unit is defined as a site/workplace, which may also be a head office if the head office is in London. It will be the whole business in the case of businesses which only have one site and part of the business in the case of multi-site firms.
**Employee** – An employee is anyone aged 16 years or over that is paid from an organisation’s payroll in return for carrying out a full-time or part-time job or being on a training scheme.
**Enterprise** – An enterprise is defined as the smallest combination of legal units which has a certain degree of autonomy in decision-making (for example, a chain of supermarkets).
**European Economic Area (EEA)** – The EEA includes the 28 countries of the European Union (EU) plus Iceland, Liechtenstein and Norway. The EU operates an internal (or single) market which allows free movement of goods, capital, services and people between EEA member countries.
**Exporter** – an exporter is defined as a business unit which sells goods and/or services to customers based outside the UK i.e. those that reported sales to the rest of Europe and/or rest of the world.
**Foreign ownership** – Business ownership is determined by the location of the immediate parent company of the enterprise. If the immediate parent company is located outside the UK, then a business is defined as foreign-owned.
**Importer** – an importer is defined as a business unit which purchases goods and/or services from suppliers based outside the UK i.e. those that reported purchases from the rest of Europe and/or rest of the world.
**Incubator, Accelerator and Co-working spaces (IACs)** – These are flexible spaces designed for start-ups and small businesses featuring shared office/work space, shared facilities and affordable, all-inclusive monthly charges; they do not include business support services. Innovation active – A business unit is defined as innovation active, if in the last 12 months, it engaged in any of the following:
- New and significantly improved forms of organisation, business structures or practices aimed at raising internal efficiency or the effectiveness of approaching markets and customers.
- The introduction of new or significantly improved product (good or service) or process e.g. improvement in quality or distinct user benefits. The innovation, although new to the business, does not need to be new to the market.
Large enterprises – Large enterprises are defined as those with 250 or more employees at UK level. The terms enterprise and firm are used interchangeably in this report.
Microenterprises – Microenterprises are defined as those with 0-9 employees at UK level.
Other SMEs – Other SMEs are defined as those with 10-249 employees at UK level.
Purchases – Purchases are defined as the total value of the goods and services purchased by a business unit (excluding VAT).
Respondent – The term respondent means the person who responded on behalf of the business unit, even if this person works at a head office which is not in London.
Sales – Sales are defined as the total value of the goods and services sold by a business unit (excluding VAT).
Science and technology categories – The categories used are a specialised grouping of UK SIC07 codes for GLA analysis purposes. They broadly identify industries which either produce scientific and/or technological outputs, or heavily employ scientific and/or technological inputs. For further information, please see the “Classification” sheet in: www.ons.gov.uk/ons/about-ons/business-transparency/freedom-of-information/what-can-i-request/published-ad-hoc-data/business-and-energy/february-2014/number-of-science-and-technology-employees-in-lads.xls
Site – A site (or local unit) is a whole enterprise or part thereof (e.g. a workshop, factory, warehouse, office or shop) situated in a single geographic location.
SMEs – Small and medium-sized enterprises (SMEs) are defined as those with 0-249 employees at UK level. They comprise microenterprises and other SMEs.
Start-up – A start-up is defined as a firm established between 2012 and the time of the survey in mid-2014.
STEM staff – Staff with Science, Technology, Engineering and Maths (STEM) skills or qualifications.
Turnover – turnover is usually defined as the total amount of earnings received from regular business transactions including sales (excluding VAT), dividends, interest, or royalties earned; however, it should be noted that business units may have used their own definitions of turnover, and in many cases turnover was reported as being equal to sales. Endnotes
1 According to ONS’s Regional Accounts, the excluded SIC07 Sections A: agriculture, forestry and fishing; B: mining and quarrying; D: electricity, gas, steam and air-conditioning supply; E: water supply; sewerage and waste management; and T: activities of households together account for around 2% of London’s GVA. According to ONS’s Workforce Jobs series, these sections provide employment for around 1% of London’s workforce.
2 The IDBR is a statistical register based on administrative sources and surveys which contains information on businesses in all parts of the economy. An organisation will be on the IDBR if it is registered for Value Added Tax (VAT), and/or pays employees through a Pay As You Earn (PAYE) scheme and/or is an incorporated business registered at Companies House. Some very small businesses, self-employed people and non-profit-making organisations are not on the IDBR as they are not registered in any of these ways.
3 The term ‘London’s private sector business economy’ refers to private sector businesses within the industry sectors that were chosen for the LBS 2014, see Introduction.
4 The total number of employees working in London in September 2013 according to BRES was 4.6 million. This includes public sector employees and SIC07 industry sectors that are not included in the LBS 2014. The BRES estimate for employees working in London in September 2013 in the LBS industry sectors was 3.6 million. However, the LBS 2014 estimate for the financial and insurance activities sector was considerably lower than the BRES 2013 estimate, which may indicate that the LBS 2014 is underestimating this sector. Estimates for some other sectors – in particular accommodation, food, travel and tourism – are higher in LBS 2014 than in BRES 2013, with the differences probably reflecting a combination of seasonal employment patterns and survey error.
5 Note that the figures in this section should be treated with caution because some of the standard errors for the estimates are quite high. See the tables in Appendix 1.
6 Note that the LBS did not explicitly include in its definition of ‘innovation active’ a third element recently introduced to official business surveys: ‘Engagement in innovation projects not yet complete or abandoned’. Therefore the proportions reported by the LBS are on a slightly different basis from those for the UK as a whole (e.g. in the UK Innovation Survey).
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1f72f2a4d672d7da532857f6666a564d350360bc | London Travel Report 2005 Introduction
The London Travel Report is an annual compendium of statistics relating to all types of travel in London. The information in this report is a compilation of data that are updated every year to give a picture of variations in travel in London over time, and data that are updated less frequently, but which are useful context for the yearly data.
The data are obtained from a wide range of sources. Many are drawn from Transport for London’s own continuous programme of research and surveys. Others are provided by the Department for Transport, the Office for National Statistics, the Office of Rail Regulation, the Port of London Authority and the Civil Aviation Authority. The sources used to compile each table and chart are detailed beneath the table. We have included a glossary at the back of the document, which contains an explanation of any acronyms and symbols used, as well as a short description of the surveys.
This edition of the report includes a new ‘Technical notes’ section which provides additional information to assist in the interpretation of specific results. The section (on page 51) is organised by table/chart number and is referenced in the report by ‘See technical note’ in the commentary beneath the relevant table/chart.
We hope you find that this report presents an informative summary of travel in London. However, to keep the report to a manageable size, we have had to be selective in what we have included. In many cases more detailed versions of the tables presented in this report are available online at: www.tfl.gov.uk/londontravelreport
For queries relating to the specific data in an individual table or chart, please phone the enquiries number provided next to that table or chart.
If you would like a printed copy a limited number are available and can be obtained by calling GTPP Business Support – 020 7126 4289. (A charge may be made to commercial organisations to cover printing costs).
For any general queries about this publication please call Henry Burroughs – 020 7126 4608.
Transport for London would welcome your comments on the report and any suggestions on how it might be improved in future editions.
Please address these to: Henry Burroughs Group Transport Planning and Policy Finance and Planning Transport for London 42-50 Victoria Street London SW1H 0TL (email: [email protected]) Contents
Key findings 1
1. Travel patterns in London 2 1.1. Daily travel 2 1.2. Travel by area of London 4 1.3. Within-day variations 7 1.4. Morning peak travel into central London 7 1.5. London residents’ travel 9 1.6. Commuting 10 1.7. Household expenditure on travel and transport 13
2. Public transport 14 2.1. Overview 14 2.2. Fares and prices 15 2.3. Bus 17 2.4. Underground 19 2.5. Rail 22 2.6. DLR 23 2.7. Croydon Tramlink 24 2.8. Taxis 25 2.9. Coach travel – Victoria Coach Station 26 2.10. River services 26 2.11. Dial-a-Ride 27 2.12. Taxicard 27
3. Private transport 28 3.1. Traffic 28 3.2. Speeds 30 3.3. Car ownership 32 3.4. Vehicle registrations 33 3.5. Cycling 34 3.6. Walking 35 3.7. Congestion charging 36
4. Freight 4.1. Road freight 4.2. Water freight 4.3. Air freight
5. Casualties 5.1. Road casualties 5.2. Underground casualties
6. Population 6.1. Resident population 6.2. Working population 6.3. Overseas visitors
7. Environment 7.1. Emissions
8. Accessibility
Glossary
Technical notes
Key facts
London’s passenger rail network map – central London Key findings
• On an average day in 2004, there were just over 27 million journeys in London, of which 42% were made by car, 18% by bus, 10% by Underground, 5% by rail, 2% by cycle and 21% by walking.
• Public transport accounted for 36% of journeys in 2004. The share of journeys by public transport has steadily increased from 33% in 2000, reflecting the 15% growth in the number of public transport journeys over the same period.
• The number of journeys by private transport grew at a much slower rate, just over 1% since 2000, less than the almost 3% growth in population.
• Bus continued to be the fastest growing mode of travel. The year-on-year growth in bus journeys recorded in 2004/05 was 5%, lower than the 11% growth in 2003/04, but higher than levels seen throughout the 1990s.
• Nearly half of all London residents’ trips were within outer London and two thirds either started or ended in this area.
• Oyster, TfL’s smartcard ticketing system, was launched in 2003. In 2004, 27% weekday Underground journeys were made using an Oyster card, including a fifth of journeys paid for as single fares and almost half of all period tickets. On buses, 18% of weekday journeys were paid for using an Oyster card.
• In Autumn 2004, on an average weekday 1.04 million people entered central London during the morning peak (7am to 10 am). This was 1% higher than the previous year, but lower than recorded between 1998 and 2002. The proportion of people entering central London by public transport remained unchanged at 88% with some increase in bus and Underground and a slight decrease in rail.
• Road traffic in London remained almost constant overall since 1999, with a slight reduction in total traffic for major roads (motorways and principal roads) and an increase on minor roads.
• Car traffic entering the central London Congestion Charging Zone showed no significant change in 2004, after dropping by around 33% in 2003 after the introduction of the congestion charge in February of that year.
• Road traffic speeds in London have been decreasing since the late 1990s, except in the central area where they increased following the introduction of congestion charging.
• The number of casualties on London roads decreased by 10% in 2004, compared with a decrease of 3% in Great Britain as a whole. The number killed or seriously injured was 4.2 thousand, 20% less than in 2003. Slightly injured casualties amounted to 30.4 thousand, a decrease of 9 per cent.
1. Travel patterns in London
1.1. Daily travel
Table 1.1.1 Daily average number of journeys
| Year | Rail | Underground | DLR | Bus | Taxi | Car | Motorcycle | Bicycle | Walk | All modes | |------|------|-------------|-----|-----|------|-----|------------|---------|------|-----------| | 1993 | 1.4 | 2.0 | – | 3.1 | 0.2 | 10.5| 0.2 | 0.3 | 5.2 | 22.8 | | 1994 | 1.4 | 2.1 | – | 3.1 | 0.2 | 10.6| 0.2 | 0.3 | 5.2 | 23.2 | | 1995 | 1.5 | 2.1 | – | 3.3 | 0.2 | 10.6| 0.2 | 0.3 | 5.2 | 23.3 | | 1996 | 1.5 | 2.1 | – | 3.4 | 0.2 | 10.7| 0.2 | 0.3 | 5.3 | 23.7 | | 1997 | 1.6 | 2.2 | 0.1 | 3.5 | 0.2 | 10.8| 0.2 | 0.3 | 5.3 | 24.1 | | 1998 | 1.7 | 2.3 | 0.1 | 3.5 | 0.2 | 10.8| 0.2 | 0.3 | 5.3 | 24.5 | | 1999 | 1.8 | 2.5 | 0.1 | 3.5 | 0.2 | 11.1| 0.2 | 0.3 | 5.4 | 25.0 | | 2000 | 1.8 | 2.6 | 0.1 | 3.7 | 0.2 | 11.0| 0.2 | 0.3 | 5.5 | 25.4 | | 2001 | 1.8 | 2.6 | 0.1 | 3.9 | 0.2 | 11.0| 0.2 | 0.3 | 5.5 | 25.8 | | 2002 | 1.9 | 2.6 | 0.1 | 4.1 | 0.2 | 11.1| 0.2 | 0.3 | 5.6 | 26.2 | | 2003 | 1.9 | 2.6 | 0.1 | 4.5 | 0.2 | 11.0| 0.2 | 0.3 | 5.6 | 26.7 | | 2004 | 1.9 | 2.7 | 0.1 | 4.8 | 0.2 | 11.0| 0.2 | 0.4 | 5.6 | 27.1 |
Source: TfL Service Performance Data, ORR, LATS 2001 Household Survey, Enquiries: 020 7126 4608 DfT road traffic statistics
1. A journey is a part of a trip made by a single mode of transport.
2. Bus journeys are counted as starting a new journey each time a new bus is boarded.
3. Underground journeys are counted by station entries and interchanges within stations are ignored.
4. Walks are counted only when they form complete trips (ie walking all the way), not when they are parts of trips using other modes of transport.
5. See technical note.
There were 27.1 million journeys per day made in London in 2004. The number of journeys has gradually increased over the previous 10 years from just over 23 million journeys a day in 1994.
These estimates have been derived from the annual estimates of travel by each mode of transport that are presented in chapters 2 and 3 of this report. Since they show the level of travel separately for each mode of transport, they may be used to derive percentage mode shares as shown in chart 1.1.1 below.
Chart 1.1.1 Modal shares of daily journeys in London (2004)
Journeys and trips represent different ways of measuring travel. A trip is a complete one-way movement from origin to destination by one person for a single purpose. A journey (or ‘trip-stage’) is a part of a trip using a single mode of transport. A trip may be made up of several journeys (see also footnotes to Table 1.1.1). The number of trips in London was over 24 million a day in 2004, increasing from under 21 million a day in 1994.
1. Travel patterns in London
Table 1.1.2 Daily average number of trips
| Year | Rail | Underground/ DLR | Bus | Taxi | Car | Motorcycle | Bicycle | Walk | All modes | |------|------|------------------|-----|------|-----|------------|---------|------|-----------| | 1993 | 1.3 | 1.4 | 2.1 | 0.2 | 10.2| 0.2 | 0.3 | 5.2 | 20.7 | | 1994 | 1.3 | 1.5 | 2.1 | 0.2 | 10.3| 0.2 | 0.3 | 5.2 | 21.0 | | 1995 | 1.3 | 1.6 | 2.2 | 0.2 | 10.3| 0.2 | 0.3 | 5.2 | 21.2 | | 1996 | 1.4 | 1.5 | 2.3 | 0.2 | 10.4| 0.2 | 0.3 | 5.2 | 21.4 | | 1997 | 1.5 | 1.6 | 2.4 | 0.2 | 10.4| 0.2 | 0.3 | 5.3 | 21.7 | | 1998 | 1.5 | 1.7 | 2.4 | 0.2 | 10.5| 0.2 | 0.3 | 5.3 | 22.0 | | 1999 | 1.6 | 1.8 | 2.4 | 0.2 | 10.7| 0.2 | 0.3 | 5.4 | 22.4 | | 2000 | 1.7 | 2.0 | 2.5 | 0.2 | 10.6| 0.2 | 0.3 | 5.4 | 22.7 | | 2001 | 1.7 | 2.0 | 2.6 | 0.2 | 10.6| 0.2 | 0.3 | 5.5 | 23.0 | | 2002 | 1.7 | 1.9 | 2.9 | 0.2 | 10.7| 0.2 | 0.3 | 5.6 | 23.3 | | 2003 | 1.8 | 1.9 | 3.2 | 0.2 | 10.7| 0.2 | 0.3 | 5.6 | 23.7 | | 2004 | 1.7 | 2.0 | 3.4 | 0.2 | 10.6| 0.2 | 0.4 | 5.6 | 24.1 |
Source: TfL Service Performance Data, ORR, LATS 2001 Household Survey, Enquiries: 020 7126 4608 DfT road traffic statistics
1. Trips are complete one-way movements from one place to another.
2. Trips may include use of several modes of transport and hence be made up of more than one journey.
3. Trips are classified to the main mode, i.e. the mode that typically is used for the longest distance within the trip.
4. ‘Round trips’ are counted as two trips, an outward and an inward leg.
For public transport, the percentage share in terms of trips (29.5%) is lower than the share in terms of journeys (34.7%). This is because trips using public transport often include more than one public transport journey, whereas trips by private transport are more often a single journey from door to door. The mode with the greatest difference between the number of trips and journeys is bus, reflecting the important role buses play in providing access to other public transport modes, mainly rail and Underground.
Chart 1.1.2 Percentages of daily trips in London by main mode (2004)
Source: Table 1.1.2
1. Travel patterns in London
1.2. Travel by area of London
Chart 1.2.1 Number and main mode share of residents’ trips between central, inner and outer London areas (2001)
Nearly half of all London residents’ trips were within outer London and two thirds either started or ended in this area. Over a quarter of trips were interregional, travelling from one region of London to another. Public transport has by far the largest share of trips to and from central London. 66% of trips between central and inner London and 79% between central and outer London were by public transport. Private transport was used for over half of all trips between inner and outer London and within outer London. Trips categorised as within an area are naturally shorter than interregional trips leading to a larger share of walk trips, particularly in the relatively small area of central London.
Chart 1.2.2 Map of fare zones
1. Travel patterns in London
Table 1.2.1 Spatial distribution of bus journeys by fare zone (2004/05)
| Fare zone | Zone 1 | Zone 2 | Zone 3 | Zone 4/5/6 | |-----------|--------|--------|--------|------------| | Zone 1 | 12 | • | • | • | | Zone 2 | 11 | 19 | • | • | | Zone 3 | 2 | 5 | 15 | • | | Zone 4/5/6| – | 1 | 7 | 29 |
Source: GLBPS
As in 2003/04, three quarters of 2004/05 bus journeys were made within a single fare zone, the largest proportion of which was within zones 4/5/6. This reflects the coverage of bus services right across London, and the significance of bus for orbital trips as well as those into and within central London.
1. Travel patterns in London
Table 1.2.2 Spatial distribution of Underground journeys by fare zone (2002/03)
| Fare zone | Zone 1 | Zone 2 | Zone 3 | Zone 4/5/6 | |-----------|--------|--------|--------|------------| | Zone 1 | 33 | • | • | • | | Zone 2 | 24 | 5 | • | • | | Zone 3 | 15 | 5 | 1 | • | | Zone 4/5/6| 10 | 3 | 2 | 1 |
Source: UUS
In contrast to bus journeys, 82% of Underground journeys start or end in fare zone 1, with a third of journeys made completely within zone 1.
See technical note.
Chart 1.2.4 Spatial distribution of Underground journeys by fare zone (2002/03)
Source: UUS
Enquiries: 020 7918 4599
1. Travel patterns in London
1.3. Within-day variations
Chart 1.3.1 Weekday number of residents’ motorised trip-stages by hour (2001)
Source: LATS 2001 Household Survey Enquiries: 020 7126 4608
The peak in the volume of trip-stages is more pronounced in the am peak period than in the pm period. There is a significant peak in volume shortly before the pm peak period, mainly attributable to the rise in the number of bus and car trip-stages.
1.4. Morning peak travel into central London
Table 1.4.1 People entering central London during the morning peak
| Year | All modes | Rail only | Rail with transfer to LUL/DLR | All rail | LUL and DLR only | Bus | Coach/ minibus | Car | Taxi | Powered two-wheeler | Cycle | |------|-----------|-----------|-------------------------------|---------|------------------|-----|----------------|-----|------|---------------------|-------| | 1991 | 1042 | 258 | 168 | 426 | 347 | 74 | 20 | 155 | \*\* | 12 | 9 | | 1992 | 992 | 245 | 156 | 401 | 337 | 61 | 24 | 150 | \*\* | 11 | 9 | | 1993 | 977 | 214 | 168 | 382 | 340 | 64 | 20 | 150 | \*\* | 11 | 9 | | 1994 | 989 | 221 | 171 | 392 | 346 | 63 | 23 | 145 | \*\* | 11 | 9 | | 1995 | 993 | 221 | 174 | 395 | 348 | 63 | 21 | 145 | \*\* | 11 | 10 | | 1996 | 992 | 223 | 176 | 399 | 333 | 68 | 20 | 143 | 9 | 11 | 10 | | 1997 | 1035 | 240 | 195 | 435 | 341 | 68 | 20 | 142 | 9 | 12 | 10 | | 1998 | 1063 | 252 | 196 | 448 | 360 | 68 | 17 | 140 | 8 | 13 | 10 | | 1999 | 1074 | 258 | 202 | 460 | 362 | 68 | 15 | 135 | 8 | 15 | 12 | | 2000 | 1108 | 269 | 196 | 465 | 383 | 73 | 15 | 137 | 8 | 17 | 12 | | 2001 | 1093 | 264 | 204 | 468 | 377 | 81 | 10 | 122 | 7 | 16 | 12 | | 2002 | 1068 | 245 | 206 | 451 | 380 | 88 | 10 | 105 | 7 | 15 | 12 | | 2003 | 1028 | 265 | 190 | 455 | 339 | 104 | 10 | 86 | 7 | 16 | 12 | | 2004 | 1039 | 251 | 201 | 452 | 339 | 116 | 9 | 86 | 7 | 16 | 14 |
Source: CAPC Enquiries: 020 7126 4610
1. Taxi data unrecorded prior to 1996.
2. Revised since the publication of LTR 2004.
See technical note.
1. Travel patterns in London
The total number of people entering central London in the morning peak which had been declining since 2000 increased slightly in 2004. However, the most significant trend has been a reduction in car trips with its share of trips into central London in the morning peak falling from 15% in 1995 down to 8% in 2004. Coach use has also declined, while use of bus, motorcycling and cycling have all increased over the last decade.
The relatively low increase in the number of people entering central London by Underground in 2004 is probably due to improvements in the bus network in zone 1 and the increase in Underground fares in zone 1.
Table 1.4.2 Occupants per vehicle entering central London during the morning peak
| Year | Bus | Car | |------|-----|-----| | 1991 | 32.0 | 1.32 | | 1992 | 26.9 | 1.32 | | 1993 | 27.7 | 1.32 | | 1994 | 27.7 | 1.31 | | 1995 | 27.8 | 1.32 | | 1996 | 29.0 | 1.31 | | 1997 | 28.8 | 1.34 | | 1998 | 30.3 | 1.34 | | 1999 | 30.4 | 1.36 | | 2000 | 34.4 | 1.39 | | 2001 | 37.5 | 1.35 | | 2002 | 37.2 | 1.36 | | 2003 | 39.0 | 1.35 | | 2004 | 43.7 | 1.37 |
Although the volume of cars coming into central London in the peak had been declining, car occupancy rates have increased from 1.32 persons per vehicle in 1991 to 1.37 in 2004.
The average occupancy of buses has also risen with the introduction of larger buses and after increasing by 12% between 2003 and 2004, is 58% higher than ten years previously.
1. Travel patterns in London
Chart 1.4.2 Isle of Dogs (including Canary Wharf) morning peak travel by mode of transport
Source: Isle of Dogs Cordon Survey Enquiries: 020 7126 4306
The number of people entering the Isle of Dogs rose by more than 20% between 2003 and 2004. The Jubilee line has the largest share (46%), which continued to grow during 2004.
1.5. London residents’ travel
Table 1.5.1 Residents’ trip-stages, key statistics (2001)
| Mode | Stages (m) | Average length (km) | Percentage Work | Percentage Education | Percentage during peak periods | |-----------------|------------|---------------------|-----------------|----------------------|-------------------------------| | Bus | 2.8 | 3.5 | 32 | 19 | 48 | | Croydon Tramlink| 0.1 | 3.8 | 40 | 9 | 55 | | Underground | 1.6 | 7.2 | 62 | 10 | 63 | | DLR | 0.1 | 4.0 | 67 | 9 | 58 | | National Rail | 0.9 | 13.5 | 69 | 8 | 69 | | Car/van | 8.1 | 6.8 | 30 | 7 | 46 | | Motorcycle | 0.1 | 8.9 | 68 | 4 | 57 | | Taxi | 0.3 | 7.2 | 30 | 3 | 30 | | Walk | 5.5 | 0.8 | 14 | 16 | 36 | | Bicycle | 0.3 | 3.2 | 48 | 8 | 53 | | All modes | 19.7 | 4.5 | 31 | 12 | 46 |
Source: LATS 2001 Household Survey Enquiries: 020 7126 4608
1. Includes vans, taxis, motorcycles and goods vehicles.
Almost a third of trip-stages made by London residents were to, from, or in the course of work. Just under half of residents’ trip-stages were made during peak periods.
1. Travel patterns in London
1.6. Commuting
Table 1.6.1 Main mode of travel to work (Autumn 2004)
| Main mode | Area of workplace | Area of residence | |----------------------------|-------------------|-------------------| | | Central London | Rest of inner London | Outer London | All London | Rest of Great Britain | Great Britain | Inner London | Outer London | All London | | Car and van | 11 | 35 | 65 | 40 | 76 | 71 | 22 | 52 | 41 | | Motorbike, moped, scooter | 2 | 2 | 1 | 1 | 1 | 1 | 2 | 1 | 1 | | Bicycle | 3 | 4 | 2 | 3 | 2 | 3 | 6 | 2 | 4 | | Bus and coach | 13 | 17 | 13 | 14 | 7 | 8 | 24 | 11 | 16 | | National Rail | 38 | 14 | 4 | 18 | 2 | 4 | 9 | 13 | 11 | | Underground, tram, light rail | 28 | 17 | 5 | 15 | – | 2 | 23 | 13 | 17 | | Walk | 4 | 10 | 9 | 8 | 11 | 11 | 11 | 7 | 9 | | Other modes | 1 | 1 | 1 | 1 | 1 | 1 | 2 | 1 | 1 | | All modes | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
Source: Labour Force Survey, ONS Enquiries: 020 7944 4955
Two thirds of those who work in central London travel there by national rail or Underground, while 11% use a car or van as their main mode of transport. For London as a whole, car or van use rises to 40% compared with 76% for the rest of Great Britain. Among those who live in London, travel patterns to work differ markedly between residents of inner London who are more likely to travel by public transport, and those in outer London the majority of whom drive to work.
Table 1.6.2 Travel times to work by main mode (Autumn 2004)
| Main mode | Area of workplace | Area of residence | |----------------------------|-------------------|-------------------| | | Central London | Rest of inner London | Outer London | All London | Rest of Great Britain | Great Britain | Inner London | Outer London | All London | | Car and van | 53 | 38 | 31 | 35 | 23 | 24 | 23 | 52 | 41 | | Motorbike, moped, scooter | 32 | 30 | 28 | 30 | 19 | 21 | 19 | 11 | 16 | | Bicycle | 29 | 26 | 22 | 26 | 16 | 17 | 16 | 13 | 17 | | Bus and coach | 46 | 40 | 37 | 40 | 33 | 35 | 33 | 13 | 35 | | National Rail | 69 | 72 | 65 | 70 | 58 | 65 | 58 | 13 | 65 | | Underground, tram, light rail | 50 | 50 | 51 | 50 | 42 | 49 | 42 | 13 | 49 | | Walk | 18 | 14 | 14 | 14 | 12 | 12 | 12 | 13 | 12 | | All modes | 55 | 42 | 32 | 42 | 23 | 26 | 23 | 52 | 41 |
Source: Labour Force Survey, ONS Enquiries: 020 7944 4955
1. All includes modes not listed (e.g. taxi).
Commuters working in central London take on average 55 minutes to travel to work, compared with 32 minutes for commuters working in outer London and 23 minutes for the rest of Great Britain. Commuters by car to central London spend more than twice the amount of time travelling to work as those in the rest of Great Britain and two thirds more than workers in outer London.
1. Travel patterns in London
Chart 1.6.1 Usual means of travel to work by ward of residence (2001)
See technical note.
Rail
Source: ONS, 2001 Census of Population
Main mode – Rail (Percentage of employed people)
- 13 to 47
- 6 to 13
- Less than 6
Crown copyright (GLA – 100032379) (2003)
Underground, DLR
Source: ONS, 2001 Census of Population
Main mode – Underground, DLR & Tram (Percentage of employed people)
- 27 to 59
- 11 to 27
- Less than 11
Crown copyright (GLA – 100032379) (2003)
1. Travel patterns in London
Chart 1.6.1 Usual means of travel to work by ward of residence (2001) (continued)
See technical note.
Bus
Source: ONS, 2001 Census of Population
Car, taxi, motorcycle
Source: ONS, 2001 Census of Population
1. Travel patterns in London
1.7. Household expenditure on travel and transport
Table 1.7.1 Expenditure per London household per week on travel and transport by detailed groups
| Year | Cars, vans and motorcycles purchase and repairs | Spares and accessories | Motor vehicle insurance and taxation | Petrol, diesel and other motor oils | Other motoring costs | Rail and tube fares | Bus and coach fares | Other travel costs | Motoring expenditure per car/van | Total transport expenditure per household | Total expenditure per household | |--------|-----------------------------------------------|------------------------|-------------------------------------|-----------------------------------|---------------------|---------------------|---------------------|-------------------|-------------------------|---------------------------------|-------------------------------| | London | | | | | | | | | | | | | 2000/01| 27.10 | 1.40 | 7.70 | 11.30 | 2.30 | 4.60 | 1.60 | 11.80 | 56.80 | 67.90 | 448.50 | | 2001/02| 29.40 | 1.10 | 10.30 | 11.90 | 1.80 | 4.00 | 2.00 | 12.70 | 56.52 | 73.40 | 510.40 | | 2002/03| 31.00 | 2.50 | 10.70 | 10.80 | 2.30 | 4.30 | 2.50 | 11.70 | 61.10 | 76.30 | 494.70 | | 2003/04| 27.40 | 1.10 | 11.00 | 13.70 | 2.60 | 3.60 | 1.90 | 8.80 | 56.50 | 70.60 | 485.40 | | Great Britain | | | | | | | | | | | | | 2000/01| 28.60 | 1.90 | 7.70 | 14.80 | 2.00 | 2.00 | 1.40 | 5.90 | 51.70 | 64.20 | 377.70 | | 2001/02| 31.50 | 1.90 | 9.40 | 15.10 | 1.90 | 2.00 | 1.50 | 5.30 | 53.20 | 68.90 | 409.60 | | 2002/03| 32.80 | 2.00 | 11.30 | 15.20 | 2.00 | 1.90 | 1.50 | 5.40 | 56.20 | 72.40 | 418.90 | | 2003/04| 33.00 | 1.90 | 10.30 | 14.90 | 1.90 | 1.90 | 1.50 | 5.50 | 54.40 | 71.10 | 418.20 |
Source: The Expenditure and Food Survey, ONS © Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queen’s Printer for Scotland).
The proportion of income which Londoners spend on transport has remained largely unchanged over the last four years, and is slightly lower than for the rest of the country. 2. Public transport
2.1. Overview
Chart 2.1.1 Bus and Underground passenger kilometres
Passenger kilometres by Underground increased in 2004/05, reversing the trend of the previous three years. Bus passenger kilometres continued the increase shown over the last six years, but at a slower rate.
Chart 2.1.2 Passenger journeys by bus and Underground
Bus passenger journeys continued to increase in 2004/05. Underground passenger journeys also showed a slight increase over the previous year but remained at a similar level to 2000/01. 2. Public transport
Chart 2.1.3 Percentage of scheduled kilometres operated by bus and Underground
Source: TfL Service Performance Data Enquiries: 020 7126 4616
The percentage of bus scheduled kilometres operated has remained nearly static, around 98%. Those operated by Underground have increased over the last two years by some 2% per year.
2.2. Fares and prices
Chart 2.2.1 Bus fare trends (adjusted for inflation)
Source: TfL Ticket Sales Data Enquiries: 020 7126 4616
2004/05 showed the first bus fare increase in real terms since 1999. This is a result of the increase in fares in January 2004 for the outer London adult cash fare (from 70p to £1), adult one day and season bus pass prices. See technical note. 2. Public transport
Chart 2.2.2 London Underground fare trends (adjusted for inflation)
Underground fares showed very little change in 2004/05 compared with the previous year.
Chart 2.2.3 Average fare per kilometre on bus and Underground (2004/05 prices)
While the price per passenger kilometre for Underground travel has remained virtually static in real terms over the five years since 1999, bus fares per passenger kilometre showed some increase in 2004/05 having fallen each year since 1999. 2. Public transport
2.3. Bus
Table 2.3.1 Bus key trends
| Year | Passenger kilometres (m) | Passenger journeys (m) | Average fare per passenger kilometres at 2004/05 prices (pence) | Traffic revenue at 2004/05 prices (£m) | Bus kilometres operated (m) | Average number of passengers per bus | Average journey length (km) | |---------|--------------------------|------------------------|---------------------------------------------------------------|----------------------------------------|-----------------------------|--------------------------------------|----------------------------| | 1990/91 | 4,141 | 1,180 | 13.8 | 570 | 280 | 14.8 | 3.5 | | 1991/92 | 3,996 | 1,149 | 14.3 | 569 | 296 | 13.5 | 3.5 | | 1992/93 | 3,922 | 1,127 | 14.5 | 569 | 304 | 12.9 | 3.5 | | 1993/94 | 3,819 | 1,112 | 15.6 | 595 | 304 | 12.6 | 3.4 | | 1994/95 | 3,912 | 1,159 | 15.9 | 624 | 318 | 12.3 | 3.4 | | 1995/96 | 4,018 | 1,198 | 16.0 | 642 | 326 | 12.3 | 3.4 | | 1996/97 | 4,159 | 1,234 | 16.1 | 669 | 328 | 12.7 | 3.4 | | 1997/98 | 4,350 | 1,277 | 15.7 | 685 | 337 | 12.9 | 3.4 | | 1998/99 | 4,315 | 1,267 | 16.0 | 691 | 339 | 12.7 | 3.4 | | 1999/00 | 4,429 | 1,296 | 16.1 | 712 | 348 | 12.7 | 3.4 | | 2000/01 | 4,709 | 1,354 | 15.3 | 720 | 357 | 13.2 | 3.5 | | 2001/02 | 5,128 | 1,430 | 14.3 | 731 | 373 | 13.8 | 3.6 | | 2002/03 | 5,734 | 1,536 | 12.9 | 741 | 398 | 14.4 | 3.7 | | 2003/04 | 6,431 | 1,702 | 12.3 | 792 | 437 | 14.7 | 3.8 | | 2004/05 | 6,755 | 1,793 | 12.9 | 869 | 450 | 15.0 | 3.8 |
Source: TfL Service Performance Data, ONS
2004/05 showed again an increase in the number of passenger journeys by bus, although less than in previous years. The average fare per passenger also increased, generating a 10% increase in traffic revenue.
Chart 2.3.1 Weekday bus journeys by time period
Source: GLBPS, London Buses
1. After 1998 using financial year GLBPS data.
Overall bus passenger kilometres and the number of journeys increased in 2004/05, though not at the rapid rate shown in the previous two years. Evening buses continued to see a significant increase in passengers in 2004/05, growing at the fastest rate of all time periods. 2. Public transport
Chart 2.3.2 Weekend and weekday bus journeys by ticket type (2004/05)
In 2004/05 there was virtually no difference in the types of tickets purchased for bus travel on weekdays and at weekends. Leisure journeys probably account for the slightly larger proportion of one day bus passes and Travelcards used at weekends.
Chart 2.3.3 Weekday and weekend bus journeys by hour (2004/05)
Bus travel is at its highest during the weekday pm and am peak periods. At weekends, bus travel is less influenced by standard working hours, with Saturday journeys peaking in the early afternoon, and Sunday journeys showing a much flatter distribution. 2. Public transport
Table 2.3.2 Bus service reliability
| Year | Percentage of scheduled kilometres operated (before traffic congestion) | High frequency services | Low frequency services | |--------|------------------------------------------------------------------------|-------------------------|------------------------| | | | Average wait time (minutes) | Percentage of timetabled services on time | | | | Actual | Excess¹ | | | 1990/91 | 97.3 | 6.8 | 2.2 | 62.9 | | 1991/92 | 98.3 | 6.4 | 1.8 | 66.4 | | 1992/93 | 98.7 | 6.3 | 1.7 | 68.7 | | 1993/94 | 97.7 | 6.6 | 1.9 | 66.7 | | 1994/95 | 99.0 | 6.5 | 1.8 | 69.7 | | 1995/96 | 99.0 | 6.5 | 1.7 | 71.4 | | 1996/97 | 99.1 | 6.4 | 1.8 | 70.3 | | 1997/98 | 98.7 | 6.4 | 1.8 | 70.0 | | 1998/99 | 98.5 | 6.6 | 2.0 | 69.0 | | 1999/00 | 97.5 | 6.7 | 2.1 | 67.8 | | 2000/01 | 97.4 | 6.8 | 2.2 | 67.7 | | 2001/02 | 98.4 | 6.6 | 2.0 | 69.4 | | 2002/03 | 98.7 | 6.4 | 1.8 | 70.5 | | 2003/04 | 98.9 | 5.8 | 1.4 | 74.6 | | 2004/05 | 99.3 | 5.6 | 1.1 | 77.1 |
Percentage change
| 1 year | -3% | -21% | | 10 years | -14% | -39% |
Source: Transport for London Enquiries: 020 7126 4616
1. Excess wait time is the difference between the actual wait time and half the service interval.
Bus service reliability for both high and low frequency services continued to improve in 2004/05. The percentage of scheduled kilometres operated (before traffic congestion) was the highest for over 15 years. Excess waiting time on high frequency services improved by more than 20% for the third year running. The percentage of low frequency services running on time increased for the fourth year running, an increase of 14% points between 1994/95 and 2004/05.
2.4. Underground
Table 2.4.1 London Underground key trends
| Year | Passenger kilometres (m) | Passenger journeys (m) | Real average fare per passenger kilometres at 2005 prices (pence) | Real traffic revenue (£m) | Train kilometres operated (m) | Average journey length (km) | |--------|--------------------------|------------------------|------------------------------------------------------------------|---------------------------|-------------------------------|-----------------------------| | 1990/91 | 6,164 | 775 | 12.6 | 776 | 52.0 | 8.0 | | 1991/92 | 5,895 | 751 | 13.2 | 780 | 53.0 | 7.8 | | 1992/93 | 5,758 | 728 | 13.8 | 796 | 53.0 | 7.9 | | 1993/94 | 5,814 | 735 | 14.6 | 847 | 53.0 | 7.9 | | 1994/95 | 6,051 | 764 | 15.4 | 929 | 55.0 | 7.9 | | 1995/96 | 6,337 | 784 | 15.1 | 960 | 57.0 | 8.1 | | 1996/97 | 6,153 | 772 | 15.9 | 977 | 59.0 | 8.0 | | 1997/98 | 6,479 | 832 | 16.5 | 1,066 | 62.0 | 7.8 | | 1998/99 | 6,716 | 866 | 16.7 | 1,123 | 61.2 | 7.8 | | 1999/00 | 7,171 | 927 | 16.7 | 1,198 | 63.1 | 7.7 | | 2000/01 | 7,470 | 970 | 16.6 | 1,242 | 63.8 | 7.7 | | 2001/02 | 7,451 | 953 | 16.7 | 1,247 | 65.4 | 7.8 | | 2002/03 | 7,367 | 942 | 16.7 | 1,228 | 65.4 | 7.8 | | 2003/04 | 7,340 | 948 | 16.2 | 1,191 | 67.7 | 7.7 | | 2004/05 | 7,606 | 976 | 16.3 | 1,241 | 69.5 | 7.8 |
Source: TfL Service Performance Data Enquiries: 020 7126 4616
Underground passenger journeys showed a slight increase in 2004/05, as did passenger kilometres. Both were at their highest levels since 1993/94. 2. Public transport
Chart 2.4.1 Growth in weekday Underground journeys by time of day period
Evening journeys continue to show the fastest rate of growth since 1991.
Chart 2.4.2 Weekday and weekend Underground journeys by ticket type (2004/05)
1. Figures in brackets are the proportion of all tickets held on Oystercard within each ticket type.
Half of all weekday journeys on the Underground in 2004/05 were made with period (i.e. weekly, monthly, yearly) Travelcards, but such card holders only made a third of the journeys undertaken at weekends, when by far the largest proportion of journeys were made with daily Travelcards. This probably reflects the increased proportion of leisure journeys made at weekends. 2. Public transport
Chart 2.4.3 Weekday and weekend Underground journeys by hour (2004/05)
Table 2.4.2 London Underground service reliability
| Year | Percentage of scheduled kilometres operated | Excess journey times (minutes) | |----------|---------------------------------------------|-------------------------------| | 1990/91 | 95.0 | \*\* | | 1991/92 | 97.2 | \*\* | | 1992/93 | 97.5 | \*\* | | 1993/94 | 96.5 | \*\* | | 1994/95 | 96.8 | \*\* | | 1995/96 | 96.2 | \*\* | | 1996/97 | 94.5 | \*\* | | 1997/98 | 95.5 | \*\* | | 1998/99 | 93.6 | 3.15 | | 1999/00 | 94.3 | 3.21 | | 2000/01 | 91.6 | 3.69 | | 2001/02 | 92.9 | 3.44 | | 2002/03 | 91.1 | 4.22 | | 2003/04 | 93.1 | 3.36 | | 2004/05 | 95.3 | 3.23 |
Source: Transport for London Enquiries: 020 7126 4616
1. Excess journey time is the difference between actual journey time and that predicted if services run to time and there are no delays due to congestion. Data not collected prior to 1998/99.
The reliability of Underground services improved for the second year running, but remained below the levels achieved in the first half of the 1990’s. There was also an improvement in excess journey times compared with the previous four years. 2. Public transport
2.5. Rail
Table 2.5.1 National rail passenger trips in London
| Year | All trips (millions) | Within London (millions) | To/from London (millions) | Percentage within London | |---------|----------------------|--------------------------|---------------------------|-------------------------| | 1995/96 | 379 | 201 | 178 | 53.0 | | 1996/97 | 406 | 212 | 194 | 52.1 | | 1997/98 | 434 | 223 | 211 | 51.4 | | 1998/99 | 458 | 235 | 223 | 51.4 | | 1999/00 | 484 | 246 | 238 | 50.8 | | 2000/01 | 492 | 248 | 244 | 50.4 | | 2001/02 | 493 | 247 | 246 | 50.1 | | 2002/03 | 505 | 254 | 252 | 50.2 | | 2003/04 | 502 | 244 | 258 | 48.6 |
Source: Office of Rail Regulation
The total number of national rail passenger trips in London declined marginally in 2003/04 following eight years of growth. However, within this overall figure longer distance trips to and from London continued to grow, while trips within London experienced a 4% decline and so constituted less than half the total rail trips for the first time since 1995/96. See technical note.
Chart 2.5.1 Percentage change in national rail trips to/from London between 2002/03 and 2003/04 by region of origin/destination
Compared with 2002/03, rail trips between Yorkshire & Humberside and London showed the greatest rate of increase, at 8.2%. Trips to/from the North East grew by 6.5% and those to/from the East Midlands by 5.3%. 2. Public transport
2.6. DLR
Table 2.6.1 Docklands Light Railway key trends
| Year | Passenger kilometres (m) | Passenger journeys (m) | Average fare per passenger kilometres at 2004/05 prices (pence) | Traffic revenue at 2004/05 prices (£m) | Train kilometres (m) | |---------|--------------------------|------------------------|---------------------------------------------------------------|---------------------------------------|----------------------| | 1987/88 | 15.4 | 3.3 | 16.4 | 2.5 | 0.5 | | 1988/89 | 32.0 | 6.6 | 13.3 | 4.3 | 0.8 | | 1989/90 | 37.8 | 8.5 | 13.8 | 5.2 | 0.7 | | 1990/91 | 33.0 | 8.0 | 13.5 | 4.5 | 0.8 | | 1991/92 | 32.3 | 7.9 | 12.7 | 4.1 | 1.0 | | 1992/93 | 32.5 | 6.9 | 15.2 | 4.9 | 1.1 | | 1993/94 | 39.4 | 8.3 | 15.3 | 6.0 | 1.1 | | 1994/95 | 55.0 | 11.5 | 15.8 | 8.7 | 1.5 | | 1995/96 | 70.0 | 14.5 | 16.6 | 11.6 | 2.0 | | 1996/97 | 85.6 | 16.7 | 17.0 | 14.6 | 2.3 | | 1997/98 | 109.9 | 21.4 | 16.0 | 17.6 | 2.4 | | 1998/99 | 138.7 | 27.6 | 16.4 | 22.7 | 2.5 | | 1999/00 | 152.2 | 30.9 | 16.2 | 24.7 | 2.6 | | 2000/01 | 195.3 | 38.4 | 16.3 | 31.9 | 2.9 | | 2001/02 | 206.9 | 41.3 | 17.6 | 36.3 | 2.9 | | 2002/03 | 232.0 | 45.7 | 16.9 | 39.1 | 3.2 | | 2003/04 | 235.0 | 48.5 | 16.7 | 39.3 | 3.4 | | 2004/05 | 242.8 | 50.1 | 17.4 | 42.8 | 3.3 |
Source: DLR
Enquiries: 020 7363 9611
Table 2.6.2 Docklands Light Railway service reliability
| Year | Percentage of scheduled service operated | Percentage of trains on time | |---------|------------------------------------------|-----------------------------| | 1997/98 | 95.6 | 89.6 | | 1998/99 | 97.5 | 92.0 | | 1999/00 | 97.8 | 93.7 | | 2000/01 | 98.2 | 96.3 | | 2001/02 | 98.3 | 96.6 | | 2002/03 | 98.1 | 96.3 | | 2003/04 | 98.2 | 96.6 | | 2004/05 | 98.5 | 97.1 |
Source: DLR
Enquiries: 020 7363 9580
Use of the DLR continued to increase, and reliability levels were also at their highest since monitoring began. 2. Public transport
2.7. Croydon Tramlink
Table 2.7.1 Croydon Tramlink key trends
| Year | Passenger kilometres (m) | Passenger journeys (m) | Average fare per passenger kilometre at 2004/05 prices (pence) | Traffic revenue at 2004/05 prices (£m) | Tram kilometres operated (m) | Average journey length (km) | |---------|--------------------------|------------------------|---------------------------------------------------------------|---------------------------------------|-----------------------------|-----------------------------| | 2001/02 | 97 | 18.6 | 12.8 | 12.4 | 2.4 | 5.2 | | 2002/03 | 100 | 19.2 | 12.9 | 12.8 | 2.5 | 5.2 | | 2003/04 | 103 | 19.8 | 12.8 | 13.2 | 2.5 | 5.2 | | 2004/05 | 113 | 21.8 | 13.9 | 15.8 | 2.4 | 5.2 |
Source: Tramtrack Croydon Limited Enquiries: 020 8394 4685
Passenger journeys and passenger kilometres on the Croydon Tramlink showed their biggest increase to date – 10% over 2003/04.
Table 2.7.2 Croydon Tramlink service reliability
| Year | Scheduled kilometres (thousands) | Operated kilometres (thousands) | Percentage of scheduled service operated | |---------|----------------------------------|---------------------------------|------------------------------------------| | 2001/02 | 2.44 | 2.41 | 99.1 | | 2002/03 | 2.49 | 2.46 | 98.9 | | 2003/04 | 2.50 | 2.48 | 99.0 | | 2004/05 | 2.49 | 2.42 | 97.2 |
Source: Tramtrack Croydon Limited Enquiries: 020 8394 4685
1. Operated kilometres exclude replacement bus services operated during periods of track repair works.
The percentage of scheduled services operated on the Croydon Tramlink, at 97.2% was the lowest since the service opened, as a result of extensive engineering works undertaken, which affected all areas of the system. It is expected that services will be affected by similar circumstances in 2005/06. 2. Public transport
2.8. Taxis
Table 2.8.1 London taxi drivers and vehicles
| Year | All London | Suburban | Total | Taxis licensed | |------|------------|----------|-------|---------------| | 1983 | 16.2 | 1.9 | 18.1 | 13.1 | | 1984 | 16.4 | 1.9 | 18.3 | 13.6 | | 1985 | 16.6 | 1.8 | 18.4 | 13.8 | | 1986 | 17.0 | 1.8 | 18.8 | 14.2 | | 1987 | 17.7 | 1.7 | 19.4 | 14.8 | | 1988 | 18.1 | 1.7 | 19.8 | 15.2 | | 1989 | 18.5 | 1.7 | 20.1 | 15.6 | | 1990 | 18.9 | 1.7 | 20.6 | 16.3 | | 1991 | 19.3 | 2.0 | 21.2 | 16.6 | | 1992 | 18.8 | 1.8 | 20.5 | 17.1 | | 1993 | 18.8 | 1.8 | 20.5 | 17.3 | | 1994 | 19.6 | 1.8 | 21.3 | 18.3 | | 1995 | 20.2 | 1.8 | 21.9 | 18.3 | | 1996 | 20.3 | 1.8 | 22.1 | 18.7 | | 1997 | 20.3 | 2.0 | 22.3 | 18.9 | | 1998 | 20.4 | 2.1 | 22.5 | 19.4 | | 1999 | 20.9 | 2.5 | 23.3 | 19.2 | | 2000 | 21.0 | 2.4 | 23.4 | 19.4 | | 2001 | 21.3 | 2.5 | 23.9 | 20.9 | | 2002 | 21.7 | 2.7 | 24.4 | 20.5 | | 2003 | 21.8 | 2.9 | 24.7 | 20.9 | | 2004 | 21.7 | 3.1 | 24.9 | 20.9 | | 2005 | 21.6 | 3.1 | 24.7 | 21.0 |
Source: TfL Public Carriage Office, PCO Licensing Book Enquiries: 020 7126 7865
Table 2.8.2 Private hire operators and vehicles
| Year | Licensed minicab operators | Licensed private hire vehicles | |------|---------------------------|-------------------------------| | 2001 | 0.1 | • | | 2002 | 1.6 | • | | 2003 | 2.2 | • | | 2004 | 2.3 | • | | 2005 | 2.3 | 36.9 |
Source: TfL Public Carriage Office Enquiries: 020 7126 7865
1. At June 2005.
While the number of licensed taxis and drivers remained constant since 2002, the number of licensed drivers reduced somewhat. The number of licensed minicab operators was also stable compared with 2003/04. See technical note. 2. Public transport
2.9. Coach travel – Victoria Coach Station
Table 2.9.1 Coach travel to and from Victoria Coach Station
| Year | Domestic coach departures | International coach departures | |----------|---------------------------|-------------------------------| | 1994/95 | 159 | 12 | | 1995/96 | 158 | 11 | | 1996/97 | 174 | 12 | | 1997/98 | 174 | 12 | | 1998/99 | 179 | 12 | | 1999/00 | 171 | 13 | | 2000/01 | 177 | 14 | | 2001/02 | 174 | 13 | | 2002/03 | 176 | 13 | | 2003/04 | 186 | 10 | | 2004/05 | 175 | 11 |
Source: Victoria Coach Station departure figures Enquiries: 020 7824 0001
1. Up to 2003/04 domestic departures include some relatively high frequency specialist London Bus services no longer operating.
See technical note. Total passenger numbers (arrivals and departures) using Victoria Coach Station in 2004/05 are estimated as 9.7 million.
2.10. River services
Table 2.10.1 Tickets sold by pier
| Piers Boarded | 1999/00 | 2000/01 | 2001/02 | 2002/03 | 2003/04 | 2004/05 | |---------------|---------|---------|---------|---------|---------|---------| | Bankside | 4 | 3 | 5 | 45 | 80 | 109 | | Blackfriars | 7 | 25 | 28 | 67 | 13 | 24 | | Embankment | 316 | 357 | 395 | 345 | 310 | 255 | | Festival | 11 | 15 | 18 | 9 | 10 | 9 | | Greenwich | 215 | 177 | 185 | 162 | 197 | 184 | | Millbank | • | • | • | • | 59 | 83 | | Tower | 274 | 237 | 224 | 235 | 207 | 289 | | Waterloo¹ | 61 | 291 | 178 | 272 | 171 | | | Westminster | 725 | 468 | 706 | 634 | 636 | 745 | | Thames Clippers² | •• | •• | •• | •• | 183 | 367 | | All Piers | 1613 | 1574 | 1739 | 1767 | 1844 | 2066 |
Percentage change
| 1 year | -2% | 11% | 2% | 6% | 11% |
Source: TfL London River Services Enquiries: 020 7941 2405
1. Excludes charter ticket sales.
2. Waterloo Pier managed by LRS (and therefore data collected) until 31/07/03 only.
3. Thames Clipper services are the only service which runs under contract to LRS. Data collected for these services by boarding rather than the pier where boarded.
The number of people using the river services increased significantly in 2004/05, as a result, among other reasons, of buoyant tourist traffic and a significant increase in private charter business. See technical note.
Embankment Pier showed a 17.8% reduction in users in 2004/05, due to one operator moving their circular service from Embankment to Westminster. Bankside had a 36% increase in passengers. 2. Public transport
2.11. Dial-a-Ride
Table 2.11.1 Dial-a-Ride key trends
| Year | Number of journeys (thousands) | Number of buses | Registered passengers (thousands) | Average cost per journey at 2004/05 prices (£) | Total grant (2004/05 prices) (£m) | |--------|--------------------------------|----------------|-----------------------------------|-----------------------------------------------|----------------------------------| | 1990/91| 676 | 160 | 77 | 16.22 | 11.9 | | 1991/92| 745 | 175 | 82 | 16.19 | 13.7 | | 1992/93| 750 | 177 | 39 | 17.93 | 14.0 | | 1993/94| 746 | 193 | 51 | 18.57 | 15.7 | | 1994/95| 835 | 215 | 61 | 16.14 | 16.6 | | 1995/96| 961 | 242 | 66 | 13.51 | 14.2 | | 1996/97| 993 | 244 | 80 | 12.59 | 13.9 | | 1997/98| 1,084 | 245 | 93 | 11.74 | 13.4 | | 1998/99| 1,142 | 262 | 107 | 11.53 | 13.6 | | 1999/00| 1,178 | 287 | 71 | 11.51 | 14.5 | | 2000/01| 1,222 | 292 | 73 | 11.18 | 14.1 | | 2001/02| 1,260 | 302 | 86 | 12.45 | 15.7 | | 2002/03| 1,269 | 317 | 96 | 13.21 | 16.8 | | 2003/04| 1,325 | 316 | 61 | 13.76 | 17.2 | | 2004/05| 1,261 | 316 | 66 | 17.02 | 20.6 |
Source: Transport for London, Dial-a-Ride Enquiries: 020 7241 7457
1. Re-registration exercises took place in 1992/93, 1999/00 and 2003/04.
2. From 2003/04, cost per passenger journey includes fares paid by passengers.
While total registered users increased by 8% compared with 2003/04, and the number of buses in service remained constant, the number of Dial-a-Ride journeys made in 2004/05 fell by 5%, primarily due to a fall in demand from passengers; possibly linked to the increased accessibility of mainstream transport. See technical note.
2.12. Taxicard
Table 2.12.1 Taxicard key trends
| Year | Number of journeys (thousands) | Number of members (thousands) | Average number of journeys per member | Average cost per vehicle journey at 2004/05 prices (£) | Average cost per journey at 2004/05 prices (£) | |--------|--------------------------------|-------------------------------|--------------------------------------|------------------------------------------------------|-----------------------------------------------| | 1990/91| 756 | 35 | 22 | 11.60 | \*\* | | 1991/92| 760 | 37 | 21 | 11.20 | \*\* | | 1992/93| 765 | 45 | 17 | 11.31 | \*\* | | 1993/94| 702 | 40 | 18 | 9.14 | \*\* | | 1994/95| 741 | 45 | 17 | 9.64 | \*\* | | 1995/96| 751 | 44 | 17 | 9.21 | \*\* | | 1996/97| 553 | 36 | 15 | 10.23 | \*\* | | 1997/98| 500 | 43 | 12 | 10.56 | \*\* | | 1998/99| 533 | 45 | 12 | 10.25 | \*\* | | 1999/00| 501 | 44 | 11 | 10.55 | \*\* | | 2000/01| 478 | 41 | 12 | 10.95 | \*\* | | 2001/02| 523 | 39 | 13 | 11.42 | 4.56 | | 2002/03| 653 | 44 | 15 | 11.50 | 4.04 | | 2003/04| 791 | 50 | 16 | 11.83 | 3.78 | | 2004/05| 948 | 63 | 15 | 11.45 | 2.54 |
Source: Taxicard Survey Enquiries: 020 7126 4873
1. Up to 2000/04 Excludes Barnet, Greenwich, Redbridge and Westminster, which used to operate their own Taxicard scheme.
2. Excludes Westminster. (Barnet, Greenwich and Redbridge joined the London Taxicard scheme in late 2003/4).
3. Data available since TfL funding began in 2001.
The number of taxicard journeys increased by 20% in 2004/05, despite a slight fall in the number of journeys per member, because of a 26% increase in the number of members. Only the City of Westminster continues to operate its own independent Taxicard scheme. See technical note. 3. Private transport
3.1. Traffic
Table 3.1.1 Total motor traffic volume in London
| Year | Motorways and trunk roads | Principal roads | Minor roads | All roads London (DfT) | All roads Great Britain | |------|---------------------------|----------------|------------|------------------------|------------------------| | 1993 | 8.3 | 11.3 | 11.1 | 30.7 | 412.3 | | 1994 | 8.5 | 11.5 | 11.2 | 31.1 | 421.5 | | 1995 | 8.5 | 11.5 | 11.2 | 31.2 | 429.7 | | 1996 | 8.6 | 11.5 | 11.3 | 31.5 | 441.1 | | 1997 | 8.7 | 11.5 | 11.4 | 31.7 | 450.3 | | 1998 | 8.8 | 11.5 | 11.6 | 31.9 | 458.5 | | 1999 | 9.0 | 11.7 | 11.9 | 32.7 | 467.0 | | 2000 | 9.1 | 11.6 | 11.9 | 32.6 | 467.1 | | 2001 | 2.2 | 18.5 | 12.1 | 32.7 | 474.4 | | 2002 | 2.2 | 18.1 | 12.5 | 32.8 | 486.5 | | 2003 | 2.1 | 18.1 | 12.6 | 32.8 | 490.4 | | 2004 | 2.1 | 18.0 | 12.6 | 32.7 | 498.6 |
Source: National Road Traffic survey, DfT Enquiries: 020 7027 9343
1. In 2001 trunk roads were reclassified as principal roads.
Traffic on all roads in Great Britain continued to increase in 2004/05, but in London the total volume of traffic remained virtually static, as it has done since 1999.
Chart 3.1.1 Annual average daily traffic flows network map
Source: DfT National Road Traffic Counts Enquiries: 020 7027 9343 3. Private transport
Table 3.1.2 London road traffic by vehicle type and road class (2004)
| Road class | Cars and taxis | Motorcycles etc | Buses and coaches | Light vans | Goods vehicles | All motor vehicles | |------------------|----------------|-----------------|-------------------|------------|----------------|--------------------| | Motorways | 1,604 | 19 | 13 | 222 | 223 | 2,080 | | Principal roads | 14,379 | 465 | 389 | 2,056 | 671 | 17,960 | | All minor roads | 10,287 | 325 | 198 | 1,622 | 207 | 12,638 | | All roads | 26,269 | 809 | 600 | 3,899 | 1,101 | 32,678 |
Source: National Road Traffic Survey, DfT Enquiries: 020 7944 3095
Table 3.1.3 Average daily traffic flows on major roads in London by vehicle type
| Year | Pedal cycles | Motor cycles | Cars and taxis | Goods vehicles | Buses and coaches | All motor vehicles | |------|--------------|--------------|----------------|----------------|-------------------|--------------------| | | Light | Heavy | | | | | | 1993 | 0.26 | 0.58 | 24.8 | 3.10 | 1.30 | 0.44 | 30.3 | | 1994 | 0.27 | 0.61 | 25.2 | 3.24 | 1.28 | 0.47 | 30.8 | | 1995 | 0.26 | 0.60 | 25.1 | 3.42 | 1.25 | 0.50 | 30.8 | | 1996 | 0.29 | 0.62 | 25.3 | 3.33 | 1.33 | 0.51 | 31.1 | | 1997 | 0.28 | 0.67 | 25.4 | 3.36 | 1.34 | 0.51 | 31.3 | | 1998 | 0.26 | 0.68 | 25.4 | 3.30 | 1.48 | 0.50 | 31.3 | | 1999 | 0.26 | 0.74 | 25.8 | 3.50 | 1.40 | 0.53 | 31.9 | | 2000 | 0.25 | 0.72 | 25.6 | 3.52 | 1.44 | 0.52 | 31.8 | | 2001 | 0.27 | 0.75 | 25.5 | 3.58 | 1.40 | 0.52 | 31.7 | | 2002 | 0.26 | 0.71 | 25.2 | 3.42 | 1.35 | 0.56 | 31.2 | | 2003 | 0.33 | 0.78 | 24.7 | 3.70 | 1.35 | 0.59 | 31.1 | | 2004 | 0.33 | 0.74 | 24.5 | 3.50 | 1.37 | 0.62 | 30.8 |
Source: National Road Traffic Survey, DfT Enquiries: 020 7944 3095
1. Major roads include motorways, trunk and principal roads.
While average flows of buses and coaches on major roads in London have been increasing steadily since 2001, car and taxi flows decreased for the third year running. Average cycle flows maintained the high level reached in 2003.
Chart 3.1.2 Cordon crossings – all motor vehicles
Source: Transport for London Enquiries: 020 7027 9343
Although the number of vehicles crossing the central cordon continued to fall, flows at the boundary cordon remained static, continuing the recent trend.
### 3.2. Speeds
#### Table 3.2.1 Average traffic speeds in Greater London
| Year | Central area | Rest of inner area | All inner | Outer area | All areas | |--------------------|--------------|--------------------|-----------|------------|-----------| | **Morning peak period** | | | | | | | 1977-1982 | 12.2 | 14.1 | 13.6 | 19.2 | 17.2 | | 1983-1990 | 11.7 | 12.7 | 12.4 | 18.6 | 16.5 | | 1990-1997 | 10.6 | 13.3 | 12.4 | 17.2 | 15.7 | | 1997-2000 | 10.0 | 12.0 | 11.4 | 18.2 | 15.9 | | 2000-2002 | 9.9 | 11.6 | 11.1 | 16.9 | 15.0 | | 2003-2006 | 10.6 | 11.7 | 11.4 | \*\* | \*\* | | **Daytime off-peak period** | | | | | | | 1977-1982 | 12.1 | 17.3 | 15.3 | 25.0 | 20.8 | | 1983-1990 | 11.5 | 15.5 | 14.1 | 24.0 | 19.9 | | 1990-1997 | 10.7 | 15.4 | 13.7 | 22.7 | 19.2 | | 1997-2000 | 10.0 | 14.8 | 13.0 | 21.9 | 18.5 | | 2000-2002 | 9.0 | 13.7 | 12.0 | 21.4 | 17.7 | | 2003-2006 | 10.5 | 14.1 | 12.9 | \*\* | \*\* | | **Evening peak period** | | | | | | | 1977-1982 | 12.1 | 13.8 | 13.3 | 20.3 | 17.6 | | 1983-1990 | 11.3 | 12.4 | 12.1 | 20.0 | 16.9 | | 1990-1997 | 10.6 | 13.0 | 12.2 | 19.3 | 16.8 | | 1997-2000 | 10.2 | 11.4 | 11.0 | 19.1 | 16.2 | | 2000-2002 | 9.6 | 11.3 | 10.8 | 18.4 | 15.7 | | 2003-2006 | 10.6 | 12.3 | 11.9 | \*\* | \*\* |
Source: TfL Traffic Speed Survey
See technical note. 3. Private transport
Chart 3.2.1 London traffic speeds in the morning peak
Traffic speeds have generally followed a downward trend in recent years, although the introduction of congestion charging has resulted in an increase in average speeds in the central area. There has also been a levelling off of average speeds in the rest of the inner area.
Chart 3.2.2 Morning peak road network congestion map (2003)
Source: Information derived from data provided by ITIS Holdings, obtained from vehicles fitted with GPS devices Enquiries: 020 7027 9343 3. Private transport
3.3. Car ownership
Table 3.3.1 Car ownership in London and Great Britain by household size (2003/04)
| Number of cars | Number of people in household | Percentage | Average household size | |----------------------|-------------------------------|------------|------------------------| | | One | Two | Three | Four or more | All households | size | | Greater London | | | | | | | | No car | 65 | 34 | 31 | 19 | 40 | 1.9 | | One car | 33 | 48 | 39 | 42 | 41 | 2.5 | | Two or more cars | 1 | 18 | 30 | 39 | 19 | 3.4 | | All households | 100 | 100 | 100 | 100 | 100 | 2.4 | | Rest of Great Britain| | | | | | | | No car | 53 | 18 | 15 | 11 | 26 | 1.7 | | One car | 45 | 50 | 39 | 36 | 44 | 2.3 | | Two or more cars | 2 | 31 | 46 | 52 | 29 | 3.1 | | All households | 100 | 100 | 100 | 100 | 100 | 2.4 | | Great Britain | | | | | | | | No car | 53 | 19 | 15 | 11 | 26 | 1.7 | | One car | 45 | 50 | 39 | 36 | 44 | 2.3 | | Two or more cars | 2 | 31 | 46 | 52 | 29 | 3.1 | | All households | 100 | 100 | 100 | 100 | 100 | 2.4 |
Source: DfT, National Travel Survey
Chart 3.3.1 Car ownership in London
Source: Transport for London Enquiries: 020 7126 4306
Car ownership in London diminished in 2004 to levels not recorded since 1988. The proportion of households with two or more cars decreased by 1% while the proportion of households without a car increased 3%. 3. Private transport
Chart 3.3.2 Car ownership by ward (2001)
Source: ONS, 2001 Census of Population Enquiries: 020 7126 4608
3.4. Vehicle registrations
Table 3.4.1 Cars registered in London
| Year | Greater London | Percentage company cars | Inner London | Outer London | |------|----------------|-------------------------|--------------|-------------| | 1996 | 2,262 | 14 | 6,79 | 1,583 | | 1997 | 2,259 | 12 | 688 | 1,571 | | 1998 | 2,287 | 11 | 697 | 1,590 | | 1999 | 2,319 | 10 | 707 | 1,611 | | 2000 | 2,331 | 10 | 709 | 1,622 | | 2001 | 2,379 | 9 | 721 | 1,657 | | 2002 | 2,390 | 7 | 717 | 1,672 | | 2003 | 2,397 | 6 | 714 | 1,682 | | 2004 | 2,438 | 6 | 718 | 1,720 |
Percentage change
| 1 Year | 2% | • | 1% | 2% | | 5 Years| 5% | • | 2% | 7% |
Source: Department for Transport Enquiries: 020 7983 4532
1. Data recorded up to the end of December each year.
See technical note. 3. Private transport
3.5. Cycling
Almost three-quarters of cycle trips in London are by males. Trips to usual workplace and for leisure account for nearly two thirds of all cycle trips.
Chart 3.5.1 Cycle trips by gender (2001) Source: LATS 2001 Household Survey Enquiries: 020 7126 4608
Chart 3.5.2 Cycle trips by purpose (2001) Source: LATS 2001 Household Survey Enquiries: 020 7126 4608
Chart 3.5.3 Growth in total number of cycles crossing the River Thames screenline Source: TfL Cordon and Screenline Surveys Enquiries: 020 7027 9339 3. Private transport
Chart 3.5.4 Proportion of employed people whose usual journey to work is by cycling, by ward of origin (2001)
Source: ONS, 2001 Census of Population Enquiries: 020 7126 4608
The level of use of bicycle as a means of travelling to work varies quite substantially from borough to borough, with a general tendency towards greater bicycle use by residents of the centre and west of London compared with the east/outer London.
3.6. Walking
Chart 3.6.1 Walk trips by gender (2001) Source: LATS 2001 Household Survey Enquiries: 020 7126 4608
Chart 3.6.2 Walk trips by purpose (2001) Source: LATS 2001 Household Survey Enquiries: 020 7126 4608
Female 43% Male 57%
Other work related 2% Other (inc. Escort) 12% Usual workplace 12% Education 16% Leisure 22% Shopping and personal business 36% 3. Private transport
Chart 3.6.3 Proportion of employed people whose usual journey to work is by walking, by ward of origin (2001)
Source: ONS, 2001 Census of Population Enquiries: 020 7126 4608
Main mode – Walking (percentage of employed people)
- 18 to 68 (39)
- 9 to 18 (156)
- 6 to 9 (238)
- 3 to 6 (200)
3.7. Congestion charging
Chart 3.7.1 Cars entering the Congestion Charging Zone during charging hours
Source: TfL, Congestion Charging Enquiries: 020 7126 4057
The introduction of the congestion charge resulted in a reduction of 33% of inbound car traffic between 2002 and 2003. With some minor fluctuations, the reduction in traffic has been maintained, at some 125,000 incoming cars per day during congestion charging hours (0700-1830). 3. Private transport
Chart 3.7.2 Non-car traffic entering the Congestion Charging Zone during charging hours
Since the introduction of the congestion charge, there has been an increase in the number of taxis and cycles entering the charging zone, although both modes have shown a small decline during 2004. The number of buses and coaches entering the charging zone continues to show a consistent increase.
Chart 3.7.3 Average flow on 16 high flow inbound gateways sites during the charging hours (0700-1830) by four week period and type of day
Traffic flows through the 16 high flow gateways during charging hours have been relatively consistent year on year since the introduction of the congestion charge, with seasonal reductions around Christmas and the main August holiday period. 4. Freight
4.1. Road freight
A total of 150 million tones of goods was lifted by road in 2004, made up of 64 million tonnes moved within London, a further 63 million tonnes from outside London to destinations within London, and 37 million tonnes from origins in London to destinations outside London.
Figures are not fully comparable with those for previous years, due to changes to the design of DfT’s Continuing Survey Road Goods Transport. See technical note. 4. Freight
4.2. Water freight
Sea-going freight through the Port of London in 2004 was 53.3 thousand tonnes, 4% higher than in 2003. 74% of the total was foreign traffic (59% imports and 15% exports) and the other 26% UK domestic traffic. 38% by weight of cargo was liquid bulk, mainly oil and oil products, 27% was dry bulk, 29% unitised (containers and roll-on/roll-off vehicles) and 6% general cargo. In addition, 1.6 thousand tonnes of internal inland waterway freight was handled at Thames wharves.
4.3. Air freight
Airfreight through London’s airports increased by 8% in 2004 to its highest level since 2000. Heathrow accounted for 74% (by weight) of freight lifted, with Gatwick and Stansted 12% each. 5. Casualties
5.1. Road casualties
Table 5.1.1 Road casualties in Greater London and Great Britain by type
| Year | Killed London | GB | Seriously Injured London | GB | Slightly Injured London | GB | All casualties London | GB | |------------|---------------|----|--------------------------|----|-------------------------|----|-----------------------|----| | 1994-1998 ave | 100 | 100| 100 | 100| 100 | 100| 100 | 100| | 1991 | 148 | 128| 117 | 117| 99 | 94 | 102 | 97 | | 1992 | 126 | 118| 108 | 112| 101 | 94 | 102 | 97 | | 1993 | 115 | 107| 95 | 102| 101 | 95 | 101 | 96 | | 1994 | 109 | 102| 92 | 106| 102 | 97 | 100 | 99 | | 1995 | 87 | 101| 98 | 103| 99 | 96 | 99 | 97 | | 1996 | 101 | 101| 102 | 101| 99 | 100| 100 | 100| | 1997 | 111 | 101| 105 | 98 | 101 | 103| 101 | 102| | 1998 | 92 | 96 | 103 | 93 | 99 | 103| 100 | 102| | 1999 | 105 | 96 | 88 | 89 | 102 | 102| 100 | 100| | 2000 | 114 | 95 | 91 | 87 | 102 | 102| 100 | 100| | 2001 | 120 | 96 | 90 | 84 | 98 | 100| 97 | 98 | | 2002 | 112 | 96 | 83 | 82 | 92 | 97 | 91 | 95 | | 2003 | 109 | 98 | 76 | 76 | 85 | 93 | 84 | 91 | | 2004 | 87 | 90 | 61 | 71 | 78 | 91 | 76 | 88 |
Source: TfL London Road Safety Unit, DfT Transport Statistics Bulletin. Road Casualties in Great Britain Main Results: 2004
1. Index based on 1994-1998 average.
The number of road casualties in London showed significant improvement in 2004, with fatalities at their lowest since 1995, and serious and slight injuries below any year since 1991. All categories of casualty have recorded a greater level of improvement, compared with the 1994-1998 average, than for Great Britain as a whole.
Chart 5.1.1 Road casualties in Greater London by type
Source: TfL London Road Safety Unit Enquiries: 020 7027 9332
The number of injuries show a decline across all categories of severity, with larger decreases in the number of killed and seriously injured. In 2004, the number of people killed in Greater London was 216. The number of people seriously injured and slightly injured in 2004 was 3,953 and 30,386 respectively. 5. Casualties
Of the people involved in fatal or serious accidents in London during 2004, the largest proportion were pedestrians or in cars. More than half those who sustained slight injuries were in cars.
5.2. Underground casualties
The slight decrease in injuries in 2004/05 is partly because for the first time the figures exclude crime-related fatalities and injuries. 6. Population
6.1. Resident population
Table 6.1.1 Resident population
| Year | 0-14 | 15-64 | 65 and over | All ages | Inner London | Outer London | Great Britain | |------|------|-------|-------------|----------|--------------|--------------|---------------| | | | | | | | | | | 1971 | 1,598| 4,922 | 1,010 | 7,529 | 3,060 | 4,470 | 54,388 | | 1981 | 1,245| 4,513 | 1,048 | 6,806 | 2,550 | 4,255 | 54,815 | | 1991 | 1,266| 4,600 | 964 | 6,829 | 2,599 | 4,230 | 55,831 | | 1996 | 1,360| 4,686 | 929 | 6,974 | 2,656 | 4,318 | 56,477 | | 2001 | 1,368| 5,058 | 897 | 7,322 | 2,859 | 4,463 | 57,361 | | 2002 | 1,362| 5,114 | 895 | 7,371 | 2,892 | 4,479 | 57,535 | | 2003 | 1,356| 5,140 | 892 | 7,388 | 2,905 | 4,483 | 57,851 | | 2004 | 1,356| 5,185 | 889 | 7,429 | 2,931 | 4,498 | 58,125 |
Percentage change
| Year range | 1971-1981 | 1981-1991 | 1991-2001 | 2001-2004 | |------------|-----------|-----------|-----------|-----------| | | -22% | 2% | 8% | -1% | | | -8% | 2% | -7% | 3% | | | 4% | -8% | 7% | -1% | | | -10% | -2% | 7% | 1% | | | -17% | 2% | 10% | 3% | | | -5% | -1% | 6% | 1% | | | 1% | 2% | 3% | 1% |
Source: ONS
Chart 6.1.1 Population density (2001)
Source: ONS, 2001 Census of Population Enquiries: 020 7126 4608
Crown copyright (GLA – 100032379) (2003) 6. Population
Table 6.1.2 Resident population projections
| Year | Inner London | Outer London | Greater London | |------|--------------|--------------|----------------| | 2001 | 2,859 | 4,463 | 7,322 | | 2006 | 2,992 | 4,546 | 7,538 | | 2011 | 3,145 | 4,671 | 7,816 | | 2016 | 3,276 | 4,773 | 8,050 | | 2021 | 3,354 | 4,826 | 8,180 | | 2026 | 3,437 | 4,891 | 8,328 | | 2031 | 3,526 | 4,964 | 8,490 |
Source: GLA, Data Management and Analysis Group (DMAG). Enquiries: 020 7983 4347 Scenario 8.07 (Reviewed November 2005).
6.2. Working population
Table 6.2.1 Working population
| Year | Employee jobs in Greater London (thousands) | Percentage Females | Self-employed (thousands) | All jobs (thousands) | |------|---------------------------------------------|--------------------|---------------------------|----------------------| | 1992 | 3,336 | 48 | 453 | 3,789 | | 1993 | 3,296 | 49 | 449 | 3,746 | | 1994 | 3,356 | 49 | 514 | 3,870 | | 1995 | 3,458 | 49 | 476 | 3,934 | | 1996 | 3,414 | 48 | 493 | 3,907 | | 1997 | 3,540 | 48 | 485 | 4,025 | | 1998 | 3,684 | 48 | 516 | 4,201 | | 1999 | 3,864 | 47 | 485 | 4,349 | | 2000 | 4,021 | 48 | 518 | 4,539 | | 2001 | 4,047 | 47 | 507 | 4,555 | | 2002 | 3,917 | 47 | 519 | 4,435 | | 2003 | 3,886 | 48 | 611 | 4,497 | | 2004 | 3,923 | 47 | 563 | 4,487 |
Percentage change
| 1 Year | 1% | -8% | - | | 10 Years | 17% | 10% | 16% |
Source: ONS, Annual Business Inquiry Enquiries: 016 3381 2318
1. September estimates of the workforce in employment.
2. Self-Employed includes those on work-related government supported training schemes without a contract of employment. Figures are only included from September 1997 onwards.
The total number of jobs in Greater London remained virtually the same in 2004 compared with the previous year, with a modest increase in employee jobs offsetting a reduction in the number of people who were self-employed. 6. Population
Chart 6.2.1 Employment density (2001)
Table 6.2.2 Commuters to and from Greater London
| Year | To Greater London¹ | From Greater London² | |------|--------------------|---------------------| | 1994 | 641 | 182 | | 1995 | 647 | 190 | | 1996 | 629 | 205 | | 1997 | 678 | 234 | | 1998 | 683 | 240 | | 1999 | 720 | 249 | | 2000 | 691 | 257 | | 2001 | 703 | 254 | | 2002 | 698 | 264 | | 2003 | 675 | 285 | | 2004 | 706 | 275 |
Source: Labour Force Survey (ONS) – Spring sample
1. Workers in Greater London with residence outside Greater London.
2. Residents in Greater London with workplace outside Greater London.
### 6. Population
#### 6.3. Overseas visitors
**Table 6.3.1 Visitors to London by country of origin**
| Country | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |--------------------------|------|------|------|------|------|------| | USA | 2.7 | 2.9 | 2.4 | 2.5 | 2.2 | 2.4 | | France and Monaco | 1.3 | 1.2 | 1.1 | 1.1 | 1.2 | 1.3 | | Germany | 1.1 | 1.1 | 0.9 | 0.9 | 0.9 | 1.2 | | Italy and San Marino | 0.6 | 0.5 | 0.5 | 0.5 | 0.6 | 0.8 | | Spain and Andorra | 0.4 | 0.4 | 0.4 | 0.4 | 0.5 | 0.7 | | Eire | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | 0.7 | | Netherlands | 0.6 | 0.5 | 0.5 | 0.5 | 0.6 | 0.6 | | Australia | 0.5 | 0.5 | 0.4 | 0.4 | 0.5 | 0.5 | | Canada | 0.4 | 0.4 | 0.3 | 0.4 | 0.3 | 0.4 | | Belgium | 0.4 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | | Sweden | 0.4 | 0.4 | 0.3 | 0.3 | 0.3 | 0.3 | | Switzerland | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | | Poland | 0.2 | 0.1 | 0.1 | 0.1 | 0.2 | 0.3 | | Japan | 0.4 | 0.4 | 0.3 | 0.3 | 0.2 | 0.3 | | Other countries | 2.8 | 2.8 | 2.6 | 2.4 | 2.4 | 2.8 | | **All countries** | **13.2** | **13.2** | **11.5** | **11.6** | **11.7** | **13.4** |
Source: International Passenger Survey, ONS
The number of visits to London by non UK residents declined sharply between 2001 and 2003, but recovered in 2004 to its previous level. 7. Environment
7.1. Emissions
Chart 7.1.1 Annual number of days with PM10 exceeded 50µgm⁻³ (TEOM\*1.3)
The Air Quality Strategy (AQS) has an incident-based objective of 50µgm⁻³, measured as a daily mean not to be exceeded on more than 35 days per year (EU limit value). Following disappointing results in 2003, the number of days when PM10 levels exceeded 50µgm⁻³ showed some improvement during 2004. However, measurements for inner London roadside and kerbside sites do continue to exceed the National Air Quality Strategy Objective.
Chart 7.1.2 Annual mean Nitrogen Dioxide (NO2) levels
The AQS stipulates as one of the objectives for NO2 an annual mean of 21 ppb (40µgm⁻³). The annual mean NO2 objective has been exceeded consistently in both inner London background and roadside, while in outer London background the annual mean NO2 objective has been achieved since 1998. Areas with a high level public transport accessibility (coloured in red) are central London and a significant proportion of inner London. There are also some areas of high accessibility in outer London, many of which coincide with metropolitan and major town centres. In general, the level of public transport accessibility for a particular location decreases the further away it is from central London. Glossary
Administrative areas
Greater London: the area administered by the Greater London Authority consisting of the City of London and the 32 London boroughs.
Central London: the Greater London Conurbation Centre or Central Statistical Area – an area roughly rectangular in shape, bounded by Regent’s Park to the north, Whitechapel to the East, Elephant & Castle and Vauxhall to the South, and Kensington Gardens to the West. It is a larger area than the central London Congestion Charging Zone, and includes the inner ring road and Paddington, Marylebone, Euston and King’s Cross rail stations.
Inner London: City of London, and the London boroughs of Camden, Hackney, Hammersmith & Fulham, Haringey, Islington, Kensington & Chelsea, Lambeth, Lewisham, Newham, Southwark, Tower Hamlets, Wandsworth, Westminster. A distinction is sometimes made between those parts of these boroughs in central London, and the rest of Inner London.
Outer London: the London boroughs of Barking and Dagenham, Barnet, Bexley, Brent, Bromley, Croydon, Ealing, Enfield, Greenwich, Harrow, Havering, Hillingdon, Hounslow, Kingston upon Thames, Merton, Redbridge, Richmond upon Thames, Sutton, Waltham Forest.
Travel
The units of travel are described as trips or journeys. Different data sources have different conventions about what constitutes a journey. This publication reserves the word ‘journey’ for data for individual modes of transport reported by transport operators or derived from counts of passengers or travellers in the course of travel. A journey, therefore, is travel by a single mode, and is essentially the same as a ‘trip-stage’ defined below.
A trip is defined as a one way movement from one place to another to achieve a single main purpose. Round trips are divided so that the return leg is treated as a separate trip. These definitions apply to data from interview surveys such as the LATS Household Survey.
Trips may be further subdivided into trip-stages, the component parts of a trip using a single mode of transport between interchanges. Walking is counted as a separate mode, but walks within single premises or between platforms at interchange stations are not included. (See also section 1.1)
The main mode of a trip is the mode of transport used for the longest stage (by distance).
Time periods
AM peak – morning peak defined as 0700 to 1000 weekdays except public holidays.
Inter-peak defined as 1000 to 1600 weekdays except public holidays.
PM peak – evening peak defined as 1600 to 1900 weekdays except public holidays.
Evening defined as 1900 to 2200 weekdays except public holidays.
Night-time defined as 2200 to 0400.
Early AM defined as 0400 to 0700.
Work status
Working full-time: people in paid employment normally working for more than 30 hours a week.
Working part-time: people in paid employment working for not more than 30 hours a week.
Self-employed: those who in their main employment work on their own account, whether or not they have any employees.
Ticket types
Ordinary ticket: valid for one specific trip (a ‘single ticket’) or for two trips to and from the same place (a ‘return’). Includes Carnets, tickets sold in batches in a booklet for subsequent use.
Season ticket: a ticket valid for unlimited travel over a specified period of time either within specific fare zones or between specified origin and destination stations. A ‘season ticket’ can be valid for just bus travel, national rail travel, or a Travelcard which is valid for all modes detailed below. Glossary
**Travelcard:** a ticket valid for unlimited travel on national rail, buses, DLR, Tramlink and Underground, subject to certain conditions within specific fare zones and for a specified time period. Includes both Travelcard seasons (weekly, monthly or annual tickets) and One Day Travelcards. Underground and national rail services within Greater London are divided into six fare zones; DLR services operate within zones 1, 2 and 3. The cost of a ticket depends on the number of zones it covers. Zone 1 covers central London, approximately the area served by the Circle line and the South Bank.
**Bus Pass:** a ticket valid for a specified time giving unlimited travel on London bus services. Bus Pass ‘seasons’ can be weekly, monthly or annual.
**Freedom Pass:** concessionary pass issued free by local authorities to London-residents aged 60 and over and disabled persons, giving unlimited travel within Greater London by National Rail, DLR, Tramlink, buses and Underground, subject to certain conditions.
**Oyster:** a ‘smart card’ that can be used as a season ticket, such as bus passes and Travelcards, or to pay for travel on a pay-as-you-go basis using Pre Pay credit held on the card. Travelcards on Oyster are valid on Tube, DLR, trams and national rail services within chosen zones and across the entire London bus network. Pre Pay is an alternative to paying cash for single or return fares and offers cheaper single fares, daily price capping and ticket extensions automatically. In addition to TfL’s usual ticket outlets, season tickets can be renewed and Pre Pay credit can be topped-up online or over the telephone.
**Traffic cordons**
Locations of traffic counts for monitoring long-run trends in traffic flows are organised to form three cordons (see section 3.1).
**Boundary cordon:** roughly corresponding to the boundary of Greater London and entirely within the M25 orbital motorway.
**Inner cordon:** enclosing an area similar to the Inner London boroughs excluding most of the boroughs of Greenwich and Lewisham.
**Central cordon:** a cordon, enclosing central London, situated outside the Inner Ring Road and within a radius of 2.5 to 3 kms from Aldwych.
**Prices**
**Retail price index (RPI):** measures the price of a constant basket of goods and services purchased by households in the United Kingdom. The RPI is available from National Statistics website (www.statistics.gov.uk).
**Headline Fares Index:** measures changes in the Gross Yield i.e. the direct effect of fares revision where passengers would buy their same ticket but at the new fare. This does not allow for switching to other ticket types and is likely to overestimate the increase in average fare actually paid. This increase, deflated by the headline Retail Price Index, is applied to the Headline Fares Index from the previous year.
**Real London Earnings:** the actual Gross Weekly Earnings of adults in full-time employment in London deflated by headline Retail Price Index. Gross weekly earnings are based on New Earnings Survey from 1971 to 1998 and the Annual Survey of Hours and Earnings from 1998/99 and are available from ONS.
**Real prices and fares:** converts current price levels to a common reference period by adjusting for the effects of inflation as measured by the RPI.
**Organisations**
DfT Department for Transport DLR Docklands Light Railway GLA Greater London Authority LBSL London Bus Services Limited, a wholly owned subsidiary of TfL LRS London River Services LUL London Underground Limited, a wholly owned subsidiary of TfL ONS Office for National Statistics ORR Office of Rail Regulation TfL Transport for London Glossary
PTAL
PTAL is a measure of public transport accessibility reflecting: the access time (by walking) from the point of interest to public transport service access points (SAPs, e.g. bus stops, stations) within a catchment area; the number of different services (e.g. bus routes, train services) operating at the SAPs; and levels of service (i.e. average waiting times, with an adjustment for the relative reliability of different modes). These components are then used to calculate an accessibility index (PTAI) which is allocated to bands corresponding to Public Transport Accessibility Levels (PTALs). The levels 1a and 1b correspond to a ‘very poor’, 3 corresponds to ‘moderate’ and 6a and 6b corresponds to an ‘excellent’ level of public transport accessibility.
Survey Sources
CAPC Central Area Peak Counts: TfL estimates of people entering central London in the morning peak period, derived from vehicle and passenger counts annually each Autumn. See technical note to table 1.4.1.
EFS Expenditure and Food Survey: ONS survey of household expenditure (formerly the Family Expenditure Survey) with a sample of about 7,000 households per annum in the UK.
GLBPS Greater London Bus Passenger Survey: quarterly sample survey of bus boarders on a sample of London bus routes, with associated counts for grossing, used principally for apportionment of Travelcard and Concessionary fare revenues.
IPS International Passenger Survey: ONS sample survey of arriving and departing passengers at UK ports and airports. Identifies overseas visitors to London.
LATS London Area Transport Survey 2001: Interviewer administered sample survey of 30,000 London households, carried out for TfL between January 2001 and April 2002. The survey included a one-day travel diary to collect data on Londoners’ weekday travel patterns. The data have been expanded to represent the household population of London as measured by the 2001 Census of Population.
LFS Labour Force Survey: ONS sample survey of approximately 57,000 households every quarter in GB, the main source of information on the labour market.
UUS Underground Users Survey: on-platform interview sample survey for LUL of over 30,000 Underground passengers in each 2-year survey cycle. The survey measures usage of ticket types and collects passenger profiles in terms of socio-demographic, economic and other characteristics.
Symbols
•• = not available 0 = nil • = not applicable – = negligible (less than half the final digit shown) Table 1.1.1 Daily average number of journeys: the series for ‘rail’ has been revised to be consistent with those for other public transport modes. Thus rail journeys that involve interchanging between different rail services are counted once for each rail service used. In table 1.1.2, rail trips refer to complete trips (ignoring interchanges) and excluding through-London trips with neither end in London (see also table 2.5.1).
Table 1.2.2 These data comes from the Underground User Survey (UUS), which is a biennial survey. The most recent available data are for 2002/03. Data for UUS 2004-05 will be available in April 2006.
Table 1.4.1 and Chart 1.4.1 Estimates are derived from counts of vehicle occupants on each road crossing a central London cordon. The cordon is situated outside the Inner Ring Road and encloses an area slightly larger than the Congestion Charging Zone.
Rail passengers are counted by observers at their last station stop before the cordon. Inter-City passengers are counted on arrival at the central London rail termini.
Results for London Underground are derived from exit counts of people leaving stations within the Central area. Since 1996, these have been taken from automatic ticket gate data.
Chart 1.6.1 These data are from the 2001 Census of Population by ward of residence. Workers (aged 16 to 74) reported the main mode of transport used for their usual journey to work. Percentages exclude workers usually working at home.
Table 2.5.1 The estimates in this table are derived from ticket data sales and relate to complete rail trips with either origin or destination (or both) within London. Thus, through trips with both origin and destination outside London are not included.
Table 2.8.2 Licensing of private hire services dates from January 2001 with the introduction of operator licensing. Private hire operators offer a variety of services including minicabs, limousines and chauffeur driver vehicles. Private hire driver licensing commenced in April 2003 and vehicle licensing in April 2004.
Table 2.9.1 Victoria Coach Station is the main London terminal for coach services, principally express coach, but also day and holiday tours and shuttle services. Until 2005 there was also a special London Buses’ inter-station (i.e. VCS and all London mainline stations) express bus service, which had 4 departures per hour for most of the day. The departures and arrivals figure for 2004/2005 is based on a survey undertaken by Victoria Coach Station with the coach operators.
Table 2.10.1 2004/05 was the first financial year in which Thames Clippers were under contract to London River Services. For the first time passengers were counted at all piers the whole year and not just those using piers owned by LRS, as in previous years. Additionally, tourist traffic is buoyant generally and there has been a significant increase in private charter business.
Table 2.11.1 Dial-a-Ride provides a multi-occupancy door-to-door transport service for people who are unable to use conventional public transport due to a permanent or long-term disability or health problem. The service is provided for all journey purposes, typically for shopping, visiting friends, and attending meetings and doctors’ or dentists’ appointments. Additional costs in 2004/5 relate to one off restructuring costs. Table 2.12.1 The Taxicard scheme provides subsidised door-to-door transport for people with have serious mobility impairment and find it difficult to use public transport. Taxicard holders are able to make journeys in licensed London taxis, with the subsidy applied directly to each journey. Late in 2003/04, three London Boroughs that had previously operated their own taxi scheme – Barnet, Greenwich and Redbridge – joined the main scheme. Under TfL conditions, boroughs were required to take steps to equalise the conditions of service, so that most boroughs now offer a similar number of trips per year, with no membership fee, no waiting lists to join Taxicard and all boroughs using an agreed set of eligibility criteria.
Table 3.2.1 The 2003/06 Outer London Speed Surveys will be completed by May 2006. Results will be reported in the London Travel Report 2006.
Table 3.4.1 The series are for vehicles registered with the Driver and Vehicle Licensing Agency at 31 December of each year, and relate to vehicles with car body-type registered in the Private and Light Goods taxation class. Vehicles are allocated to areas (Inner or Outer London) according to the postcode of the registered keeper. The registered keeper may be either an individual or a company. However, company cars include cars registered in the name of a company but provided for an employee’s private use. It is likely that changes in the number of company cars, as a percentage of the total stock of cars, reflect changes in taxation and are not necessarily indicative of changes in car use.
Chart 4.1.1 The high increase in the tonnage of road freight lifted, particularly with traffic originating in London and that moved within London appears to be due, at least partly, to methodological changes made by DfT to the way the survey is carried out in order to improve the accuracy of survey estimates. In particular, the sample strata have been amended to reflect current trends in vehicle type, weight and legislative groups. For practical and administrative reasons, changes have also been made to the sample selection methodology.
### Key facts
| Land area | Square Miles | Square Km | |----------------------------|--------------|-----------| | Central London | 11 | 27 | | Rest of inner London | 114 | 294 | | Outer London | 486 | 1,259 | | All Greater London | 610 | 1,579 |
| Road Lengths | Miles | Km | |----------------------------|-------|-----| | Motorways | 37 | 60 | | Trunk and Principal roads | 1,069 | 1,721| | Minor roads | 8,014 | 12,896|
| Road Lengths | Miles | Km | |----------------------------|-------|-----| | All London roads | 9,120 | 14,676| | of which | | | | TFL Road Network | 360 | 580 |
| Rail networks | Stations served | Miles | Km | |----------------------------|-----------------|-------|-----| | Rail (within Greater London)| 321 | 490 | 788 | | London Underground | 275 | 253 | 408 | | Docklands Light Railway | 34 | 18 | 29 | London’s passenger rail network map – central London
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7bb95f5791aa7c0ce5355e012b8138ce7d07106b | London Travel Report 2007 Introduction
The London Travel Report is an annual compendium of statistics of travel and transport in London. The Report brings together data from many sources, most of which are updated every year to provide information on trends and variations over time. It also contains a selection of information from less frequent sources, such as the Census of Population, where these provide useful background for understanding London’s transport requirements and performance.
This Report has been compiled by Steer Davies Gleave on behalf of Transport for London.
Many of the data are drawn from TfL’s own programme of research or directly from transport operations over the full range of TfL’s responsibilities. The rest are provided by other bodies, including the Department for Transport, the Office for National Statistics, the Office of Rail Regulation, the Port of London Authority, the Civil Aviation Authority, and Visit Britain. The assistance of all these organisations is gratefully acknowledged.
This Report may also be downloaded from the TfL Web site at www.tfl.gov.uk/londontravelreport. Also available from the site are spreadsheets with the data used in the report, in some cases including more data than it was possible to show in the published paper version.
A limited number of printed copies are available from TfL/Transport Planning Business Operations, telephone 020 7126 3039.
If you have queries relating to individual tables or charts, please phone the enquiries number provided next to the specific table or chart. General queries about the publication may be directed to London Travel Report Enquiries, telephone 020 7126 4608.
We would welcome readers’ comments on the report and suggestions how it might be improved. These should be addressed to:
Colin Shepherd Transport for London 11th floor Windsor House 42-50 Victoria Street London SW1H 0TL (email: [email protected])
Notes: Figures in tables may not sum exactly to the totals shown because of rounding.
Care should be taken when comparing information from tables that are based on different sources, because of possible differences in definitions and coverage. Further guidance may be found in the Glossary and Technical Notes sections.
‘Journey stages’ refers to the component parts of a complete trip between transport interchanges. Thus, a journey stage is made by a single mode of transport (including walking) within a trip that may comprise several journey stages by different modes. In some previous issues of the London Travel Report, journey stages have also been known as ‘journeys’ but the usage is avoided in the 2007 Report because in many other publications (and in general use) ‘trips’ and ‘journeys’ tend to be synonymous. Contents
Key findings 1
1. Travel patterns in London 2 1.1. Daily travel 2 1.2. Travel by area of London 3 1.3. Morning peak travel into central London 5 1.4. Commuting 8
2. Personal travel 9 2.1. Trip rates 9 2.2. Travel purposes 11 2.3. Within day variations 12 2.4. London residents’ travel 13 2.5. Mode share 13 2.6. Frequency of use 14 2.7. Travel times 16 2.8. People with disabilities 17 2.9. Household expenditure on travel and transport 18
3. Public Transport 19 3.1. Overview 19 3.2. Fares and prices 22 3.3. Bus 24 3.4. Underground 28 3.5. Rail 32 3.6. Docklands Light Railway 35 3.7. Croydon Tramlink 36 3.8. Taxis 37 3.9. Coach travel 38 3.10. River services 39 3.11. Dial-a-Ride 40 3.12. Taxicard 41
4. Private Transport 42 4.1. Road traffic 42 4.2. Speeds 46 4.3. Car ownership 49 4.4. Vehicle registrations 50 4.5. Cycling 51 4.6. Walking 53 4.7. Congestion Charging 55 Key findings
• In 2006, on an average day in London there were just under 28 million journey stages; 39% of these were made by car, 19% by bus or tram, 10% by Underground, 8% by rail, 2% by cycle and 20% were on foot.
• Of these journey stages, 37% were by public transport, slightly more than in 2005. The public transport share has steadily increased from 32% in 2000, while the share of journey stages by private transport has continued to decline.
• The main London public transport modes all recorded increased patronage in the financial year 2006/07. Compared with the previous year, passenger journeys by bus were up by 3.6%, Underground by 4.5% and Docklands Light Railway by 16%.
• Use of Oyster cards continued to increase in 2006. At the end of the year, 73% of bus journey stages used an Oyster card, up from 47% the previous year. Use of Oyster card on the Underground also grew, accounting for 66% of all journey stages at the end of 2006, compared with 53% the previous year.
• This shift to Oyster card has resulted particularly in increased use of pay as you go, with 15% of weekday bus journey stages in the fourth quarter of 2006/07, compared to 7% in the same quarter of the previous year. In the same quarter nearly 25% of Underground journey stages used pay as you go, up from 14% the previous year.
• On an average weekday in Autumn 2006, 1.1 million people entered central London during the morning peak (7am to 10am). This was a 5% increase on the previous year and also higher than the previous peak in 2000. All the public transport modes saw increases, especially rail, Underground and DLR, while the number of people entering by car continued to decrease.
• Total road traffic by motor vehicles in London rose by 1% between 2005 and 2006, after 6 years of no growth. The increase was mainly on motorways while traffic on principal and minor roads remained almost static.
• Car traffic entering the Central London Congestion Charging Zone in 2006 remained at a similar level to that seen in 2005.
• The number of overseas visitors to London increased in 2006, by 13% over the previous year, continuing the upward trend since 2001.
• The number of passengers using London’s airports also continued to grow, despite a slight fall in the number of passengers at Heathrow. This was offset by continued strong growth in passengers travelling through Stansted and increases at Gatwick, Luton and London City airports.
1. Travel patterns in London
1.1. Daily travel
Table 1.1.1 Daily average number of journey stages
| Year | Rail | Underground | DLR | Bus (including tram) | Taxi | Car | Motorcycle | Bicycle | Walk | All modes | |------|------|-------------|-----|----------------------|------|-----|------------|---------|------|-----------| | 1993 | 1.4 | 2.0 | - | 3.1 | 0.2 | 10.5| 0.2 | 0.3 | 5.2 | 22.9 | | 1994 | 1.4 | 2.1 | - | 3.1 | 0.2 | 10.6| 0.2 | 0.3 | 5.2 | 23.1 | | 1995 | 1.5 | 2.1 | - | 3.3 | 0.2 | 10.6| 0.2 | 0.3 | 5.2 | 23.4 | | 1996 | 1.5 | 2.1 | - | 3.4 | 0.2 | 10.7| 0.2 | 0.3 | 5.3 | 23.7 | | 1997 | 1.6 | 2.2 | 0.1 | 3.5 | 0.2 | 10.8| 0.2 | 0.3 | 5.3 | 24.1 | | 1998 | 1.7 | 2.4 | 0.1 | 3.5 | 0.2 | 10.8| 0.2 | 0.3 | 5.3 | 24.5 | | 1999 | 1.8 | 2.5 | 0.1 | 3.5 | 0.2 | 11.1| 0.2 | 0.3 | 5.4 | 25.0 | | 2000 | 1.8 | 2.6 | 0.1 | 3.7 | 0.2 | 11.0| 0.2 | 0.3 | 5.5 | 25.5 | | 2001 | 1.8 | 2.6 | 0.1 | 3.9 | 0.2 | 11.0| 0.2 | 0.3 | 5.5 | 25.8 | | 2002 | 1.9 | 2.6 | 0.1 | 4.2 | 0.2 | 11.1| 0.2 | 0.3 | 5.5 | 26.2 | | 2003 | 1.9 | 2.6 | 0.1 | 4.6 | 0.2 | 11.0| 0.2 | 0.3 | 5.5 | 26.7 | | 2004 | 1.9 | 2.7 | 0.1 | 5.0 | 0.2 | 11.0| 0.2 | 0.4 | 5.6 | 27.1 | | 2005 | 2.0 | 2.6 | 0.1 | 5.0 | 0.2 | 10.9| 0.2 | 0.4 | 5.6 | 27.2 | | 2006 | 2.1 | 2.7 | 0.2 | 5.2 | 0.2 | 10.9| 0.2 | 0.5 | 5.6 | 27.6 |
Source: TfL Planning Enquiries: 020 7126 4608
1. A journey stage is a part of a trip made by a single mode of transport.
2. Rail interchanges between train operating companies start a new journey stage.
3. Bus journey stages are counted as starting a new journey stage each time a new bus is boarded.
4. Underground journey stages are counted by station entries and interchanges within stations are ignored.
5. Walks are counted only when they form complete trips (ie walking all the way), not when they are parts of trips using other modes of transport.
See technical note.
Chart 1.1.1 Modal shares of daily journey stages in London (2006)
Journey stages and trips represent different ways of measuring travel. A trip is a complete one-way movement from origin to destination by one person for a single purpose. A journey stage is a part of a trip using a single mode of transport. A trip may be made up of several journey stages (see also footnotes to Table 1.1.1). The number of trips in London was 23.8 million a day in 2006, increasing from under 21 million a day in 1993.
See technical note.
1. Travel patterns in London
Table 1.1.2 Daily average number of trips
| Year | Rail | Underground and DLR | Bus | Taxi | Car | Motorcycle | Bicycle | Walk | All modes | |------|------|---------------------|-----|------|-----|------------|---------|------|-----------| | 1993 | 1.3 | 1.4 | 2.1 | 0.2 | 10.2| 0.2 | 0.3 | 5.2 | 20.7 | | 1994 | 1.3 | 1.5 | 2.1 | 0.2 | 10.3| 0.2 | 0.3 | 5.2 | 21.0 | | 1995 | 1.3 | 1.6 | 2.2 | 0.2 | 10.3| 0.2 | 0.3 | 5.2 | 21.2 | | 1996 | 1.4 | 1.5 | 2.3 | 0.2 | 10.4| 0.2 | 0.3 | 5.3 | 21.4 | | 1997 | 1.5 | 1.6 | 2.3 | 0.2 | 10.4| 0.2 | 0.3 | 5.3 | 21.8 | | 1998 | 1.5 | 1.7 | 2.3 | 0.2 | 10.5| 0.2 | 0.3 | 5.3 | 22.0 | | 1999 | 1.6 | 1.8 | 2.3 | 0.2 | 10.6| 0.2 | 0.3 | 5.4 | 22.4 | | 2000 | 1.7 | 2.0 | 2.4 | 0.2 | 10.6| 0.2 | 0.3 | 5.5 | 22.7 | | 2001 | 1.7 | 2.0 | 2.6 | 0.2 | 10.6| 0.2 | 0.3 | 5.5 | 23.1 | | 2002 | 1.7 | 1.9 | 2.8 | 0.2 | 10.7| 0.2 | 0.3 | 5.5 | 23.4 | | 2003 | 1.8 | 2.0 | 2.8 | 0.1 | 10.5| 0.2 | 0.3 | 5.5 | 23.2 | | 2004 | 1.7 | 2.1 | 3.1 | 0.1 | 10.4| 0.2 | 0.3 | 5.6 | 23.5 | | 2005 | 1.8 | 2.0 | 3.1 | 0.1 | 10.3| 0.2 | 0.4 | 5.6 | 23.5 | | 2006 | 1.9 | 2.1 | 3.2 | 0.1 | 10.3| 0.2 | 0.4 | 5.6 | 23.8 |
Source: TfL Planning
1. Trips are complete one-way movements from one place to another.
2. Trips may include use of several modes of transport and hence be made up of more than one journey stage.
3. Trips are classified by main mode, ie the mode that typically is used for the longest distance within the trip.
4. Round trips are counted as two trips, an outward and an inward leg.
5. Estimates for 2003 to 2005 have been revised.
See technical note.
1.2. Travel by area of London
Chart 1.2.1 Number and main mode share of residents’ trips between and within central, inner and outer London (2001)
Source: LATS 2001 Household Survey Enquiries: 020 7126 4608
© Crown copyright. All rights reserved (GLA 100032379) (2003)
1. Travel patterns in London
Chart 1.2.2 Map of fare zones
The distribution of bus journey stages shows that over 75% of bus journeys occurred within a single fare zone. This reflects the predominant use of bus for short distance travel. In contrast, Underground journey stages tended to be within Central London zone 1 (30%) or between zone 1 and the outer zones (48%).
Table 1.2.1 Spatial distribution of bus and Underground journey stages by fare zone
| Fare zone | Bus (2006/07) | Underground (2006-2007) | |----------------------------|---------------|-------------------------| | Within zone 1 | 250 | 293 | | Within zone 2 | 417 | 46 | | Within zone 3 | 329 | 22 | | Within zone 4/5/6 | 667 | 24 | | Between zones 1 and 2 | 212 | 223 | | Between zones 1 and 3 | 29 | 135 | | Between zones 1 and 4/5/6 | 6 | 108 | | Between zones 2 and 3 | 95 | 61 | | Between zones 2 and 4/5/6 | 18 | 33 | | Between zones 3 and 4/5/6 | 132 | 26 | | All journey stages | 2,155 | 971 |
Source: GLBPS and UUS
Enquiries: 020 7126 4553 (bus) and 020 7918 4599 (Underground)
1. Zones A, B, C, D are included in Zone 6.
2. Travel patterns in London
1.3. Morning peak travel into central London
Table 1.3.1 People entering central London in the morning peak (7am to 10am)
| Year | All modes | Rail only | Rail with transfer to LUL/DLR | LUL or DLR only | Bus | Coach/minibus | Car | Taxi¹ | Two wheeled motor vehicles | Cycle | |------|-----------|-----------|-------------------------------|-----------------|-----|---------------|-----|-------|---------------------------|-------| | 1991 | 1,042 | 258 | 168 | 426 | 347 | 74 | 20 | 155 | \*\* | 12 | | 1992 | 992 | 245 | 156 | 401 | 337 | 61 | 24 | 150 | \*\* | 11 | | 1993 | 977 | 214 | 168 | 382 | 340 | 64 | 20 | 150 | \*\* | 11 | | 1994 | 989 | 221 | 171 | 392 | 346 | 63 | 23 | 145 | \*\* | 11 | | 1995 | 993 | 221 | 174 | 395 | 348 | 63 | 21 | 145 | \*\* | 11 | | 1996 | 992 | 223 | 176 | 399 | 333 | 68 | 20 | 143 | 9 | 11 | | 1997 | 1,035 | 240 | 195 | 435 | 341 | 68 | 20 | 142 | 9 | 11 | | 1998 | 1,063 | 252 | 196 | 448 | 360 | 68 | 17 | 140 | 8 | 13 | | 1999 | 1,074 | 259 | 201 | 460 | 363 | 68 | 15 | 135 | 8 | 15 | | 2000 | 1,108 | 269 | 196 | 465 | 383 | 73 | 15 | 137 | 8 | 17 | | 2001 | 1,093 | 263 | 204 | 468 | 377 | 81 | 10 | 122 | 7 | 16 | | 2002 | 1,068 | 245 | 206 | 451 | 380 | 88 | 10 | 105 | 7 | 15 | | 2003 | 1,029 | 265 | 191 | 455 | 339 | 104 | 10 | 86 | 7 | 16 | | 2004 | 1,043 | 256 | 196 | 452 | 344 | 116 | 9 | 86 | 7 | 16 | | 2005 | 1,065 | 273 | 200 | 473 | 344 | 115 | 9 | 84 | 8 | 16 | | 2006 | 1,114 | 280 | 211 | 491 | 380 | 116 | 8 | 78 | 7 | 15 |
Source: CAPC, TfL
1. Data for taxis was not recorded before 1996.
See technical note.
Chart 1.3.1 People entering central London in the morning peak
1. Includes coach/minibus, taxi, two wheeled motor vehicle and cycle.
See technical note.
The total number of people entering central London during the morning peak on an average autumn working day increased by 5% in 2006. The highest percentage increase was seen in Underground use, with a 10% increase over 2005 (excluding people transferring from rail at the London termini). The number entering central London by car continued to decline, with a 7% decrease in 2006.
1. Travel patterns in London
Table 1.3.2 Occupants per vehicle entering central London during the morning peak
| Year | Bus | Car | |------|------|------| | 1991 | 32.0 | 1.32 | | 1992 | 26.9 | 1.32 | | 1993 | 27.7 | 1.32 | | 1994 | 27.7 | 1.31 | | 1995 | 27.8 | 1.32 | | 1996 | 29.0 | 1.31 | | 1997 | 29.9 | 1.36 | | 1998 | 30.3 | 1.42 | | 1999 | 30.9 | 1.43 | | 2000 | 34.4 | 1.40 | | 2001 | 37.5 | 1.35 | | 2002 | 37.2 | 1.36 | | 2003 | 39.0 | 1.35 | | 2004 | 43.7 | 1.37 | | 2005 | 42.6 | 1.39 | | 2006 | 41.3 | 1.38 |
Source: CAPC, TfL
The average occupancy per car at the central London boundary during the morning peak declined slightly to 1.38 in 2006. The number of bus passengers per bus also slightly decreased but is still above that seen in all years before 2004.
Chart 1.3.2 Central Area Peak Counts (CAPC) boundary cordon
1. Travel patterns in London
Chart 1.3.3 Isle of Dogs (including Canary Wharf) morning peak travel by mode of transport
Source: Isle of Dogs Cordon Survey Enquiries: 020 7126 4306
1. Includes river bus, bicycle and walk
2. Includes vans, taxis, motorcycles and goods vehicles
Total numbers of people entering the Isle of Dogs in the morning peak increased slightly in 2006, although the rate of increase was a lot lower than in previous years. The number of people entering by DLR and car was down compared to 2005.
Chart 1.3.4 Location of Isle of Dogs cordon sites
© Crown copyright. All rights reserved (GLA) (100032379) (2006).
1. Travel patterns in London
1.4. Commuting
Table 1.4.1 Main mode of travel to work (Autumn 2006)
| Main mode | Area of workplace | Area of residence | |----------------------------|-------------------|-------------------| | | Central London | Rest of inner London | Outer London | All London | Rest of Great Britain | Great Britain | Inner London | Outer London | All London | | Car and van | 11 | 31 | 63 | 37 | 76 | 71 | 20 | 47 | 37 | | Motorbike, moped, scooter | 2 | 1 | 1 | 1 | 1 | 1 | 2 | 1 | 1 | | Bicycle | 3 | 4 | 2 | 3 | 3 | 3 | 6 | 2 | 3 | | Bus and coach | 12 | 16 | 14 | 14 | 7 | 8 | 21 | 13 | 16 | | National Rail | 40 | 16 | 5 | 19 | 2 | 4 | 11 | 14 | 13 | | Underground, tram, light rail | 28 | 19 | 5 | 16 | - | 2 | 26 | 14 | 18 | | Walk | 4 | 12 | 10 | 9 | 11 | 11 | 14 | 8 | 10 | | Other modes | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | | All modes | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | | Number of people (millions)| 1.11 | 0.87 | 1.36 | 3.34 | 21.48 | 24.83 | 1.06 | 1.88 | 2.94 |
Source: Labour Force Survey, ONS Enquiries: 020 7944 4955
Of those who work in central London, 80% travelled to work by public transport (bus, National Rail or Underground). This compares to 9% in the rest of Great Britain. Conversely, 11% who work in central London travelled by car, compared with 76% in the rest of Great Britain. As in previous years, there was a marked difference in travel patterns depending on the area of residence in London. Nearly half of those living in outer London drove to work whereas nearly 60% who live in inner London travelled by public transport.
Table 1.4.2 Travel times to work by main mode (Autumn 2006)
| Main mode | Area of workplace | Area of workplace | Area of workplace | Area of workplace | Area of workplace | Area of workplace | |----------------------------|-------------------|-------------------|-------------------|-------------------|-------------------|-------------------| | | Central London | Rest of inner London | Outer London | All London | Rest of Great Britain | Great Britain | | Car and van | 48 | 32 | 25 | 29 | 20 | 20 | | Motorbike, moped, scooter | 36 | 29 | 27 | 31 | 19 | 21 | | Bicycle | 33 | 24 | 20 | 25 | 15 | 17 | | Bus and coach | 47 | 39 | 36 | 40 | 33 | 34 | | National Rail | 69 | 66 | 43 | 66 | 47 | 58 | | Underground, tram, light rail | 49 | 45 | 37 | 47 | 42 | 46 | | Walk | 21 | 16 | 13 | 15 | 12 | 13 | | All modes | 55 | 39 | 27 | 39 | 20 | 23 |
Source: Labour Force Survey, ONS Enquiries: 020 7944 4955
1. Includes modes not listed (eg taxi).
2. Comparisons with earlier years results (reported in previous editions) are subject to sampling error and should be treated cautiously.
On average, the travel time to work was nearly twice as long for those living in London as it was for those in the rest of Great Britain. For all areas of workplace, National Rail passengers had the highest travel time. 2. Personal travel
Most of the results in this chapter come from the 2006/07 London Travel Demand Survey (LTDS). These update similar results from the 2001 London Area Transport Survey (LATS).
2.1. Trip rates
Table 2.1.1 Modal shares of weekday trips by gender (2001 and 2006/07)
| Main mode | 2001 | 2006/07 | |-----------------|------|---------| | | Male | Female | All | Male | Female | All | | National Rail | 5 | 4 | 5 | 6 | 4 | 5 | | Underground/DLR | 8 | 6 | 7 | 9 | 6 | 7 | | Bus | 10 | 13 | 11 | 13 | 16 | 14 | | Taxi | 1 | 1 | 1 | 2 | 1 | 1 | | Car/Van | 45 | 42 | 44 | 40 | 37 | 39 | | Cycle | 2 | 1 | 2 | 2 | 1 | 2 | | Walk | 28 | 33 | 30 | 28 | 34 | 31 | | All modes | 100 | 100 | 100 | 100 | 100 | 100 | | Trips per person| 2.77 | 2.85 | 2.81 | 2.76 | 2.93 | 2.85 |
Source: LATS 2001 Household Survey, LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
The number of trips by Londoners was almost unchanged between 2001 and 2006/07 at 2.8 trips per person per weekday. However, there was an increase in the share of bus trips and a slight increase in walking, while the share of car trips decreased. Women had slightly higher trip rates than men.
Chart 2.1.1 Modal shares of weekday trips by gender (2006/07)
Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
As in 2001, modal share was broadly similar for men and women in 2006/07. Women, however, tended to use bus and to walk more than men, and to use cars slightly less. 2. Personal travel
Table 2.1.2 Modal shares of weekday trips by working status (2006/07)
| Main mode | Full time | Part time | Student | Not Working | Retired | All adults | |---------------|-----------|-----------|---------|-------------|---------|------------| | National Rail | 9 | 3 | 6 | 1 | 1 | 2 | | Underground/DLR | 12 | 5 | 11 | 2 | 3 | 3 | | Bus | 9 | 11 | 29 | 19 | 16 | 22 | | Taxi | 2 | 1 | 1 | – | 1 | 3 | | Car/Van | 43 | 49 | 22 | 33 | 33 | 38 | | Cycle | 3 | 1 | 2 | 1 | 1 | 1 | | Walk | 23 | 30 | 30 | 45 | 45 | 32 | | All modes | 100 | 100 | 100 | 100 | 100 | 100 | | Trips per person | 3.09 | 3.73 | 2.44 | 2.89 | 2.22 | 2.91 |
Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
In 2006/07, people in part-time employment had the highest trip rates, 3.7 trips per day compared with 3.1 trips per day by people working full-time. Retired people made 2.2 trips per day and other non-working adults 2.9 trips per day on average.
Chart 2.1.2 Trips per person per weekday by main mode and working status (2006/07)
Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
1. Trip rates are for adults aged 16+.
2. Personal travel
Table 2.1.3 Purpose shares of weekday trips by gender (2001 and 2006/07)
| Purpose | 2001 Male | 2001 Female | 2001 All | 2006/07 Male | 2006/07 Female | 2006/07 All | |--------------------------------|-----------|-------------|----------|--------------|----------------|-------------| | Usual workplace | 26 | 19 | 22 | 25 | 17 | 21 | | Other work related | 9 | 4 | 6 | 10 | 4 | 7 | | Education | 12 | 11 | 12 | 11 | 9 | 10 | | Shopping and personal business | 23 | 30 | 27 | 24 | 33 | 29 | | Leisure | 21 | 19 | 20 | 20 | 20 | 20 | | Other (inc Escort) | 9 | 16 | 13 | 9 | 17 | 13 | | All purposes | 100 | 100 | 100 | 100 | 100 | 100 | | **Trips per person per day** | **2.77** | **2.85** | **2.81** | **2.76** | **2.93** | **2.85** |
Source: LATS 2001 Household Survey, LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
In 2006/07, the pattern of trips by journey purpose remained broadly similar to 2001. In general, men were more likely to make work-related trips (35%), while women had a higher proportion of shopping and escort trips.
2.2. Travel purposes
Chart 2.2.1 Purpose shares of weekday trips by gender (2006/07)
Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
Purpose shares for men and women differed in 2006/07 for nearly all purposes. Thus, work represented 25% of all trips made by men but only 17% of those made by women. Shopping and personal business trips also differed between the genders, representing 24% for men and 33% for women. 2. Personal travel
2.3. Within day variations
Chart 2.3.1 London residents’ weekday journey stages (excluding walk) by mode of transport and hour of departure (2006/07)
Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
The daily profile of weekday journey stages show a very pronounced peak in the morning, with the highest number of journey stages starting between 8 and 9am. In the afternoon, two less pronounced peaks are seen: The first one between 3 and 4pm, mainly due to school children and the ‘school run’, and the second one between 5 and 6pm.
1. Includes motorcycle, pedal cycle, tram, taxi, school bus, coach, plane, boat and other.
2. Personal travel
2.4. London residents’ travel
Table 2.4.1 Residents’ weekday journey stages, key statistics (2006/07)(^1)
| Mode | Journey stages per day (m) | Percentage share of journey stages by purpose of trip | |-----------------------|---------------------------|------------------------------------------------------| | | | Commuting and in course of work | Education(^3) | Shopping and personal business | Leisure and other | All purposes | | Bus | 2.8 | 32 | 17 | 30 | 20 | 100 | | Croydon Tramlink | 0.1 | 29 | 24 | 21 | 26 | 100 | | Underground | 1.9 | 61 | 7 | 13 | 19 | 100 | | DLR | 0.1 | 76 | 2 | 12 | 10 | 100 | | National Rail | 0.9 | 66 | 6 | 10 | 18 | 100 | | Car/van | 8.1 | 28 | 6 | 25 | 41 | 100 | | Motorcycle | 0.1 | 70 | 2 | 18 | 10 | 100 | | Taxi and PHV | 0.3 | 39 | 1 | 20 | 39 | 100 | | Walk(^2) | 5.5 | 53 | 5 | 18 | 24 | 100 | | Bicycle | 0.3 | 53 | 5 | 18 | 24 | 100 | | All modes | 20.0 | 30 | 10 | 27 | 32 | 100 |
Source: LTDS 2006/07 Household Survey
1. The table shows travel by household residents of Greater London only and is not comparable with Table 1.1.1 which includes non-residents’ travel in London.
2. Walk all the way only; excludes walks to or from other transport.
3. Includes education and trips to pick up or drop off children at school.
See technical note.
Most journey stages undertaken on Underground, DLR and National Rail in 2006/07 were for work purposes, accounting for between 61% and 76% of all the journey stages made by these modes. Work journey stages also represented 70% of those made by motorcycle, and 53% of those by bicycle. Most of car and taxi journey stages were for leisure and other purposes, while shopping and personal business accounted for the largest share of walk trips.
2.5. Mode share
Chart 2.5.1 Main mode share by age and gender (2006/07)
The mode share was similar for men and women in 2006/07, although women made more use of public transport. The age group with most usage of public transport was 17-24, accounting for 40% of trips by men and 43% by women in this age group. 2. Personal travel
Chart 2.5.2 Main mode share by ethnic group (2006/07)
Mode share varied amongst different ethnic groups in 2006/07. Thus, Pakistanis, Indians and Whites had the largest share of trips by car, while Black Africans and Chinese had the highest share of trips by public transport. Other Black ethnic groups and Bangladeshis had the largest share of trips on foot.
2.6. Frequency of use
Chart 2.6.1 Frequency of use of London Underground by age and gender (2006/07)
People between 17 and 44 were most likely to use London Underground, while those least likely to use it were men and women under 17 or above 75 years old. 2. Personal travel
Chart 2.6.2 Frequency of use of buses by age and gender (2006/07)
Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
Women between 17 and 24 were most likely to use bus, with 50% of them using bus 5 or more days a week. Similarly, between 33% and 36% of men under 24 used buses 5 or more times a week, while 39% of men and 27% of women between 45 and 64 used bus less than once a month.
Chart 2.6.3 Frequency of use of National Rail by age and gender (2006/07)
Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
Of the major modes of transport, rail is the mode used with least frequency by all age groups. Thus, 60% of men and 64% of women used National Rail less than once a month. The age groups most likely to use National Rail on a regular basis were the 17-24 and 25-44 groups. 2. Personal travel
Chart 2.6.4 Frequency of car driving by age and gender (2006/07)
Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
Frequency of car driving was highest in men and women between 45 and 64 years old. For all age groups, men tended to drive cars more frequently than women.
2.7. Travel times
Chart 2.7.1 Mean daily time spent travelling by age and gender (2006/07)
Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
The mean daily time spent travelling by London residents was 84 minutes per day in 2006/07. Men spent on average 90 minutes and women 78 minutes. People in the 25-44 group spent the most time travelling, while those aged 85 and over averaged only 26 minutes per day. 2. Personal travel
2.8. People with disabilities
Chart 2.8.1 Percentage share of disability types by age group (2006/07)
Wheelchair users are people that use a wheelchair some, or all, of the time. People with walking difficulties are those where walking causes difficulty when travelling, but who don’t use a wheelchair. Other disabilities include all other people with a longstanding health problem or disability that affects their ability to travel.
The proportion of the population with a disability was greatest in the age groups above 45. 11% of people between 45 and 59 years old had some sort of disability, while in people above 60 this proportion was 32%. The main disability for these groups was walking difficulty, while 6% of the population aged 60 and over used a wheelchair.
Table 2.8.2 Modal share of weekday trips by disability type (2006/07)
| Main mode | No disability | Wheelchair user | Walking difficulties | Other disability | |-----------------|---------------|-----------------|----------------------|------------------| | National Rail | 5 | – | 3 | 3 | | Underground/DLR | 8 | 3 | 3 | 3 | | Bus | 14 | 17 | 19 | 25 | | Taxi | 1 | 3 | 4 | 2 | | Car/van | 39 | 47 | 36 | 27 | | Cycle | 2 | 2 | 1 | – | | Walk | 31 | 20 | 34 | 38 | | Other | – | 9 | 2 | 1 | | All modes | 100 | 100 | 100 | 100 | | Trips per person| **2.93** | **1.48** | **1.99** | **2.61** |
While people without disabilities made 2.9 trips a day in 2006/07, those who require a wheelchair made only 1.5 on average. Most of the trips made by people with disabilities were by car or on foot/wheelchair, followed by bus. Underground, DLR and National Rail use was very low amongst people with disabilities, perhaps reflecting the greater difficulty in access for these modes. Bus use had higher share amongst all groups of disabled people than those without a disability. 2. Personal travel
2.9. Household expenditure on travel and transport
Table 2.9.1 Expenditure per London household per week on travel and transport by detailed groups (2006/07 prices)
| Type of expenditure | London 2001/02 to 2003/04 | London 2003/04 to 2005/06 | United Kingdom 2001/02 to 2003/04 | United Kingdom 2003/04 to 2005/06 | |--------------------------------------------|-----------------------------|-----------------------------|-----------------------------------|-----------------------------------| | **Motoring and cycling** | | | | | | Purchase and repairs¹ | 31.50 | 29.30 | 35.00 | 32.50 | | Spares and accessories¹ | 1.90 | 1.60 | 2.20 | 2.10 | | Motor vehicle insurance and taxation | 11.90 | 12.40 | 11.20 | 12.40 | | Petrol, diesel and other motor oils | 13.10 | 13.50 | 16.20 | 16.80 | | Other motoring costs | 2.40 | 2.50 | 2.10 | 2.30 | | **Total motoring and cycling** | 60.80 | 59.30 | 66.70 | 66.10 | | **Fares and other travel costs** | | | | | | Rail and Underground fares | 4.30 | 3.70 | 2.00 | 2.10 | | Bus and coach fares | 2.30 | 2.30 | 1.50 | 1.60 | | Combined fares² | 6.10 | 5.70 | 0.90 | 0.80 | | Other travel costs³ | 5.60 | 6.00 | 4.80 | 4.90 | | **Total fares and other travel costs** | 18.30 | 17.70 | 9.20 | 9.40 | | **Totals** | | | | | | Transport expenditure per household | 79.10 | 77.00 | 75.90 | 75.50 | | Total expenditure per household | 533.00 | 518.80 | 445.90 | 448.10 |
Source: The Expenditure and Food Survey, National Statistics © Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland.
1. Includes cars, vans, motorcycles, cycles and other vehicles.
2. Includes travelcards to be used on Underground, rail and bus.
3. Includes air fares, school travel, taxis, hire cars and ferry travel.
Average expenditure per household on travel and transport (derived from the ONS Expenditure and Food Survey) for years 2001/02 to 2004/05 has been rebased to constant (2006/07) prices using the RPI (all items).
On average London households spend nearly 15% of their total expenditure on transport, a lower share than the United Kingdom average, almost 17%. London households spend almost double the amount on public transport fares and other travel costs, but less on motoring and cycling. However, over three-quarters of transport expenditure per household is on motoring and cycling. 3. Public transport
3.1. Overview
Passenger kilometres increased for both bus (up 5%) and Underground (1%) in 2006/07 after a slight fall in 2005/06. The number of journey stages by these modes also grew over the year. DLR use showed even stronger growth, with a 17% increase in passenger kilometres. Passenger kilometres also increased for the Croydon Tramlink.
The type of ticket used for both Underground and bus journeys showed a continued increase in the use of Oyster pay as you go, as well as a greater usage of Oyster cards in general.
Results for National Rail are not available on a consistent journey stage basis with other modes. However, rail trips with both origin and destination in London fell by 2.5% compared with 2005/06.
Table 3.1.1 Public transport passenger kilometres
| Year | Bus | Underground | DLR | Croydon Tramlink | |----------|------|-------------|-----|------------------| | 1991/92 | 3,996| 5,895 | 32 | | | 1992/93 | 3,922| 5,758 | 33 | | | 1993/94 | 3,819| 5,814 | 39 | | | 1994/95 | 3,912| 6,051 | 55 | | | 1995/96 | 4,018| 6,337 | 70 | | | 1996/97 | 4,159| 6,153 | 86 | | | 1997/98 | 4,350| 6,479 | 110 | | | 1998/99 | 4,315| 6,716 | 139 | | | 1999/00 | 4,429| 7,171 | 152 | | | 2000/01 | 4,709| 7,470 | 195 | | | 2001/02 | 5,128| 7,451 | 207 | 97 | | 2002/03 | 5,734| 7,367 | 232 | 100 | | 2003/04 | 6,431| 7,340 | 235 | 103 | | 2004/05 | 6,755| 7,606 | 243 | 113 | | 2005/06 | 6,653| 7,586 | 257 | 117 | | 2006/07 | 7,014| 7,665 | 301 | 127 |
Source: TfL Service Performance Data, DLR, Tramtrack Croydon Limited Enquiries: 020 7126 4616
Chart 3.1.1 Bus and Underground passenger kilometres
Source: TfL Service Performance Data Enquiries: 020 7126 4616 3. Public transport
Chart 3.1.2 Passenger journey stages by bus and Underground
The number of bus and Underground passenger journey stages both increased by 4% in 2006/07, with increases in average journey lengths by both modes.
Chart 3.1.3 Percentage of scheduled kilometres operated by bus, Underground and DLR
The percentage of scheduled kilometres operated by Underground and DLR both increased in 2006/07, while those operated by bus decreased slightly. Bus fares in London have resisted the UK trend with fares decreasing since 1999/00. Fares have started to fall again in 2006/07 after rising slightly from the low seen in 2003/04. Underground fares have remained largely unchanged since 1999/00, although fares have been slightly increasing since 2004/05, and are now above the 1999/00 levels. In contrast, motoring costs have decreased steadily year on year since 1999/00 across the UK as a whole. 3. Public transport
3.2. Fares and prices
Headline fares increased in 2006/07 as a result of the January 2006 and 2007 fares revisions. However, the average fare paid decreased as a result of increased usage of Oyster cards.
See technical note.
Both the Underground average fare paid and headline fares index continued to rise in 2006/07. The average fare paid per kilometre by bus fell in 2006/07, to just over 14 pence. This reversed the trend seen in the previous two years. The level is still much lower than in 1999/00, where fares averaged over 17 pence per kilometre. Average Underground fares rose to over 18 pence per kilometre, while DLR fares dropped to below 18 pence per kilometre for the first time since 2000/01. 3. Public transport
3.3. Bus
Table 3.3.1 Bus key trends
| Year | Passenger kilometres (m) | Passenger journey stages (m) | Real average fare per passenger kilometre at 2006/07 prices (pence) | Traffic revenue at 2006/07 prices (£m) | Bus kilometres operated (m) | Average number of passengers per bus | Average journey stage length (km) | |---------|--------------------------|-----------------------------|---------------------------------------------------------------------|---------------------------------------|-----------------------------|--------------------------------------|----------------------------------| | 1991/92 | 3,996 | 1,149 | 15.2 | 606 | 299 | 13.4 | 3.5 | | 1992/93 | 3,922 | 1,127 | 15.4 | 606 | 317 | 12.4 | 3.5 | | 1993/94 | 3,819 | 1,112 | 16.6 | 633 | 315 | 12.1 | 3.4 | | 1994/95 | 3,912 | 1,159 | 17.0 | 664 | 319 | 12.3 | 3.4 | | 1995/96 | 4,018 | 1,198 | 17.0 | 683 | 325 | 12.4 | 3.4 | | 1996/97 | 4,159 | 1,234 | 17.1 | 713 | 327 | 12.7 | 3.4 | | 1997/98 | 4,350 | 1,277 | 16.8 | 729 | 336 | 12.9 | 3.4 | | 1998/99 | 4,315 | 1,267 | 17.0 | 735 | 340 | 12.7 | 3.4 | | 1999/00 | 4,429 | 1,296 | 17.1 | 758 | 348 | 12.7 | 3.4 | | 2000/01 | 4,709 | 1,354 | 16.3 | 767 | 357 | 13.2 | 3.5 | | 2001/02 | 5,128 | 1,430 | 15.2 | 778 | 373 | 13.7 | 3.6 | | 2002/03 | 5,734 | 1,536 | 13.8 | 789 | 397 | 14.4 | 3.7 | | 2003/04 | 6,431 | 1,702 | 13.1 | 842 | 437 | 14.7 | 3.8 | | 2004/05 | 6,755 | 1,793 | 13.7 | 926 | 450 | 15.0 | 3.8 | | 2005/06 | 6,653 | 1,816 | 14.6 | 974 | 454 | 14.7 | 3.7 | | 2006/07 | 7,014 | 1,880 | 14.3 | 1,003 | 458 | 15.3 | 3.7 |
Source: TfL Service Performance Data
1. Due to better data collection methods, estimates of bus passenger journey stages for 2006/07 will be revised next year. The new estimates are based on Oyster validation records, and will include journey stages made by people with staff passes and police warrants. The effect of these changes is to increase the 2006/07 estimate to 2.1 billion journey stages.
Although there was an increase in both passenger kilometres and average number of passengers per bus since 2005/06, the average fare per passenger kilometre decreased. This decrease was a result of an increased use of Oyster cards on bus journeys.
Chart 3.3.1 Weekday bus journey stages by time period
Source: GLBPS
Enquiries: 020 7126 4553
1. After 1998 using financial year GLBPS data.
See technical note. 3. Public transport
Chart 3.3.2 Weekday bus journey stages by time period: index (1991=100)
Source: GLBPS Enquiries: 020 7126 4553
1. After 1998 using financial year GLBPS data. See technical note.
As in 2005/06 all time periods showed an increase in the number of journey stages (on average by 6%). Night bus usage increased by 14% in 2006/07. Weekend journey stages also increased, especially on Sundays.
Chart 3.3.3 Weekend and weekday bus journey stages by ticket type (2006/07)
Source: TfL Ticket Sales Data, GLBPS Enquiries: 020 7126 4616
The mix of tickets used for bus travel was very similar at the weekend to that during the week in 2006/07. Oyster card pay as you go usage continued to increase rapidly throughout 2006/07, changing from 10% in weekdays in the first quarter to 15% in the fourth quarter. Conversely, use of cash based tickets continued to decline throughout the year. These include singles, savers and one day bus passes. All other ticket types are available on Oyster. 3. Public transport
Chart 3.3.4 Use of Oyster card for bus travel
Source: Oyster card usage records, TFL Ticket Sales Data and GLBPS Enquiries: 020 7126 4616
The Oyster card was introduced in September 2003 for use on bus, Underground, DLR and trams. Freedom Passes for free travel by elderly and disabled people were transferred to Oyster card in 2004 and Travelcards in September 2005. From January 2006 Oyster card pay as you go fares were cheaper than cash fares for the same journeys. Since its introduction, Oyster card use has increased with a steady monthly growth and accounted for 85% of all bus journeys by March 2007. Cash fares and other ticket types decreased by more than 50% between March 2006 and March 2007, pay as you go usage increased by 96% and other Oyster card ticket types by 25% in the same period.
Chart 3.3.5 Weekday and weekend bus journey stages by hour of departure (2006/07)
Source: GLBPS Enquiries: 020 7126 4553
Weekday and weekend bus usage show distinctive hourly profiles, with weekdays showing two distinct peaks, one in the morning around 8am, and one between 3-6pm. On a Saturday a flatter profile is seen, with the largest demand during the daytime between 11am and 5pm. On Sundays, the demand is lower than on other days, with a peak at about 1pm. 3. Public transport
Table 3.3.2 Bus service reliability
| Year | Percentage of scheduled kilometres | High frequency services | Low frequency services | |----------|-----------------------------------|-------------------------|------------------------| | | Operated | Lost due to traffic congestion | Lost due to other causes | Average wait time (minutes) | Actual | Excess | Percentage of timetabled services on time | | 1993/94 | 96.9 | 0.8 | 2.3 | 6.6 | 1.9 | 66.7 | | 1994/95 | 98.0 | 1.1 | 0.9 | 6.5 | 1.8 | 69.7 | | 1995/96 | 98.2 | 1.0 | 0.8 | 6.5 | 1.7 | 71.4 | | 1996/97 | 97.9 | 1.2 | 0.9 | 6.4 | 1.8 | 70.3 | | 1997/98 | 97.4 | 1.3 | 1.3 | 6.4 | 2.1 | 70.0 | | 1998/99 | 96.9 | 1.6 | 1.5 | 6.6 | 2.0 | 69.0 | | 1999/00 | 95.7 | 1.8 | 2.5 | 6.7 | 2.1 | 67.8 | | 2000/01 | 95.3 | 2.1 | 2.6 | 6.8 | 2.2 | 67.7 | | 2001/02 | 96.4 | 2.0 | 1.6 | 6.6 | 2.0 | 69.4 | | 2002/03 | 96.1 | 2.6 | 1.3 | 6.4 | 1.8 | 70.5 | | 2003/04 | 97.2 | 1.7 | 1.1 | 5.8 | 1.4 | 74.6 | | 2004/05 | 97.7 | 1.6 | 0.8 | 5.6 | 1.1 | 77.1 | | 2005/06 | 97.7 | 1.7 | 0.6 | 5.6 | 1.1 | 77.2 | | 2006/07 | 97.5 | 1.9 | 0.6 | 5.5 | 1.1 | 78.1 |
Percentage change
1 year: • • • –2% 0% • 10 years: • • • –14% –40% •
Source: Transport for London Enquiries: 020 7126 4616
1. High frequency services are those operating with a frequency of 5 or more buses per hour.
2. Low frequency services are those operating with a frequency of 4 or less buses per hour.
3. Buses are defined as on time if departing between 2.5 minutes before and 5 minutes after their scheduled departure times.
Bus service reliability maintained a very similar level in 2006/07 to that seen the previous year. There was a slight increase in bus kilometres lost to traffic congestion, although this was still lower than in 2002/03. There was a 2% drop in actual wait times for high frequency services, continuing the declining trend since 2000/01.
Chart 3.3.6 Scheduled and operated kilometres by bus
Source: TfL Service Performance Data Enquiries: 020 7126 4616
1. Deducting scheduled kilometres lost due to traffic congestion.
2. Public transport
3.4. Underground
Table 3.4.1 London Underground key trends
| Year | Passenger kilometres (m) | Passenger journey stages (m) | Real average fare per passenger kilometre at 2006/07 prices (pence) | Traffic revenue at 2006/07 prices (£m) | Train kilometres operated (m) | Average journey stage length (km) | |--------|--------------------------|-----------------------------|---------------------------------------------------------------|--------------------------------------|-------------------------------|----------------------------------| | 1991/92 | 5,895 | 751 | 14.1 | 830 | 53.0 | 7.8 | | 1992/93 | 5,758 | 728 | 14.7 | 848 | 53.0 | 7.9 | | 1993/94 | 5,814 | 735 | 15.5 | 902 | 53.0 | 7.9 | | 1994/95 | 6,051 | 764 | 16.3 | 989 | 55.0 | 7.9 | | 1995/96 | 6,337 | 784 | 16.1 | 1,022 | 57.0 | 8.1 | | 1996/97 | 6,153 | 772 | 16.9 | 1,040 | 59.0 | 8.0 | | 1997/98 | 6,479 | 832 | 17.5 | 1,135 | 62.0 | 7.8 | | 1998/99 | 6,716 | 866 | 17.8 | 1,195 | 61.2 | 7.8 | | 1999/00 | 7,171 | 927 | 17.8 | 1,276 | 63.1 | 7.7 | | 2000/01 | 7,470 | 970 | 17.7 | 1,322 | 63.8 | 7.7 | | 2001/02 | 7,451 | 953 | 17.8 | 1,327 | 65.4 | 7.8 | | 2002/03 | 7,367 | 942 | 17.7 | 1,307 | 65.4 | 7.8 | | 2003/04 | 7,340 | 948 | 17.3 | 1,268 | 67.7 | 7.7 | | 2004/05 | 7,606 | 976 | 17.4 | 1,321 | 69.5 | 7.8 | | 2005/06 | 7,586 | 971 | 17.8 | 1,347 | 68.5 | 7.8 | | 2006/07 | 7,665 | 1,014 | 18.5 | 1,417 | 69.8 | 7.6 |
Source: TfL Service Performance Data
1. The revenue for 2005/06 includes a late Travelcard adjustment.
London Underground passenger kilometres and journey stages increased in 2006/07. Traffic revenue increased by 5%, partly due to the 4% increase in the average fare. Average journey stage length decreased, from 7.8km in 2005/06 to 7.6 in 2006/07.
Chart 3.4.1 Weekday Underground journey stages by time period: index (1991=100)
Source: LUL Entry Counts
Enquiries: 020 7918 4492
The number of journey stages on the Underground increased for all time periods in 2006 after a relatively flat trend in preceding years. Evening growth continued to far outdo other time periods, with an 11% increase since 2005 compared to an average 7% increase in other time periods. 3. Public transport
Chart 3.4.2 Weekday and weekend Underground journey stages by ticket type (2006/07)
The shares of weekday and weekend ticket types for Underground usage did not greatly change between the quarters in 2006/07. The main change was the increased use of Oyster card pay as you go, which rose by more than 10% between the fourth quarter and the fourth quarter of the previous year for both weekday and weekend. Conversely, singles/carnet saw a decrease of around 3% between the first and fourth quarter for both weekday and weekend, on what was already a small percentage share. Daily price capping is available on Oyster, meaning that the total pay as you go fare will be less than the equivalent one day travelcard fare, explaining some of the shift to Oyster.
Chart 3.4.3 Use of Oyster card for Underground travel
Source: Oyster card usage records and TfL Ticket Sales Data, UUS Enquiries: 020 7126 4616 3. Public transport
The increased use of Oyster cards on the Underground in 2006/07 was similar to that seen for buses; usage of Oyster cards increased by 70% since they were introduced in September 2003.
Cash fares and other non-Oyster ticket types saw a decrease in usage between March 2006 and March 2007. Use of other Oyster card tickets remained similar to that seen in March 2006, while pay as you go use for Underground travel increased by 73% in the same period. In March 2007 Oyster card ticket types (including Freedom passes) accounted for over 60% of all tickets used on the Underground.
Chart 3.4.4 Weekday and weekend Underground journey stages by hour of departure (2005/06)
Source: LUL Entry Counts Enquiries: 020 7918 4492
The percentage of scheduled kilometres operated increased in 2006/07 after the decrease in 2005/06 following the terrorist attacks in July 2005. However, the 2006/07 figure is still lower than that seen in 2004/05. Excess journey time increased by 0.6 minutes, continuing the trend seen over the previous two years.
Table 3.4.2 London Underground service reliability
| Year | Percentage of scheduled kilometres operated | Excess journey time (minutes)¹ | |----------|---------------------------------------------|--------------------------------| | 1990/91 | 95.0 | \*\* | | 1991/92 | 97.2 | \*\* | | 1992/93 | 97.5 | \*\* | | 1993/94 | 96.5 | \*\* | | 1994/95 | 96.8 | \*\* | | 1995/96 | 96.2 | \*\* | | 1996/97 | 94.5 | \*\* | | 1997/98 | 95.5 | \*\* | | 1998/99 | 93.6 | 7.1 | | 1999/00 | 94.3 | 7.5 | | 2000/01 | 91.6 | 8.6 | | 2001/02 | 92.9 | 8.1 | | 2002/03 | 91.1 | 9.7 | | 2003/04 | 93.1 | 7.4 | | 2004/05 | 95.3 | 7.2 | | 2005/06 | 93.6 | 7.5 | | 2006/07 | 94.5 | 8.1 |
Source: Transport for London Enquiries: 020 7918 3439
¹ Excess journey time is the difference between actual journey time and that predicted if services run to time, weighted based on how customers value time. Data not collected prior to 1998/99.
See technical note. 3. Public transport
Chart 3.4.5 Scheduled and operated kilometres by Underground
Source: TfL Service Performance Data Enquiries: 020 7126 4616
Chart 3.4.6 London Underground service reliability by line (2006/07)
Source: Transport for London Enquiries: 020 7918 3439
Service reliability on London Underground is defined as the percentage of scheduled kilometres operated. The East London line was the most reliable in 2006/07 at 99.1%, followed by the Waterloo & City line (97.7%). The Circle and Hammersmith & City lines operated the lowest percentage of scheduled kilometres (90.1%), followed by the Northern line (90.6%). 3. Public transport
3.5. Rail
Table 3.5.1 National Rail passenger trips in London
| Year | All trips | Within London | To/from London | Percentage within London | |---------|-----------|---------------|----------------|-------------------------| | 1995/96 | 379 | 201 | 178 | 53.0 | | 1996/97 | 406 | 212 | 194 | 52.1 | | 1997/98 | 434 | 223 | 211 | 51.4 | | 1998/99 | 458 | 235 | 223 | 51.4 | | 1999/00 | 484 | 246 | 238 | 50.8 | | 2000/01 | 492 | 248 | 244 | 50.4 | | 2001/02 | 493 | 247 | 246 | 50.1 | | 2002/03 | 505 | 254 | 252 | 50.2 | | 2003/04 | 502 | 244 | 258 | 48.6 | | 2004/05 | 503 | 238 | 265 | 47.3 | | 2005/06 | 503 | 232 | 271 | 46.1 |
Source: Office of Rail Regulation
See technical note.
Chart 3.5.1 National Rail trips to/from London by region of origin/destination
The South East and East have seen the highest increases in National Rail trips to and from London; the South East by 18% and East by 19%. However, trips within London have decreased by nearly 9% since the peak in 2002/03. 3. Public transport
Passenger kilometres by rail in London and the South East continued the general increasing trend seen in previous years. An increase of 8% was seen in 2006/07, with 22.4 billion passenger kilometres travelled.
Passenger journeys on London and South East operator services have also shown an increasing trend since 1998/99. 2006/07 saw a particularly sharp increase, with journeys in London and the South East up by 7%. 3. Public transport
Chart 3.5.4 London and the South East operators percentage of trains arriving on time
The percentage of trains arriving on time continued in an annual cycle for both peak and all services, with the highest rates seen in the first quarter (April to June) of each year. The percentage of trains arriving on time was lower in the peak period than over the whole day.
Chart 3.5.5 Rail fare trends (adjusted for inflation) London and the South East operators: index (Jan 1995=100)
Since 1995, rail fares charged by London and South East operators increased in real terms for both standard (unregulated) and first class tickets while standard class regulated fares, after falling between 1998 and 2003, rose again to reach 2% below the 1995 level in January 2007. 3. Public transport
3.6. Docklands Light Railway
Table 3.6.1 Docklands Light Railway key trends
| Year | Passenger kilometres (m) | Passenger journey stages (m) | Average fare per passenger kilometre at 2006/07 prices (pence) | Traffic revenue at 2006/07 prices (£m) | Train kilometres (m) | |---------|--------------------------|-----------------------------|---------------------------------------------------------------|---------------------------------------|----------------------| | 1987/88 | 15.4 | 3.3 | 17.7 | 2.7 | 0.5 | | 1988/89 | 32.0 | 6.6 | 14.4 | 4.6 | 0.8 | | 1989/90 | 37.8 | 8.5 | 14.9 | 5.6 | 0.7 | | 1990/91 | 33.0 | 8.0 | 14.6 | 4.8 | 0.8 | | 1991/92 | 32.3 | 7.9 | 13.8 | 4.5 | 1.0 | | 1992/93 | 32.5 | 6.9 | 16.4 | 5.3 | 1.1 | | 1993/94 | 39.4 | 8.3 | 16.5 | 6.5 | 1.1 | | 1994/95 | 55.0 | 11.5 | 17.0 | 9.4 | 1.5 | | 1995/96 | 70.0 | 14.5 | 17.9 | 12.5 | 2.0 | | 1996/97 | 85.6 | 16.7 | 18.4 | 15.8 | 2.3 | | 1997/98 | 109.9 | 21.4 | 17.3 | 19.0 | 2.4 | | 1998/99 | 138.7 | 27.6 | 17.7 | 24.6 | 2.5 | | 1999/00 | 152.2 | 30.9 | 17.6 | 26.7 | 2.6 | | 2000/01 | 195.3 | 38.4 | 17.7 | 34.5 | 2.9 | | 2001/02 | 206.9 | 41.3 | 19.0 | 39.3 | 2.9 | | 2002/03 | 232.0 | 45.7 | 18.2 | 42.3 | 3.2 | | 2003/04 | 235.0 | 48.5 | 18.1 | 42.5 | 3.4 | | 2004/05 | 242.8 | 50.1 | 19.1 | 46.3 | 3.3 | | 2005/06 | 257.4 | 53.0 | 19.9 | 51.2 | 3.6 | | 2006/07 | 300.6 | 61.3 | 17.5 | 52.5 | 4.3 |
Source: DLR
DLR saw a continued increase in use in 2006/07. Both passenger kilometres and journeys (boardings) continued to rise. At the same time, the average fare paid per passenger kilometre decreased to the lowest level since 1997/98.
Table 3.6.2 Docklands Light Railway service reliability
| Year | Percentage of scheduled services operated | Percentage of trains on time | |---------|-------------------------------------------|-----------------------------| | 1997/98 | 95.6 | 89.6 | | 1998/99 | 97.5 | 92.0 | | 1999/00 | 97.8 | 93.7 | | 2000/01 | 98.2 | 96.3 | | 2001/02 | 98.3 | 96.6 | | 2002/03 | 98.1 | 96.3 | | 2003/04 | 98.2 | 96.6 | | 2004/05 | 98.5 | 97.1 | | 2005/06 | 98.7 | 97.3 | | 2006/07 | 99.2 | 97.8 |
Source: DLR
DLR service reliability continued to improve and in 2006/07 was at its highest since monitoring began in 1997/98. 3. Public transport
3.7. Croydon Tramlink
Table 3.7.1 Croydon Tramlink key trends
| Year | Passenger kilometres (m) | Passenger journey stages (m) | Average fare per passenger kilometre at 2006/07 prices (pence) | Traffic revenue at 2006/07 (£m) | Tram kilometres operated (m) | Average journey stage length (km) | |----------|--------------------------|------------------------------|---------------------------------------------------------------|---------------------------------|-------------------------------|----------------------------------| | 2001/02 | 97 | 18.6 | 13.7 | 13.3 | 2.4 | 5.2 | | 2002/03 | 100 | 19.2 | 13.8 | 13.7 | 2.5 | 5.2 | | 2003/04 | 103 | 19.8 | 13.7 | 14.1 | 2.5 | 5.2 | | 2004/05 | 113 | 21.8 | 14.9 | 16.9 | 2.4 | 5.2 | | 2005/06 | 117 | 22.5 | 15.6 | 18.3 | 2.4 | 5.2 | | 2006/07 | 127 | 24.5 | 14.5 | 18.5 | 2.5 | 5.2 |
Source: Tramtrack Croydon Limited Enquiries: 020 8689 3788
1. In 2006/07, passengers under the age of 5 were included for the first time.
Croydon Tramlink services began in 2000/01, with the first full year of operation being 2001/02, and since then a steady rise has been seen in its usage. In 2006/07 the number of passenger kilometres and journey stages increased. The traffic revenue also increased slightly, even though there was a fall in the average fare.
Table 3.7.2 Croydon Tramlink service reliability
| Year | Scheduled kilometres (thousands) | Operated kilometres (thousands) | Percentage of scheduled service operated | |----------|----------------------------------|---------------------------------|------------------------------------------| | 2001/02 | 2.44 | 2.41 | 99.1 | | 2002/03 | 2.49 | 2.46 | 98.9 | | 2003/04 | 2.50 | 2.48 | 99.0 | | 2004/05 | 2.49 | 2.42 | 97.2 | | 2005/06 | 2.50 | 2.44 | 97.4 | | 2006/07 | 2.57 | 2.54 | 98.7 |
Source: Tramtrack Croydon Limited Enquiries: 020 8689 3788
1. Operated kilometres exclude replacement bus services operated during periods of track repair works.
The percentage of scheduled kilometres operated by Croydon Tramlink increased in 2006/07 to 98.7%, just below the level achieved in the first 3 years of operation. 3. Public transport
3.8. Taxis
Table 3.8.1 London taxi drivers and vehicles
| Year | Taxi drivers licensed | Taxis licensed | Real fares index (1994=100) | |------|-----------------------|----------------|-----------------------------| | | All London | Suburban | Total | | | | 1983 | 16.2 | 1.9 | 18.1 | 13.1 | 88.0 | | 1984 | 16.4 | 1.9 | 18.3 | 13.6 | 88.3 | | 1985 | 16.6 | 1.8 | 18.4 | 13.8 | 85.8 | | 1986 | 17.0 | 1.8 | 18.8 | 14.2 | 87.4 | | 1987 | 17.7 | 1.7 | 19.4 | 14.8 | 88.5 | | 1988 | 18.1 | 1.7 | 19.8 | 15.2 | 89.8 | | 1989 | 18.5 | 1.7 | 20.1 | 15.6 | 92.6 | | 1990 | 18.9 | 1.7 | 20.6 | 16.3 | 92.4 | | 1991 | 19.3 | 2.0 | 21.2 | 16.6 | 95.0 | | 1992 | 18.8 | 1.8 | 20.5 | 17.1 | 97.2 | | 1993 | 18.8 | 1.8 | 20.5 | 17.3 | 99.5 | | 1994 | 19.6 | 1.8 | 21.3 | 18.3 | 100.0 | | 1995 | 20.2 | 1.8 | 21.9 | 18.3 | 100.9 | | 1996 | 20.3 | 1.8 | 22.1 | 18.7 | 103.1 | | 1997 | 20.3 | 2.0 | 22.3 | 18.9 | 103.9 | | 1998 | 20.4 | 2.1 | 22.5 | 19.4 | 104.2 | | 1999 | 20.9 | 2.5 | 23.3 | 19.2 | 107.0 | | 2000 | 21.0 | 2.4 | 23.4 | 19.4 | 110.8 | | 2001 | 21.3 | 2.5 | 23.9 | 20.9 | 125.1 | | 2002 | 21.7 | 2.7 | 24.4 | 20.5 | 127.0 | | 2003 | 21.8 | 2.9 | 24.7 | 20.9 | 124.4 | | 2004 | 21.7 | 3.1 | 24.9 | 20.9 | 124.9 | | 2005 | 21.6 | 3.1 | 24.7 | 21.0 | 128.0 | | 2006 | 21.5 | 3.1 | 24.7 | 21.7 | 128.4 | | 2007 | 21.5 | 3.1 | 24.6 | 21.6 | 131.3 |
Source: TfL Public Carriage Office, PCO Licensing Book
See technical note.
2007 saw very little change from 2006, with the number of licensed drivers remaining static, while the number of licensed taxis fell by less than 1%. Fares continued to increase, with real fares almost a third higher than 1994.
Table 3.8.2 Private hire operators and vehicles
| Year | Licensed private hire operators | Licensed private hire vehicles | Licensed private hire drivers | |------|---------------------------------|--------------------------------|-------------------------------| | 2001 | 0.1 | * | * | | 2002 | 1.6 | * | * | | 2003 | 2.2 | * | * | | 2004 | 2.3 | * | 7.0 | | 2005 | 2.3 | 36.9 | 19.0 | | 2006 | 2.3 | 40.5 | 31.1 | | 2007 | 2.1 | 44.4 | 38.0 |
Source: TfL Public Carriage Office
See technical note.
The number of both licensed private hire vehicles and drivers increased significantly in 2007, by 10% and 22% respectively. 3. Public transport
3.9. Coach travel
Table 3.9.1 Coach travel to and from Victoria Coach Station
| Year | Domestic coach departures¹ | International coach departures | Total passenger numbers (millions)² | |------------|----------------------------|--------------------------------|-----------------------------------| | 1994/95 | 159 | 12 | • | | 1995/96 | 158 | 11 | • | | 1996/97 | 174 | 12 | • | | 1997/98 | 174 | 12 | • | | 1998/99 | 179 | 12 | • | | 1999/00 | 171 | 13 | • | | 2000/01 | 177 | 14 | • | | 2001/02 | 174 | 13 | • | | 2002/03 | 176 | 13 | • | | 2003/04 | 186 | 10 | • | | 2004/05 | 175 | 11 | 9.70 | | 2005/06 | 184 | 12 | 7.93 | | 2006/07 | 177 | 11 | 8.10 |
Source: Victoria Coach Station departure figures Enquiries: 020 7824 0001
1. Up to 2003/04 domestic departures include some relatively high frequency specialist London Bus services no longer operating.
2. Numbers of passengers are reported by coach operators by calendar year: thus, for example, the passengers reported in 2005/06 relate to the year 2005.
See technical note.
Both domestic and international coach departures decreased between 2005/06 and 2006/07, but total passenger numbers increased.
Table 3.9.2 Central London coach movements
| Service type: | Summer 2003 | Easter 2004 | Summer 2004 | Easter 2005 | Summer 2005 | Easter 2006 | Summer 2006 | Easter 2007 | |------------------------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------| | Private Hire | 28 | 24 | 35 | 34 | 33 | 25 | 36 | 30 | | Scheduled | 47 | 54 | 52 | 49 | 53 | 57 | 49 | 49 | | Foreign (non-UK registered) | 9 | 15 | 10 | 13 | 11 | 17 | 12 | 20 | | Other | 16 | 7 | 3 | 3 | 3 | 2 | 2 | 1 | | All types | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | | Number of coaches¹ | 3,391 | 3,077 | 3,693 | 3,221 | 3,043 | 2,912 | 3,266 | 3,107 |
Source: Central London Coach Survey Enquiries: 020 7027 9650
1. Coaches entering or leaving central London between 7am and 7pm on a random weekday.
Coach movements increased in Summer 2006 compared with the previous year, but remain below those seen in 2003 and 2004. The number of non-UK registered coaches continued to increase, and more full coaches, as opposed to half full or nearly empty, were also observed. 3. Public transport
3.10 River services
Table 3.10.1 Tickets sold at London River Services piers
| Piers1 | 1999/00 | 2000/01 | 2001/02 | 2002/03 | 2003/04 | 2004/05 | 2005/06 | 2006/07 | |--------|---------|---------|---------|---------|---------|---------|---------|---------| | Bankside | 4 | 3 | 5 | 45 | 80 | 109 | 114 | 104 | | Blackfriars2 | 7 | 25 | 28 | 67 | 13 | 24 | 29 | \*\* | | Embankment | 316 | 357 | 395 | 345 | 310 | 255 | 190 | 216 | | Festival | 11 | 15 | 18 | 9 | 10 | 9 | 6 | 8 | | Greenwich | 215 | 177 | 185 | 162 | 197 | 184 | 194 | 209 | | Millbank | • | • | • | • | 59 | 83 | 75 | 93 | | Tower | 274 | 237 | 224 | 235 | 207 | 289 | 272 | 332 | | Waterloo3 | 61 | 291 | 178 | 272 | 171 | • | • | • | | Westminster | 725 | 468 | 706 | 634 | 636 | 745 | 721 | 796 | | All Piers | 1,613 | 1,574 | 1,739 | 1,767 | 1,682 | 1,699 | 1,601 | 1,759 |
Percentage change
| 1 year | \*\* | –2.4% | 10.5% | 1.6% | –4.8% | 1.0% | –5.7% | 9.9% | | Thames Clippers4 | \*\* | \*\* | \*\* | \*\* | 183 | 367 | 525 | 662 |
Source: TfL London River Services
1. Excludes charter ticket sales.
2. From 2006, Blackfriars is served only by Thames Clippers therefore all passengers at this pier are included in the Thames Clippers total.
3. Waterloo Pier was managed by LRS (and therefore data only collected) until 31/07/03 only.
4. Thames Clippers run under contract to LRS. Passengers have not been counted in LRS pier totals.
See technical note.
The total tickets sold for London River Services increased by 9.9% in 2006/07. The number of boardings of the Thames Clipper service also increased in 2006/07, by 26%.
### 3. Public transport
#### 3.11. Dial-a-Ride
**Table 3.11.1 Dial-a-Ride key trends**
| Year | Number of journeys (thousands) | Number of buses | Registered passengers (thousands) | Average cost per passenger journey (2006/07 prices) (£) | Total grant (2006/07 prices) (£m) | |----------|--------------------------------|-----------------|-----------------------------------|--------------------------------------------------------|----------------------------------| | 1990/91 | 676 | 160 | 77 | 17.27 | 12.7 | | 1991/92 | 745 | 175 | 82 | 17.24 | 14.6 | | 1992/93 | 750 | 177 | 39 | 19.09 | 14.9 | | 1993/94 | 746 | 193 | 51 | 19.78 | 16.7 | | 1994/95 | 835 | 215 | 61 | 17.19 | 17.6 | | 1995/96 | 961 | 242 | 66 | 14.38 | 15.1 | | 1996/97 | 993 | 244 | 80 | 13.40 | 14.8 | | 1997/98 | 1,084 | 245 | 93 | 12.50 | 14.3 | | 1998/99 | 1,142 | 262 | 107 | 12.28 | 14.5 | | 1999/00 | 1,178 | 287 | 71 | 12.25 | 15.4 | | 2000/01 | 1,222 | 292 | 73 | 11.90 | 15.0 | | 2001/02 | 1,260 | 302 | 86 | 13.25 | 16.7 | | 2002/03 | 1,269 | 317 | 96 | 14.06 | 17.9 | | 2003/04 | 1,325 | 316 | 61 | 14.65 | 18.3 | | 2004/05 | 1,261 | 316 | 66 | 18.12 | 21.9 | | 2005/06 | 1,232 | 336 | 71 | 19.85 | 23.7 | | 2006/07 | 1,173 | 342 | 72 | 23.42 | 26.7 |
Source: Transport for London, Dial-a-Ride
1. Re-registration exercises took place in 1992/93, 1999/00 and 2003/04.
2. From 2003/04, cost per passenger journey includes fares paid by passengers.
3. Additional costs in 2005/06 and 2006/07 were caused by delays to the implementation of a new booking system and central call centre.
See technical note.
The number of journeys on Dial-a-Ride services decreased by nearly 5% in 2006/07. The average cost per passenger journey increased by 18%, due to additional booking staff costs in 2005/06 and 2006/07. 3. Public transport
3.12. Taxicard
Table 3.12.1 Taxicard key trends
| Year | Number of journeys (thousands) | Number of members (thousands) | Average cost per vehicle trip at 2006/07 prices (£) | User contribution at 2006/07 prices (£) | Total joint funding (TfL & Boroughs) at 2006/07 prices (£m) | |--------|-------------------------------|-------------------------------|---------------------------------------------------|----------------------------------------|----------------------------------------------------------| | 1990/91| 756 | 35 | 12.90 | \*\* | \*\* | | 1991/92| 760 | 37 | 12.46 | \*\* | \*\* | | 1992/93| 765 | 45 | 12.58 | \*\* | \*\* | | 1993/94| 702 | 40 | 10.17 | \*\* | \*\* | | 1994/95| 741 | 45 | 10.72 | \*\* | \*\* | | 1995/96| 751 | 44 | 10.25 | \*\* | \*\* | | 1996/97| 553 | 36 | 11.38 | \*\* | \*\* | | 1997/98| 500 | 43 | 11.75 | \*\* | \*\* | | 1998/99| 533 | 45 | 11.40 | \*\* | \*\* | | 1999/00| 501 | 44 | 11.73 | \*\* | \*\* | | 2000/01| 478 | 41 | 12.18 | \*\* | \*\* | | 2001/02| 523 | 39 | 12.71 | 4.85 | 10.25 | | 2002/03| 653 | 44 | 12.80 | 4.30 | 11.74 | | 2003/04| 791 | 50 | 13.15 | 4.02 | 12.19 | | 2004/05| 948 | 63 | 12.19 | 2.70 | 12.99 | | 2005/06| 1,118 | 74 | 14.24 | 2.49 | 13.38 | | 2006/07| 1,275 | 77 | 13.70 | 2.28 | 15.30 |
Percentage change
| 1 year | 14% | 4% | -4% | -8% | 14% | | 10 years | 131% | 113% | 20% | \*\* | \*\* |
Source: Taxicard Survey
1. Up to 2003/04 excludes Barnet, Greenwich, Redbridge and Westminster, which operated their own Taxicard scheme. From 2004/05, only Westminster is excluded.
2. The average cost per trip comprises the total metered fare, plus an administration fee, before the user’s contribution is deducted.
3. The user contribution comprises the user’s minimum fare, plus any amount on the meter that is in excess of the borough’s subsidy. Data available since TfL funding began in 2001.
See technical note.
Both the number of journeys and the number of Taxicard members continued to increase in 2006/07. In ten years, the number of journeys has more than doubled. The average cost per vehicle trip and user contribution both decreased in real terms compared to the previous year. Since TfL funding began in 2001, the number of members increased by 85% and the number of journeys per member by 44%.
Table 3.12.2 Capital Call key trends
| Year | Number of journeys (thousands) | Number of members (thousands) | Average cost per vehicle trip at 2006/07 prices (£) | User contribution (2006/07 prices (£) | |--------|-------------------------------|-------------------------------|---------------------------------------------------|--------------------------------------| | 2004/05| 15.6 | 3.4 | 14.65 | 1.60 | | 2005/06| 20.6 | 5.0 | 15.13 | 1.56 | | 2006/07| 21.8 | 6.6 | 15.83 | 1.50 |
Percentage change
| 1 year | 6% | 33% | 5% | -4% |
Source: Capital Call survey
1. The average cost per vehicle trip does not include administration costs.
See technical note.
The numbers of journeys and members for Capital Call continued to increase in 2006/07. The number of members increased by a third in 2006/07, almost doubling the initial membership in 2004/05. The average cost per vehicle trip also increased, although the user contribution decreased by 4% in real terms. 4. Private transport
4.1. Road traffic
Table 4.1.1 London road traffic by road class
| Year | Motorways and trunk roads | Principal roads | Minor roads | All roads London | All roads Great Britain | |------|---------------------------|----------------|------------|-----------------|------------------------| | 1993 | 8.3 | 11.3 | 11.1 | 30.7 | 412.3 | | 1994 | 8.5 | 11.5 | 11.2 | 31.1 | 421.5 | | 1995 | 8.5 | 11.5 | 11.2 | 31.2 | 429.7 | | 1996 | 8.6 | 11.5 | 11.3 | 31.5 | 441.1 | | 1997 | 8.7 | 11.5 | 11.4 | 31.7 | 450.3 | | 1998 | 8.8 | 11.5 | 11.6 | 31.9 | 458.5 | | 1999 | 9.0 | 11.7 | 11.9 | 32.7 | 467.0 | | 2000 | 9.1 | 11.6 | 11.9 | 32.6 | 467.1 | | 2001 | 2.2 | 18.5 | 12.1 | 32.7 | 474.4 | | 2002 | 2.2 | 18.1 | 12.5 | 32.8 | 486.5 | | 2003 | 2.1 | 18.1 | 12.6 | 32.8 | 490.4 | | 2004 | 2.1 | 18.0 | 12.6 | 32.7 | 498.6 | | 2005 | 2.0 | 18.0 | 12.6 | 32.7 | 499.4 | | 2006 | 2.2 | 18.1 | 12.7 | 33.0 | 506.4 | | Total road length (km) | 60 | 1,720 | 13,146 | 14,926 | 398,350 |
Source: National Road Traffic survey, DfT
1. In 2001 all-purpose trunk roads in London were reclassified as principal roads.
See technical note.
Road traffic in London in 2006 remained at a similar level to that seen in 2005. Levels of road traffic in London have remained static since 1999, with less than 1% growth between then and 2006. In contrast, road traffic in Britain as a whole has increased by over 8% between 1999 and 2006. Traffic on London’s motorways increased by 10% in 2006, although levels were no higher than in 2001. Chart 4.1.1 Annual average daily vehicle flows (2006)
Source: DfT National Road Traffic Counts Enquiries: 020 7027 9343
© Crown copyright. All rights reserved (GLA) (100032379) (2003). 4. Private transport
Table 4.1.2 London road traffic by vehicle type and road class (2006)
| Road class | Cars and taxis | Two-wheeled motor vehicles | Buses and coaches | Light vans | Goods vehicles | All motor vehicles | |------------------|----------------|----------------------------|-------------------|------------|----------------|--------------------| | Motorways | 1.682 | 19 | 15 | 265 | 218 | 2.199 | | Principal roads | 14.455 | 482 | 409 | 2.182 | 664 | 18.192 | | All minor roads | 10.261 | 322 | 197 | 1.680 | 191 | 12.650 | | All roads | 26.398 | 823 | 621 | 4.126 | 1.073 | 33.041 |
Source: National Road Traffic Survey, DfT Enquiries: 020 7944 3095
See technical note.
Table 4.1.3 Average daily vehicle flows on major roads in London by vehicle type
| Year | Cars and taxis | Two-wheeled motor vehicles | Buses and coaches | Light vans | Goods vehicles | All motor vehicles | |--------|----------------|----------------------------|-------------------|------------|----------------|--------------------| | 1993 | 24.8 | 0.6 | 0.4 | 3.1 | 1.3 | 30.3 | | 1994 | 25.2 | 0.6 | 0.5 | 3.2 | 1.3 | 30.8 | | 1995 | 25.1 | 0.6 | 0.5 | 3.4 | 1.3 | 30.8 | | 1996 | 25.3 | 0.6 | 0.5 | 3.3 | 1.3 | 31.1 | | 1997 | 25.4 | 0.7 | 0.5 | 3.4 | 1.3 | 31.3 | | 1998 | 25.4 | 0.7 | 0.5 | 3.3 | 1.5 | 31.3 | | 1999 | 25.8 | 0.7 | 0.5 | 3.5 | 1.4 | 31.9 | | 2000 | 25.6 | 0.7 | 0.5 | 3.5 | 1.4 | 31.8 | | 2001 | 25.5 | 0.7 | 0.5 | 3.6 | 1.4 | 31.7 | | 2002 | 25.2 | 0.7 | 0.6 | 3.4 | 1.4 | 31.2 | | 2003 | 24.7 | 0.8 | 0.6 | 3.7 | 1.3 | 31.1 | | 2004 | 24.5 | 0.7 | 0.6 | 3.5 | 1.4 | 30.8 | | 2005 | 24.4 | 0.7 | 0.6 | 3.6 | 1.4 | 30.7 | | 2006 | 24.8 | 0.8 | 0.7 | 3.8 | 1.4 | 31.4 |
Source: National Road Traffic Survey, DfT Enquiries: 020 7944 3095
1. Major roads include motorways, all-purpose trunk and principal roads; in 2001 all-purpose trunk roads in London were reclassified as principal roads.
See technical note.
Vehicle flows on major roads in London have remained relatively stable since the start of the century. There was a slight increase in the number of cars and taxis in 2006, which was 2% higher than 2005 levels. The number of motorcycles on London’s major roads also increased, by 14%. 4. Private transport
Chart 4.1.2 Cordon crossings – all motor vehicles
As in previous years, the number of vehicles crossing the central cordon fell in 2006, decreasing by 2%.
Chart 4.1.3 Location of London road traffic cordons
© Crown copyright. All rights reserved (GLA/100032379) (2003) 4. Private transport
4.2. Speeds
Table 4.2.1 Average traffic speeds in Greater London
| Year | Central area | Rest of inner area | All inner | Outer area | All areas | |--------------------|--------------|--------------------|-----------|------------|-----------| | Morning peak period| | | | | | | 1977-1982 | 12.2 | 14.1 | 13.6 | 19.2 | 17.2 | | 1983-1990 | 11.7 | 12.7 | 12.4 | 18.6 | 16.5 | | 1990-1997 | 10.6 | 13.3 | 12.4 | 17.2 | 15.7 | | 1997-2000 | 10.0 | 12.0 | 11.4 | 18.2 | 15.9 | | 2000-2002 | 9.9 | 11.6 | 11.1 | 16.9 | 15.0 | | 2003-2006 | 10.6 | 11.7 | 11.4 | 16.3 | 14.8 | | 2006-2009 | 9.3 | 11.2 | 10.7 | \*\* | \*\* | | Daytime off-peak period | | | | | | | 1977-1982 | 12.1 | 17.3 | 15.3 | 25.0 | 20.8 | | 1983-1990 | 11.5 | 15.5 | 14.1 | 24.0 | 19.9 | | 1990-1997 | 10.7 | 15.4 | 13.7 | 22.7 | 19.2 | | 1997-2000 | 10.0 | 14.8 | 13.0 | 21.9 | 18.5 | | 2000-2002 | 9.0 | 13.7 | 12.0 | 21.4 | 17.7 | | 2003-2006 | 10.5 | 14.1 | 12.9 | 21.3 | 18.3 | | 2006-2009 | 9.4 | 13.7 | 12.3 | \*\* | \*\* | | Evening peak period| | | | | | | 1977-1982 | 12.1 | 13.8 | 13.3 | 20.3 | 17.6 | | 1983-1990 | 11.3 | 12.4 | 12.1 | 20.0 | 16.9 | | 1990-1997 | 10.6 | 13.0 | 12.2 | 19.3 | 16.8 | | 1997-2000 | 10.2 | 11.4 | 11.0 | 19.1 | 16.2 | | 2000-2002 | 9.6 | 11.3 | 10.8 | 18.4 | 15.7 | | 2003-2006 | 10.6 | 12.3 | 11.9 | 17.9 | 16.0 | | 2006-2009 | 10.2 | 12.2 | 11.7 | \*\* | \*\* |
Source: TfL Traffic Speed Survey
See technical note. In recent years there has generally been a downward trend in average traffic speeds across London. However, speeds in central London during the morning peak increased from under 10mph in 2002 to 11mph in 2003, as a result of reduced traffic levels following congestion charging. Since 2003, there has been a gradual decline to reach 10.2mph in 2006, just above the 1999 level. Speeds in the rest of inner London and outer London decreased by almost 1mph and 2mph, respectively, over the same period. Chart 4.2.2 Morning peak road network congestion (2006)
Source: Road Network Performance Team Enquiries: 020 7027 9343
Minutes delayed per km
- Greater than 1.5
- 1 to 1.5
- 0.5 to 1
- 0.25 to 0.5
- Less than 0.25
- No Data
Information derived from data provided by ITIS Holdings obtained from vehicles fitted with GPS devices
© Crown copyright. All rights reserved (GLA) (100032379) (2003). 4. Private transport
4.3. Car ownership
Table 4.3.1 Car ownership in London and Great Britain by household size (2005-06)
| Number of cars | Number of people in household | Percentage | Average household size | |----------------------|-------------------------------|------------|------------------------| | | One | Two | Three | Four or more | All households | size | | Greater London | | | | | | | | No car | 61 | 33 | 32 | 17 | 38 | 1.9 | | One car | 37 | 51 | 45 | 46 | 44 | 2.4 | | Two or more cars | 2 | 17 | 23 | 38 | 17 | 3.3 | | All households | 100 | 100 | 100 | 100 | 100 | 2.4 | | Rest of Great Britain| | | | | | | | No car | 50 | 14 | 14 | 9 | 23 | 1.7 | | One car | 47 | 49 | 34 | 33 | 43 | 2.2 | | Two or more cars | 3 | 37 | 52 | 58 | 34 | 3.1 | | All households | 100 | 100 | 100 | 100 | 100 | 2.4 | | Great Britain | | | | | | | | No car | 52 | 17 | 16 | 10 | 25 | 1.8 | | One car | 46 | 49 | 36 | 34 | 43 | 2.2 | | Two or more cars | 2 | 34 | 48 | 55 | 32 | 3.1 | | All households | 100 | 100 | 100 | 100 | 100 | 2.4 |
Source: DfT, National Travel Survey
The share of London households with no car fell in 2006, from 35% to 34%. Similarly, households with two or more cars also declined, from 21% to 17%. This led to an increase in the share of households with one car, which rose from 44% to 49%.
See technical note. 4. Private transport
4.4. Vehicle registrations
Table 4.4.1 Private cars registered in London
| Year | Greater London | Percentage company cars | Inner London | Outer London | |------|----------------|-------------------------|--------------|-------------| | 1996 | 2,262 | 14 | 679 | 1,583 | | 1997 | 2,259 | 12 | 688 | 1,571 | | 1998 | 2,287 | 11 | 697 | 1,590 | | 1999 | 2,319 | 10 | 707 | 1,611 | | 2000 | 2,331 | 10 | 709 | 1,622 | | 2001 | 2,379 | 9 | 721 | 1,657 | | 2002 | 2,390 | 7 | 717 | 1,672 | | 2003 | 2,397 | 6 | 714 | 1,682 | | 2004 | 2,438 | 6 | 718 | 1,720 | | 2005 | 2,473 | 5 | 724 | 1,750 | | 2006 | 2,480 | 5 | 719 | 1,761 |
Percentage change
1 year – • – 1% 5 years 4% • – 6%
Source: DfT, from DVLA vehicle record
1. Data recorded at the end of December each year.
See technical note.
The number of car registrations in London at the end of 2006 continued an upward trend, and was 4% higher than in 2001. This was the net result of a 6% increase in outer London but almost no change in inner London. 4. Private transport
4.5. Cycling
Chart 4.5.1 Average daily cycle flows on major roads in London
Source: National Road Traffic Survey, DfT Enquiries: 020 7944 3095
1. Major roads include trunk and principal roads.
Cycle flows on London’s major roads continued to increase in 2006, with almost twice as many cycles recorded compared to 2000.
Chart 4.5.2 Cyclist flows on the Transport for London Road Network (TLRN): index (March 2000=100)
Source: TfL Automatic Cycle Counters Enquiries: 020 7027 9339
The level of cyclists using the TLRN continued to increase in 2006/07, with at times over twice the number of cyclists recorded in March 2000. 4. Private transport
Chart 4.5.3 Cycle trips by age group (2006/07) Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
Across all age groups, men make more cycle trips than women. This is especially apparent in the 25-44 age group, where men made nearly twice as many trips as women. A large proportion of cycle trips (44%) are for commuting purposes, with shopping and leisure trips each accounting for just under 20% of all cycle trips.
Chart 4.5.4 Cycle trips by purpose (2006/07) Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
Chart 4.5.5 Cycles crossing the River Thames screenline Source: TFL Cordon and Screenline Surveys Enquiries: 020 7027 9339
The chart shows the number of cycles crossing the Thames in both directions, based on a single day count at each bridge. Until 2006 there was a steady growth in the number of cycles crossing the River Thames, but a reduction in 2007. 4. Private transport
Chart 4.5.6 Proportion of employed people whose usual journey to work is by cycling, by ward of origin (2001)
Source: ONS, 2001 Census of Population Enquiries: 020 7126 4608
4.6. Walking
Chart 4.6.1 Walk trips by age group (2006/07) Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
Chart 4.6.2 Walk trips by purpose (2006/07) Source: LTDS 2006/07 Household Survey Enquiries: 020 7126 4608
In all age groups except children, women make more walk trips than men. This is especially true for the 25-44 age group, where women make over 80% more walk trips than men. Nearly 40% of all walk trips are for shopping or personal business, with almost a quarter being for leisure purposes. Only 11% of people walk to work. 4. Private transport
Chart 4.6.3 Proportion of employed people whose usual journey to work is by walking, by ward of origin (2001)
Source: ONS, 2001 Census of Population Enquiries: 020 7126 4608
Higher proportions of walking to work are seen in areas where the employment density is high. The map has a similar pattern to chart 7.2.1 and reflects the fact that the vast majority of walks are for short distances. 4. Private transport
4.7. Congestion Charging
Chart 4.7.1 Cars(^1) entering the Congestion Charging zone during charging hours
Source: TfL, Congestion Charging Enquiries: 020 7126 4384
Traffic patterns in and around the central London Congestion Charging zone remained broadly stable during 2006. Traffic entering the zone (vehicles with four or more wheels) was 21% lower than in 2002, the last year before the charge. The number of cars decreased by 36%. Among non-chargeable vehicles, pedal cycles entering the zone were 49% higher than in 2002, licensed taxis 13% higher and buses and coaches 25% higher.
(^1) Including minicabs. 4. Private transport
Chart 4.7.3 Average daily charging hours flow across a sample of 16 major roads entering the original Congestion Charging zone
In general, traffic flows followed the same seasonal pattern every year. Flows in 2006 appear to be lower throughout most of the year than the previous three years.
Chart 4.7.4 Central London Congestion Charging zone boundary
On 19 February 2007, the Central London Congestion Charging Scheme was extended westwards. The hours of operation also changed in February 2007, with the scheme now operating between 7am and 6pm on weekdays. This does not affect any of the charts in this chapter. 5. Freight
5.1. Road freight
Chart 5.1.1 London road freight lifted
Source: DfT Continuing Survey of Road Goods Transport Enquiries: 020 7944 4261
See technical note.
Road freight lifted increased in 2006 after 2005’s fall, with levels higher than any time since 1990. 68 million tonnes were moved within London, with a further 54 million tonnes coming into London from outside, and 34 million tonnes originating in London with destinations outside London. In total, 156 million tonnes of goods were lifted by road.
5.2. Water freight
Chart 5.2.1 London water freight lifted
Source: Port of London Authority Enquiries: 020 7743 7900
Internal traffic remained at a similar level to 2005, with 2.5 million tonnes lifted. Port of London sea-going traffic dropped to 51.9 million tonnes after two years of growth. The tonnage of air freight lifted decreased by 4% in 2006 after having remained stable in 2005. Heathrow has the highest volume of freight lifted (74%), while Gatwick has continued to lift about 0.22 million tonnes a year since 2003. On the other hand, freight lifted at Stansted airport has increased steadily, from 0.06 million tonnes in 1993 to 0.22 million tonnes in 2006. 6. Casualties
6.1. Road casualties
Table 6.1.1 Road casualties in Greater London and Great Britain by type
| Year | Killed London | Seriously Injured London | Slightly Injured London | All casualties London | Killed GB | Seriously Injured GB | Slightly Injured GB | All casualties GB | |---------------|---------------|--------------------------|-------------------------|-----------------------|-----------|----------------------|---------------------|-------------------| | 1994-1998 average | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | | 1991 | 148 | 128 | 117 | 117 | 99 | 94 | 102 | 97 | | 1992 | 126 | 118 | 108 | 112 | 101 | 94 | 102 | 97 | | 1993 | 115 | 107 | 95 | 102 | 101 | 95 | 101 | 96 | | 1994 | 109 | 102 | 92 | 106 | 102 | 97 | 100 | 99 | | 1995 | 87 | 101 | 98 | 103 | 99 | 96 | 99 | 97 | | 1996 | 101 | 101 | 102 | 101 | 99 | 100 | 100 | 100 | | 1997 | 111 | 101 | 105 | 98 | 101 | 103 | 101 | 102 | | 1998 | 92 | 96 | 103 | 93 | 99 | 103 | 100 | 102 | | 1999 | 105 | 96 | 88 | 89 | 102 | 102 | 100 | 100 | | 2000 | 114 | 95 | 91 | 87 | 102 | 102 | 100 | 100 | | 2001 | 120 | 96 | 90 | 84 | 98 | 100 | 97 | 98 | | 2002 | 112 | 96 | 83 | 82 | 92 | 97 | 91 | 95 | | 2003 | 109 | 98 | 76 | 76 | 85 | 93 | 84 | 91 | | 2004 | 87 | 90 | 61 | 71 | 78 | 91 | 76 | 88 | | 2005 | 86 | 89 | 53 | 66 | 72 | 88 | 70 | 85 | | 2006 | 93 | 89 | 58 | 65 | 66 | 83 | 65 | 81 |
2006 number of casualties: 231, 3,172, 3,715, 28,673, 25,864, 226,559, 29,810, 258,404
Source: TfL London Road Safety Unit Enquiries: 020 7027 9332
DfT Transport Statistics Bulletin. Road Casualties in Great Britain Main Results: 2006 www.dft.gov.uk
1. Index based on 1994-1998 average.
Overall, the number of casualties in London continued to decrease in 2006 due to a drop in the number with slight injuries.
Chart 6.1.1 Road casualties in Greater London by type
Source: TfL, London Road Safety Unit Enquiries: 020 7027 9332
In 2006, the number of people killed on roads in London was 231. The numbers of people seriously injured and slightly injured in 2006 were 3,715 and 25,864 respectively. 6. Casualties
While most people involved in collisions were in cars, the great majority of these people had only a slight injury. On the other hand, pedestrians, cyclists and motorcyclists were more likely to be killed or seriously injured when involved in collisions.
6.2. Underground casualties
In 2006/07, the number of injuries and deaths on the Underground increased compared to previous years. The number of deaths was higher than previous years at 9 people, and the number of injuries was also high at 150, compared to 117 in 2005/06. 7. Population
7.1. Resident population of London
Table 7.1.1 Resident population
| Year | 0-14 | 15-64 | 65 and over | All ages | Inner London | Outer London | Great Britain | |------|------|-------|-------------|----------|--------------|--------------|---------------| | | | | | | | | | | Estimates | | | | | | | | | 1971 | 1,598 | 4,922 | 1,010 | 7,529 | 3,060 | 4,470 | 54,388 | | 1981 | 1,245 | 4,513 | 1,048 | 6,806 | 2,550 | 4,255 | 54,815 | | 1991 | 1,266 | 4,600 | 964 | 6,829 | 2,599 | 4,230 | 55,831 | | 1996 | 1,360 | 4,686 | 929 | 6,974 | 2,656 | 4,318 | 56,477 | | 2001 | 1,368 | 5,058 | 897 | 7,322 | 2,859 | 4,463 | 57,361 | | 2002 | 1,362 | 5,104 | 895 | 7,362 | 2,886 | 4,475 | 57,627 | | 2003 | 1,356 | 5,116 | 892 | 7,364 | 2,891 | 4,473 | 57,855 | | 2004 | 1,351 | 5,150 | 888 | 7,389 | 2,907 | 4,482 | 58,136 | | 2005 | 1,355 | 5,214 | 887 | 7,456 | 2,944 | 4,512 | 58,514 | | 2006 | 1,360 | 5,269 | 884 | 7,512 | 2,973 | 4,539 | 58,846 |
Percentage change
| Period | 0-14 | 15-64 | 65 and over | All ages | Inner London | Outer London | Great Britain | |--------|------|-------|-------------|----------|--------------|--------------|---------------| | 1971-1981 | –22% | –8% | 4% | –10% | –17% | –5% | 1% | | 1981-1991 | 2% | 2% | –8% | – | 2% | –1% | 2% | | 1991-2001 | 8% | 10% | –7% | 7% | 10% | 6% | 3% | | 2001-2006 | –1% | 4% | –2% | 3% | 4% | 2% | 3% |
Source: ONS Mid-year estimates (2002-06 revised Aug 2007)
Chart 7.1.1 Population density (2001)
Source: ONS, 2001 Census of Population Enquiries: 020 7126 4608 7. Population
7.2. Working population
Table 7.2.1 Working population
| Year | Employee jobs in Greater London | Self-employed | All jobs | |-------|---------------------------------|---------------|---------| | 1992 | 3,352 | 453 | 3,805 | | 1993 | 3,307 | 449 | 3,756 | | 1994 | 3,365 | 535 | 3,900 | | 1995 | 3,458 | 499 | 3,957 | | 1996 | 3,425 | 520 | 3,945 | | 1997 | 3,562 | 512 | 4,074 | | 1998 | 3,695 | 544 | 4,239 | | 1999 | 3,897 | 513 | 4,410 | | 2000 | 4,041 | 547 | 4,588 | | 2001 | 4,046 | 536 | 4,582 | | 2002 | 3,940 | 548 | 4,488 | | 2003 | 3,920 | 637 | 4,557 | | 2004 | 3,910 | 589 | 4,499 | | 2005 | 3,987 | 617 | 4,604 | | 2006 | 4,034 | 636 | 4,670 |
Percentage change
| | 1 year | 10 years | |----------|--------|----------| | Employee | 1% | 18% | | Self | 3% | 22% |
Source: ONS, Annual Business Inquiry Enquiries: 016 3381 2318
1. September estimates of the workforce in employment.
2. From 1997, self-employed includes those on work-related government supported training schemes without a contract of employment.
The number of jobs in London increased by 1% in 2006. Self-employed jobs rose faster than employees in employment, with a 3% increase to 636,000, accounting for 14% of all jobs in 2006.
Chart 7.2.1 Employment density (2001)
Source: ONS, 2001 Census of Population Enquiries: 020 7126 4608
© Crown copyright. All rights reserved (GLA) (100032379) (2003). The number of people commuting into Greater London continued to increase in 2007, continuing the trend that started in 2004. After a large rise in 2006, the number of London residents commuting out of London fell slightly in 2007.
Table 7.2.2 Commuters to and from Greater London
| Year | In-commuters(^1) | Out-commuters(^2) | |------|-------------------|-------------------| | 1995 | 647 | 190 | | 1996 | 629 | 205 | | 1997 | 678 | 234 | | 1998 | 683 | 240 | | 1999 | 720 | 249 | | 2000 | 691 | 257 | | 2001 | 703 | 254 | | 2002 | 698 | 264 | | 2003 | 675 | 285 | | 2004 | 706 | 275 | | 2005 | 717 | 281 | | 2006 | 735 | 331 | | 2007 | 767 | 321 |
Source: Labour Force Survey (ONS) – Spring sample
1. Workers in Greater London with residence outside Greater London.
2. Residents in Greater London with workplace outside Greater London.
3. Population
7.3. Visitors
Table 7.3.1 Visitors to London key trends
| Year | Number of visitors (millions) | Average number of nights spent | Average spending at 2005 prices (£) | |------|-------------------------------|--------------------------------|-----------------------------------| | | Domestic visitors | | | | 2000 | 18.5 | 2.3 | 166 | | 2001 | 17.0 | 2.4 | 177 | | 2002 | 16.1 | 2.2 | 175 | | 2003 | 14.3 | 2.3 | 225 | | 2004 | 12.8 | 2.3 | 216 | | 2005 | 10.8 | 2.2 | 194 | | 2006 | 11.0 | 2.2 | 207 | | | Overseas visitors | | | | 2000 | 13.1 | 6.3 | 525 | | 2001 | 11.4 | 6.6 | 510 | | 2002 | 11.7 | 6.5 | 499 | | 2003 | 11.6 | 6.8 | 502 | | 2004 | 13.4 | 6.8 | 481 | | 2005 | 13.9 | 6.6 | 496 | | 2006 | 15.6 | 6.5 | 502 |
Source: United Kingdom Tourism Survey (UKTS), International Passenger Survey (IPS) Enquiries: 0208 563 3320 www.visitbritain.com/research
1. Excludes day visits.
See technical note.
Table 7.3.2 London visits by purpose
| Purpose | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |--------------------------------|------|------|------|------|------|------|------| | Domestic visitors | | | | | | | | | Holiday | 9.0 | 8.2 | 7.9 | 6.8 | 6.1 | 4.9 | 5.5 | | Business | 3.8 | 3.9 | 3.9 | 3.6 | 3.1 | 3.2 | 3.0 | | Visiting friends or relatives | 5.0 | 4.6 | 3.8 | 3.5 | 3.1 | 2.4 | 2.1 | | Study | | | | | | | | | Other | 0.7 | 0.3 | 0.5 | 0.4 | 0.5 | 0.3 | 0.4 | | All domestic | 18.5 | 17.0 | 16.1 | 14.3 | 12.8 | 10.8 | 11.0 | | Overseas visitors | | | | | | | | | Holiday | 6.2 | 4.8 | 4.9 | 4.9 | 5.9 | 5.9 | 6.5 | | Business | 3.1 | 2.8 | 2.8 | 2.7 | 2.9 | 3.2 | 3.7 | | Visiting friends or relatives | 2.5 | 2.6 | 2.7 | 2.8 | 3.2 | 3.4 | 3.7 | | Study | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | | Other | 1.1 | 1.0 | 1.1 | 1.0 | 1.2 | 1.2 | 1.5 | | All overseas | 13.1 | 11.4 | 11.7 | 11.6 | 13.4 | 13.9 | 15.6 |
Source: United Kingdom Tourism Survey (UKTS), International Passenger Survey (IPS) Enquiries: 0208 563 3320 www.visitbritain.com/research
1. Excludes day visits.
The numbers of both domestic and overseas visitors increased in 2006. This is a marked change for domestic visitors as between 2000 and 2005 the number of visitors decreased. 7. Population
Table 7.3.3 Overseas visitors to London by region of origin
| Region | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |-------------------------------|------|------|------|------|------|------|------| | Europe | 6.9 | 6.2 | 6.3 | 6.9 | 8.0 | 8.3 | 9.7 | | North America | 3.3 | 2.8 | 2.8 | 2.6 | 2.8 | 2.7 | 3.0 | | Asia | 0.9 | 0.8 | 0.7 | 0.7 | 0.8 | 0.8 | 0.9 | | Australia and New Zealand | 0.6 | 0.5 | 0.5 | 0.6 | 0.6 | 0.7 | 0.7 | | Africa | 0.5 | 0.4 | 0.4 | 0.4 | 0.5 | 0.3 | 0.5 | | Middle East | 0.5 | 0.4 | 0.4 | 0.3 | 0.4 | 0.3 | 0.4 | | Latin America | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.1 | 0.2 | | South East Asia | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | | Caribbean | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | | **International Visitors Total** | **13.2** | **11.5** | **11.6** | **11.7** | **13.4** | **13.5** | **15.6** | | **Domestic Visitors Total** | **18.5** | **16.9** | **16.1** | **14.3** | **12.8** | **10.8** | **11.0** |
Source: International Passenger Survey, ONS
The number of international visitors to London increased by 16% in 2006. As usual, the majority of visitors came from Europe (62%), followed by North America (19%) and Asia (6%). The largest increase was seen in visitors from Africa, which saw an increase of two-thirds over 2005. 8. Environment
8.1. Air Quality
Chart 8.1.1 Annual number of days when PM10 exceeded 50μgm⁻³ (TEOM\*1.3)
Source: London Air Quality Network and King’s College London Enquiries: www.londonair.org.uk
The Air Quality Strategy (AQS) has an incident-based objective of 50μgm⁻³, measured as a daily mean not to be exceeded on more than 35 days per year (EU Limit Value). Following disappointing results due to unfavourable weather conditions in 2003, the number of days when PM10 levels exceeded 50μgm⁻³ showed improvement at background sites during 2004 and 2005. However, measurements for Inner London roadside and kerbside sites have not returned to their pre 2003 levels and continue to exceed the Air Quality Strategy Objective/EU Limit Value.
Chart 8.1.2 Annual mean Nitrogen Dioxide (NO₂) levels
Source: London Air Quality Network and King’s College London Enquiries: www.londonair.org.uk
The AQS stipulates an annual mean NO₂ objective of 21 ppb (40μgm⁻³). The annual mean NO₂ objective has been exceeded consistently in both Inner London background and roadside, while in Outer London background the annual mean NO₂ objective has been achieved since 1998. Chart 9.1.1 Public Transport accessibility (2006)
Source: Transport for London Enquiries: 020 7126 2849
PTALs
- 0 No PT accessibility
- Level 1a – low accessibility
- Level 1b
- Level 2
- Level 3
- Level 4
- Level 5
- Level 6b – high accessibility
10. Air passengers
10.1. Terminal passengers
Table 10.1.1 Terminal passengers by London area airport
| Year | Heathrow | Gatwick | Stansted | Luton | London City | All London area airports | |------|----------|---------|----------|-------|-------------|--------------------------| | 1995 | 54.1 | 22.4 | 3.9 | 1.8 | 0.6 | 82.8 | | 1996 | 55.7 | 24.1 | 4.8 | 2.4 | 0.7 | 87.8 | | 1997 | 57.8 | 26.8 | 5.4 | 3.2 | 1.2 | 94.4 | | 1998 | 60.4 | 29.0 | 6.8 | 4.1 | 1.4 | 101.7 | | 1999 | 62.0 | 30.4 | 9.4 | 5.2 | 1.4 | 108.4 | | 2000 | 64.3 | 31.9 | 11.9 | 6.2 | 1.6 | 115.8 | | 2001 | 60.5 | 31.1 | 13.7 | 6.5 | 1.6 | 113.4 | | 2002 | 63.0 | 29.5 | 16.0 | 6.5 | 1.6 | 116.7 | | 2003 | 63.2 | 29.9 | 18.7 | 6.8 | 1.5 | 120.1 | | 2004 | 67.1 | 31.4 | 20.9 | 7.5 | 1.7 | 128.6 | | 2005 | 67.7 | 32.7 | 22.0 | 9.1 | 2.0 | 133.5 | | 2006 | 67.3 | 34.1 | 23.7 | 9.4 | 2.4 | 136.9 |
Source: Civil Aviation Authority Enquiries: 020 7453 6258
See technical note.
The total number of passengers travelling through London area airports has shown a consistent upward trend, apart from a dip in 2001 following the terrorist attacks in the USA. All airports except Heathrow (which accounts for half of all passengers) showed an increase in 2006. In the 11 years to 2006, Stansted has shown the highest growth with an extra 20 million passengers, accounting for 37% of the total growth at London airports.
London City airport saw a 20% rise of passengers using the airport compared with 2005 and over three times as many passengers as in 1995.
Chart 10.1.1 Terminal passengers by London area airport
Source: Civil Aviation Authority Enquiries: 020 7453 6258
### Table 10.1.2 Terminal passengers by origin and London area airport (2006)
| Country of origin | Heathrow | Gatwick | Stansted | Luton | London City | All London area airports | |----------------------------|----------|---------|----------|-------|-------------|--------------------------| | Western Europe – EU | 22.9 | 17.1 | 17.2 | 5.8 | 1.2 | 64.2 | | Western Europe – Other | 3.4 | 1.9 | 1.2 | 0.6 | 0.5 | 7.7 | | Eastern Europe – Other | 1.2 | 0.4 | – | 0.1 | – | 1.7 | | Eastern Europe – EU | 1.2 | 1.1 | 2.3 | 1.3 | – | 5.9 | | North Africa | 0.7 | 1.4 | – | 0.1 | – | 2.2 | | Southern Africa | 1.6 | 0.2 | – | – | – | 1.8 | | West Africa | 0.6 | 0.3 | – | – | – | 0.9 | | United States of America | 11.3 | 3.9 | 0.1 | – | – | 15.3 | | Canada | 2.5 | 0.6 | – | – | – | 3.0 | | Caribbean | 0.4 | 1.2 | – | – | – | 1.6 | | Indian Sub-continent | 2.8 | 0.1 | – | – | – | 3.0 | | Middle East | 3.3 | 0.8 | – | – | – | 4.0 | | Near East | 0.9 | – | 0.1 | – | – | 1.0 | | Far East | 5.9 | – | – | – | – | 5.9 | | Australasia | 1.4 | – | – | – | – | 1.4 | | Other countries | 1.4 | 0.9 | 0.1 | – | – | 2.3 | | **Total international passengers** | **61.3** | **30.0** | **21.0** | **7.9** | **1.7** | **122.0** | | **Total domestic passengers** | **6.0** | **4.1** | **2.7** | **1.5** | **0.6** | **14.9** | | **Total passengers** | **67.3** | **34.1** | **23.7** | **9.4** | **2.4** | **136.9** |
Source: Civil Aviation Authority
1. Excludes transit passengers.
See technical note.
The majority of passengers arriving at London area airports were from EU countries (53%). Passengers from the USA were the second most significant group, comprising 13% of all passengers. Just over a third of all international passengers at Heathrow were from the EU, compared to over 70% of all international passengers travelling to Stansted, Luton and London City airports. Glossary
Administrative areas
**Greater London:** the area administered by the Greater London Authority consisting of the City of London and the 32 London boroughs.
**Central London:** the Greater London Conurbation Centre or Central Statistical Area – an area roughly rectangular in shape, bounded by Regent’s Park to the North, Whitechapel to the East, Elephant & Castle and Vauxhall to the South, and Kensington Gardens to the West. It is a larger area than the central London Congestion Charging Zone (excluding the Western Extension), and includes the inner ring road and Paddington, Marylebone, Euston and King’s Cross rail stations.
**Inner London:** City of London, and the London boroughs of Camden, Hackney, Hammersmith and Fulham, Haringey, Islington, Kensington and Chelsea, Lambeth, Lewisham, Newham, Southwark, Tower Hamlets, Wandsworth, Westminster. A distinction is sometimes made between those parts of these boroughs in central London, and the rest of Inner London.
**Outer London:** the London boroughs of Barking and Dagenham, Barnet, Bexley, Brent, Bromley, Croydon, Ealing, Enfield, Greenwich, Harrow, Havering, Hillingdon, Hounslow, Kingston upon Thames, Merton, Redbridge, Richmond upon Thames, Sutton, Waltham Forest.
Travel
A **trip** is defined as a one way movement from one place to another to achieve a single main purpose. Round trips are divided so that the return leg is treated as a separate trip. These definitions apply to data from interview surveys such as the LATS Household Survey and the London Travel Demand Survey (LTDS).
Trips may be further subdivided into **journey stages**, the component parts of a trip using a single mode of transport between interchanges. Walking is counted as a separate mode, but walks within single premises or between platforms at interchange stations are not included. (See also section 1.1)
The **main mode** of a trip is the mode of transport used for the longest stage (by distance).
**Trip (or journey) purpose**
The purpose of a trip is defined by the activity at the destination, except when the trip is returning home in which case the purpose is defined by the activity at the origin. The following purposes are defined:
- **Work/commuting** – travel to or from the respondent’s usual place of work;
- **Employer’s business/other work** – travel in course of work or to work at a location that is not the respondent’s usual workplace;
- **Education** – travel to or from school, college or university;
- **Escort education** – accompanying a child to or from school;
- **Shopping and personal business** – including shopping and use of services such as hairdressers, dry-cleaners, doctors, dentists, banks, solicitors etc;
- **Leisure** – travel to or from entertainment, sport or social activities;
- **Other** including **escort** – all purposes not otherwise classified, including accompanying or meeting someone for purposes other than education.
**Weekday time periods**
- **AM peak** – morning peak, 0700 to 1000.
- **Inter-peak** – 1000 to 1600.
- **PM peak** – evening peak, 1600 to 1900.
- **Evening** – 1900 to 2200.
- **Night-time** – 2200 to 0400.
- **Early am** – 0400 to 0700.
**Work status**
- **Working full-time:** people in paid employment normally working for more than 30 hours a week.
- **Working part-time:** people in paid employment working for not more than 30 hours a week.
- **Self-employed:** those who in their main employment work on their own account, whether or not they have any employees. Glossary
Ticket types
**Ordinary ticket:** valid for one specific trip (a ‘single ticket’) or for two trips to and from the same place (a ‘return’). Includes Carnets, which are tickets sold in batches in a booklet for subsequent use.
**Season ticket:** a ticket valid for unlimited travel over a specified period of time either within specific fare zones or between specified origin and destination stations. A ‘season ticket’ can be valid for bus travel, National Rail travel, or a Travelcard which is valid for all modes detailed below.
**Travelcard:** a ticket valid for unlimited travel on National Rail, buses, DLR, Tramlink and Underground, subject to certain conditions within specific fare zones and for a specified time period. Includes both Travelcard seasons (weekly, monthly or annual tickets) and One Day Travelcards. Underground and National Rail services within Greater London are divided into six fare zones; DLR services operate within zones 1, 2 and 3. The cost of a ticket depends on the number of zones it covers. Zone 1 covers central London, approximately the area served by the Circle line and the South Bank.
**Bus Pass:** a ticket valid for a specified time giving unlimited travel on London bus services. Bus Pass ‘seasons’ can be weekly, monthly or annual.
**Freedom Pass:** concessionary pass issued free by local authorities to London residents aged 60 and over and disabled persons, giving unlimited travel within Greater London by National Rail, DLR, Tramlink, buses and Underground, subject to certain conditions.
**Oyster card:** a ‘smart card’ that can be used as a season ticket, such as bus passes and Travelcards, or to pay for travel on a pay as you go basis using credit held on the card. Travelcards on Oyster card are valid on Tube, DLR, trams and some National Rail services within chosen zones and across the entire London bus network. Pay as you go is an alternative to paying cash for single or return fares and offers cheaper single fares, daily price capping and ticket extensions automatically. In addition to TfL’s usual ticket outlets, season tickets can be renewed and pay as you go credit can be topped-up online or over the telephone.
Traffic cordons:
Locations of traffic counts for monitoring long-run trends in traffic flows are organised to form three cordons (see section 4.1).
**Boundary cordon:** roughly corresponding to the boundary of Greater London and entirely within the M25 orbital motorway.
**Inner cordon:** enclosing an area similar to the inner London boroughs.
**Central cordon:** a cordon, enclosing central London, situated outside the Inner Ring Road and within a radius of 2.5 to 3kms from Aldwych.
Prices
**Retail price index (RPI):** measures the price of a constant basket of goods and services purchased by households in the United Kingdom. The RPI is available from the Office for National Statistics website (www.statistics.gov.uk).
**Headline Fares Index:** tracks the change in the Gross Yield, ie the direct effect of a fares revision assuming passengers would buy the same ticket but at the new fare. This does not allow for switching to other ticket types and is likely to overestimate the increase in average fare actually paid. This percentage increase in Gross Yield, deflated by the headline Retail Price Index, is applied to the Headline Fares Index from the previous year.
**Real London Earnings:** the actual Gross Weekly Earnings of adults in full-time employment in London deflated by headline Retail Price Index. Gross weekly earnings are based on New Earnings Survey from 1971 to 1998 and Annual Survey of Hours and earnings from 1998/99 and are available from ONS.
**Real prices and fares:** converts current price levels to a common reference period by adjusting for the effects of inflation as measured by the RPI. Glossary
PTAL Public Transport Accessibility Level (PTAL) is a measure of public transport accessibility reflecting: the access time (by walking) from the point of interest to public transport service access points (SAPs, eg bus stops, stations) within a catchment area; the number of different services (eg bus routes, train services) operating at the SAPs; and levels of service (ie average waiting times, with an adjustment for the relative reliability of different modes). These components are then used to calculate an accessibility index (PTAI) which is allocated to bands corresponding to Public Transport Accessibility Levels (PTALs). The levels 1a and 1b correspond to ‘very poor’, 3 corresponds to ‘moderate’, 6a and 6b corresponds to an ‘excellent’ level of public transport accessibility and 0 refers to areas where there are no public transport services within the specified catchment area.
Roads classification Major Roads: include motorways and all class A (principal) roads.
TLRN: the Transport for London Road Network is those major roads in London for which TfL has direct responsibility, comprising 580kms of London’s red routes and other important streets.
Minor Roads: B and C classified roads and unclassified roads.
Within London, the London boroughs are responsible for maintenance of minor roads and A roads not part of the TLRN. Sources
**CAPC** Central Area Peak Count: TfL estimates of people entering central London in the morning peak period, derived from vehicle and passenger counts annually each Autumn.
**Central London Coach Survey:** Counts of coaches carried out by TfL four times a year at a sample of points, on main routes into central London. Actual numbers observed are scaled up to represent total coach movements entering or leaving central London between 7am and 7pm. The survey covers all coaches over 8 metres in length, including both tourist coaches and those operating on scheduled services. Significant numbers of empty coaches are due to coaches travelling to or from parking locations outside the Central area.
**EFS** Expenditure and Food Survey: ONS survey of household expenditure (formerly the Family Expenditure Survey) with a sample of about 7,000 households per annum in the UK.
**GLBPS** Greater London Bus Passenger Survey: quarterly sample survey of bus boarders on a sample of London bus routes, with associated counts for grossing, used principally for apportionment of Travelcard and Concessionary fare revenues.
**IPS** International Passenger Survey: ONS sample survey of passengers at UK ports and airports.
**Isle of Dogs Cordon Survey:** Counts of all trips into and out of the Isle of Dogs between 0500 and 2300 hours, carried out annually. The cordon survey reports only those trips that have an origin or destination within the Isle of Dogs and cross the cordon boundary. Through trips, interchange trips between the two rail modes that do not start or end in the Isle of Dogs and wholly internal trips, are excluded.
**LATS** London Area Transport Survey 2001: Interviewer administered sample survey of 30,000 London households, carried out for TfL between January 2001 and April 2002. The survey included a one-day travel diary to collect data on Londoners’ weekday travel patterns. The data have been expanded to represent the household population of London as measured by the 2001 Census of Population.
**LTDS** London Travel Demand Survey: Annual sample survey of 8,000 randomly selected households in London and the surrounding area. The survey design and methodology are similar to the LATS 2001 Household Survey.
**LFS** Labour Force Survey: ONS quarterly sample survey with a rolling sample of approximately 57,000 households in Great Britain, a major source of information on participation in the labour market.
**National Road Traffic Estimates (DfT):** National and regional statistics of road traffic for Great Britain, derived from data from manual and automatic traffic counts. The London series is constructed from the subset of counts within Greater London. A summary description ‘How the national traffic estimates are made’ is available from: http://www.dft.gov.uk/pgr/statistics/datatablespublications/roadtraffic/traffic/rtstatistics/
**UKTS** United Kingdom Tourism Survey: Survey carried out by the National Tourist Board, of trips undertaken by UK residents. The main results are the number of trips taken, expenditure, and nights spent away from home.
**UUS** Underground Users Survey: on-platform interview sample survey for LUL of over 30,000 Underground passengers in each 2-year survey cycle. The survey measures usage of ticket types and collects passenger profiles in terms of socio-demographic, economic and other characteristics.
Organisations
**DfT** Department for Transport
**DLR** Docklands Light Railway
**GLA** Greater London Authority
**LBSL** London Bus Services Limited, a wholly owned subsidiary of TfL
**LRS** London River Services
**LUL** London Underground Limited, a wholly owned subsidiary of TfL
**ONS** Office for National Statistics
**ORR** Office of Rail Regulation
**TfL** Transport for London
Symbols
•• = not available • = not applicable 0 = nil – = negligible (less than half the final digit shown) Table 1.1.1 and Chart 1.1.1 Estimates of the number of journey stages are derived from the annual totals for each mode and refer to all journeys to, from or within Greater London on an average day (including weekends and public holidays) in each year. For Underground, DLR and bus (including tram) these annual totals are the TfL estimates reported in chapter 3. Rail is similarly derived from the ORR annual estimates. The series for road traffic (car, taxi, motorcycle and bicycle) are derived by TfL, based on trends shown by the DfT road traffic series (tables 4.1.1 and 4.1.3). Walks are estimated from the ONS population estimates (table 7.1.1) and the walk trip rates reported in TfL’s household interview surveys (LATS and LTDS): they relate to walk-only trips by London residents.
Table 1.1.2 shows the equivalent numbers of trips corresponding to the journey stages in table 1.1.1. A trip may be made up of several journey stages using different modes. Conversion factors from stages to trips have been derived from the detailed data on the composition of trips collected in LATS and LTDS. Trips are classified by main mode according to the hierarchy of modes shown in the table.
Table 1.3.1 and Chart 1.3.1 Estimates are derived from counts of vehicle occupants on each road entering central London. The cordon is situated outside the inner ring road and encloses an area slightly larger than the Central London Congestion Charging zone (excluding the Western Extension).
Rail passengers are counted by observers at their last station stop before the cordon. Inter-city passengers are counted on arrival at the central London rail termini. Results for London Underground are derived from exit counts of people leaving stations within the central area. Since 1996, these have been taken from automatic ticket gate data.
Table 2.4.1 The number of residents’ journey stages reported is derived from the 2006/07 LTDS, expanded to residents of Greater London. Results are not comparable with the total average journey stages per day derived from modal sources reported in other tables.
Chart 3.2.1 Real London earnings are London earnings deflated by the RPI.
Chart 3.3.1 and Chart 3.3.2 These data comes from ticket sales, and therefore do not include journey stages made without a ticket or with staff passes and police warrants.
Table 3.4.2 Excess journey times have been revised and are different to those in the London Travel Report 2006. They are now weighted to take into account how customers value time, as the measure of performance.
To calculate excess journey time, each journey is broken down into its constituent parts namely access from station entrance to platform, ticket queuing and purchase time, platform wait time, on train time, platform to platform interchange and egress from platform to station exit. Each component has a ‘perfect’ or ‘scheduled’ value which states how long a particular journey would take if everything went as planned. Actual journey times are measured and then compared to the schedule, the difference being the measure of lateness – referred to as excess journey time. Each journey time component has a Value of Time weighting associated with it, which vary according to how the customers perceive the activity. For example, a perceived time weight of 2 is applied to platform wait time, as customers regard waiting as unattractive. Note that results presented in previous years’ reports have not reflected these Value of Time weightings.
Table 3.5.1 The estimates in this table are derived from ticket data sales and relate to complete rail trips with either origin or destination (or both) within London. Thus, through trips with both origin and destination outside London are not included.
Table 3.8.1 There are two types of taxi driver licence, All London and Suburban. An All London driver is issued with a green badge and is licensed to ply for hire anywhere within the Greater London area. A suburban driver is issued with a yellow badge and is licensed to ply for hire only within the suburban sectors for which they are licensed. Suburban drivers may accept a hiring to anywhere in the Greater London area from their area but must return to the area for which they are licensed before they can pick up another hiring.
Table 3.8.2 Licensing of private hire services dates from January 2001 with the introduction of operator licensing. Private hire operators offer a variety of services including minicabs, limousines and chauffeur driver vehicles. Private hire driver licensing commenced in April 2003 and vehicle licensing in April 2004. Table 3.9.1 Victoria Coach Station is the main London terminal for coach services, principally express coach, but also day and holiday tours and shuttle services. Until 2005 there was also a special London Buses’ inter-station (ie VCS and all London mainline stations) express bus service, which had four departures per hour for most of the day.
Table 3.10.1 2004/05 was the first financial year in which Thames Clippers were under contract to London River Services.
Table 3.11.1 Dial-a-Ride provides a multi-occupancy door-to-door transport service for people who are unable to use conventional public transport due to a permanent or long-term disability or health problem. The service is provided for all journey purposes, typically for shopping, visiting friends, and attending meetings and doctors’ or dentists’ appointments. Additional costs in 2004/05 relate to one-off staff restructuring costs associated with the introduction of a new booking and scheduling centre, and to an increase in the TfL Employers’ Pension Contribution.
Table 3.12.1 The Taxicard scheme provides subsidised door-to-door transport for people with have serious mobility impairment who find it difficult to use public transport. Taxicard holders are able to make journeys in licensed London taxis, with the subsidy applied directly to each journey. Late in 2003/04, three London Boroughs that had previously operated their own taxi scheme – Barnet, Greenwich and Redbridge – joined the main scheme. Under TfL conditions, boroughs were required to take steps to equalise the conditions of service, so that most boroughs now offer a similar number of trips per year, with no membership fee, no waiting lists to join Taxicard and all boroughs using an agreed set of eligibility criteria.
Table 3.12.2 Capital Call is a TfL funded service that provides subsidised door-to-door journeys for older and disabled people for whom mainstream public transport is not always accessible. The service contracts licensed private hire vehicle operators in nine boroughs – Bexley, Enfield, Hillingdon, Hounslow, Kingston, Lambeth, Lewisham, Merton and Southwark – where there is a recognised shortage of taxis, which makes it difficult for Taxicard members to book trips. Users must be Taxicard members in those boroughs to be eligible to join Capital Call and they pay a flat fare of £1.50 per trip with the balance of the fare deducted from a £200 annual travel budget allocated to each member and funded by TfL.
Table 4.1.1 and Table 4.1.2 Total traffic movements on London’s roads are measured in vehicle kilometres. Statistics of traffic in Great Britain are derived from the Department for Transport’s national road traffic surveys, from which the estimates for London roads are reported in Table 4.1.1 and Table 4.1.2. The traffic for each year relates to the public road network in place in that year. Thus growth over time is mainly due to changes in vehicle flows but also take account of changes in network length.
Table 4.1.3 The average vehicle flow on a section of the road network is the mean flow (number of vehicles) across the network. It is calculated as the total traffic (vehicle kilometres) on the network divided by the road length (kilometres).
Table 4.2.1 Traffic speed surveys are carried out on a 3-year cycle in central, inner and outer London, supplemented by more frequent surveys in central London since the introduction of Congestion Charging (shown in chart 4.2.1). The data are collected by a car moving at the prevailing speed of the traffic.
Chart 4.3.1 Estimates for years 1988 to 2004 are based on the combined sample from 3 sample surveys, the National Travel Survey (DfT), and the General Household Survey (ONS) and Expenditure and Food Survey (formerly the Family Expenditure Survey, ONS). Results for 2006 are provisional.
Table 4.4.1 The series are for vehicles registered with the Driver and Vehicle Licensing Agency at 31 December of each year, and relate to vehicles with car body-type registered in the Private and Light Goods taxation class. Vehicles are allocated to areas (inner or outer London) according to the post-code of the registered keeper. The registered keeper may be either an individual or a company. However, company cars include cars registered in the name of a company but provided for an employee’s private use. It is likely that changes in the number of company cars, as a percentage of the total stock of cars, reflect changes in taxation and are not necessarily indicative of changes in car use. Technical notes
Chart 5.1.1 The high increase in 2004 in the tonnage of road freight lifted, particularly with traffic originating in London and that moved within London appears to be due, at least partly, to methodological changes made by DfT to the way the survey is carried out in order to improve the accuracy of survey estimates. In particular, the sample strata have been amended to reflect current trends in vehicle type, weight and legislative groups. For practical and administrative reasons, changes have also been made to the sample selection methodology.
Table 7.1.1 ONS is undertaking a substantial and long term programme of work to improve the population statistics it produces. This work highlighted several improvements to methodology that could be made immediately. These improvements have impacted principally on the distribution of the national population to local areas. The new methods have been used in making population estimates for 2006 and have resulted in revised estimates for the years 2002 to 2005.
Table 7.3.1 and Table 7.3.2 Following an extensive review of tourism data, UKTS moved in May 2005 to using face to face interviews instead of telephone interviews to estimate the number and value of domestic overnight trips. This means that data from 2005 should not be compared to previous years.
Table 10.1.1 and Table 10.1.2 A terminal passenger is a passenger joining or leaving an aircraft at the reporting airport. A passenger travelling between two reporting airports is counted twice, once at each airport. A passenger who changes from one aircraft to another, carrying the same flight number (change of gauge) is treated as a terminal passenger, as is an interlining passenger.
Counts of terminal passengers do not include transit passengers, ie passengers arriving and departing on the same aircraft which is transiting the airport.
### Key facts
| Land area | Square Miles | Square Km | |----------------------------|--------------|-----------| | Central London | 11 | 27 | | Rest of inner London | 114 | 294 | | Outer London | 486 | 1,259 | | All Greater London | 610 | 1,579 |
| Road lengths | Miles | Km | |----------------------------|-------|-----| | Motorways | 37 | 60 | | Principal roads | 1,069 | 1,720| | Minor roads | 8,168 | 13,146|
| Road lengths | Miles | Km | |----------------------------|-------|-----| | All London roads | 9,274 | 14,926| | of which TfL Road Network | 360 | 580 |
| Rail networks | Stations served | Miles | Km | |----------------------------|-----------------|-------|-----| | Rail (within Greater London)| 321 | 490 | 788 | | London Underground | 275 | 253 | 408 | | Docklands Light Railway | 34 | 18 | 29 |
| Tram network | Stations served | Miles | Km | |----------------------------|-----------------|-------|-----| | Croydon Tramlink | 38 | 18.5 | 28 | London’s passenger rail network – central London London’s major road network
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1759149c033f12f37fb70409e0e92fbec06abe5e | London Councils Leaders' Committee Governing Agreement
13 December 2001 London Councils was known as the Association of London Government (ALG) until December 2006 when the name was changed to London Councils. In this agreement, any uses the terms ‘Association of London Government’ or ‘ALG’ should be taken to mean ‘London Councils’.
Please note that the following variations have been made to this agreement since 2001:
- Schedule 3 (Functions of London Housing Unit Committee) no longer applies, as this body has been disbanded.
- Schedule 5 (London Boroughs Grants Scheme) was updated on 1st February 2004.
- Schedule 6 (Standing Orders) has been updated several times, most recently on 15th July 2014.
- Schedule 7 (Financial Regulations) was updated in June 2009.
These variations can be viewed on the London Councils website.
Several minor amendments were made to this agreement at the July 2014 Annual General Meeting of London Councils Leaders’ Committee. These amendments are detailed in the papers and minutes of the meeting, which can be viewed on the London Councils website. DATED 13 December, 2001
ASSOCIATION OF LONDON GOVERNMENT:
AGREEMENT
Ref: PR 6602/21/LJ
Standing Orders revised 9 June 2004 CONTENTS
Clauses
01. Preliminary
02. Commencement and Duration
03. Definitions and Interpretation
04. Membership and Standing Orders
05. Meetings and Proceedings of ALG
06. Lead Authority Functions
07. Obligations of ALG and Sectoral joint committees
08. Obligations of London Local Authorities
09. Staff
10. Assets and Liabilities
11. Financial Arrangements
12. Costs and Expenses.
13. Termination and Breach
14. Dissolution
15. General
16. Execution
Schedules
Schedule 1 Part 1: The London Local Authorities Schedule 1 Part 2: London Housing Unit Committee: Member Authorities Schedule 2 Parts 1-3: ALG Functions Schedule 3: Functions of London Housing Unit Committee Schedule 4: Lead Authority Functions Schedule 5: London Boroughs Grants Scheme Schedule 6: Standing Orders Schedule 7: Financial Regulations Schedule 8: Costs and Expenses THIS AGREEMENT is made this 13th day of December, 2001
BETWEEN THE Councils listed in Part 1 of Schedule 1 hereto in pursuance of arrangements made under section 101 (5), 101 (5B), 102, 111, 112, 113, 141 and 142 Local Government Act 1972; section 1 Local Authorities (Goods and Services) Act 1970; section 20 Local Government Act 2000; the Local Authorities (Arrangements for the Discharge of Functions) Regulations 2000 and all other enabling powers
1. PRELIMINARY
1.1 By an Agreement dated 1 April, 2000 (the “First Agreement”), the local authorities named in Part 1 of Schedule 1, in the interests of co-ordinating more effectively the formulation of policy in relation to the functions referred to in the First Agreement and achieving greater efficiency in the use of their resources agreed to establish a joint committee under Sections 101 and 102 Local Government Act 1972 and agreed to delegate (subject to the exceptions and reservations set out in the Agreement) the functions listed in Schedule 2 to the joint committee and to name the joint committee the Association of London Government (“ALG”)
1.2 By the First Agreement, the local authorities named in Part 2 of Schedule 1 agreed to delegate the functions set out in Schedule 3 under section 8 Housing Act 1985; sections 101(12), 111 and 141 Local Government Act 1972; section 1 Local Authorities (Goods and Services) Act 1970 and any other express or implied enabling power, to a Sectoral joint committee named the London Housing Unit Committee which operates, in relation to the ALG, in accordance with the provisions of this Second Agreement which govern Sectoral joint committees. Any of the London Local Authorities listed in Part 1 of Schedule 1 may elect at any time to delegate the functions set out in Schedule 3 to the London Housing Unit Committee. Such delegation is hereby deemed a minor variation for the purposes of Clause 15.4 and this Agreement shall thereafter be construed as if each of those London Local Authorities were listed in Part 2 of Schedule 1. Any of the London Local Authorities listed in Part 2 of Schedule 2 may at any time elect to revoke the delegation of the functions set out in Schedule 3 to the London Housing Unit Committee. Such revocation is hereby deemed a minor variation for the purposes of Clause 15.4 and this Second Agreement shall thereafter be construed as if that London Local Authority’s name were removed from Part 2 of Schedule 1.
1.3 The local authorities listed in Part 1 of Schedule 1 are herein collectively named “the London Local Authorities”.
1.4 The ALG has acted from the date of the First Agreement as the Association of the London Local Authorities for the purposes set out in Part 1 of Schedule 2 and receiving subscriptions from the London Local Authorities under section 143 Local Government Act 1972.
1.5 The London Local Authorities are the constituent councils for the purposes of section 48(1)(a) Local Government Act 1985 (Grants to Voluntary Organisations) and by the First Agreement, amended the Scheme adopted thereunder (“the London Boroughs Grants Scheme”) in accordance with Schedule 4 of the First Agreement.
1.6 The committee established to discharge various functions in accordance with section 48 Local Government Act 1985 is now known as the ALG Grants Committee and the London Boroughs Grants Scheme as amended is set out in full in Schedule 5 hereto.
1.7 The London Local Authorities were the Participating Councils in the Transport Committee for London Agreement dated 15th January, 1998, (“TCfL Agreement”) and by the Agreement dated 1 April, 2000, varied the Transport Committee for London Agreement in accordance with Schedule 5 of the First Agreement. 1.8 The Transport Committee for London is now known as the Association of London Transport and Environment Committee (“ALGTEC”)
1.9 By the First Agreement, ALG was appointed under section 1 Local Authorities (Goods and Services) Act 1970 to employ the staff of ALGTEC, carry out all administrative and appropriate financial functions on its behalf, recover the costs thereof and the costs payable to AGTEC by the London Local Authorities listed in Part 1 of Schedule 1.
1.9 The London Local Authorities are the Participating Councils in the ALGTEC Agreement of even date herewith (“ALGTEC Agreement”) which amends the TCfL Agreement
1.10 The functions of some of the London Local Authorities set out in Schedules 2 and 3 are the responsibility of the executive of those authorities under executive arrangements adopted for the purposes of section 10 Local Government Act 2000 while the functions of other authorities remain the responsibility of the authorities themselves
1.11 It is expedient that any London Local Authority which should adopt executive arrangements after the date of this Agreement should be able through arrangements made by their mayors, executives, members of executives, committees of executives, executive leaders or council managers (as appropriate) to continue as parties to this Second Agreement
IT IS HEREBY AGREED AS FOLLOWS:
2. COMMENCEMENT AND DURATION
2.1 This Agreement shall commence on 13 December, 2001 (“the Commencement Date”) and shall continue until terminated in whole or in part in accordance with the provisions of Clause 13. 3. DEFINITIONS AND INTERPRETATION
3.1 In this Agreement:
“ALG” means the Association of London Government, the joint committee appointed in accordance with Clause 1.1.
“associated committees of the ALG” means the ALG Grants Committee and the ALGTEC which shall operate, in relation to the ALG, in accordance with the London Boroughs Grants Scheme (as amended and set out in full at Schedule 5) and the ALGTEC Agreement.
“constituent councils” means the London borough councils and the Common Council, which have made the London Boroughs Grants Scheme, as permitted by section 48 Local Government Act 1985.
“Leader” means the person vested from time to time (in accordance with law and the applicable constitutional arrangements) with the political leadership, for the purposes of this Agreement, of each of the London Local Authorities listed in Part 1 of Schedule 1.
“Panels of ALG” means the sub-committees appointed by ALG to discharge any of functions delegated to ALG under Clause 1.1 above.
“Parties” means the parties to this Agreement, that is the London Local Authorities listed in Part 1 of Schedule 1.
“Sectoral joint committee” means a joint committee appointed under section 102 Local Government Act 1972 to discharge functions which a minimum of three and a maximum of 32 of the London Local Authorities have agreed to delegate to it, whose terms of reference have been approved by ALG and which shall operate, in relation to ALG, in accordance with this Agreement.
3.2 The Schedules to this Agreement are intended to form part of this 3.3 Words importing the singular shall include the plural and *vice versa*. Words importing any gender shall include both genders. Words importing persons shall include bodies corporate, unincorporated associations and partnerships.
3.4 Clause headings are inserted for ease of reference only and shall not affect the interpretation of this Agreement.
3.5 A reference to any statute or statutory provision includes a reference to all statutory instruments or orders made pursuant to it and includes a reference to that statute, statutory provision, instrument or order as amended, extended, re-enacted or consolidated from time to time.
3.5 In the event of any conflict between Clauses 1-15 and the Schedules to this Agreement, the provisions of Clauses 1-15 shall prevail.
4. **MEMBERSHIP AND STANDING ORDERS OF ALG AND SECTORAL JOINT COMMITTEES**
4.1 Each London Local Authority shall appoint its Leader as its representative to ALG and shall be entitled to appoint deputy representatives in accordance with Schedule 6.
4.2 ALG may admit to membership such representatives of such other bodies as it considers appropriate from time to time in accordance with Schedule 6.
4.3 The functions set out in Schedule 2 shall whenever appropriate be discharged by Panels of ALG constituted in accordance with Schedule 6.
4.4 The members of the London Housing Unit Committee established to discharge the functions set out in Schedule 3 shall be the Leaders from time to time of each of the London Local Authorities set out in Part 2 of Schedule 1. 4.5 Each London Local Authority shall appoint its Leader as its representative to any Sectoral joint committee and shall be entitled to appoint deputy representatives in accordance with Schedule 6.
4.6 The discharge of the functions set out in Schedule 3 (with the exceptions of the functions of approval of cross-cutting and strategic policy in relation thereto, as determined by the London Housing Unit Committee from time to time, and approval of the budget thereof, which are hereby reserved to the London Housing Unit Committee) shall be delegated by the London Housing Unit joint committee to a sub-committee which shall be constituted in accordance with Schedule 6.
4.7 Each Sectoral joint committee may admit to membership such representatives of such other bodies as it considers appropriate from time to time in accordance with Schedule 6.
4.8 The members of ALG Grants Committee shall be appointed by the constituent councils in accordance with the London Boroughs Grants Scheme as set out in Schedule 5.
4.8 The Standing Orders of ALG are set out in Schedule 6
5. MEETINGS AND PROCEEDINGS OF ALG
5.1 ALG shall hold a minimum of 8 meetings each year, one of which shall be an annual general meeting.
5.2 Subject to Clause 5.1, meetings of ALG shall be called in accordance with the Standing Orders set out in Schedule 6 and the procedure to be adopted at such meetings shall be determined in accordance with Schedule 6.
5.3 Each Sectoral joint committee established hereunder from time to time shall, unless otherwise determined in accordance with paragraph 1(A)(viii)b) of Schedule 6, hold a meeting directly following each ALG 6. **LEAD AUTHORITY FUNCTIONS**
6.1 Subject to the provisions of this Clause 6, ALG may appoint one or more of the London Local Authorities to discharge all or any of the Lead Authority functions as set out in Schedule 4 on behalf of the ALG, any Sectoral joint committee or (subject to the provisions of Schedule 5 and the ALGTEC Agreement) either associated committee.
6.2 In the event that a London Local Authority acting or appointed hereunder withdraws its consent to discharge a Lead Authority function, it shall give (unless otherwise agreed in writing), not less than six calendar months’ notice in writing (to expire on 31st March) of its intention to do so to ALG.
6.3 The decision to terminate the appointment of a London Local Authority in respect of any Lead Authority function shall be by a majority vote of ALG.
6.4 Subject to Clause 6.5 below and notwithstanding any service level agreement in force at the date of this Agreement, any termination pursuant to Clause 6.3 may be made by ALG giving (unless otherwise agreed in writing) not less than six calendar months’ notice in writing (to expire on 31st March) to the Lead Authority of its intention to terminate the appointment and may be given at any time.
6.5 Notwithstanding Clause 6.4, if the London Local Authority is in material breach of any of its obligations in respect of a Lead Authority function (whether the obligation is contained in this Agreement or in any service level agreement for the time being), any such termination pursuant to Clause 6.3 may be made at any time thereafter by ALG giving not less than one calendar month’s notice in writing to the London Local Authority of its intention to terminate the appointment.
6.6 Notwithstanding Clause 6.2, if ALG is in material breach of any of its obligations to the London Local Authority (whether the obligation is contained in this Agreement or in any service level agreement) the London Local Authority may withdraw its consent to act in respect of a Lead Authority function by giving not less than three calendar months’ notice in writing to ALG of its intention to withdraw its consent.
6.7 ALG shall reimburse each London Local Authority appointed under this Clause 6 all costs, charges and expenses (inclusive of VAT correctly levied) incurred in the provision of any services in connection with a Lead Authority function by that London Local Authority (or arising /outstanding in respect of any Lead borough function performed by any London Local Authority prior to the Commencement Date of this Second Agreement) within 30 days of receipt of invoices submitted by it to ALG.
6.8 The reimbursement payable by ALG to each London Local Authority appointed or acting under this Clause 6 shall be subject to audit by ALG and its authorised representatives and the London Local Authority shall on request make available all accounts, records and other documents reasonably required for such purpose.
6.9 Upon the termination of any appointment of a London Local Authority under this Clause 6, howsoever occasioned, the London Local Authority shall be entitled to payment from ALG of any outstanding costs reasonably incurred in the performance of its duties in respect of a designated council and/or Lead Authority function.
6.10 The London Borough of Richmond upon Thames shall continue to discharge the designated council and Lead Authority functions in accord with section 48(2)(a) Local Government Act 1985 and the London Boroughs Grants Scheme as set out in Schedule 5.
7. OBLIGATIONS OF ALG AND SECTORAL JOINT COMMITTEES
7.1 ALG shall discharge the functions set out in Schedule 2 and the functions delegated to it under the London Boroughs Grants Scheme, together with such further functions as all of the London Local Authorities shall resolve to delegate to it, and, in so doing, shall act in the collective interests of the London Local Authorities which subscribe to each of those functions. ALG shall also act as the Association of the London Local Authorities.
7.2 Each Sectoral joint committee established hereunder from time to time shall discharge the functions which have been delegated to it by the London Local Authorities which have agreed to subscribe to such Sectoral joint committee and, in doing so, shall act in the collective interests of those London Local Authorities.
7.3 ALG and (subject to Schedule 5 and the ALGTEC Agreement) each associated and Sectoral joint committee established hereunder from time to time shall comply with the Standing Orders set out in Schedule 6, the Financial Regulations set out in Schedule 7 and the financial arrangements set out in Clauses 11 and 12 and Schedule 8.
7.4 ALG shall appoint a Chief Executive, and a Finance Officer on terms to be agreed by ALG. The Finance Officer appointed hereunder shall be responsible for the proper administration of ALG’s financial affairs and (subject to Schedule 5 and the ALGTEC Agreement) those of the associated and any Sectoral joint committees established hereunder from time to time.
7.5 The Finance Officer shall make appropriate arrangements to procure the audit of the annual accounts of ALG and (subject to Schedule 5 and the ALGTEC Agreement) the associated committees and any Sectoral joint committee at the end of each financial year by an Auditor approved by the Audit Commission. Copies of audited accounts shall be provided to ALG the associated committees and any Sectoral joint committee and sent to each of the London Local Authorities. 8 OBLIGATIONS OF LONDON LOCAL AUTHORITIES
8.1 Each London Local Authority shall:
8.1.1 contribute to the costs and expenses of ALG and any Sectoral joint or associated committee established hereunder from time to time of which that London Local Authority is a member in accordance with the provisions of Clause 12 and Schedule 8.
8.1.2 provide ALG and any Sectoral joint or associated committee with such information as is required by ALG to carry out the functions referred to in Clauses 7.1 and 7.2 and to recover costs in accordance with Schedule 8.
9 STAFF
9.1 The ALG shall appoint such staff as they think necessary for the discharge by ALG of the functions set out herein
9.2 The London Local Authorities listed in Part 2 of Schedule 1 shall indemnify and keep indemnified the London Local Authorities which do not subscribe to the functions set out in Schedule 3 against any and all costs, liabilities and expenses arising after the Commencement Date in respect of the staff employed to discharge the Schedule 3 functions.
10 ASSETS AND LIABILITIES
10.1 The assets and liabilities which vested in ALG prior to the Commencement Date shall continue to so vest following the Commencement Date
11. FINANCIAL ARRANGEMENTS
11.1 In October of each year (or such other date as shall be agreed by ALG) ALG shall send the draft budgets for the following financial year for each of the groups of functions set out in Schedules 2 and 4 (to include the designated council function in respect of the London Boroughs Grants Scheme) for comment by the London Local Authorities listed in Part 1 of Schedule 1 as London Local Authorities subscribing to each of those groups of functions. The budget for each group of functions shall be finalised and approved in December of each year (or such other date as shall be agreed by ALG) in accordance with paragraph 21.1 of Schedule 6.
11.2 ALG shall send the budgets for the London Boroughs Grants Scheme and ALGTEC in accordance with the ALGTEC Agreement and the London Boroughs Grants Scheme.
11.3 In October of each year (or such other date as shall be agreed) each Sectoral joint committee established hereunder from time to time shall send the draft budget for the following financial year for each of the functions which has been delegated to such Sectoral joint committee for comment by each of the London Local Authorities which are members of such Sectoral joint committee. The budget shall be finalised and approved in December of each year by a simple majority of the representatives of those London Local Authorities who are present at the meeting and authorised to vote in accordance with Schedule 6 on the budget in question. The annual budget (including any contingency sum) in respect of any function shall not be exceeded without the prior approval of a simple majority of the representatives of those London Local Authorities who are present at the meeting at which the proposal to exceed the budget is under consideration and authorised to vote in accordance with Schedule 6.
11.4 ALG and any Sectoral joint committee shall cause proper accounts to be kept in respect of the functions discharged by ALG, either associated joint committee (in respect of any accounting responsibilities of ALG in relation thereto) and any Sectoral joint committee established hereunder from time to time and shall make all accounts records and other documentation available for inspection by any London Local Authority on request. 11.5 Whenever any sum of money is recoverable by ALG from, or payable by a London Local Authority to ALG in respect of any of the groups of functions set out in Schedules 2 - 5, it may be deducted from any sum then due to that London Local Authority from ALG in respect of that group of functions and vice versa.
11.6 ALG shall cause to be maintained a separate balance sheet in the name of ALG in respect of all payments received from the London Local Authorities in respect of each of the groups of functions set out in Schedules 2 – 3 and 5, such payments to be held as nominee for the London Local Authorities from which they have been received.
12 COSTS AND EXPENSES
12.1 The costs and expenses of ALG, either associated committee and any Sectoral joint committee appointed hereunder from time to time in discharging the functions delegated to them hereunder shall be reimbursed by the London Local Authorities in accordance with the provisions of Schedule 8. For the avoidance of doubt, the consent of all the London Local Authorities subscribing to each of the functions set out in Schedule 2 shall be required to change the basis on which costs are apportioned between them in respect of each of those functions.
12.2 ALG shall notify each of the London Local Authorities by not later than 31st. December in each year, unless otherwise agreed, in respect of the Schedule 3 functions and not later than 31st. January each year in respect of any other function, of the amount due from that London Local Authority under Clause 12.1, such notification to include a breakdown of the sums payable in respect of each of the groups of functions set out in Schedules 2 and 3 and the date on which payment is due.
12.3 Interest shall accrue at the rate of 2 per cent above the base rate for the time being of National Westminster Bank PLC on all amounts due to ALG under Clause 12.1 from the due date until the date of payment in full inclusive.
12.4 In the event of any disagreement as to the amount of costs and expenses to be borne by any London Local Authority under Clause 12.1 and Schedule 8, the London Local Authority in dispute shall, not later than 14th. February, or a date agreed with the Finance Officer, notify the Finance Officer of the nature of the dispute and shall provide full supporting reasoning and documentation as appropriate to the Finance Officer. The Finance Officer and the London Local Authority shall thereafter use all reasonable endeavours to resolve the dispute. In the event that the dispute remains unresolved on 14th. March or a date to be agreed with the Finance Officer, the matter may be referred by either party to such independent CIPFA Accountant of not less than ten years’ standing as the parties to the dispute shall agree. Any such independent CIPFA Accountant shall be deemed to act as expert and not as arbitrator and his/her determination shall, in the absence of manifest error, be binding on ALG and the London Local Authority. In the event that the dispute is resolved at first instance by the Finance Officer, or by the CIPFA Accountant in favour of the London Local Authority, interest shall not be payable on any outstanding sums. In the event that the dispute is resolved in favour of ALG by the CIPFA Accountant, interest shall accrue on all outstanding payments in accordance with Clause 12.3 The costs of dispute resolution hereunder shall be met by the unsuccessful party PROVIDED THAT in the event that any dispute under this Clause 12.4 is in respect of the amounts payable by the London Local Authorities as subscriptions to the functions listed in Schedule 3 or any Sectoral joint committee, or is in respect of the allocation of costs by ALG between ALG functions and those of any Sectoral joint committee, references in this Clause to “the London Local Authority” shall be construed as references to the person nominated for the purpose of dispute resolution by the Chair of the London Housing Unit Committee or any Sectoral joint committee.
13 TERMINATION AND BREACH
13.1 The termination of this Agreement or any part thereof, however caused, and the serving of notice to terminate shall be without prejudice to any obligations or rights of any of the parties which have accrued prior to such termination and shall not affect any provision of this Agreement which is expressly or by implication provided to come into effect after such termination.
13.2 Without prejudice to any other rights or remedies, this Agreement or the relevant part thereof shall terminate on the earlier of:
13.2.1 the unanimous agreement of all the London Local Authorities which are subscribers to any of the groups of functions listed in Schedules 2 - 3 or any Sectoral joint committee;
13.2.2 where by reason of any change in law, or other reason not attributable to the fault of the London Local Authorities, they shall be prohibited from giving effect to their obligations hereunder.
13.3 This Agreement may be terminated by ALG by a two-thirds majority of those members present and voting in relation to any London Local Authority in respect of any of the groups of functions set out in Schedule 2 or any future functions which are delegated to ALG, and shall be terminated in relation to any London Local Authority at the request of the Chair of a Sectoral joint committee following a decision to terminate by that Sectoral joint committee in respect of the functions discharged by such Sectoral joint committee, by written notice to that London Local Authority effective on receipt on the occurrence of any of the following events:
13.3.1 that London Local Authority materially breaches any of the provisions of this Agreement and, in the case of a breach capable of remedy, fails to remedy the same within 28 days of being notified of the breach by ALG and being required to remedy the same; or
13.3.2 where by reason of any change of law or other reason not attributable to the fault of the London Local Authority, that Authority shall be unable to give effect to its obligations hereunder.
13.4 This Agreement may be terminated by any London Local Authority in respect of any of the groups of functions set out in Schedules 2 and 3 by that London Local Authority giving one year’s notice in writing to ALG to expire on 31st March.
PROVIDED THAT if at any time the number of members of ALG is less than 33, the functions and consultations which are hereby discharged by ALG in relation to the ALG Grants Committee and ALGTEC shall continue to be discharged by a joint committee of all the London Local Authorities listed in Part 1 of Schedule 1 which shall meet immediately prior to each of the meetings of ALG referred to in Clause 5.1.
13.5 In the event of termination under Clause 13.3 or 13.4, in addition to any outstanding subscriptions, the London Local Authority shall pay to ALG such sum as represents the contribution to the capitalised value of that proportion of the continuing and outstanding liabilities of ALG and/or any Sectoral joint committee which extend beyond such termination which is properly attributable to that London Local Authority’s membership.
14. DISSOLUTION
14.1 In the event of dissolution of ALG and/or any Sectoral joint committee, the assets thereof, after settlement of all outstanding debts, liabilities and costs or, if none, the liabilities thereof, shall be distributed amongst the London Local Authorities by ALG and/or such Sectoral joint committee in proportion to the contributions of each of the London Local Authorities 15. **GENERAL**
15.1 **Notices**
All notices which are required to be given or received hereunder shall be in writing addressed to the Chief Executive of ALG or the London Local Authority, as the case may be. Any such notice may be delivered personally or by first class pre-paid letter or by facsimile transmission and shall be deemed to have served if by personal delivery, when delivered, if by first class post, 48 hours after posting and if by facsimile transmission, on successful transmission.
15.2 **Continuing Agreement**
All provisions of this Agreement shall, so far as they are capable of being performed and observed, continue in full force and effect notwithstanding termination, except in respect of those matters then already performed.
15.3 **Good Faith**
Each of the Parties undertakes with each of the others to act in good faith and to do all things reasonably within its powers which are necessary or desirable to give effect to the spirit and intent of this Agreement.
15.4 **Variations**
No variation to this Agreement, other than variations which ALG (or any Sectoral joint committee in respect of any matters which fall to be discharged solely by any such Sectoral joint committee) reasonably considers to be minor, shall be valid or effective unless made by one or more instruments in writing signed by all the Parties.
15.5 **Waiver** No failure to exercise and no delay in exercising on the part of any of the Parties hereto any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies unless otherwise provided by law.
15.6 **Severability**
Notwithstanding that any provision of this Agreement may prove to be illegal or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect.
16 **EXECUTION**
16.1 This Agreement is executed by each Party by signing the annexed Memorandum of Participation on behalf of that Party and such Memorandum of Participation shall be evidence of execution by that Party when Memoranda executed by all the Parties are incorporated into this Agreement.
**SCHEDULE 1**
**PART 1**
**THE LONDON LOCAL AUTHORITIES**
The City of Westminster
The London Borough of Barking and Dagenham
The London Borough of Barnet
The London Borough of Bexley The London Borough of Brent The London Borough of Bromley The London Borough of Camden The London Borough of Croydon The London Borough of Ealing The London Borough of Enfield The London Borough of Greenwich The London Borough of Hackney The London Borough of Hammersmith and Fulham The London Borough of Haringey The London Borough of Harrow The London Borough of Havering The London Borough of Hillingdon The London Borough of Hounslow The London Borough of Islington The Royal Borough of Kensington & Chelsea The Royal Borough of Kingston-upon-Thames The London Borough of Lambeth The London Borough of Lewisham The London Borough of Merton The London Borough of Newham The London Borough of Redbridge The London Borough of Richmond upon Thames The London Borough of Southwark The London Borough of Sutton The London Borough of Tower Hamlets The London Borough of Waltham Forest
The London Borough of Wandsworth
The Mayor and Commonalty and Citizens of the City of London SCHEDULE 1
PART 2
LONDON HOUSING UNIT COMMITTEE
Member Authorities
The London Borough of Barnet The London Borough of Brent The London Borough of Camden The London Borough of Croydon The London Borough of Ealing The London Borough of Enfield The London Borough of Greenwich The London Borough of Hackney The London Borough of Hammersmith and Fulham The London Borough of Haringey The London Borough of Havering The London Borough of Hillingdon The London Borough of Hounslow The London Borough of Islington The London Borough of Lambeth The London Borough of Lewisham The London Borough of Merton The London Borough of Newham The London Borough of Redbridge The London Borough of Southwark The London Borough of Tower Hamlets The London Borough of Waltham Forest SCHEDULE 2
PART 1 FUNCTIONS
1. To consult on the common interests of the London Local Authorities and to discuss matters relating to local government.
2. To represent the interests of the London Local Authorities to national and local government, to Parliament, to the European Union and other international organisations and to other bodies and individuals, and to negotiate as appropriate on behalf of member authorities.
3. To formulate policies for the development of democratic and effectively managed local government.
4. To provide forums for the discussion of matters of common concern to the London Local Authorities and a means by which their views may be formulated and expressed.
5. To appoint representatives or staff to serve on any other body.
6. To represent the interests of the London Local Authorities as employers.
7. To provide services to the London Local Authorities including the dissemination of information on local government and on other relevant issues.
8. To provide information to the public, individuals and other organisations on the policies of the ALG and local government issues relevant to London.
9. To act as the regional body of the Local Government Association. PART 2: FUNCTIONS
Generally
1. To act for, and on behalf of, London Local Authorities in their role as employers, through the provision and development of a range of services including in particular:
i. Advice on the application and interpretation of national and provincial agreements covering administrative, professional, technical and clerical employees; manual employees, craft employees; and other local government employees;
ii. Advice on best practice in the conduct of employment relations and personnel procedures;
iii. Policy advice on development and training matters;
iv. Advice and information across the range of development and training activities;
v. The organisation and delivery of regional and individual local authority training courses/seminars and similar activities;
vi. Research and information on human resources, development and funding;
vii. Advice on health, safety and welfare matters;
viii. To represent the view of London local authorities on pay and conditions of service to the national negotiating bodies; and to advise London representatives on the same bodies.
ix. To co-operate with The Improvement & Development Agency, The Employers’ Organisation, local authority regional and provincial employer organisations, and other relevant local authority bodies; x. To provide professional advice to the employer’s side of the Greater London Provincial Council and the Greater London Joint Negotiating Committee;
xi. To provide a conciliation and arbitration role in the resolution of industrial relations disputes;
xii. To exchange information and opinion with other organisations and to provide a human resource service to Associate and Subscriber Members and other contracted bodies.
Specifically:
1. To appoint members to represent ALG on the Greater London Provincial Council in such numbers as are provided for in the constitutions of those joint bodies.
2. To secure, as far as it is possible, the largest possible measure of joint action, as between member authorities, for the consideration of pay and terms and conditions of service for those employees of member authorities falling within purview of the Greater London Provincial Council.
3. To represent the views of the Boroughs on pay and terms and conditions of service for employees to the national negotiating body.
4. To consider any other appropriate matters referred to it by constituent bodies relating to the terms and conditions of employment of employees in its scope.
5. To co-operate as appropriate with other Provincial Employers or other appropriate bodies in matters of common interest.
SCHEDULE 2
PART 3: GENERAL FUNCTIONS
1. To do anything which is calculated to facilitate, or is conducive or incidental to, any of its functions under this Agreement and to discharge such other functions as can be lawfully discharged in accordance with Clause 1.1.4 of this Agreement.
2. To employ such staff on such terms and conditions of employment as ALG considers appropriate to discharge the functions set out in Schedules 2 and 3, the functions discharged by the associated committees of ALG and any further functions which are delegated to ALG or a Sectoral joint committee by all or any of the London Local Authorities; to accept such staff on secondment from any of the London Local Authorities for any of these purposes as ALG considers appropriate and to procure accommodation for the purposes of this Agreement.
3. To enter into contracts for goods, works and services in relation to any aspect of the functions hereunder or such other functions as ALG can lawfully discharge and to enter into service level agreements with any of the London Local Authorities or any other body in relation thereto.
4. To implement, in respect of the functions delegated to ALG by the London Local Authorities hereunder, any duties or powers arising under the Best Value regime under the Local Government Act 1999.
PROVIDED THAT in discharging the Functions, ALG shall ensure that in all its activities, ALG and all its committees, representatives, staff and advisers pay full regard to the promotion of equal opportunities for all regardless of colour, creed, disability, gender, race or sexual orientation.
SCHEDULE 3
LONDON HOUSING UNIT COMMITTEE FUNCTIONS
1. The Committee shall be concerned with the statutory powers and duties (hereinafter referred to as “functions”) of Constituent Councils and the housing activities of other agencies, primarily to assist Constituent Councils to discharge their statutory housing functions.
2. The Committee shall also be concerned with the housing functions of councils generally and the housing activities of other housing agencies where it is to the benefit of the Constituent Councils in undertaking their statutory housing functions.
3. The activities of the Committee shall include:
(a) provision, organisation and co-ordination of housing publicity and information on issues relevant to member authorities;
(b) research and analysis on housing matters;
(c) evaluation and analysis on housing policy and service issues;
(d) other appropriate activities consistent with or contributing to the housing duties and functions of the Constituent Councils.
4. To carry out for and on behalf of Constituent Councils or other appropriate bodies or to assist Constituent Councils or other appropriate bodies to carry out investigations into and the collection of information relating to the housing functions of the Constituent Councils and the housing activities of other appropriate bodies.
5. To make for and on behalf of Constituent Councils or to assist in making arrangements for such information and the results of such investigations to be made available to Constituent Councils, other local authorities, any government department, other appropriate bodies or the public.
6. To assist the Constituent Councils in giving publicity to their functions and the amenities and/or advantages of and entitlements affecting their area individually and/or collectively.
7. To provide professional administrative and technical assistance to the Constituent Councils or other appropriate bodies in the preparation and implementation of specific projects proposed to be undertaken by one or more such Councils or other appropriate bodies.
SCHEDULE 4
LEAD AUTHORITY FUNCTIONS
1. To procure or provide such professional advice including but not limited to financial, IT, legal, surveying and personnel as ALG may require for the due and proper execution of its duties
2. To provide or procure accommodation for the purposes of ALG
3. To employ staff to undertake any ALG function and/or to provide payroll facilities and access to pension arrangements for staff employed by ALG
4. To negotiate and execute contracts in respect of goods, works, services and property transactions on behalf of the ALG on request
5. To institute and defend in its own name any court proceedings on behalf of ALG on request
6. Such other functions as may be agreed by ALG
Schedule 5
LONDON BOROUGHS GRANTS SCHEME
Made under section 48 of the Local Government Act 1985 by the London Borough Councils and the Common Council of the City of London
Note: The Scheme is set out below reflecting the amendments that were agreed by the Constituent Councils as part of the creation of the new ALG and which took effect from 1 April 2000.
This version also includes some small amendments which have been made to improve the text. These are indicated by footnotes at the relevant paragraph and explained at the end of the Scheme.
INTRODUCTION
1.1 There shall be a Scheme in accordance with section 48 of the Local Government Act 1985 (hereinafter referred to as the Act) for the making of grants to eligible voluntary organisations in Greater London.
1.2 The scheme is made by the London Borough Councils and the Common Council of the City of London (hereinafter referred to as the constituent councils).
THE GRANTS COMMITTEE
2.1 There shall be a London Boroughs Grants Committee consisting of one elected member representative from each constituent council which shall make all decisions relating to the making of grants and the operation of the scheme save those which are reserved to constituent councils under section 8 below.
2.2 If the representative of a constituent council is unable to be present at a meeting of the Committee, the council may be represented by a deputy who shall be an elected member of that council. A deputy attending a meeting of the Committee shall declare themselves as such. Having done so the deputy shall be eligible to speak and vote as if they were a member of the Committee.
(Note 1)
2.3 The Committee may establish such sub-committees and other groups of members as it considers appropriate.
2.4 The Committee shall appoint a Chair, Vice-Chair and Deputy Chair, in accordance with the standing orders of the Committee.
(Note 2)
ELIGIBLE VOLUNTARY ORGANISATIONS 3.1 For the purposes of this scheme "voluntary organisation" means a body the activities of which are carried out on otherwise than for profit but does not include any public or local authority and "eligible voluntary organisation" means a voluntary organisation whose activities will directly or indirectly benefit the whole of Greater London or any part of it extending beyond the area of any particular constituent council.
3.2 The Grants Committee may define supplementary criteria of eligibility which shall be communicated to voluntary organisations applying for grants under the scheme.
REVIEW OF NEEDS
4.1 The constituent councils have resolved to delegate the function specified in section 48(10) Local Government Act 1985 (review of needs of Greater London) to ALG from 1 April 2000 and shall submit, via the Grants Committee, a proposal for reviewing the needs of Greater London to ALG for approval in September of each year.
THE DESIGNATED COUNCIL AND LEAD BOROUGH
5.1 The London Borough of Richmond upon Thames shall be the designated council for the purposes of section 48(2)(a) Local Government Act 1985 (making of grants).
5.2 Subject to Clause 6 of the Association of London Government Agreement dated 1 April 2000, the London Borough of Richmond upon Thames shall provide and be reimbursed for the following Lead Borough functions in respect of the Grants Unit established under this Scheme:
(1) the handling of all payroll activities and pension arrangements in respect of staff employed in the Grants Unit, together with the provision of the full range of personnel functions to the Grants Unit;
(2) Legal advice as required from time to time subject to resources being available.
(3) Financial advice and continuous internal audit of the Grants Unit’s affairs.
(4) Computer services for the Grants Unit.
(5) Accommodation for the Grants Unit and purchasing of equipment and stationery.
(6) Committee services.
THE GRANTS UNIT 6.1 The Grants Unit shall be responsible to ALG and the Grants Committee through its Director and staff for the efficient administration of the scheme and for advice on policies and priorities towards grant giving within and between services being funded.
6.2 In particular the Grants Unit shall -
(1) keep under review the needs of Greater London and report to the Grants Committee and ALG from time to time on a strategy for collective grant giving devised with due regard to those needs;
(2) draw up and submit for consideration and approval by the Grants Committee detailed criteria and policies for grant giving in the light of the agreed strategy;
(3) prepare and submit an annual budget for consideration by the Grants Committee and ALG by the end of November each year for the financial year commencing the following April. This budget shall include the costs of staffing, office and support services considered necessary to facilitate the effective and efficient operation of the Scheme, as well as expenditure proposals for grant aid to eligible voluntary organisations, and any contingency provision;
(4) receive, assess and process grant applications from eligible voluntary organisations and report on them and make recommendations to the Grants Committee and or any Sub-Committees it may establish;
(5) administer the payment of approved grants to eligible voluntary organisations and monitor the use made of such funding;
(6) convene and service meetings of the Grants Committee, its sub-committees and any other bodies established by it.
MEETINGS
7.1 There shall be meetings of the Grants Committee at least twice a year in July and November, and on such other occasions as may be decided by the Committee or its Chair or in accordance with the Standing Orders of the Committee. (Notes 3 and 4)
7.2 A meeting may be requisitioned by not less than one third of the members of the Committee. Any such requisition shall be delivered to the Secretary to the London Boroughs Grants Committee not less than ten working days before the date of the meeting and shall specify the business to be transacted at the meeting. No business other than that set out in the summons shall be transacted at such a meeting.
(Note 5) 7.3 The quorum of any meeting of the Committee or a Sub-Committee shall be one third of the number of members entitled to be present. No business shall be transacted at any meeting unless a quorum is present.
7.4 The July meeting of the Grants Committee shall approve the strategy, priorities and any delegation to sub-committees and to the Director of the Grants Unit for recommendation to ALG. That meeting shall also receive a forward plan and budget for the following financial year for consideration and for approval by ALG.
(Note 4)
7.5 The November meeting shall receive details of the budget for the following financial year as approved by ALG and shall make recommendations as to the level of overall expenditure for the consideration and approval of constituent councils as provided for under the Act. The budget shall include proposals for expenditure on grants to eligible voluntary organisations, the administrative and staffing costs of the Grants Unit and any contingency provision. In order that the level of expenditure may be speedily determined constituent councils shall respond to the recommendations of the Grants Committee by not later than the third Friday of the following January.
(Note 6)
7.6 The Grants Committee may make such other arrangements for the conduct of meetings as it considers appropriate.
CONTRIBUTIONS TO EXPENDITURE
8.1 The constituent councils shall be required to contribute to any expenditure of the designated council which has been incurred with the approval of at least two-thirds of the constituent Councils; and the amounts of the contributions shall be determined so that the expenditure in respect of which they are payable is borne by the constituent councils in proportion to the populations of their respective areas.
8.2 As respects expenditure incurred before 1 April 1986, rule 8.1 shall have effect with the substitution for the reference to two-thirds of the constituent councils of a reference to a majority of those councils. Before 1 April 1986, expenditure may be incurred only on administrative expenses. No grants may be paid before 1 April 1986.
8.3 For the purpose of approving expenditure under the Scheme, constituent councils’ approval to overall expenditure for the year shall require the appropriate majority to agree but decisions with regard to the allocation of expenditure within the overall expenditure approved shall be taken by the Grants Committee in accordance with the Scheme and the detailed operational arrangements. 8.4 For the purposes of rules 8.1 and 8.2 above the population of any area shall be taken to be the number estimated by the Registrar General and certified by him to the Secretary of State by reference to such date as the Secretary of State may from time to time determine.
(Note 7)
8.5 The total annual expenditure incurred under the scheme by the designated council shall not exceed such amount as is prescribed by an order made by the Secretary of State, if so prescribed.
8.6 The designated council shall invoice constituent councils one month in advance for their contributions to the approved budget for the scheme in the following way:
(1) in March and September of each year for half the expenditure incurred in respect of the Lead Borough functions set out in paragraph 5.2 above (other costs including staffing and accommodation costs to be recovered by ALG in accordance with Clause 12 and Schedule 9 of the ALG agreement) and a quarter of the expenditure proposed for grants to eligible voluntary organisations and any agreed contingency provision;
(2) in June and December of each year for a quarter of the expenditure proposed for grants to eligible voluntary organisations and any agreed contingency provision.
8.7 Constituent councils shall pay their contributions to the scheme not later than the 8th day of April, July, October and January of each financial year in order that payments of approved grants may be made to eligible voluntary organisations before the end of those months, generally in quarterly instalments.
8.8 The Grants Unit shall keep proper records of income and expenditure, and shall prepare for the July meeting of the Grants Committee a statement of account for the financial year ended on the previous 31 March. The statement shall be approved by ALG audited by independent auditors appointed by the ALG.
OPERATIONAL MATTERS AND SUPPLEMENTARY PROVISIONS
9.1 This scheme shall be read in conjunction with the Eligibility Criteria approved by constituent councils and reported to the Grants Committee on 17 October, 1985, and the Decision-Making Procedures and Operational Arrangements in force from time to time. Any provisions of the scheme which are supplementary to those prescribed by section 48 Local Government Act 1985 may be varied by a two-thirds majority of the constituent councils acting by ALG on a recommendation from the London Boroughs Grants Committee.
PERIOD OF OPERATION OF THE SCHEME
10.1 The scheme will continue in force for at least two financial years after that in which it is made, that is at least until 31 March 1988.
10.2 Subject to rule 10.1, the Scheme may be revoked by the constituent councils (or, in the absence of agreement between all of them, by a majority of those councils) with effect from the end of any financial year after that in which the decision to revoke is made.
10.3 The designated council may be giving not less than twelve months notice to the other constituent councils withdraw its consent to act as designated council with effect from the end of any financial year not earlier than the second financial year after that in which the scheme was made; and in that event the scheme shall terminate when the withdrawal takes effect.
Footnotes The Scheme should be read with the following clarifying footnotes.
Note
1. In rule 2.2 line 4 the word “themselves” replaces “himself”. In line 5 the word “the deputy” replaces the word “he”. In line 6 the word “they” replaces the word “he”.
2. In rule 2.4 line 1, the words “Chair”, Vice-Chair and Deputy Chair” replace the words “Chairman, Vice-Chairman and Deputy Chairman”.
3. In rule 7.1 line 3, the word “Chair” replaces the word “Chairman”.
4. Further to rules 7.1 and 7.4 the Committee agreed at its annual meeting on 17 May 1989 that some of the limitations imposed by these timing constraints were restrictive. Custom and practice, but particularly the arrangements which have developed since the PA consultants review of 1989, have moved away from this original timetable. Some of the functions are now considered in the Policy and Development Sub-Committee (i.e. priorities and strategy) and the timing has altered.
Priorities are considered at the June or early July Policy and Development Sub-Committee meeting with further discussion in September. Budget making has moved forward to a late October or early November meeting of the Grants Committee and delegation to the Director is dealt with at the start of the Committee’s four year cycle, running for the duration of that period unless amendments are needed.
5. In rule 7.2 lines 2 and 3, the words “Secretary” replace the words “Honorary Secretary”.
6. Further to rule 7.5, recent legislative changes require that constituent councils should have agreed to the overall level of expenditure for the following financial year by 1 February, failing which the Secretary of State will make an Order the effect of which will be that constituent councils shall be deemed all to have given their approval to the amount approved, or deemed to have been approved, for the preceding financial year.
These provisions are contained in Section 48(4A) of the 1985 Act and the Grants to Voluntary Organisations (Specified Date) Order 1992.
7. In rule 8.4, the Registrar General’s estimate need no longer be certified to the Secretary of State. Regulation 6.8 of the Levying Bodies (General) Regulations 1992 (coming into force on 11 December 1992) now determines the way in which contributions to the annual overall level of expenditure will be apportioned. Regulation 6.8 states:
“A levying body shall secure that the expenses to be met by levies by it under these Regulations by reference to the relevant precepting power conferred by section 48 or 88 of the Local Government Act 1985 are borne by the relevant authorities in a proportion calculated by reference to the total resident population of the area of each relevant authority on 30th June in the financial year beginning two years before the beginning of the financial year in respect of which the levy is issued, as estimated by the Registrar General”.
This means that the 1999-2000 expenditure apportionment is based on the mid-year 1997 estimates, 2000-01 be based on mid-year 1998, and so on.
The Committee’s overall expenditure and each borough’s contribution towards it, constitutes a levy which the Regulations require to be authorised and sent out to constituent councils by 15 February each year.
The designated council (lead borough) is defined as a levying body further to sections 74 and 117 of the Local Government Finance Act 1988. This means that the levy has to be approved formally at a Council meeting of the lead borough before payment requests are sent out. SCHEDULE 6
STANDING ORDERS
INTRODUCTION
These are the Standing Orders and rules of debate and procedure for the conduct of meetings of the ALG Leaders’ Committee. The standing Orders also apply, wherever appropriate, to the associated committees, any Sectoral joint committee, the sub-committees and Forums of the ALG. The rules have been drawn up having regard to DETR best practice guidance and statutory requirements.
In the event of any conflict between the provisions of the Standing Orders and any provision of the ALGTEC Agreement and/or Schedule 5 hereto, the relevant provision of the ALGTEC Agreement or Schedule 5 shall prevail.
Revised by ALG on 4 May 2004 CONTENTS
01. Meetings a) Generally b) Annual Meeting c) Ordinary meetings
02. Membership
03. Time and Place of meetings
04. Notice of and summons to meetings
05. Chair of meetings
06. Quorum
07. Duration of meetings
08. Deputations
09. Motions on notice
10. Motions without notice
11. Rules of debate
12. Previous decisions and motion
13. Voting
14. Minutes
15. Record of attendances
16. Exclusion of public
17. Members Conduct
18. Disturbance by public
19. Urgency
20. Declaration of Interest
21. Annual Subscriptions
22. Delegation of Functions
23. Supply of information to members
24. Meeting with outside bodies
25. Forums of ALG
26. Access to meetings and documents
27. Suspension and amendment of the Standing Orders
28. Meetings
(A) Generally
i) ALG shall hold a minimum of 8 meetings each year, one of which shall be an annual general meeting, except in a year in which elections to local authorities are held in London when fewer than eight may be held.
ii) Subject to Clause 1 (A) (i), meetings of ALG shall be called, and the procedure to be adopted at such meetings shall be determined in accordance with the provisions of these Standing Orders.
iii) Each Sectoral joint committee established hereunder from time to time shall, unless otherwise determined in accordance with clause 1 (A) (i), hold a meeting directly following each ALG meeting.
iv) Any member London Local Authority may give written notice of an item to be placed on the agenda for any meeting. All notices of items for agendas and reports for circulation with agenda must be received by the Chief Executive not less than ten working days prior to the meeting the agenda relates to.
v) Each London Local Authority subscribing to ALG its associated committees and any Sectoral joint committee shall be entitled to receive from the Chief Executive sufficient copies of the Agenda, papers and minutes of the proceedings of the meetings of the committees and any Forums and sub-committees thereof.
vi) Deputations shall be entitled, upon prior notification being given to the Chief Executive and at the discretion of the Chair, to attend and address the meeting for not more than ten minutes and to answer questions from members of a further ten minutes.
vii- Calling Meetings Meetings may be called at such time and such place:
a) as may be determined by the ALG, the associated or Sectoral joint committee by resolution;
b) the Chair of the relevant committee;
c) by requisition, signed by not less than one third of the representatives, delivered to the Chief Executive at least ten working days before the date mentioned in the requisition.
viii) Business
a) The Summons to any such meeting shall set out the business to be transacted thereat, and no business other than that set out in the summons shall be considered at the meeting unless by reason of special circumstances, which shall be specified in the minutes, the Chair of the meeting is of the opinion that the item should be considered at the meeting as a matter of urgency.
b) PROVIDED THAT meetings of any Sectoral joint committees shall take place, unless otherwise agreed by the Chair of the relevant Sectoral joint committee and the Chair of ALG, immediately following each meeting of ALG.
(B) Annual Meeting Of The Association
Timing and Business
The ALG shall hold an annual general meeting in July of each year. The annual meeting will:
(i) appoint from the Leaders the Chair, Deputy Chair and three Vice Chairs of ALG (ii) approve the minutes of the last meeting;
(iii) receive any announcements from the chair and/or head of the paid service;
(iv) appoint such sub committees and forums as the ALG considers appropriate to deal with matters which are not otherwise reserved to the ALG
(v) approve a programme of ordinary meetings of the ALG for the year; and
(vi) consider any business set out in the notice convening the meeting.
(vii) agree the scheme of delegation
VIII Selection of Councillors on Committees and Outside Bodies
At the annual meeting, the Association will:
(i) decide which committees to establish for the municipal year; (ii) decide the size and terms of reference for those committees; (iii) decide the allocation of seats [and substitutes] to political groups in accordance with the political balance rules; (iv) receive nominations of councillors to serve on each committee and outside body.
(C) ORDINARY MEETINGS
Ordinary meetings of the Association will take place in accordance with a programme decided at the ALG’s annual meeting. Ordinary meetings will: i) elect a person to preside if the chair, deputy chair, or vice chairs are not present.
ii) approve as a correct record and sign the minutes of the last meeting;
iii) receive any declarations of interest from members;
iii) receive any announcements from the chair, or the Chief Executive;
iv) receive questions from, and provide answers to, the public in relation to matters which in the opinion of the person presiding at the meeting are relevant to the business of the meeting and the submission of which have complied with Standing order 8;
v) deal with any business from the last meeting;
vi) receive and consider reports/presentations from the ALG sub-committees, forums and associated committees [and receive questions and answers on any of those reports;]
vii receive and consider minutes of meetings of ALG Sub committees/forums and associated committees
viii) consider motions; and
x) consider any other business specified in the summons to the meeting.
xi) The order of business of any associated committee and Sectoral joint committee shall be as shall be determined by such committee
xii) The Chair may at his/her discretion alter the order in which business is taken
2. **MEMBERSHIP**
2.1 Each London Local Authority, that is the 32 London boroughs and the Common Council of the City of London, shall appoint its Leader as its representative to ALG.
2.2 The Chairs of each of the Forums of ALG and of any sub-committees of any Sectoral joint committee shall also be entitled to sit ex officio (but not to vote in such capacity) on ALG
2.3 The Chairs of each of the associated committees of ALG, shall also be entitled to sit ex officio (but not to vote in such capacity) on ALG.
2.4 The Lead Member for Equalities of ALG and any other Lead Member appointed in respect of any issue shall be entitled to sit ex officio (but not to vote in such capacity) on ALG.
2.5 ALG may admit to membership such representatives of such other bodies as it considers appropriate or is required as the result of any legislation to admit from time to time on such terms as shall be agreed with such other bodies. Such representatives shall be entitled to sit ex officio but not to vote in such capacity.
2.6 The Chief Executive of each of the London Local Authorities or his/her nominated representative shall be entitled to attend as an observer but not to speak or vote at any meeting.
2.7 Each London Local Authority subscribing to any Sectoral joint committee shall appoint its Leader as its representative to such Sectoral joint committee.
2.8 Each Sectoral joint committee shall invite nominations from each London Local Authority subscribing to such Sectoral joint committee for membership of any sub-committee established thereunder PROVIDED THAT no sub-committee shall consist of more than one representative from each subscribing London Local Authority.
Deputy Representatives
2.9 If the representative of a London Local Authority is unable to be present at a meeting of ALG or any Sectoral joint committee, that member authority may be represented by a deputy who shall be duly appointed for the purpose. A deputy attending a meeting shall declare him/herself as such. but shall otherwise be entitled to speak and vote as if he/she were a member of ALG or that Sectoral joint committee.
ELECTED OFFICERS OF ALG AND THE LONDON HOUSING UNIT COMMITTEE
2.10 The following shall be the Elected Officers of ALG and the London Housing Unit Committee:
2.10.1 Chair
2.10.2 Deputy Chair
2.10.3 up to three Vice Chairs
the overall balance of which shall be such as to ensure proportional representation of party political groupings on the ALG.
3. TIME AND PLACE OF MEETINGS
The time and place of meetings will be determined by the Chief Executive and notified in the summons.
4. NOTICE OF AND SUMMONS TO MEETINGS
4.1 The Chief Executive will give notice to the public of the time and place of any meeting in accordance with the Access to Information Rules
4.2 The Chief Executive shall, not less than seven clear days before the intended meetings of ALG and any associated and Sectoral joint committee circulate a notice thereof to each representative and deputy representative and the Town Clerk/Chief Executive or the nominated officer of every London Local Authority subscribing to ALG, the associated committees and any Sectoral joint committee. The notice will give the date, time and place of each meeting and specify the business to be transacted, and will be accompanied by such reports as are available.
4.3 Provided that the failure of any such notice to be delivered shall not affect the validity of the meeting or of the business transacted thereat. Provided also that at times it may be necessary to circulate reports in a second despatch or to circulate them at the meeting.
5. CHAIR OF MEETING
5.1 At every meeting the Chair if present shall preside. If the Chair is absent the Deputy Chair if present, shall preside. If both the Chair and the Deputy Chair are absent a Vice Chair if present, shall preside. If neither the Chair, Deputy Chair or a Vice Chair is present the meeting shall elect a Chair from one of its members.
5.2 For the purposes of these Standing Orders references to the Chair, in the context of the conduct of business at meetings, shall mean the person presiding under this Standing Order.
5.3 The person presiding at the meeting may exercise any power or duty of the chair. Where these rules apply to sub-committee or forum meetings, references to the chair also include the chair of sub-committees or forums.
6. QUORUM
6.1 The quorum shall be one quarter, or the number nearest to one quarter, of the members of ALG, and any sub committee/forum of ALG and, in the case of any Sectoral Joint committee shall be such number as shall be determined by such Sectoral joint committee. The quorum of the associated committees is one-third. of the members entitled to be present.
6.2 If within half an hour of the time appointed for the meeting to commence, a quorum is not present, the meeting shall be dissolved.
6.3 Remaining business will be considered at a time and date fixed by the chair. If he/she does not fix a date, the remaining business will be considered at the next ordinary meeting.
7. DURATION OF MEETING
7.1 Subject to Standing Order 26 (suspension of Standing Orders) if, after two and a half hours after the time appointed for the start of the meeting, the business on the agenda has not been completed, subject to a contrary resolution the meeting of ALG or any associated committee or Sectoral joint committee shall automatically adjourn and any debate then proceeding shall be suspended and all business unfinished shall stand adjourned to the next meeting.
8. DEPUTATIONS
Deputations shall be entitled, upon prior notification being given to the Chief Executive and at the discretion of the Chair, to attend and address meetings of the ALG for not more than ten minutes and to answer questions from members of ALG and any Sectoral joint committee for a further ten minutes.
9. MOTIONS ON NOTICE
9.1 Notice
Except for motions which can be moved without notice under Standing Order 10 or consideration of any matters of urgency brought forward by leave of the Chair, written notice of every motion, signed by at least 5 members, must be delivered to the Chief Executive not later than 10 clear days before the date of the meeting. These will be entered in a book open to public inspection.
9.2 Motions set out in agenda
Motions for which notice has been given will be listed on the agenda in the order in which notice was received, unless the member giving notice states, in writing, that they propose to move it to a later meeting or withdraw it.
9.3 Scope
Motions must be about matters for which the ALG has a responsibility.
10. MOTIONS WITHOUT NOTICE
The following motions may be moved without notice:
(a) to appoint a chair of the meeting at which the motion is moved; (b) in relation to the accuracy of the minutes; (c) to change the order of business in the agenda; (d) to refer something to an appropriate body or individual; (e) to appoint a sub committee or member arising from an item on the summons for the meeting; (f) to receive reports or adoption of recommendations of committees or sub committees or officers and any resolutions following from them; (g) to withdraw a motion; (h) to amend a motion; (i) to proceed to the next business; (j) that the question be now put; (k) to adjourn a debate; (l) to adjourn a meeting; (m) that the meeting continue beyond two and a half hours in duration (n) to suspend a particular Standing Order; (o) to exclude the public and press in accordance with the Access to Information Rules; (p) to not hear further a member named under Standing Order 17.1 or to exclude them from the meeting under Standing Order 17.2; and
(q) to give the consent of the ALG where its consent is required by this Agreement.
11. RULES OF DEBATE
11.1 Speakers to Address the Chair All speakers shall address the Chair. All members shall preserve order whilst the speaker is speaking. A speaker shall give way if the Chair rises.
11.2 No discussion until motion seconded A motion or amendment shall not be discussed until it has been proposed and seconded.
11.3 Right to require motion in writing Unless notice of the motion has already been given, the chair may require it to be written down and handed to him/her before it is discussed.
11.4 Mover and Seconder’s speech The mover and seconder of a motion shall be deemed to have spoken thereon. When seconding a motion or amendment, a member may reserve their speech until later in the debate.
11.5 Content and length of speeches Speeches must be directed to the question under discussion or to a personal explanation or point of order. The mover of a motion shall be allowed 5 minutes and the seconder and succeeding speakers 3 minutes each. The time limit for speakers may be extended by an affirmative vote of the members. 11.6 **When a member may speak again**
A member who has spoken on a motion may not speak again whilst it is the subject of debate, except:
(a) to speak once on an amendment moved by another member;
(b) to move a further amendment if the motion has been amended since he/she last spoke;
(c) if his/her first speech was on an amendment moved by another member, to speak on the main issue (whether or not the amendment on which he/she spoke was carried);
(d) by the mover of an original motion in exercise of a right of reply, and this shall close the discussion;
11.6 **Amendments to motions**
(a) An amendment to a motion must be relevant to the motion and will either be:
(i) to refer the matter to an appropriate body or individual for consideration or reconsideration;
(ii) to leave out words;
(iii) to leave out words and insert or add others; or
(iv) to insert or add words.
as long as the effect of (ii) to (iv) is not to negate the motion.
(b) Only one amendment may be moved and discussed at any one time. No further amendment may be moved until the amendment under discussion has been disposed of.
(c) If an amendment is not carried, other amendments to the original motion may be moved.
(d) If an amendment is carried, the motion as amended takes the place of the original motion. This becomes the substantive motion to which any further amendments are moved.
(e) After an amendment has been carried, the chair will read out the amended motion before accepting any further amendments, or if there are none, put it to the vote.
11.7 Alteration of motion
(a) A member may alter a motion of which he/she has given notice with the consent of the meeting. The meeting’s consent will be signified without discussion.
(b) A member may alter a motion which he/she has moved without notice with the consent of both the meeting and the seconder. The meeting’s consent will be signified without discussion.
(c) Only alterations which could be made as an amendment may be made.
11.8 Withdrawal of motion
A member may withdraw a motion which he/she has moved with the consent of both the meeting and the seconder. The meeting’s consent will be signified without discussion. No member may speak on the motion after the mover has asked permission to withdraw it unless permission is refused.
11.9 Right of reply (a) The mover of any original motion, but not of any amendment, may reply to the discussion for a period of not more than 3 minutes without introducing new material and this shall close the discussion.
(b) If an amendment is moved, the mover of the original motion has the right of reply at the close of the debate on the amendment, but may not otherwise speak on it.
(c) The mover of the amendment has no right of reply to the debate on his or her amendment.
11.10 **Motions which may be moved during debate**
When a motion is under debate, no other motion may be moved except the following procedural motions:
(a) to withdraw a motion; (b) to amend a motion; (c) to proceed to the next business; (d) that the question be now put; (e) to adjourn a debate; (f) to adjourn a meeting; (g) that the meeting continue beyond two and a half hours in duration; (h) to exclude the public and press in accordance with the Access to Information Rules; and (i) to not hear further a member named under Standing Order 17.1 or to exclude them from the meeting under Standing Order 17.2
11.11 **Closure motions**
(a) A member may move, without comment, the following motions at the end of a speech of another member: (i) to proceed to the next business;
(ii) that the question be now put;
(iii) to adjourn a debate; or
(iv) to adjourn a meeting.
(b) If a motion to proceed to next business is seconded and the chair thinks the item has been sufficiently discussed, he or she will give the mover of the original motion a right of reply and then put the procedural motion to the vote.
(c) If a motion that the question be now put is seconded and the chair thinks the item has been sufficiently discussed, he/she will put the procedural motion to the vote. If it is passed he/she will give the mover of the original motion a right of reply before putting his/her motion to the vote.
(d) If a motion to adjourn the debate or to adjourn the meeting is seconded and the chair thinks the item has not been sufficiently discussed and cannot reasonably be so discussed on that occasion, he/she will put the procedural motion to the vote without giving the mover of the original motion the right of reply.
11.12 **Point of order**
A member may raise a point of order at any time. The chair will hear them immediately. A point of order may only relate to an alleged breach of these Standing Orders or the law. The member must indicate the rule or law and the way in which he/she considers it has been broken. The ruling of the chair on the matter will be final.
A speaker may give way to a point of information, and must give way to a point of order if it is accepted by the Chair. 11.13 **Personal explanation**
A member may make a personal explanation at any time. A personal explanation may only relate to some material part of an earlier speech by the member which may appear to have been misunderstood in the present debate. The ruling of the chair on the admissibility of a personal explanation will be final.
11.14 **Ruling of Chair**
The Chair shall decide all questions of order and his/her ruling upon such questions or upon matters arising in debate shall be final and shall not be open to discussion.
12. **PREVIOUS DECISIONS AND MOTIONS**
12.1 **Motion to rescind a previous decision**
A motion or amendment to rescind a decision made at a meeting of the Association within the past six months cannot be moved unless the notice of motion is signed by at least 5 members.
12.2 **Motion similar to one previously rejected**
A motion or amendment in similar terms to one that has been rejected at a meeting in the past six months cannot be moved unless the notice of motion or amendment is signed by at least 5 members. Once the motion or amendment is dealt with, no one can propose a similar motion or amendment for six months.
13. **VOTING**
13.1 One representative from each London Local Authority subscribing to ALG, its associated committees and any Sectoral joint committee shall be entitled to vote on behalf of his/her authority in each meeting of ALG, either associated committee or any Sectoral joint committee.
13.2 Subject to Clause 11.1, 12.1 of this Agreement and Standing Order 14.1, and any provisions of this Agreement or the ALGTEC Agreement requiring unanimity, questions arising at any meeting of ALG shall be determined by a show of hands and shall be decided by a simple majority of votes.
13.3 In the case of an equality of votes, the Chair shall have a second or casting vote.
13.4 On the requisition of any representative made before any vote is taken on a motion or an amendment, and supported by five representatives, the voting shall be recorded so as to show how each representative present and voting voted. The name of any representative present and not voting shall also be recorded.
13.5 Where any member requests it immediately after the vote is taken, their vote will be so recorded in the minutes to show whether they voted for or against the motion or abstained from voting.
[mandatory standing order Local Authorities (Standing Orders) Regulations 1993]
Voting on appointments
13.6 If there are more than two people nominated for any position to be filled and there is not a clear majority of votes in favour of one person, then the name of the person with the least number of votes will be taken off the list and a new vote taken. The process will continue until there is a majority of votes for one person. 14. MINUTES
Signing the minutes
14.1 The Chair will sign the minutes of the proceedings at the next suitable meeting. The chair will move that the minutes of the previous meeting be signed as a correct record. The only part of the minutes that can be discussed is their accuracy.
14.2 Where in relation to any meeting, the next meeting for the purpose of signing the minutes is a meeting called under paragraph 3 of schedule 12 to the Local Government Act 1972 (an Extraordinary Meeting), then the next following meeting (being a meeting called otherwise than under that paragraph) will be treated as a suitable meeting for the purposes of paragraph 41(1) and (2) of schedule 12 relating to signing of minutes
[Mandatory standing order under the Local Authorities (Standing Orders) Regulations 1993.]
Form of minutes
14.3 Minutes will contain all motions and amendments in the exact form and order the chair put them.
15. RECORD OF ATTENDANCE
At every meeting, each representative of a member authority and all other representatives present in accordance with Standing Order 2 (Membership), shall enter his/her name in an attendance book provided by the Clerk to the Meeting.
16. EXCLUSION OF PUBLIC Members of the public and press may only be excluded either in accordance with the Access to Information Rules or Standing Order 18
17. MEMBERS’ CONDUCT
17.1 Member not to be heard further
If a member persistently disregards the ruling of the chair by behaving improperly or offensively or deliberately obstructs business, the chair may move that the member be not heard further. If seconded, the motion will be voted on without discussion.
17.2 Member to leave the meeting
If the member continues to behave improperly after such a motion is carried, the chair may move that either the member leaves the meeting or that the meeting is adjourned for a specified period. If seconded, the motion will be voted on without discussion.
17.3 General disturbance
If there is a general disturbance making orderly business impossible, the chair may adjourn the meeting for as long as he/she thinks necessary.
18. DISTURBANCE BY PUBLIC
18.1 Removal of member of the public
If a member of the public interrupts proceedings, the chair will warn the person concerned. If they continue to interrupt, the Chair will order their removal from the meeting room. 18.2 **Adjournment**
In the event of a general disturbance which, in the opinion of the Chair renders the due and orderly dispatch of business impossible, the Chair, in addition to any other power vested in the Chair, may without question adjourn the meeting for such period as in the Chair’s discretion shall be considered expedient.
19. **URGENCY**
19.1 If at any time the Chief Executive of ALG considers that any matter is urgent and should be decided on prior to the next meeting of ALG, then he/she shall consult the Elected Officers of ALG. If at least two of the Elected Officers, of whom at least one will be from a minority party, agree that the matter is urgent and agree on the Chief Executive’s recommendation, then the decision shall be taken by the Chief Executive in accordance with such recommendation, subject to the decision being recorded in writing and signed by the Elected Officers agreeing the recommendation and the Chief Executive.
19.2 In the event the provisions of Standing Order 19.1 are inoperable following local government elections and there is a need for urgent action, the Chief Executive is authorised to take executive action having consulted as appropriate, such action to be reported to the next meeting of ALG.
19.3 The Elected Officers of ALG and the Chief Executive may nominate persons to act in their absence for the purposes of this Standing Order.
19.4 A copy of the record of a decision taken under this Standing Order shall be kept at the office of the Chief Executive. 19.5 All decisions taken under this Standing Order shall be reported to the next meeting of ALG.
19.6 The urgency procedures to be followed by any Sectoral joint committee shall be as shall be adopted by such Sectoral joint committee.
19.7 The urgency procedure to be followed by ALGTEC is as in 19.1-19.5 above, with the substitution of “Director” for “Chief Executive” and “group leaders and Chair, if the Chair is not a group leader” for “Elected Officers”
20. DECLARATIONS OF INTERESTS
20.1 Any member of ALG, its associated committees and any Sectoral joint committee or sub-committee thereof and any Forums of ALG having a financial interest, direct or indirect, otherwise than solely as a trustee, in any matter under consideration at a meeting shall:
20.1.1 forthwith declare his/her interest;
20.1.2 not speak or vote thereon;
20.1.3 forthwith withdraw from the room whilst the matter is under consideration.
20.2 For the purposes of paragraph 20.1 above a member shall be treated as having an indirect financial interest in any matter if:
20.2.1 she/he or any nominee of her/his is a shareholding member of profit-making company or other body (apart from any public body) which has a direct financial interest in the matter;
20.2.2 she/he is a partner, or in the employment of, a person with a direct financial interest in the matter and a member shall be treated as having a direct or indirect interest if the member’s spouse or partner has such an interest. 20.3 Members shall comply with the National Code of Local Government Conduct as revised, amended or substituted from time to time.
20.4 The provisions of this Standing Order shall be kept under review and adapted as necessary following the enactment of the proposed Local Government (Organisation and Standards) Act and any such adaptations shall be treated as minor variations for the purposes of Clause 15.4.
21. **ANNUAL SUBSCRIPTIONS**
21.1 ALG shall by a majority of at least two-thirds of those representatives present at the meeting and entitled to a vote in respect of each of those functions, approve by no later than 31st January in each year the subscriptions or contributions payable by the London Local Authorities for each of the groups of functions set out in Schedule 2. If ALG fails to agree by such date the subscriptions or contributions for the ensuing financial year, then that subscription or contribution shall be at the same amount as the subscription for the current financial year. The annual budget (including any contingency sum) in respect of any function shall not be exceeded without the prior approval of a two-thirds majority of the representatives of those London Local Authorities who are present at the meeting to which the proposal to exceed the budget is under consideration and authorised to vote.
21.2 Any Sectoral joint committee shall approve the subscriptions payable by each London Local Authority subscribing thereto in such manner as shall be determined by such Sectoral joint committee.
21.3 Contributions to the London Boroughs Grants Scheme are as set out in Schedule 5.
21.4 Contributions to ALGTEC are as set out in the ALGTEC Agreement
22. **DELEGATION OF FUNCTIONS** 22.1 ALG, its associated committees, any Sectoral joint committee or sub-committee thereof and any Forum of ALG may delegate to officers such of their functions as are permissible under statute and may, in relation to any of those functions, require that the exercise of those functions be subject to such conditions as ALG deems fit to impose, including, where appropriate, prior consultation with the leading member on ALG of each political party or group before taking such action.
23. **SUPPLY OF INFORMATION TO MEMBERS**
23.1 Members of ALG, its associated committees, any Sectoral joint committee or sub-committee thereof and any Forums of ALG, shall be entitled to receive from officers such information as they may require in order to enable them to carry out their duties as members of such committee or sub-committee.
23.2 In addition, the leading members on ALG of each political party or group shall be entitled to receive briefings and briefing papers from officers on the same basis as the Chair.
24 **MEETINGS WITH OUTSIDE BODIES**
24.1 A representative of each political party or group shall be entitled to be notified of and to attend any meeting with an outside body at which a Member of ALG is present and which has been arranged on behalf of ALG.
(This Standing Order shall not apply to those meetings convened by political advisers)
25. **FORUMS OF ALG**
25.1 ALG shall establish Forums to discharge the functions set out in Schedule 2 and such further forums and consultative groups as it considers appropriate
25.2 All or any of the London Local Authorities wishing to delegate a function to ALG, or to any Sectoral joint committee, may request ALG’s consent to the delegation of such function in accordance with the terms of this Agreement, such consent not to be unreasonably withheld or delayed.
25.3 The terms of reference of any Sectoral joint committee and any consultative group of ALG shall be subject to the approval of ALG.
25.4 The Chair and Deputy Chair of ALG shall be ex-officio members of every Sectoral joint committee and sub-committee thereof and any Forum but shall not be entitled to speak or vote at such meetings in that capacity.
26. ACCESS TO MEETINGS AND DOCUMENTS
26.1 Admission of members of the public to meetings of ALG, any Sectoral joint committee and sub-committee thereof and any Forum and access to documents thereof shall be in accordance with the Access to Information legislation in force from time to time.
27. SUSPENSION AND AMMENDMENT OF STANDING ORDERS
27.1 Suspension Any of these Standing Orders except Standing Orders 13.5 and 14.2 may be suspended at any meeting, in respect of any business on the agenda for such meeting, provided that the majority of the representatives of authorities in membership of ALG its associated committees or any Sectoral joint committee who are present and entitled to vote so decide PROVIDED THAT any suspension hereunder complies with any legislation in force from time to time. 27.2 Variation and Revocation
Any addition to, or variation or revocation of these Standing Orders shall be by majority vote of those present and entitled to vote at any meeting of ALG its associated committees or any Sectoral joint committee. Any motion to vary or revoke these Standing Orders shall require confirmation at the next ordinary meeting of ALG, associated committee or Sectoral joint committee as the case may be before the proposed variation or revocation shall have effect PROVIDED THAT any addition, variation or revocation hereunder complies with any legislation in force from time to time. Key points/message
Every Director shall ensure that the Financial Regulations are strictly observed within their departments and shall arrange for all necessary staff training.
Any employee who knowingly or by negligence breaches these regulations may be subject to disciplinary action.
## CONTENTS
| Subject | Page | |----------------------------------------------|------| | 1. Definitions | | | 2. General | | | 3. Budgets | | | 4. Virements | | | 5. Accounting & Document Retention | | | 6. Imprest Accounts | | | 7. Banking Arrangements | | | 8. Contracts | | | 9. Budgetary Control | | | 10. Audit | | | 11. Information Systems | | | 12. Income | | | 13. Disposal of Assets | | | 14. Control of Assets | | | 15. Write Offs | | | 16. Orders for Work, Goods and Services | | | 17. Payments | | | 18. Salaries, Wages and Pensions | | | 19. Security | | | 20. Stocks and Stores | | | 21. Motor Vehicles | | | 22. Travelling and Subsistence Claims | | | 23. Insurance | | | 24. Treasury Management and Investments | | | 25. Unofficial Funds | | | 26. Taxation Requirements | |
### Appendices
1. Request to Chief Financial Officer to Effect Virement
2. Retention & Microfilming of Documents
3. Suggested Format for Inventories
4. Stocktaking Guidelines
______________________________________________________________________
1. **Definitions** 1.1 The Chief Executive means the officer appointed pursuant to Clause 7.4 or, wherever appropriate, his nominated representative.
1.2 The Finance Officer means the officer appointed pursuant to Clause 7.4 who shall be the “Responsible Financial Officer” as defined by Regulation 2(2) of the Accounts and Audit Regulations 1996.
1.3 The Organisation means the ALG, any Sectoral joint committees and the associated committees.
2 General
2.1 These financial regulations are designed to detail the responsibilities, procedures and working practices adopted under this Agreement and provide essential information in relation to day to day financial administration.
2.2 The Chief Executive and the Finance Officer have a responsibility to establish within the Organisation strong internal control procedures so that activities are conducted in an efficient, effective and well-ordered manner. Such procedures should facilitate the detection and prevention of fraud and/or corruption at an early stage.
2.3 The Finance Officer shall maintain a register in which officers shall enter each gift, favour, reward or hospitality offered by a person or organisation doing, or seeking to do business with the Organisation.
2.4 It is the responsibility of the Chief Executive to ensure that all staff are made aware of these regulations and to make suitable arrangements to ensure adherence. This does not remove the requirement for all staff to make themselves conversant with these regulations and comply with their requirements.
2.5 The Organisation shall not consider:-
2.5.1 a new policy, nor
2.5.2 a development or variation of existing policy, nor
2.5.3 a variation in the means or time-scale of implementing existing policy which affects or may affect the Committee’s finances, unless there is before it at the same time a full statement of the financial implications by the Finance Officer.
2.6 The Chief Executive shall consult the Finance Officer with respect to any matter within his/her purview, which is liable materially to affect the finances of the Organisation before any commitment is incurred or before reporting thereon to any Committee.
2.7 Failure to observe these Financial Regulations may, at the discretion of the Finance Officer, be reported to ALG.
2.8 The Finance Officer in consultation with the Chief Executive will be responsible for submission of all claims for grant to Government Departments and other outside bodies. All agreements for the receipt of grant by a Committee shall:
2.8.1 be obtained in writing;
2.8.2 state the amount and conditions relating to the receipt of grant; and
2.8.3 be referred to the Finance Officer for his observations on legal and financial implications prior to signing.
2.9 Except in exceptional circumstances, reports to any Committee shall be presented to the Finance Officer at least 14 days prior to the agenda circulation date in order to allow him/her to provide Members with the appropriate financial comment. Where the Finance Officer is of the opinion that there is no financial implication to a report then he/she may agree a period of less than 14 days at his/her discretion.
2.10 The Finance Officer, in consultation with the Chief Executive, has the right to withdraw any Committee report where insufficient notice has been given to allow the provision of adequate financial comment.
2.11 The Finance Officer shall be consulted in any cases involving the interpretation of the Financial Regulations and his/her decision as to their meaning, scope and application shall be final providing such decision does not have the effect of altering the meaning of a Standing Order or other regulation or contract approved by a Committee.
2.12 The Finance Officer shall annually review the financial threshold figures stated in the Financial Regulations, making any necessary adjustments and then notify the Chief Executive accordingly. However, any proposed increases exceeding the appropriate rate of inflation shall first be referred to ALG and the relevant Sectoral joint or associated committee for their approval.
2.13 The Finance Officer shall review these Financial Regulations at least every two years in consultation with the Chief Executive and report to ALG and the relevant Sectoral joint or associated committee recommending those changes he/she considers necessary.
2.14 A Lead Authority, in its capacity as administrator of an activity delegated by ALG or a Sectoral joint or associated committee, shall be deemed to have complied with these Financial Regulations so long as it is in compliance with the applicable Financial Regulations and Standing Orders of that Lead Authority.
2.15 Any of these financial regulations may be revoked, varied or suspended in respect of all or any of the functions referred to in this Agreement by ALG in accordance with Schedule 6.
3 Budgets
3.1 The Finance Officer shall prepare the Capital Programme for submission to ALG and any Sectoral joint and the associated committees and shall lay down a timetable for achieving this result. The Chief Executive shall supply such information to the Finance Officer as may be required for the analysis of the programme and for the preparation of reports required by ALG and any Sectoral joint and the associated committees. The Finance Officer in consultation with the Chief Executive shall advise ALG and any Sectoral joint and the associated committees on the most appropriate method of funding capital expenditure.
3.2 Where capital expenditure is to be met in whole or in part by a grant or contribution from another party (e.g. government department) no expenditure shall be incurred until all necessary approvals have been obtained.
3.3 Capital expenditure shall not be incurred on a specific project until approved by ALG and the relevant Sectoral joint or associated committee, following a report to that committee, which details an estimate of the annual revenue expenditure which may arise from the project and any other factors which affect its financing. 3.4 Estimates of revenue income and expenditure shall be prepared by the Chief Executive in consultation with the Finance Officer who shall critically scrutinise the draft estimates before their submission to ALG and any Sectoral joint or associated committee.
3.5 The estimates shall show the latest approved estimates for the current year and the estimated expenditure and income for the ensuing year. The Finance Officer and Chief Executive shall provide sufficient supporting information as required by ALG, and any Sectoral joint or associated committee in order for variations between budget headings to be analysed. The detailed form of the annual budget shall be determined by the Finance Officer and Chief Executive consistent with general directions of ALG and any Sectoral joint or associated committee.
3.6 The Finance Officer shall make appropriate detailed calculations for each budget head. A working paper showing the basis of each calculation shall be kept for six years or until the final accounts for the year in question have been approved by the external auditor.
3.7 Estimates of income and expenditure made in respect of LHU shall be prepared in sufficient time to allow consideration and approval by the London Housing Unit Committee no later than 31st December preceding the financial year to which the estimates will relate.
3.8 Estimates of income and expenditure made in respect of LBG, shall be prepared in accordance with the timetable contained in the London Boroughs Grants Scheme as emnded by Schedule 4 as follows:
3.8.1 The LBG draft budget shall be submitted to ALG and the London Boroughs Grant Committee not later than the end of November each year.
3.8.2 ALG shall approve the draft budget and the London Boroughs Grants Committee shall recommend to the applicable Constituent Councils an overall level of expenditure on an annual basis and this shall include the amounts to be collected from each Constituent Council as determined by the Regulations.
3.8.3 At least two-thirds of the Constituent Councils must approve the recommended overall level of expenditure each year by not later than the third Friday in January as provided for in the Scheme. 3.8.4 If at least two thirds of the Constituent Councils have not approved the recommended overall level of expenditure before the 1st February in the year in which that financial year begins, the Constituent Councils shall all be deemed to have given their approval for that financial year to total expenditure of an amount equal to the amount that was approved or as the case may be, deemed to have been approved, for the preceding financial year. Such approval shall be subject to any order which may be made by the Secretary of State under Section 48 (5) of the Local Government Act 1985 and will confer authority on the London Boroughs Grants Committee to incur such expenditure.
3.9 If it appears that an overspending is unavoidable, even after making use of the virement provisions, then the approval of ALG and the relevant Sectoral joint or associated committee must be sought before application of any supplementary estimate. Any proposal affecting the funds of ALG or any Sectoral joint or associated committee shall be submitted to such committee accompanied by a report of the Chief Executive who shall consult the Finance Officer as necessary, indicating the sufficiency or otherwise of the estimate provision.
3.10 The conclusion of the Concessionary Fares contract shall be reported to TfL no later than the 31st of December each year.
4 Virements
4.1 Virement between budget heads is allowed subject to the following:-
4.1.1 Where any expenditure budget head will be overspent or income budget head will not be attained, by the end of the financial year, it shall be possible to offset the overspending or shortfall of income in respect of any function by virement, from other budget heads for the same function which would have sufficient provision during the same financial year. Such virement is defined below.
4.1.2 The Finance Officer is authorised to approve virements up to a maximum of £10,000 in any one instance, provided the total virement to any one budget head in any one financial year does not exceed £10,000 or, either 50% of the receiving budget or, £1,000 if the receiving budget is less than £2,000. This being subject to the savings utilised not arising from Estimates of Salaries and Wages, Capital Costs or Support Costs. In the case of a virement which impacts on budgets of Salaries and Wages, Capital Costs or Supporting Costs, authorisation must be given by ALG and any Sectoral joint or associated committee and is regardless of the amount involved.
4.1.3 For all such virements, which should be in multiples of £100, the Chief Executive shall send the requests in accordance with the format stipulated by appendix 1, either in writing or by electronic mail identifying him/her as the sender to the Finance Officer who, provided the above conditions are met, will effect the necessary adjustments in the Financial Information Systems within seven working days.
5 Accounting and Document Retention
5.1 All accounts, financial records, including computerised records, and financial administration procedures shall be kept or undertaken in a form approved by the Finance Officer who shall also be responsible for keeping the principal accounting records. It is the responsibility of the Chief Executive to retain securely, and in an easily retrievable form, all other information relating to the Organisation’s financial and operational activity in support of the accounting and final account process.
5.2 In the allocation of accounting duties, the following principles shall be observed:
5.2.1 The duties of providing information regarding sums due to or from ALG and of calculating, checking and recording these sums, shall be separated as completely as possible from the duty of collecting or disbursing them;
5.2.2 Officers charged with the duty of examining and checking the accounts of cash transactions shall not themselves be engaged in any such transactions.
5.3 The Chief Executive shall make returns of outstanding expenditure, income and any other relevant information in the form and by the date specified by the Finance Officer for the reporting process detailed in Financial Regulation 9.6 and the closure of the annual accounts.
5.4 All computerised financial systems should be capable of producing relevant accounting analysis capable of transfer in a format, level of detail and manner approved by the Finance Officer. The information transfer should include specific types of transaction such as write offs. The Chief Executive shall consult with the Finance Officer before introducing, amending or discontinuing any record or procedure relating to financial transactions or accounting.
5.5 All accounting records shall be retained in safe custody for such a period as shall be determined by the Finance Officer and no voucher or other document shall be destroyed before the specified period has elapsed. Details of minimum periods for which certain records are to be retained, and guidance as to microfilming, are provided at appendix 2. The ultimate disposal of financial records should be arranged by the Chief Executive as “confidential waste” and on no account should sensitive information be disposed of through the normal waste collection process. All such confidential waste disposal arrangements shall be subject to the prior approval of the Finance Officer.
5.6 The Finance Officer in consultation with the Chief Executive shall be responsible for the production and publication of the organisation’s final accounts in such a form and in accordance with such a timetable as to make them consistent with any relevant statute and the general directions of ALG and any Sectoral joint or associated committee.
5.7 As soon as practicable after the end of each financial year and before the 30th September, the Finance Officer in consultation with the Chief Executive shall report provisional out-turn figures for income and expenditure to ALG and any Sectoral joint or associated committee, comparing these to the approved estimates. The Finance Officer shall present the Statement of Accounts for the year in question to ALG’s External Auditors as early as possible but no later than the 30th September.
5.8 The Finance Officer shall retain, in safe custody, copies of audited Statements of Accounts including the External Auditor’s signed certificate and opinion. All significant issues raised by the External Auditor’s annual report on the accounts together with any accompanying management letter must be reported to ALG, unless the issues relate solely to the accounts of any Sectoral joint committee, The Finance Officer in consultation with the Chief Executive shall be responsible for the production and publication of the organisation’s final accounts in such a form and in accordance with such a timetable as to make them consistent with any relevant statute and the general directions of ALG and any Sectoral joint or associated committee. 5.7 As soon as practicable after the end of each financial year and before the 30th September, the Finance Officer in consultation with the Chief Executive shall report provisional out-turn figures for income and expenditure to ALG and any Sectoral joint or associated committee, comparing these to the approved estimates. The Finance Officer shall present the Statement of Accounts for the year in question to ALG’s External Auditors as early as possible but no later than the 30th September.
5.8 The Finance Officer shall retain, in safe custody, copies of audited Statements of Accounts including the External Auditor’s signed certificate and opinion. All significant issues raised by the External Auditor’s annual report on the accounts together with any accompanying management letter must be reported to ALG, unless the issues relate solely to the accounts of any Sectoral joint committee.
6 Imprest Accounts
6.1 The Finance Officer shall provide such imprest accounts as he/she considers appropriate after consultation with the Chief Executive.
6.2 The Finance Officer may arrange for bank accounts to be opened for use by holders of imprest accounts. Such bank accounts shall not be overdrawn, and it shall be a standing instruction to the bank concerned that any departure from this regulation is reported immediately to the Finance Officer.
6.3 The Chief Executive shall be responsible for the control and operation of the imprest account in accordance with instructions issued by the Finance Officer.
6.4 No sums received on behalf of ALG may be paid into an imprest account, but shall be banked separately or paid to ALG promptly as may be directed by the Finance Officer.
6.5 Payments from imprest accounts shall be limited to minor items, unobtainable through Creditors or Stores and ineligible for reimbursement through Payroll, the maximum value of which shall be £50 (inclusive of VAT), unless specific dispensation has been provided to the Chief Executive by the Finance Officer. All payments shall be supported by vouchers and all receipts, where appropriate, relating to expenditure from an imprest must be attached to the relevant voucher. 6.6 To satisfy the requirements of external auditors, imprest holders shall provide the Finance Officer with certificates annually to certify the balance held. These certificates must be sent to Finance Officer promptly after the end of the appropriate financial year. (Blank certificates will be provided to the imprest holders for this purpose by the Finance Officer before the end of each financial year).
6.7 Claims for the reimbursement of imprest accounts should be made at regular monthly intervals, following a full reconciliation of the account and, in any event, frequently enough for the relevant bank account to remain in credit until the reimbursement is received. Imprest reimbursement forms are to be provided by the Finance Officer.
6.8 It shall be the duty of the Chief Executive to notify the Finance Officer sufficiently in advance of the impending resignation or departure of the imprest account holder. When an imprest account holder leaves the service of ALG, he or she shall account to the Finance Officer for the amount advanced.
6.9 The general principle of imprest accounting is that at any time the cash balance, together with the aggregate value of any receipts on hand, unreimbursed claims and cheques not credited, should total the approved imprest account balance. At no stage should the cash balance be allowed to fall below zero. Income and change floats shall be kept separately from the imprest cash at all times, and shall not be used to fund cash expenditure.
6.10 If it becomes apparent that the current level of imprest is insufficient, the items on which the imprest is expended shall be reviewed. If it is clear that there is no reasonable alternative to expenditure through the imprest, a formal request in writing to have it increased shall be made to the Finance Officer. Similarly, if it becomes apparent that exceptional circumstances mean a temporary increase/decrease is required then a formal request is to be submitted to the Finance Officer. Further, sub-floats must not be issued from an imprest without the prior approval of the Finance Officer.
6.11 No officer shall authorise his or her own claims from an imprest account. Claims are to be authorised by the Chief Executive. Certification by or on behalf of the Chief Executive shall be taken to mean that the certifying officer is satisfied that the expenses and allowances claimed are properly and necessarily incurred and are properly payable. 6.12 Expenditure which should form part of the payroll system, eg clothing and car allowances, shall not be processed through imprest accounts.
6.13 All non-computerised records relating to imprest accounts should be maintained in ink.
6.14 The encashment of personal cheques and the advancing of loans from an imprest is strictly forbidden.
6.15 The only bank charges which should be incurred, in respect of imprests operated via a bank account, are those in the normal course of operation of the account. As can be seen from Financial Regulation 6.2, bank charges in respect of overdrawn accounts should not be incurred. If they have been incurred, however, they should be debited to an appropriate expenditure code and reclaimed on the imprest reimbursement form.
6.16 All Departments holding petty cash should ensure that, at all times, cash is adequately secured. As a minimum this should be in a cash box within a lockable drawer. Amounts in excess of £50 should be kept overnight in a safe or lockable cupboard with very restricted access.
6.17 Whenever any matter arises which involves or may suggest irregularities affecting a petty cash imprest system, the Chief Executive shall notify the Finance Officer forthwith. This Regulation also applies in the event of any loss from the imprest account, identified during reconciliation.
7 Banking Arrangements
7.1 The Finance Officer will make arrangements with ALG’s bankers for the operation of such accounts as he/she may consider necessary. No other bank accounts will be opened without the permission of the Finance Officer.
7.2 All bank accounts shall bear an official title and in no circumstances shall an account be opened in the name of an individual.
7.3 The Finance Officer will make appropriate arrangements with ALG’s bankers concerning designated signatories of cheques, drafts, promissory notes, acceptances, negotiable instruments, orders and instructions. 7.4 The Finance Officer shall be responsible for arranging the temporary investment of monies not immediately required, and the ordering and issue of cheques/giro-cheques, direct debit and credit card facilities.
7.5 The Finance Officer will ensure that a register is maintained to record all stocks of cheques held by ALG.
7.6 Stocks of cheques will be held by the Finance Officer in a safe covered by adequate insurance arrangements.
7.7 The Finance Officer is responsible for arranging the cancellation and subsequent replacement of specific cheques with ALG’s bankers. All requests in relation to cancellations must be channelled through the Finance Officer.
7.8 Directors should ensure that all bank accounts under the control of their Unit are reconciled on a monthly basis and that end of the year balancing requirements are adhered to.
7.9 The Finance Officer shall arrange such safeguards as necessary and practicable, including the separation of staff duties as far as possible in respect of:-
7.9.1 the checking of creditors accounts; 7.9.2 the control of cheque forms; 7.9.3 the preparation of cheques; 7.9.4 the signature of cheques; 7.9.5 the despatch of cheques; 7.9.6 the entry of the cash accounts; and 7.9.7 the reconciliation of bank accounts.
8 Contracts
8.1 Every contract shall comply with these Financial Regulations and no exception from any of the following provisions shall be made otherwise than at the direction of ALG or any Sectoral or associated committee. Every exception made by a Committee Member or an officer to which the power of making contracts has been delegated shall be reported to the relevant committee, and the report shall specify the emergency by which the exception shall have been justified.
8.2 Contracts may be defined as being agreements for the supply of goods or materials, or the carrying out of works or services. Contracts are also deemed to include the engagement of professional consultants (excluding Counsel).
8.3 It is a breach of the Financial Regulations to artificially divide contracts where the effect is to circumvent the regulations concerning financial limits.
8.4 Each proposed contract for works or services, with an estimated value in excess of £130,000, must be the subject of a separate design report to ALG or any Sectoral joint or associated committee as appropriate, requesting approval to seek tenders for the recommended design solution. This report must state the size of any contingency provision to be included in the tender documents or estimated costs, as well as any prevalent risks to the organisation as a result of the recommended design solution.
8.5 Notice of Tender
No contract which exceeds £50,000 in value or amount for the supply of goods or materials shall be made unless at least 10 days public notice has been given, unless the relevant committee has agreed that for a particular contract tenders can be sought from a selected list. No contract shall be made, nor any tender invited unless provision has been made in the annual budget for the proposed expenditure.
8.5.1 Public notice shall be given in one or more journals circulating among such persons as undertaken such contracts setting out particulars of the contract into which the committee wish to enter and inviting persons interested to apply within such period not being less than 10 days, as may be specified for permission to tender. Advertising in the Official Journal of the European Communities shall be taken to comply with this requirement.
8.5.2 After the expiration of the period specified in any notice, invitations to tender for the contract shall be sent to not less than 3 persons selected in the manner determined by the committee, or if fewer than 3 persons have applied and/or are considered suitable, to all such persons. 8.6 Receipt of Tenders
Every invitation to tender shall state that no tender will be received except in a plain sealed envelope or package which shall bear the words TENDER - followed by the subject to which the tender relates, but shall not bear any name or mark indicating the sender. When received, an entry shall be made upon such envelopes or packages indicating the time and date of receipt and these will then remain in the custody of the Chief Executive or the Finance Officer until the time appointed for their opening.
8.7 Opening of Tenders
Tenders shall be opened at one time in the presence of :-
8.7.1 Such Member or Members of a Committee as may be designated for the purpose by ALG or any Sectoral joint or associated committee as appropriate, to which the power of making the contract to which the tenders relate has been delegated; and/or
8.7.2 The Chief Executive or in his/her absence the Finance Officer of the organisation.
8.8 Acceptance of Tenders
8.8.1 Where the lowest tender is £50,000 or less, the Chief Executive shall be authorised to evaluate and accept the tender.
8.8.2 Where the lowest tender is above £50,000 and below £130,000 the Chief Executive in consultation with the Chairman, Deputy-Chairman and one other Member of the appropriate committee shall be authorised to evaluate and accept the lowest tender.
8.8.3 Where the lowest tender exceeds £130,000 a meeting of the appropriate committee, shall consider the tenders received. If necessary a special meeting of the appropriate committee shall be convened for this purpose.
8.8.4 Where the recommended tender is above £50,000 and is not the lowest tender, a report must be made to a meeting of the appropriate committee, for approval to accept the tender. If necessary a special meeting of the appropriate committee shall be convened for this purpose.
8.8.5 Where the recommended tender is below £50,000 and is not the lowest tender, the approval of the Chairman, Deputy-Chairman and one other member of the appropriate committee must also be obtained to authorise the acceptance of the tender.
8.9 Contract Provisions
8.9.1 Every contract in writing (unless such contract is let by a Lead Authority in accordance with Schedule 8) shall be signed by the Chief Executive.
8.9.2 Every contract in writing shall specify:-
8.9.2.1 the work, materials, matters, or things to be furnished, had or done;
8.9.2.2 the price to be paid, with a statement of discounts or other deductions;
8.9.2.3 the time or time within which the contract is to be performed; and,
8.9.2.4 insurance, employers liability and professional indemnity.
8.10 Quotations
8.10.1 Contracts or orders which exceed £2,000 and not exceeding £50,000 in value require at least 3 written quotations from suitable suppliers before the contract order is placed.
8.10.2 It shall not be obligatory to obtain 3 quotations if unable to do so because:-
8.10.2.1 effective competition is prevented by Government control, or
8.10.2.2 the special nature of the work to be executed limits the number of contractors capable of undertaking the work to less than 3, or
8.10.2.3 the goods, services or materials to be purchased are only available from less than 3 suppliers, or
8.10.2.4 the work is a continuation of a previous contract or order.
8.10.3 The Chief Executive shall maintain a record of those contracts let without competitive quotations, detailing the reasons why these have not been obtained.
8.11 Withdrawal of Tender
In the event of any person withdrawing a tender, or not signing the contract after his/her tender has been accepted, or if the Chief Executive or the Committee are satisfied that a Contractor has not carried out a contract in a satisfactory manner, or for any other justified reason, then tenders will not be accepted from such contractors in future, except after specific Committee approval.
8.12 Communications with Tenderers
Accounting records for all contracts must be maintained as agreed by the Finance Officer.
8.13 No members of the relevant Committee shall have or allow any interview or communications with any person or representative of any person proposing to tender or contract, except by the authority of that Committee. Where such interview or communication does, nevertheless, take place then it is to be reported to the relevant Committee at the first available opportunity.
8.14 Subject to the provisions of the contract, every variation shall be instructed in writing and signed by the designated officer prior to the commencement of work on the variation concerned or as soon as possible thereafter. Designated officers may authorise variations which are essential for the completion of a contract, and minor variations of an optional nature, provided the cost remains within the approved estimate. Major variations to contracts shall require the approval of the appropriate committee.
8.15 All ex gratia and non contractual claims from contractors shall be referred to the Finance Officer and also to the Chief Executive for comments before settlement is reached.
8.16 Where contracts, valued in excess of £50,000, provide for payments to be made by instalments, all payments to contractors shall be made on a certificate issued and signed by ALG’s designated officer. Those contracts not subject to the issue of certificates, may be paid on invoices and/or any means allowed by the Finance Officer.
8.17 The Finance Officer shall, to the extent he/she considers necessary, examine the final accounts or interim valuations for contracts and he/she shall be entitled to make all such enquiries and receive such information and explanations as he/she may require in order to be satisfied as to the accuracy of the accounts.
8.18 The final certificate for the payment of any contract, where the final cost exceeds £50,000, shall not be issued until the Supervising Officer under the contract has produced to the Finance Officer a detailed statement of account with all relevant documents. Such papers shall be lodged with the Finance Officer two months prior to the due date of the final certificate or in exceptional circumstances a previously agreed period in order to allow a thorough review of their contents prior to the issue of the final certificate. In addition, all consultants’ fee accounts that in total exceed £30,000 in value shall be forwarded to the Finance Officer for verification prior to the respective final payments being processed. A clause to this effect shall be inserted in the appropriate contract, bills of quantities, or specification.
8.19 Wherever works or services are let on a dayworks contract then every payment costing in excess of £100 shall be supported by daywork sheets. Such dayworks sheets shall contain adequate descriptions of the work carried out and the names of the operatives involved, together with details of the times during which the work was performed, the hourly rates applied and any plant or materials used. Daywork sheets shall be signed by the designated officer indicating that the amount claimed reasonably reflects the labour and materials content of the works executed.
8.20 Any contract let by a Lead Authority, in its capacity as administrator of an activity delegated by ALG or any Sectoral joint or either associated committee shall be deemed to comply with these Financial Regulations so long as it is in compliance with the Financial Regulations and Standing Orders of that Lead Authority.
9 Budgetary Control 9.1 Approval of a revenue expenditure budget by ALG and the relevant Sectoral joint or associated committee shall confer the authority on the Chief Executive to incur expenditure, except in the case of any item which the relevant committee wishes to have referred to it for further consideration.
9.2 No expenditure may be incurred unless a budget for that purpose has been approved.
9.3 Where the Chief Executive proposes to incur expenditure for which there is no budget head in the annual budget:
9.3.1 But the expenditure is unlikely to exceed £5,000 by the end of the financial year, the Chief Executive may make arrangements to incur the costs, which must be financed by the virement arrangements under paragraph 4.1.2; and
9.3.2 If the expenditure is likely to exceed £5,000 by the end of the financial year the Chief Executive shall report thereon to ALG or the relevant Sectoral joint or associated committee, depending on which approved the expenditure. The financing of this expenditure must be determined in accordance with Financial Regulation 4.1.2.
9.4 The Chief Executive may only pay or make provision for payment in respect of goods received or services rendered within each financial year and for which budget provision has been made.
9.5 Where ALG or the relevant Sectoral joint or associated committee has authorised a fund for a particular purpose, under or overspent balances may be carried forward to the following financial year on a one-off basis. All other balances in hand at the end of the financial year shall be reported to the Committee by the Finance Officer. ALG or the Sectoral Joint Committee shall then determine the use of those balances.
9.6 In the light of actual expenditure on administrative costs during the financial year the Finance Officer in consultation with the Chief Executive shall present to ALG or the relevant Sectoral joint or associated committee, reports showing projected out-turn figures for each budget heading approved by that Committee. This reporting process is to take place between six and nine months after the start of that financial year.
9.7 During the financial year the Chief Executive in consultation with the Finance Officer, shall present to each meeting of the Grants Committee, reports showing current levels of grant expenditure committed to date.
9.8 It is the duty of the Chief Executive to ensure that the budgets under his/her direct control are not overspent.
9.9 The Finance Officer shall ensure that there is a financial information system which provides periodic statements of receipts and payments under each head of approved budget and other relevant information, facilitating the reporting of such information to Committee.
9.10 Overall annual expenditure of the Grants Committee must be within the level approved by one of the following :-
9.10.1 At least two-thirds of the applicable Constituent Councils under Section 48(3) of the Local Government Act 1985; OR
9.10.2 Deemed by the Secretary of State further to Section 48 (4a) of the Local Government Act 1985; OR
9.10.3 Any order made by the Secretary of State under Section 48(5) of the Local Government Act 1985.
10 Audit
10.1 Responsibility for maintaining an adequate and effective system of internal audit rests with ALG and any Sectoral joint or associated committee, but has been delegated to the Finance Officer who makes arrangements for the examination of all financial and related systems under this Agreement. All significant issues raised by the Finance Officer following this examination, must be reported to ALG or the relevant Sectoral joint or associated committee. Similarly the External Auditor’s annual report on the accounts together with any accompanying management letter must also be reported to either ALG or the relevant Sectoral joint committee, as per financial regulation 5.8.
10.2 The Finance Officer shall, so far as he/she considers reasonable, arrange for the internal audit of the organisation’s activities:- 10.2.1 To review the soundness, adequacy and application of internal controls and, where necessary, make recommendations for the improvement of systems, controls and procedures that affect the finance or assets of the organisation;
10.2.2 To assist in protecting the assets and interests of the organisation by carrying out a continuous examination of activities in order to detect or prevent fraud, misappropriation, irregular expenditure and losses due to waste, extravagance, inefficient administration and improper practices;
10.2.3 To review resources used in pursuit of the organisation's agreed activities and, where necessary, make recommendations for the improvement of value for money; To review, appraise and report upon the reliability of financial and management data;
10.2.4 To report to the Chief Executive on the result of any audit carried out within their unit and to make the necessary recommendations which need to be implemented to eradicate the identified weakness(es).
10.3 The Finance Officer, or any accredited representative shall have authority on production of identification to :-
10.3.1 Enter at all reasonable times on any of the organisation’s premises or land;
10.3.2 Have access to all records, documents and correspondence relating to any financial and other transactions of the organisation;
10.3.3 Require and receive such explanations as are necessary concerning any matter under examination; Require any persons holding or controlling cash, stores or any other property to produce such items;
10.3.4 Verify cash and bank balances for which persons are accountable to the organisation.
10.4 Immediately an irregularity, or suspicion of an irregularity, arises affecting money or property or any other transaction or aspect of the organisation’s business, the Chief Executive concerned shall immediately advise the Finance Officer. The Finance Officer shall investigate and report to the Chief Executive if he/she forms the view that disciplinary or criminal proceedings should be considered. If it is thought appropriate to involve the Police, the Finance Officer will first consult with the Chief Executive. Officers should not notify the police direct except in an emergency in order to prevent further loss, or where it is necessary for the police to examine an area before it is disturbed by staff or members of the public. Except in exceptionally clear cut cases, management should not attempt to interview staff suspected of perpetrating an irregularity as this may prejudice any subsequent police investigation or legal proceedings. Any individual officer with knowledge or suspicion of any losses or irregularities involving staff, cash, assets or other financial matters has the right to approach the Finance Officer directly should circumstances dictate that this is necessary.
10.5 The Chief Executive shall be required to provide a written response to draft audit reports, final audit reports, and management letters within 28 calendar days of their issue. Extensions to this timescale shall be at the discretion of the Finance Officer.
10.6 Unless the Finance Officer specifically agrees otherwise, all receipt forms, order books, tickets and other similar items shall be ordered and retained by the Finance Officer prior to their issue to the Chief Executive. Such controlled stationery items shall be supplied, on request only, to those officers who have been authorised to receive them by the Chief Executive. Every issue of any such document shall be acknowledged by the signature of the officer to whom the issue is made. The Chief Executive shall satisfy the Finance Officer as to the safe keeping and control of such documents.
11 Information Systems
11.1 The development of Information Technology Systems should conform to the overall strategy as set out and agreed by ALG.
11.2 The Chief Executive shall be responsible for ensuring compliance with any Computer Security Guidelines promulgated by the Finance Officer.
11.3 Any development of new systems that involve a financial operation or produce output that may influence the allocation of resources must involve consultation with the Finance Officer regarding mutually acceptable minimum standards of control. The Chief Executive, in consultation with the Finance Officer shall be responsible for the control of the computer systems in the Organisation, and the security and privacy of data contained therein, in accordance with the Data Protection Acts of 1984 and 1998. The Chief Executive shall also be responsible for ensuring appropriate controls in accessing those systems which they maintain.
11.4 The Chief Executive in consultation with the Finance Officer shall make sound arrangements to ensure the security and continuity of service in the event of a disaster.
12 Income
12.1 The systems effecting the collection of all money due to the organisation shall be approved by the Finance Officer. The collection of all money due to the organisation is under the overall supervision of the Finance Officer.
12.2 Revenues consisting of income arising from work done, goods supplied or services rendered and not paid for at the time, must be the subject of accounts being rendered and the Chief Executive must facilitate the prompt issue and rendering of such accounts applicable to their unit. The Chief Executive shall therefore furnish the Finance Officer with details of projects, seminars, rents recoverable, work done, goods supplied, or services rendered and of all other amounts as may be required by him/her to record correctly all sums due to the organisation and to ensure the prompt rendering of accounts due for income.
12.3 The Chief Executive shall promptly notify the Finance Officer of all money due to the organisation and of contracts, leases and other agreements and arrangements entered into which involve the receipt of money by ALG. The Finance Officer has the right to inspect any document or other evidence in this connection as he/she may decide is relevant.
12.4 The records kept by the Organisation with regard to items of income shall be in such form as may be agreed from time to time by the Finance Officer. Unless the Finance Officer specifically agrees otherwise, all receipt forms, tickets and other similar items shall be obtained in accordance with financial regulation 10.6. All new types of income due are to be notified to the Finance Officer.
12.5 The Finance Officer shall prescribe the accounting arrangements necessary to ensure that all monies due and received are banked promptly.
12.6 All debtors shall be invoiced within seven days of full details of the debt being ascertained.
12.7 Procedures for accepting cheques or credit card payments tendered in respect of the sale of goods, materials or services shall be agreed by the Finance Officer.
12.8 Every sum in cash received by an officer of the Organisation shall be immediately acknowledged by the issue of an official receipt, ticket or voucher except in cases where other arrangements have been approved by the Finance Officer.
12.9 All income, whether cheques, notes or coins received by an officer on behalf of the Organisation shall, without delay, be recorded and paid intact either directly to the Finance Officer, or into a designated bank account at regular intervals as directed by him, thereby ensuring the safe keeping of income. Every officer who banks money shall enter on the paying-in slip a reference to the related debt (such as the receipt number or the name of the debtor) or otherwise indicate the origin of the cheque; on the reverse of each cheque the officer shall enter the name of his or her unit.
12.10 Money held on behalf of the Organisation shall be kept separately from personal funds and shall not be used to cash personal cheques.
12.11 Every transfer of official money from one member of staff to another will be evidenced in the records of the unit concerned by the signature of the receiving officer.
12.12 The Finance Officer shall make safe and efficient arrangements for the recording of income received by direct debiting of debtors accounts.
12.13 Scales of charges for services, with any variations, shall be reviewed at regular intervals, together with any new charges, by the Finance Officer after consultation with the Chief Executive, prior to submission to ALG or the relevant Sectoral joint or associated committee for approval.
13 Disposal of Assets
13.1 Sales of surplus equipment, plant and stores will be at market 13.2 The Chief Executive has authority to approve the disposal of all goods or equipment under his control which by reason of damage, wear or obsolescence, are no longer required, and the book value, or estimated value, does not exceed £5,000. The disposal of such goods or equipment valued above £5,000 but not exceeding £10,000 shall require the prior written approval of the Finance Officer. Disposal of such goods or equipment valued above £10,000 shall require the prior approval of ALG or the relevant Sectoral joint or associated committee.
13.3 Before disposal of any leased asset, the Chief Executive shall notify the Finance Officer in writing so that the terms of the lease may be examined and advice provided.
13.4 Salvageable items shall be sold in the best available market subject to the following:
13.4.1 No single item with a book value, or estimated value, exceeding £500 shall be disposed of without quotations first being invited. (unless disposed of by public auction, if appropriate)
13.4.2 No item will be disposed of to a member of staff without the direct approval in writing of the Finance Officer. Where approval is given, detailed documentation of the transaction shall be retained by the applicable Unit Director.
13.5 Under the 1989 Local Government and Housing Act, capital receipts are defined as the income from the disposal of any interest in an asset if, at the time of disposal, expenditure on the acquisition of an asset would be expenditure for capital purposes. Where the anticipated capital receipt is £10,000 or less, then the arrangements for disposal shall be subject to the agreement of the Chief Executive, where a value exceeds £10,000 then the arrangements for such disposal shall be subject to the prior agreement of the Finance Officer.
13.6 The Chief Executive will be responsible for maintaining all records and documentation relating to any disposal.
13.7 All proceeds from the disposal of assets will be subject to the addition of Value Added Tax, except in respect of the disposal of property or certain transfers involving statutory undertakings. In respect of these exemptions advice should be sought from the Finance Officer before the conclusion of a transaction.
13.8 The Chief Executive will notify the Finance Officer of the disposal of any items which are specifically listed on the organisation’s Insurance Policy.
14 Control of Assets
14.1 The Chief Executive is responsible for ensuring arrangements are in place to physically control all of the Organisation’s assets for which her/his department has management responsibilities.
14.2 The Local Government and Housing Act 1989 requires adherence to the Accounting Codes of Practice approved by the Accounting Standards Board. One such Code of Practice concerns the subject of capital accounting and suggests the creation and maintenance of registers for all assets. The asset registers form the basis by which the Organisation meets the capital accounting requirements in the raising of capital charges for the use of assets such as buildings, land and vehicles.
14.3 The asset registers are required to itemise all assets which cost in excess of £1,000 while recording the date and cost of their acquisition.
14.4 The Chief Executive shall allocate responsibility for the maintenance of individual registers as appropriate.
14.5 The Chief Executive shall ensure that any information requested by the above registrars, for the purposes of maintaining the asset registers, is provided rapidly and freely. Any acquisitions or disposals of assets should be notified to the relevant registrar at the appropriate time.
14.6 The Chief Executive shall nominate one officer to be responsible for the safe custody of all deeds and lease agreements in respect of all properties owned or leased by the Organisation. This responsible officer shall:
14.6.1 Make arrangements for such documents to be inspected when required; and
14.6.2 Provide copies of any relevant documents on request. 14.7 Inventories of all furniture, fittings, equipment, plant, and machinery shall be maintained by the Chief Executive. Items that are being rented or leased on a long term basis, or such that the responsibilities of stewardship lie with the Organisation, should also be included in the inventory. Generally, items with a life-span longer than one year should be included, unless they are already recorded on a formal stock record system.
14.8 The inventory should be in the form of a permanent document. It is important to ensure that the inventory is complete and that all parts of it are kept together. The inventory can be in any media. A suggested format of an inventory is provided at appendix 3.
14.9 The inventory should provide the following information for each item:
14.9.1 Location, but if the item is moved between locations, note the general area. (A separate record of location may well be necessary);
14.9.2 Full description;
14.9.3 Serial and Code numbers, if relevant;
14.9.4 Date of purchase and cost of acquisition;
14.9.5 Estimated current replacement value (for insurance purposes), which should be reviewed annually; and
14.9.6 Date of disposal and the proceeds.
14.10 The total of all the estimated current replacement values should be shown, so that the information is readily available for insurance purposes.
14.11 Where practical, the inventory should be updated each time there is an acquisition or disposal. This will produce a more accurate record than if all the amendments are done at the end of the year.
14.12 The Chief Executive is responsible for ensuring that an annual check is carried out, in December, of all items on the inventory and for taking action in relation to surpluses and deficiencies. The date of the check and the name(s) of the officer(s) carrying it out should be recorded. When carrying out this check, the current inventory should be used as a starting point. The procedure should be that each location is checked in a methodical manner. 14.13 If any discrepancies are found when checking the inventory, these should be followed up until reasons have been found. If it is not possible to find reasons and the amount involved is significant (e.g. more than £100 in value), the Finance Officer should be informed. If the result of these findings is that an item has to be removed from the inventory, then the appropriate authorisation for such write-off should be sought in accordance with Financial Regulation 15.1.
14.14 It is important that at least one copy of the inventory is held separately from the assets that it lists, so that if a disaster occurs to the Organisation or its buildings, then all information is protected for insurance purposes, in the event that items need replacement. For inventories that are kept on computer disk, back up copies should be kept in a fire proof cabinet in a separate location to the computer.
14.15 For the purposes of capital accounting, the Finance Officer may require all registrars and inventory holders to provide asset registers and inventories reflecting assets held as at the 31st March of each year.
15 Write Offs
15.1 No debt, asset, or benefit due to ALG, including Liquidated Damages, shall be written off without first obtaining the approval of the Finance Officer. The Chief Executive shall submit a list of such items to be written off, together with details of the reasons. The writing off of any such item valued in excess of £500 must also be subject to the prior approval of ALG or the relevant Sectoral joint or associated committee. Any report seeking such approval must detail the actions taken to recover these debts, assets or benefits.
15.2 The Chief Executive shall maintain a file for each debt to be written-off, containing relevant documentation to support the validity of the write-off. The file should also identify whether appropriate actions have been taken to recover or mitigate the loss.
15.3 In respect of third party damage to on-street equipment used by the Traffic Unit, the approval of ALG is not required for losses of £1,000 or less. In such instances separate accounting instructions, approved by the Finance Officer, shall apply.
16 Orders for Work, Goods and Services
16.1 No officer shall commit the organisation to expenditure in excess of any approved estimate without first seeking the appropriate approval. This Financial Regulation may be waived in cases of emergencies where delays in obtaining approval for excess expenditure would cause loss to ALG or endanger public health and safety. In such cases the approval for such expenditure must be sought as soon as possible after the event concerned.
16.2 Official orders, including those within a computerised ordering system, shall be in a form approved by the Finance Officer and are only to be authorised by the Chief Executive or his/her nominee. These authorised officers shall then be responsible for the issue of official orders.
16.3 In cases where goods, materials, works or services are required urgently and where delay would cause either loss to the organisation or endanger public health or safety then the requisite orders may be placed verbally. However, such verbal orders must be followed by an official written order within two working days and marked “Confirmation Order”.
16.4 Official orders shall be issued for all work, goods or services to be supplied to the organisation except for public utility services, petty cash purchases or other exceptions approved by the Finance Officer and copies, or full details, of each order shall be retained in the unit where issue has taken place.
16.5 No order should be issued unpriced. In those circumstances where a definite price cannot be ascertained at the time of issue, then the order concerned must either be endorsed "price not to exceed" and a value given, or its copy endorsed with an estimated figure.
16.6 When an order is amended or varied, a note of the amendment or variation shall be made on the copy order, together with a reference to the authority for such amendment or variation which shall be confirmed in writing to the supplier.
16.7 Care shall be taken in the signing of goods received notes, where parcels etc. are unable to be inspected. In such cases the signature should be accompanied by the comment "not inspected" to safeguard the organisation against unseen breakages or shortages at the time of delivery.
16.8 The return of all goods to suppliers shall be authorised by the Chief Executive or his or her authorised representative. In each instance officers are only to release such goods when they are certain that the return has been properly authorised, satisfied that the collection company has been previously notified to them, and that they are in receipt of appropriate return note documentation.
17 Payments
17.1 Apart from petty cash and other payments from the imprest account (see Financial Regulation 6) the normal method of payment shall be by cheque or other instrument drawn on the bank account operated for the Organisation by the Finance Officer.
17.2 The Finance Officer has authority to pay all amounts to which the Organisation is legally committed, after authorisation by the Chief Executive or nominated officer.
17.3 The Chief Executive having issued an order is responsible for examining, verifying and authorising the related invoice. It shall be the duty of the Chief Executive to ensure that all goods, materials and services received are as ordered in respect of price, quantity and quality.
17.4 Before certifying an account, the authorising officer shall, save to the extent that the Finance Officer may otherwise determine, be satisfied that:-
17.4.1 The works, goods or services to which the account relates have been received, examined, approved, are fit for purpose and, where appropriate, comply with pre-determined standards;
17.4.2 The expenditure is within an approved estimate, or is covered by special financial provision authorised by ALG or the relevant committee;
17.4.3 The proper entries have been made in the asset registers, inventories, or store records where appropriate;
17.4.4 The price charged is correct and any trade discounts receivable have been deducted;
17.4.5 The invoice or payment certificate is arithmetically correct both in the extensions and the total and that the allowances, credits and tax are correct;
17.4.6 Any copy orders are duly endorsed as paid and brief details of the payment are marked thereon;
17.4.7 The invoice or payment certificate has not previously been passed for payment and is a proper liability of the Organisation;
17.4.8 The appropriate expenditure code numbers are entered on the document for payment and that no payment is made on duplicate or photocopy invoices unless the Chief Executive certifies in writing that the amounts have not been previously passed for payment; and
17.4.9 In the case of charges for utilities including gas, electricity and water, any standing charges are correct, and that consumption is charged on the most advantageous tariff and is otherwise reasonable.
17.5 Any amendment required of a VAT invoice shall be effected through the application of a credit note from the applicable Creditor. Any amendment to a non VAT invoice shall be made in permanent ink and initialled by the officer making it, stating briefly the reasons where they are not self-evident.
17.6 The Finance Officer and the Chief Executive shall, between them, arrange a suitable division of staff duties within the Organisation so that the officer who authorises the invoice as correct shall not be the person who either placed the order, or has certified the receipt of the goods or completion of the work concerned.
17.7 An invoice for goods supplied to the Organisation shall not be prepared by an officer of ALG, but by the creditor. In certain circumstances invoices for services rendered to ALG may be prepared, but always in a form approved by the Finance Officer, and the officer preparing the invoice must not authorise it for payment.
17.8 As soon as possible after the 31st March, all outstanding expenditure relating to the previous financial year shall be identified by the Finance Officer.
18 Salaries, Wages and Pensions
18.1 The payment of all salaries, wages, pensions, compensation and other emoluments to all employees and pensioners of the Organisation shall be made by the Finance Officer or under arrangements approved by him.
18.2 The Chief Executive or his authorised representatives, shall notify the Finance Officer as soon as possible, and in the prescribed form, of all matters affecting the payment of such emoluments, and in particular:-
18.2.1 Appointments, resignations, dismissals, suspensions, secondments, transfers and deaths, and for pensions, changes in marital status and deaths;
18.2.2 Absences from duty for sickness or other reason, apart from approved leave;
18.2.3 Changes in remuneration, and pay awards and agreements of general application;
18.2.4 Information necessary to maintain records of service for superannuation, national insurance, income tax, etc.
18.3 All pay documents and time records shall be in a form approved by the Finance Officer and shall either be certified in manuscript by or on behalf of the Chief Executive, or in such form as the Finance Officer may direct. The names of the officers authorised to sign such records shall be sent to the Finance Officer together with specimen signatures. Changes shall be notified to the Finance Officer as they occur.
18.4 All payments to individuals who are considered to be self employed, in respect of services provided to the Organisation, shall be processed through the Payroll System unless the status of the individual has been confirmed as self employed in accordance with the latest Inland Revenue Guidelines.
18.5 All time records and other pay documents shall be submitted to the Finance Officer in accordance with the timetables and deadlines determined by the Finance Officer.
19 Security
19.1 The Chief Executive shall be responsible for introducing and maintaining adequate arrangements for all aspects of security throughout the Organisation including personnel, buildings, land, stores, equipment, cash, computers, records, and confidential information. The Finance Officer’s advice should be sought upon the adequacy of arrangements relating to cash, stores and valuable and attractive items of equipment as well as in those instances where security is thought to be defective. Maximum limits for cash holdings shall be agreed with the Finance Officer and shall not be exceeded without his/her express permission. 19.2 Keys to safes and similar receptacles are to be the responsibility of designated officers and are to be kept secure at all times. Loss of any such keys must be reported to the Finance Officer forthwith. Duplicate keys to all safes are to be held in a place approved by the Finance Officer and locked away for use in the case of emergency only.
19.3 The Finance Officer shall be responsible for ensuring that secure arrangements are made for the preparation and holding of pre-printed pre-signed cheques, stock certificates, bonds and other financial documents.
19.4 Whenever breaking and entering, burglary or criminal damage occur the matter must be reported immediately by the Chief Executive to the Finance Officer in accordance with Financial Regulation 10.4.
19.5 The Chief Executive shall designate one officer as having responsibility for the co-ordination of computer data security issues. This designated officer shall agree with the Chief Executive the degree of privacy of the information put into computer systems used by the Organisation. The designated officer shall then be responsible for its intended use in the computer installation and for the ability of designed controls to comply with the Data Protection Acts 1984 and 1998 as applicable.
19.6 To comply fully with the requirements of the 1984 and 1998 Data Protection Acts, the Chief Executive shall be responsible for maintaining proper security and the appropriate degree of privacy of information held within the Organisation either electronically or in other formats e.g. microfiche, paper output etc. All staff are responsible for ensuring that their use of personal data is consistent with the Organisation’s registrations under the Act.
19.7 The Chief Executive should ensure that all staff who use information technology adhere to any guidelines on data security issued from time to time by the designated officer. All new employees should be briefed as to the security policies and procedures applicable, including the implications of relevant legislation.
19.8 In order to comply with the requirements of the 1988 Copyright, Design and Patents Act, the Chief Executive shall ensure that staff within their units only use software that is properly licensed.
19.9 The 1990 Computer Misuse Act introduced powers to prosecute those who deliberately and without authorisation misuse computer systems belonging to their employers. The Chief Executive should ensure that staff within the Organisation are aware of this legislation and ensure that their use of computers is for authorised purposes only and that no action, such as the running of unauthorised programs or games, corrupts data or introduces a virus to the system.
19.10 The Chief Executive should ensure that all members of their unit are aware that information concerning secret and confidential matters, particularly those involving cash or cash deliveries, must not be disclosed in any way except to persons entitled to receive such information.
20 Stocks and Stores
20.1 The Chief Executive shall be responsible for the proper custody of stocks and stores held by the Organisation and shall see that all stocks and stores under his/her supervision are subject to an effective system of stock recording and control as well as stocktaking.
20.2 It is the duty of the Chief Executive to maintain a continuous stock-check of all stocks and stores held by the Organisation.
20.3 Stocks and stores must not be held in excess of what is considered by the Organisation to constitute normal requirements.
20.4 All goods received should be checked against quantity/ quality at the time of delivery. Delivery notes should be retained with the original order and invoice and signed by the officer accepting receipt of the goods.
20.5 Issues of stores must only be made in exchange for a requisition note signed by an authorised employee of the Organisation.
20.6 The Chief Executive should ensure that a count and valuation of all stocks and stores held in the Organisation is carried out on a date to be stipulated by the Finance Officer each year. In this respect, reference should be made to the stocktaking guidelines contained at appendix 4. The Finance Officer, however, may dispense with this requirement in cases where the total value of the items held in a store is considered to be too small to justify such activities.
21 Motor Vehicles 21.1 Records shall be maintained listing details of all motor vehicles whether owned by, hired by or leased to the organisation. Such records shall show the dates of purchase of new vehicles and their cost of acquisition as well as the details of disposals and their proceeds. The Chief Executive shall ensure that all such information concerning vehicles under their control is supplied to that officer who is allocated responsibility for maintaining an asset register for owned vehicles.
21.2 The Chief Executive may dispose of any vehicle in part-exchange for a replacement. In such instances, the Chief Executive shall ensure that, as far as is reasonably practicable, a better deal is not possible by disposing of the existing vehicle and purchasing a replacement separately. Other disposals are to be disposed of in accordance with the Organisation’s agreed disposals procedures (see Financial Regulation 13). In respect of vehicles valued in excess of £1,500 this shall be subject to the prior approval of ALG or the relevant Sectoral joint or associated committee.
21.3 The registration documents of all owned vehicles shall be recorded and held in safekeeping in a manner approved by the Finance Officer.
21.4 Each unit hiring or leasing vehicles shall maintain adequate records evidencing the terms of the hire or leasing agreement.
21.5 No vehicle shall be used otherwise than in accordance with the ordinary course of the Organisation’s business activities or purposes without the prior permission of the Finance Officer. Such permission only to be given in exceptional circumstances upon presentation of a written report providing justification.
21.6 All acquisitions of motor vehicles, including replacements of existing vehicles, should be the subject of a report to ALG or the relevant Sectoral joint or associated committee seeking approval for acquisition giving details of the intended use of, and justification for the vehicle.
21.7 A vehicle trip log shall be kept for all motor vehicles which require a road fund licence. This should show as a minimum the mileometer readings at the beginning and end of the trip, the reasons for the trip, and the name of the driver/officer in charge of the vehicle during the trip. The Chief Executive shall be responsible for ensuring that mileometer readings are continuous.
21.8 Where a unit has its own fuel pump, comprehensive records shall be maintained of all deliveries and issues.
22 Travelling and Subsistence Claims
22.1 Claims for travelling, subsistence and minor expenses other than those reimbursed via the payroll system, are to be reimbursed by cheque through the Organisation’s creditor system. Each claim shall be promptly submitted to the Finance Officer for payment and shall be presented on an approved form clearly detailing the expenditure incurred, supported by receipts where applicable, dated, coded, signed by the claimant and counter-signed by the appropriate authorising officer. Claims with a total value of less than £50 (inclusive of VAT) may be met from petty cash accounts.
22.2 Every officer who receives a car loan or car allowance, whether casual or essential, must produce to the Chief Executive the registration document of the car, a valid and adequate certificate of insurance and an assurance to take all reasonable steps to maintain the car in an efficient and roadworthy condition. This is to take place on a yearly basis, but the Chief Executive shall be promptly informed of any subsequent changes to the above details.
22.3 All car allowances are to be paid through the payroll system.
22.4 The Chief Executive shall supply the Finance Officer with specimen signatures of all persons in the Organisation who are authorised to certify travelling and subsistence claims and the Finance Officer shall be notified of any changes as they occur.
22.5 The certification by or on behalf of the Chief Executive shall be taken to mean that the certifying officer is satisfied that the journeys were authorised, the expenses properly and necessarily incurred and all the requirements of the appropriate approved scheme have been observed.
23 Insurance
23.1 The Finance Officer in consultation with the Chief Executive shall ensure that adequate insurance cover is maintained for all the Organisation’s assets. The Finance Officer shall also ensure that suitable cover exists to meet any losses or claims which may arise in connection with the provision of the Organisation’s services, or from its legal liabilities as an employer, or to third parties. 23.2 The Finance Officer shall negotiate annually renewal terms for all the Organisation’s insurances at least every five years and the Chief Executive shall provide such information as is necessary to facilitate these negotiations.
23.3 The Finance Officer will advise the Chief Executive on all necessary arrangements and information required in respect of insurance cover for the acquisition of property or goods which may necessitate notice to the organisation’s insurers.
23.4 The Chief Executive shall give prompt notification to the Finance Officer of all new insurable risks and shall provide the Finance Officer with a copy of any indemnity which the Organisation is expected to give. The Chief Executive shall not enter into any such indemnity unless the terms thereof have been approved by the Finance Officer.
23.5 The Chief Executive shall notify promptly the Finance Officer of anything likely to give rise to a claim and shall provide such information as is necessary to negotiate claims. Where appropriate, and not in conflict with Financial Regulation 10.4, the Unit Director should inform the Police.
23.6 The Finance Officer may establish such funds as are necessary to meet the uninsured losses of ALG. Where such losses relate to a Sectoral joint committee then the prior agreement of the appropriate SJC must be obtained. In all other instances the prior agreement of ALG is to be obtained. Such funds will be operated in accordance with a scheme drawn up by the Finance Officer.
23.7 The Finance Officer shall maintain a register of all insurances and the property or risks covered. The Finance Officer shall be notified immediately that any valuables belonging to a private individual are taken into the Organisation’s possession so that directions may be given as to their recording and safe keeping. For the purposes of this Financial Regulation the term "valuables" shall include watches, jewellery, cash, documents, goods, chattels or any other items of intrinsic value. This Financial Regulation does not apply to "lost property" of a low value.
23.8 Prompt notification shall be given to the Finance Officer following any alteration to the Organisation’s insurance status resulting from the award or completion of any contract. 24 Treasury Management and Investments
24.1 ALG has adopted the “Code of Practice for Treasury Management in Local Authorities” as published by the Chartered Institute of Public Finance and Accountancy (CIPFA). This will include its reporting requirements. The CIPFA Code defines “Treasury Management” as “The management of all money and capital market transactions in connection with cash and funding resources of the local authority”. Unless decided otherwise by ALG, this does not include management of Pension Fund money.
24.2 The Finance Officer shall be responsible for all borrowing and investment of ALG, subject to the approval of ALG or the relevant Sectoral joint committee.
24.3 In order to minimise the extent of temporarily surplus funds the Finance Officer shall make such arrangements (including direct payment by the Participating Councils in the TCfL Agreement to the Operators) as are reasonable and practical to match the timing of those Councils’ contributions to the Concessionary Fares scheme with payments due to the various Transport Operators.
24.4 All investments shall be made by the Finance Officer on behalf of ALG and shall be noted as being for the purposes of the relevant Committee.
24.5 All executive decisions on borrowing, investment or financing shall be delegated to the Finance Officer or through him/her to his staff, who shall be required to act in accordance with CIPFA’s "Code of Practice for Treasury Management in Local Authorities".
24.6 Income received from investments shall be reported annually to ALG and any Sectoral joint or associated committee by the Finance Officer, as part of the close down of accounts procedure. The Finance Officer shall submit reports on policy, sales and purchases for consideration by ALG to at least four meetings each year.
24.7 The investment of funds included within Pension Funds may be carried out by one or more firms of Fund Managers with the concurrence of ALG, which shall review the appointment of managers within a five year cycle.
25 Unofficial Funds 25.1 An “unofficial fund” is any fund where the income and expenditure does not form part of the Organisation’s accounts, but which is controlled wholly or in part by an officer on behalf of ALG.
25.2 The Chief Executive shall be responsible for the immediate control of unofficial funds within or relating to the London Boroughs Grants Unit.
25.3 The Finance Officer shall be informed of the existence of all unofficial funds, and will issue and update accounting instructions for them where necessary.
26 Taxation Requirements
26.1 The Finance Officer has overall responsibility for dealing with all statutory requirements concerning the collection, payment and accounting for Value Added Tax (VAT), Pay As You Earn (PAYE) and Construction Industry Scheme (CIS).
26.2 The Finance Officer will from time to time issue to the Chief Executive guidance and advice on VAT, PAYE and CIS arrangements arising from such issues as changes in legislation. It is the responsibility of the Chief Executive to make arrangements in the Organisation to ensure that the advised regulations and procedures are implemented.
26.3 The Chief Executive must ensure that procedures are in place in the Organisation to provide evidence that all VAT, PAYE and CIS transactions are supported by the correct documentation.
The Chief Executive will consult with the Finance Officer with regard to any issue on VAT, PAYE and CIS that requires advice or clarification. SCHEDULE 8
COSTS AND EXPENSES
1. General:
1.1 ALG shall establish and maintain separate accounts for each of the groups of functions set out in Parts 1 – 3 of Schedule 2, Schedule 3 and Schedule 5 (excepting the designated council function whilst it is carried out by the London Borough of Richmond upon Thames) and any other functions delegated to ALG or any Sectoral joint committee. ALG and the Finance Officer shall have regard at all times to the principle underlying this Agreement of separation and ring-fencing of funding streams and costs of functions.
1.2 Subject to paragraph 2 below, the costs and expenses of the groups of functions set out in Parts 1 and 2 of Schedule 2 and Schedule 3 shall be borne by the London Local Authorities which subscribe to each of those groups of functions on the same basis as that on which they were allocated prior to the Commencement Date i.e. in equal shares, and any change in such allocation shall require the consent of all the London Local Authorities which subscribe to each of those groups of functions.
1.3 Subject to paragraph 2 below, the costs and expenses of the functions set out in Part 3 of Schedule 2 shall be borne by the London Local Authorities in such proportions as ALG shall reasonably determine relates directly to the discharge of those functions, having regard to paragraph 1.1 above.
1.4 The allocation of costs and expenses in respect of any further functions which may be delegated to ALG by all or any of the London Local Authorities shall be as agreed between ALG and such Authorities. 1.5 Subject to paragraph 2 below, the contributions of the constituent councils to the designated council in respect of grants made to eligible voluntary organisations under the London Boroughs Grants Scheme, the designated council function and any Lead Borough functions carried out by the designated council shall be in accordance with Section 48(3) Local Government Act 1985, i.e. in proportion to the populations of their respective areas.
1.6 Subject to paragraph 2 below, the contributions of the Participating Councils in the ALGTEC Agreement shall be in accordance with Parts 1 - 4 of Schedule 6 of that Agreement.
2. **Increases or Decreases in staffing, administration and accommodation costs**
2.1 Any net increases in overheads including staffing, administration, accommodation costs (including fitting-out) and all reasonably related costs which result from the formation of ALG and the delegation of the functions set out herein to ALG which in ALG’s reasonable opinion and that of the Finance Officer are not directly attributable to the discharge of the functions or an improvement in the service received by a particular function as a result of the formation of ALG shall be borne by an increase in the subscription payable by each London Local Authority in respect of the Schedule 2 Part 1 functions, such increase to be allocated to the London Local Authorities in equal shares.
2.2 Any savings which, in the reasonable opinion of ALG, accrue from the creation of ALG and the delegation to it of the functions set out herein shall accrue to the budget for the particular function(s) in which such savings are found.
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414e7695833928f8dfc6e840faaa2a612d4e0d3b | London Skills and Employment Board (LSEB) draft adult skills and employment strategy: London Councils’ draft response
1. Are these the right challenges for action by the Board?
**Challenge 1:** A fundamental change to the employment and skills support available for Londoners making it easier for individuals to access the help they need to move into work, and to help existing employees progress and/or develop new skills.
**Challenge 2:** An ambitious new Employer Programme for London employers (private and public) that is business focused and demonstrates the clear business benefits of workforce development, of recruiting locally, and helping out-of-work Londoners back into work.
**Challenge 3:** A new level of responsiveness from London’s learning and skills providers to ensure that skills provision is focused on meeting genuine needs.
**Challenge 4:** An integrated skills and employment infrastructure.
**Challenge 5:** Public funding for skills and employment in London aligned to the challenges and priorities identified in the draft Strategy.
London Councils broadly agrees with the five overarching challenges that the Board has set itself. However, there needs to be more emphasis on what employers can do to help alleviate worklessness. London Councils also believes the Board, whilst thinking strategically around pan-London employment and skills provision, also needs to take a bottom-up approach to delivery by building on and joining up the good practice that already exists in the capital.
Barriers to work for workless people exist on both the demand- and supply-side of London’s job market. It is a commonly cited contradiction that despite London having a proportionally high level of jobs compared to the rest of the UK(^1), it has the highest rate of worklessness. The private sector and the public sector need to work together to solve this.
Four out of five of the main challenges outlined by the Board require changes to public sector provision. Employment and training provision does need to change in order to become more effective and efficient. However, London Councils believes that barriers to work exist strongly within the private sector meaning that ‘improvements [to Jobcentre Plus] alone will not solve employment problems in London if the underlying labour market causes are left unaddressed’(^2).
Employment Zone pilots (EZ) can demonstrate a valuable lesson to this effect. At considerably more cost than Jobcentre Plus, EZs provided clients with holistic advice and guidance in order to get them into sustainable employment.(^3) While EZs had more immediate success, over the longer term the outputs equalised. Evaluation of Employment Zones concluded, ‘over longer periods, few jobs in either EZ or New Deal areas have been sustained. A key reason for poor long-term sustainability is that many jobs have been low paid and temporary’.(^4) Employment Zones demonstrate the need for not only a
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(^1) London’s share of GB jobs is 15.5% Employment opportunity for all: tackling worklessness in London, HM Treasury, March 2007
(^2) Ibid.
(^3) Employment Zones were approximately 40 per cent more expensive than New Deal programmes per job start costs and 15 per cent more per job, but of similar cost per sustained job.
(^4) Synthesising the Evidence on Employment Zones, LGIU Policy Unit briefing, September 2007 comprehensive public sector offer, but strong in-work support from employers, to make work pay, and provide progression into higher quality and fulfilling work.
2. If not, what key things are the most important for action by the Board to improve the employment and skills of Londoners?
London Councils agrees that it needs to be made easier for individuals to access the help they need to move into work. The current situation is that clients will either move into work through Jobcentre Plus (JCP) or an independent/ or borough-led service. It is now widely acknowledged that JCP does not always provide sustainable job outcomes for those with multiple disadvantages, and that these clients need more pre- and in-work support to stay in work longer term. The Department of Work and Pensions (DWP) have to some degree recognised this situation with the proposed flexible New Deal, and the White Paper ‘Opportunity, employment and progression: making skills work’. As part of the flexible New Deal and Pathways to Work, the Government has also made clear that they will be relying on the private and voluntary sector to provide much of the intensive support needed to get clients ‘job ready’.
London Councils considers that a significant change in employment and skills support is not the main issue. There are already many examples of effective employment and skills provision in London (see Appendix 2), although there are issues around a consistent quality of service. However there is no overall effective employment and skills system. To create an effective system, fundamental changes are required, and these are outlined under challenges 4 and 5; agencies and authorities being clear about their roles; joint investment planning and shared targets; more flexible funding and the right targets and incentives. Local authorities are keen to keep and expand their current role. At the moment, there is an expectation on them to ensure service provision is co-ordinated through their LSP. Local authorities are in a suitable position to provide this co-ordination as the only geographically-based local partnerships. However, some funding commissioners, such as European Social Fund and the LDA Area Programme, do not consult the relevant LSP before distributing funds in that geographic area – which obstructs the LSP’s co-ordination role.
London Councils agrees with Challenge 2: an ambitious new employer programme. The work of the London Skills and Employment Board is essential is raising the profile of worklessness issues to London employers. However, there needs to be much more recognition around what employers need to be offering to help overcome worklessness. This should mean offering more part-time and flexible working opportunities, subsidised crèches, in-work mentoring and work experience, plus a wider understanding of mental health issues and periods of ill health. Work with employers should take into account relationships that exist at a local level, using examples of best practice to help employers identify ways that they could add value to the employment and skills agenda.
The London Child Poverty Commission’s Interim report suggests incentives for employers such Investors in People or a ‘branding’ for ethical and social employment standards covering areas such as pay, work-life balance, gender and ethnic minority employment and promotion. This could encourage employers to work above the legal minima. It also suggests the introduction of Fair Procurement policies and encouraging employers to sign up to ‘living wage’ schemes that could lead to reduction of those in work but still vulnerable to poverty.
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5 There are other issues that exist alongside these, such as pay and benefits. 6 The future of Community Regeneration Funding, London Councils and GLE, 2007 7 London Child Poverty Commission Interim report, London Councils and Greater London Authority, September 2007 Finally, the report suggests a strengthening of the measures designed to tackle discrimination at work, in particular in relation to race, gender and disability. All these measures would provide a more diverse workforce for businesses and improve retention rates.
The Jobs and Skills Pledges and Local Employment Partnerships are clearly a move in the right direction in terms developing the role of employers in decreasing worklessness and increasing skills in London. The LSEB will have to knit these agendas together with their skills and employment strategy whilst simultaneously developing actions to address specific London issues such as the lack of part-time work and low wages. Eighteen out of 33 boroughs have now signed up to a Local Employment Partnership, whilst the boroughs of Haringey, Westminster and Kingston are all engaged in changing recruitment practices to employ local, workless people. See Question 12 for more information local authorities as employers.
3. Do you agree with the Board’s ambition?
The Board’s ambition is:
The Board wants to sustain and enhance London’s successful and globally competitive labour market so that it meets the current and future needs of both employers and Londoners. It aims to do this by:
- equipping Londoners not in work with the skills they will need to get into long-term, fulfilling employment;
- supporting Londoners already in work to acquire new skills and capabilities so that they can succeed in the workforce; and
- supporting London employers to be increasingly competitive by being able to recruit local people with the right skills and by developing the skills of their existing workforce.
London Councils agrees with the Board’s three ambitions, with some reservations. Londoners do need upskilling in order to help access long-term fulfilling employment, however, they may also have other barriers that prevent them from accessing employment. The Board needs to be realistic about the starting point for many out-of-work people in London. Many have no or low educational attainment, no formal working history as well as language, housing and health needs, childcare responsibilities and confidence issues. Recent research demonstrates that Londoners are more likely to face multiple barriers to work, e.g. they are likely to have a combination of needs listed above. Therefore, tackling skills in isolation may not be enough to get workless Londoners into long-term fulfilling employment, but should be part of a wider support package.
It is important that the development of skills must not be seen in the context of just getting a job but also longer-term prospects. Many low-skilled, workless Londoners only have access to jobs that are low paid and low status with no security and few benefits. Government can and should offer financial incentives and support to get people into work, but the Board and employers should strive towards a greater understanding of the needs of employees, and to encourage provision of in-work support in order to make employment opportunities sustainable. London Councils agrees with the Board’s suggestion of supporting employees already in work and would also like to hear more about any plans to provide incentives to employers, in exchange for them taking up aspects of the strategy.
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8 In London 30 per cent of individuals face two or more key barriers to work, in the rest of the country the proportion is lower at 23 per cent. Source: Employment Opportunity for all: tackling worklessness in London, HM Treasury, March 2007 London Councils agrees that employers should be supported to recruit local people who present with the right skills set, and that they should develop the skills of their workforce and provide flexibility to employees around health and childcare issues. The public sector as employers can help with the Board's ambitions in this respect, and London Councils would like to work with the Board in rolling out this agenda to London boroughs.
4. Are these the right supporting targets?
- Reduce the proportion of Londoners with no qualifications to 11% by 2013, focusing particularly on improving functional literacy and numeracy.
- Increase the proportion of the employed workforce engaged in training to 15% by 2013.
- A target to cover progression to higher skills.
(please refer to the strategy for more information on targets http://www.london.gov.uk/lseb/docs/proposalboardstrategy.pdf)
London Councils agrees these are targets are appropriate but would like to see commitments around narrowing the gaps between the employment rate for London’s most disadvantaged groups and London’s average employment rate. Similarly there needs to be a concentration on spatial areas of high worklessness, and closing the gap between these and other areas in the capital with average employment rates. However, the Board should be aware that these targets can often be problematic due to the high level of population churn in disadvantaged areas. The targets should also tie in with those in the National Indicator set that will become part of the next round of Local Area Agreements from next year. Of these, there are many that fall in with the remit of the Board including three worklessness targets, one child poverty indicator and five adult skills targets.9
London Councils strongly agrees that there should be targets around the employment rate of key disadvantaged groups such as BAME (Black, Asian and Minority Ethnic), women and disabled people. However, there are other at-risk groups that should be included in monitoring, such as lone parents, where the employment rate in London has not seen the same increase as the rest of the UK.10 The employment rate for those in social housing is also particularly high11, to measure the progress of this group would be a useful indicator in terms of reaching those with greater needs.
5. If not, what alternative targets would you suggest?
In addition to the points raised under Question 4, qualitative indicators should also include employers’ awareness around offering work placements and/or apprenticeship schemes, flexible working and part-time work and issues around low pay.
When measuring employment rate it is important to capture the sustainability of those entering work. It should be a key aim that employment is sustainable as this will translate into
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9 See ‘The New Performance Framework for Local Authorities & Local Authority Partnerships: Single Set of National Indicators’, Department for Communities and Local Government, October 2007 10 43% of lone parents are in work in London compared to 58% in the UK. See London Child Poverty Commission Interim report, London Councils and Greater London Authority, September 2007 11 47% of people in socially rented housing are economically inactive, compared with 18% in owner occupied housing and 22% of those renting privately. See ‘A profile of Londoners by housing tenure:Analysis of Annual Population Survey & Labour Force Survey data’, GLA Economics, September 2007 savings for both employers in terms of recruitment costs and public sector in terms of benefits and associated ‘revolving door’ costs. Targets should measure those entering employment how many are still in work within 3, 6 and 12 months. This does not necessarily have to be the same job, but employment cannot be considered sustainable if there are periods of unemployment within the year.
6. Do you agree with the priorities and actions in this chapter for improving the support and services available to individuals to improve their skills and employment opportunities?
**Priority 1: Changing the aspirations and behaviours of young people and adults so that they are more motivated and confident that they can fulfil their potential through the skills and employment system**
**Action 1.1: An engagement campaign directed at individuals and those working in the delivery system**
A campaign alone will not change the aspiration and behaviour of people to go out and improve their skills or get a job might unless it is backed up by real changes in both the public sector offer and the experience of work.
Many people that are currently workless will have tried to get into work before. These experiences, compounded by the difficulty of getting back on to benefits if people become unemployed, represent negative associations around ‘getting back to work’. The draft strategy demonstrates a good understanding of some of the barriers that prevent Londoners from getting into work. If it can be demonstrated that changes have been made so that barriers previously encountered can be more effectively overcome, then this will have more of a positive effect on the confidence, motivation and behaviour of workless people than just a campaign.
The provision of better advice and information at the right time is also key. The right time might be when people are most vulnerable to unemployment – this includes post education, relationship breakdown and leaving prison or the armed services. Providing integrated advice about skills and training provision, childcare, housing and benefits at these key stages will equip people with the information they need to make educated decisions about the employment options that best suit their needs.
Clients will also need robust better-off calculations in order to assess their financial situation in work. This is particularly true of parents and lone parents where there may be complex variables around out of work and in work benefits. The Haringey Guarantee recently successfully requested an enabling measure via the DWP to obtain the Jobcentre Plus’ IBIS software that carries out better-off calculations. These facilities should be available to all employment and skills services.
Furthermore clients need assurance that not only will going back to work leave them better off in the short term, but also for the foreseeable future. Tax credit awards, for example, are calculated based on earnings from the previous year. When a person moves into employment, this often means that they are better off in the first year of work as they receive a significant award based on the £0 income from the previous year. However, boroughs report that it is in the 2nd year of employment when problems can arise as the tax credit amount reduces (due to the salary in year 1). This can ‘tip the scales’ where low income households may not be as ‘better off’ as they were the year before. In terms of the
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12 Revolving door is a term that describes those who enter work and then leave in quick succession. commitment to clients not ending when they are in work, towards the end of year 1 employment services need to make contact with clients to make them aware of their change in circumstances and how to plan for different financial circumstances.
Better off calculations also need to take into account all costs associated with moving into work, including the loss of free school meals, transport costs, childcare costs – not just nursery but also extended school fees. For many people, moving off benefits and into work may only make them £10 or £20 better off per week so any extra expenses could make their new working situation untenable and put themselves and any children at risk. Calculations should also take into account housing costs and council tax.
**Priority 2** Improving information, advice and guidance to point people in the right direction and provide them with the support they need to find and stay in work
**Action 2.1: Develop an effective London careers advice service**
The lack of detail on the careers and advice service makes it difficult to comment. It is important that the service has a physical presence in areas of high worklessness, and that its remit alongside JCP, local authorities and the voluntary sector provision is clear. The service would have to build on some of the local advice and guidance that already exists if it is of sufficient quality. A pan-London careers service would need to know what services and opportunities were available in a specific locality, and have a delivery arm to provide advice and referrals. It would also have to recognise that London is not homogenous and that there are different skills and employment issues in different areas. Furthermore, much of the information, advice and guidance (IAG) is currently provided by local colleges in order to market their own courses – it is crucial that brokers provide impartial information. Local authorities should be involved in the development of a careers service as they have detailed knowledge of employment and skills provision on the ground. It may be more effective for the LSEB to scale-up existing IAG provision by issuing funding with a guiding set up principles.
As suggested in Challenge 4, there would need to be shared data between the Learning and Skills Council, JCP and the local labour market to make this a seamless service for clients. If the advice aspired to be truly holistic, information on overcoming other barriers to work, such as benefits, childcare and housing, would be need to be built in. This could use the expertise of local authority services. Lessons learnt from the City Strategy pilots will be valuable, particularly the vision of the City Strategy to offer a more strategic overview of services and eradicate the current fragmented delivery.
Finally, a careers service of this kind would require significant resource – which there has currently been no commitment to.
**Priority 3** Improving pre-employment training and support, giving priority to communities that are typically excluded from skills and employment
**Action 3.1: Tailor pre-employment training and support to individual's needs, improving work readiness by offering skills and job search help**
**Action 3.2: Target people with severe barriers to employment such as people for whom English is a second language, offenders and ex-offenders and people with learning difficulties and/or disabilities**
As outlined under Question 2, London Councils believes there are already many examples of good practice in employment and skills provision in London (see Appendix 2), which, in line with different funding regulations, usually give priority to those typically excluded from skills and employment. The Board needs to investigate which schemes are currently being delivered on the ground, as borough- and voluntary-sector-led pre-employment training and support will most likely have to demonstrate that it is tailored to an individual's needs. Due to an overall reduction in Neighbourhood Renewal Fund (or Working Neighbourhoods Fund) local authorities will have to work smarter and more joined up – both with each other and with regional government – in order to deliver employment and skills provision in the future.
In light of many pre-existing employment and skills projects, the issue should not be the creation of more, but the feasibility of rolling out current good practice. Joint investment planning through the pooling of resources, such as LDA, LSC, JCP and ESF, would break the cycle of chasing small pots of funding. Furthermore, increasing funding cycles to three years minimum would increase the feasibility and stability of many employment and skills projects. Also acknowledged by both the Board and local authorities is the small scale of some of these successful projects. Joint planning needs to have the capacity to upscale projects to give a wider reach and higher potential outputs, whilst receiving cost and efficiency benefits of economies of scale. It is crucial that joint working is genuine, to avoid similar projects being commissioned by different departments or partner organisations working in isolation.
Boroughs are well placed to deliver projects that target communities excluded from skills and employment provision. Recent research showed that local authorities used their knowledge of the needs of local communities to ‘fill in the gaps’ between mainstream employment and skills providers. London Borough of Greenwich’s ‘Work for Families’ project, for example, aims to help lone parent families overcome barriers to employment. Support is provided through an advisory team made up of advisors from the Children’s Information Service, Jobcentre Plus and GLLaB (Greenwich Local Labour and Business run by Greenwich Council). A total of 403 individuals have been supported through the WfF’s project with 50 percent of those from Neighbourhood Renewal areas. Local authorities are therefore well placed to deliver and commission employment and skills projects that target the needs of excluded people in their community.
Local authorities are increasingly using joint working across all their services to provide a seamless employment and skills service for clients. London Councils is currently undertaking research to gauge the extent of cross-service working. Anecdotal evidence suggests that representatives such as those from children’s services, the primary care trust, and housing are working together on LAA worklessness sub groups. Given local authorities’ scope, in terms of strategic management of housing in their area, benefits, health etc, boroughs should be encouraged by Government and funders to increase the amount of holistic end-to-end support they provide. Greenwich’s ‘Work for Health’ uses the expertise of Oxleas NHS Foundation Trust and GRETA (Greenwich Education & Training Advice for Adults) to support people experiencing mental health problems to overcome barriers to employment. Both projects work closely with Jobcentre Plus (see Appendix 2 for more information on both projects).
Finally, a redesign of services is needed to provide advice and job search opportunities for those being released from prison or custody. There should be a clear link to the work of Government Office for London’s Resettlement Board in the provision of services for this group.
**Priority 4: Helping employers and training providers to join forces to develop good quality programmes to ensure employability and advancement for Londoners**
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13 The Future of Community Regeneration Funding, London Councils and GLE, 2007 **Action 4.1:** Employers to work collaboratively with training providers to develop good quality programmes in key sectors
**Action 4.2:** More extensive use of work-based learning and skills development including much better promotion of apprenticeships
**Priority 5:** Enabling individuals to develop their Skills
**Action 5.1:** Creating effective arrangements to enable adults – in work and out of work – to improve their skills
The availability and promotion of work-based learning, skills development and apprenticeships is crucial to getting workless Londoners into sustainable employment. All low skilled individuals who have accessed employment through JCP should be offered free training under Train to Gain or apprenticeships. The Board should explore the possibility of subsidising or incentivising employers, perhaps through tax benefits, to take on people that may not have worked before or for long periods of time. The London Child Poverty Commission have suggested incentives for employers and their service suppliers that include a ‘branding’ for ethical and social employment standards.14
Work experience placements are a low risk step to getting people back to work for the employers, who get a ‘spare pair of hands’ whilst getting to know the claimant and the claimant gets to ‘try out work’ without losing benefits. Even if the outcome is not an employment placement through the work experience provider, work experience should lead to an increase in confidence and more opportunity to find work with another employer.
In terms of local authorities as employers, 18 are already negotiating Local Employment Partnerships with Jobcentre Plus, and London Councils is currently working with the London LSC on a pilot with 4 South London boroughs to identify how best the Train to Gain service can be tailored to enable local authorities to take up the offer. As part of this pilot they have agreed to sign the Skills Pledge. London Borough of Kingston has been working with Somerset County Council to extract best practice information on committing to the Jobs Pledge. However, there is still plenty more local authorities can and should be doing in terms of offering work experience and upskilling their workforce. London Councils will work with Jobcentre Plus, the LSC and the LSEB to encourage London boroughs to develop their employment policies in line with the proposals for employers in the draft strategy.
7. **What further priorities and actions would you suggest?** All points made as part of question 6.
8. **Do you agree with the priorities and actions in this chapter for involving more employers in London’s employment and skills challenges?**
**Priority 1:** Working with employers to tackle London’s skills and employment challenges
**Action 1.1:** Develop a new London Employer Programme including a new top-notch brokerage service
**Action 1.2** Employers to lead the way in employee training and development
London Councils agrees with Priority 1, specifically it believes that employers should play a role in the design and engagement of pre-employment training. As outlined under Question 6, work experience and placements should be offered by all employers as a meaningful work taster. However, the public sector needs to be able to provide a continuation of benefits and access to childcare for those who need it in order for people to access work experience.
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14 For more information see Question 2 and London Child Poverty Commission Interim Report, London Councils and GLA, September 2007 London Councils sees it is particularly important that employers change their recruitment processes in order to employ those who may have been out of work long term or may have never had a job before. Lewisham Borough Council, for example, run a Construction Related Skills programme which aims to employ people that the industry wouldn't normally, such as women and BAME communities. Targeted at local residents, trainees attend 3 days a week over 6 months to develop skills and provide job opportunities.
A new London Employer Programme should hold information on good practice in employer-led employment and skills programmes and disseminate this to a wide range of employers. Such a programme should make a business case around the benefits of employing local, workless people, as well as promoting apprenticeships, in-work training, part-time and flexible working opportunities, and awareness raising around discrimination and childcare issues. The Programme should be fully integrated with the Pan-London Job Brokerage Network as well as the London Accord, Local Employment Partnerships and Jobs and Skills Pledges. The London Employer Programme should have strong links to Jobcentre Plus, the Learning and Skills Council, Business Link for London and local authorities.
Finally, London Councils considers it key that a new London Employer Programme would have a stream of work that encouraged employers to look at their supply chain and encourage similar behaviour. As outlined under Question 2, if there was a kind of ‘branding’ for ethical and social employment standards employers could demand such standards from their supply chain, or at least declare a preference for such suppliers. Similarly this might work with companies that take up the idea of a Living Wage (referred to under Question 2). London Councils is keen to work with the LSEB to investigate how London boroughs can use their procurement functions in this way and be supported to do this.
**Priority 2: Strengthen the capacity of Sector Skills Councils to respond effectively to London’s skills and employment issues**
**Action 2.1:** Promote the engagement of London employers with their Sector Skills Council
**Action 2.2:** Ensure Sector Skills Councils have the capacity and support to be responsive to London’s needs
London Councils agrees with these action points, however it would like to raise the issue that a significant number of large employers are not necessarily represented by a Sector Skills Council (SSC). Local authorities for example, who employ around 250,622(^{15}) people across London, no longer have their own Sector Skills Council, and are in the position of having some employees covered by existing SSCs, and some who are covered by none.
Contrary to the general findings in the London Story(^{16}), London local authorities are already facing severe skills shortages in many areas, including transport, planning, environmental health, trading standards and social work. These shortages have created a vicious circle whereby there are not enough staff to support in-house development and training, so fewer trainees and young staff are coming through the system, and the skills gaps are widening. In areas where work experience is an integral requirement of certain qualifications, the problem is accentuated. Early consideration should be given as to how financial and in-house training resource shortages can be addressed within the overall strategy. In some cases this may involve an increase in cross-sectoral cooperation.
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(^{15}) Local Government Employment Survey, 2005
(^{16}) Globalisation, skill and employment: The London story, London Skills and Employment Board, October 2007 9. What further priorities and actions would you suggest? Further points addressed under Question 8.
10. Do you agree with the priorities and actions in this chapter for creating an education and skills system for the future?
**Priority 1:** Ensure provision is aimed at employability and progression
**Action 1.1:** Improve the further education offer for adults to promote a focus on employability and progression
**Action 1.2:** Improved employer involvement with the delivery of higher-level skills in London to produce graduates with the skills the London economy needs
**Action 1.3:** Support actions to widen participation in higher education
London Councils agrees there should be much closer working between Further Education (FE) colleges and employers to ensure training and skills are relevant to the current and future workforce. However, in order to get out of work people into work, particularly those who experience multiple barriers to work, skills development should not be seen in isolation of other needs.
As the strategy acknowledges there is a concentration on the achievement of qualifications over and above the achievement of skills needed for work. Further Education colleges need to engage with local authorities through Local Strategic Partnerships (LSPs) in order to identify the needs of local workless people and local employers. English to Speakers of Other Languages (ESOL) provision should be available to higher standards and linked to vocational training opportunities. Clients who have been out of work for a number of years or who have never worked before are also likely to require support in softer skills such as confidence building.
London Councils agrees that improving participation and attainment for under 19s is crucial for improving worklessness rates in London. Specifically, the delivery of 16-19 education should take into account of the local labour and skills market and the LSEB should work on the availability of entry level jobs for school leavers who are not likely to have work experience at this stage. Furthermore, the strategy does not take into account the implications of the current 14-19 developments in London, which aim to tackle some of the issues it raises, such as the introduction of specialised diplomas with an emphasis on work-based learning and job readiness.
Critically, London Councils would not welcome the LSEB taking a strategic role for 16-19 education in London after funding responsibilities have been transferred from the LSC to local authorities. The Department for Children, Schools and Families' decision to bring 16-19 funding under the control of local authorities (who already have a statutory duty to deliver 14-16 education) marks a move towards ensuring a more coherent delivery process for the 14-19 reforms and education offer for young people. London Councils has a regional overview of the 14-19 reforms in London, working in partnership with key stakeholders including LSC and Government Office for London, and is currently looking at pan-London issues through the London 14-19 Executive Group. London Councils would be keen to work with the LSEB to contribute strategic information around the 16-19 education agenda and listen to employers’ feedback.
**Priority 2:** Promoting innovation in delivery of services
**Action 2.1:** New ways of involving employers and others in governing further and higher education **Action 2.2: Opening up of the publicly funded learning and skills market**
Opening up the publicly funded learning and skills market is likely to contribute to the already crowded picture of employment and skills provision on the ground. As mentioned above, there is already a lot of effective provision available, so the priority should be to focus on getting all existing services up to scratch and scaling up good practice. Delivery of current projects is also being hindered by a lack of flexibility in what mainstream providers such as Jobcentre Plus can offer, or by a lack of flexibility and joined up working with smaller funding streams. Effective provision is also not being scaled up because of a lack of resources and insecurity around funding cycles. London Councils considers that helping to overcome these issues would have a more positive effect on provision than opening up the market.
11. What further priorities and actions would you suggest? Addressed under question 10.
12. Do you agree with the priorities and actions in this chapter for integrating employment and skills delivery systems?
**Priority 1: A unified employment and skills system focused on providing long-term employment for all Londoners**
**Action 1.1:** The key agencies and authorities commit to working in an integrated and co-ordinated way through regional level targets, joint commissioning of programmes and joint investment planning
**Action 1.2:** Promote integration at a local level through planning agreements, local area agreements and other arrangements which link the support of employment and skills action with regeneration and other policies
**Action 1.3:** London Development Agency to set up a London skills observatory to provide better information on skills needs (now and future) to help public and private providers to plan
The confusion a client experiences when accessing employment and skills support is the result of ‘a lack of co-ordination between funding bodies, and a lack of consultation with boroughs about the picture of service provision on the ground’. Local authorities are increasingly seen as ‘place shapers’ and have a thorough knowledge of the needs of the workless people in their localities. Through their Local Area Agreements (LAA), local authorities ‘fill in the gaps’ in mainstream services by providing end-to-end employability support, tackling barriers such as childcare, health and disability. However, LAAs are unable to pool much of the cocktail of funding that is available, such as London Development Agency funding and the various ESF co-financers. Furthermore, the vast majority of resources to address worklessness are channelled through the Government’s preferred supplier – JCP who sub-contract with national organisations. There is very limited opportunity for LAAs to influence how this resource is used or to bid for contracts.
London Councils, therefore, strongly agrees with the need for key agencies and authorities to commit to working in an integrated and co-ordinated way. Joint investment planning should be directed at employment and skills services that are already proven to be working successfully or need increased funding to keep operating or to scale up. Consistent funding rules, including longer funding cycles, as well as shared data and joint priorities, will all be necessary in order to achieve a successful joint investment plan.
London Councils believes that many of the priorities raised in the LSEB draft strategy are also current priorities for Local Area Agreements. Indeed, the inclusion of three worklessness
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17 The future of community regeneration funding, London Councils and GLE, 2007 targets, one child poverty indicator and five adults skills targets as part of the New Performance Framework for local authorities suggest there may be an even stronger focus on worklessness.\\textsuperscript{18} Local authorities will need to focus on these targets and direct available funding towards them. There is no reference to Government Office for London in the LSEB draft strategy who are instrumental in the development of local priorities and should be fully engaged with the strategy.
In the light of the Local Government White Paper, London Councils would like to see the proposed ‘duty to cooperate’\\textsuperscript{19} on the Learning and Skills Council and Jobcentre Plus included in their joint investment plan. Furthermore, London Councils considers, as the draft strategy suggests, that integration should be promoted at a local level – particularly with a view to spending by the London Development Agency and ESF co-financers.
Finally, London Councils fully supports the integration of health, childcare, housing and transport issues into both Local Area Agreements, and Multi Area Agreements (if established in London), as well as at regional and existing sub-regional levels.
13. What further priorities and actions would you suggest?
London Councils also supports the establishment of a London Skills observatory, which would be a helpful tool both for improving adult skills and those of young people. This should include data at a local authority and ward level to ensure effective targeting of resources. It should also monitor the performance of employment and skills providers. It would be useful to take into account intelligence requirements around the delivery of 14-19 reforms in London when setting up the observatory.
14. Do you support the priorities and actions in this chapter for making the public sector system work for London?
\\textbf{Priority 1: Sharpening the Government’s incentive and target system to improve skills and employment outcomes for Londoners}
\\textbf{Action 1.1: Develop a more flexible funding and target system for skills and employment delivery and funding agencies to ensure they focus on getting people into long-term employment and progression}
London Councils welcomes the LSEB proposals to improve the incentive and target system in London, where national policies to improve skills and employment outcomes for Londoners are proving less effective.
London Councils also welcomes the new flexibilities around the 16-hour rule outlined under the DWP white paper ‘Opportunity, employment and progression: making skills work’. A bridging fund should still be considered to support those moving from out of work to in work benefits. This would cover temporary shortfalls in late benefit payments as well as shortfalls in childcare or transport costs. The fund could provide small emergency grants or low interest loans that would be paid back when the client reaches stability in work.
London Councils would also welcome more detail from the LSEB around incentives and targets for employers to improve skills and employment outcomes. Proposals around
\\textsuperscript{18} See ‘The New Performance Framework for Local Authorities & Local Authority Partnerships: Single Set of National Indicators’, Department for Communities and Local Government, October 2007
\\textsuperscript{19} There is a requirement on key public agencies to ‘cooperate’ with local authorities in developing and delivering their Community Strategies and Local Area Agreements. incentive payments for employers for providing training, or business rate reductions in exchange for taking up aspects of the strategy should be explored. Incentives for employers should not be developed without education for employers around the benefits of being engaged with the employment and skills agenda. A strong business case should be built up to appeal to both Corporate Social Responsibility and business functions.
Boroughs have indicated to London Councils that the Train to Gain service is too focused on qualifications (eg testing competence) rather than supporting skills development, and there is a lack of resources and priority given within authorities to undertaking significant skills audits to identify the gaps. There has also been criticism of the lack of flexibility around LSC funding – which is overly focused on achieving qualifications as opposed to obtaining employment. London Borough of Brent, for example, provide ESOL (English to Speakers of Other Languages) training as part of their work-focused Language2Work scheme (see Appendix 2). The LSC were unable to fund the project because it did not lead to a qualification, despite placing over a 1000 people in to employment.
15. What further priorities and actions would you suggest? All points indicated under question 14.
## Appendix 1: Local Authority examples of good practice in employment and skills provision
| Borough / Project name | Project overview | Motivation | Target group | Money Spent / funding | Time Frame / project start date | Success Rate | Further Information | |------------------------|------------------|------------|--------------|------------------------|---------------------------------|--------------|---------------------| | City of London | Spitalfields Employment Project | Support residents in overcoming the barriers they face to accessing employment, education and training | The wards that constitute the Spitalfields area experience some of the highest levels of unemployment in the Greater London. | Unemployed local residents in Spitalfields area | The project is joint-funded by the City of London Corporation and SDG, the partnership which re-developed the old Spitalfields Market | Established January 2006 Duration: at least two to three years | Supported 92 people into employment or more appropriate employment and 104 people through employment preparation courses | | Brent | Brent in2 work | Works with over 40 local employers to support local residents into work | High levels of unemployment and economic inactivity in Brent – Brent in2 work also prevents organisations with similar goals competing for clients, employer access and funding grants. | Local residents. Over 75% of residents supported are from BAME groups, with a significant number living in more deprived neighbourhoods. | Since 2002, it has supported around 2,500 residents into work. In 2006/07 it supported over 1,000 into work and a further 1,000 into learning. Since 2002, claimant levels have decreased by over 18%. | http://www.brentin2work.co.uk/ | | Brent | Language in2 work | Serves the growing number of Brent residents that do not speak English as a first language. The project focuses upon the skills needed for searching, obtaining and keeping employment. | Brent is the most ethnically diverse borough in the country with over 130 different languages spoken. The borough also has the highest proportion of people born outside the EU. Lack of ESOL courses in the borough. Entry levels on existing English language courses are too high | Growing number of local residents of different ages and backgrounds that do not speak English as a first language. | The course is an intensive (6 week), holistic, language programme. Once clients have left the course they also receive ongoing support for a 13 week period (or longer as needed) | In 2006-2007, 150 people accessed the project and of these, 65 have found work. Over 40% of clients find work through the programme and 85% are still in work after 13 weeks. The project itself has a 95% retention rate. | | Lewisham Construction Related Skills (CRS) Training Centre | Builds opportunities and trade skills for all and addresses the construction industry's need to increase the participation of those under-represented in the sector especially women and BAME communities | Addresses the construction industry's need to increase the participation of those under-represented in the sector | Local residents, particularly those under-represented in the sector especially women and BAME communities | Trainees attend 3 days a week over 6 months. | Email: [email protected] | |---|---|---|---|---|---| | Lewisham Opening Doors (1) | Assisting lone parents into sustained employment. 1:1 careers advice and mentoring, with an individual action/training plan. Employability workshops and job search coaching. Support with developing IT skills for work and job search | To assist the Council to meet the LPSA target as agreed with the Government, for the number of lone parents supported into sustained employment from April 2005 – March 2008. | Jobless lone parents – people that are aged 16 or over, have a dependent child under 16 and are not working or working less than 16 hours per week | | Email: [email protected] | | Lewisham Opening Doors (2) | Opening Doors has successfully delivered a 2 year LSC/ESF co-financed project to provide information, advice and guidance to adults who are economically inactive | Need to tackle the many issues faced by those seeking employment | Adults over 50 who are economically inactive | Learning and Skills Council / European Social Fund co-financed project | Opening Doors has successfully delivered a 2 year LSC / ESF co-financed project to provide information, advice and guidance to adults | Email: [email protected] | | **Haringey** | **Haringey Guarantee** | **Lambeth** | **Employment and Skills Plan** | **Westminster** | **Paddington First** | **Bexley** | **Knowing Bexley** | |---|---|---|---|---|---|---|---| | **Haringey Guarantee** | Haringey Council’s flagship programme to tackle worklessness. Employs a new and innovative approach to building pathways to sustained employment. | Need to deliver the LAA worklessness stretch targets | Unemployed local residents who already have skills that are required by employers | The Guarantee brings together £1 million of Neighbourhood Renewal Fund (NRF) and Council funding (to March 2008). | Established in April 2006 | The current programme aims to support and engage over 1,000 residents and move over 250 people into sustained employment. | http://www.haringey.gov.uk/index/business/haringeyguarantee.htm | | **Lambeth Employment and Skills Plan** | Improves outcomes for people who experience difficulty in accessing and staying in work | Established to meet the goal of a 70% employment rate by 2012 | Target groups are: those unemployed and on Incapacity Benefit or Job Seekers’ Allowance in deprived neighbourhoods, those with the lowest qualifications in specific wards, specific communities including Black Caribbean, Black African, mixed Race White and Caribbean, over 50s, and lone parents. | | | | | | **Westminster Paddington First** | Paddington First is a local jobs brokerage service for local employers working to place local people in employment. | Unemployed local residents | | Set up in 1999 | Work has been found for over 5,000 people since the project was established | | http://www.paddingtonfirst.co.uk/ | | **Bexley Knowing Bexley** | Provide improvements and conditions in which knowledge based businesses can become established and local people equipped with the skills to access the jobs being generated | Unemployment remains higher than the national average in the northern wards of Bexley. The low degree of high tech employment, low business formation rate and fewer management or | Local workforce and job seekers | | | | 5 year plan | | The Royal Borough of Kensington and Chelsea | The Recruitment Department, working across the local authority and its partners, hosting arrangements for sub-contractors. Personnel enable managers to attract the right candidates for our jobs through advertising, campaigns, recruitment fairs, web based advertising etc. | Working towards reaching Level 5 of the Equality Standard by 2008 | Targets to promote equality and combat discrimination across the local authority | Working with local and sub-regional employers for more than 8 years | | Newham Workplace - Employment One Stop Shops | Provides services relating to recruitment, jobs, training and business support. Workplace brings together a range of providers in a single location to offer seamless, integrated, readily accessible and user-friendly services to both employers and jobseekers | The benefit claim rates in Newham are consistently above the London average, and 21% of the borough's current unemployed population have never worked. | • Individuals seeking employment • Individuals seeking to start up their own enterprise • Businesses seeking advice and information on developing their business • Businesses seeking to fill a vacancy or vacancies | To date (October 2007), Workplace has placed over 260 people into jobs in a range of sectors including construction, hospitality, retail, customer service, leisure. | www.newhamworkplace.co.uk | | Newham | Mayor’s Employment (Pilot Plan) | The Pilot offers intensive support for long term unemployed residents | The benefit claim rates in Newham are consistently above the London average, and 21% of the borough’s current unemployed population have never worked. | Long term unemployed people living in a household where Housing Benefit is claimed, especially people who have never worked. The Pilot will also help people who have been unemployed for 1 year plus (whatever benefits they’re claiming) especially people who have never worked. | |---|---|---|---|---| | Enfield | One Large Intervention – an innovative approach to address child poverty and make families more prosperous - break down barriers to employment and address worklessness. | High levels of worklessness and child poverty in specific areas. Very high rises in Incapacity Benefit claimants | 5 disadvantaged groups identified | ‘Every Child really does matter’ has been the theme of the LAA. Pan London NRF/ESF joint financed programme across 10 boroughs | | Greenwich | Work for Family (WFF) | The project aims to help lone parent families overcome barriers to employment. Offer support through an advisory team made up of advisors from the Children’s Information Service, Jobcentre Plus and GLLaB (Greenwich Local Labour and | Lone parent families | A total of 403 individuals have been supported through the WFF’s project 50% of those supported by the project to date have been from Neighbourhood Renewal areas A total of 301 lone parents have been | | Greenwich Work for Health (WFH) | The purpose of the project is to support those experiencing mental health problems overcome barriers to employment. The project supports participants through an advisory team made up of advisors from Oxleas NHS Foundation Trust, Jobcentre Plus, Greta and GLLaB. There is also | Residents experiencing mental health problems who are in receipt of a health related benefit | supported with information, advice/guidance or funding in relation to childcare, employment or training A total of 300 individuals have been supported with employment action plans through JCP & GLLaB A total of 207 lone parents have been supported with employment action plans 7 lone parents have been supported through the Childcare Support Fund | | Southwark | Southwark Works | Southwark Works helps people into sustainable work and targets particular disadvantaged groups that face additional barriers to employment. Specialist employment advisers are hosted by partner organisations including social services, education, hospitals, libraries, training and employment providers and community organisations, to ensure employment and training services are taken directly to the client. | High levels of unemployment and economic inactivity. | Long term unemployed and economically inactive residents. Advisers specialise in the following areas: Health; Incapacity Benefit; mental health; learning difficulties; refugees; young people leaving council care; drug and alcohol misuse (for ex-offenders); single parents and childcare. | Majority NRF funded, also LDA and GoL. | Programme started in 2004. | Over 3,600 people have been assisted by the programme. Over 1,320 were helped into training and over 440 have found work. | The programme is supported by the Southwark worklessness multi agency initiative. Members include Southwark Council, Government Office for London, London Development Agency, Learning and Skills Council, Jobcentre Plus, Aylesbury NDC, South London and Maudsley Hospital. | | Bexley | Matching People and Jobs | Project provides customised training, advice, work experience and job search to local residents who are unemployed or under employed | Address the employability agenda and break down multiple barriers to unemployment. Delivery is targeted to maximise employability and access to further | Targeted at any unemployed (registered or not) or underemployed resident. | Funded via LDA and Bexley Council | Project established in 2003 | Project is extremely successful and supports 250+ year on year into employment. Enables 450 residents to gain qualifications. | [http://www.bexley.gov.uk/service/resources_plus/index.html](http://www.bexley.gov.uk/service/resources_plus/index.html) | | **Bexley Talking Business** | Project upskills existing employee in Bexley area leading to job change or career progression | Addresses the higher level skills shortages in Bexley and supports companies to invest in their staff development whilst being able to fill higher level jobs with right calibre of labour | Local businesses who seek to fill internal vacancies with higher skilled staff or seek to increase staff skills | Funded by LDA, Bexley Council and local businesses | Project established 2003 | Supports 250 businesses per annum | Train 500 employees per annum | [http://www.bexley.gov.uk/service/resources_plus/index.html](http://www.bexley.gov.uk/service/resources_plus/index.html) | | **Bexley Resources** | Local labour scheme for Bexley delivery job brokerage advice and guidance and supports employers in recruitment and selection | Addresses access to employment for both unemployed and employed local residents borough-wide | All job seekers, employed or unemployed | Funded via the LDA and Bexley Council | Established in 2003 | 300 into jobs per annum | [http://www.bexley.gov.uk/service/resources_plus/index.html](http://www.bexley.gov.uk/service/resources_plus/index.html) | | **Bexley Jobnet** | Accountable body for Jobnet – runs over 5 boroughs: Bexley, Lewisham, Redbridge, Havering and Barking & Dagenham and provides local labour solutions and shared vacancies. Shares expertise and undertakes joint recruitment drives plus pooled intelligence | Increased access to local employment, breaking down barriers to employment | Jobseekers in 5 boroughs | Funded via the LDA, 5 boroughs and some local partnership delivery mechanisms. | April 2006 | 1500 jobs per annum | [http://www.jobnet.org.uk](http://www.jobnet.org.uk) | | **Tower Hamlets Skillsmatch** | Skillsmatch is the Council’s Job brokerage team offering a comprehensive service to both local | The significant increase in job opportunities in Tower Hamlets now offers at least 2 jobs for every | All job seekers and workless residents, with a particular emphasis on young people in view of the extremely young | External funding has been successfully secured to around £600,000 a year – including NRF, augmented by | Project established in 1997 in partnership with Canary Wharf Group | Skillsmatch support 600 local residents into employment each year. 73% are BAME | [http://www.jobnet.org.uk](http://www.jobnet.org.uk) | | Job seekers and employers. Negotiations with employers right from the point of planning agreements on all local developments ensures a chance to secure appropriate job vacancies for local people. Innovative programmes such as the award winning (National Training Award) transitional programmes help provide no risk solutions. Job seekers are offered pre-employment support through a partnership approach of the Employment Task Group. Skillmatch are the ‘hub’ for the BOOST Olympic programme. Currently developing a construction training centre offering modular site ready skills training with associated job brokerage. This will be located within Wood Wharf – a large mixed use major development programme and will be developed so it can move to future economically active resident. However the employment rate is still the worst in the country. The Skillmatch team develop and promote effective employer links and engagement and screen and match local job seekers to appropriate jobs. Sustainability of employment is a key factor. Current Welfare to Work Programmes offer around 50% sustainability after 13 weeks, the Skillmatch team have consistently achieved 80% sustainability at 13 and 26 weeks and growing population. The service reflects the diversity of the population with a high number of BAME clients (around 70%) Skillmatch and the wider Partnership of the Employment Task Group is offering a £2m pilot programme (until March 09) through the City Strategy Pilot to offer workless families and families with NEET young people or people at risk of becoming NEET more support and effective pathways to employment. | Mainstream Council budgets. Past external funds include SRB, ESF, Action Teams and LDA funds. | Clients, 61% female, 49% male. 60% were under 25. Sustainability is a consistent 80% measured at 13 and 26 weeks. Examples of success – work with Credit Suisse on the transitional programmes resulted in over 28 placements secured – 18 have already been offered permanent employment with Credit Suisse. Through the wider Employment Task Group, the Tower Project, a local voluntary group offer a dedicated programme for disabled job seekers – 48 have been assisted into employment over the last year. A range of employer led pre-employment training programmes offered by TH College to the financial sector has significantly increased the number of BAME financial advisers – | | Tower Hamlets Employment task Group | The Employment task Group was established to provide a strategic overview of the needs of workless residents in order to shape the work of the LSP and oversee NRF. Representatives include: LB Tower Hamlets, JCP, Tower Hamlets College, Education Business partnership, Leaside Regeneration, LDA, LSC, Connexions. The partnership offer innovative pathways to employment complimentary to mainstream JCP and LSC services. | The Task Group have 'ownership' of the Regeneration Strategy and the LAA indicators relating to employment | Target groups in line with priorities in Regeneration Strategy and LAA | NRF allocation - £2m a year over last 4 years, allocated to supporting local programmes | The Employment Task Group – through Leaside Regeneration – have developed an initiative to create 6 community hubs offering local engagement and progression and linking the work of local voluntary groups. The task group are currently considering improvements to both the Council's and PCT's recruitment process to encourage better pathways to employment for workless residents |
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779465e85618486494a1f350e448ae0544900351 | London Councils’ response to the Mayor’s draft London Housing Strategy
London Councils is committed to fighting for more resources for the capital and getting the best possible deal for London’s 33 local authorities. We lobby key stakeholders, develop policy and do all we can to help our boroughs improve the services they deliver. We also run a range of services ourselves, all designed to make life better for Londoners.
London Councils’ Members sit on the Homes and Communities Agency London Board overseeing the Homes and Communities Agency’s investment strategy in London and the delivery of some aspects of the Mayor’s Housing Strategy.
Summary
Following discussion at London Councils’ Executive, Housing Forum and London Councils’ Housing Directors Group the following paper sets out our response to the Mayor’s draft London Housing Strategy. For ease of reference, we have focused our response on three areas: delivery, devolution and design. Our key proposals on each are as follows:
Delivery
- A short review of the current effectiveness of the Homes and Communities Agency London Board;
- The Mayor commits to a review of London borough affordable housing targets as delivery becomes apparent;
- That the Greater London Authority works with us to develop a coherent plan of action so as to encourage the growth of institutional investment in London and to make best use of work already being undertaken by the Homes and Communities Agency;
- The Greater London Authority works with London Councils to develop a pan-London shared-equity scheme, to sit along side other elements of the Mayor’s First Steps programme;
- The Greater London Authority works with London Councils and London boroughs to oversee and manage the rollout of the London Development Agency’s proposed London-wide Housing Company.
Devolution
- The Greater London Authority works with the Homes and Communities Agency and London boroughs to establish a ‘Devolution Commission’ on housing investment and governance which would explore a potential model for devolution in the capital;
- The Greater London Authority works closely with London Councils in developing an approach to the rationalisation of the housing association sector; • The Greater London Authority works with London Councils to develop an appropriate strategy to tackle the likelihood that not all local authorities will be able to meet Government’s target to halve the use of temporary accommodation by 2010.
Design
• The principles of the Mayor’s Design Guide be adopted generally, but that provision be created for exceptional instances where aspects might be waived for particular developments of a certain scale;
• The Greater London Authority commit to working with London boroughs on developing a costed successor standard to the Decent Homes standard.
Introduction
1. Housing policy shapes the political and economic contours of the capital like no other public sector intervention: levels of worklessness, educational attainment, quality of life, levels of democratic engagement and business competitiveness are all influenced by people being able to access stable, secure and suitable accommodation, be it through owning their own homes or renting in the private or social sectors.
2. Delivering these homes, however, is proving to be an exceptionally challenging task. Even before the current economic crisis, London struggled to meet the housing needs of Londoners, with nearly 50,000 households still in temporary accommodation and 350,000 households on London borough waiting lists. Similarly, outside the social rented sector, first time buyers have seen themselves increasingly frozen out of the market as the ratio of household incomes to house prices has soared and access to mortgage finance has dried up.
3. London Councils firmly believes that London local government, the boroughs working with the Mayor and the Greater London Authority, have a crucial responsibility to tackle these challenges, to work together to deliver the homes London so desperately needs. Recent developments have also underlined the need to provide people with a genuine choice, with opportunities to access homes that meet a wide variety of needs, across a range of tenures, but without compromising on standards.
4. The Mayor’s draft London Housing Strategy, goes a long way to establishing a coherent, well thought-out vision for delivering housing across London. On the whole, the Strategy is to be welcomed and London Councils is keen to stress its commitment to working with the Greater London Authority for the benefit of London’s communities.
5. As such, we have focused our response on those areas where we feel that the boroughs and London Councils has a particular role to play and where we believe the Mayor’s proposals would benefit from further discussion and engagement. These are: delivery, devolution and design. Within each area we have set out the specific topics we are most concerned with and proposed a way forward. Delivery
Arrangements of the Homes and Communities Agency London Board
6. The Homes and Communities Agency London Board, Chaired by the Mayor and attended by three Borough Leaders is the key mechanism for approving the allocation of approximately £3.5 billion of National Affordable Housing Programme resources in London and the driving force behind the effective implementation of many innovative housing market interventions. Since its inception in December 2008, not only has the role of the public sector in delivering more affordable housing proved to be more crucial than ever, but the need for a strong, representative board, one legitimately able to make the case on behalf of London has been underlined.
7. Clearly, there is much to be proud of: London Councils and the Greater London Authority's joint efforts to secure the return of £268 million of Growth Support Affordable Housing Funds; the co-ordinated response both organisations developed in light of Government's recent decision to potentially delay decent homes funding to local authority Arms Length Management Organisations yet to achieve two stars. However, with market conditions affecting housing supply over the next year likely to be exceptionally turbulent, we feel that London would benefit from efforts to ensure that the board is best-placed to deal with these challenges.
| London Councils proposes that the Greater London Authority, working with the Homes and Communities Agency and London boroughs undertakes a short review of the current effectiveness of the Homes and Communities Agency London Board. This review could consider decision-making processes and officer support. Ideally, it should be concluded before the end of 2009. |
Affordable Housing Targets
08. The Mayor’s decision to step-back from the requirement that 50 per cent of all new housing developments be affordable and instead adopt an overall target for London of 50,000 affordable homes for the period 2008-11 has attracted a range of views, but is cautiously welcomed. London desperately needs more affordable housing and to the extent that the removal of the 50 per cent target potentially encourages greater levels of delivery and a more collegiate relationship between the Mayor and London's boroughs, we are keen to endorse these arrangements.
09. However, we are concerned at the degree of progress in negotiating these targets and by the possibility that both economic conditions and national policy decisions may place undue pressure on boroughs to achieve targets set within a markedly different context.
10. The recent announcement by the Homes and Communities Agency to lower projections relating to the number of affordable homes to be delivered from National Affordable Housing Programme resources for the period 2008-11, from 44,000 to 37,000 serves as useful illustration in this regard. New homes can only be built if there are sufficient resources to do so. With increased levels of grant required to facilitate delivery through housing associations, it necessarily follows that, all else being equal, for a given level of resources the number of homes which can be delivered decreases.
11. The Government’s review of council housing finance potentially paves the way for local authorities to build directly if they choose, to lever in additional resources from locally raised rental income. It is therefore possible that a recovered housing market, in combination with extra resources from Government will allow London boroughs to make significant progress towards achieving the Mayor’s aim. However, to ensure that this shared goal of meeting London’s affordable housing needs is supported effectively, we believe a degree of ongoing evaluation would be appropriate; to identify where there are barriers and where additional resources and flexibility might be appropriate.
London Councils proposes that the Mayor should commit to a review of affordable housing targets, as delivery becomes apparent. The review should be based on a comprehensive appraisal of relevant macro-economic factors and should be underpinned by a robust assessment of borough demand, capacity and engagement.
Institutional Investment in the Private Rented Sector
12. With the highest house prices in the country, the highest levels of homelessness and overcrowding, a good quality, viable affordable private rented sector is a fundamental pre-requisite in enabling the London boroughs to address housing need, prevent homelessness and promote choice whilst supporting flexibility in the employment market.
13. In 2009, 20 per cent of London households privately rent their home and whilst the percentage of home owners has shrunk over the past three years, the number of renters has increased by over 22 per cent over the same period.
14. Consequently, due to the strategic importance of the private rented sector to London’s wider ‘housing offer’ and the capital’s economic well-being, London Councils welcomes the Mayors aims to support the sector with the underlying objective of maintaining choice and sectoral flexibility. In particular, we welcome recognition of the need to engage with institutional investors and to explore the role new sources of finance capital might play in helping expand and improve private rented sector provision.
15. London Councils believes that a more extensive, professionally managed, private rented sector has an important part to play in providing Londoners with different needs and at different points in their lives with a greater degree of choice and flexibility. Whilst owner occupation remains, for many, the tenure of choice, it is important to recognise that it is not a destination all can reach due to a variety of economic and other factors.
16. Mindful of the Homes and Communities Agency’s Private Rented Sector Initiative, London Councils is in the process of commissioning a piece of research which will set out the case for institutional investment in London and establish the key role local authorities might play in unlocking returns in this sector.
London Councils proposes that the Greater London Authority works with us to develop a coherent plan of action so as to encourage the growth of institutional investment in London and to make best use of work already being undertaken by the Homes and Communities Agency. Intermediate Housing
17. In proposing that 40 per cent of all new affordable homes delivered in the period 2008-11 will be intermediate rather than social rented, London Councils feels that the Mayor is making a contribution to addressing concerns regarding the residualisation of social housing and taking a positive step towards providing affordable housing that acts a ‘ladder of opportunity’. Similarly, the Mayor’s support for London Councils’ demands for a variation in the level of stamp duty relief and the decision to increase the level of household income at which buyers are eligible for intermediate housing products are to be welcomed.
18. As such, we have watched with interest the launch of the Mayor’s First Steps scheme and wider efforts to expand the use of shared ownership products. Our understanding is that these undertakings have enjoyed some degree of success, but that the market remains relatively confused as to the nature of shared ownership and financial institutions continue to treat such products as ‘sub-prime’, preferring instead, the use of shared-equity.
19. Evidence to the Communities and Local Government Select Committee from the Council of Mortgage Lenders supports this preference for shared equity. However, Government has recently closed to new applicants one of the most successful shared-equity schemes, ‘Open Market Homebuy’, leaving what is potentially a significant opportunity for London local government to work together and meet unmet demand.
London Councils proposes that the Greater London Authority works with London boroughs and the Homes and Communities Agency to develop a pan-London shared-equity scheme, which would sit alongside other elements of the Mayor’s First Steps programme. We also propose to continue lobbying Government for appropriate regional variations in stamp duty and national housing market interventions such as the mortgage rescue scheme.
London Development Agency Housing Company
20. The possibility of a pan-London Housing Company, developed and managed by the London Development Agency, raises the prospect not only of increased economies of scale and co-ordination, but also of a coherent partnership approach to delivery, which will likely have positive implications for the future devolution of housing investment decisions to a local borough level.
21. London Councils therefore broadly welcomes the London Development Agency’s recent proposals on this issue. In particular, clarity should be provided regarding the relationship of the London Development Agency’s proposed London Housing Company to the powers and duties of the Homes and Communities Agency. In what is already a complex and challenging environment we would not wish to see unnecessary duplication of effort at public expense or any development which would serve to undermine the consensus enjoyed between boroughs on housing-related matters. Equally, any form of pan-London Housing Company should still allow for a high degree of local borough control.
London Councils proposes that the Greater London Authority works with London boroughs and the London Development Agency to oversee the development and management of a pan-London Housing Company, which appropriately meets the strategic requirements of London local government. Devolution
The Devolution of Housing Investment Decisions to London Boroughs
22. Against the background of an increased focus on the benefits of local devolution, an impetus to do more with less and to tailor local services to the demands of local people, the Mayor’s aspiration to devolve housing investment and investment decision-making powers to London boroughs is to be welcomed.
23. Clearly, much of the detail which underpins these proposals has yet to be established and, going forward, we recognise that boroughs have a significant role to play in defining the degree of devolution they would wish to see. However, in so far as it is appropriate to offer comment on the general principles of devolved housing delivery architecture for London, we would wish to highlight the following.
24. First, whatever the outcome of discussions regarding the detail of devolution it remains paramount that London boroughs need to be given the freedom to get on and deliver. Local authorities have spent a long time arguing for increased financial freedom and have long made the case that as the strategic place-shaper for an area, they are best placed to deliver for their residents. Furthermore, local authorities are some of the most scrutinized institutions in the public sector, democratically accountable to local residents and with an enviable reputation for fiscal prudence. As such, any proposed system of devolution needs to recognise that only the lightest form of additional regulation is likely to be appropriate, that only the highest level of strategic target is likely to encourage local innovation and success.
25. Second, in agreeing the goals of a devolved system, London boroughs need to have a clear role in defining how success is measured and in determining how the rewards of that success might be captured locally and regionally. Genuine devolution to the local level offers up the prospect of significant benefits, possibilities which go beyond questions relating to economies of scale or the delivery of additional affordable homes. If there is to be a devolution of housing investment powers, then we will need to be clear from the outset why such a course of action is envisaged, what level of support is likely to be available to boroughs willing to work with the Mayor in this manner.
26. Third, through the City Charter the Mayor and London boroughs have demonstrated their capacity to work side-by-side in tackling the strategic challenges of the capital. In moving towards a devolved system of housing delivery we must ensure that local communities are fully consulted and any arrangements are both transparent and accountable at all levels of Government. Devolution must be seen as a partnership between equals, a move informed by the principles of subsidiarity and not an attempt to shift the balance of responsibility for achieving challenging housing delivery targets in uncertain times.
London Councils proposes that the Greater London Authority works with the Homes and Communities Agency and London boroughs to establish a ‘Devolution Commission’ on housing investment and governance. This commission would be charged with developing a suitable model for devolving housing investment and investment decision-making powers in London and would inform, at a strategic level, the principles of any individual borough contracts. Housing Association Rationalisation
27. The housing association sector clearly stands at a cross-road. The collapse of the cross-subsidy model of housing delivery, the resultant growth in required social housing grant rates and the challenges posed by Government’s rent restructuring regime in a low inflation context pose significant challenges to the status quo. Against this background, the creation of the Tenants Services Authority as the regulator of social housing providers raises the possibility of radical reform and the occasion to address at least some of these challenges.
28. London Councils has worked closely with boroughs and the Tenants Services Authority to establish an appropriate regulatory framework and to explore the economic case for housing association rationalisation. From our experience we believe that policy developments in this area are likely to require a high degree of sensitivity and will necessarily entail detailed negotiations between London boroughs, London Councils, housing associations and the Tenants Services Authority. Whilst we welcome the Mayor’s enthusiasm for discussion, we would caution against unilateralism.
London Councils proposes that any reform of the housing association sector or negotiations on this topic orchestrated on behalf of London by the Mayor are co-ordinated with London boroughs.
Tackling Homelessness
29. London Councils fully supports the Mayor’s commitment to halve the number of households in temporary accommodation by 2010 and to end rough sleeping by 2012. We await with interest the initial findings of the Rough Sleeping Delivery Board and look forward to playing our part in implementing its recommendations. That said, we are concerned that simply restating the desire for London boroughs to reduce their use of temporary accommodation does little to assist those local authorities facing significant delivery challenges. It is almost certain that some boroughs will not be able to meet the Government’s target in this regard and we believe that a more appropriate way forward would be to look at how a rebased goal might be established in line with current trajectories.
30. We believe that a useful means of tackling this challenge would be to allow households in long-term, settled ‘temporary’ accommodation (two years plus) to be counted against the achievement of the temporary accommodation target. We would encourage the Mayor to work with London Councils and London boroughs to implement this position.
London Councils proposes the Greater London Authority work with us to develop an appropriate solution in light of the fact that some boroughs are unlikely to meet the target to halve their use of temporary accommodation by 2010. In particular, we propose joint-lobbying around the use of temporary to settled schemes and a move towards a monitoring regime better suited to the practical challenges of reducing the use of temporary accommodation. Design
The Mayor's Housing Design Guide
31. London Councils is encouraged by the Mayor’s production of a Housing Design Guide for London. We fully recognise that the economic crisis and resulting state of public finances means that, more than ever, public resources should only be spent on delivering housing schemes which exemplify the very highest quality. We also firmly believe that people deserve decent, safe homes, of a size and quality that reflects the importance housing has in defining so many elements of a successful and sustainable life. As such, we see as vital, the need to capture and codify those design elements which contribute towards achieving the desired standards.
32. In setting standards relating to larger dwelling sizes and in proposing a preclusion against single-aspect buildings, we recognise that there is the potential for increased costs which may impact on the ability of developers to supply new properties at a price the market can sustain. It would be an invidious position if London was faced with a choice between the supply of a smaller number of high-cost, high-quality homes and a larger number of lower-cost, lower-quality homes. London Councils supports the decision to introduce the standards and principles contained within the Mayor's Housing Design Guide for all affordable housing. It would also expect to see a public discussion regarding the implementation of these design standards for the private sector as part of the examination in public of the London Plan. However, in recognition of the role local authorities have as the responsible place-shaper for an area and in light of feedback from private sector developers looking to innovate in a challenging economic context, we propose that the Mayor create provision for certain aspects of the Design Guide to be waived in exceptional circumstances. Essentially, we would see this as analogous to previous guidance relating to site scale and the requirement to provide affordable housing. We believe that this would provide the correct balance between higher-standards and deliverability.
Beyond the Decent Homes Standard
33. London Councils would agree that the current Decent Homes Standard lacks many elements, particularly relating to thermal efficiency, security and environmental quality, which might be considered crucial components of a ‘decent home’. We have previously worked with the Greater London Authority and London boroughs to define what might constitute an appropriate successor standard and to explore how this standard might be funded. Clearly, this latter concern is a key consideration: the Decent Homes Standard entailed billions of pounds of Government investment and, at least initially, improving on this standard is likely to be similarly resource intensive. Beyond the actual cost, there is also a question relating to where this cost should fall and the extent to which compliance might be considered mandatory. The lessons of implementing Code for Sustainable Homes level four, five and six for new build housing may be helpful in this regard.
34. The recent challenge relating to the likely delay of decent homes funding to Arms Length Management Organisations yet to achieve two stars provides an important lesson and perhaps a way forward in this regard. A long-term sustainable funding model for local authority homes needs to take a full account of stock condition, previous levels of investment and the emerging regulatory framework of the Tenants Services Authority. Through joint working with boroughs and the Homes and Communities Agency, it is possible that the Greater London Authority and London Councils will be able to develop a proposal that fully takes account of these pressures and lobbies Government accordingly.
London Councils proposes that the Greater London Authority commit to working with London boroughs and the Homes and Communities Agency to explore a comprehensive model for funding the improvement of stock condition beyond the decent homes standard. We also propose that the Mayor makes a formal commitment to achieving and maintaining the current decent homes standard across all social housing in London.
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bafa4fac09a5ac4ef89a18d679f79e223963bdcd | London Councils Total Place – towards a new service model for Londoners January 2010
## Contents
| Section | Page | |------------------------------------------------------------------------|------| | Introduction | 3 | | Background to this project | 3 | | Total Place – London Councils’ contribution | 3 | | Total Place – a new way of working? | 3 | | Methodology | 5 | | How the mapping was done | 5 | | How the service themes were chosen | 6 | | How the strands were brought together | 6 | | Public expenditure in London | 7 | | Mapping expenditure in London | 7 | | Managing chronic care | 13 | | Introduction | 13 | | What is the problem and why is this a particular issue for London? | 13 | | The current system and its flaws | 15 | | A proposed new system and why this is better | 17 | | Conclusion | 20 | | A whole systems approach to young people exhibiting anti-social behaviour | 21 | | Introduction | 21 | | What is the problem and why is it a particular issue for London? | 21 | | The current system and its flaws | 25 | | A proposed new system and why this is better | 26 | | Conclusion | 29 | | Tackling obstacles to employment | 30 | | Introduction | 30 | | What is the problem and why is this a particular issue for London? | 30 | | The current system and its flaws | 33 | | A proposed new system and why this is better | 34 | | Conclusion | 39 | | Overarching analysis and making the case for change | 40 | | Introduction | 40 | | Extrapolation of findings and potential savings | 44 | | Annex: Non-departmental public bodies operating in London | 45 | Introduction
Background to this project In September 2009, London Councils appointed PricewaterhouseCoopers (PwC) to help develop thinking on Total Place at a pan-London level.
In this paper, we set out the background to Total Place, both nationally and in London, analyse public expenditure in London using the preferred Total Place categorisation of spending, and outline the work we have undertaken with London Councils on the deeper analysis of three important public service areas. Finally, we draw out relevant conclusions from the three thematic analyses that we believe may help to develop the wider public service landscape in London in the Total Place context and highlight the scale of the potential benefits that could be secured.
Total Place – London Councils’ contribution London Councils aims to make a distinctive and considered contribution to the debate on Total Place in the capital. As a representative, pan-London body, London Councils’ goals in so doing are complementary to those of the Boroughs undertaking Total Place projects. London Councils is in a position to join up important themes that impact on all Londoners and to see the pan-London position on public services. In that sense, London Councils has the unique advantage of being close to, but not part of local government service provision in the capital.
PwC’s commission was to map expenditure for London at the headline level and apply Total Place thinking to three public service themes. The three themes need to be seen as exemplars of a way of working through Total Place at this early stage: they are certainly not the only relevant Total Place ideas for London. They are:
- Managing chronic conditions
- A whole system solution to the impact of anti social young people
- Overcoming obstacles to employment.
In each case, the objectives were to build a case for more effective joint working by the public sector in London on the chosen theme and then to begin a debate on reasonable and practicable alternatives to the present pattern of service provision. We are not presenting these to London Councils as perfectly worked up solutions; instead, we are putting these forward as ideas that need further expert input and public debate. However, in each case, by applying Total Place thinking, it is already possible to see the potential for significant financial savings, service improvements and better outcomes.
Total Place – a new way of working? Total Place is a programme aimed at all localities in England and has its origins in pilot work undertaken in Cumbria under the banners Counting Cumbria and Calling Cumbria. Public sector partners in the county cooperated in a process that produced a map of total public sector expenditure in Cumbria and began the process of exploring together how they could be more effective in spending this resource. The term “Total Place” was adopted for this activity by Sir Michael Bichard in his contribution to the Operational Efficiency Programme (HM Treasury, April 2008). Sir Michael’s first recommendation was:
Roll out Total Place, a programme mapping total public spending in a local area and identifying efficiencies through local public sector collaboration to at least 12 pilot sites with a high level reference group to identify how to increase incentives and eliminate the barriers for joint working and with ministerial sponsorship to ensure that issues raised are addressed swiftly across government.
Government has chosen to launch the programme at 13 pilot sites, two of which (Lewisham and Croydon) are in London.
Total Place is an ambitious and challenging programme that, in bringing together elements of central government and local agencies within a place, aims to:
- Create service transformations that can improve the experience of local residents and deliver better value
- Deliver early efficiencies to validate the work
- Develop a body of knowledge about how more effective cross agency working can deliver cost savings and/or better services for citizens.
The Total Place pilots have undertaken two complementary strands of work: the ‘counting’ process that maps money flowing through the place (from central and local bodies) and the thematic/service focus through “deep dives” that explores links between services and identifies where public money can be spent more effectively, most commonly through service design around the citizen.
Our brief from London Councils was to examine the opportunities across London as a whole, complementing the Total Place work that is being undertaken at an individual London Borough level, whether in the two official pilots (Croydon and Lewisham) or by other councils in London. Methodology
How the mapping was done
London Councils commissioned PwC to map public expenditure in London against: services; spending body, funding sources and demographic group. Because of limitations in the data, we were not able to identify expenditure against demographic groups within the capital with sufficient confidence and so have not included that element of the analysis in this report.
Summarised in this report are the expenditure data showing spending by service area and spending body. The reference year chosen was 2008/09 as the latest from which complete data sets are available. The expenditure has been allocated to service blocks using the United Nations’ classification of functions of government (COFOG) definition of public expenditure categories. This is the system used by HM Treasury (HMT) in their national and regional public sector statistical analyses (PESA) and has been adopted as a common language amongst the Total Place pilots.
COFOG is a taxonomy system that breaks down to at least three layers of detail. At level one (the highest category) the COFOG classifications used in the analysis are:
- Defence
- Economic affairs
- Recreation, culture and religion
- Education
- Health
- Public order and safety
- Social protection
- Housing and community amenities
- General public services
- Environmental protection.
The data in this document are sourced from HMT’s PESA set for 2008/09 and the relevant annual accounts for public bodies. The data were segmented into expenditure by national, non-departmental public bodies (such as government agencies) and local bodies (which include the GLA family and primary care trusts). Unlike in other Total Place pilots, we have not undertaken detailed work on the budget books of local bodies in London. There are more than 40 such bodies and so that task alone would have consumed the resources for this project. How the service themes were chosen
The project was managed by a team from London Councils. A project steering group (with leaders, chief executives and finance directors as members) and a number of officers working at a senior level in local government, helped to choose the themes for in depth analysis. All had an influence on the choice of themes for in depth analysis. It was considered important to choose themes that ranged across a number of public services and partners while also selecting areas where it was clear that the lives of many Londoners could be changed for the better if the services could be improved.
Clearly, the three topics are not the only challenges facing the capital; doubtless some would argue that there are other, more pressing issues that should be considered as part of a Total Place approach to improving outcomes for Londoners. Nonetheless, they provide a helpful starting point for the application of Total Place in London because they:
- Affect large sections of London’s population, either directly or indirectly, and attract large volumes of London’s total public service expenditure
- Require whole-system engagement with vulnerable groups of Londoners who face challenging personal circumstances
- Are areas where the governance, fiscal and delivery landscape is complex and where such whole-system engagement is therefore difficult to achieve.
In summary, these topics exemplify the types of challenges that Total Place was designed to tackle. They provide both a frame of reference and a ‘test bed’ for a genuinely transformational approach to public service management and delivery.
How the strands were brought together
The selection of the themes for further analysis was informed in part by the results of the expenditure mapping exercise. The selected topics sit in some of the higher spending COFOG categories, for example social protection, health and public order and safety, and have the potential to impact upon expenditure in a number of other categories. They also involve interactions between some of the larger institutions that make up the delivery of local public services in London – not only local authorities but also Government departments (such as Department of Health, Department for Work and Pensions and Ministry of Justice) as well as a number of the key NDPBs such as Jobcentre Plus and the Youth Justice Board.
In addition, we were seeking to identify any common themes that could have wider application in developing Total Place solutions to London’s challenges. Examples of these include:
- The potential benefits – in fiscal and outcome terms – of early intervention and a preventative approach
- Testing the importance of effective and more integrated case management in reshaping the local state around the needs of its citizens
- Achieving an appropriate balance between central control where it is needed, and devolution to either the local state or the individual where it makes sense
- The possible need to reshape the role of public service professionals to support Total Place approaches to solving London’s pressing social challenges.
Within the three themes that we studied, we have postulated savings in total of around £1.5bn each year. By applying both the general principles set out above and the learning from the thematic studies, we have suggested that the potential benefits of Total Place approaches that could accrue to the public purse in the capital could be as much as 15% of the £73.6bn total spend per annum: or some £11bn each year. Public expenditure in London
Mapping expenditure in London
London is like no other city in the UK – and arguably, it is like few other cities in the world. So in mapping public sector expenditure in London, it is important to acknowledge that London contains the infrastructure of a world city and much of the architecture of the government of the UK. London has many major transport hubs and much of the national infrastructure. It also has a governance structure unlike any other UK city with the office of the Mayor, the Greater London Authority (GLA), many non departmental public bodies (NDPBs) and the London-wide bodies set up by the boroughs. Even within the South East region and sub regions, London predominates more than any of the other regional capitals in England. London’s social and economic influence extends wider and more deeply than any other UK city across a large swathe of England.
For the calculation of London’s share of national expenditure, we have relied on the PESA data which do not disaggregate local (and in London’s case, pan London-controlled) expenditure into the more detailed sub-categories – that is, the information is not available below the top level COFOG headings. So while the expenditure mapping methodology we have used is largely comparable with our other Total Place projects, the results of the mapping need to be seen in London’s particular context.
The headline results
Total public expenditure in London in 2008/09 was £73.6bn. This amounts to around £10,000 for each London resident.
London’s complex travel-to-work pattern makes this hard to compare to other places as many services and assets - for example the transport system or the police - are heavily used by people who work in London but live elsewhere.
The figure below shows that collective expenditure by local bodies(^1) accounted for 58% of the total followed by national departmental expenditure (34%) and NDPBs (8%). London has a more substantial extent of local control (both at the London-wide and borough levels) than other parts of the country due to the additional extent of London-wide government, especially in areas such as transport and economic development.
______________________________________________________________________
(^1) “Local bodies” in this report include London Boroughs, London-level government, the PCTs and NHS Trusts. “Locally accountable bodies” refers to elected bodies As shown in the figure below, the largest areas of aggregate (national, NDPB and local) expenditure are social protection (£25bn), health (£15bn) and education (£12bn). This reinforces the expectation that much public sector activity is based around meeting the needs of individuals, many of whom are in difficult circumstances. This is similar to the distribution seen across the country, although we would expect some small differences given London’s younger population and smaller geographical area.
The largest share of expenditure (about two-thirds) is dedicated to meeting the needs of individuals and communities. Any move to increase public sector efficiency and effectiveness significantly will need to consider these areas carefully. Activities that lessen the need for state intervention – especially in social protection and health – while at the same time maintaining positive individual and societal outcomes, must be key opportunities to focus upon for potential savings; as these are where the money is spent and where it is possible to limit any potential adverse impact on individual and community outcomes.
The table below shows that when the global total is broken down by central government, NDPBs and local bodies, the split of expenditure in London by COFOG category was: National departmental expenditure
Government departments spend over £25bn a year on behalf of Londoners. This is dominated by expenditure which goes directly to meet individual needs as national entitlements, for example, pensions.
| £ millions | National | NDPBs | Local | Total | % | |------------|----------|-------|-------|-------|---| | Social protection | £15,510 | £350 | £9,050 | £24,900 | 34% | | Health | £1,700 | £280 | £13,500 | £15,440 | 21% | | Education | £2,380 | £2,580 | £7,550 | £12,450 | 17% | | Economic affairs | £2,380 | £770 | £4,520 | £7,670 | 10% | | Public order and safety | £2,160 | £300 | £3,930 | £6,390 | 9% | | Housing and community amenities | £120 | £1,190 | £1,840 | £3,150 | 4% | | General public services | £250 | £50 | £980 | £1,280 | 2% | | Recreation, culture and religion | £430 | £40 | £710 | £1,170 | 2% | | Environment protection | £210 | £80 | £870 | £1,160 | 2% | | Defence | £5 | £0 | £10 | £15 | 0% | | Total | £25,100 | £5,600 | £42,900 | £73,600 | 100% |
Over 60% of national departmental expenditure in London is accounted for by £15.6bn of social protection spending which largely comprises state pensions (£6bn), family and income support (£5bn) and disability support (£2.5bn).
Economic affairs account for £2.4bn in expenditure with the largest components in transport (especially the rail network) and support for employment and economic development programmes. Education accounts for expenditure of £2.4bn which is largely routed to tertiary education and non-compulsory education (PESA considers schools funding to be local, not national expenditure). Public order and safety is largely accounted for by the law courts and prison services as policing and fire are locally-controlled activities.
Centralised health expenditure of £1.7bn consists largely of national management of the NHS and support services for local health professionals and institutions.
The next table shows that fourteen government departments are each estimated to spend more than £100m in London. The largest two departments – DWP and the Chancellor’s Departments (HM Treasury and HM Revenue and Customs) – are largely accounted for by social services payments. | Department | £m | Share | |------------------------------------------------|------|-------| | 1 Work and Pensions | £11,200 | 43% | | 2 Chancellor's Departments (HMT and HMRC) | £2,800 | 11% | | 3 Health | £2,700 | 10% | | 4 Children, Schools and Families | £2,100 | 8% | | 5 Transport | £2,100 | 8% | | 6 Innovation, Universities and Skills | £1,500 | 6% | | 7 Home Office | £940 | 4% | | 8 Justice | £920 | 4% | | 9 Communities and Local Government | £510 | 2% | | 10 Culture, Media and Sport | £450 | 2% | | 11 Defence | £290 | 1% | | 12 Environment, Food and Rural Affairs | £240 | 1% | | 13 Energy and Climate Change | £140 | 0.5% | | 14 Business, Enterprise and Regulatory Reform | £120 | 0.5% |
While most expenditure is in departments’ traditional areas (such as the spending of the Department of Health on health), there is also significant expenditure outside these areas based on national shares of departmental spending by COFOG category. As an example, the Ministry of Defence spends approximately £300m annually in London on military and civil services pensions which count as social protection not defence expenditure.
**The expenditure of non-departmental public bodies**
We have identified 156 NDPBs that spend more than £100,000 and have an influence in London. They are listed in the annex to this paper. NDPBs spent £5.6bn on London and Londoners in 2008/09. The largest area of expenditure is education which accounts for just under half of all expenditure, largely focussed on further and higher education. The table below shows the fifteen largest NDPBs by expenditure. As can be seen, these are dominated by two large education bodies (HEFCE and LSC) and the combined housing funders.
| NDPB | £m | |----------------------------------------------------------------------|------| | 1 Higher Education Funding Council for England | £1,083 | | 2 Learning and Skills Council | £875 | | 3 Home and Communities Agency | £693 | | 4 Housing Corporation | £439 | | 5 Legal Services Commission | £275 | | 6 Office for Fair Access | £250 | | 7 Jobcentre Plus | £171 | | 8 Big Lottery Fund | £171 | | 9 Medical Research Council | £161 | | 10 Engineering and Physical Sciences Research Council | £118 | | 11 Teachers Training Agency | £116 | | 12 Science and Technology Facilities Council | £93 | | 13 National Policing Improvement Agency | £86 | | 14 Youth Justice Board for England and Wales | £74 | | 15 Arts Council England | £66 |
These fifteen bodies together account for 83% of NDPB expenditure in London. However, expenditure does not necessarily equate directly to policy influence as some of the large spending bodies are driven by funding formulas determined outside of their own control, whereas some of the smaller spending bodies may have significant power over policy direction and delivery (a good example of this being the inspectorates, who have a relatively small operational spend but a large degree of influence.)
Some sense of the crowding of some types of spending bodies in London arises from a comparison of the numbers of bodies spending by the major COFOG classifications. For example:
- Education and Housing and Community Amenities, which, combined, account for 67% of NDPB expenditure in London have only 29 (out of 169) major spending bodies identified in London
- Economic Affairs has the largest number of spending bodies (58) but accounts for only 14% of total NDPB expenditure
- Recreation, Culture & Religion has the second highest proportion of bodies (35) but accounts for less than 1% of total NDPB expenditure in London.
| UN COFOG | Expenditure (£m) | Spend Share | Bodies | |-----------------------------------|------------------|-------------|--------| | Economic affairs | £772 | 14% | 58 | | Recreation, culture and religion | £36 | 1% | 35 | | Education | £2,576 | 46% | 23 | | Health | £276 | 5% | 14 | | Public order and safety | £300 | 5% | 14 |
2 The 2008/09 financial year included activities of both the HCA and the former Housing Corporation Local expenditure
The usual way to derive a picture of local expenditure is to interrogate the budget books of the relevant bodies. We did not do this here given the scale of such a task in the context of the size of this commission. Some of the local expenditure estimates are therefore from different sources and are not directly comparable.
London-based bodies spent £42.9bn on public services. About half of this expenditure was made by bodies operating at the pan-London level or as part of the National Health Service.
The COFOG analysis does not enable the net spending of local government to be identified with any accuracy. Separately, the Chartered Institute of Public Finance and Accountancy (CIPFA) collects details of local government expenditure annually and for 2008/09, the general fund service expenditure of London Boroughs combined was in the order of £15bn. This number excludes some important service areas such as money flowing through housing revenue accounts but includes others such as Housing Benefit expenditure.
London ‘regional’ bodies (Greater London Authority, London Development Agency, Metropolitan Police, London Fire Brigade and Transport for London) accounted for some £7.5bn expenditure in 2008/09. Of this, two-thirds was for the police and one-sixth for transport.
London local health bodies – both Primary Care Trusts and other NHS Trusts – spent some £15bn in 2008/09. While not directly accountable to elected local representatives, their boards are required to reflect the needs of local communities.
Health expenditure accounts for 31% of local expenditure mostly through NHS Trusts (both foundation trusts and PCTs). Local social protection expenditure accounts for 21% of local expenditure and is a combination of social services and some locally-controlled transfers such as housing benefit. Education is largely for primary and secondary education which is controlled at the borough level. Economic affairs include transportation which is a major share of the funding of Transport for London. Public order and safety is largely spent on the Metropolitan Police with the London Fire Brigade also included. Managing chronic care
Introduction
As average life expectancy extends, more and more people are affected by chronic conditions, both in the developing and developed regions of the world. In 2005, chronic conditions caused approximately 35 million deaths worldwide and this number is expected to increase by almost a fifth in the next decade. When compared with the global pattern, the chronic disease impact upon populations in the western world is disproportionately borne by older people, rather than the economically active. This holds true both in England as a whole and in London in particular.
This topic was chosen as an area for deeper examination because:
- It represents a significant proportion of the total of £74bn of public expenditure each year and encompasses some of the biggest service providers in London
- A significant proportion of that public expenditure is borne by local government, but in a system that is characterised by considerable interdependence between providers
- The problem of chronic care is escalating significantly and, if not addressed more effectively, will present further challenges to London’s public services in the future.
What is the problem and why is this a particular issue for London?
Chronic conditions, as defined by the Department of Health are “diseases which current medical interventions can only control not cure”. The life of a person with a chronic condition is forever altered – there is no return to normal.” Some of the more common chronic conditions are diabetes mellitus; chronic obstructive pulmonary disease (COPD); asthma; arthritis; epilepsy and mental ill health.
In England, more than 15 million people have chronic conditions, with a quarter of these reporting two or more conditions. Prevalence varies suggesting that there are a number of factors driving the variations, including age, lifestyle and so on (ibid). However, age is the most significant driver of chronic conditions in the UK (ibid).
Prevalence of chronic conditions in England 2006/07 (Quality and Outcomes data, DH)
| Condition | Numbers affected | |-----------------------------------------------|------------------| | Coronary heart disease | 1,899,000 | | Heart failure | 420,000 | | Stroke and transient ischemic attack | 863,000 | | Hypertension | 6,706,000 | | Diabetes | 1,962,000 |
3 WHO: An estimate of the economic impact of chronic non communicable diseases in selected countries, Abegunde, D and Stanciole A 4 Raising the profile of long term conditions: A compendium of information, Department of Health 2004 | Chronic obstructive pulmonary disease | 766,000 | |--------------------------------------|---------| | Epilepsy | 321,000 | | Cancer | 489,000 | | Severe mental health conditions | 380,000 | | Asthma | 3,100,000 |
With declining birth rates and the increases in life expectancy that come from advances in medicine and medical technology, chronic conditions are more likely to affect the populations of Northern Europe. There are a significant number of people over the age of 40 who report having multiple long term chronic health conditions. The trends for an ageing population are likely to increase the pressures in terms of people with chronic conditions. By 2025, there will be 16% more people aged 40 and over in England and 42% aged 65 and over. Based on these trends, the number of people in the national population with at least one chronic condition could rise to 18 million by 2025. People who have chronic conditions are high users of social care and community services.
Although the demand for long term care is not synonymous with chronic care, the two are hard to separate: public expenditure on long term care is estimated to reach almost £16 billion and total long term care expenditure is projected to reach approximately 1.8% of gross domestic product by 2022.
**The Government’s objectives in relation to chronic health conditions**
Joining up health and social care is on the national and local agenda. The Government is looking to achieve the following outcomes across health and social care:
- Better health and well-being for all – helping people to stay healthy and well, empowering people to live independently and tackle health inequalities
- Better care for all – the best possible health and social care, offering safe and effective services, when and where people need help, and empowering people to make choices
- Better value for all – delivering affordable, efficient and sustainable services, contributing to the wider economy and the nation
The following indicator has been set to measure improvements as part of the National Quality and Outcomes Framework (NHS 2008/09):
**For people with chronic conditions, improving their satisfaction with the support they are given to be independent and in control of their condition and reducing the number of emergency bed days**
**Chronic conditions in London**
There are at least 3.5 million Londoners with some degree of chronic condition, (some of these will be mild or early stage – for example, musculo-skeletal problems) with 1.3 million registered NHS cases of
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5 60% of UK adults report having at least one chronic condition (Department of Health 2004), and 26% report have three or more chronic conditions (British Household Panel 2001)
6 ONS population projections 2006-2031
7 Based on ONS projected population aged over 40 of 29.5 million and a 60% rate of chronic conditions among adults (DH 2004)
8 Long-term care expenditure for older people, projections to 2022 for Great Britain PSSRU 2005
9 See DH Our Health, Our Care, Our Say Jan 2006 or Shaping the Future of Care Together July 2009 the major chronic conditions. Approximately 900,000 people have more than three chronic conditions and more than half of GP visits in London; 65% of outpatient appointments; and 72% of all hospital bed days are associated with chronic conditions in some way.\\textsuperscript{11}
People with chronic conditions are twice as likely to have mental health problems, three times as likely to suffer from depression and have an increased likelihood of suicide.\\textsuperscript{12} Chronic conditions place a significant limit on the potential for employment. Chronic conditions also affect both the nature and amount of work undertaken. Households that include someone with a chronic condition are more likely to have lower incomes. In 2007/08, the cost of DWP benefits payments in London directly associated with chronic conditions, (that is: Attendance Allowance; Carer’s Allowance; Disability Living Allowance; Incapacity Benefit/Severe Disablement Allowance) was £2.1bn being 14% of all benefit expenditure (DWP statistics service).
Our research suggests that expenditure on chronic care in London is at least £5bn pa (approximately 7% or more of total annual public expenditure in the capital), with primary care trusts spending at least £3bn per annum on chronic conditions across all care settings. We have estimated that social services expenditure in London related to chronic conditions and needs is at least £2bn pa as set out in the table (that is approximately 13% of the estimated £16bn total expenditure in 2008/09 by London Boroughs.) The category “other adult services” includes expenditure on substance misuse and vulnerable people.
### Estimate of social care costs of chronic conditions to London Boroughs
(NHS Personal Social Services Expenditure and Unit Costs data set)
| Completed Assessments | Provision of residential care (people-years) | Net total expenditure (£m) | |-----------------------|---------------------------------------------|---------------------------| | Older people (65+) | 53,550 | 19,437 | 1,105 | | Adults under 65 with Physical disability | 12,560 | 1,409 | 261 | | Adults under 65 with learning disability | 1,575 | 5,715 | 564 | | Adults under 65 with mental health needs | 15,145 | 2,649 | 271 | | Asylum seekers | | | 9 | | Other adult services | 5,295 | | 85 | | **TOTAL** | | | **1,955** |
Thus, the burden of chronic disease in London is a serious one. It affects the quality of life of Londoners; causes premature death and disability and creates large and underappreciated economic effects on individuals, families, across communities and for London as a whole.
### The current system and its flaws
There are many flaws in the current systems for treating chronic conditions which lead to increased costs and lower satisfaction. These can be summarised as follows:
#### Organisation of the model of care
Despite many attempts to re-orientate the service model, service provision in health has continued to focus on the acute hospital and the acute episode of care rather than the systematic prevention of those at risk from entering the acute system. To deliver more appropriate care to people with chronic conditions
\\textsuperscript{11} Extrapolated from DH UK figures 2004
\\textsuperscript{12} Raising the profile of long term conditions: A compendium of information, Department of Health 2004 will require a step change in approach to focus on prevention and timely intervention. The position in social care is a little different with more progressive local authorities making large strides towards earlier intervention and more self directed care; other councils still have some way to go on this.
Organisational boundaries cause fragmentation of services and support, with inherent delays and inefficiencies in service delivery. Better collaboration – even integration – has yielded some excellent results in individual localities, but, despite some first-rate local initiatives, the joint model of care in London requires a ‘step change’ in approach and delivery to avoid a system where the care is only offered to people with chronic conditions when their needs are most acute.
**Customer expectations**
The public, carers and service providers are not routinely involved in service design or configuration. Most people living with chronic conditions would like more say in where and how their care is provided and how services to support their independence and well-being are configured.
Many people who have long term conditions also want access to information about their conditions so that they are empowered to manage them better. The more likely they are to want to take care of their own health, the more likely they are to want to work and to feel more socially included.
**Financing the system**
Different political parties will postulate different spending positions, but the fiscal and economic outlook for spending on health and social care is poor in the short to medium term, whichever party forms the next government. Reduced spending will impact on individuals, families and communities and is likely to mean more means testing, co-funding and further reliance on the role of individuals, families and carers in dealing with complex health and social care issues.
Funding streams do not easily support the multi-agency working that can deliver the best possible outcomes for the public. Not only does this lead to conflicts in governance and duplication of effort, but can conflict with the objective of providing value for money. Thus it is difficult to determine whether initiatives are delivering good value for taxpayers and individuals as reporting is done by organisation (top down) rather than by individual, family or community (bottom up).
Individual budgets across health and social care are accepted as a positive initiative but are not routinely used as a means to empower individuals, improve efficiency and gain better user satisfaction. Information is not easily shared between agencies and this is a significant barrier to adopting a citizen-centred approach to health and social care.
**Design principles for a future delivery model**
Research internationally and in the UK has identified four requirements that underlie the prevention and alleviation of chronic conditions. These should influence any new model of care.
- **Self management of chronic conditions in the context of promoting healthy lifestyles**
Investment in prevention and resources to encourage healthy lifestyles continues to be a challenge for the NHS and local authorities. Whilst the Comprehensive Area Assessment is driving closer collaboration, more work is required for these partnerships to mature.
Inequalities in health outcomes persist and the social determinants of health need to be addressed in a systematic manner.
- **Prevent unnecessary deaths and disabilities arising from chronic conditions**
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13 See SCIE Research Briefing 20: The implementation of individual budget schemes in adult social care
14 Improving Care for People with Long term conditions: HSMC University of Birmingham and NHS Institute for Innovation and Improvement
15 Post 2010 Strategic review of health inequalities – The Marmot Review DH 2009 Personalised care planning and the provision of useful and relevant guidance and information are essential for self care and management as this will prevent future complications.
- **Treat chronic conditions effectively and in the most appropriate care setting**
Individual case management and a whole system approach with citizens at the centre can ensure that the right care is delivered in the right place at the right time. Effective treatment is most often early treatment, with the appropriate supporting infrastructure, for example, access to diagnostics.
- **Provide appropriate and tailored care and support for those living with long term conditions**
Self care and self management should be the goal of all people living with chronic conditions. Service providers should be encouraged to support individuals to achieve this, no matter how difficult the organisational boundaries.
**A proposed new system and why this is better**
Our recent work with national and international social care organisations has emphasised the importance of early intervention and self directed care. We explore in this section whether such learning specifically applied to people with chronic conditions could offer a significant improvement on current care pathways, especially in the provision of appropriate healthcare.
The new model is predicated on a number of reforms to the current system including: a shift in resource commitment on the part of the NHS to earlier intervention across the system; a greater emphasis on self-directed care; a common service pathway and a common system of case management.
The graphic overleaf sets out three health and social care pathways for people with chronic conditions. **The first box** “Current health and social care model” outlines the way in which most people access health and/or social care at present – often too late, and under the guidance of professional social workers. While there is user involvement, too much of the care on offer comes in predetermined packages.
**The second box** “Emerging model of social care” represents the way in which a number of leading local authorities (in London and elsewhere) are developing the Adult social care agenda: and is in tune with *Shaping the Future of Care Together* (the adult social care green paper 2009 – DH). It shows a greater level of self determination – some “de-professionalization” of early care interventions and concentrates the self-directed care at prevention and/or re-enablement.
**The third box** shows the most recent thinking and takes the principles of self-directed health and social care to a pathway for chronic care by describing an emerging model of integrated health and social care. This model:
- Places the citizen at the heart of service design and the planning of appropriate care and medical intervention
- Articulates the need for investment in prevention rather than cost at the point of acuity or service contact but does not quantify it in economic terms
- Promotes early re-enablement support as being key to ensuring care is provided in the right setting by facilitating independence.
- Recognises that service users may require services and care packages that are bespoke to their particular needs.
There are many innovative aspects to the new care pathway model but at its core is the recognition that a greater level of self directed care should be a genuine three-way endeavour between the citizen, local government and the NHS. The key to putting such a change in place would be to commit significant NHS resource to help fund the preventative care package. To put this in a way that ordinary service users might understand, *it needs the NHS to spend health money on you when you’re not acutely ill.* Crystallising and bringing forward acute health spending is not the only feature of the model. A greater level of self-direction in care is also judged to be a social and economic good of itself: and the model works best when the care assessment process is a common one between health and social care. That is, a single caseworker helping citizens to access what to date has been care in two different systems.
A proposed new model of health care for people with chronic conditions set alongside old and new models of social care
Applying this new model to the treatment of people with diabetes
Type two diabetes is one of the most intractable chronic conditions with an increasing prevalence due both to lifestyle factors and an ageing population. According to the London Health Observatory, there are around 320,000 registered diabetics in London (reference year 2005/06). However, early intervention in lifestyle behaviours and good care and management of the condition can significantly improve people’s lives. It is a formal objective of the NHS in London to work to prevent people with diabetes presenting in an acute setting.16
We therefore consider the treatment of people with diabetes to be a good exemplar to use in order to explore the way in which a new service model consistent with the principles of the care model described above might work. Particularly whether it could change outcomes, deliver public satisfaction and secure better value for money services.
There is relatively little information available on the detailed costs of care for Londoners with diabetes. So what follows is a set of broad assumptions that we made for the purposes of modelling new outcomes. While the cohorts we describe below probably mirror the reality of life for people with diabetes, we do not claim an absolute triangulation with objective London-wide information on costs of care or care outcomes. For the purposes of testing a new model of care, we made assumptions about the characteristics of the population of Londoners with diabetes and allocated them into four notional cohorts:
**Cohort one:** are the 90% of patients who generally self-manage and require relatively little extra supervision and care management, though they have annual ‘upkeep’ cost for drugs and extra GPs visits
**Cohort two:** 2.5% of patients do not self-manage and require emergency admissions
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16 NHS Healthcare for London Programme Cohort three: 5% of patients need additional assistance to in order self-manage, but who would like to manage their own conditions more effectively
Cohort four: 2.5% of patients have co-morbidities with conditions such as mental health disorders.
Indicative costs allocated to each cohort
To model new outcomes, we derived assumptions about the direct current costs of care. Again, these assumptions are based on real life experiences, but are necessarily indicative at this stage. For cohort one, we have allocated drugs and GPs’ costs; for the remaining cohorts, we have allocated different mixes of emergency admissions (between two and four per year), home care services (three times per week), meals on wheels (five times per week) and funded nursing care (three times per week). Aggregated up, the costs of these interventions are in the table below.
Based on these assumptions, the annual costs of managing diabetes in London would represent approximately 11% of the annual chronic care expenditure. This is approximately £590m of the £5bn annual expenditure that we identified earlier. Significantly, these costs are for the relevant health and social care services: we have made no wider assumptions about the cost benefit to London’s economy or community of better diabetes care. The direct costs are summarised in the table below.
| Patients | NHS Costs (£m) | Local Authority Costs (£m) | Total Costs (£m) | |----------|----------------|-----------------------------|------------------| | Cohort 1 | 256,462 | 18.2 | 18.2 | | Cohort 1 | 8,014 | 63.9 | 90.9 | | Cohort 1 | 16,029 | 95.7 | 181.9 | | Cohort 1 | 8,014 | 47.9 | 90.9 | | TOTAL | 320,577 | 225.7 | 363.8 |
Managing chronic care – the potential savings around diabetes
We then modelled some interventions which reduce the assumed needs of the cohorts for health and care based on the principles of the new care pathway above. For example, we assume that:
- With earlier intervention and better case management, half of the cohort two patients have only two emergency admissions per year and after six months, their home care packages reduce to once a week
- Half the cohort four patients have no emergency admissions and gradually reduce their needs for home care services
- Half of the cohort three patients are helped to realise their ambition to manage their condition more effectively.
The new costs of provision and savings associated with the new model are in the table below.
| | NHS Costs (£m) | Local Authority Costs (£m) | Total Costs (£m) | |------------------|----------------|-----------------------------|------------------| | New costs | 203.9 | 281.6 | 485.6 | | Savings | 21.7 | 82.2 | 103.9 |
We suggest savings of more than £100mn are achievable on the modelled expenditure for diabetes care; a reduction of almost 20% of the total assumed cost. And as a reminder, neither the costs nor the savings encompass wider benefits of better care. These savings accrue principally as a consequence of people being treated in the most appropriate care setting, and more particularly, of being treated before conditions become so acute that emergency health intervention is needed. Can we extrapolate these benefits across other chronic conditions?
The primary purpose of this document is to make the case for change – not to work up a finely tuned solution. But organisations around London – for example, NHS Barnet on vascular disease; Lewisham Council and NHS Lewisham on whole systems commissioning; and Well London on healthy eating and living – have all made progress in this field by adopting a model loosely based on:
- Emphasising prevention or early intervention
- Jointly building the systems around the customer/patient
- Boosting the level of self-direction in care.
Postulating the wider potential benefits of change is complicated. The American Diabetes Association estimates that around 10% of the USA’s wider healthcare costs are attributable to diabetes. In this paper, we have suggested that this cost in London is around £590m - which is just over 11% of the £5bn we identified as the cost of chronic conditions to health and local government as a whole. So these estimates of the proportion of expenditure are broadly in line. We suggest savings of more than £100mn on the assumed direct expenditure on diabetes: a saving of just under 18%.
Our examination of the benefits of the new model of care for the treatment of diabetes is also relevant to the treatment of other chronic health conditions. It is therefore reasonable to assume that a similar level of savings could be secured through reform to the treatment of these other conditions. If comparable reductions in expenditure could be made by applying similar models of care across all chronic conditions, we estimate that direct savings of £880mn could accrue on the annual direct cost of £5bn. For local government, our assumptions at the broadest level would suggest that savings in the region of 25% or more may be achievable on the costs of chronic care, but these are unlocked by a relative shift in NHS spending towards preventative care/earlier intervention.
While we acknowledge that our suggestions need more work, we would also argue that we have not yet computed any wider savings to the economy and community of London from improving the treatment and care of people with chronic conditions.
Conclusion
We believe that a package of reform based primarily on policy realignment around earlier intervention could enhance outcomes for Londoners and result in savings of about £880mn out of the total £5bn currently spent on treating and caring for people with chronic health conditions. This package of reform is not dependent upon structural reorganisation within the capital’s public services. Rather, it requires a redirection of resource within the NHS from acute settings to focus more on prevention; a move towards on self-direction and self-service by users; and more effective case management. This presents a set of challenges both to health and social care professionals and organisations, but with a significant potential prize on offer. A whole systems approach to young people exhibiting anti-social behaviour
Introduction
Compared to other areas of criminal behaviour, anti-social behaviour (ASB) by young people is not a particularly well researched area. It has only been a focus of Government action in the past decade or so and there is limited statistical information available about it on a national or regional basis. Data on volume and impact of the problem are not collected through official channels because most forms of ASB are not classified as crimes. The evidence base is focused on public perceptions rather than empirical research. Data on costs (to the public sector and to society) are also highly patchy and at a high level.
This area was chosen for deeper examination because, although the direct costs associated with the issue are relatively small when compared to the two other themes we have studied, it is characterised by complexity in administration and the involvement of a large number of public sector bodies. It is also an area where, as this section highlights, significant “lifetime” costs associated with truancy and broader criminality are incurred by the public sector as a result of a failure to intervene sooner and more effectively.
Given the nature of the data, it is not possible to present with accuracy detailed, costed recommendations for the future. Rather, we suggest a number of areas where we believe improvements to the current, highly fragmented delivery model might be made, which London Councils may wish to explore further with key partners in this sector. We believe these improvements present opportunities for efficiency gains and have the potential for producing better outcomes for Londoners, with significant financial benefits in the longer term as a consequence.
What is the problem and why is it a particular issue for London?
Definitions
Anti-social behaviour (ASB) is defined by the Home Office as “any aggressive, intimidating or destructive activity that damages or destroys another person’s quality of life”. By definition, ASB is not criminal behaviour (ASB interventions such as ASBOs are civil not criminal penalties), but can have a similarly adverse impact on the communities and individuals affected by it.
The Home Office has developed a typology of anti-social behaviours(^\\text{17}) which highlights the following:
- Drug/substance misuse and dealing
- Begging
- Kerb crawling
- Abandoned cars
- Street drinking
- Prostitution
- Sexual acts
- Noise
(^{17}) Defining and measuring anti-social behaviour: Home Office 2004
- Rowdy behaviour
- Hoax calls
- Intimidation/harassment
- Vehicle-related nuisance/inappropriate vehicle use
- Nuisance behaviour
- Animal-related problems
- Criminal damage/vandalism
- Litter/rubbish
The size of the problem – numbers and cost to public services
The focus of this analysis is upon youth-associated ASB but it is important to note that young people do not have the monopoly on ASB. Much is committed by adults, concerns environmental problems, or is related to general rudeness by people of all ages. But it is not unreasonable to say that a significant proportion of the responsibility for perceived ASB is placed at the door of young people. As the chart below from the current British Crime Survey shows, most people in the UK think that ‘teenagers hanging around’ is the number one ASB issue for them.
Perceptions of anti-social behaviour by strand, 2001/02 to 2008/08
Source: British Crime Survey 2008/09
Estimating the number of young people exhibiting ASB in London is not straightforward. It would take a great deal of new, primary research to do so with any notable degree of precision. However, we have produced some indicative figures for the purposes of this project, based on extrapolations of national data sets.
2006 Home Office research suggests that every year, between 200,000 and 300,000 young people across London commit criminal and/or anti social behaviour within their communities. Most of these actions are relatively small scale and involve a limited number of incidents; they will be towards the ASB end of the continuum, rather than the criminal end. We judge that an extrapolation from national evidence on anti-social behaviour allows us to estimate that approximately 180,000 London young people commit anti-social behaviour every year.
Proportionally, London has fewer youth offenders than the North West, South East, West Midlands and Yorkshire regions based on official sanctions, but given the city’s size and transport links there is a perception that ASB and youth crime can occur anywhere in the city. The table below(^\\text{18}) shows that the overall perception of ASB is no higher in London than it is in Birmingham or Manchester. However, it is
(^{18}) Home Office Anti-Social Behaviour Action website noticeably higher than the London average in East Inner London and the outer areas surrounding it and lower in the more secure areas in the West and the South.
| Area | Percentage | |-------------------------------------------|------------| | West Inner London | 20.8% | | East Inner London | 33.8% | | East and North East Outer London | 28.9% | | South Outer London | 20.9% | | West and North West Outer London | 24.4% | | London | 26.7% | | Greater Manchester | 27.0% | | West Midlands | 27.4% |
Home Office research into the impact of anti-social behaviour highlights the degree of activity and its costs to the public service. Based on an analysis of a single day’s activities across England, the research calculates that ASB costs the public sector £13.5mn per day, or £3.4bn each year. The largest areas of costs are criminal damage/vandalism, intimidation/harassment, litter/rubbish, nuisance behaviour and vehicle-related nuisance.
| Category | Count | Est Cost per Day | Est Annual Costs | |-----------------------------------------------|-------|------------------|------------------| | LITTER/RUBBISH | 10,086| £1,866,000 | £486m | | CRIMINAL DAMAGE/VANDALISM | 7,855 | £2,667,000 | £687m | | VEHICLE RELATED NUISANCE | 7,782 | £1,361,000 | £340m | | NUISANCE BEHAVIOUR | 7,660 | £1,420,000 | £355m | | INTIMIDATION/HARASSMENT | 5,415 | £1,983,000 | £496m | | NOISE | 5,374 | £994,000 | £249m | | ROWDY BEHAVIOUR | 5,339 | £996,000 | £249m | | ABANDONED VEHICLES | 4,994 | £360,000 | £90m | | STREET DRINKING AND BEGGING | 3,239 | £504,000 | £126m | | DRUG/SUBSTANCE MISUSE AND DRUG DEALING | 2,920 | £527,000 | £132m | | ANIMAL RELATED PROBLEMS | 2,546 | £458,000 | £114m | | HOAX CALLS | 1,286 | £198,000 | £49m | | PROSTITUTION, KERB-CRAWLING, SEXUAL ACTS | 1,011 | £167,000 | £42m | | TOTAL | 66,107| £13,500,000 | £3.375bn |
We have estimated that the proportion of this cost falling to London’s public services in respect of the ASB committed by young people is approximately £500mn per year. Around two-thirds of this cost falls upon local authorities and the remainder to the Metropolitan Police. Much of the expenditure is remedial, for example, dealing with the consequences of evidenced ASB.
These are the direct costs of ASB to the public purse in London. Including the direct costs to private individuals, companies and organisations would increase this significantly. The additional emotional costs of lives restricted by fear and worry would be even higher. This is because ASB more broadly impacts on the living standards and costs of London residents, workers and visitors. It breaks down the social ties and trust which underpin sustainable and prospering communities. Faced with ASB, people feel less comfortable undertaking their day-to-day activities, feel the need to spend money on protecting themselves and their property, and worry about the impact on friends and families.
We have not focused on these broader costs to non-public sector bodies and the immediate wider social impact of ASB in this examination. Instead, we have considered the impact to the public purse of a
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19 Economic and social costs of crime in London – Based on data from Home Office (2005). The economic and social costs of crime against individuals and households and 2008/09 crime data from the Home Office RDS website failure to address ASB effectively. The main result of this failure is that those who show this behaviour during their youth then descend into more serious criminal activity over a prolonged period of time and this has associated (and escalating) costs. We have also examined the potential benefits to other areas of public expenditure in the short term in more successfully addressing ASB by means of earlier interventions.
**ASB and youth offending – the wider costs**
The dividing line between ASB and youth offending is not precisely defined, but there is a substantial body of evidence that demonstrates the links. Most young people exhibiting ASB do so infrequently and without progressing into recognised criminal activity or becoming subject to the criminal justice system. At the same time, it is reasonable to assume that a clear majority of recognised youth offenders have, at some point, exhibited ASB. Therefore for the purposes of this examination, the youth offending population has been regarded as a subset of the broader population of 180,000 young Londoners exhibiting ASB.
The transition to youth offending happens when young people move on to more serious offences involving violence and property crimes. The annual reoffending rate of juveniles is 40% on average, but over 80% for those who have committed more than 10 crimes; who also commit more serious and costly crimes. Therefore, “nipping ASB in the bud” can have a big pay back.
We have focused on the activity of Youth Offending Teams (YOTS) across the capital as a means of assessing the broader costs associated with youth offending. YOTS are designed to bring together the services of police, health, local authorities and others to support their work in reducing youth re-offending and escalation of criminal careers. Currently, some 15,000 young Londoners are on the books of YOTs – in short, approximately 8% of the current population of young people exhibiting ASB can also be considered to be young offenders.
The budgets of YOTS and the cost of youth custody are a direct cost associated with the management of this population of young offenders. The YJB spends £74mn in London on both custody and YOTS. In addition, there are other costs associated with the operation of YOTS and the management of the court service. We estimate that total annual expenditure on dealing with youth offending in the capital is in the order of £150mn.
In total, therefore, our examination of youth ASB is concerned with direct public sector costs annually of approximately £650mn. This is made up of the £500mn of direct costs we estimated from the national costs and some £150mn of YJB, court and others costs.
**Longer term costs**
Our exploration of this theme has also concentrated on other costs that are, in part, attributable to ASB amongst young people. Specifically, we have looked at the links between ASB and truancy, and the impact of ASB on future levels of criminality and the criminal justice system. Our reason for examining these areas is that more effective action in tackling ASB earlier should help to avoid these future, higher levels of expenditure.
There is a substantial body of evidence demonstrating the links between school truancy and youth ASB. Some 11,400 young Londoners are persistent truants with an estimated lifetime cost of £500mn in total. Interestingly, the research cited notes that the impacts on long-term prospects from regular truancy can exceed that for young people who are excluded, as the persistent truants do not receive support to make up the ground that they have lost, whereas excluded young people often get specialised, focused educational provision.
The great majority of young people grow out of ASB, but for a minority it can be the precursor to more serious problems. There is strong evidence linking ASB – especially early on-set (that is children younger than ten) – to future more serious offending which can lead to greater damage to both people
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20 Report of Policy Action Team on ASB – Social Exclusion Unit
21 New Philanthropy Capital (2007) Misspent youth: the costs of truancy and exclusion and property and to further public sector cost. Descent into extensive offending can reduce the life-long opportunities for the young people involved in crime: they can lose out on educational opportunities; find it harder to find employment; damage their personal and familial relationships; and risk spending time in prison.
The more significant public cost therefore arises from the failure of public services to prevent youth ASB from developing into more serious offending. Based on separate research that we have undertaken, we believe that the costs of associated with a “life time” of crime would on average easily run into many hundreds of thousands of pounds per individual.
Unpublished PwC research for the Ministry of Justice suggests that a very large majority of male criminals now in custody started offending at a young age. There are currently around 18,000 adult Londoners in prison and the costs associated with this level of imprisonment amount to approximately £900mn per year. This number highlights the inability of the present systems dealing with ASB and youth offending to prevent London’s youth from progressing to more serious criminal activity.
It is apparent therefore that tackling ASB amongst young people more effectively should lead to significant reductions in the £500mn lifetime costs associated with truancy and the £900mn annual costs associated with the management of London’s imprisoned offenders.
**The current system and its flaws**
The current systems for dealing with ASB and its consequences are complex; as are those for preventing these activities from escalating to more serious criminal activity.
There are multiple, overlapping providers and commissioners of services to address ASB. The activities they carry out fall uncomfortably along the line between services that are under the jurisdiction of the police – with a remit to ensure public safety and to tackle crime -- and under the control of local authorities who have a remit to ensure the liveability of their areas and community cohesion. National agencies such as the Youth Justice Board also play an important role in funding and monitoring YOTs as well as purchasing places in secure units for the most serious child offenders. A lack of clear coordination at the local level leads to patchy provision depending on the priorities of assorted national and local bodies. These objectives can often clash, especially where there are very specific targets that the various bodies are looking to meet. A target to increase the number of incidents which are pursued by the police may well run contrary to a local authority’s desire to limit the number of local young people who are being criminalised at an early age.
The diagram below shows the range of agencies involved in service provision for this group, from preventative work with families to rehabilitation work with older offenders who have entered the adult justice system. Under the current arrangements, there are essentially two types of intervention which are undertaken:
- **Personalised interventions** which focus on specific individuals, families or specific small groups of individuals. These can have a significant impact but are costly as resources can only be focussed on a relatively small number of people at a time. Therefore, the interventions are often focussed on those who already have a significant history of ASB and offending. While these people are more likely to commit greater numbers of future crimes, personalised interventions can do little to prevent people from entering a criminal career. Rather, they minimise the impact once one has begun;
- **Social interventions** which are applied to entire groups or areas: for example, they may involve working with local residents or students in specific schools. Such interventions can lower the overall impact of ASB and youth offending, but it is harder to measure a specific impact from them as the individuals involved are deterred from committing crimes in the first place.
In addition to ASB itself, addressing the wider fall out from truancy and school exclusion is not widely dealt with in a coordinated manner across education, criminal justice and social services, despite some specific individual projects that address the issue.
**A proposed new system and why this is better**
There is certainly greater scope for cooperation across the public sector in providing services that contribute to the prevention of ASB and youth offending by working with young people at risk – and their communities – and to reducing re-offending by working with young offenders. The national policy debate is moving in the direction of incentivising locally-led preventative action with young offenders. This proposition is a key part of the Ministry of Justice’s (MoJ) Transforming Justice programme. Local authorities need to be ready to offer help in those areas where they are best able to support other public sector activities, but also need to ensure that the activities of other public bodies support the work of local authorities.
As we have noted earlier, London’s local authorities end up picking up many of the direct costs and an even greater proportion of the indirect costs of this social problem. At the same time they are the democratic bodies closest to their communities and with the best community knowledge. We therefore propose that councils should have a much stronger role as a unifying organisational link between the other bodies at work in this system and that they be strongly incentivised to intervene much earlier in the cycle of a young person's criminality.
The diagram below highlights the areas where we believe there is a strong case for amending the system.
This proposed new model has the following key features:
**Locally-led intensive support.** Much of the evidence and cost analyses point towards the benefits of earlier interventions to prevent anti-social and criminal behaviour. Local authorities have many of the required tools and information to be in the lead for early interventions but will need to work with other local bodies, such as the health services and schools, to identify and work with families and individuals at risk. This may require co-operation at a pan-London level to share best practice and tackle common issues such as data sharing.
**Aligning the evidence and resources available** can enable an appropriate intervention at a time when it is more appropriate and when families are vulnerable, such as when an older sibling has got into trouble with the police and may be about to serve time in prison.
**Children at risk.** Local authorities need to strengthen their work to identify children showing early signs of ASB and criminal behaviour and ensure that interventions are being joined-up across relevant public bodies. Persistent truancy and the development of behavioural problems and examples of these signs. Steps can then be taken to provide the appropriate support to ensure that their underlying issues are addressed and that the young person does not start to offend and further damage their future potential.
**Control over youth ASB agencies.** We suggest that local authorities should take control of YOTs and ensure that they are fully integrated with the local provision for young people, including education and alcohol/drug treatment teams. Central bodies such as YJB, Home Office and DCFS could give local authorities greater latitude to respond to local issues by providing a series of funding pots and match funding which allow authorities greater flexibility to match resources to the needs and objectives that reflect local circumstances and resonate most with local communities. Offender re-integration. Local authorities can provide an important service to prevent re-offending by older offenders – including those coming back from youth offending sentences – by ensuring that there is a re-integration service available for those that have been serving time in prison. Most offenders will receive minimal re-location support and limited probation time as they are not judged to be at high risk. However, they have a high likelihood to re-offend, especially if they are not able to establish themselves in housing and employment. Working with the prison service and Youth Justice Board, we believe local authorities should take a lead to ensure that these individuals are met by a support worker and helped to obtain the housing, health, educational and other support they need to allow them the chance to become productive citizens. This would have a beneficial impact for the community both in terms of reducing the individual’s likelihood to re-offend (if they do re-offend, it is likely to occur near to where they live) but also by ensuring that the young people and others in their family and community networks are given the right signals about the ability of people to pull away from a criminal career.
The benefits and costs of a reform package This reform proposition focuses on London Boroughs playing a new, or more developed, role in respect of young people exhibiting ASB in their local areas. It suggests that local authorities play a coordinating, end-to-end role, interjecting at key points in the life of young people to help prevent them from developing from ASB to more serious offending behaviour. The focus on prevention will have long term benefits for the public purse by reducing the need for expensive spending on criminal justice interventions. There are numerous examples of local authorities playing this kind of role (Tower Hamlets and Lambeth for example in respect of offender reintegration), but they suffer from short term funding and unclear governance arrangements.
The Government has set itself a target of reducing re-offending (both adult and youth) by 10% over the current spending review period. We believe our package of proposed reforms will help significantly towards the achievement of that target in the future. We further believe that our proposals could reduce youth ASB by a similar amount.
On the assumption that an average criminal “career” spans about ten years, the application of these reforms could therefore also result in reduced direct expenditure associated with youth ASB and offending of approximately £65m of the estimated £650m annual costs. The majority of the savings would flow from the benefits of earlier intervention that would reduce the immediate incidence of ASB and the consequential costs associated with youth offending. There are also savings within this estimated total to be secured in the administration of the system through the greater clarity and efficiency in the flow and administration of funds, and in the activities of the various bodies. The new model depends on a ‘justice reinvestment’ proposition, that opens up a pool of funding for local authorities and their partners to invest in preventative work on the basis that this will reduce overall spending on palliative interventions across a number of financial years.
We suggest that a ‘kick start’ to a more flexible form of funding that emphasises social investment could be delivered by decentralising a large part of the YJB, DCFS, OCJR and Home Office funding for YOTs to local authorities, removing the costs of multiple administrative functions at the centre. This would be in the region £20m per year.
Changing the funding regime in the current climate will be difficult, but it this sort of ‘justice reinvestment’ idea has been discussed by academics and lobby groups in the sector and is starting to gain traction with Government. Justice Reinvestment makes the case for reallocating funding for expensive correctional services interventions (it costs £250k per year to keep a young person in a secure children’s home) to preventative services over a reasonable time period (the three years of a spending review).
It would therefore be a propitious time for London Councils to engage in this debate because it features strongly in two major reform programmes:
- The Transforming Justice programme, being run by the Ministry of Justice which includes a programme to ‘invest in prevention to reduce youth crime’, including by exploring better ways of ‘incentivising’ local authorities to focus on this area; and
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22 Reinventing Justice, Esmee Fairburn Foundation 2003 • The review of the Youth Justice Board which includes exploration of the feasibility of devolving budgets for custodial services to local government.
Both projects are at the stage of developing strategic business cases which may well help London Councils develop and inform new thinking in this area by providing a local perspective on the topic.
**Conclusion**
There is currently an estimated £650mn spent annually by London public services on dealing with ASB and consequential youth offending. We estimate that our proposed reforms, focused on earlier intervention, simpler administration and an enhanced role for local authorities to “fill the gaps” in current arrangements should reduce overall costs by as much as 10%. They can also deliver better outcomes in the form of reduced occurrence of ASB and lower reoffending rates. This will require some significant investment on the part of London’s public services.
The benefits, however, go much broader than the direct costs highlighted above. By reducing ASB and youth offending, London’s public services will also be tackling the costs associated with high levels of truancy (£500mn lifetime costs) and with early offenders descending into a lifetime of crime (£900mn per annum on Londoners in prison). These are important objectives to pursue. Tackling obstacles to employment
Introduction
London is paradoxically both the engine room of the United Kingdom economy and one of the areas of the country most affected by worklessness. There are around 1.6mn workless Londoners, a figure which not only reflects the recent economic downturn, but also illustrates a longer term challenge that has not been addressed in the period between 1997 and 2007 when the economy was growing strongly.
This service theme has its own distinguishing characteristics and was chosen for deeper analysis because:
- It is an area with a relatively large commitment of direct public expenditure covering a range of COFOG headings
- Many national, NDPB and local agencies are involved as providers and commissioners
- At face value, it has the potential to facilitate wider benefits beyond savings in expenditure – for example, increasing taxation revenues, or even the social benefits inherent in moving people into employment.
What is the problem and why is this a particular issue for London?
London’s economic activity rate is 75.8% compared to an England average of 79.5%, and its unemployment rate is 8.9% compared to 7.9% for England. The economically active gap between London and the English average therefore represents 189,000 additional individuals who are not in work or who are looking for work in London. London’s unemployment gap – the difference between London’s unemployment rate and the English unemployment rate – equates to an additional 209,000 people out of work; roughly equivalent to the population of the London Borough of Merton. Even adjusting for the high proportion of students within London, this higher local level of unemployment in London may seem peculiar, given the strength of London’s economy relative to other areas of the UK. Available evidence suggests that the problem of worklessness in the capital is driven by:
- A higher prevalence of individuals at risk of worklessness relative to the UK average
- A claimant population who in many cases are claiming for longer than elsewhere in the UK
- The effects of migration and competition for jobs
- The nature of London’s labour market.
We expand upon each of these characteristics in more detail below.
Higher prevalence of individuals at greater risk of worklessness
There is widespread data highlighting the demographic trends behind worklessness in the UK, and a number of these highlight particular problems facing Londoners, 30% of whom face two or more key
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23 ONS London Labour Market Statistics, August 2009 barriers to work, against a UK average of 23%. Unemployment rates are higher amongst minority ethnic groups across the UK as a whole, and Black/Minority Ethnic unemployment levels in London are 41% compared to 38% for the rest of the UK (ONS, 2009). Patterns of worklessness are also closely correlated with measures of poverty and exclusion, where London has a disproportionate share compared to the English average. Almost 17% of London’s homes are local authority-owned, compared to 13.1% in England and nearly half of all households living in social rented accommodation were workless (47%) compared with 21% for households living in privately rented property, and 8 per cent for those living in owner-occupied accommodation.
**Longer term claimants with poorer employment prospects**
Around 3,000 Londoners have been claiming an unemployment benefit for more than six months, which is broadly in line with the England average, but the number claiming benefits for more than a year is greater in London than the national average. A total of 6.1% of those of working age claim Incapacity Benefit (IB), below the national average of 7.3%, but 55% of London’s claimants have inadequate National Insurance contributions to claim contributory IB compared to 34% outside London, suggesting a worse work history in the capital (HMT, 2007). London IB claimants have poorer employment prospects than elsewhere with only 35% of those moving off IB finding employment of over 16hrs a week compared to 63% nationally (ibid).
**Migration, competition and London’s labour market**
Although the number of jobs in London increased by 700,000 in the decade between 1997 and 2007, the overall employment rate remained largely unchanged due to increases in the working age population over the same period. Domestic and international migration brings a constant stream of new workers into the city and increases competition, compounded by the fact that the demand pattern within London’s labour market has changed significantly in recent decades. Between 1981 and 2001 low skilled jobs fell as a proportion of London jobs from 12% to 10% (HMT, 2007).
On the supply side, London has an unbalanced skills structure which ‘sags’ in the middle, with more NVQ4+ individuals, but with fewer NVQ1-3/trade apprenticeships than the England average. There is a higher proportion of skilled labour seeking employment than elsewhere in England, which can exclude those with fewer qualifications and less experience.
**Building up the wider costs of worklessness in London**
An assessment of the total costs associated with worklessness is dependent upon the scope of benefits, credits, employment support and associated administrative costs that are included in any calculation. Based on our analysis, we estimate the figure for London to be at least £5bn per year, representing around 7% of the total spent on public services in the capital.
Expenditure on worklessness can be allocated between ‘direct’ and ‘indirect’ costs. The direct costs are those unemployment benefit payments directly attributable to worklessness, including Income Support (‘IS’), Jobseekers’ Allowance (‘JSA’), and Incapacity Benefit (‘IB’, replaced by the introduction of the Employment Support Allowance in 2008).
The total expenditure within London on those working age benefits was £2.645bn in 2007/08 set out in the table below.
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24 Labour Force Survey, Spring 2005, quoted in HMT 2007 25 2001 Census from Neighbourhood Statistics 26 ONS, Labour Market Trends, November 2004 27 Employment opportunity for all: tackling worklessness in London – HMT 2007 The costs of administering these benefits are not easily available. While these costs are hard to apportion at a regional level, London has 14.3% of the total numbers of IS, IB and JSA customers, and apportionment of the administrative costs of JCP on the same basis would give a figure of £450mn.
Finally, this number is further increased by some £450mn spent on employment policy within London during the same period. Thus the benefit and administration costs combined of direct benefits are in excess of £3.5bn.
We believe that the resulting figure understates the total expenditure on worklessness in London, since it ignores those working age benefits for which the worklessness of the claimant is likely to have a major bearing on the claim. Specifically, workless people are typically eligible to claim housing benefit and council tax benefit, and for some, their worklessness is a key factor driving the claim. Total expenditure on these other working age benefits was £4.821bn in 2007/08.
Finally, housing benefit administration costs in London totalled £71.6mn in 2003/04, the last year for which figures could be obtained from public sources.
This adds up to a combined total direct and indirect spend of more than £8bn on benefits, administration and related services, as set out in the diagram below.
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28 DWP Statistical and Accounting Data 29 HMT PESA data 30 http://hansard.millbanksystems.com/written_answers/1996/feb/22/housing-benefit On the basis that not all of the benefit expenditure for housing benefit and council tax benefit can be apportioned to worklessness, we have assumed, conservatively in our view, that it is reasonable to apportion £5bn of these total costs to worklessness.
The current system and its flaws
The current customer journey
In examining the potential for reform to the current system for tackling worklessness, we have applied a process of “customer journey mapping” to better understand the experience of people who are workless. The diagram overleaf illustrates in broad terms some of the strengths (highlighted in green) and weaknesses (highlighted in red) of the customer journey through the existing welfare administration process.
Strengths are that the initial award of benefit is swift and relatively efficient. The award is made nationally and therefore consistently. The system is relatively joined up; for example, claimants only have to prove eligibility for JSA/ESA in order to receive housing benefit and council tax benefit support.
However, there are also a number of weaknesses in the current process. The initial weakness is that, except in cases of large scale redundancy, there is limited preventative support to help people at risk to avoid worklessness. Research suggests that earlier interventions are more successful in supporting people into work(^{31}), yet in the current system significant delays can occur before customers with more complex needs are identified and offered support.
Current approaches to welfare support
Available research also indicates that the different welfare programmes adopted in recent years demonstrate relatively poor performance in London. For example, Work Based Learning for Adults, as measured by the percentage of leavers going into work is much less successful across the board in London than nationally.(^{32}) The correlation between national performance by ethnic minority groups and London’s performance, suggests that it is London’s higher proportion of these groups which makes a key difference in London’s underperformance. The causality is not with ethnicity but that ethnicity further
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(^{31}) DWP Contracting support for the hard to help http://www.dwp.gov.uk/docs/wr-chapter-3.pdf
(^{32}) http://research.dwp.gov.uk/asd/asd1/wbla/jul2006/wbla_jul06_table1.pdf correlates with underpinning factors of unemployment such as skills levels, language capacity, networks and some social choices (for example, female employment outside the home).
There is, more generally, a paucity of data which could be used to analyse the return on investment of these programmes, which in itself is a negative feature of the status quo.
One available source document, DWP research report 525, highlights that the Pathways programme had been ‘rather limited’ in impact. For example, the additional impact of this programme on employment chances, when compared to a control group was an increase of only 7%. This is compared against an additional cost of around £300 per claim.33
Key themes in recent thinking on welfare reform
More generally, the failings of the current welfare system and what can be done about them have been the subject of much recent thinking by both Government and a range of other interested parties. Perhaps most prominently, a report by David Freud34 identified a number of weaknesses in the process for helping individuals into work. Freud highlighted that individuals with multiple characteristics of worklessness were not being sufficiently catered for by the existing ‘New Deal’ client group approach, and emphasised a more personalised approach where public, voluntary and private providers drove up standards through competition.
Recognising the challenge of personalisation, the introduction of the Flexible New Deal was announced in Jan 2008. Alongside this, programmes such as Pathways to Work have sought to support those on Incapacity Benefit into work. In December 2008, DWP published the White Paper Raising expectations and increasing support: reforming welfare for the future.35 This was billed as ‘a decisive step towards a personalised welfare state’. The Treasury has also noted that the challenge of worklessness needs greater input from the local dimension; a recent policy paper stated that ‘Local autonomy is important to allow the flexibility to address area-specific problems’.36
In summary, there is a strong case for considering new ways to tackle worklessness, and this is all the more pressing in London given the scale of the challenge facing the capital. We set out below our proposals for a radical Total Place proposition to reorganise the delivery of welfare support services to London’s most vulnerable job-seekers.
A proposed new system and why this is better
Outline design for a new delivery model in London
We propose a new delivery model anchored in the following design principles:
- **Citizen-centric** – creating a system that builds tailored welfare support around the circumstances of individuals and local labour markets in the capital;
- **Devolutionary where it matters** – devolving responsibilities and resources to individuals and to local government to support a more personalised approach;
- **Centralised where it makes sense** – JCP retains an important role in processing and standard-setting to ensure consistency, fairness and efficiency;
- **Incentives and sanctions to support an early return to work are built into the system** - and aligned to individual and organisational accountability; and
- **The provision of employment advice should be further professionalised and locally organised** - by passing responsibility for performance management of these roles to local government and re-emphasising a case management approach.
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33 http://research.dwp.gov.uk/asd/asd5/rports2007-2008/rep525.pdf 34 http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/freud-report/ 35 http://www.dwp.gov.uk/docs/fullversion.pdf 36 HM Treasury, Employment opportunity for all – tackling worklessness in London March 2007 Our suggested approach proposes a seismic shift in central and local roles and responsibilities for worklessness in London, alongside a ‘staged’ approach to supporting workless people into work. The diagram provides an overview of this proposition, whilst the following sections set out how this might work in practice.
In this model, the individual continues to be given an initial assessment and award of benefit through the existing Jobcentre Plus initial award process. An initial assessment of their support need is made in relation to a number of criteria, including:
- The individual’s work history and the extent to which they have maintained a steady track record of previous employment
- The individual’s current skills levels and any aspirations they have for further training
- Their own view of their confidence and capability to find work in the future
From the assessment individuals would be grouped into those likely to require limited personal support to find a job, and those who will require more hands-on, personalised support. In the model we propose, the former continue to be managed by JCP.
The latter would be referred to a personal advisor, employed and managed (whether directly or through commissioning) by the local authority. They are responsible for helping the individual decide how best to use their own ‘personal budget’ – the pot of allocated expenditure which traditionally would have been partially devolved to them directly, and partially spent on their behalf.
Local government would be responsible for supporting the development of a provider market, from which the individual is encouraged to commission welfare and related support services. This could enable more personalised, individually relevant support which can be better linked to an individual’s needs – for example, childcare and rehabilitation. The underpinning rationale is that the local authority is well-placed to help individuals with complex needs both navigate through the myriad agencies that could help them, and advise on how they can best use the resources locally set aside for their use – including health and social care budgets for some individuals. JCP would maintain responsibility for the bulk of individuals who are well-placed to find work relatively easily with limited support. JCP would also take on a role as standard setter and enforcer, including applying sanctions to individuals not using the opportunity of personalised budgets appropriately.
The model recognises the local authority’s unique strengths, in having reach on the ground to other public, private and voluntary bodies and the holistic responsibility for an area which enables it to act as the convenor of services around an individual. It follows the hypothesis that support for well being and support into employment are complementary, rather than distinct, activities. It also reflects a wider range of learning and skills support outside of the traditional, course-led offer which could be better utilised. For example, work experience, job shadowing and peer support. For London in particular, it could provide a more holistic approach to supporting individuals with multiple and complex needs.
The diagram below illustrates the range of these services across the key dimensions of health and well being, skills and experience, and finding and staying in work.
**Key roles and responsibilities in the new framework**
**Workless individuals**
Workless individuals have a new responsibility for their own personal budget, to be used to purchase welfare and other support services to suit their needs. The right to resources comes with a responsibility to deliver an ‘into work plan’ agreed with their advisor, with a ‘ladder of sanctions’ approach; meaning they progressively sacrifice resource control if they fail to meet their commitments.
**Local government**
Local government acts as the strategic commissioner and market manager for the area, taking advantage of local knowledge of the labour market. It also acts as the convenor of a range of local services and galvanise public, private and voluntary sector interventions towards preventing and reducing worklessness, such as using local area agreements and similar mechanisms.
**Jobcentre Plus**
Jobcentre Plus continues to provide the initial assessment and payment function to all claimants – efficiently and consistently – on a national basis. JCP is able to share evidence about ‘what works’ in welfare interventions to support local authority market management activity and become a knowledge broker, rather than delivery vehicle for these services. It sets ‘kite mark’ standards for welfare providers. and the personal advisor role to support minimum quality standards; the role here would be akin to establishing a set of ‘professional standards’ to which providers and personal advisors should adhere, based on JCP’s existing experience and understanding of what is most effective in the delivery of welfare services and welfare advisory support.
There is also potential for JCP to act as an ombudsman in the event that local providers fail to meet their obligations – providing a ‘voice’ option in addition to the market effect of individuals voting with their feet.
Managing the risks associated with personal budgets
The potential advantages of personalised budgets have been demonstrated in the course of their increasing adoption within health and social care. Nonetheless, personal budget approaches carry risks that individuals make more or less effective decisions about resource allocation. One way to manage this would be to build risk mitigation into the new framework, and the following are set out below as illustrations of potential approaches that could be taken:
Potential approach: ‘Ladder of sanctions’
Currently, housing and council tax benefits are generally paid on the individual’s behalf, directly to their landlord (which in many cases is a social landlord). The Employee Support Allowance or JSA is paid directly by DWP, to the individual claimant. Any further support – for example, the costs of courses and personal care in the case of individuals with conditions – is spent on the individual’s behalf by various agencies, including Jobcentre Plus, local authorities and the NHS.
We acknowledge that personalisation of some of these benefits is controversial, but in the new model, they are devolved into one ‘pot’ controlled by the individual, empowering them to make decisions on where it is spent. The personal advisor’s role is help them navigate the market, and agree an ‘into work plan’ which will set out different conditions the individual has to meet to continue to have ownership of their funds. Failure to meet these conditions – for example, not attending interviews – would result in the activation of a sliding-scale of control being taken back by the local authority.
Naturally, the proposed model has significant implications for financial control and governance of resources. There are a number of ways this could be managed, which would need to be subject to detailed analysis as part of further development of the model. These could include:
- Retaining responsibility for each element of the ‘pot’ within the individual agencies who devolve the funding;
- Appointing a ‘lead agency’ to take overall responsibility and ownership of the resources on behalf of the key organisations involved; and/or
- Creating a bespoke, arms-length entity with specific responsibilities for the governance of the funding involved, as a way of managing the risks associated with this kind of devolutionary approach.
**A localised approach to commissioning additional employment support**
The Government has recognised the need for more direct forms of labour market support for certain groups of individuals, most recently in its Pre-Budget Report announcement of guaranteed work or training for 18-24 year-olds who are unemployed for more than six months.
We propose that this proposal could be expanded to support wider groups of workless individuals back into work, potentially through investment in local social enterprise drawing on a blend of public and third sector expertise. Given their existing economic development responsibilities, local authorities are well-placed to use local partnerships to establish such social enterprises, aimed at raising skills and experience among target groups and building social capital in deprived areas. This option might be considered for those individuals for whom individual support interventions have proved ineffective or where the most appropriate skills and experience support that could be given would be experience of a working environment.
We recognise that this has the potential to become a ‘crowded space’ given an existing and vibrant social enterprise market in some areas; we suggest that this type of intervention be focused on those areas where local authorities can use their local leadership role to stimulate support of this nature where it is less well-developed. The return on investment would be through reduced benefit costs as well as the local value generated by the enterprise. Jobs created in this way could be fixed term and aligned directly with local labour market needs, to ensure the flow of individuals back into the private economy.
**The potential financial implications of the proposed model**
Identifying the potential financial implications of this proposed approach is challenging, given the complexities in articulating the full costs of the current system. However, it is possible to develop some outline estimates of the potential savings available, by making a number of assumptions based on the available evidence about the effectiveness of existing programmes that have focused on greater personalisation of welfare support. We summarise below both the results of our analysis and a summary of our approach to undertaking it.
Our approach has been to focus on the potential savings in direct and indirect benefits expenditure that would result from getting more people back into work more quickly than the current system, since these represent the lion’s share of the £5bn costs of worklessness we identified earlier. We have also undertaken a high-level assessment of the potential additional ‘tax take’ on the earnings of those people moved back into work, which would otherwise be lost to the Exchequer.
**Our initial estimates suggest a potential for savings of almost £630mn** on benefits costs. The savings assumptions are set out in the table below.
| Savings area | Savings assumptions (maximised) (£mn) | |-----------------------|---------------------------------------| | Reductions in JSA payments | 60.7 | | Reductions in IS payments | 148.1 | | Reductions in IB payments | 52.3 | As soon as workless individuals are back in work, wider benefits accrue. For example, we estimate that the increased ‘tax take’ from getting Londoners back into work could be around £440mn, taking the wider picture of savings and benefits combined to more than £1bn.
Our savings assessment is underpinned by many assumptions. The key ones include that:
- The proposed model succeeds in closing the gap in unemployment levels between London and the UK average for the entire ‘excess unemployed’ population
- The ‘excess unemployed’ reduce the average time they spend claiming JSA by 35%
- The savings generated in reduced IS, IB and HB payments are half of those generated by reductions in JSA payments (reflecting the fact that IS/IB claimants have been historically harder to move back into employment than those claiming JSA, and that there will be a commensurate saving in HB linked to claimants returning to work)
- An additional ‘tax take’ is generated by 50% of the excess unemployed entering the workforce, based on an assumed average salary of £22,861 (equivalent to the bottom quartile for London as a whole); and
- The administrative costs of the proposed model are broadly equivalent to the existing system and therefore cost-neutral.
**Conclusion**
Clearly, some of these assumptions are optimistic and further financial analysis will be required in order to better develop a more robust assessment of the costs and benefits of the approach we propose. Nonetheless, the scale of the challenge facing London in relation to worklessness, and the potential financial and other benefits of an improved approach to tackling this challenge, suggest an urgent need to consider radical alternatives to the current system.
We advocate more detailed work to develop a model for testing, based on the principles and outline design that we have set out here, which puts workless individuals at the centre of a more personalised approach to welfare support, supported by local authorities as the agencies best-placed to co-ordinate the support services required to help people back into sustainable employment.
Our headline conclusions at this stage are that reforms along the lines that we have proposed could result in savings of almost £630mn of the current £5bn spent annually on addressing worklessness in London. In addition, there are the broader benefits of a further £440mn from increased tax revenues as a result of getting Londoners back into work. Overarching analysis and making the case for change
Introduction
The deeper analysis around the three themes was not undertaken solely to look at how services could be improved and/or costs reduced in these areas; an equally important aim was to identify opportunities for savings, service change or organisational realignment that could have application across public services and public spending more generally in London.
The three areas that we have examined in detail account for an estimated £10.65bn of expenditure: that is, almost 14.5% of total annual public expenditure in the capital. We have not even reviewed the totality of the systems of provision in each of these, yet our analysis already suggests that there is the potential for efficiency gains to be secured in the region of 15% of current expenditure across the three themes as summarised in the table below:
| Theme | Current estimated cost £mn | Potential saving £mn | Savings as a percentage of current costs | |------------------------|----------------------------|----------------------|------------------------------------------| | Chronic care | 5,000 | 880 | 17.6 | | Young people with ASB | 650 | 65 | 10.0 | | Worklessness | 5,000 | 629 | 12.5 | | Total | 10,650 | 1,574 | 14.8 |
The potential for improvement and efficiency is based on addressing a number of flaws that characterise current arrangements for delivering public services and outlining solutions to address them. There is a high degree of overlap in the analysis of the problems and generation of solutions between the three service areas we have explored. But more importantly, we believe that both the flaws and potential remedies identified are applicable more generally to public services across London, and therefore that the total potential financial and service improvement prize is considerably greater than that outlined in the above table. This range of reforms with more general applicability is summarised below.
Policy realignment around earlier intervention
The analysis of all three topics suggests that a significant weakness in existing arrangements is that insufficient attention is given to early interventions that avoid greater and more expensive problems occurring later. The consequence of this is less effective, and more costly, reactive responses by London’s public services.
The current arrangements for the management of diabetes illustrate this clearly. Despite steps in the right direction, resources to care for those with the more severe effects of diabetes remain disproportionately focused on the provision of episodic care within acute settings. The development of a more preventative approach, alongside other changes, has the potential to deliver more effective forms of treatment that are better aligned with the wishes of most people with diabetes and secure significant efficiency gains. This principle extends more widely across public services in London, for example, from health to criminal justice, from worklessness to homelessness. In particular, we believe that a greater focus on earlier intervention and prevention is at the core of helping to address the particular demands placed on local public services by what are frequently termed “the most chaotic families”.
Realising the full potential of the benefits from early intervention presents a significant challenge to the way public sector organisations are currently configured – our example of diabetes and also our recommendations concerning ASB both highlight the need for a considerable shift in resource to enable investment in preventative and early intervention measures.
There is an important leadership role for local government in London to play in pursuing this case for change, if only because London Boroughs stand to benefit disproportionately from the changes that we are advocating. In our example of the benefits of early intervention and prevention concerning the systems for treating diabetes, the gains to local government (£82m per annum) are potentially in the region of 23% of current expenditure compared to benefits of approximately 10% to the NHS (£22m) against current levels of spend.
This raises a broader and substantive challenge to public services and to Whitehall in terms of the design and delivery of efficiency programmes. The scale of the fiscal crisis facing public services is likely to engender another period of scrutiny of expenditure and now gives an opportunity – even an imperative – to put in place the necessary policy realignment across existing organisational boundaries to effect radical change based upon principles of early intervention and prevention.
Previous efficiency programmes driven from Whitehall, for example Gershon, have largely tended to reflect organisational boundaries both within central government and at the more local level. By taking a whole systems approach to complex challenges, our analysis suggests that the next wave of projects that secure substantial efficiencies within local government will in part be dependent upon reform within other parts of the public sector. Without that commitment to change, local authorities will increasingly find it difficult to secure their share of the efficiency gain in their position at the end of the “supply chain”.
Overall, our analysis indicates that, when planned correctly, almost everyone can benefit in a system built on earlier and more effective intervention.
**Self direction/self service by customers and citizens**
Our analysis suggests that another key and common strand of the reform that underpins greater efficiency is more self-direction or self-service by customers. This is not a new theme - “personalisation” has been at the heart of changes in the social care system for some time now but applicability beyond that is still relatively limited. In a separate study that we undertook in 2008, we estimated that the amount of current expenditure that met one of the four “personalisation criteria” of individual control; individual influence; community control; and community influence; amounted to only about 6% of that local authority’s budget. However, there was the potential for greater personalisation of services to apply in up to 50% of the local budget, so there is much more to play for here.
The revised models for service delivery that are explored in this paper are built upon a premise of greater self direction by the citizen/customer. Not only is this compatible with ideas of greater choice in public services; it is also consistent with the view that giving power to patients/customers/citizens to have a hand in shaping the services delivered to them is a social good in its own right. Critically, this move does not have to cost more. Indeed, we argue that it will cost less in most cases providing that the public sector agencies work hard to cut back that element of service provision that was built around the older service model. Our models are predicated on efficiency gains being secured for example through the transfer of funds to individuals in the form of a personal budget to assist them in seeking and securing work.
Self direction/self service is a theme that resonates across much of the public service beyond the three areas that we have examined. It has a role to play in education, cultural provision, housing and some elements of the criminal justice system. The range of potential areas for further investigation and analysis is significant – as a relatively small example, the option to give parents the budgets to spend on gifted and talented children as opposed to supporting provision through schools. The extension of personalisation to secure these financial and other benefits again requires significant policy realignment across public services, including within Whitehall. Again, we believe that local government has a clear leadership role to play here drawing upon its experience to date of extending personalisation in the area of social care.
**The importance of effective case management**
Our analysis has shown that, in some areas, current arrangements for service delivery are overly complex because of the involvement of multiple public sector bodies with occasionally overlapping roles and functions; sometimes contradictory objectives and targets; and at times inappropriate arrangements for the tasks in hand. We have resisted the obvious temptation to suggest a reduction the number of agencies involved in an overly-simplistic redrawing of roles and responsibilities as this often tends to recreate problems elsewhere within the system. Instead, we have identified three types of reform that help to underpin our analysis of the potential for savings within the three areas that we have studied but that also, we believe, have wider applicability across public service provision in London.
In our analysis of the whole system approach to young people who behave anti-socially, we highlight the complexity of the existing service delivery landscape. It has multiple agencies responsible for a variety of fragmented interventions designed to ‘nip’ anti-social behaviour and low-level criminal activity ‘in the bud’, and limited co-ordination of the sanctions and support for individual offenders and their families. We articulate a new approach to the management of anti-social behaviour amongst young people that places at its centre an integrated case management approach led by Youth Offending Teams under the control of local authorities. This development of a case management approach is the first of the three areas of reform that we have identified.
By case management, we mean more flexible, end-to-end management and organisation of the public service support that an individual needs, overseen by a key worker, case officer or similar. While this approach has been rolled out across a number of individual services, with mixed success, there have been fewer attempts to develop a single case worker role to co-ordinate and shape the delivery of multiple public services around the needs of individuals or even households. This is an important theme for the future: earlier intervention requires more intelligent predictive strategies to avoid later costs. Self direction/self service necessitates rounded and appropriate help for individuals or households seeking to navigate their way around the system. And more integrated approaches to service delivery by multiple public sector agencies require someone to act as the integrator.
All these needs point towards a better system of case management for individual citizens, especially around key transition events in their lives. This need becomes even sharper in the case of households who have multiple needs and who access services from many organisations. There has been considerable focus recently on the part of a number of local authorities, including some London Boroughs, on the needs and demands of high service users – such as the “top 100 families” in an area. These examinations have highlighted the very considerable requirements that relatively small numbers of households place on public services through their complex needs and frequent interactions with multiple providers. Our advocacy of effective and integrated case management should be an integral part of emergent local strategies both to deliver more effective solutions to these individuals and families and to secure substantial efficiency gains for the public purse.
We do not underestimate the scale of the challenge presented by this reform. The sorts of changes outlined above, and the more detailed propositions set out in relation to each of the key topics for this study, will require a new breed of public service professional to deliver them. Historically – and for sound reasons – public service professionals have been anchored in specific institutions and professional disciplines – and accountable upwards for performance to those same institutions. The service delivery models developed in our topic analyses suggest the need for more flexible public service workers, who are able to convene interventions by multiple public service organisations, engage proactively and early with individual citizens, and who are encouraged to feel more directly accountable outwards to the individuals they serve.
Once again, local authorities are ideally placed to take the lead here. Their existing construction as multi-purpose organisations with highly diverse workforces means that they have the broad outlook and role to take the lead in championing new models of public service workers. Organisational complexity and the delivery of local services that are place-appropriate
This paper highlights that the current systems for dealing with young people who behave anti-socially and for managing chronic conditions are both characterised by the involvement of a large number of public sector bodies (nine for ASB and eight for chronic care) and a lack of clear co-ordination between them. Indeed, on far too many occasions, the objectives and targets of one public body can clash with those of another – an oft cited example is the requirement for hospitals to hold patients longer than medically required as they await social care provision to be available in their homes and/or for move-on accommodation to become free.
These areas are not the exception. The multiplicity of organisations that provide services does not seem in general to have a strong logic: as we highlight in the earlier text, the relatively low spending field of “economy” has 60 spending organisations, whereas in education, with three times the spend there are only 21 spending bodies.
As we have noted above, we have resisted the temptation to call for a widespread dismantlement of existing public sector structures. There is a case to be made for that and it has been rehearsed by others. But widespread structural change can be expensive and disruptive, and is no guarantee in itself that services improve and that better outcomes are achieved. Notwithstanding that reservation, our analysis suggests that greater simplicity, with the added potential benefits of enhanced service delivery and better value for money can be delivered through some reallocation of responsibilities between public sector agencies within London. We further suggest that London Boroughs are ideally placed to assume these responsibilities.
For example, our analysis of current arrangements for tackling anti-social behaviour amongst young people emphasises the importance of an enhanced role for local authorities to ensure that Youth Offending Teams are deployed more effectively. We believe London Boroughs are best-placed to assume these greater responsibilities because they:
- Are the public sector bodies that are typically closest to their communities and with the best community knowledge
- Often incur significant additional costs at the end of the service delivery chain as a result of failed (or absent) interventions earlier in the system. In extending their role, there is a greater motivation for them to secure greater efficiency overall for the public purse.
In each case, our proposals therefore advocate greater authority for local councils who, we propose, should take responsibility for a greater proportion of the existing systems. Our analysis further suggests that the three areas we have examined in detail are unlikely to represent the sum total of the potential for efficiencies to be secured through the transfer of responsibilities to local authorities – witness our findings concerning the number of organisations associated with economic development. This in turn may call into question the viability of a number of agencies and bodies – as we say, this was not the starting point for our investigation but it is conceivable that a broader extension of this analysis across other areas of public expenditure in London will identify this as an appropriate course of action.
Organisational complexity and the gaps in provision
Our analysis has also identified that, in some cases, there are gaps in current public sector provision where appropriate intervention can secure better outcomes and greater efficiency. For example, at present there is insufficient attention given by public service providers to support young people in the transition to secondary education and to those youngsters who are excluded from formal education and who become associated with anti-social behaviour.
We have argued that London Boroughs are ideally placed to fill this current void for the range of reasons set out above. The extent to which this analysis and remedy can be repeated across other areas of public service provision is at present unclear, but it is reasonable to assume there are other areas of complex service delivery and/or community needs where “gaps” exist at present and consequently individuals’ problems are not addressed effectively and additional costs are incurred later by a range of public service organisations. Extrapolation of findings and potential savings
London Councils chose three important themes for us to explore in this paper – and within these, we have postulated savings that combine at more than £1.5bn each year. For the most part, these are the direct costs associated with those areas. We have identified still broader benefits in terms of enhanced tax revenues through effectively tackling worklessness and reduced future costs to society at large through earlier and more effective intervention in addressing anti-social behaviour.
We have highlighted the more general applicability of our reform principles to public expenditure at large within the capital. We therefore believe that the suggested savings of almost 15% that we believe would accrue in the three areas that we have reviewed, would apply equally to the total public expenditure in London of some £73.6bn per annum. In short, through general application of the reform principles we have set out above, we believe that the potential benefits accruing to the public purse in the capital could be as much as £11bn per annum.
Clearly further work is required to give greater certainty to this initial analysis and investment will be required to secure this level of savings, but our examination suggests there is a significant prize to be secured in delivering better services for Londoners at better value for money. Annex: Non-departmental public bodies operating in London
The list of bodies in the table below is based on Cabinet Office’s *Public Bodies 2008* publication. We selected those with a level of spend over £100,000 in that year and with a direct or significant indirect impact on London in that financial year. We have netted off income generated in normal operations (for example admission fees), in coming to a view about yearly operating costs.
| Departmental reporting/responsibility | COFOG category (PwC allocation) | |---------------------------------------|---------------------------------| | **Cabinet Office** | | | 1 Capacitybuilders | Economic affairs | | 2 Commission for the Compact | General public services | | 3 National School of Government | General public services | | **Communities and Local Government** | | | 5 Community Development Foundation | Economic affairs | | 6 English Partnerships | Housing and community amenities | | 7 Firelink | Public order and safety | | 8 Housing Corporation | Housing and community amenities | | 9 Home and Communities Agency | Housing and community amenities | | 10 Independent Housing Ombudsman Ltd | Social protection | | 11 LEASE (The Leasehold Advisory Service) | Social protection | | 12 London Thames Gateway Development Corporation | Social protection | | 13 Rent Service Executive Agency | Housing and community amenities | | 14 Standards Board for England | Social protection | | 15 Valuation Tribunal Service | Housing and community amenities | | **Department for Constitutional Affairs** | | | 16 Legal Services Commission | Social protection | | Departmental reporting/responsibility | COFOG category (PwC allocation) | |--------------------------------------|---------------------------------| | Department for Culture, Media and Sport | | | 17 Arts Council England | Recreation, culture and religion | | 18 Big Lottery Fund | Economic affairs | | 19 British Library | Recreation, culture and religion | | 20 British Museum | Recreation, culture and religion | | 21 Commission for Architecture and the Built Environment | Housing and community amenities | | 22 English Heritage | Recreation, culture and religion | | 23 Football Licensing Authority | Recreation, culture and religion | | 24 Gambling Commission | Economic affairs | | 25 Geffrye Museum (London) | Recreation, culture and religion | | 26 Horniman Public Museum and Public Park Trust | Recreation, culture and religion | | 27 Horserace Betting Levy Board | Economic affairs | | 28 Imperial War Museum | Recreation, culture and religion | | 29 Museum of London | Recreation, culture and religion | | 30 Museum of Science and Industry | Recreation, culture and religion | | 31 Museums, Libraries and Archives Council | Recreation, culture and religion | | 32 National Gallery | Recreation, culture and religion | | 33 National Heritage Memorial Fund | Recreation, culture and religion | | 34 National Lottery Commission | Recreation, culture and religion | | 35 National Maritime Museum | Recreation, culture and religion | | 36 National Museum of Science and Industry | Recreation, culture and religion | | 37 National Portrait Gallery | Recreation, culture and religion | | 38 Natural History Museum | Recreation, culture and religion | | 39 Olympic Delivery Authority | Recreation, culture and religion | | 40 Olympic Lottery Distributor | Recreation, culture and religion | | 41 Public Lending Right | Recreation, culture and religion | | 42 Sir John Soane’s Museum | Recreation, culture and religion | | 43 Sport England | Recreation, culture and religion | | 44 Tate | Recreation, culture and religion | | 45 UK Film Council | Recreation, culture and religion | | 46 UK Sport | Recreation, culture and religion | | 47 Victoria and Albert Museum | Recreation, culture and religion | | 48 VisitBritain | Economic affairs | | 49 Wallace Collection | Recreation, culture and religion | | Departmental reporting/responsibility | COFOG category (PwC allocation) | |--------------------------------------|---------------------------------| | **Department for Children, Schools and Families** | | | 50 11 Million | Education | | 51 British Educational Communications and Technology Agency | Education | | 52 Children and Family Court Advisory and Support Service | Education | | 53 National College for School Leadership | Education | | 54 Office of Her Majesty's Chief Inspector | Education | | 55 Partnership for Schools | Education | | 56 Qualifications and Curriculum Authority | Education | | 57 School Food Trust | Education | | 58 Teachers Training Agency | Education | | 59 Training and Development Agency for Schools | Education | | **Department for Environment, Food and Rural Affairs** | | | 60 Agricultural and Horticultural Development Board | Economic affairs | | 61 Agricultural Wages Board for England and Wales | Economic affairs | | 62 Agricultural Wages Committees for England | Economic affairs | | 63 British Potato Council | Economic affairs | | 64 Consumer Council for Water | Economic affairs | | 65 Environment Agency | Environmental protection | | 66 Food from Britain | Economic affairs | | 67 Gangmasters Licensing Authority | Economic affairs | | 68 Home Grown Cereals Authority | Economic affairs | | 69 Horticulture Development Council | Economic affairs | | 70 Joint Nature Conservation Committee | Economic affairs | | 72 Marine and Fishery Agency | Economic affairs | | 73 Milk Development Council | Economic affairs | | 74 National Forest Company | Environmental protection | | 75 Natural England | Environmental protection | | 76 Royal Botanic Gardens, Kew | Recreation, culture and religion | | 77 Sea Fish Industry Authority | Economic affairs | | 78 Foods Standard Agency | Economic affairs | | **Department for International Development** | | | 79 Commonwealth Scholarship Commission in the UK | Education | | Departmental reporting/responsibility | COFOG category (PwC allocation) | |--------------------------------------|---------------------------------| | **Department for Transport** | | | 80 British Transport Police Authority| Public order and safety | | 81 Highways Agency | Economic affairs | | 82 Rail Passengers Council | Economic affairs | | 83 Railway Heritage Committee | Economic affairs | | 84 Renewable Fuels Agency | Economic affairs | | 85 Trinity House Lighthouse Service | | | 86 Office of Rail Regulator | Economic affairs | | **Department for Work and Pensions** | | | 87 Health and Safety Commission | Economic affairs | | 88 Health and Safety Executive | Economic affairs | | 89 Jobcentre Plus | Economic affairs | | 90 Independent Living Funds | Social protection | | 91 Personal Accounts Delivery Authority| Social protection | | 92 The Pensions Advisory Service | Economic affairs | | 93 Pensions Agency | Economic affairs | | 94 The Pensions Regulator | Economic affairs | | 95 Working Ventures UK | Economic affairs | | **Department of Health** | | | 96 Alcohol Education and Research Council| Health | | 97 Appointments Commission | Health | | 98 Commission for Patient and Public Involvement in Health | Health | | 99 Commission for Social Care Inspection | Health | | 100 General Social Care Council | Health | | 101 Health Protection Agency | Health | | 102 Healthcare Commission (Commission for Healthcare Audit and Inspection) | Health | | 103 Human Fertilisation and Embryology Authority | Health | | 104 Human Tissue Authority | Health | | 105 Monitor – Independent Regulator of NHS Foundation Trusts | Health | | 106 National Biological Standards Board | Health | | **Department for Business, Enterprise and Regulatory Reform** | | | 107 Advisory, Conciliation and Arbitration Service | Economic affairs | | 108 Competition Commission | Economic affairs | | 109 Competition Service | Economic affairs | | 110 Consumer Council for Postal Services (Postwatch) | Economic affairs | | 111 Gas and Electricity Consumer Council (Energy Watch) | Economic affairs | | Departmental reporting/responsibility | COFOG category (PwC allocation) | |--------------------------------------|---------------------------------| | 112 Hearing Aid Council | Health | | 113 Local Better Regulation Office | Economic affairs | | 114 National Consumer Council x 3 | Economic affairs | | 115 Natural Environment Research Council | Environmental protection | | 116 SITPRO Ltd | Economic affairs | | 118 UK Atomic Energy Authority | Economic affairs |
**Department for Innovation, Universities and Skills**
| Departmental reporting/responsibility | COFOG category (PwC allocation) | |--------------------------------------|---------------------------------| | 118 Arts and Humanities Research Council | Education | | 119 Biotechnology and Biological Sciences Research Council | Economic affairs | | 120 British Hallmarking Council | Economic affairs | | 121 Construction Industry Training Board | Economic affairs | | 122 Design Council | Economic affairs | | 123 Economic and Social Research Council | Education | | 124 Engineering and Physical Sciences Research Council | Economic affairs | | 125 Engineering Construction Industry Training Board | Economic affairs | | 126 Higher Education Funding Council for England | Education | | 127 Investors in People UK | Economic affairs | | 128 Learning and Skills Council | Education | | 129 Medical Research Council | Health | | 130 National Endowment for Science Technology and the Arts | Economic affairs | | 131 Office for Fair Access | Education | | 132 Quality Improvement Agency | Education | | 133 Science and Technology Facilities Council | Education | | 134 Sector Skills Development Agency | Education | | 135 Student Loans Company | Education | | 136 Technology Strategy Board | Economic affairs | | 137 UK CES | Social protection |
**Foreign and Commonwealth Office**
| Departmental reporting/responsibility | COFOG category (PwC allocation) | |--------------------------------------|---------------------------------| | 138 British Council | General public services | | 139 Great Britain – China Centre | General public services | | 140 Marshall Aid Commemoration Commission | Education | | 141 Westminster Foundation for Democracy | General public services |
**Government Equalities Office**
| Departmental reporting/responsibility | COFOG category (PwC allocation) | |--------------------------------------|---------------------------------| | 142 Equality and Human Rights Commission | General public services | | Departmental reporting/responsibility | COFOG category (PwC allocation) | |--------------------------------------|---------------------------------| | **Home Office** | | | 143 Independent Police Complaints Commission | Public order and safety | | 144 Independent Safeguarding Authority | Public order and safety | | 145 National Policing Improvement Agency | Public order and safety | | 146 Office of the Immigration Services Commissioner | Public order and safety | | 147 Security Industry Authority | Public order and safety | | 148 Serious Organised Crime Agency | Public order and safety | | **Ministry of Defence** | | | 149 National Army Museum | Recreation, culture and religion| | 150 Royal Air Force Museum | Recreation, culture and religion| | **Ministry of Justice** | | | 151 Criminal Cases Review Commission | Public order and safety | | 152 Criminal Injuries Compensation Authority | Public order and safety | | 153 Information Commissioner's Office | Public order and safety | | 154 Judicial Appointments Commission | Public order and safety | | 155 Parole Board | Public order and safety | | 156 Youth Justice Board for England and Wales | Public order and safety |
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c95df28de319c7d94441c7cee5fdc4f3cc643eb6 | London’s Political Climate
Tony Travers LSE Mayoral election: 1\\textsuperscript{st} preference votes – 2000, 2004, 2008 and 2012
| | 2000 | 2004 | 2008 | 2012 | |------------------|------|------|------|------| | Livingstone | 39 | 37 | 37 | 40 | | Norris/Johnson | 27 | 29 | 43 | 44 | | Kramer/Hughes/Paddick | 12 | 15 | 10 | 4 | | Greens | 2.2 | 3.1 | 3.2 | 4.5 | | UKIP | 1.0 | 6.2 | 0.9 | 2.0 | | BNP | 2.0 | 3.1 | 2.9 | 1.3 | | Sioban Benita | | | | 3.8 | GLA elections: Assembly seats won – 2000, 2004, 2008 and 2012
| | 2000 | 2004 | 2008 | 2012 | |-------|------|------|------|------| | Con | 9 | 9 | 11 | 9 | | Lab | 9 | 7 | 8 | 12 | | LD | 4 | 5 | 3 | 2 | | Green | 3 | 2 | 2 | 2 | | UKIP | 0 | 2 | 0 | 0 | | BNP | 0 | 0 | 1 | 0 | GLA elections: Assembly ‘list’ vote share – 2000, 2004, 2008 and 2012
| | 2000 | 2004 | 2008 | 2012 | |-------|------|------|------|------| | Con | 29 | 29 | 35 | 32 | | Lab | 30 | 25 | 28 | 41 | | LD | 15 | 17 | 11 | 6.8 | | Green | 11 | 8.6 | 8.4 | 8.5 | | UKIP | 2.1 | 8.4 | 1.9 | 4.5 | | BNP | 2.9 | 4.8 | 5.4 | 2.1 | | Oth | 10 | 7 | 10 | 4.9 | Johnson/Livingstone vs Con/Lab – vote share 2008 and 2012
| | % | % | | |------------------|----|----|---| | Johnson | 43 | 44 | +1| | Conservatives | 35 | 32 | -3| | Johnson ‘lead’ | 8 | 12 | +4| | Livingstone | 37 | 40 | +3| | Labour | 28 | 41 | +13| | Livingstone ‘lead’| 9 | -1 | -10| ‘Swing’ Con to Lab – 2008 to 2012
Mayoral: 1%
Assembly: 8%
England: 14%
‘Ken’ effect, or Labour doing worse in London?
## Vote share
- Assembly list and borough
| Year | Con LB | Con Ass | Lab LB | Lab Ass | LD LB | LD Ass | Max | Min | |------|--------|---------|--------|---------|-------|--------|-----|-----| | 2002 | 34 | 31 | 34 | 25 | 20 | 18 | 60 | 31 | | 2004 | 31 | 35 | 25 | 28 | 18 | 20 | 53 | 25 | | 2006 | 35 | 37 | 28 | 28 | 20 | 14 | 53 | 25 | | 2008 | 37 | 32 | 28 | 33 | 14 | 22 | 53 | 25 | | 2010 | 32 | 32 | 33 | 41 | 22 | 7 | 53 | 25 | | 2012 | 32 | 60 | 41 | 7 | 7 | 4 | 60 | 4 |
(1968) (1971) (1982) (2004)
Conservative vote is resilient over time Labour vote is also resilient over time Lib Dem vote in 2012 was its worst-ever in any LB or Assembly elections London: “a Labour city”?
Conservatives - General Election vote share (%)
| Year | London | UK | London ‘lead’ | |------|--------|-----|---------------| | 1979 | 46.0 | 43.9| 2.1 | | 1983 | 43.9 | 42.4| 1.5 | | 1987 | 46.5 | 42.2| 4.3 | | 1992 | 45.3 | 41.9| 3.4 | | 1997 | 31.2 | 30.7| 0.5 | | 2001 | 30.5 | 31.7| -1.5 | | 2005 | 31.9 | 32.3| -0.4 | | 2010 | 34.5 | 36.1| -1.6 | London: “a Labour city”?
| Year | London | UK | London ‘lead’ | |------|--------|------|---------------| | 1979 | 39.6 | 36.9 | 2.7 | | 1983 | 29.9 | 27.6 | 2.3 | | 1987 | 31.5 | 30.8 | 0.7 | | 1992 | 37.1 | 34.4 | 2.7 | | 1997 | 49.5 | 43.2 | 6.3 | | 2001 | 47.3 | 40.7 | 6.6 | | 2005 | 38.9 | 35.3 | 3.6 | | 2010 | 36.6 | 29.0 | 7.6 |
## Greater London Council/Greater London Authority elections
| Year | GLC/Mayor winner | Following General Election winner | |------|------------------|----------------------------------| | 1964 | Lab | Lab | | 1967 | Con | Con | | 1970 | Con | Con | | 1973 | Lab | Lab | | 1977 | Con | Con | | 1981 | Lab | Con | | 2000 | Ind (Lab) | Lab | | 2004 | Lab | Lab | | 2008 | Con | Con (minority) | | 2012 | Con | ? | London’s Political Climate
Tony Travers LSE
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f405762afc0db0bbb171f1a5f9a1e3bcd22065c2 | The London Plan revised early minor alterations - update
The London Plan is the Mayor’s planning document for development in Greater London, and was published in July 2011. The plan has been amended following government changes, with the revised changes nearly complete, a key component of these being the Planning Inspector’s report. This briefing updates members on the revisions and on the views of the Planning Inspector and the Secretary of State for Communities on the role of the Affordable Rent product within the planning system.
Background
The London Plan is the spatial development plan for the 32 boroughs and the City of London, and is the only remaining regional plan in England. It is published approximately every four years, and the latest iteration was published in summer 2011.
The local plans of the boroughs need to be in conformity with the London Plan. In turn, the London Plan needs to be in conformity with national planning policy, in the form of the National Planning Policy Framework (NPPF). The final version of this was published in March 2012, and so post-dated the London Plan’s publication.
In addition, in 2011 the government introduced a new form of housing, the ‘Affordable Rent’ product. This type of housing was to be aimed at those eligible for ‘traditional’ council or housing association housing but, in London, would require rents of between 65 per cent and 80 per cent of market rent to be paid (compared to social rents of about 40 per cent of market rents).
The Mayor decided that the London Plan was in general conformity with the NPPF, despite having been published before it. However, to ensure conformity and to consistency with the newly defined form of social housing, the Affordable Rent product, he has proposed some ‘revised early minor alterations’ (REMA) to the London Plan.
Overview
The Mayor published the proposed REMA for public consultation in June 2012. Following this, a hearing was held in front of a Planning Inspector in late 2012, and the GLA has now published his findings on the proposed changes. He has found the REMA broadly sound, but has however made some recommendations for changes in key areas, mainly in relation to the provision of affordable housing.
1. http://www.london.gov.uk/priorities/planning/london-plan/early-minor-alterations Affordable Housing
The issue that was most contentious during the REMA consultation and subsequent ‘examination-in-public’ (EIP) hearing was that of affordable housing, and how the new ‘Affordable Rent’ product would fit in with the twin aims of ensuring that housing was available to Londoners on lower incomes, and how supply of that housing could be maximised. The two ends, it was argued, were mutually contradictory, because the funding mechanism to ensure the funding and building of Affordable Rent homes was dependent on rents that were much higher than traditional ‘social’ rents, despite the housing being aimed at the same group as those who would normally qualify for social rent homes. As such, they would be unaffordable to them and would not in fact meet the housing needs of people who were, supposedly, eligible for that type of housing.
A number of boroughs argued at the EIP that, if Affordable Rent properties were marketed in their areas at 60 per cent -80 per cent of local market rent, this would put them out of reach for many of their poorest residents; so undermining a central aim of the London Plan. The boroughs argued that, as a result, they should be able to define local levels of affordability in reference to local incomes and rents, and the Inspector agreed with this view:
“The Boroughs as local planning authorities should be enabled to meet objectively assessed needs for affordable housing, the eligibility for which has to be established by reference to local prices and income levels.” (Paragraph 23)
The consequence of this would have been that, where planning permission was being sought for a development that included Affordable Rent homes, if the proposed rents did not meet borough-defined levels of affordability, then the development could be refused planning permission. The Inspector recommended that the Mayor’s proposed change removing the right of a borough to do this should be removed.
Following the Inspector’s report, the Secretary of State for Communities and Local Government has written to the Mayor to indicate that he is happy for the REMA to stand unaltered, i.e. without the Inspector’s recommended deletion.
Other issues were also addressed by the REMA. The Inspector supported alterations that covered:
• greater flexibility for boroughs to set ranges for income levels for intermediate housing • flexibility for accepting financial contributions in-lieu of providing on-site affording housing in s106 agreements • a commitment to consider how the Mayor can support self-build • boroughs identifying sites for gypsy and traveller sites in accordance with national policy • the provision of more cycle parking in new developments • other minor changes relating to looking at Londoners’ health inequalities and green spaces.
The Inspector’s report made another key change to the Mayor’s proposed alterations, namely concerning the Community Infrastructure Levy (CIL). The Mayor had proposed wording that would have prescribed the priority that should be attached to borough CIL spending: the Inspector recommended that this also be deleted.
Commentary
London Councils recognises the difficulty in funding new sub-market housing supply in a context of constrained public spending. While the Affordable Rent model will work for those on low incomes in much of the country, and in most of London, given the high (and rising) level of market rents in much of central London, any home that charges even 60 per cent of these will still be unaffordable in practical terms to many, especially those on low incomes. Equally, the Affordable Rent programme, once complete, will have produced tens of thousands of sub-market homes in London at a time of severe housing need, and when new housing supply across all tenures is barely matching half the new demand created every year.
The Mayor was not introducing a new regional policy on affordable housing by seeking to ensure that the Affordable Rent product was accounted for in the London Plan; rather he was seeking to ensure that the London Plan conformed to national housing policy and planning guidance. The dispute over the process of ensuring this conformity arises because national policy could be interpreted to give two different outcomes in London, as it says both that housing needs should be fully and objectively assessed and catered for (NPPF para 47), and that Affordable Rent is for the same households who would otherwise be eligible for social rented housing (NPPF, Annex 2). The higher the rent level, the greater the tension between these two policy aims.
The Inspector’s report supported the view that boroughs were within their rights under the NPPF to set their own thresholds for what constituted ‘affordable’ in their local areas, and thus could refuse planning permission for developments that did not meet this. However, the Secretary of State rejected this view.
While it is not unusual for the Secretary of State to override the recommendations of one of his own Inspectors, what was unusual was that he did not give reasons for doing so. His letter, also published by the GLA with the Inspector’s report, does not directly refer to the basis of the conflicting views, namely differing interpretations of national policy, but rather states that ‘[i]mposing rent controls through local planning policies would hinder the objective of increasing the delivery of affordable housing’. Whilst this is undoubtedly his concern, it is not certain that, as written, this is a sufficient justification to protect his decision from legal challenge. It does also not fully address the concerns raised by boroughs (and addressed by the Inspector) that Affordable Rent homes may not actually be affordable for their intended tenants.
On 14 August the Mayor published the Inspector’s report and submitted the ‘intend to publish’ REMA to the London Assembly for their consideration. Under this new final stage in London Plan preparation or alteration (a change to the GLA Act 1999 introduced by the Localism Act 2011), the Assembly has 21 days within which it can reject the alterations by a two thirds majority if it so wishes. It remains to be seen what the Assembly will do, and, if they agree with the Mayor’s proposed alterations, whether there will be any subsequent response from boroughs.
Author: Dominic Curran, principal project and policy officer (020 7934 9508) Click here to send a comment or query to the author
Links: The London Plan homepage
This member briefing has been circulated to: Portfolio holders and those members who requested policy briefings in the following categories: Economic Development; Housing and Planning
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d7633587ea2c45ac0b078d3fc86626c9107da83b | The London Planning Statement
The GLA is inviting comments on the ‘London Planning Statement’, a replacement for the now-revoked Government Office for London (GOL) Circular 1/2008, which provided advice for the arrangement of strategic planning in London. This briefing summarises the document and assesses its impact on the boroughs.
Overview
On 11 December the GLA published the ‘London Planning Statement’¹. This draft supplementary planning guidance (SPG) seeks to replace the GOL circular 1/2008², which was revoked by the National Planning Policy Framework (NPPF) in March 2012³. The circular and the draft replacement SPG, are intended to set out how the Mayor fulfils his planning functions in London’s unique governance arrangements. The SPG is a consultation document, and the GLA is inviting comments by 15 January 2013.
The SPG begins by highlighting the importance of good planning: ‘If we fail to plan, we plan to fail’. Given the constraints of a rising population (which the latest census data suggests is now predicted to overtake its historic peak of 8.6m by 2019 and not 2026, as previously thought) and the policy objectives of not encroaching on the green belt or open spaces, it is vital that, in order to meet the objectives of sustainable development set out in the NPPF (see member briefing 103), good planning is undertaken.
The SPG, which will sit under the London Plan, sets out the general principles of the approach that the Mayor will undertake, explains the Mayor’s role in the planning system, highlights the current Mayor’s priorities, and sets out the Mayor’s intended work programme. It concludes with three annexes that concern the legislative and procedural basis on which planning decisions are made.
The below very briefly summarises the key points under the Statement’s headings:
General principles
- ensuring propriety in taking decisions
- promoting sustainable growth
- ensuring development is viable, and that viability assessments are rigorously done, and that planning obligations are not burdensome
1 http://www.london.gov.uk/publication/london-planning-statement 2 http://www.london.gov.uk/sites/default/files/Circular%201-2008.pdf 3 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/6077/2116950.pdf The Mayor’s role in the planning system
- to publish the city’s spatial development strategy (the London Plan), and any supplementary guidance supporting it, and to monitor its implementation
- ensuring conformity between the London Plan, neighbourhood & borough plans and the NPPF (in light of the Mayor’s view that the London Plan is broadly consistent with the NPPF)
- to take planning decisions on matters of ‘potential strategic importance’ as defined in the Mayor of London Order 20084 (either by directing a borough to refuse planning permission or by taking over the application if it meets certain criteria)
- the SPG notes the Mayor’s reluctance to intervene in the planning system generally, he would do so in order to ensure delivery of key objectives as set out in the London Plan, especially for key infrastructure and to build new housing
- to designate Mayoral Development Corporations (MDCs) to secure the regeneration of specific areas (noting the Olympic Park MDC) with attendant, and significant, planning powers assumed from the boroughs in the areas concerned.
The Mayor’s priorities in the planning system
- planning for the city’s growth in a sustainable way that encourages renewal of London’s urban realm, and takes a positive approach to development
- ensuring enough jobs, training and education facilities, homes and social and other infrastructure to cope with growth, and with environmental challenges
- securing London’s place as ‘the United Kingdom’s World City’, supporting new economic specialisms, for example in technology, media, telecoms and green industries, and welcoming inward investment
- working with boroughs and others to ensure assessments of infrastructure need are made and funding mechanisms are in place to secure implementation
- ensuring a prompt planning system that doesn’t make undue demands of developers, takes decisions quickly, is properly resourced, and which is supported by the GLA through provisions of things like the London Development Database and the provision of planning guidance
The Mayor’s work programme
- ensuring consistency with the NPPF and policy relating to the Affordable Housing Programme
- taking account of updated population and housing need projections, and providing policies on areas of emerging concern including energy, and housing for older people
- ensuring implementation of the London Plan through a ‘London Plan Implementation Plan’ and associated annual monitoring report
- focusing growth on Opportunity Areas through planning frameworks, reviewing the Mayor’s Community Infrastructure Levy every two years, with the first in 2014, and seeking greater inter-regional co-operation
4 http://www.legislation.gov.uk/uksi/2008/580/contents/made Commentary
The London Planning Statement is shorter, more concise and more accessible than the circular it seeks to replace. By placing many of the technical legislative and procedural aspects of the planning process as annexes, it has made the main body of the document more understandable for the general reader. This is in line with the spirit of the NPPF, which replaced 1,000 pages of often very detailed planning policy guidance with 57 pages of policy in more accessible language.
This move towards clarity and simplicity is welcome, although, as with the NPPF it runs the risk of not adding sufficient clarity for the planning practitioner. On balance, however, as the planning practitioner will already be aware of the process, and will in any event still be able to access the technical details of legislation and procedure via the annexes, this risk will most likely be on the downside.
Given the revocation of the GOL circular it is helpful to have a replacement setting out the planning process, principles and priorities, especially to those people that are outside the immediate planning process (e.g. voluntary organisations, community groups and the private sector). The SPG does not contain any surprises or herald any changes in terms of policy or process, and should be seen as a document that supports and clarifies existing policy rather than symbolising any new policy direction.
Of necessity, the SPG addresses matters that are of concern that were not relevant at the time of the circular’s writing. The emphasis on achieving ‘sustainable development’, while a duty on the Mayor since the establishment of the position in 1999, now has a greater weight since the NPPF’s focus on this objective. Additionally, the several mentions of the higher than expected growth in London’s population, and the impact this will have on housing and other infrastructure needs, intensifies the need to plan (or re-plan) to accommodate London’s expansion. Equally the Mayor’s Community Infrastructure Levy and its impact on development in London is mentioned as it was only introduced in April 2012.
The SPG mentions the Mayor’s willingness to support work with boroughs, and to ‘interfere’ as little as possible, several times. This recognition of the distinct roles of boroughs in planning and London governance generally is correct and welcome. In areas where there is the potential for conflict between the GLA and boroughs, the SPG is clear about where the ‘lines’ are. Paragraph 3.16, particularly, states that the Mayor will use his formal planning powers ‘sparingly’, and the boroughs will be keen to ensure that this is the case going forward.
Less welcome is the reference in the following paragraph, however, that the Mayor, in taking planning decisions, will always keep in mind the ‘importance of prompt decision-making and borough performance’.
Borough planning departmental performance should not be a criterion that the Mayor should apply when deciding whether to exercise his powers (this might change given the government’s policy of removing planning decision-making from ‘poorly performing’ boroughs [see member briefing 169]) as decisions should always be made as locally as possible, and where there are problems in making a planning decision, the primary aim should be to support the borough in doing so rather than removing the ability to do so.
London Councils welcomes the publication of the SPG, and hopes that boroughs will take the opportunity to respond to it before the 15 January deadline. It is a helpful and accessible document in the main, and while there are some areas where London Councils will be seeking clarity of purpose and intent, it is broadly in tune with the aspirations of boroughs to plan for London’s continuing success. This member briefing has been circulated to: Portfolio holders and those members who requested policy briefings in the following categories: Housing and Planning
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f29e2572465f9c18911d875366e0033387a44237 | Disclaimer
Whilst every effort has been made to ensure the accuracy of the material in this document, neither Centre for Economics and Business Research Ltd nor the report’s authors will be liable for any loss or damages incurred through the use of the report.
Authorship and acknowledgements
This report has been produced by Cebr, an independent economics and business research consultancy established in 1992. The views expressed herein are those of the authors only and are based upon independent research by them.
The report does not necessarily reflect the views of London Councils.
London, November 2019
## Contents
| Section | Page | |----------------------------------------------|------| | Contents | 3 | | Executive Summary | 4 | | About the report | 4 | | **Headline findings** | 4 | | 1 London’s business base | 6 | | 2 Revealed comparative advantage | 12 | | 3 Gross value added and turnover | 15 | | 4 Employment | 18 | | 5 High growth sectors | 21 | | 6 Knowledge intensive industries | 23 | | 7 Business rates data | 24 | | 8 Summary | 27 | | 9 Appendix 1: Methodology | 28 | Executive Summary
About the report
- This report was produced by the Centre for Economics and Business Research (Cebr) for London Councils. The report summarises the data collection and analysis performed by Cebr to establish a comprehensive understanding of London’s business base.
- Particular focus is placed on the contribution of micro-businesses to London’s economy and the geographical location of particular clusters of industry activity around the capital.
- The high-level findings presented here are supplemented by 33 local authority profiles and a data workbook containing additional detail for each local authority in London, which are available on London Councils’ website.
Headline findings
- There are over 1 million businesses in London. In line with the UK average an estimated 55% of these are unregistered small businesses.
- In 2018, 87% of all registered business local units (495,000) across London were micro-businesses (fewer than 10 employees).
- London’s registered (non-financial) micro-businesses generated over £210 billion in turnover in 2018 – an average of £475,000 per business.
- This represents one fifth of the £1.06 trillion total turnover generated by London’s non-financial businesses.
- Small and micro-sized firms continue to play an important role in all sectors, even those such as finance and insurance which are dominated by larger companies, with 58% of registered businesses in these industries employing fewer than 10 people.
- Since the financial crisis London’s business base has grown substantially. The micro-business count grew by 50% between 2010 and 2018.
- While all of London’s boroughs have their own economic strengths just three of them – the City of London, Camden and Westminster - account for 20% of all London’s Gross Value Added.
- On average, each London borough has a revealed comparative advantage in 71 industries.
- The Central London Forward boroughs have more unique industry specialisms which produces a higher average ‘complexity score’ than across the other sub-regions of London.
- 50% of London’s micro-businesses operate in knowledge intensive industries, 13 percentage points higher than the UK average (37%). What proportion of businesses operate in Knowledge Intensive Sectors?
- **57%** of Central London businesses
- **50%** of South London businesses
- **45%** of West London businesses
- **41%** of East London businesses 1 London’s business base
London is home to around 1.1 million businesses, making up around one fifth of the UK’s total business population and generating over a quarter of national business turnover. Notably, London hosts 29% of the country’s Information and Communication sector businesses, accounting for almost half (49%) of their turnover.
One important role of this research is, however, to establish more information about London’s smaller businesses, revealing further detail about the location and industry mix of these firms. As such, much of the report considers micro-businesses, those with 0-9 employees, in detail. Altogether these represent 96% of all businesses in London, although more than 600,000 of these are so small as to be unregistered i.e. with turnover below the VAT threshold and not registered for PAYE (see Table 2). However, even among registered firms some 87% are micro-businesses.
Table 1: Summary of business population statistics for London (2018)
| Category | Business counts | % of UK total | Turnover (millions) | % of UK total | |---------------------------------|-----------------|---------------|---------------------|---------------| | All UK | 5,667,510 | 100% | £3,861,613 | 100% | | London | 1,096,095 | 19% | £1,055,103 | 27% | | Of which: | | | | | | Manufacturing | 31,270 | 11% | 552,725 | 8% | | Construction | 172,395 | 17% | 318,170 | 18% | | Wholesale and retail | 94,320 | 17% | 1,295,613 | 28% | | Information and communication | 104,175 | 29% | 255,901 | 49% | | Finance and insurance | 20,755 | 24% | n/a | n/a | | Professional, technical etc | 207,165 | 25% | 340,384 | 43% | | Administration support services | 88,490 | 18% | 267,194 | 30% | | Other services | 49,860 | 15% | 34,154 | 17% |
Source: Department for Business, Energy & Industrial Strategy, business population estimates
Micro-businesses
As a proportion of all businesses, unregistered businesses are most prevalent among firms in the construction and ‘other services’ sectors. This result makes intuitive sense¹ as many forms of ‘other services’ activity cover so-called lifestyle businesses including small scale operations such as dog-walking or hairdressing that are often chosen for their flexibility but will often only generate turnover below the VAT threshold. Meanwhile, construction work is project based and skilled construction workers often seek a steady supply of new jobs from different employers which encourages self-employment.
¹ Notwithstanding any potential issues around businesses that fail to declare income in order to avoid registering for VAT Table 2: Micro-business in London
| Category | Micro (1-9 employees) | Businesses with no employees\* | Of which: Unregistered businesses | Proportion of all business unregistered\*\* | |---------------------------------|-----------------------|------------------------------|-----------------------------------|------------------------------------------| | All UK | 1,137,290 | 4,278,225 | 3,093,710 | 55% | | London | | | | | | Of which: | 195,420 | 858,580 | 605,995 | 55% | | Manufacturing | 5,995 | 23,480 | 17,515 | 56% | | Construction | 20,830 | 149,610 | 120,395 | 70% | | Wholesale and retail | 30,085 | 58,220 | 33,765 | 36% | | Information and communication | 20,205 | 80,090 | 35,835 | 34% | | Finance and insurance | 4,580 | 14,260 | 6,745 | 32% | | Professional, technical etc | 37,870 | 162,390 | 89,495 | 43% | | Administration support services | 21,030 | 62,900 | 40,980 | 46% | | Other services | 9,410 | 39,305 | 35,115 | 70% |
Source: Department for Business, Energy & Industrial Strategy,
- includes working proprietors \*\*percentage of all businesses in each sector that are unregistered
Although 55% of businesses in London are unregistered their small scale means they generate just 2% all London’s turnover, an average of £41,500 per business. By contrast, registered micro-businesses generate 20% of the total turnover across London an average of £475,000.
Figure 1 Share of total sector turnover generated by micro-businesses, London
Source: Department for Business, Energy & Industrial Strategy, Cebr calculations Mapping London’s business base
There are over one million businesses across the capital. But a lack of good data and the inherently low level of economic output produced by unregistered businesses means the following sections are concerned with analysing the role of the more than half a million registered firms in London. Nevertheless, the role of the self-employed people and unregistered business owners within London’s supply chains remains worthy of discussion and clusters of activity within industries are often supported locally by self-employed workers within related industries.
A registered business (an enterprise) may operate across a number of sites and the majority of the analysis below considers the location of these individual sites across London’s boroughs. The data used recognises these individual sites as ‘local units’ which the ONS defines as follows:
“A local unit is an enterprise or part thereof (e.g. a workshop, factory, warehouse, office, mine or depot) situated in a geographically identified place”
Local units may therefore be either a complete business based in a single location, or a local unit of a larger enterprise. There were 568,000 of these local units in London in 2018.
Figure 2 Various heatmaps – the number of local units, share of micro-businesses and number of rateable properties in London, by Middle Super Output Area, 2018
Source: Inter Departmental Business Register, London Councils, Cebr calculations Maps contain public sector information licensed under the Open Government Licence v3.0. The maps above illustrate the distribution of businesses across London at the Middle Super Output Area (MSOA) level. An MSOA is a geographical unit based on the 2011 census which contain a population of between 5,000 and 15,000 people. However, as indicated by the maps above this can relate to vastly different levels of business activity. The local units map (top left) simply shows the count of local units in each MSOA, with darker shades indicating a higher business count. The micro-business map (top right) is similar but in this case the count excludes local units with 10 or more employees. The proportion of micro-businesses in the total count of local units is shown in the micro-share map (bottom left), with dark blue indicating a lower share of micro-businesses in the area. Finally, the rateable property map (bottom right) shows the count of properties eligible for business rates in each MSOA.
London’s economic geography is in part a function of its long history, with a central activity zone that has been home to globally important industries such as finance, insurance and shipping for centuries. As a consequence, older central areas both within and between boroughs are more firmly established and have over time attracted more dense clusters of businesses. Indeed, a quarter of local units are found in just four boroughs: Westminster (10.0%), Camden (6.1%), the City of London (4.8%) and Barnet (4.4%), of which Barnet is the only borough outside of central London. This is a similar proportion to the combined business count across the 13 boroughs with the smallest number of local units (26.4%).
Much of the industry within central areas is well established and these are home to many of the UK’s largest firms. Consequently, the proportion of micro-businesses is typically lower in these central areas than in the outer London boroughs. Across London as a whole, 495,000 local units are micro-businesses – 87% of all local units.
While the number of businesses is skewed towards London’s central activity zone, the level of economic output is even more concentrated within those same local authority areas. Westminster (14.6%), Camden (7.8%) and the City of London (11.9%) are estimated to have produced more than one third (34.3%) of London’s Gross Value Added (GVA) in 2018. The 13 boroughs with the smallest volume of local units produced just 18.3% of GVA in the same period. One of the other notable hotspots on the maps above is the large MSOA on the western edge of London around Heathrow airport that contains many rateable properties and a relatively low share of micro-businesses. Comparing the business base across boroughs
In order to compare each borough’s business base, this report analyses a range of relevant data across the six dimensions outlined in Table 3. Details of the measures and the methodology for calculating the scores can be found in Appendix 1: Methodology.
Table 3 Summary of measures
| Measure | Description | London | |--------------------------------|-----------------------------------------------------------------------------|---------| | Business count | The number of registered businesses in the borough. | 568,200 | | Business density | The number of registered businesses per resident employee. A score of 1 indicates an equal number of business and employees based in the borough. A low score suggests that resident employees are out-commuting or work for a few large companies, a high score indicates low levels of out-commuting and/or smaller businesses. | 0.21 | | Micro-share | The share of registered business that are micro-businesses - defined as those businesses with 0-9 employees. | 87% | | Rateable properties per business | The number of rateable properties per registered business. A low ratio indicates that there are more businesses than rateable properties in the borough suggesting smaller businesses in industries that may not have a fixed place of work e.g. consultancy or construction. | 0.48 | | GVA per business (£m) | The borough’s total economic output (Gross Value Added) per registered business. | 0.75 | | Business diversity | A measure of the industry concentration of the total business count. Higher scores indicate the business population is more concentrated in a few industries. | 0.32 | | Complexity | The complexity score measures the number of industries in which the borough ‘punches above its weight’ i.e. where the share of businesses in that industry exceeds the borough’s share of all businesses in the country. The borough holds a ‘comparative advantage’ in these industries. The final score is the count of industries in which the borough has a comparative advantage, scaled by how widespread the industry is nationally, as measured by the count of local authorities that also punch above their weight in that industry. A score of 0 indicates no industry specialisation. Higher scores indicate more specialised and/or unique economic activity. | 0.90 |
Table 4 sets out the scores for all 33 local authorities in London across all six measures. The scores are heavily skewed towards the inner London boroughs for business density and complexity. Commercial land uses are far more prominent and intensive in these boroughs so there are inevitably more firms per resident employee, with workers commuting in from outer boroughs and beyond.
These areas are also significantly more ‘complex’ and in some cases e.g. the City of London represent global or national hubs for industries that are not widely represented outside of those particular boroughs. A consequence of this level of specialisation is a lower business diversity score. By contrast, in most out boroughs the type of business is typically less niche and more evenly distributed across different industries.
Table 4 summary of key measures by London borough
| Borough | Business count | Business density | Micro-share | Rateable properties per business | GVA per business (£m) | Business diversity | Complexity | |--------------------------------|----------------|------------------|-------------|----------------------------------|-----------------------|--------------------|------------| | Barking and Dagenham | 7,790 | 0.16 | 88% | 0.50 | 0.51 | 0.24 | 0.46 | | Barnet | 24,820 | 0.22 | 91% | 0.33 | 0.44 | 0.27 | 0.79 | | Bexley | 9,895 | 0.12 | 88% | 0.48 | 0.52 | 0.31 | 1.00 | | Brent | 16,460 | 0.17 | 89% | 0.48 | 0.58 | 0.23 | 0.80 | | Bromley | 17,070 | 0.14 | 90% | 0.38 | 0.46 | 0.31 | 0.57 | | Camden | 34,745 | 0.58 | 85% | 0.43 | 0.96 | 0.36 | 1.09 | | City of London | 27,365 | > 1 | 79% | 0.59 | 1.86 | 0.54 | 1.93 | | Croydon | 16,615 | 0.15 | 89% | 0.49 | 0.49 | 0.28 | 0.66 | | Ealing | 19,490 | 0.17 | 90% | 0.48 | 0.54 | 0.25 | 0.79 | | Enfield | 14,285 | 0.15 | 88% | 0.46 | 0.49 | 0.23 | 0.63 | | Greenwich | 11,265 | 0.14 | 89% | 0.42 | 0.41 | 0.33 | 0.63 | | Hackney | 21,145 | 0.27 | 89% | 0.44 | 0.39 | 0.34 | 2.00 | | Hammersmith and Fulham | 14,460 | 0.23 | 86% | 0.55 | 0.83 | 0.31 | 0.64 | | Haringey | 13,200 | 0.16 | 91% | 0.49 | 0.46 | 0.25 | 0.71 | | Harrow | 15,500 | 0.19 | 93% | 0.31 | 0.42 | 0.37 | 0.52 | | Havering | 10,990 | 0.13 | 87% | 0.47 | 0.55 | 0.26 | 0.54 | | Hillingdon | 15,320 | 0.17 | 85% | 0.50 | 0.91 | 0.25 | 0.65 | | Hounslow | 14,775 | 0.17 | 88% | 0.45 | 0.91 | 0.36 | 0.67 | | Islington | 21,010 | 0.28 | 85% | 0.49 | 0.89 | 0.34 | 0.70 | | Kensington and Chelsea | 15,590 | 0.47 | 85% | 0.52 | 0.80 | 0.33 | 0.76 | | Kingston upon Thames | 9,860 | 0.19 | 88% | 0.44 | 0.52 | 0.34 | 0.55 | | Lambeth | 15,660 | 0.15 | 87% | 0.52 | 0.74 | 0.32 | 0.68 | | Lewisham | 10,970 | 0.11 | 91% | 0.49 | 0.48 | 0.31 | 0.51 | | Merton | 12,490 | 0.16 | 89% | 0.38 | 0.45 | 0.33 | 0.55 | | Newham | 14,005 | 0.16 | 89% | 0.49 | 0.54 | 0.31 | 0.51 | | Redbridge | 14,760 | 0.20 | 92% | 0.37 | 0.36 | 0.35 | 0.57 | | Richmond upon Thames | 14,485 | 0.26 | 90% | 0.38 | 0.53 | 0.43 | 0.83 | | Southwark | 18,320 | 0.19 | 83% | 0.58 | 0.86 | 0.32 | 0.85 | | Sutton | 9,280 | 0.13 | 89% | 0.39 | 0.51 | 0.31 | 0.58 | | Tower Hamlets | 19,215 | 0.21 | 86% | 0.68 | 1.55 | 0.36 | 0.96 | | Waltham Forest | 11,775 | 0.14 | 91% | 0.52 | 0.41 | 0.25 | 0.54 | | Wandsworth | 19,010 | 0.16 | 90% | 0.42 | 0.61 | 0.38 | 0.61 | | Westminster | 56,580 | 0.99 | 81% | 0.56 | 1.10 | 0.30 | 1.58 | | London | 568,200 | 0.21 | 87% | 0.48 | 0.75 | 0.32 | 0.90 |
Note: The diversity score is a Herfindahl index where a higher score indicates a higher levels of concentration i.e lower diversity in the business base. This indicates the City has a lower diversity to Lewisham where there is no dominant sector. 2 Revealed comparative advantage
One of the fundamental drivers of the complexity measure derived for the borough summary is the concept of revealed comparative advantage (RCA). The RCA is a way of looking at the various industries in a particular geography and assessing whether the size of an industry within that area is large relative to i) its own business base and ii) the size of the industry nationally.
Business based location quotients
The business-based location quotient is a score attributed to every combination of a location (local authority) and industry (3 digit SIC code). These scores are calculated as the proportion of an industry’s national business count that are based in a location, divided by that location’s share of all businesses nationally. If the score is 1, then that industry in that location is representative of the national average. A higher score indicates there is a local cluster and the area is ‘punching above its weight’ in that industry.
Figure 3 simplified example of revealed comparative advantage
In the hypothetical case presented in Figure 3, a local authority has a 10% share of the UK’s total businesses but a 5% share of industry A, a 10% share of industry B and a 25% share of industry C.
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3 Standard Industrial Classification code: SIC codes are numerical representations of major businesses and industries. SIC codes are assigned based on common characteristics shared in the products, services, production and delivery system of a business e.g. 620: Computer programming, consultancy and related activities Industry C. The business location quotient scores for the three industries would be 0.5, 1 and 2.5, respectively.
This measure is useful because a score above 1 indicates that the industry is of greater than average significance to the local economy. In other words, something about the location suits that industry and it has a revealed comparative advantage (RCA). In the example, this borough punches above its weight in Industry C, which is more important to the business base locally than it is across the rest of the country. The opposite is true where the score falls below 1. In the example, Industry A is less prevalent than average in this local authority and there is no local advantage.
It is notable that the manufacturing sector is constituted of a large number of relatively niche industries – there are 95 separate 3 digit SIC codes in the manufacturing group, compared to just 9 in construction. This means manufacturing industries more regularly show up as a source of local comparative advantage because the national business count is spread across many categories. For instance, with only around 940 UK businesses engaged in the manufacture of electronic components and boards, just 5 or 10 of them being located in the smaller London boroughs would be indicative of a RCA.
Complexity scores
Across London most places have some areas of relative strength within their business base when compared to the rest of the country. To focus in on local authorities with a range of specialist industrial advantages, the relative strengths are adjusted into a ‘complexity’ score, which begins with the number of industry RCAs. On average, out of the 273 industries included in this analysis, the London boroughs record 71 industries in which their RCA score is greater than 1: Croydon has the highest number (83) while Harrow has the lowest (56).
In many cases, however, these strengths are not unique and are observed widely across the country. For instance, the requirement to provide some services close to the customer means that in industries such as repair and maintenance of motor vehicles or electrical installation, there are many small businesses providing these services across most local authorities. As a consequence of this business model, in both of these industries over 200 hundred of the UK’s 381 local authorities have a RCA in at least one of them. By contrast, the City of London is the only local authority with a RCA in reinsurance.
260 of the UK’s 381 local authorities have a revealed comparative advantage in the maintenance and repair of motor vehicles.
The purpose of the complexity calculation is to weight the raw count of the RCA values to account for how many other areas also indicate a relative strength in that industry. The final complexity score is the sum of these weighted RCA counts. For instance, an industry that is effectively confined to a single location e.g. reinsurance in the City of London, receives a 100% weighting. Meanwhile, relative strength in an industry like the maintenance and repair of motor vehicles is given a lower weighting, because so many other local authorities also have a high share of these businesses.
Some industries in London stand out based on their contribution to the complexity score. For instance, just 79 local authorities hold a comparative advantage in creative, arts and entertainment activities across the country and 25 of these are located within London. Similarly, 26 London boroughs out of a total of 69 local authorities have a comparative advantage in motion picture, video and television programme activities. These industries clearly benefit from access to the pool of specialist talent and facilities that London is able to provide.
The simple average of the complexity scores for local authorities districts/unitaries across the UK is 0.68. Across London the simple average of all borough complexity scores is 0.78, which increases to 0.90 when weighted by business counts.
Figure 4 indicates the complexity scores of the four London sub-regions. With the most specialist industries that combine to produce higher complexity scores, typically found in the central boroughs. This produces the highest overall complexity score across this sub-region. Outer boroughs have economies that are less different to the UK average, with their comparative advantage concentrated in industries that are much more common.
Figure 4 Complexity score by sub-region of London
Source: Inter Departmental Business Register, Cebr calculations
4 ‘London is divided into four subregions with four subregional partnerships, Central London Forward’s Central includes Lewisham, Southwark, Lambeth, Wandsworth, Kensington & Chelsea, City of Westminster, City of London, Tower Hamlets, Hackney, Islington, Camden, and Haringey; Local London’s East covers Enfield, Waltham Forest, Redbridge, Newham, Greenwich, Bromley, Bexley, Barking & Dagenham, and Havering; The South London Partnership South includes Croydon, Sutton, Merton, Kingston upon Thames, and Richmond upon Thames; The West London Alliance’s West includes Hillingdon, Harrow, Ealing, Hounslow, Hammersmith & Fulham, Brent, and Barnet.' 3 Gross value added and turnover
Gross Value Added (GVA) measures the combined value of the output produced in the economy (after accounting for taxes and subsidies). At the borough level this measures the amount of value added by the economic units in the production of goods and services in the local area. Figure 5 once again illustrates the dominance of central London in terms of GVA, and particularly the boroughs of Westminster and Camden and the City of London. Given the huge volume of businesses in these areas it is unsurprising that, in 2016, they accounted for 20% of total London GVA, worth £141 billion. Furthermore, the Central London boroughs had a GVA of £266 billion, equivalent to the South East of England (£259 billion).
The remaining London boroughs (the East, West and South sub-regions) had a combined GVA of £160 billion. This was close to that of the North West of England (£167 billion) and larger than any of the UK’s other constituent regions or nations outside of the South East.
Figure 5 GVA by London local authority, 2016, £ million
Source: Office for National Statistics, Gross Value Added (Balanced) by Local Authority By excluding any intermediate consumption, GVA is a more refined measure of economic output, accounting only for the value of goods and services produced locally and not any inputs to production that were made elsewhere. At the borough level, this data is experimental and limited in scope, however, and is not suitable for deeper investigation. Instead, the remainder of this section focuses on turnover as a lens with which to examine the nature of each borough’s micro-businesses.
The turnover data available are produced in bands and therefore the analysis presented below is heavily rounded and purely indicative. Nevertheless, Figure 6 shows how the output of micro-businesses varies across industries and boroughs.
Figure 6 turnover of registered businesses and share of turnover from micro-businesses
Wholesale and retail trade is responsible for over a third of turnover in London, but due to the high level of intermediate consumption, where finished goods are delivered from other suppliers and sold on by retailers, the sector accounts for just 7% of GVA in London. Micro-businesses account for a reasonably small share of turnover in wholesale and retail (21%) compared to industries such as construction, where micro-businesses are estimated to be responsible for 47% of turnover among all construction businesses registered in London.
The spread of turnover across the London boroughs varies significantly between sectors. For instance, while the Central boroughs are estimated to be responsible for 99% of all
______________________________________________________________________
5 See methodological appendix for further details. turnover in mining and quarrying businesses (in London generally HQ activities) this falls to less than a third for transportation and storage. The same pattern applies for turnover among micro-businesses, whereby the central zone generates the bulk of the turnover of the most specialist industries. Manufacturing is more evenly spread, with around a fifth of turnover estimated in both the West London (23%) and East London (22%) sub-regions.
Figure 7 sub-regional breakdown of micro-business turnover by sector, 2018
Source: Inter Departmental Business Register, Business Register and Employment Survey, Business Population Estimates, Cebr calculations 4 Employment
Employment in London largely tracks the business base and although its distribution will vary between sectors the average employment intensity in some industries is notably higher than in others. For instance, while the production industries and utilities have higher levels of employment per business, these industries are not central to the economy of London and as a consequence there is very little employment in total. Employment per business is highest in education, as the sector is dominated by large organisations, often in the public sector.
Figure 8 employment in London and level of employment per private sector business, by industry
Source: Business Register and Employment Survey, Inter Departmental Business Register
The professional and technical services sector is the largest by both employment numbers and the number of businesses. Over 700,000 employees in the sector are spread across 124,000 private sector businesses, an average of around 6 employees per business. The lowest average number of employees per business across the sectors was in construction, with many skilled tradesmen setting up independently in small registered businesses. The information and communication sector also features many small consultancies, bringing down the average number of employees per business.
The sub-regional breakdown is skewed heavily toward central boroughs, with 59% of employment in the Central sub-region. The Southern sub-region contains the lowest share of employment at just 8%, although it should be noted that this region is comprised of just five boroughs. The West and East sub-regions are home to the remaining 18% and 15% of employment, respectively. The nature of employment is also very different between boroughs. The City of London stands out for the level of employment in knowledge intensive industries(^6). Three-quarters of the City’s employment is in a knowledge intensive industry (74%), 25 percentage points higher than the next borough, Tower Hamlets (49%).
(^6) These are defined in further detail in Section 6 Figure 10 employment in knowledge intensive industries, % of total
Source: Business Register and Employment Survey, Cebr calculations 5 High growth sectors
Although past growth is not always an indicator of future success, the way the business base in London has changed over the years since the global financial crisis is indicative of two broad trends. First, a number of sectors were hit especially hard in the downturn and have more recently been staging a recovery. The second driver of growth is based on structural changes affecting the nature of the economy. The move towards greener energy, the increasing use of online shopping and other digital services have all presented opportunities for new business growth.
The years since 2010 have seen London’s business base, measured by the number of registered companies, grow by 179,000, to 561,000 in 2018. In total, the business base has grown by 47%, equivalent to an average annual growth rate of 4.9%. Newham had the fastest growing business base of all of London’s boroughs, recording average annual growth of 11.1%. Westminster was the slowest growing (2.6% annually), albeit from a significantly larger base. The micro-business count grew by 50% between 2010 and 2018 across London as a whole. Newham’s micro-business count was once again the fastest growing, expanding by 145% to 12,450 in 2018.
Table 5 shows the top 10 industries according to the growth in the number of micro-business local units. While the rapid growth in employment placement agencies can be explained by the strength of the labour market, as the economy has recovered from the economic crisis of 2008, increases in other industries are more likely the result of structural changes in the economy.
| Industry | Number of micro-businesses 2010 | Number of micro-businesses 2018 | Compound annual growth rate | |----------|---------------------------------|---------------------------------|-----------------------------| | 351 : Electric power generation, transmission and distribution | 70 | 1,245 | 43.3% | | 422 : Construction of utility projects | 15 | 135 | 31.6% | | 856 : Educational support activities | 140 | 1,070 | 28.9% | | 421 : Construction of roads and railways | 150 | 1,075 | 27.9% | | 110 : Manufacture of beverages | 35 | 245 | 27.5% | | 774 : Leasing of intellectual property and similar products, except copyrighted works | 50 | 275 | 23.8% | | 781 : Activities of employment placement agencies | 1,105 | 6,270 | 24.2% | | 559 : Other accommodation | 70 | 270 | 18.4% | | 479 : Retail trade not in stores, stalls or markets | 2,385 | 6,810 | 14.0% | | 611 : Wired telecommunications activities | 80 | 275 | 16.7% |
The number of business local units in the electric power generation, transmission and distribution industry grew faster than any other between 2010 and 2018 in London. The number of micro-businesses expanded by 43.3% per year over the same period. Growth in this industry is indicative of the declining market share of the major energy suppliers. Ofgem found that between 2011 and 2019, the combined electricity market share of the six largest suppliers dropped from nearly 100% to 73%, as smaller suppliers gained up to 27% of the market by Q1 2019. Although Westminster (415) and the City of London (310) had the largest number of local units in the industry, Southwark also has a notable cluster, of 90 businesses, in the electricity production industry located in a single MSOA (Southwark 006). Growth in retail trade not in stores, stalls or markets is fairly widespread across London, without a particularly strong trend in any one borough. This is somewhat to be expected as the opportunities for online retailers, who are included in this category, have expanded over the last decade. Moreover, among micro-businesses the ability to run a company from, or close to, home at low cost probably outweighs the benefits of a central location favoured by some more traditional industries. Of the outer London boroughs, in the category of ‘non-store’ retail Bromley stands out, with 435 businesses. 6 Knowledge intensive industries
The Office for National Statistics has categorised certain Standard Industry Classification (SIC) codes as Knowledge Intensive industries. In 2018, half of all micro-business local units and a similar proportion (49%) of all businesses in London were classified in SIC codes producing one of either Knowledge Intensive Market Services (25%), High-tech Knowledge Intensive services (13%), Knowledge Intensive Financial Services (3%) or Other Knowledge Intensive Services (9%). A further 0.1% were involved in High technology manufacturing in the capital.
The City of London had the highest share of Knowledge Intensive micro-businesses in the business base (69%) of all the London boroughs. The Central sub-region had a 57% share of Knowledge Intensive micro-businesses. The South (50%) was in line with the London average, while the East (41%) and West (45%) sub-regions lagged behind.
Figure 11 share of Knowledge Intensive micro-businesses in the business base, 2018
Source: Inter Departmental Business Register 7 Business rates data
Using data supplied by London Councils we investigated the relationship between the business base in each borough and the number of properties liable for business rates. The analysis was completed down to the MSOA level and considered all rateable property excluding those that could obviously never be occupied by a business such as advertising rights, ATMs and Ministry of Defence property.
Across London there were 0.48 rateable properties on average per local unit suggesting that even among registered businesses, many either do not occupy a purpose-built commercial property or operate out of a shared workspace. For smaller firms in industries such as construction or consulting the project/client-based nature of work might render a permanent office space useless as the physical location of work changes from week to week. Large businesses are more likely to need a permanent base for their staff, regardless of the industry.
This phenomenon is apparent from the negative correlation (see Figure 4) between the share of micro-businesses and the number of rateable properties per business in an MSOA. The fact that a number of MSOAs have more rateable properties than businesses indicates either that i) there is a high rate of vacancy in the area or ii) the larger businesses are spread out across several separate properties. In practical terms this could relate to multiple floors of an office block, for example, if the Valuation Office Agency has valued those parts of a building separately.
Figure 12: Share of micro-businesses and rateable properties per business by MSOA
The central London boroughs, which are generally home to larger businesses are therefore likely to have more rateable properties per business. Tower Hamlets has the highest ratio at 0.68 and this is most likely driven by the very dense office space in Canary Wharf which is well suited to large firms. Harrow, which is home to the highest proportion of micro-businesses, also has the fewest rateable properties per business at 0.31. Figure 13: Number of rateable properties per registered business
Source: London councils, Inter Departmental Business Register, Cebr calculations Maps contain public sector information licensed under the Open Government Licence v3.0. 8 Summary
London’s business base is highly diverse and provides a home for everything from global leaders in financial services to hundreds of thousands of micro-business. While some of these are so-called ‘lifestyle’ businesses or nimble sub-contractors providing niche expertise, others are seeking to expand into the global leaders of tomorrow.
Each of the capital’s boroughs has its own industrial strengths. Outside of central London industries tend to be highly clustered into specific areas of business activity while other areas are more residential – without a detailed understanding of the business base there is a risk that the nature of these clusters remains hidden. Indeed, as the nature of commerce changes and businesses move online the prevalence of very small companies that may not work out of formal commercial properties means some clusters may have otherwise gone unnoticed. Furthermore, the extent to which some boroughs have seen the development of successful clusters in particular industries may have lessons for others as they identify their own opportunities for growth.
This report and the associated data shed light onto these clusters and draw attention to the areas of business strength within and between boroughs. By presenting a single shared evidence base for comparison it is hoped that policy makers are provided with a useful tool for building a strategy to support the continued development of London’s business base. 9 Appendix 1: Methodology
Business counts data
In establishing the business base this analysis makes extensive use of the Inter-Departmental Business Register (IDBR). An extract compiled from the data records the number of enterprises that were live at a reference date in March each year. Extracts were taken by employment size band, detailed industry (2, 3 and 5-digit SIC2007) and legal status. These were collected at various geographies including UK, London, local authority district and London’s Middle Super Output Area (MSOAs) from NOMIS.
Analysis was conducted at the level of the enterprise and the local unit. Enterprises can be thought of as the overall business, made up of all the individual sites or workplaces. It is defined as the smallest combination of legal units (generally based on VAT and/or PAYE records) that has a certain degree of autonomy within an enterprise group. A local unit is an individual site (for example a factory or shop) associated with an enterprise. It can also be referred to as a workplace.
Employment
The level of employment was estimated using data from two separate surveys: the Annual Survey of Hours and Earnings (ASHE) and the Business Register and Employment Survey (BRES).
An estimate of the number of resident employees by borough was take from ASHE. This data was combined with the number of businesses to assess the relative importance of the local workforce to the business base.
The total level of employment by industry and borough was established from BRES.
Turnover
Extracts from the IDBR provide counts of the number of enterprises by turnover size band and industry. The midpoint of these turnover bands and the business counts in each industry (3 digit SIC code) are used to generate a total turnover estimate for each of those industries across London. Using the estimates from BRES of employment by 3-digit SIC code a London average turnover per employee in each industry is estimated.
Using the Business Population Estimates dataset for 2018, the level of employment per business in London can be broken down by sector and employment size band. Multiplying together the average employment by sector for private sector (micro)-businesses, the average turnover by industry and industry business counts by borough from the IDBR produces an estimate of the total turnover by borough and industry.
Note: The use of averages, midpoints and rounded business counts means the borough turnover estimates are indicative at best. Using the Business Population Estimates dataset for 2018, the average turnover per business in London was broken down by sector to produce London-wide turnover values. Comparison against the borough totals showed the extent of any over or underestimate. The ratio between the borough-wide and London-wide estimates was used to scale-up the results at the borough level. Business rates
Business rates data were provided by London councils. After removing those categories of property that were clearly unrelated to businesses e.g. advertising rights, ATMs and Ministry of Defence property the postcodes of the properties were used to aggregate counts of rateable property and rateable values by Middle Super Output Area (MSOA).
Revealed Comparative Advantage
The Revealed Comparative Advantage score is a variant on a location quotient based on the business count data. The first stage in calculating the location quotient for industry ( i ) in local authority ( j ) is to divide the number of businesses in that industry in the area by the national total business count for the industry:
[ (1) \\quad \\frac{industry\_{ij}}{\\sum\_{j=1}^{n} industry\_{ij}} ]
This value is divided by the local authority’s share of all businesses across all industries:
[ (2) \\quad \\frac{businesses_j}{\\sum\_{j,i=1}^{n,m} businesses\_{ji}} ]
The location quotient score is (1) divided by (2) and a location quotient greater than 1 indicates a Revealed Comparative Advantage (RCA). Each industry and local authority combination with a location quotient greater than 1 is given a RCA score of 1 and everything else a score of 0.
To calculate a final complexity score each industry receives a ‘ubiquity weighting. This weighting is calculated as the inverse of the sum of all local authorities with an RCA score of 1 in that industry. For the maintenance and repair of motor vehicles, where 260 local authorities have an RCA score of 1, the ubiquity weighting is ( 1/260 = 0.004 ). For reinsurance where only the City of London has an RCA score of 1, the ubiquity weighting is ( 1/1 = 1 ).
The complexity score the is sum of the weighted RCA scores.
Geographical cluster scores
A business cluster can also be defined as a geographic concentration of related businesses in a particular field. There are numerous famous business clusters around London such as the tailors situated on Saville Row or the jewellery shops in Hatton Gardens. Aside from identifying comparative advantage across the borough as a whole a geographical cluster score was also developed to find specific locations within the borough’s boundaries where industries were clustered.
The cluster scores included in the accompanying data are calculated using the proportion of businesses with the same 5-digit SIC code operating in the same MSOA, divided by the sum of all the businesses with the same 5-digit SIC codes across the borough. The final cluster score is the variance between these proportions across MSOAs, weighted by the share of all businesses in a borough within that SIC code. The higher the score, the more geographically concentrated the business cluster.
For instance, while there is a cluster of ‘Retail sale of clothing in specialised stores’ in the Westminster 013 MSOA, the home of Saville Row, the cluster score is 0.291, compared to a score of 1.132 for the cluster of ‘Barristers at law’ in Westminster 018. The reason for the discrepancy is that the very tight concentration of Barristers in chambers around Temple is not replicated in other locations across the borough, while other businesses in the specialist clothing retailers category are spread across Westminster and not solely the tailors at Savile Row.
**Note:** The clusters identified here are produced on the basis of data collected at the MSOA level and therefore a cluster spanning multiple MSOAs may not score highly using this methodology.
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47351c62aa10117c267a477757dfc9b676508591 | Appendix D Interviewer (stage 1) overview of elements and documents
D1 Overview of information collected during the interview stage
Table D.1 summarises the information collected during the interviewer stage of fieldwork. Where the information was limited to a particular age group, this is described.
| Table D.1: Information collected during interviewer stage | |----------------------------------------------------------| | **CAPI questionnaire** | | Household information | | Information on the circumstances/ habits that could affect dietary intake | | Employment status, educational background, household income | | **Participant** | | Main Food Provider (MFP)/aged 19 years and over | | All ages | | Aged 16 years and over | | **Physical measurements** | | Height | | Weight | | Aged 2 years and over | | All ages | | **Collection of dietary data** | | Four day food and drink diary | | All ages | | **Self completion** | | Smoking and drinking | | Recent Physical Activity | | Aged 8-17 years¹ | | Aged 16 years and over |
Interviewer stage documents are provided later in this Appendix.
D2 Overview of Computer Assisted Personal Interview (CAPI) questionnaires
The CAPI questionnaire had three main elements: household composition/structure interview, MFP interview and individual interview.
The MFP questionnaire was divided into the following sections: • Cooking facilities (e.g. access to a working freezer, oven, microwave) (Year 5 only).
• Shopping for food (e.g. main type of shop used, distance from home).
• Food preparation (e.g. boil, steam, roast, fry, grill).
The individual questionnaire had two parts: Part I, which was asked at the first main interviewer visit; and Part II, which was asked at the third main visit after the interviewer collected the diary. Parts I and II were both divided into a number of sections. These sections are shown in order in Table D.2, and the intended participants are indicated.
| Table D.2: Content of Part I and II of the individual questionnaires | |---------------------------------------------------------------| | **Part I sections** | **Participant** | | Access to food at school | Aged under 1.5-15 years (or aged 16/17 years and in full-time education) | | Eating habits | All ages | | General health | All ages | | Dental health | All ages | | Drinking | Aged 8 years and over (those aged 8-17 years given a self-completion booklet) | | Smoking | Aged 8 years and over (those aged 8-17 years given a self-completion booklet) | | Education | Aged 16 years and over | | Job and income | Asked of MFP or selected participant about the ‘Household Reference Person’ (HRP) |
| **Part II sections** | **Participant** | | Mental Health (Year 6 only) | Aged 16 years and over | | Dietary supplements | All ages | | Sun exposure | All ages | | Nurse introduction | All ages |
1 Participants aged 18 to 24 years were given the option of using a self-completion booklet for the questions on smoking and drinking in order to provide more privacy and to avoid disclosing their answers to other household members. National Diet and Nutrition Survey (NDNS)
P10041 Year 9
Program Documentation
Interviewer Schedule
This ‘paper version of the program’ has been created to indicate the wording and content of the interviewer questionnaire.
PART 1: Interviewer Schedule
- Instructions for the interviewer are given in capital letters, and questions the interviewer is to ask the participant are given as normal text.
- Items which appear in the actual program but which have been excluded here for clarity include: Repetition of participant’s name on each question; Checks on the accuracy of answer codes in relation to each other; Prompts for back-coding during the edit process.
Contents:
HOUSEHOLD GRID ............................................................................................................. 2 HRP SELECTION .................................................................................................................. 8 TENURE ............................................................................................................................... 10 MAIN FOOD PROVIDER QUESTIONNAIRE ..................................................................... 11 SHOPPING HABITS ............................................................................................................. 11 FOOD PREPARATION ........................................................................................................ 12 EMPLOYMENT OF HOUSEHOLD REFERENCE PERSON ............................................. 16 BENEFITS .......................................................................................................................... 17 INCOME .............................................................................................................................. 18 SCHOOL PROVISION ....................................................................................................... 19 EATING OUT AND OTHER PROVISION ........................................................................... 23 EATING HABITS .................................................................................................................. 25 FOOD AVOIDANCE .......................................................................................................... 29 GENERAL HEALTH .......................................................................................................... 32 ORAL HEALTH .................................................................................................................. 35 SELF-COMPLETIONS ....................................................................................................... 37 SMOKING ............................................................................................................................ 38 DRINKING ........................................................................................................................... 40 FOOD DIARY PLACEMENT .............................................................................................. 46 HEIGHT & WEIGHT MEASUREMENTS ............................................................................ 51 CONTACT DETAILS .......................................................................................................... 57 SUN EXPOSURE ................................................................................................................ 63 CHILD PHYSICAL ACTIVITY ............................................................................................ 67 DIARY COLLECTION ......................................................................................................... 78 & PHYSICAL ACTIVITY QUESTIONNAIRE PLACEMENT ............................................. 78 NHS CENTRAL REGISTER ............................................................................................... 84 & CANCER REGISTRY CONSENT FORM ....................................................................... 84 RECONTACT QUESTIONS ................................................................................................. 85 IODINE SPOT ..................................................................................................................... ERROR! BOOKMARK NOT DEFINED. NURSE INTRODUCTION .................................................................................................... 88 SHGInt I'd like to know a little about the members of your household who shop and cook as a group. Can you tell me the names of everyone in your household (who shop and cook as a group). INTERVIEWER: Press '1' to continue and record (participant/ MFP and/or parent(s)) as first person in household PRESS 1 AND <ENTER> TO CONTINUE
Name RECORD THE NAME (OR A UNIQUE IDENTIFIER) FOR EACH MEMBER OF THE CATERING UNIT. WHEN ALL HOUSEHOLD MEMBERS HAVE BEEN ENTERED, PRESS PgDn.
(The following questions are asked about each household member. “You / X” is substituted with the appropriate name for X).
Sex INTERVIEWER: Ask or record sex of X 1 Male 2 Female
DoB What is your / X’s date of birth? INTERVIEWER: If day not given....enter 15 for day. If month not given....enter 6 for month.
IF (DOB = Don’t know / Refusal) THEN
Age What was your / X’s age last birthday? ENTER 0 FOR A CHILD UNDER 12 MONTHS. 98 or more = CODE 97 INTERVIEWER: If participant is unable to provide their age at their last birthday or their date of birth, please thank the participant and explain that if we don"t have their age then we will be unable to use their data so they are not eligible to continue with the interview. Please code "599. OFFICE APPROVAL ONLY - Other 'unproductive' at IOut in the Admin ' block and phone the office. Range: 0..97
DVAge Age, computed
DvAgeM Age in months, computed
IF (DVAge ≥ 16) THEN
MarSt2 ASK OR RECORD MARITAL STATUS. CODE FIRST THAT APPLIES.
(HELP <F9>)
Interviewer: The aim is to obtain legal marital status, irrespective of any de facto arrangement. The only qualification to this aim is that you should not probe the answer 'separated'.
Should a participant query the term, explain that it covers any person whose spouse is living elsewhere because of estrangement (whether the separation is legal or not). Ignore temporary absences, e.g. on oil rig.
A person whose spouse has been working away from home for over 6 months, e.g. on a contract overseas or in the armed forces, should still be coded as married and living with husband/wife if the separation is not permanent.
Are you / is X ... 1 NevMarr "single, that is, never married" 2 MarrLiv "married and living with your husband/wife" 3 Civil "civil partner in a legally recognised Civil Partnership" 4 Separated "married and separated from your husband/wife" 5 Divorced "divorced" 6 Widowed "or widowed?" 7 CivilSep "Spontaneous only - formerly in a legally recognised civil partnership and separated from civil partner" 8 CivilDis "Spontaneous only - formerly in a legally recognised civil partnership and civil partnership is now legally dissolved" 9 CivWid "Spontaneous only - a surviving civil partner (his/her partner has since died)"
IF (more than 1 person aged 16+ in household) AND (MarStat = NevMar OR Separated OR Divorced OR Widowed OR CivilSep OR CivilDis OR CivWid) THEN LiveW2 May I just check, are you / is X living with someone in the household as a couple? ASK OR RECORD. INTERVIEWER: Only participants who are living with their partner in this household should be coded as living together as a couple. INTERVIEWER: You may code No without asking the question ONLY if all members of the household are too closely related for any to be living together in a de facto marital relationship. 1 Yes "Yes" 2 No "No" 3 SameSex "Spontaneous only: Same sex couple (but not in a formal registered civil partnership)"
DVMarDF2 De facto marital status, computed 1 Married "Married" 2 DFCivil "Civil partnered" 3 Cohab "Cohabiting" 4 DFSingle "Single" 5 DFSepar "Separated" 6 DFDivor "Divorced" 7 DFWidow "Widowed" 8 DFCivDis "Formerly in same-sex civil partnership, now legally dissolved" 9 DFCivWid "A surviving civil partner"
IF (DvAge ≥ 16) THEN WrkStat Is X / Are you ...READ OUT... INTERVIEWER: CODE FIRST TO APPLY. 1 FTEduc "...going to school or college full-time (including on vacation)" 2 Working "...in full or part-time employment, or" 3 NWork "...not working at present?"
IF (WrkStat = FTEduc) THEN PTWork Does X / Do you do any paid or voluntary work as well as studying? 1 Yes 2 No
IF (WrkStat = FTEduc OR NWork) AND (PTWork = No) THEN IF (WrkStat = NWork) THEN EverWk Has X / Have you ever had a paid job, apart from casual or holiday work? 1 Yes 2 No
IF (Country= Northern Ireland THEN NatID=NatIDNI) ELSE (NatID=NatIDGB) NatID SHOW CARD A What do you consider your / X's national identity to be? Please choose your answer from this card. 1 English 2 Scottish 3 Welsh 4 Northern Irish 5 British 6 Other "Other answer"
If Country= England, Wales, Scotland THEN NatIDGB SHOW CARD A What do you consider your/ X's national identity to be? Please choose your answer from this card.
1. English,
2. Scottish,
3. Welsh,
4. NthIrish "Northern Irish",
5. British,
6. Other "Other answer"
If Country= Northern Ireland THEN NatIDNI SHOW CARD A What do you consider your_names national identity to be? Please choose your answer from this card.
1. British,
2. Irish,
3. Ulster,
4. NthIrish "Northern Irish",
4 of 89 5. English, 6. Scottish, 7. Welsh, 8. Other "Other answer"
**NatIDUK (Derived from NatIDGB and NatIDUK)**
SHOW CARD A What do you consider your names national identity to be? Please choose your answer from this card.
1. English,
2. Scottish,
3. Welsh,
4. NthIrish "Northern Irish",
5. British,
6. Other "Other answer"
**IF (NatID = Other) THEN**
**NatOth** How would you describe your / X’s national identity? INTERVIEWER: IF SOMEONE DESCRIBES THEMSELVES AS HALF ENGLISH AND HALF IRISH OR ANY OTHER COMBINATION OF WELSH/SCOTTISH/IRISH/ENGLISH CODE THEM AS ‘Mixed British’.
1. Mixed "Mixed British - SPECIFY AT NEXT QUESTION"
2. Describe "Other - SPECIFY AT NEXT QUESTION"
**IF (NatOth = Describe) THEN**
**XNatOth** INTERVIEWER: ENTER DESCRIPTION OF NATIONAL IDENTITY. : STRING [100]
**IF (Country= Northern Ireland THEN EthGrp=EthGrpNI) ELSE (EthGrp=EthGrpGB)**
**EthGrp** SHOW CARD B To which of these ethnic groups do you consider you / X belong(s)? INTERVIEWER: THIS IS A QUESTION OF PARTICIPANT’S (OR PROXY’S) OPINION.
01. White "English / Welsh / Scottish / Northern Irish / British"
02. White -Irish "Irish"
03. White - Gypsy "Gypsy or Irish Traveller"
04. WhtOth "Any other white background (please describe)"
05. MixedWBC "Mixed - White and Black Caribbean"
06. MixedWBA "Mixed - White and Black African"
07. MixedWAs "Mixed - White and Asian"
08. MixedOth "Any other mixed background (please describe)"
09. Indian "Asian or Asian British - Indian"
10. Pakistan "Asian or Asian British - Pakistani"
11. Bngldesh "Asian or Asian British - Bangladeshi"
12. AsianOth "Any other Asian/Asian British background (please describe)"
13. BlackCrb "Black or Black British - Caribbean"
14. BlackAfr "Black or Black British - African"
15. BlackOth "Any other Black/Black British background (please describe)"
16. Chinese "Chinese"
17. Arab "Arab"
18. Other "Any other (please describe)" EthGrpGB SHOW CARD B To which of these ethnic groups do you consider you/ X belong(s)? INTERVIEWER: THIS IS A QUESTION OF PARTICIPANT'S (OR PROXY'S) OPINION.
19. White "White - English / Welsh / Scottish / Northern Irish / British",
20. Irish "White - Irish",
21. Gypsy "White - Gypsy or Irish Traveller",
22. WhiteOth "Any other white background (please describe)"
23. MixedWBC "Mixed - White and Black Caribbean",
24. MixedWBA "Mixed - White and Black African",
25. MixedWAs "Mixed - White and Asian",
26. MixedOth "Any other mixed background (please describe)"
27. Indian "Asian or Asian British - Indian",
28. Pakistan "Asian or Asian British - Pakistani",
29. Bngldesh "Asian or Asian British - Bangladeshi",
30. AsianOth "Any other Asian/Asian British background (please describe)"
31. BlackCrb "Black or Black British - Caribbean",
32. BlackAfr "Black or Black British - African",
33. BlackOth "Any other Black/Black British background (please describe)"
34. Chinese,
35. Arab,
36. Other "Any other (please describe)"
EthGrpNI SHOW CARD B To which of these ethnic groups do you consider you/ X belong(s)? INTERVIEWER: THIS IS A QUESTION OF PARTICIPANT'S (OR PROXY'S) OPINION.
01. Wht,
02. IrishTrv "Irish traveller",
03. Mixed,
04. Indian,
05. Pakistan,
06. Bngldesh "Bangladeshi",
07. AsianOth "Other Asian",
08. BlackCrb "Black Caribbean",
09. BlackAfr "Black African",
10. BlackOth "Other Black",
11. Chinese,
12. Other "Other ethnic group"
EthGrpUK (Derived from EthGrpGB and EthGrpNI) SHOW CARD B To which of these ethnic groups do you consider you/ X belong(s)? INTERVIEWER: THIS IS A QUESTION OF PARTICIPANT'S (OR PROXY'S) OPINION.
01. White "White - English / Welsh / Scottish / Northern Irish / British",
02. Irish "White - Irish",
03. Gypsy "White - Gypsy or Irish Traveller",
04. WhiteOth "Any other white background (please describe)"
05. MixedWBC "Mixed - White and Black Caribbean",
06. MixedWBA "Mixed - White and Black African",
07. MixedWAs "Mixed - White and Asian",
08. MixedOth "Any other mixed background (please describe)"
09. Indian "Asian or Asian British - Indian",
10. Pakistan "Asian or Asian British - Pakistani",
11. Bngldesh "Asian or Asian British - Bangladeshi"
12. AsianOth "Any other Asian/Asian British background (please describe)"
13. BlackCrb "Black or Black British - Caribbean"
14. BlackAfr "Black or Black British - African"
15. BlackOth "Any other Black/Black British background (please describe)"
16. Chinese,
17. Arab,
18. Other "Any other (please describe)"
IF (EthGrp = 4, 8, 12, OR 15) THEN EthOth Please can you describe your / X’s ethnic group? INTERVIEWER: ENTER DESCRIPTION OF ETHNIC GROUP. : STRING [100]
IF (Person > 1) THEN Rel SHOW CARD C INTERVIEWER: CODE RELATIONSHIP OF EACH HOUSEHOLD MEMBER TO THE OTHERS - X is Y’S… SOME CODES MAY NOT BE VISABLE ON THE SCREEN <SEE HELP F9> YOU MAY WISH TO INTRODUCE THIS SECTION. ONE POSSIBLE INTRODUCTION IS : There are a lot of changes taking place in the make-up of households/families and this section is to help find out what those changes are. I'd like you to tell me the relationship of each member of the household to every other member. INTERVIEWER: THIS SECTION MUST BE ASKED FOR ALL HOUSEHOLDS CONSISTING OF MORE THAN ONE PERSON. PLEASE ASK IN EVERY CASE. YOU SHOULD NOT MAKE ASSUMPTIONS ABOUT ANY RELATIONSHIP. TREAT RELATIVES OF COHABITING MEMBERS OF THE HOUSEHOLD AS THOUGH THE COHABITING COUPLE WERE MARRIED, UNLESS THE COUPLE ARE A SAME SEX COUPLE. HALF-BROTHERS/SISTERS SHOULD BE CODED WITH STEP-BROTHERS/SISTERS. ASK PARTICIPANT TO GIVE THE CODE NUMBER ON THE CARD RATHER THAN THE RELATIONSHIP. See interviewer instructions for further details. 1 Spouse "Husband/Wife" 2 CivilP "Civil partner" 3 Cohabitee "Partner/Cohabitee" 4 Child "Natural son/daughter" 5 AChild "Adopted son/daughter" 6 FChild "Foster child" 7 StChild "Stepson/stepdaughter" 8 ILChild "Son-in-law/daughter-in-law" 9 Parent2 "Natural Parent" 10 AdParent "Adoptive parent" 11 FParent "Foster parent" 12 StParent "Step-parent" 13 ILParent "Parent-in-law" 14 Sib "Natural brother/sister" 15 HSib "Half-brother/sister" 16 StSib "Step-brother/sister" 17 ASib "Adopted brother/sister" IF (Rel = 2 or 3) THEN
INTERVIEWER: As of 29 March 2014 same sex couples can marry in England and Wales. There are also plans to allow the conversion of civil partnerships to marriages by the end of 2014. Please check if the couple are married or are in a civil partnership, and code appropriately.
**HRP SELECTION**
**HHldr** In whose name is the accommodation owned or rented? INTERVIEWER: IF THE RENT OR MORTGAGE FOR THIS ACCOMMODATION IS PAID FOR BY SOMEONE OUTSIDE THE HOUSEHOLD, CODE THE PERSON IN THE HOUSEHOLD WHO IS RESPONSIBLE FOR THE ACCOMMODATION. ANYONE ELSE? CODE ALL THAT APPLY.
IF (more than one person coded as being the householder at HHldr) THEN
**HiHNum** You have told me that X and X jointly own or rent the accommodation. Who has the highest income (from earnings, benefits, pensions and any other sources)? INTERVIEWER: THESE ARE THE JOINT HOUSEHOLDERS: (Names of joint householders) ENTER PERSON NUMBER. IF TWO OR MORE HAVE SAME INCOME, ENTER 97. IF PARTICIPANT ASKS FOR PERIOD TO AVERAGE OVER - ONE YEAR. PROMPT AS NECESSARY FOR JOINT HOUSEHOLDERS: IS ONE OF THEM THE SOLE PERSON WITH PAID WORK OR OCCUPATIONAL PENSION. Range: 1..97
IF (HiHNum=11) THEN
**JntEldA** ENTER PERSON NUMBER OF THE ELDEST JOINT HOUSEHOLDER FROM THOSE WITH THE SAME HIGHEST INCOME. ASK OR RECORD.
IF (HiHNum=DONTKNOW OR REFUSAL) THEN
**JntEldB** ENTER PERSON NUMBER OF THE ELDEST JOINT HOUSEHOLDER. ASK OR RECORD.
**HRPNum** {Computed from responses above} Person number of household reference person:
**AdNum1** ENTER PERSON NUMBER OF ADULT PARTICIPANT (NAME RECORDED ON FIRST PAGE OF THE ARF) IF (Female adult aged ≤ 49) THEN
AdChk INTERVIEWER: When doing the selection you should have checked to ensure that *(Name of selected adult participant)* is not currently pregnant or breastfeeding. Please type ‘1’ to confirm that this is the case 1 NotP "X not pregnant or breastfeeding" 2 Preg "X is pregnant or breastfeeding"
ChNum ENTER THE PERSON NUMBER OF 'PARTICIPANT 2' AGED 18 MONTHS TO 18 YEARS. (NAME RECORDED ON FIRST PAGE OF THE ARF) Range: 1..97
P2Mum *(Derived)* Mother of selected child from HHGrid : 0..10
P2Dad *(Derived)* Mother of selected child from HHGrid : 0..10
Par1 Which of the people in this household are *(Name of selected child participant)*’s parents or have legal parental responsibility for him/her on a permanent basis? INTERVIEWER: Code first person at this question. Range: 1..97
IF (Par1 = 1..10) THEN
Par2 Which other person in this household is *(Name of selected child participant)*’s parent or has legal parental responsibility for him/her on a permanent basis? INTERVIEWER: Code second person at this question. Range: 1..97
IF (Female child and aged 13-18) THEN
ChChk INTERVIEWER: When doing the selection you should have checked to ensure that *(Name of selected child participant)* is not currently pregnant or breastfeeding. Please type ‘1’ to confirm that this is the case" 1 NotP "X not pregnant or breastfeeding" 2 Preg "X is pregnant or breastfeeding"
ChResp SOME OF THE QUESTIONS ABOUT *(Name of selected child participant)* WILL NEED TO BE ASKED OF AN ADULT. Enter person number of adult who will answer questions on behalf of *(Name of selected child participant)* INTERVIEWER: Only an adult household member can act as a proxy when collecting information about children. Range: 1..10
MFPNum Enter the person number of the MAIN FOOD PROVIDER (NAME RECORDED ON ARF). Range: 1..10
**Rinfo** INTERVIEWER: Summary of participant info ..... MFP: Adult Participant: (Main Food Provider name) Child Participant: (Adult participant name) Proxy Participant: (Child participant name)
**TENURE**
**Ten1** SHOW CARD D In which of these ways do you/does your household occupy this accommodation? INTERVIEWER: CODE FIRST THAT APPLIES. NOTE: QUESTIONS ABOUT TENURE ARE ASKED ABOUT THE HOUSEHOLD REFERENCE PERSON 1 Own "Own outright" 2 Morg "Buying it with the help of a mortgage or loan" 3 Share "Pay part rent and part mortgage (shared ownership)" 4 Rent "Rent it" 5 RentF "Live here rent-free (including rent-free in relative's/friend's property; excluding squatting)" 6 Squat "Squatting"
**IF (Ten1 = Rent OR RentF) THEN**
**LLord** Who is your landlord? INTERVIEWER: IF PROPERTY IS LET THROUGH AN AGENT, THE QUESTION REFERS TO THE OWNER NOT THE AGENT. CODE 1 (LOCAL AUTHORITY) INCLUDES PEOPLE RENTING FROM HOUSING ACTION TRUSTS. CODE 2 (HOUSING ASSOCIATION) INCLUDES REGISTERED SOCIAL LANDLORDS AND LOCAL HOUSING COMPANIES. USE CODE 5 ONLY IF THE PARTICIPANT AND LANDLORD WERE FRIENDS BEFORE THEY WERE TENANT AND LANDLORD, NOT IF THEY HAVE ONLY BECOME FRIENDLY SINCE THEN. 1 LA "The local authority/council/New Town Development/Scottish Homes" 2 HA "A housing association or co-operative or charitable trust or Local Housing company" 3 Comp "Employer (organisation) of a household member" 4 OthOrg "Another organisation" 5 RelFrnd "Relative/friend (before you lived here) of a household member" 6 EmplIndiv "Employer (individual) of a household member" 7 OthIndiv "Another individual private landlord"
**IF (Ten1 = Rent OR RentF) THEN**
**Furn** Is the accommodation provided... ...RUNNING PROMPT... 1 Furnd "...furnished" 2 PFurn "...partly furnished (eg carpets and curtains only)" 3 UnFurn "...or, unfurnished?" MAIN FOOD PROVIDER QUESTIONNAIRE
THIS IS A HOUSEHOLD LEVEL QUESTIONNAIRE ASKED ONCE AT ALL ELIGIBLE HOUSEHOLDS. EITHER THE MAIN FOOD PROVIDER / MFP (AGED 16 YEARS OR OVER), IDENTIFIED IN THE HOUSEHOLD COMPOSITION QUESTIONNAIRE, ANSWERS THE FOLLOWING QUESTIONS OR A PROXY MFP INTERVIEW IS CONDUCTED WITH PARTICIPANT 1 (AGED 19 YEARS OR OVER).
MFPProx IS THIS A PERSONAL OR A PROXY INTERVIEW WITH THE MAIN FOOD PROVIDER? 1 WithMFP "PERSONAL INTERVIEW WITH MFP" 2 WithProx "PROXY INTERVIEW"
IF (MFPProx = WithProx) THEN MProxWho ENTER THE PERSON NUMBER OF PROXY PARTICIPANT list of household members ENTER CODE 11 IF NON-HOUSEHOLD MEMBER Range: 1..11
SHOPPING HABITS
ASK ALL ShopIntr Now I would like to ask you about shopping. INTERVIEWER: PROMPT WHENEVER NECESSARY. IF PARTICIPANT DOESN'T KNOW ANSWERS, TRY TO SPEAK TO PERSON WHO DOES SHOPPING. PRESS <ENTER> TO CONTINUE 1 Continue
ASK ALL ShopFV SHOW CARD E Where do you/ does your household mainly buy fresh fruit and vegetables from? INTERVIEWER: CODE ONE ONLY. IF MORE THAN ONE, CODE WHERE MOST FRUIT AND VEG BOUGHT FROM. DO NOT INCLUDE FRUIT AND VEGETABLES THAT ARE GROWN BY THE PARTICIPANT. SUCH FOOD SHOULD BE INCLUDED UNDER THE FOLLOWING QUESTIONS ABOUT FREE FOOD. 1 LSuper "Large supermarket" 2 SSuper "Mini supermarket (e.g. Tesco Metro)" 3 CornerS "Local/corner shop (including newsagents)" 4 Garage "Garage forecourt" 5 Greeng "Independent greengrocer" 6 Butcher "Independent butcher" 7 Baker "Independent baker" 8 FishM "Independent fishmonger" 9 Market "Market (including stalls)" 10 Farm "Farm" 11 HomeDel "Home delivery (including co-operatives, community schemes/local initiatives)" 12 Other "Other shop" 13 Several "Use more than one of these for main shop (SPONTANEOUS ONLY)"
**FVOft** SHOW CARD F How often do you buy fresh fruit and vegetables? INTERVIEWER: CODE FIRST THAT APPLIES 1 MOnceD "More than once a day" 2 OnceD "Once a day" 3 TThWk "2 or 3 times a week" 4 Weekly "Weekly" 5 TThMth "2 or 3 times a month" 6 Monthly "Monthly" 7 TwoMths "Every 2 months" 8 LTTwoMths "Less often than every 2 months"
**FruitAv** How often do you usually have FRESH FRUIT available in your home? Would you say ... 1 MTime "Most of the time" 2 SomeT "Sometimes" 3 Never "Or, never?"
**FOOD PREPARATION**
**ASK ALL** PrepIntr I am now going to ask you about how you usually prepare some food items. PRESS <ENTER> TO CONTINUE 1 Continue
**ASK ALL** MincF1 When you buy mince, do you choose mince with fat or mince without much fat? INTERVIEWER: PROMPT IF NECESSARY, 'MINCE' MEANS ANY GROUND ANIMAL PRODUCT (BEEF, CHICKEN, PORK ETC.) 1 MinFat "Mince with fat" 2 MinNoFat "Mince without much fat" 3 NoEat "Do not prepare/eat this food"
**ASK IF** (MinceF1 = MinFat OR MinNoFat) THEN MincF2 When you are cooking mince, do you strain off the fat or do you not strain off the fat? 1 Strain "Strain off the fat" 2 NoStrain "Do not strain off the fat"
**ASK ALL** ChipHow SHOW CARD G Please describe how you usually prepare chips, that is if you or anyone in your household eat(s) them? INTERVIEWER: IF 'VARIES', CODE HOW PREPARED MOST OFTEN. DO NOT INCLUDE CHIPS PURCHASED FROM TAKEAWAY OUTLET. 1 FrOld "Freshly made from old potatoes" 2 FrNew "Freshly made from new potatoes" 3 Frozen "Frozen, fried" 4 OvenC "Oven ready chips" 5 MicroC "Microwave chips (eg McCain Microchips)" 6 Other "Make chips another way" 7 NoEat "Do not prepare/eat this food"
SaltChk Do you add salt or salt substitute to your food during cooking, such as salt in water for cooking potatoes? INTERVIEWER: IF USE BOTH SALT AND SALT SUBSTITUTE, CODE WHICH USED MOST OFTEN. 1 Salt "Salt" 2 Subst "Salt substitute" 3 Neither "Neither"
IF (SaltChk = Salt) THEN SaltHowC Is that always, usually or sometimes (that you add salt to your food during cooking)? 1 Always "Always" 2 Usually "Usually" 3 Somet "Sometimes"
IF (SaltChk = Subst) THEN SltSHow Is that always, usually or sometimes (that you add salt substitute to your food during cooking)? 1 Always "Always" 2 Usually "Usually" 3 Somet "Sometimes"
Main Food Provider hours of work
IF (MFP = participant) THEN questions asked to participant, ELSE questions asked of MFP:
JobYes Thank you for answering these questions so far. Now I would like to ask a few questions about your employment. Do you have a job? 1 Yes 2 No
IF (JobYes = 1) THEN RegCas Can I just check, are you in a regular job or an occasional job? 1 RegJob "Regular job" 2 OccasJob "Occasional job" 3 Both "Both regular job AND occasional job" IF (RegCas = RegJob OR Both) THEN RegHrs How many hours do you work per week in your regular job? INTERVIEWER: RECORD TYPICAL NUMBER OF HOURS. IF 97 HOURS OR MORE THEN ENTER 97. Range: 0..97
IF (RegCas = RegJob OR Both) THEN WTypHrs Is this the typical number of hours you work? 1 Yes 2 No
IF (WTypHrs = No) THEN NTypHrs INTERVIEWER: RECORD TYPICAL NUMBER OF HOURS WORKED PER WEEK. INTERVIEWER: IF 97 HOURS OR MORE THEN ENTER 97. Range: 1..97
{IF RegCas=OccasJob OR Regcas=Both} Cashrs How many hours did you/ MFP work in this occasional job in the seven days ending last Sunday? INTERVIEWER: IF 97 HOURS OR MORE THEN ENTER 97 Range: 1..97
{IF RegCas=OccasJob OR Regcas=Both} TypCas Is this the typical number of hours you/ MFP work/s in your/ MFPs occasional job? : YN
{IF Typcas=No} NCashrs INTERVIEWER: RECORD TYPICAL NUMBER OF HOURS WORKED PER WEEK IN OCCASIONAL JOB(S) IF 97 HOURS OR MORE THEN ENTER 97 Range: 1..97
Educ I'd now like to ask you a couple of questions about education and work-related training. PRESS <ENTER> TO CONTINUE 1 Continue
EducFin At what age did you / X finish your/his/her continuous full-time education at school or college? INTERVIEWER: PLEASE NOTE THIS IS 'CONTINUOUS' FULL-TIME EDUCATION. I.E. MATURE STUDENTS MAY CURRENTLY BE IN FULL-TIME EDUCATION BUT MAY HAVE FINISHED THEIR CONTINUOUS EDUCATION SEVERAL YEARS AGO. 1 Notyet "Not yet finished" 2 Never "Never went to school" 3 und14 "14 or under" 4 at15 "15" 5 at16 "16" 6 at17 "17" IF (EducFin IN [Never..ov19]) THEN
QualCh Do you have any qualifications from school, college or university, or any qualifications connected with work or from government schemes? 1 Yes 2 No
IF (QualCh = Yes) THEN
Qual SHOW CARD H - 2 PAGES Please look at this card and tell me whether you/ X have/ has any of the qualifications listed. Start at the top of the list and tell me the first one you come to that you/ X have/ has passed. 1 HiDeg "Higher degree, e.g. MSc, MA, MBA, PGCE, PhD" 2 L5NVQ "Level 5 NVQ / SVQ" 3 BTECAPr "BTEC Advanced Professional Diploma/Certificate" 4 Deg "First degree, e.g. BSc, BA, BEd, MA at first degree level" 5 L4NVQ "Level 4 NVQ / SVQ" 6 HNC "HNC / HND" 7 BTECHi "BTEC Higher National or Professional Diploma/Certificate" 8 RSAHi "RSA or OCR Higher" 9 Alevel "GCE 'A'-level" 10 A2 "A2" 11 AVCE "AVCE" 12 SCEAdv "SCE Advanced Higher Grades" 13 SCEHi "SCE Higher Grades (A-C)" 14 CSYS "CSYS" 15 KSkL3 "Key Skills Level 3" 16 L3NVQ "Level 3 NVQ / SVQ" 17 ONC "ONC / OND" 18 BTECA "BTEC Advanced or National Diploma/Certificate" 19 RSAAdv "RSA or OCR Advanced Diploma" 20 CityG3 "City & Guilds Advanced Craft / Part 3" 21 AdvGNVQ "Advanced GNVQ; Vocational A Level" 22 AdvMAp "Advanced Modern Apprenticeship" 23 GCSEAC "GCSE grade A\*-C" 24 Olevel "GCE 'O'-level passes" 25 CSE1 "CSE grade 1" 26 SCEAC "SCE O Grades (A-C)" 27 SCEStd13 "SCE Standard Grades (1-3)" 28 SchCert "School Certificate / Matriculation" 29 KSkL2 "Key Skills Level 2" 30 L2NVQ "Level 2 NVQ/SVQ" 31 ESQLV2 "Level 2 Essential Skills Qualifications" 32 BTECInt "BTEC Intermediate or First Diploma/Certificate" 33 RSADip "RSA Diploma" 34 CityG2 "City & Guilds Craft / Part 2" 35 IntGNVQ "Intermediate GNVQ" 36 FounMAp "Foundation Modern Apprenticeship" 37 GCSEDG "GCSE grade D-G" 38 CSE25 "CSE grade 2-5" 39 SCEDE "SCE O grades(D-E)" 40 SCEStd47 "SCE O grades(4-7)" EMPLOYMENT OF HOUSEHOLD REFERENCE PERSON
IF (HRP = participant) THEN questions asked in person, ELSE questions asked of MFP about HRP:
JHRPIntr Now I would like to ask a few questions about the job that you do/ HRP does. IF ASKED SAY 'because the accommodation is in your/ HRP's name'. PRESS <ENTER> TO CONTINUE 1 Continue
IndD CURRENT/ MOST RECENT JOB OF HRP What does/did the firm or organisation you/HRP work(s)/worked for mainly make or do (at the place where you/HRP work(s)/worked)? INTERVIEWER: DESCRIBE FULLY - PROBE MANUFACTURING or PROCESSING or DISTRIBUTING ETC. AND MAIN GOODS PRODUCED, MATERIALS USED, WHOLESALE or RETAIL ETC. : STRING [80]
OccT JOB TITLE OF CURRENT / MOST RECENT JOB What is/was your/ HRP main job?" : STRING [30]
OccD CURRENT / MOST RECENT JOB OF HRP What do/does/did you/HRP mainly do in this job? INTERVIEWER: CHECK SPECIAL QUALIFICATIONS/TRAINING NEEDED TO DO THE JOB : STRING [80]
Stat Are/does/did you/HRP working as an employee or are/does/did you/HRP self-employed? 1 Employee "Employed" 2 SelfEmp "Self-employed"
Manage In this job, do/did you/HRP have any formal responsibility for supervising the work of other employees? INTERVIEWER: CODE 1 ('YES') INCLUDES PEOPLE WHO SAY THEY ARE MANAGERS. DO NOT INCLUDE IN CODE 1 (I.E. CODE AS 'NO'):
- SUPERVISORS OF CHILDREN (E.G. TEACHERS, NANNIES, CHILDMINDERS)
- SUPERVISORS OF ANIMALS
- PEOPLE WHO SUPERVISE SECURITY OR BUILDINGS ONLY (E.G. CARETAKERS, SECURITY GUARDS)
ANY SUPERVISORY/MANAGERIAL DUTIES 1 Yes 2 No
EmpNo How many people work(ed) for your/HRP’s employer at that place? Are/were there ... (RUNNING PROMPT)... 1 n1_24 "1-24" 2 n25_499 "25 to 499, or" 3 n500plus "500 or more employees?"
Solo Are/does/did you/HRP working alone or do/does/did you/HRP have employees? 1 OnOwn "on own/with partner(s) but no employees" 2 WithEmp "with employees"
SENo How many people do/does/did you/HRP employ at the place where you/HRP work(s)? Were there ... (RUNNING PROMPT)... 1 n1_24 "1-24" 2 n25_499 "25 to 499, or" 3 n500plus "500 or more employees?"
BENEFITS
Benefits SHOW CARD I There has been a lot of talk about health and income. We would like to get some idea of your household's income. This card shows various possible sources of income. Can you please tell me which kinds of income you (and your husband/wife/partner) receive?
INTERVIEWER: FOR ALL SOURCES. CODE ALL THAT APPLY 1 Emp Earnings from employment or self-employment 2 StatPens State retirement pension 3 EmpPens Pension from former employer 4 PersPens Personal Pensions 5 JSA Job-Seekers Allowance 6 EmpAll Employment and Support Allowance 7 IncSupp Income Support 8 PensCred Pension Credit 9 WTaxCred Working Tax Credit 10 ChildCred Child Tax Credit 11 ChildBen Child Benefit 12 HousBen Housing Benefit 13 CounTxBn Council Tax Benefit 14 OthStBen Other state benefits 15 Interest Interest from savings and investments (e.g. stocks & shares) 16 OthOuts Other kinds of regular allowance from outside your household (e.g. maintenance, student's grants, rent) 17 NoBen No source of income INCOME
Income SHOW CARD J Thank you for answering the questions so far. Before we move on, please could you take a look at this card and tell me the letter of the group which represents your household's total income in the last 12 months, before any deductions for tax etc. Please include income from earnings, self-employment, benefits, pensions, and interest from savings. INTERVIEWER: CARD SHOWS ANNUAL AMOUNTS. THIS MEANS CATERING UNIT INCOME (NOT HOUSEHOLD INCOME). HOUSING BENEFITS AND CHILD ALLOWANCE SHOULD BE INCLUDED. PROBE TO MAKE SURE PARTICIPANT HAS INCLUDED THIS: ‘Can I just check, do you receive any housing benefits and/or child allowance?’
1 IncA "A" 2 IncB "B" 3 IncC "C" 4 IncD "D" 5 IncE "E" 6 IncF "F" 7 IncG "G" 8 IncH "H" 9 IncI "I" 10 IncJ "J" 11 IncK "K" 12 IncL "L" 13 IncM "M"
MFPEnd INTERVIEWER: End of Main Food Provider interview with (name of MFP) / on behalf of (name of MFP). PRESS <ENTER> TO CONTINUE 1 Continue
INTRODUCTION TO INDIVIDUAL INTERVIEW
IntroP INTERVIEWER: This is the start of the individual questions for NAME. Do you want to do this interview now or later? (NB Once set to ‘Now’ you will not be able to change to ‘later’)
Now 2. Later
IF (PAge = 1-15) THEN FNAdCon INTERVIEWER: Please record the name of the parent/guardian who gave consent for PName to take part in the interview. This must be the same information recorded at D7 on the ARF. Enter first name here and surname in next question. : STRING SNAdCon INTERVIEWER: Enter surname here. : STRING
SCHOOL PROVISION FOR 18 MONTHS-15 YEARS & 16-18 YEARS IN FULL-TIME EDUCATION
WHERE PARTICIPANT 10 OR YOUNGER - ASK THROUGH GUARDIAN; WHERE PARTICIPANT 11-18, ASK DIRECTLY.
IF (aged 1-15) THEN FNAdCon INTERVIEWER: Please record the name of the parent/guardian who gave consent for (name) to take part in the interview. This must be the same information recorded at D7 on the ARF. Enter first name here and surname in next question. : STRING [15]
SNAdCon INTERVIEWER: Enter surname here. : STRING [15]
IF (aged 18 months-15 years OR 16-18 in FT education) THEN SchType SHOW CARD CC Please look at this card and tell me which of these best describes the school you/ (child’s name) attend(s). INTERVIEWER: IF SPECIFIC TYPE OF COLLEGE (E.G. MUSIC COLLEGE), CODE AS '5, A SIXTH FORM COLLEGE/HIGHER EDUCATION COLLEGE': 1 Nurs "a nursery school" 2 Prim "a primary school (including infant school, junior school)" 3 Sec "a secondary school (including sixth form in a school)/High school" 4 Mid "a middle school" 5 SixthF "a sixth form college/Higher Education college" 6 Other "Other" 7 HomEd "Home-educated" 8 NoSch "SPONTANEOUS ONLY: Hasn't started school yet"
IF (SchType = Nurs..Other) THEN SchIntr Now I would like to ask some questions about food and meals you / (child's name) may have whilst at school/college. PRESS <ENTER> TO CONTINUE 1 Continue
SchProv Does your / (child's name)'s school/college provide food? INTERVIEWER: INCLUDE SANDWICHES AND SALADS. DO NOT INCLUDE SNACKS SUCH AS CONFECTIONERY, CRISPS, FRUIT. 1 Yes 2 No IF (SchProv = Yes) THEN
SchName Please could you tell me the name and address of your / child's name school/college. We only need this information in case we need to ask them questions about how the school/college prepares food. Please tell me the name of the school first. INTERVIEWER: PLEASE ENTER NAME OF SCHOOL IN FULL. : STRING [40]
SchAdd1 And what is the first line of the address? : STRING [30]
SchAdd2 INTERVIEWER: Enter next line of address or press the <Enter> key if no more. Do not enter postcode here : STRING [30]
SchAdd3 INTERVIEWER: Enter next line of address or press the <Enter> key if no more to enter. Do not enter postcode here. : STRING [30]
SchAdd4 INTERVIEWER: Enter next line of address or press the <Enter> key if no more to enter. Do not enter postcode here. : STRING [30]
SchPCode INTERVIEWER: Enter postcode here if known. Use <CTRL K> if not known. : STRING [8]
IF (SchProv = Yes) THEN
SchMeal Does the school/college provide a cooked meal? School provides cooked meal 1 Yes 2 No
IF (SchMeal = Yes) THEN
SchProv2 Do you / Does (child's name) ever have this cooked meal? 1 Yes 2 No
IF (SchType = Prim..Other) THEN
SchLun SHOW CARD DD On a school/college day, what do you / does (child's name) usually have for lunch? INTERVIEWER: CODE ONE ONLY. INCLUDE SANDWICHES AND SALADS. DO NOT INCLUDE SNACKS SUCH AS CONFECTIONERY, CRISPS, FRUIT. WE ARE INTERESTED IN THE MEAL EATEN RATHER THAN THE TIME AT WHICH IT WAS EATEN. 1 HSMeal "Cooked school meal" 2 CSMean "Cold school meal (including sandwiches, salads)" 3 PackedL "Packed lunch (from home)" 4 BuyL "Buy lunch from shop/cafe" 5 Home "Go home" 6 NoLunch "Do not eat lunch"
IF (SchType = Prim..Other) THEN SchSn Is there an outlet in your / (child's name)'s school where pupils can buy snacks or drinks? INTERVIEWER: 'SNACKS' INCLUDE CONFECTIONERY, CRISPS, FRUIT. DO NOT INCLUDE SANDWICHES, SALADS AS 'SNACKS'. 1 Yes 2 No
IF (SchSn = Yes) THEN SchSn2 Do you / Does (child's name) ever buy snacks or drinks from this outlet? 1 Yes 2 No
IF (SchTyp = (Prim…Other) OR (SchTyp = NoSch) THEN SchSub SHOW CARD EE Do you / Does (child's name) receive any of the following? INTERVIEWER: CODE ALL THAT APPLY. 1 FreeMeal "Free school meal (at lunchtime)" 2 RedMeal "Reduced price or subsidised school meal (at lunchtime)" 3 FreeMilk "Free school milk" 4 RedMilk "Subsidised school milk" 5 FreFruit "Free fruit" 8 PreSch "Free food BEFORE school" 9 PostSch "Free food AFTER school" 10 Other "Other" 11 None "None of these - SPONTANEOUSLY ONLY"
IF (SchSub NOT = FreeMeal) THEN School2 Are you / Is (child's name) entitled to free school meals at lunchtime? 1 Yes 2 No
IF (School2 = Yes) THEN School2i Why do you / does (child name) not take up your/his/her free school meals? 1 Prefhome "Prefers to come home" 2 Nlike "Doesn't like school meals" 3 PackedL "Prefers packed lunch" 4 Diet "Dietary reasons" 5 Cultural "Cultural/religious reasons" 6 PeerP "Peer pressure/stigma" 7 Other "Other"
IF (SchSub = FreeMeal) THEN SchOft On average, how many times per week do you/does (child’s name) have free school meals at lunchtime? Range: 1..5
IF (SchOft = 1-5) THEN SchOft2 Why do you/does (child’s name) not take up all your/his/her free school meals at lunchtime? INTERVIEWER: CODE MAIN REASON. 1 Prefhome "Prefers to come home" 2 Nlike "Doesn't like school meals" 3 PackedL "Prefers packed lunch" 4 Diet "Dietary reasons" 5 Cultural "Cultural/religious reasons" 6 PeerP "Peer pressure/stigma" 7 Other "Other"
IF (SchSub = PreSch) THEN PrScOft On average, how many times per week do you/does (child’s name) have free food before school? Range: 1..5
IF (SchSub = PostSch) THEN PoScOft On average, how many times per week do you/does (child’s name) have free food after school? Range: 1..5 EATING OUT AND OTHER PROVISION
IF (AgeP>64) THEN HeClub Have you ever used the following services ... INTERVIEWER: READ OUT AND CODE ALL THAT APPLY... 1 LClub "Lunch club?" 2 DCare "Day care centre?" 3 MoW "Meals on wheels?" 4 None "None of these?"
IF (AgeP>64 AND HeClub = LClub) THEN HeLC SHOW CARD K How often do you attend a lunch club? 1 Every "Every day or nearly every day" 2 TwoW "Two or three times a week" 3 OnceW "Once a week" 4 TwoM "Two or three times a month" 5 OnceM "Once a month or less" 6 Never "(Do not currently use - SPONTANEOUS CODE ONLY)"
IF (AgeP>64 AND HeClub = DCare) THEN HeDCC SHOW CARD K How often do you attend a day care centre? 1 Every "Every day or nearly every day" 2 TwoW "Two or three times a week" 3 OnceW "Once a week" 4 TwoM "Two or three times a month" 5 OnceM "Once a month or less" 6 Never "(Do not currently use - SPONTANEOUS CODE ONLY)"
IF (AgeP>64 AND HeClub = MoW) THEN HeMW SHOW CARD K How often do you eat a meal provided by Meals on Wheels? 1 Every "Every day or nearly every day" 2 TwoW "Two or three times a week" 3 OnceW "Once a week" 4 TwoM "Two or three times a month" 5 OnceM "Once a month or less" 6 Never "(Do not currently use - SPONTANEOUS CODE ONLY)"
IF (HeMW = Every) THEN MWHow How do you receive your meals on wheels? 1 Hot "As a hot meal delivered on the day" 2 Frozen "As frozen meals delivered weekly / fortnightly" ASK ALL MealOut SHOW CARD L On average, how often do you / does (child’s name) eat meals out in a restaurant or cafe? INTERVIEWER: ‘MEALS’ MEANS MORE THAN A BEVERAGE OR BAG OF CHIPS. 1 Five "5 or more times per week" 2 ThrFour "3-4 times per week" 3 OneTwoW "1-2 times per week" 4 OneTwoM "1-2 times per month" 5 Rarely "Rarely or never?"
TAMeal SHOW CARD L On average, how often do you / does (child’s name) eat takeaway meals at home? INTERVIEWER: ‘MEALS’ MEANS MORE THAN A BEVERAGE OR BAG OF CHIPS. INCLUDE PIZZA, FISH AND CHIPS, INDIAN, CHINESE, BURGERS, KEBAB ETC. INTERVIEWER: THIS QUESTION IS ABOUT TAKE AWAY MEALS IN THE PARTICIPANT’S HOME ONLY. 1 Five "5 or more times per week" 2 ThrFour "3-4 times per week" 3 OneTwoW "1-2 times per week" 4 OneTwoM "1-2 times per month" 5 Rarely "Rarely or never?"
FOLLOWING QUESTIONS ARE ASKED OF ALL PARTICIPANTS AGED 16+ AND IN EMPLOYMENT - (WrkStat = Working) OR (PTWork = Yes)
Canteen Does your place of work have a staff canteen? 1 Yes 2 No
IF (Canteen = Yes) THEN CantSub Do you know if the canteen food is subsidised in any way? By subsidised I mean that your employer meets some of the cost of providing the food. 1 Sub "Yes it is subsidised" 2 NotSub "No it isn’t subsidised" 3 DKnow "Don’t Know"
LunchWk What do you usually do about meals (e.g. lunch) when you are at work? INTERVIEWER: INCLUDE HOT MEALS, SANDWICHES AND SALADS. DO NOT INCLUDE SNACKS SUCH AS CONFECTIONERY, CRISPS, FRUIT. INTERVIEWER: THIS QUESTION IS STILL RELEVANT EVEN IF PARTICIPANT WORKS NIGHT SHIFTS. WE WANT TO KNOW ABOUT ANYTHING THEY EAT, REGARDLESS OF WHETHER IT IS BREAKFAST, LUNCH OR DINNER. 1 Canteen "Eat at the staff canteen" 2 PackedL "Take a packed lunch (from home)" 3 ShopCafe "Buy lunch from shop / cafe" 4 Other “Other” 5 NoLunch "Do not have lunch" EATING HABITS
ASK ALL (WHERE PARTICIPANT 10 OR YOUNGER ASK THROUGH PARENT / GUARDIAN)
YrIntr The next few questions are about your / (child’s name)’s eating habits over the last year PRESS <ENTER> TO CONTINUE 1 Continue
ASK ALL OilFish SHOW CARD M Other than tinned tuna, in the last 12 months how often have you/ has (child’s name) eaten tinned oily fish, such as salmon, sardines, mackerel, kippers, herrings, pilchards, anchovies? Please do not include tinned tuna. INTERVIEWER: TINNED TUNA DOES NOT COUNT AS OILY FISH BECAUSE THE CANNING PROCESS REDUCES THE OMEGA-3 FATTY ACID CONTENT. 1 Never “Never” 2 OneMth “Less than once per month” 3 OneDM “On 1-3 days per month” 4 OneDW “On 1-2 days per week” 5 ThrDW “On 3-4 days per week” 6 FivDW “On 5-6 days per week” 7 Daily “Every day in the last month”
ASK ALL FrOFsh SHOW CARD M In the last 12 months how often have you/ has (child’s name) eaten fresh or frozen Oily fish (e.g. salmon, sardines, mackerel, kippers, anchovies, pilchards, trout or tuna)? 1 Never “Never” 2 OneMth “Less than once per month” 3 OneDM “On 1-3 days per month” 4 OneDW “On 1-2 days per week” 5 ThrDW “On 3-4 days per week” 6 FivDW “On 5-6 days per week” 7 Daily “Every day in the last month”
ASK ALL ShFish SHOW CARD M In the last 12 months how often have you/ has (child’s name) eaten Shellfish (e.g. prawns, shrimps, crab)? 1 Never “Never” 2 OneMth “Less than once per month” 3 OneDM “On 1-3 days per month” 4 OneDW “On 1-2 days per week” 5 ThrDW “On 3-4 days per week” 6 FivDW “On 5-6 days per week” 7 Daily “Every day in the last month” ASK ALL Offal SHOW CARD M In the last 12 months how often have you/ has (child’s name) eaten Offal (e.g. liver, kidney)? INTERVIEWER: INCLUDE FAGGOTS, STEAK AND KIDNEY PIE AND OTHER DISHES CONTAINING OFFAL. 1 Never “Never” 2 OneMth “Less than once per month” 3 OneDM “On 1-3 days per month” 4 OneDW “On 1-2 days per week” 5 ThrDW “On 3-4 days per week” 6 FivDW “On 5-6 days per week” 7 Daily “Every day in the last month”
ASK ALL RarEatX SHOW CARD N In the last 12 months have you/ has (child’s name) eaten any of the foods on this card? INTERVIEWER: DO NOT INCLUDE NUTS IN CODE 2 (SEEDS). 0 None “None of these” 1 Sprats “Sprats” 2 Seeds “Seeds as a snack (e.g. sunflower seeds, pumpkin seeds, sesame seeds, melon seeds (also known as egusi))” 3 Cassava “Cassava chips/cassavacrisps” 4 Seaweed “Seaweed (includes hijiki, wakame)” 5 Sushi “Sushi (including purchased sushi)” 6 FrPap “Papaya (include fresh and canned)” 7 DrPap “Dried papaya” 8 Game “Game (includes venison, rabbit, pheasant, partridge, wood pigeon, hare or wild boar)” 9 NCowMilk “Non cow’s milk (includes rice milk, soya milk, sheep’s milk, goat’s Milk or Oat Milk)” 10 FishEggs “Fish eggs, for example caviar, cod’s roe” 11 SmkSaus “Smoked sausages” 12 GojiBer “Goji berries” 13 FishLiv “Fish liver (not oil)” 14 DarkChoc “Dark chocolate, i.e. 50% or higher cocoa solids” 15 Okra “Okra” 16 BCrab “Brown Crab Meat”
(Ask for each response at RareEat) RarOft SHOW CARD O How often have you / has (child’s name) eaten (food from RareEat)? 1 OneMth “Less than once per month” 2 OneDM “On 1-3 days per month” 3 OneDW “On 1-2 days per week” 4 ThrDW “On 3 or more days per week”
IF (RarEatX = Game) THEN GameTyp SHOW CARD P Please look at this card and tell me which types of game you have / (child’s name) has eaten. INTERVIEWER: CODE ALL THAT APPLY. 1 Pheasant "Pheasant" 2 Partridg "Partridge" 3 Quail "Quail" 4 WdPigeon "Wood pigeon" 5 Rabbit "Rabbit" 6 Venison "Venison" 7 Hare "Hare" 8 Grouse "Grouse" 9 WdBoar "Wild boar" 10 Other "Other, please specify at next question"
IF (GameTyp = Other) THEN GameOth INTERVIEWER: PLEASE ASK OR RECORD OTHER TYPE OF GAME EATEN. : STRING [50]
IF (RarEatX = NCowMilk) THEN NCowMTyp SHOW CARD Q Please look at this card and tell me which types of non-cow's milk you have / (child’s name) has eaten or drunk. INTERVIEWER: CODE ALL THAT APPLY. 1 RiceMilk "Rice milk" 2 SoyaMilk "Soya milk" 3 SheepMlk "Sheep's milk" 4 GoatMilk "Goat's milk" 5 OatMilk "Oat milk" 6 AlmMilk "Almond milk" 7 CocoMilk "Coconut milk" 8 Other "Other, please specify at next question"
IF (NCowMTyp = Other) THEN NCowMOth INTERVIEWER: PLEASE ASK OR RECORD OTHER TYPE OF NON-COW'S MILK CONSUMED. : STRING [50]
IF (RarEatX = SmkSaus) THEN SausTyp SHOW CARD R Please look at this card and tell me which types of smoked sausages you have / (child’s name) has eaten. INTERVIEWER: CODE ALL THAT APPLY. 1 Kabanos "Kabanos" 2 Kielbasa "Kielbasa" 3 BrtWurst "Bratwurst" 4 SummSaus "Cervelat or Summer Sausage" 5 Andouil "Andouille" 6 KnkWurst "Knackwurst" 7 Linguica "Linuica" 8 Chorizo "Chorizo" 9 Mrtadella "Mortadella" 10 HotDog "Hot Dogs" 11 Bologna "Bologna" IF (SausTyp = Other) THEN SausOth INTERVIEWER: PLEASE ASK OR RECORD OTHER TYPE OF SMOKED SAUSAGE EATEN. : STRING [50] FOOD AVOIDANCE
ASK ALL (WHERE PARTICIPANT 10 OR YOUNGER ASK THROUGH PARENT / GUARDIAN)
ASK ALL AvoidYN Are there any types of foods that you/ (child’s name) never eat(s)? 1 Yes 2 No
IF (AvoidYN = Yes) THEN Avoid SHOW CARD S Can you tell me what types of foods you/ (child’s name) never eat(s)? INTERVIEWER: CODE ALL THAT APPLY 1 Meat "Meat or meat products (not including poultry)" 2 Poultry "Chicken or other poultry and dishes containing them" 3 Fish "Fish or seafood and fish and seafood dishes" 4 Eggs "Eggs" 5 Milk "Milk (including yoghurt)" 6 Cheese "Cheese" 7 Salad "Salad vegetables (e.g. lettuce, cucumber, tomato)" 8 Green "Cooked green vegetables (e.g. spinach, cabbage, peas, broccoli)" 9 RootV "Root vegetables (e.g. carrots, parsnips)" 10 Fruit "Fresh fruit" 11 Nuts "Nuts" 12 Offal "Offal" 13 Other "Other"
IF (AgeP ≥ 10) THEN DietWL Are you / Is (child’s name) currently dieting to lose weight? 1 Yes 2 No
ASK ALL Veg Can I just check, would you describe yourself / (child’s name) as vegetarian or vegan? 1 Veggie "Vegetarian" 2 Vegan "Vegan" 3 Neither "Neither"
IF (Veg = Veggie) THEN VegeChk Can I just check, do you / does (child’s name) eat any meat, fish, poultry or dishes that contain these? 1 Yes 2 No
IF (Veg = Vegan) THEN VeganChk Can I just check, do you / does (child’s name) eat any foods of animal origin. That is meat, fish, poultry, milk, milk products, eggs or any dishes that contain these? 1 Yes 2 No
ASK ALL WashIntr The next few questions are about fruit and vegetables. We are interested in whether you / (child’s name) eat(s) them with the skins left on. PRESS <ENTER> TO CONTINUE 1 continue
ASK ALL WshNPot Firstly, do you / does (child’s name) eat new potatoes with the skins on? INTERVIEWER: IF ‘YES’ PROMPT WHETHER ALWAYS, USUALLY OR SOMETIMES. 1 Always "Yes, ALWAYS eat the skin/peel" 2 Usual "Yes, USUALLY eat the skin/peel" 3 STimes "Yes, SOMETIMES eat the skin/peel" 4 Never "No, NEVER eat the skin/peel" 5 NoEat "Don't eat this type of fruit/veg at all"
ASK ALL WshPot And do you / does (child’s name) eat other potatoes cooked in any way with the skins on? INTERVIEWER: IF ‘YES’ PROMPT WHETHER ALWAYS, USUALLY OR SOMETIMES. 1 Always "Yes, ALWAYS eat the skin/peel" 2 Usual "Yes, USUALLY eat the skin/peel" 3 STimes "Yes, SOMETIMES eat the skin/peel" 4 Never "No, NEVER eat the skin/peel" 5 NoEat "Don't eat this type of fruit/veg at all"
ASK ALL EatPeel SHOW CARD T1 Do you / does (child’s name) eat the peel or skin of any of the fruits listed on this card in... INTERVIEWER: CODE ALL THAT APPLY 1 Marm "... marmalade, jams or chutneys?" 2 Cake "... cakes, biscuits etc?" 3 HMade "... home made food/drink e.g. purees, soups, blended drinks etc?" 4 None "SPONTANEOUS ONLY - None of these"
ASK ALL Peel SHOW CARD T2 Do you / does (child’s name) ever eat the peel or skin (outer layer) of the following fruits? INTERVIEWER: INCLUDES EATING THE WHOLE FRUIT INCLUDING THE PEEL OR BLENDING THE PEEL/SKIN TO MAKE A SMOOTHIE. EXCLUDES EATING PEEL/SKIN IN FRUIT CAKES, MARMALADE, CHUTNEYS ETC. 0 None "None of these" 1 Orange "Orange" 2 Lemon "Lemon" 3 Kiwi "Kiwi fruit" 4 Grapef "Grapefruit" 5 Mango "Mango" 6 Banana "Banana" 7 Lime "Lime" 8 Papple "Pineapple" 9 SoftCit "Soft citrus fruit (satsumas/mandarins/clementines)" 10 Melon "Melon"
(Asked for each response at Peel)
PeelOft SHOW CARD U How often do you / does (child’s name) eat(s) the peel or skin of (fruit from Peel)? 1 Daily "Every day/most days" 2 Week1 "Once or twice a week" 3 Month1 "Once or twice a month" 4 Less "Less than once a month"
(Asked for each response at Peel)
PeelAmt SHOW CARD V When you / (child’s name) eat(s) the peel or skin of (fruit from Peel), how much of it do you / does (child’s name) usually eat? 1 All "All of the peel or skin" 2 Most "Most of the peel or skin" 3 Half "Around half of the peel or skin" 4 Quart "Around a quarter of the peel or skin" 5 Less "Less than a quarter of the peel or skin"
ASK ALL
WashFru If you / (child’s name) eat(s) your/his/her fruit with the skin or peel on do you / does he or she wash it before eating/cooking? 1 Always "Yes, ALWAYS wash" 2 Usual "Yes, USUALLY wash" 3 STimes "Yes, SOMETIMES wash" 4 Never "No, NEVER washes" 5 NoEat "Does not eat with peel on/raw"
WashVeg If you/ (child’s name) eat(s) raw vegetables (e.g. tomatoes, carrots, cucumbers), do you /does he or she wash them before eating? 1 Always "Yes, ALWAYS wash" 2 Usual "Yes, USUALLY wash" 3 STimes "Yes, SOMETIMES wash" 4 Never "No, NEVER washes" 5 NoEat "Does not eat with peel on/raw" GENERAL HEALTH
ASK ALL HealIntr I'd now like to ask you some questions about you / (your child's) general health. PRESS <ENTER> TO CONTINUE 1 Continue
GenHelf How is your / (your child's) health in general? Would you say it was ...READ OUT... 1 Vergood "...very good," 2 Good "good," 3 Fair "fair," 4 Bad "bad, or" 5 Verbad "very bad?"
ASK ALL HeaCon Do you / does your child have any physical or mental health condition(s) or illnesses that have lasted, or are expected to last, for 12 months or more? 1 Yes 2 No
IF (HeaCon = YES) THEN HeaAff Does this condition(s) or illness affect you / your child in any of the following areas? Show Card w 1 Vision Vision (e.g. due to blindness or partial sight). 2 Hearing Hearing (e.g. due to deafness of partial hearing). 3 Mobile Mobility, such as difficulty walking short distances, climbing stairs, lifting & carrying objects. 4 Learn Learning or concentrating or remembering. 5 Mental Mental Health 6 Stamina Stamina or breathing difficulty 7 Social Social or behavioural issues (for example, due to neuro diverse conditions such as Autism, Attention Deficit or Aspergers' Syndrome) 8 Other other impairment 9 None None of these
IF (HeaAff = Other) THEN HeaAffO INTERVIEWER: Which other area does your / your child's condition or illness affect you / your child?" : STRING [30]
IF (HeaCon = YES) THEN ConRed Does your / your child's condition(s) or illness(es) reduce your / his / her ability to carry out day-to-day activities? Running prompt 1 Yeslot Yes, a lot 2 Yeslitt Yes, a little 3 No
IF (ConRed = YESlot or YesLitt) THEN
TimeAff For how long have your day-to-day activities been affected?
Running prompt 1 Less than 6 months 2 Between 6 & 12 months 3 12 months or more
IF (HeaCon = Yes) AND (Age ≥ 16) THEN
LimShop Does this illness or disability (Do these illnesses or disabilities) limit you or prevent you from shopping? 1 Limits “Limits” 2 Prevents “Prevents” 3 Neither "Illness does not limit/prevent from shopping"
IF (LimitShp = Limits OR Prevents) AND (Age ≥ 16) THEN
LimShpH Can you tell me how you are limited/prevented from shopping? INTERVIEWER: CODE ALL THAT APPLY 1 DiffWalk "Difficulties with walking" 2 Sight "Problems with sight" 3 Ncarry "Cannot carry (heavy) shopping" 4 Tire "Gets tired easily" 5 Other "Other difficulties"
IF (Limit = Yes) AND (Age ≥ 16) THEN
LimPrep Does this illness or disability (Do these illnesses or disabilities) limit you or prevent you from preparing food? 1 Limits “Limits” 2 Prevents “Prevents” 3 Neither "Illness does not limit/prevent from preparing food"
IF (LimitPrep = Limits OR Prevents) AND (Age ≥ 16) THEN
LimPrpH Can you tell me how you are limited/prevented from preparing food? INTERVIEWER: CODE ALL THAT APPLY 1 DiffHand "Difficulties with hands (e.g. chopping, peeling, lifting)" 2 DiffWalk "Difficulties with walking" 3 DifStand "Difficulties with standing" 4 Sight "Problems with sight" 5 IllHlth "Chronic ill-health (e.g. MS, depression)" 6 Tire "Gets tired easily" 7 Other "Other difficulties"
ASK ALL CutDown Now I'd like you to think about the two weeks ending yesterday. During those two weeks, did you / (child’s name) have to cut down on any of the things you/he/she usually do/does about the house, (or at work/college) or in your/his/her free time because of (a condition you have just told me about or any other) illness or injury?
1 Yes 2 No
IF (CutDown = Yes) THEN
NDayCutD
How many days was this in all during these last two weeks, including Saturdays and Sundays? Range: 1..14
IF (CutDown = Yes) THEN
CutMatt
What was the matter with you / (child’s name)? : STRING [80] OralIntr INTERVIEWER: YOU ARE ABOUT TO ENTER THE ORAL/DENTAL HEALTH SECTION. The next questions are about your oral and dental health. PRESS <ENTER> TO CONTINUE 1 Continue
AnyOwn INTERVIEWER: ASK OR RECORD Do you have any of your own, natural, teeth? 1 Yes 2 No
DentUse Do you use a denture at all? 1 Yes 2 No
Chew SHOW CARD X In general, how well are you able to CHEW food that you eat nowadays? Please take your answer from the card. 1 NoDiff "No difficulty" 2 LitDiff "A little difficulty" 3 FairDiff "A fair amount of difficulty" 4 GreDiff "A great amount of difficulty"
{ASK IF 45 yrs or over, OR wears denture - DentUse=Yes} Diffeat SHOW CARD Y Looking at the foods on Show card Y. Please tell me if there are any that you would have difficulty eating. It doesn't matter whether or not you like the types of Food or ever choose to eat it nowadays. We are interested in how well you could eat it if you wanted to. INTERVIEWER:@'EAT' MEANS BITE, CHEW AND SWALLOW. THIS IS NOT ASKING HOW WELL PEOPLE CAN DIGEST THESE FOODS. 1 Sliceb "Sliced Bread" 2 CrustyB "Crusty Bread" 3 Cheese "Cheese" 4 Tomat "Tomatoes" 5 Carrot "Raw Carrots" 6 Greens "Cooked Green vegetables" 7 Lettuce "Lettuce" 8 Meat "Sliced cooked meats" 9 Steak "Well-cooked Steaks" 10 Apples "Apples" 11 Oranges "Oranges" 12 Nuts "Nuts" 13 None "None of these" IF (Age ≥ 45 OR wears dentures) AND (DiffEat- Response)) THEN
Eatfod Can you only eat soft or mashed foods or can you eat other foods as well? 1 Soft "Only soft or mashed foods" 2 Other "Other foods as well" 3 Liquid "Can only take liquids/cannot eat even soft or mashed foods" SELF-COMPLETIONS FOR PARTICIPANTS AGED 8-24
IF (AgeP = 18-24) THEN DrinIntr INTERVIEWER: SMOKING AND DRINKING SELF-COMPLETION BOOKLET. The next set of questions are about smoking cigarettes and drinking alcohol. We can either continue using the laptop to answer the questions, or you can fill in your answers in this booklet. Which would you prefer to do? IS THE YOUNG PERSON TO CONTINUE WITH QUESTIONS IN CAPI OR ARE THEY TO BE GIVEN A BOOKLET (PEACH COVER)? 1 Asked "Continue with questions in CAPI" 2 Given "Given self completion booklet"
IF (AgeP = 11-24) THEN SCIntro INTERVIEWER: Prepare self completion booklet for ages (8-12: GREEN cover) / (13-15: PALE BLUE cover) / (16-24: PEACH cover) by entering serial numbers. Check that you have the correct person number. Name············Point··Address··Check letter··Person number 1 Continue
IF (AgeP = 8-10) THEN SCIntCh Here is a little booklet which I would like to ask (child's name) to complete for him/herself. It asks children if they have ever tried cigarettes or alcohol. May I explain it to you/him/her? INTERVIEWER: If asked, show green booklet to (Participant's name). If agrees, prepare green booklet. Name············Point··Address··Check letter··Person number INTERVIEWER: Explain to child how to complete and show example in booklet. 1 Continue
SComp2 I would now like you to answer some questions by completing this booklet on your own. The questions cover smoking and drinking. INTERVIEWER: Explain how to complete booklet and show example in booklet. 1 Continue
IntDemog INTERVIEWER: Wait until (participant's name) has completed the self-completion booklet, then thank them for completing it and ask them to return it to you. Press \<1> and <Enter> to continue. SMOKING FOR PARTICIPANTS AGED 18 AND OVER
IF (no self completion AND Age = 16-24) OR (Age ≥ 25) THEN SmokIntr INTERVIEWER: YOU ARE ENTERING THE SMOKING SECTION This next section is about smoking. 1 Continue
SmokEver Have you ever smoked a cigarette, cigar, pipe or anything with tobacco in it? 1 Yes 2 No
IF (SmokEver = Yes) THEN CigEver Have you ever smoked a cigarette? 1 Yes 2 No
IF (CigEver = Yes) THEN CigAge How old were you when you first tried smoking a cigarette, even if it was only a puff or two? Range: 3..97
SmokNow Do you smoke cigarettes at all nowadays? 1 Yes 2 No
IF (SmokNow = Yes) THEN CigWDay About how many cigarettes a day do you usually smoke on a weekday? INTERVIEWER: IF LESS THAN ONE A DAY, CODE 0. IF RANGE GIVEN AND CAN'T ESTIMATE, ENTER MID POINT. IF PARTICIPANT SMOKES ROLL UPS AND CANNOT GIVE NUMBER OF CIGARETTES, CODE 97. Range: 0..97
CigWEnd About how many cigarettes a day do you usually smoke at the weekend? INTERVIEWER: IF LESS THAN ONE A DAY, CODE 0. IF RANGE GIVEN AND CAN'T ESTIMATE, ENTER MID POINT. IF PARTICIPANT SMOKES ROLL UPS AND CANNOT GIVE NUMBER OF CIGARETTES, CODE 97. Range: 0..97
CigType Do you mainly smoke filter-tipped cigarettes, plain or untipped cigarettes, or hand-rolled cigarettes? 1 Tipped "Filter-tipped cigarettes" 2 Plain "Plain or untipped cigarettes" 3 Rolled "Hand-rolled cigarettes" IF (SmokNow = No) THEN CigReg Have you ever smoked cigarettes regularly? INTERVIEWER: ...READ OUT... 1 Reg "Yes, regularly, that is at least one cigarette a day" 2 Occ "No, only occasionally" 3 Never "Or no, never really smoked cigarettes, just tried them once or twice"
IF (CigReg = Reg) THEN CigUsed About how many cigarettes did you smoke IN A DAY when you smoked them regularly? INTERVIEWER: IF LESS THAN ONE A DAY, CODE 0. IF RANGE GIVEN AND CAN'T ESTIMATE, ENTER MID POINT. IF PARTICIPANT SMOKES ROLL UPS AND CANNOT GIVE NUMBER OF CIGARETTES, CODE 97. Range: 0..97
CigStop How long ago did you stop smoking cigarettes regularly? 1 LessSix "Less than 6 months ago" 2 SixMth "6 months to 1 year ago" 3 OneTwo "1 to 2 years ago" 4 TwoFve "2 to 5 years ago" 5 FivTen "5 to 10 years ago" 6 MoreTen "More than 10 years ago" IF (no self completion AND Age = 16-24) OR (Age ≥ 25) THEN Drink I am now going to ask you a few questions about what you drink - that is if you drink. Do you ever drink alcohol nowadays, including drinks you brew or make at home? 1 Yes 2 No
IF (Drink = No) THEN DrinkAny Could I just check, does that mean you never have an alcoholic drink nowadays, or do you have an alcoholic drink very occasionally, perhaps for medicinal purposes or on special occasions like Christmas and New Year? 1 Occ "Very occasionally" 2 Never "Never"
IF (DrinkAny = Never) THEN AlwaysTT Have you always been a non-drinker or did you stop drinking for some reason? 1 Alwys "Always a non-drinker" 2 Stopped "Used to drink but stopped"
IF (Drink = Yes) OR (DrinkAny = Occ) THEN DrinAge How old were you the first time you ever had a proper alcoholic drink? Range: 3..97
DrinkOft SHOW CARD Z Thinking now about all kinds of drinks, how often have you had an alcoholic drink of any kind during the last 12 months? 1 AED "Almost every day" 2 Five "Five or six days a week" 3 Three "Three or four days a week" 4 OneWk "Once or twice a week" 5 OneMth "Once or twice a month" 6 CupMth "Once every couple of months" 7 OneYr "Once or twice a year" 8 NotYr "Not at all in the last 12 months"
IF (DrinkOft \<> NotYr) THEN DrinkL7 Did you have an alcoholic drink in the last seven days, that is since (date 7 days ago) until yesterday? 1 Yes 2 No
IF (DrinkL7 = Yes) THEN DrnkDay On how many days out of the last seven did you have an alcoholic drink? Range: 1..7 IF (DrnkDay = 2 to 7 days) THEN DrnkSame Did you drink more on one of the days/some days than others, or did you drink about the same on both/each of those? 1 Varied "Drank more on one/some day(s) than other(s)" 2 Same "Same each day"
IF (DrinkL7 = Yes) THEN WhichDay Which day (last week) did you last have an alcoholic drink (have the most to drink)? 1 Sunday 2 Monday 3 Tuesday 4 Wednesday 5 Thursday 6 Friday 7 Saturday
DrnkType SHOW CARD AA Thinking about last (day from WhichDay), what types of drink did you have that day? CODE ALL THAT APPLY. 1 NBeer "Normal strength beer/lager/cider/shandy" 2 SBeer "Strong beer/lager/cider" 3 Spirits "Spirits or liqueurs" 4 Sherry "Sherry or martini" 5 Wine "Wine" 6 Pops "Alcopops/pre-mixed alcoholic drink" 7 Other "Other alcoholic drinks" 8 Low "Low alcohol drinks only"
NBrL7 Still thinking about last (day from WhichDay), how much normal strength beer, lager, stout, cider or shandy (excluding cans and bottles of shandy) did you drink that day? INTERVIEWER: Code measures that you are going to use. 1 HPints "Half pints" 2 SmCans "Small cans" 3 LgCans "Large cans" 4 Bottles "Bottles"
IF (NBRL7 = HPints) THEN NBRL7Q(1) ASK OR CODE: How many half pints of normal strength beer, lager, stout, cider or shandy (excluding cans and bottles of shandy) did you drink that day? Range: 1..97
IF (NBRL7 = SmCans) THEN NBRL7Q(2) ASK OR CODE: How many small cans of normal strength beer, lager, stout, cider or shandy (excluding cans and bottles of shandy) did you drink that day? Range: 1..97
IF (NBRL7 = LgCans) THEN NBRL7Q(3) ASK OR CODE: How many large cans of normal strength beer, lager, stout, cider or shandy (excluding cans and bottles of shandy) did you drink that day? Range: 1..97
IF (NBRL7 = Bottles) THEN NBrL7Q(4) ASK OR CODE: How many bottles of normal strength beer, lager, stout, cider or shandy (excluding cans and bottles of shandy) did you drink that day? Range: 1..97
IF (NBRL7 = Bottles) THEN NBotL7 ASK OR CODE: What make of normal strength beer, lager, stout or cider did you drink from bottles on that day? INTERVIEWER: If participant drank different makes code which they drank most. : STRING [21]
IF (Drnktype = SBeer) THEN SBrL7 Still thinking about last (day from WhichDay), how much strong beer, lager, stout or cider did you drink that day? INTERVIEWER: Code measures that you are going to use 1 HPints "Half pints" 2 SmCans "Small cans" 3 LgCans "Large cans" 4 Bottles "Bottles"
IF (SBRL7 = Hpints) THEN SBrL7Q(1) How many half pints of strong beer, lager, stout or cider did you drink on that day? Range: 1..97
IF (SBRL7 = SmCans) THEN SBrL7Q(2) How many small cans of strong beer, lager, stout or cider did you drink on that day? Range: 1..97
IF (SBRL7 = LgCans) THEN SBrL7Q(3) How many large cans of strong beer, lager, stout or cider did you drink on that day? Range: 1..97
IF (SBRL7 = Bottles) THEN SBrL7Q(4) How many bottles of strong beer, lager, stout or cider did you drink on that day? Range: 1..97
IF (SBRL7 = Bottles) THEN SBotL7 ASK OR CODE: What make of strong beer, lager, stout or cider did you drink from bottles on that day? INTERVIEWER: If participant drank different makes code which they drank most. : STRING [21]
IF (DrnkType = Spirits) THEN SpirL7 Still thinking about last (day from WhichDay), how much spirits or liqueurs (such as gin, whisky, brandy, rum, vodka, advocaat or cocktails) did you drink on that day? INTERVIEWER: Code the number of singles - count doubles as two singles Range: 1..97
IF (DrnkType = Sherry) THEN ShryL7 Still thinking about last (day from WhichDay), how much sherry or martini, including port, vermouth, Cinzano and Dubonnet did you drink on that day? INTERVIEWER: Code the number of glasses Range: 1..97
IF (DrnkType = Wine) THEN WineL7 Still thinking about last (day from WhichDay), how much wine, including Babycham and champagne, did you drink on that day? INTERVIEWER: Code the measure the participant used. Please note that participant may give answer in bottles and glasses. Please code the relevant option. 1 Bottle "Bottle or parts of bottle" 2 Glasses “Glasses” 3 Both "Both bottles or parts of bottle, and glasses"
IF (WineL7 = Bottle) THEN WL7Bt INTERVIEWER: Code the number of 125ml glasses drunk from the bottle by the participant. E.g. If they drank half a bottle, code 3 glasses. 1 bottle = 6 glasses 1/2 bottle = 3 glasses 1/3 bottle = 2 glasses 1/4 bottle = 1.5 glasses 1 litre = 8 glasses 1/2 litre = 4 glasses 1/3 litre = 2.5 glasses 1/4 litre = 2 glasses If participant has answered in bottles or litres, convert to glasses using the information provided on the screen. For example, if a participant said they shared a bottle with one other person and they shared it equally, code 3 glasses. Range: 1.0..97.9
IF (WineL7 = Glasses) THEN WL7Gl INTERVIEWER: Code the number of glasses (drunk as glasses). Range: 1.0..97.9
WL7Glz Were you drinking from a large, standard, or small glass? INTERVIEWER: If participant drank from two or three different size glasses, please code all that apply. Please note that if participant was drinking in a pub or wine bar and had a small glass, this would usually be 175ml. 1 Large "Large glass (250ml)" 2 Standard "Standard glass (175ml)" 3 Small "Small glass (125ml)"
IF (WL7Glz = 1) THEN MI250Glz How many large glasses (250ml) did you drink? Range: 1.0..97.9
IF (WL7Glz = 2) THEN MI175Glz How many standard glasses (175ml) did you drink? Range: 1.0..97.9
IF (WL7Glz = 3) THEN MI125Glz How many small glasses (125ml) did you drink? Range: 1.0..97.9
IF (DrnkType = Pops) THEN PopsL7 Still thinking about last (day from WhichDay), how much alcoholic soft drink ('alcopop') did you drink on that day? INTERVIEWER: Code measures that you are going to use. 1 SmCans "Small cans" 2 Bottles "Bottles"
PopsL7Q ASK OR CODE: How many (answer from PopsL7) of alcoholic soft drink ('alcopop') did you drink on that day? Range: 1..97
IF (DrnkType = Other) THEN OthL7TA Still thinking about last (day from WhichDay), what other type of alcoholic drink did you drink on that day? INTERVIEWER: Code first mentioned only. : STRING [30]
OthL7QA How much (answer from OthL7TA) did you drink on that day? INTERVIEWER: Write in how much. Remember to specify half pints/ singles/ glasses/ bottles. : STRING [30]
OthL7B Did you drink any other type of alcoholic drink on that day? 1 Yes 2 No
IF (OthL7B = Yes) THEN OthL7TB Still thinking about last (day from WhichDay), what other type of alcoholic drink did you drink on that day? INTERVIEWER: Code first mentioned only. : STRING [30] OthL7QB How much (answer from OthL7TB) did you drink on that day? INTERVIEWER: Write in how much. Remember to specify half pints/ singles/ glasses/ bottles. : STRING [30]
OthL7C Did you drink any other type of alcoholic drink on that day? 1 Yes 2 No
IF (OthL7C = Yes) THEN OthL7TC Still thinking about last (day from WhichDay), what other type of alcoholic drink did you drink on that day? INTERVIEWER: Code first mentioned only. : STRING [30]
OthL7QC How much (answer from OthL7TC) did you drink on that day? INTERVIEWER: Write in how much. Remember to specify half pints/ singles/ glasses/ bottles. : STRING [30]
IF (current age is 5 or more years greater than age first had alcoholic drink) THEN DrAmount Compared to five years ago, would you say that on the whole you drink more, about the same or less nowadays? 1 More "More nowadays" 2 Same "About the same" 3 Less "Less nowadays" FOOD DIARY PLACEMENT ALL PARTICIPANTS
DDate1 INTERVIEWER: You will now introduce the food diary. The diary should be completed for the four days below: Day1 : (date) Day2 : (date) Day3 : (date) Day4 : (date) Check that participant(s) can complete the diary for these dates and that second visit appointments can be made within three days of the last diary day. Do you accept these dates for the diary? If yes, please remember to write the diary start date on the front of the diary and on the green reminder card." 1 Yes 2 No
DDate2 Please enter the date on which the participant(s) can start their diary. Remember to write the diary start date on the front of the diary and on the green reminder card." : DATETYPE
MDVis INTERVIEWER: Please now place the diary and make an appointment for a mid-diary check up visit on @R^Day2Txt@R. INTERVIEWER: IF THIS DATE IS NOT CONVENIENT, PLEASE ARRANGE A TELEPHONE CHECK INSTEAD. During the placement, remember to mention the personalised dietary feedback." 1 Continue
DApp2 INTERVIEWER: Please make an appointment to collect the diary and do the next part of the interview. Enter a date up to three days after the last diary day. Diary Dates: Day1 : (date) Day2 : (date) Day3 : (date) Day4 : (date) Record the diary dates and diary collection date on the DIARY TASK LIST page on the ARF." : DATETYPE DoSpUr INTERVIEWER: YOU WILL NOW INTRODUCE THE SPOT URINE SAMPLE FOR *NAME*. THE SAMPLE CAN BE COLLECTED NOW OR AT ANY POINT THE PARTICIPANT NEEDS TO PASS URINE DURING THIS VISIT. YOU WILL BE PROMPTED TO RECORD THE SAMPLE COLLECTION OUTCOME AT THE END OF THIS VISIT. IF THE PARTICIPANT CANNOT PROVIDE A SAMPLE TODAY THERE WILL BE ANOTHER OPPORTUNITY DURING VISIT 3. YOU MUST NOT LEAVE THE CONTAINER WITH THE PARTICIPANT TO COLLECT THE SAMPLE BETWEEN VISITS. THE SAMPLE CANNOT BE COLLECTED AT VISIT 2. Press 1 and <ENTER> to continue.
IUrSt INTERVIEWER: NOW FOLLOWS THE IODINE SPOT URINE PLACEMENT MODULE. Press 1 and <ENTER> to continue.
IUrInt We want to measure the levels of iodine in the body. Iodine is an important nutrient. To measure iodine we would like to collect a small sample of (your/‘child’s name’) urine. We cannot get this information from (your/their) food diary or in any other way. Press 1 and <ENTER> to continue.
IUrEli SEE SHOWCARD MM Due to the way that the samples are analysed we are unable to take them from some people. Answering yes or no: (Do/Does) (you/child’s name) fall into any of the categories on this card? :YN
IF Sex = Female AND IUrEli = Yes THEN IUrTime Would (you/child’s name) be interested in providing a sample at another visit? :YN
IF IUrEli = No THEN IUrLeaf Please read this leaflet, it explains about what taking part in the spot urine sample involves. INTERVIEWER: GIVE LEAFLET TO PARTICIPANT. ALLOW THEM TIME TO READ IT AND ANSWER ANY QUESTIONS."
IUrAgr Are you willing (for child’s name) to give a urine sample? IF Age>=16 THEN INTERVIEWER: YOU ARE RECORDING PARENTAL CONSENT, CHECK ALSO CHILD IS WILLING. INTERVIEWER: IF EITHER PARENT OR CHILD NOT WILLING RECORD 2.
1. Agree "Participant agrees to give urine sample",
2. Refuse "Participant refuses to give urine sample",
3. Unable "Unable to obtain urine sample for reason other than refusal"
IF IUrAgr = Refuse OR Unable THEN IUrYRef INTERVIEWER: GIVE REASON(s) FOR REFUSAL CODE ALL THAT APPLY
1. Sensi "Embarrassed/sensitive about providing sample",
2. JustBeen "Went to toilet too recently to provide sample",
3. DiffSamp "Knows they would have difficulty providing a sample for reason other than having just been to toilet",
4. NoTime "No time/busy/already spent enough time on this survey",
5. Yuk "Doesn't like the thought of doing it",
6. Concern "Concerns about how sample will be used/store",
7. NotUnd "Participant did not understand the procedure",
8. NotPhys "Not physically able (e.g. in a wheelchair)",
9. Other (97) "Other (SPECIFY AT NEXT QUESTION)"
IF IUrYRef = Other THEN IUrYRfO INTERVIEWER: WRITE IN OTHER REASON FOR REFUSAL : STRING[100]
IF IUrAgr = Agree AND Age >= 16 THEN IUrConA INTERVIEWER: EXPLAIN THE NEED FOR WRITTEN CONSENT. GIVE THE PARTICIPANT THE WHITE CONSENT FORM. PARTICIPANT MUST READ AND INITIAL THE STATEMENTS THEY AGREE TO BEFORE SIGNING. LEAVE THE BOTTOM COPY WITH THE PARTICIPANT; SEND THE TOP COPY TO BRENTWOOD. INTERVIEWER: DETAILS FOR CONSENT FORM... Serial number Check letter Participant number Sex Date of birth
Press 1 and <Ente> to continue
IF IUrAgr = Agree AND Age < 16 THEN IUrConC INTERVIEWER: EXPLAIN THE NEED FOR WRITTEN CONSENT. GIVE THE PARTICIPANTS PARENT/ LEGAL GAURDIAN THE BLUE CONSENT FORM. PARENT/ LEGAL GAURDIAN MUST READ AND INITIAL THE STATEMENTS THEY AGREE TO BEFORE SIGNING. GIVE BLUE CHILD ASSENT FORM TO CHILD AND ASK THEM TO CIRCLE YES OR NO NEXT TO STATEMENTS THEN SIGN NAME IF YOU THINK THEY CAN READ AND UNDERSTAND. LEAVE THE BOTTOM COPIES WITH THE PARTICIPANT; SEND THE TOP COPIES TO BRENTWOOD. INTERVIEWER: DETAILS FOR CONSENT FORM... Serial number Check letter: Participant number Sex Date of birth
Press 1 and <Ente> to continue
IUrAss INTERVIEWER: HAS CHILD SIGNED THE BLUE ASSENT FORM?
1. Yes,
2. No,
3. NotAsked "Interviewer code only: Did not ask child to sign form"
IUrCon2 INTERVIEWER: WAS WRITTEN CONSENT GIVEN TO OBTAIN A URINE SAMPLE FOR THE MEASUREMENT OF IODINE? :YN
IUrCon3 INTERVIEWER: WAS WRITTEN CONSENT GIVEN FOR ANY REMAINING URINE TO BE STORED AND USED IN FUTURE RESEARCH? :YN
IF (IUrEli = No) OR (IUrAgr \<> Agree) OR (IUrCon = NoCons) THEN NoIUri INTERVIEWER: NO URINE SAMPLE TO BE TAKEN."
IUrSN INTERVIEWER: MAKE SURE THE FOLLOWING PARTICIPANT DETAILS ARE WRITTEN ON THE LABEL ON THE TUBE AND THE CASE. Serial number Collection date Date of birth
IUrInst INTERVIEWER: EXPLAIN HOW TO PROVIDE SAMPLE: GIVE THE SPOT URINE LEAFLET TO THE PARTICIPANT DO NOT OPEN TUBE UNTIL IN BATHROOM DO NOT PUT FINGERS IN TUBE ONCE SAMPLE PROVIDED, CHECK LID IS TIGHTLYSCREWED ON USE DRY TOILET PAPER TO WIPE SPILLAGES ON TUBE - DO NOT USE WET WIPES OR ANY OTHER CLEANING PRODUCT. PLACE TUBE CONTAINING SAMPLE IN CASE. PRESS 1 AND <ENTER> TO CONTINUE.
IUrInst2 INTERVIEWER: THE SAMPLE COLLECTION OUTCOME WILL BE ENTERED AT THE END OF THE VISIT.1 PRESS 1 AND <ENTER> TO CONTINUE
IUr1End INTERVIEWER: This is the end of the spot urine placement module
SpUrCol INTERVIEWER: Now follows the spot urine outcome module PRESS 1 AND <ENTER> TO CONTINUE.
IUr2SDt Spot Urine collection start date : DATETYPE
IUr2STm Spot Urine collection start time : TIMETYPE
IUrSam INTERVIEW: Has (participant name) been able to provide a urine sample at this visit? CHECK CASE CLOSED AND PLACE BACK IN JIFFY BAG (ADDRESSED TO HNR) AND SEAL. INTERVIEWER: POST TODAY
1. Yes "Urine sample obtained",
2. Refused "Urine sample refused",
3. NoTry "Urine sample not attempted",
4. TryNot "Attempted but not obtained"
IUrColD Date urine collected : STRING[10]
IUrNoOb INTERVIEWER: GIVE REASON(s) WHY SAMPLE WAS NOT OBTAINED. CODE ALL THAT APPLY"=
1. Sensi "Embarrassed/sensitive about providing sample",
2. JustBeen "Went to toilet too recently to provide sample",
3. DiffSamp "Knows they would have difficulty providing a sample for reason other than having just been to toilet",
4. NoTime "No time/busy/already spent enough time on this survey",
5. Yuk "Doesn't like the thought of doing it",
6. Concern "Concerns about how sample will be used/store",
7. NotUnd "Participant did not understand the procedure",
8. Other "Other (SPECIFY AT NEXT QUESTION)"
IUrYNOO INTERVIEWER: WRITE IN OTHER REASON FOR REFUSAL. STRING[100]
IUrThnk INTERVIEWER: THANK PARTICIPANT FOR PROVIDING A SAMPLE. PLEASE GIVE (PARTICIPANT/ THEIR PARENT) A £5 VOUCHER PRESS 1 AND <ENTER> TO CONTINUE
CardSU Spot urine gift card number for participant STRING[30]
IUrEnd INTERVIEWER: END OF THE IODINE SPOT URINE COLLECTION MODULE. IF THE PARTICIPANT HAS NOT PROVIDED A SAMPLE TODAY PLEASE REMEMBER TO TAKE THE CONTAINER WITH YOU. YOU MUST NOT LEAVE THE CONTAINER WITH THE PARTICIPANT TO COLLECT SAMPLE BETWEEN VISITS. IF THEY ARE WILLING TO TRY AND PROVIDE A SAMPLE THEY WILL HAVE THE OPPORTUNITY TO DO SO AT VISIT 3.
Press 1 and <ENTER> to continue.
**IUr2EDat** Spot Urine collection end date : DATETYPE
**IUr2ETim** Spot Urine collection end time : TIMETYPE
______________________________________________________________________
**HEIGHT & WEIGHT MEASUREMENTS**
**ALL PARTICIPANTS**
**Intro** INTERVIEWER: CODE AS 'Later' IF YOU DO NOT WISH TO DO THE MEASUREMENTS FOR (participant’s name) NOW. PREAMBLE: I would now like to measure your / (child’s name)’s height and weight. There is interest in how people's weight, given their height, is associated with their health. INTERVIEWER: MAKE OUT MRC FOR (participant’s name), IF MEASUREMENTS WILL BE TAKEN.
(Serial) (Check letter) 1 Continue
**MeasDate** Date at start of (Measurement) : DATETYPE
**MeasTime** Time at start of (Measurement) : TIMETYPE
**IF (Sex = Female) AND (Age = 16 – 49) THEN**
**PregNowB** MEASUREMENTS FOR (participant’s name) May I check, are you pregnant or breastfeeding now? 1 Yes 2 No
**IF (Age >= 2) AND (PregNowB \<> Yes) THEN**
**RespHts** MEASUREMENTS FOR (participants’s name) INTERVIEWER: MEASURE HEIGHT AND CODE. INCLUDE 'DISGUISED' REFUSALS SUCH AS 'IT WILL TAKE TOO LONG', 'I HAVE TO GO OUT' ETC. AT CODE 2: HEIGHT REFUSED. 1 Meas "Height measured" 2 Ref "Height refused" 3 Attempt "Height attempted, not obtained" 4 NotAt "Height not attempted"
Height1 MEASUREMENTS FOR (participant's name) INTERVIEWER: ENTER HEIGHT, IN CENTIMETRES. : 60.0..244.0
Height2 MEASUREMENTS FOR (participant's name) INTERVIEWER: PLEASE MEASURE HEIGHT AGAIN AND ENTER HEIGHT, IN CENTIMETRES. : 60.0..244.0
IF (difference between height1 and height2 is greater than 0.5 centimetres) THEN Height3 MEASUREMENTS FOR (participant's name) INTERVIEWER: THE PREVIOUS HEIGHTS DIFFER BY MORE THAN .5cm. PLEASE MEASURE HEIGHT AGAIN AND ENTER HEIGHT, IN CENTIMETRES : 60.0..244.0
IF (RespHts = Meas) THEN Height MEASUREMENTS FOR (participant's name) HEIGHT IN CENTIMETRES : 60.0..244.0
StadNo MEASUREMENTS FOR (participant's name) INTERVIEWER: PLEASE RECORD THE ASSET NUMBER OF THE STADIOMETER USED FOR THIS INTERVIEW. THE ASSET NUMBER IS USUALLY IN ONE OF THE FOLLOWING FORMS: CST+digits e.g. CST123 NS+digits+L e.g. NS123L NS+digits+NC e.g. NS123NC LST+digits e.g. LST123 EST+digits e.g. EST123 : STRING [7]
RelHite MEASUREMENTS FOR (participant's name) INTERVIEWER: CODE ONE ONLY. 1 NoProb "No problems experienced, reliable height measurement obtained" 2 Rel "Problems experienced, measurement likely to be: Reliable" 3 UnRel "Problems experienced, measurement likely to be: Unreliable"
IF (RelHite = UnRel) THEN HiNRel MEASUREMENTS FOR (participant's name) INTERVIEWER: WHAT CAUSED THE HEIGHT MEASUREMENT TO BE UNRELIABLE? 1 Hair "Hairstyle or wig" 2 Hat "Turban or other religious headgear" 3 Stoop "Participant stooped" 4 Stretch "Child participant refused stretching" 5 Fidgit "Participant would not stand still" 6 Shoes "Participant wore shoes" 7 Other "Other, please specify"
IF (HiNRel = Other) THEN OHinRel MEASUREMENTS FOR (participant’s name) INTERVIEWER: PLEASE SPECIFY WHAT CAUSED UNRELIABLE HEIGHT MEASUREMENT. : STRING [60]
IF (RespHts = Meas) THEN MBookHt MEASUREMENTS FOR (participant’s name) INTERVIEWER: CHECK HEIGHT RECORDED ON MEASUREMENT RECORD CARD IF WANTED. HEIGHT: ^Height cm OR ^Foot feet ^Inch inches. PRESS <ENTER> TO CONTINUE 1 Continue
IF (RespHts = Ref) THEN ResNHi MEASUREMENTS FOR (participant’s name) INTERVIEWER: GIVE REASONS FOR REFUSAL. 1 NoPoint "Cannot see point/Height already known/Doctor has measurement" 2 Busy "Too busy/Taken too long already/ No time" 3 TooIll "Participant too ill/frail/tired" 4 Intrusiv "Considered intrusive information" 5 Anxious "Participant too anxious/nervous/shy/embarrassed" 6 Refused "Refused (no other reason given)" 7 Other "Other"
IF (RespHts = Attemp..NotAt) THEN NoHtBC MEASUREMENTS FOR (participant’s name) INTERVIEWER: CODE REASON FOR NOT OBTAINING HEIGHT. CODE ALL THAT APPLY. 1 Away "Child: away from home during fieldwork period (specify in a Note)" 2 Unsted "Participant is unsteady on feet" 3 CantStan "Participant cannot stand upright/too stooped" 4 Chair "Participant is chairbound" 5 Bed "Confined to bed" 6 Shoes "Participant unable to remove shoes" 7 NotStl "Child:subject would not stand still" 8 Ill "Ill or in pain" 9 NotWrk "Stadiometer faulty or not available" 10 ASleep "Child asleep" 11 Other "Other - specify"
IF (NoHtBC = Other) THEN NoHitCO MEASUREMENTS FOR (participant’s name) INTERVIEWER: Please specify other reason. : STRING [60]
IF (Age >= 2) AND (PregNowB \<> Yes) THEN RespWts MEASUREMENTS FOR (participant’s name) INTERVIEWER: MEASURE WEIGHT AND CODE. INCLUDE ‘DISGUISED’ REFUSALS SUCH AS ‘IT WILL TAKE TOO LONG’, ‘I HAVE TO GO OUT’ ETC. AT CODE 2: WEIGHT REFUSED. 0 Held "Weight obtained - Child held" (only use if child 5 or under) 1 Meas "Weight obtained" 2 Ref "Weight refused" 3 Attemp "Weight attempted, not obtained" 4 NotAt "Weight not attempted"
IF (RespWts = Meas) THEN XWt1 MEASUREMENTS FOR (participant’s name) INTERVIEWER: RECORD WEIGHT IN KILOGRAMS. Range: 5.0.. 250.0
IF (RespWts = Held) THEN WtAd1 MEASUREMENTS FOR (participant’s name) INTERVIEWER: ENTER WEIGHT OF ADULT ON HIS/HER OWN AND ENTER WEIGHT IN KILOGRAMS. Range: 30.0.. 250.0
WtChA1 MEASUREMENTS FOR (participant’s name) INTERVIEWER: ENTER WEIGHT OF ADULT HOLDING CHILD AND ENTER WEIGHT IN KILOGRAMS. Range: 30.0.. 250.0
Wght MEASUREMENTS FOR (participant’s name) Weight in Kilograms. Computed Range: 0.0.. 250.0
IF (Weight obtained) THEN FloorC MEASUREMENTS FOR (participant’s name) INTERVIEWER CODE: SCALES PLACED ON?" 1 Uneven "Uneven floor" 2 Carpet "Carpet" 3 Neither "Neither"
IF (weight measurement taken) THEN RelWaitB MEASUREMENTS FOR (participant’s name) INTERVIEWER: CODE ONE ONLY 1 NoProb "No problems experienced, reliable weight measurement obtained" 2 Rel "Problems experienced, measurement likely to be: Reliable" 3 UnRel "Problems experienced, measurement likely to be: Unreliable"
IF (Age ≥ 16) AND (Height = response) AND (RelHite = NoProb OR Rel) AND (Weight = response) AND (RelWaitB = NoProb OR Rel) THEN BMI MEASUREMENTS FOR (participant’s name) Measured Body Mass Index (BMI). Range: 5.0..50.0
IF (RespWts = Meas OR Held) THEN MBookWt MEASUREMENTS FOR (participant’s name) INTERVIEWER: CHECK WEIGHT RECORDED ON MEASUREMENT RECORD CARD IF WANTED. Weight: kg OR stones pounds. BMI : BMI measurement If weight looks wrong, go back to ‘XWt1’ or ‘WtAd1’ and reweigh. PRESS <ENTER> TO CONTINUE 1 Continue
IF (RespWts = Meas OR Held) THEN SciNo MEASUREMENTS FOR (participant’s name) INTERVIEWER: PLEASE RECORD THE ASSET NUMBER OF THE SCALES USED FOR THIS INTERVIEW. THE ASSET NUMBER IS USUALLY IN ONE OF THE FOLLOWING FORMS: CSC+digits e.g. CSC123 SC+digits+TA e.g. SC123TA SC+digits+TL e.g. SC123TL SC+digits+NC e.g. SC123NC LSC+digits e.g. LSC123 ESC+digits e.g. ESC123 : STRING [7]
IF (RespWts = ref) THEN ResNWt MEASUREMENTS FOR (participant’s name) INTERVIEWER: GIVE REASONS FOR REFUSAL. 1 NoPoint "Cannot see point/Weight already known/Doctor has measurement" 2 Busy "Too busy/Taken long enough already/No time" 3 TooIll "Participant too ill/frail/tired" 4 Intrusiv "Considered intrusive information" 5 Anxious "Participant too anxious/nervous/shy/embarrassed" 6 ChildRef "Child refused to be held by parent" 7 ParRef "Parent refused to hold child" 8 Refused "Refused (no other reason given)" 9 Other "Other"
IF (RespWts = Attmpt OR NotAt) THEN NoWBC MEASUREMENTS FOR (participant’s name) INTERVIEWER: CODE REASON FOR NOT OBTAINING WEIGHT. CODE ALL THAT APPLY. 1 Away "Child: away from home during fieldwork period (specify in a Note)" 2 Unsted "Participant is unsteady on feet" 3 CantStan "Participant cannot stand upright" 4 Chair "Participant is chairbound" 5 Bed "Confined to bed" 6 Shoes "Participant unable to remove shoes" 7 More250 "Participant weighs more than 250kg" 8 Ill "Ill or in pain" 9 NotWrk "Scales not working" 10 NoHold "Parent unable to hold child" 11 ASleep "Child asleep" 12 Other "Other - specify"
IF (NoWtBC = Other) THEN NoWatCO MMEASUREMENTS FOR (participant's name) INTERVIEWER: Please specify other reason. : STRING [60]
EndOfM MMEASUREMENTS FOR (participant's name) INTERVIEWER: YOU HAVE NOW COMPLETED ALL THE MEASUREMENTS FOR (participant's name). YOU NEED TO ENTER ‘1’ HERE TO ENSURE THAT FEES ARE COMPUTED CORRECTLY. 1 Continue CONTACT DETAILS ALL PARTICIPANTS
Phone We may need to contact you by telephone throughout the course of this study. Are you willing to provide your home phone number so that you can be contacted for the purposes of this study only?" 1 Yes 2 No 3 NoLand "No landline, but have mobile"
IF (Phone = Yes) THEN PhoneNum INTERVIEWER: Please record the full landline number including area code. : STRING [15]
IF (Phone = No/NoLand) THEN Mobile Are you willing to provide your mobile phone number so that you can be contacted for the purposes of this study only? 1 Yes 2 No
IF (Mobile = Yes) THEN MobNum INTERVIEWER: Please record the full landline number including area code. : STRING [15]
EmailCon Are you willing to provide an email address which can be used to contact you throughout the course of this study? 1 Yes 2 No
IF (EmailCon = Yes) THEN Email INTERVIEWER: Please record the full email address here. Email address can be checked at next question. : STRING [150]
Email2 Is this correct: (participant's email address) PRESS 1 AND <ENTER> TO CONTINUE. CAPI 2
IntroC2A THIS IS THE START OF THE CAPI 2 QUESTIONS FOR KEEVA. DO YOU WANT TO ASK THESE QUESTIONS?
1. Now
2. Later
Mental Health FOR PARTICIPANTS AGED 16 AND OVER
IF (Age >= 16) THEN SatLife Next I would like to ask you four questions about your feelings on aspects of your life. There are no right or wrong answers. For each of these questions I’d like you to give an answer on a scale of nought to 10, where nought is ‘not at all’ and 10 is ‘completely’. Overall, how satisfied are you with your life nowadays? INTERVIEWER: ON SCALE OF 0-10, WHERE 0 = ‘NOT AT ALL’ AND 10 = ‘COMPLETELY’ : 0….10
IF (Age >= 16) THEN LifWor Overall, to what extent do you feel that the things you do in your life are worthwhile? INTERVIEWER: ON SCALE OF 0-10, WHERE 0 = ‘NOT AT ALL’ AND 10 = ‘COMPLETELY’ : 0….10
IF (Age >= 16) THEN HapYes Overall, how happy did you feel yesterday? INTERVIEWER: ON SCALE OF 0-10, WHERE 0 = ‘NOT AT ALL’ AND 10 = ‘COMPLETELY’ : 0….10
IF (Age >= 16) THEN AnxYes On a scale where nought is ‘not at all anxious’ and 10 is ‘completely anxious’, overall, how anxious did you feel yesterday? INTERVIEWER: ON SCALE OF 0-10, WHERE 0 = ‘NOT AT ALL’ AND 10 = ‘COMPLETELY’ : 0….10 SupplInt I would now like to ask some questions about your/ (child’s name)’s use of dietary supplements over the last year. Firstly I am going to look to see whether you have recorded taking any supplements in your diary. INTERVIEWER: CHECK DIARY. SUPPLEMENTS RECORDED IN DIARY? 1 Yes 2 No
IF (SupplInt = Yes) THEN SupplInt2 Just to let you know that as you have also taken these supplements in the past year I will need to record the details again here [in CAPI]. You can also tell me about any other supplements you may have taken in the past year PRESS <ENTER> TO CONTINUE
HSVits (If Sex= Female AND Age >=16) THEN Have you ever taken NHS Healthy Start vitamins for women? INTERVIEWER: THESE VITAMINS CONTAIN FOLIC ACID AND VITAMINS C & D. THEY ARE AVAILABLE TO WOMEN WHO ARE PREGNANT OR HAVE A BABY UNDER ONE YEAR AND WHO MEET BENEFITS CRITERIA. ONLY INCLUDE NHS HEALTHY START VITAMINS PROVIDED AS PART OF THE GOVERNMENT 'HEALTHY START" SCHEME ' (USING GREEN HEALTHY START VITAMIN COUPONS). DO NOT INCLUDE ANY OTHER TYPES OF VITAMINS. (If Age\<=4) THEN Have you ever given NHS Healthy Start Childrens' Vitamin Drops (vitamins A, C and D) to (child name)? INTERVIEWER: ONLY INCLUDE NHS HEALTHY START CHILDRENS" VITAMINS DROPS PROVIDED AS PART OF THE GOVERNMENT "HEALTHY START" SCHEME (USING GREEN HEALTHY START VITAMIN COUPONS). DO NOT INCLUDE ANY OTHER TYPES OF VITAMINS.
Ever taken/given Healthy Start vitamins?" Yes, No, NoneAv "SPONTANEOUS ONLY: Tried to claim, but none available"
IF HSVits=Yes THEN HSVOf And how often do you take/ give these vitamins ("/" to child name)? Daily, Occ "Occasionally", VRare "Very rarely", Never, UsedTo "Used to give, but now don't" **Vitamin D and Folic Acid supplement**
(Ask all)
**SuppYr2**
SHOW CARD FF
Have you / Has (child’s name) taken any of the dietary supplements listed on this card in the past year, including prescription and non-prescription supplements?
1 Yes 2 No
**IF (SuppYr = Yes) THEN**
**SDet2**
Now I would like to collect some details about these dietary supplements that you / (child’s name) have / has taken in the past year.
It will be easiest if you show me the bottles or containers and I can copy down the information.
: STRING
Press 1 and Enter to continue
{Following questions asked as a loop}
**SRec**
INTERVIEWER: CODE WHETHER first/ next BOTTLE/CONTAINER CHECKED BY YOURSELF, THE PARTICIPANT OR NOT AT ALL."
1 Inte "Checked by myself", 2 Resp "Checked by participant", 3 NoCon "Not checked"
**SName**
INTERVIEWER: RECORD FULL NAME, INCLUDING BRAND AND STRENGTH.
INTERVIEWER: IT IS VERY IMPORTANT TO RECORD THE NAME, BRAND AND STRENGTH ACCURATELY SO THAT WE KNOW WE HAVE INFORMATION ON EXACTLY THE RIGHT SUPPLEMENT.
: STRING [60]
**SForm**
INTERVIEWER: RECORD FORM."
1 Tablets, 2 Capsules, 3 Drops, 4 Liquid "Liquid/Syrup", 5 Powder
**SDose**
INTERVIEWER: RECORD DOSE - NUMBER OF TABLETS, DROPS, 5ml SPOONS.
CHECK WITH PARTICIPANT THE DOSE ACTUALLY TAKEN AND RECORD THIS IF IT IS DIFFERENT TO THE ADVICE GIVEN ON CONTAINER.
: 1..20
**SFreq**
SHOW CARD GG
How often did you / (child’s name) take this supplement?
INTERVIEWER: Use <CTRL K> if does not know.
1 LessMth "Less than once a month" 2 OneThMth "1-3 times a month" 3 OnceWk "Once a week" 4 TwoFrWk "2-4 times a week" 5 OnceDay "Once a day" 6 TwoThDay "2-3 times a day" 7 FrMrDay "4 or more times a day"
SPres Was the supplement prescribed by your / (child’s name) GP/other healthcare professional? 1 Yes 2 No
SMore INTERVIEWER: RECORD WHETHER THERE ARE ANY MORE VITAMINS OR SUPPLEMENTS TO CODE." Yes No
SuppYr SHOW CARD HH Have you / Has (child’s name) taken any vitamins, minerals, fish oil, fibre or other dietary supplements of the type listed on this card in the past year, including prescription and non-prescription supplements? INTERVIEWER: GIVE FURTHER EXAMPLES - VITAMIN C, IRON, GLUCOSAMINE, EVENING PRIMROSE, GARLIC, GINSENG, OMEGA 3, COMPLAN, ETC. 1 Yes 2 No
IF (SuppYr = Yes) THEN SDet Now I would like to collect some details about the vitamins, minerals and other dietary supplements that you / (child’s name) have / has taken in the past year. It will be easiest if you show me the bottles or containers and I can copy down the information. PRESS <ENTER> TO CONTINUE 1 Continue
{Following questions asked as a loop}
SRec INTERVIEWER: CODE WHETHER (First/Next) BOTTLE/CONTAINER CHECKED BY YOURSELF, THE PARTICIPANT OR NOT AT ALL. 1 Inte "Checked by myself" 2 Resp "Checked by participant" 3 NoCon "Not checked"
SName INTERVIEWER: RECORD FULL NAME, INCLUDING BRAND AND STRENGTH. INTERVIEWER: IT IS VERY IMPORTANT TO RECORD THE NAME, BRAND AND STRENGTH ACCURATELY SO THAT WE KNOW WE HAVE INFORMATION ON EXACTLY THE RIGHT SUPPLEMENT. : STRING [60]
SForm INTERVIEWER: RECORD FORM. 1 Tablets "Tablets" 2 Capsules "Capsules" 3 Drops "Drops" 4 Liqu "Liquid/Syrup" 5 Powder "Powder"
SDose INTERVIEWER: RECORD DOSE - NUMBER OF TABLETS, DROPS, 5ml SPOONS. CHECK WITH PARTICIPANT THE DOSE ACTUALLY TAKEN AND RECORD THIS IF IT IS DIFFERENT TO THE ADVICE GIVEN ON CONTAINER. : 1..20
SFreq SHOW CARD GG How often did you / (child’s name) take this supplement? INTERVIEWER: Use <CTRL K> if does not know. 1 LessMth "Less than once a month" 2 OneThMth "1-3 times a month" 3 OnceWk "Once a week" 4 TwoFrWk "2-4 times a week" 5 OnceDay "Once a day" 6 TwoThDay "2-3 times a day" 7 FrMrDay "4 or more times a day"
SPres Was the supplement prescribed by your / (child’s name) GP/other healthcare professional? 1 Yes 2 No
SMore INTERVIEWER: RECORD WHETHER THERE ARE ANY MORE VITAMINS OR SUPPLEMENTS TO CODE. 1 Yes 2 No
IF (P2Age ≥ 4) THEN HSVits Have you ever given Healthy Start vitamins to (Child’s name)? 1 Yes 2 No 3 NoneAv "SPONTANEOUS ONLY: Tried to claim, but none available"
IF (HSVits=Yes) THEN HSVOf And how often do you give these vitamins to (Child’s name)? 1 Daily 2 Occ "...Occasionally" 3 VRare "Very rarely" 4 Never 5 UsedTo "Used to give, but now don’t" SunInt Now I'd like to ask you some questions about some of the things you / (child’s name) have/has done in the last seven days, that is since (day / date) up until yesterday, that involve exposure to sunlight. Exposure to sunlight means being outdoors. Unless otherwise stated, please think of the last seven days only when answering these questions. PRESS <ENTER> TO CONTINUE 1 Continue
{Ask all children aged < 16}
Sch7D Can I just check, in the last seven days, that is since last (day / date), did you/ X go to school? 1 Yes “Yes” 2 NoHol "No, I was on holiday" 3 NoSick "No, I was sick" 4 NoHome "No, I don't go to school (home-educated)" 5 NoOth "No, any other reason"
IF (Sch7D = Yes) THEN MBreakO On the days when you/he/she was/were at school in the last seven days, did you/he/she usually spend the morning break outside? 1 Yes 2 No
LBreakO On the days when you/he/she were at school in the last seven days, for how much of your/ X’s lunch break was/were you/he/she usually outside? ...READ OUT AND CODE ONE ONLY... 1 All "All or most of it" 2 Half "About half of it" 3 None "Or, very little or none of it?"
{End of specific questions for children aged < 16}
ASK ALL OutS2M Showcard II In the last month, how much time per day did you/your child usually spend outdoors during the daylight hours? Please do not include going to and from work, school, or time spent in outdoor physical activities 1 None No time 2 LessM15 Less than 15 mins 3 M15to30 15 to 30mins 4 M30to60 30mins to 1 hour OutS2S Showcard II How much time per day do you/your child usually spend outdoors during the daylight hours in summer? Please do not include going to and from work, school, or time spent in outdoor physical activities 1 None 2 LessM15 Less than 15 mins 3 M15to30 15 to 30mins 4 M30to60 30mins to 1 hour 5 H1to2 1 to 2 hours 6 H3to4 3 to 4 hours 7 MoreH4 More than 4 hours
OutS2W Showcard II How much time per day do you/your child usually spend outdoors during the daylight hours in winter? Please do not include going to and from work, school, or time spent in outdoor physical activities 1 None 2 LessM15 Less than 15 mins 3 M15to30 15 to 30mins 4 M30to60 30mins to 1 hour 5 H1to2 1 to 2 hours 6 H3to4 3 to 4 hours 7 MoreH4 More than 4 hours
SunCrm In sunny weather, in both the UK and abroad, do you/does your child protect your/his/her skin from the sun, for example with clothing or suncream? 1 Often 2 Sometimes 3 Rarely 4 Never
SunBrn In sunny weather, in both the UK and abroad, do you/does your child get blistering after being burned in the sun? 1 Often 2 Sometimes 3 Rarely 4 Never
SunTn In sunny weather, in both the UK and abroad, do you/does your child actively seek a suntan? 1 Often 2 Sometimes 3 Rarely ASK ALL
Hair What is your/his/her natural (undyed) hair colour? INTERVIEWER: IF PARTICIPANT ANSWERS 'GREY', ASK 'What was it before becoming grey?' IF PARTICIPANT ANSWERS 'BALD', ASK 'What was it before becoming bald?' INTERVIEWER: IF ASKED, WE ARE INTERESTED IN HAIR AND SKIN COLOUR BECAUSE WE GET MOST OF OUR VITAMIN D THROUGH EXPOSURE TO SUNLIGHT (ONLY SOME COMES FROM OUR DIET). BY KNOWING HAIR AND SKIN COLOUR, THE AMOUNT OF TIME SPENT OUTSIDE, AND ALSO DIETARY DETAILS, WE CAN WORK OUT HOW MUCH VITAMIN D IS FORMED IN THE SKIN. 1 Black "Black" 2 Red "Red / Ginger" 3 Blond "Blond / Fair" 4 LBrown "Light brown / Mouse" 5 DBrown "Dark brown" 6 Auburn "Auburn" 7 None "None of these"
Skin Which of the following best describes your/his/her natural skin colour. By natural colour I mean before exposure to the sun. Is it...READ OUT... INTERVIEWER: IF ASKED, WE ARE INTERESTED IN HAIR AND SKIN COLOUR BECAUSE WE GET MOST OF OUR VITAMIN D THROUGH EXPOSURE TO SUNLIGHT (ONLY SOME COMES FROM OUR DIET). BY KNOWING HAIR AND SKIN COLOUR, THE AMOUNT OF TIME SPENT OUTSIDE, AND ALSO DIETARY DETAILS, WE CAN WORK OUT HOW MUCH VITAMIN D IS FORMED IN THE SKIN. 1 White "White" 2 Brown "Brown" 3 Black "Black" 4 Olive "Or, olive?" 5 Other "Other"
IF (Skin = White OR Olive) THEN
SkTyp Would you say your/his/her type of skin... ...READ OUT... 1 NeverT "Never tans" 2 DiffT "Tans with difficulty" 3 EasyT "Or tans easily?" 4 NotKno "DO NOT READ OUT - Not known"
ASK ALL
Holi12m In the past year, have / has you / (child’s name) been on a sun holiday or trip to a sunny place for two days or more? This could be a sun holiday abroad or in the UK. INTERVIEWER: IT NEEDS TO HAVE BEEN SUNNY FOR TWO DAYS OR MORE WHILE PARTICIPANT WAS AWAY. 1 Yes 2 No IF (Participant 2 within ‘Core Address’) THEN SameHolS Were any of these holidays the same as the ones (Participant one’s name) has already told me about? That is to the same place at the same time as (Participant one’s name). INTERVIEWER: IF YES: PROBE AND CODE ALL THAT APPLY FROM LIST BELOW
IF (Holi12m = Yes) THEN SunHM Thinking of the {first/second/third/ fourth} sun holiday you/he/she took in the last year, in which month was this holiday? INTERVIEWER: IF HOLIDAY SPANS MORE THAN ONE MONTH, RECORD THE MONTH IN WHICH THE HOLIDAY BEGAN. 1 January 2 February 3 March 4 April 5 May 6 June 7 July 8 August 9 Sept "September" 10 October 11 November 12 December
HolC What country did you/he/she visit on this trip? INTERVIEWER: IF UK / GREAT BRITAIN, CHECK IF ENGLAND, SCOTLAND, WALES OR NORTHERN IRELAND. INTERVIEWER: RECORD NAME OF COUNTRY. INTERVIEWER: IF MORE THAN ONE, CODE THE COUNTRY WHERE PARTICIPANT SPENT THE MOST TIME. INTERVIEWER: INCLUDE VISITS TO FRIENDS AND FAMILY. : STRING [30]
AnyMore INTERVIEWER: ARE THERE ANY MORE SUN HOLIDAYS TO RECORD? 1 Yes 2 No Child Physical Activity
FOR PARTICIPANT AGED 2-15 FOR CHILDREN AGED 2-12 PARENT WILL ANSWER ON BEHALF OF CHILD. CHILDREN AGED 13-15 TO ANSWER FOR THEMSELVES.
IF (AGE = 2 – 25 years) THEN ChIntro Now I’d like to ask you some questions about things that (you have / name of child has) done that involve physical activity. This may be things that (you have / he has / she has) done at school, nursery, playgroup or things that (you have / he has / she has) done in the evenings and at weekends. INTERVIEWER: PRESS 1 AND ENTER TO CONTINUE. 1..1
Sch7Db Can I just check, in the last seven days, that is from (date of interview – 7) to yesterday, did (you / name of child) go to school, nursery or playgroup? 1 Yes, school 2 Yes, nursery 3 Yes, playgroup 4 No
Note: If Sch7D = No, route straight to Sports and Activities section (WDIntro).
IF (sch7Db = 1, 2 or 3) THEN SchDays In the last seven days (that is from (date of interview – 7) to yesterday), on how many days did (you / name of child) go to (school / nursery / playgroup)?
INTERVIEWER: ENTER NUMBER OF DAYS INTERVIEWER: DO NOT INCLUDE WORK EXPERIENCE OR EXTRA-CURRICULAR ACTIVITIES AS GOING TO SCHOOL Range: 1..6
IF (SchDays > 0) THEN JWlkCyc Still thinking about the last seven days, (that is from (date of interview – 7) to yesterday), did (you / name of child) walk or cycle all or part of the way to or from (school / nursery / playgroup)?
INTERVIEWER: INCLUDE WALKING TO OR FROM THE BUS STOP OR THE TRAIN STATION, OR WALKING PART OF THE WAY AFTER DRIVING (“PARK AND STRIDE”) BUT ONLY WHEN THEY WERE ON THEIR WAY TO OR COMING BACK FROM SCHOOL. IF A CHILD USES A SCOOTER ON THEIR JOURNEY TO OR FROM SCHOOL, THIS SHOULD BE RECORDED AS WALKING. 1 Yes - Walking 2 Yes – Cycling 3 Yes – Both 4 No IF (JWlkCyc= 1 OR 3) THEN JWlkDT In the last seven days on how many days did (you / name of child) walk all or part of the way to (school / nursery / playgroup)? Range: 0..6
JWlkDF And on how many days did (you / name of child) walk all or part of the way home from (school / nursery / playgroup)? Range: 0..6
IF (JWlkDT > 0 or JWlkDF > 0) THEN JWlkTim How long does it usually take (you / name of child) to walk to (school / nursery / playgroup)? INTERVIEWER: AN AVERAGE TIME PER DAY IS BEING SOUGHT. IF JOURNEYS TO AND FROM SCHOOL ARE DIFFERENT LENGTHS THEN ENTER AN AVERAGE. ENTER NUMBER OF MINUTES. IF NONE, ENTER 0 Range: 0..120
IF (JwlkCyc = 2 OR 3) THEN JCycDT In the last seven days, on how many days did (you / name of child) cycle all or part of the way to (school / nursery / playgroup)? Range: 0..6
JcycDF And on how many days did (you / name of child) cycle all or part of the way home from (school / nursery / playgroup)? Range: 0..6
IF (JcycDT > 0 or JcycDF > 0) THEN JCycTim How long does it usually take (you / name of child) to cycle to (school / nursery / playgroup)? INTERVIEWER: AN AVERAGE TIME PER DAY IS BEING SOUGHT. IF JOURNEYS TO AND FROM SCHOOL ARE DIFFERENT LENGTHS THEN ENTER AN AVERAGE. ENTER NUMBER OF MINUTES. IF NONE, ENTER 0 Range: 0..120
IF (SCH7Db = School) THEN SchlBr SHOW CARD JJ I would like you to think about (your / name of child’s) school breaks in the last seven days, that is from (date of interview – 7) to yesterday. Apart from time spent eating, which activity on this card did (you / name of child) do most often in (your / his / her) morning, lunchtime and afternoon breaks? 1 Sit Sitting down 2 Hang Hanging around 3 Walk Walking 4 Running Running around or playing games for example skipping, hide and seek, football or netball IF (SchBr = 3) THEN WalkPace Which of the following best describes (your / name of child's) usual walking pace ...READ OUT... 1 Slow ...a slow pace, 2 Steady a steady average pace, 3 Brisk ...a fairly brisk pace, 4 Fast ...or, a fast pace?
ASK ALL AGED 2-15 WDIntro SHOW CARDS KK AND LL I would now like to ask you some questions about whether (you have / name of child has) done any of the physical activities listed on these two showcards in the last 7 days. INTERVIEWER: SHOW PARTICIPANT CARDS KK AND LL. I will first ask you about the informal activities on Showcard KK and then about the more formal activities on Showcard LL. INTERVIEWER: PRESS 1 AND ENTER TO CONTINUE 1..1
ASK ALL NSWA SHOW CARD KK Firstly, please think about informal activities. Since last (day of week seven days ago), (have you / has name of child) done any activities listed on this card on weekdays (outside school hours)? INTERVIEWER: By outside school hours we mean anything not done in lessons and school breaks. The participant should include activities done in after school clubs. 1 Yes 2 No
Note: If NSWA = No, route to WendWA2.
IF (NSWA = Yes) THEN NSWA2 SHOW CARD KK Which ones? CODE ALL THAT APPLY 1 Cycl Cycling (but not to or from school) 2 Walking Walking (but not to or from school / nursery / playgroup) 3 Housework Hoovering, cleaning car, gardening, etc 4 HopScotch Hopscotch 5 Trampo Bouncing on trampoline 6 Play Playing around, e.g. kicking a ball around, catch, hide and seek 7 Skate Skating / Skateboarding / using a scooter 8 Dance Dancing, including dance lessons 9 Rope Skipping rope
IF (NSWA2 [1..9] DO) THEN NSPAD On which weekdays since last (day 7 days ago) did (you / name of child) do (name of activity)? CODE ALL THAT APPLY: 1 Monday 2 Tuesday 3 Wednesday 4 Thursday 5 Friday
IF (NSPAD IN 1..5 DO) THEN
NSPATH How long did (you / name of child) spend in total doing (name of activity) on (day)? RECORD HOURS BELOW. ENTER 0 IF LESS THAN 1 HOUR. RECORD MINUTES AT NEXT QUESTION Range: 0..20
NSPATM How long did (you / name of child) spend in total doing (name of activity) on (day)? ENTER NUMBER OF MINUTES. IF AN EXACT HOUR, ENTER 0 FOR MINUTES Range: 0..59
Note: NSPATH and NSPATM repeated for each day coded at NSPAD. NSPAD to NSPATM repeated for each activity coded at NSWA2.
WendWA2 SHOW CARD KK I would now like to ask you about any activities (you / name of child\] did (last weekend). (last weekend) did (you / name of child) do any activities listed on this card? 1 Yes 2 No
IF (WendWA2 = Yes) THEN
WEPWA2 SHOW CARD KK Which ones? CODE ALL THAT APPLY. 1 Cycl Cycling (but not to or from school) 2 Walking Walking (but not to or from school / nursery / playgroup) 3 HouseWrk Vacuuming, cleaning car, gardening, etc" 4 HopScotch Hopscotch 5 Trampo Bouncing on trampoline 6 Play Playing around, e.g. kicking a ball around, catch, hide and seek 7 Skate Skating / Skateboarding / using a scooter 8 Dance Dancing, including dance lessons 9 Rope Skipping rope
IF (WEPWA2 IN [1..9] DO) THEN
WEPAD On which days did (you / name of child) do (name of activity)? INTERVIEWER: CODE ALL THAT APPLY 1 Saturday 2 Sunday
IF (WEPAD IN [1..2], i = 1..2 DO) THEN
WEPAH How long did (you / name of child) spend in total doing (name of activity) on (day)? INTERVIEWER: Record hours below. Enter 0 if less than 1 hour. Record minutes at next question WEPAM How long did (you / name of child) spend in total doing (name of activity) on (day)? INTERVIEWER: Enter number of minutes. If an exact hour, enter 0 for minutes Range: 0..59
Note: WEPAH and WEPAM repeated for each day coded at WEPAD. WEPAD to WEPAM repeated for each activity coded at WEPWA2.
NSWB SHOW CARD LL Now, please think about formal activities. Since last (day of week 7 days ago), (have you / has name of child) done any activities listed on this card on weekdays (outside school hours)? INTERVIEWER: By outside school hours we mean anything NOT done in lessons and school breaks. The participant SHOULD include activities done in after school clubs. 1 Yes 2 No
IF (NSWB =Yes) THEN NSpWB SHOW CARD LL Which ones? INTERVIEWER: CODE ALL THAT APPLY. 1 Footb Football / Rugby / Hockey /Lacrosse 2 Netb Netball / Basketball / Handball 3 Cricket Cricket/ Rounders 4 Athl Running, jogging, athletics 5 SwimLap Swimming laps/ lengths 6 SwimSp Swimming (splashing about) 7 Gymn Gymnastics 8 GymWtT Workout with gym machines / Weight training 9 Aero Aerobics 10 Tenn Tennis / Badminton / Squash
IF (NSpWB in [1..10], DO) THEN NSWBD On which weekdays in the last week did (you / name of child) do (name of activity)? CODE ALL THAT APPLY: 1 Monday 2 Tuesday 3 Wednesday 4 Thursday 5 Friday
IF (NSWBD in [1..5] DO) THEN NSWBH How long did (you /name of child) spend in total doing (name of activity) on (day)? INTERVIEWER: Record hours below. Enter 0 if less than 1 hour. Record minutes at next question NSWBM How long did (you / name of child) spend in total doing (name of activity) on (day)? INTERVIEWER: ENTER NUMBER OF MINUTES. IF AN EXACT HOUR, ENTER 0 FOR MINUTES Range: 0..59 Note: NSWBH and NSWBM repeated for each day coded at NSWBD. NSWBD to NSWBM repeated for each activity coded at NSpWB.
WendWB2 SHOW CARD LL I would now like to ask you about any activities (you / name of child) did (last weekend). (Last weekend) did (you / name of child) do any activities listed on this card? 1 Yes 2 No
IF (WendWB2 = Yes) THEN WendWB SHOW CARD LL Which ones? CODE ALL THAT APPLY. 1 Footb Football / Rugby / Hockey / Lacrosse 2 Netb Netball / Basketball / Handball 3 Cricket Cricket / Rounders 4 Athl Running, jogging, athletics 5 Swimlap Swimming laps / lengths 6 SwimSp Swimming (splashing about) 7 Gymn Gymnastics 8 GymWIT Workout with gym machines / Weight training 9 Areo Aerobics 10 Tenn Tennis / Badminton / Squash
IF (WendWB IN [1..10] DO) THEN WendWBD On which days in the last week did (you / name of child) do (name of activity)? CODE ALL THAT APPLY 1 Saturday 2 Sunday
IF (WendWBD in [1..2] DO) THEN WendWBH How long did (you / name of child) spend in total doing (name of activity) on (day)? INTERVIEWER: Record hours spent below. Enter 0 if less than 1 hour. Record minutes at next question Range: 0..20
WendWBM How long did (you / name of child) spend in total doing/playing (name of activity) on (day)? INTERVIEWER: Enter number of minutes. If an exact hour, enter 0 for minutes Range: 0..59
Note: WendWBH and WendWBM repeated for each day coded at WendWBD. WendWBD to WendWBM repeated for each activity coded at WendWB.
IF (Total time spent on activities on each day of week >= 480 minutes) THEN Check Can I check you mentioned that you spent (number of hours and minutes spent on activities in total on day of week) doing these activities on (day of week). This seems a lot are you sure this is correct? [List of activities mentioned and time spent on them] 1 Yes 2 No
Note: Check repeated for each day of week
ASK ALL AGED 2-15 NSOth2 SHOW CARDS KK AND LL In the last seven days, that is from (date of interview – 7) to yesterday, (have you / has name of child) done any other similar activities not listed on these two cards on weekdays?
INTERVIEWER: IF ‘Yes’, RECORD BRIEF DETAILS OF ALL OTHER ACTIVITIES IN THE NEXT QUESTION 1 Yes 2 No
IF (NSOth2 = yes) THEN NOSpEx2 INTERVIEWER: Record brief details of the (first / second / third / fourth / fifth) other sport or exercise activity. Type in first few letters of the sport to enter coding frame. Type ‘other’ if the sport is not listed. Type ‘xxx’ (for not listed/don’t know) if unable to code. On exiting coding frame press ‘Enter’ to move to next question.
OSpEx2 INTERVIEWER: Enter brief description of this sport” : STRING[80]
Note: repeat NSOth2 and OspEx2 for up to 5 activities.
NSOthD2 On which weekdays during the last seven days did (you / name of child) do (activity)? CODE ALL THAT APPLY: 1 Monday 2 Tuesday 3 Wednesday 4 Thursday 5 Friday IF (NSOthD2 in [1..5] DO THEN
NSOthT2H How long did (you / name of child) spend doing (activity) on (day)? INTERVIEWER: Record hours spent below. Enter 0 if less than 1 hour. Record minutes at next question Range: 0..20
NSOthT2M How long did (you / name of child) spend doing (name of sport/activity) on (day)? INTERVIEWER: Enter number of minutes. If an exact hour, enter 0 for minutes Range: 0..59 END DO
Inten When (you / name of child) did (activity) was it hard enough to make (you / name of child) out of breath or sweaty? 1 Yes 2 No
Note: NOSpEx2 to Inten repeated for each activity coded at NOSpEx2.
ASK ALL WEOth2 Did (you / name of child) do any other similar activities not listed on these two cards (last weekend)? INTERVIEWER: IF ‘Yes’, RECORD BRIEF DETAILS OF ALL OTHER SPORTS AND ACTIVITIES IN THE NEXT QUESTION. 1 Yes 2 No
IF (WEOth2 = yes) THEN WEOspEx2 INTERVIEWER: Record brief details of the (first / second / third / fourth / fifth) other sport or exercise activity. Type in first few letters of the sport to enter coding frame. Type ‘other’ if the sport is not listed. Type ‘xxx’ (for not listed/don’t know) if unable to code. On exiting coding frame press <Enter> to move to next question. :1…999
OSpEx2 INTERVIEWER: Enter brief description of this sport : STRING[80]
Note: WEOth2 and WEOspEx2 are repeated for up to five activities.
WEOthD On which days did (you / name of child) do (activity)? CODE ALL THAT APPLY 1 Saturday 2 Sunday
IF (WEOthD IN [1..2] DO THEN WEOTHTH How long did (you / name of child) spend doing/playing (activity) on (day)? INTERVIEWER: Record hours spent below. Enter 0 if less than 1 hour. Record minutes at next question Range: 0..20
WEOTHTM How long did (you / name of child) spend doing/playing (activity) on (day)? INTERVIEWER: Enter number of minutes. If an exact hour, enter 0 for minutes Range: 0..59
Inten3 When (you / name of child) did/played (activity) was it hard enough to make (you / him / her) out of breath or sweaty? 1 Yes 2 No
END DO END IF
Note: WEOTH2 to Inten3 repeated for each activity coded at WEOspEx2.. IF (NSWA2 = 1, 5, 6, 7, 8, or 9) OR (WEPWA2 =1, 5, 6, 7, 8, or 9) THEN ExcMusCl You told us that you did [informal activity recorded at NSWA2, WEPWA2] last week: During the last week, was the effort of [any of these activities/ name of informal activity recorded at NSWA2, WendWA2] usually enough to make your muscles feel some tension, shake or feel warm? 1 Yes 2 No
IF (NSpWB = 1-10) OR (WendWB = 1-10) THEN ExcMusCF You told us that you did [formal activity recorded at NSpWB, WendWB] last week: During the last week, was the effort of [any of these activities/ name of formal activity recorded at NSpWB, WendWB] usually enough to make your muscles feel some tension, shake or feel warm? 1 Yes 2 No
Note: ExcMusCl is repeated for each informal activity coded at NSWA2 or WEPWA2. ExcMusCl is repeated for each formal activity codes at NSpWB or WendWB.
ASK ALL AGED 2-15 IntroST Now I’d like to ask some questions about time that (you / name of child) might have spent sitting down. For these questions, I’d like you to think about what (you have / name of child has) done in the last seven days, that is from (date of interview –7) to yesterday.
Firstly I would like to ask you about any activities (you have / name of child has) done (after school on weekdays, from last (day) to yesterday. INTERVIEWER: PRESS 1 AND ENTER TO CONTINUE 1..1 TVWkH On weekdays from last (day) to yesterday, how much time did (you / name of child) usually spend each day sitting watching TV including DVDs or videos? INTERVIEWER: RECORD HOURS BELOW. ENTER 0 IF LESS THAN 1 HOUR. RECORD MINUTES AT NEXT QUESTION Range: 0..20
TVWkM ENTER NUMBER OF MINUTES. IF AN EXACT HOUR, ENTER 0 FOR MINUTES Range: 0..59
SedWkH Still thinking about weekdays, from last (day) to yesterday, how much time did (you / name of child) usually spend each day sitting down doing other any other activity? INTERVIEWER: EXAMPLES OF ACTIVITIES INCLUDE READING, DOING HOMEWORK, DRAWING, USING A COMPUTER OR PLAYING VIDEO GAMES RECORD HOURS SPENT BELOW. ENTER 0 IF LESS THAN 1 HOUR. RECORD MINUTES AT NEXT QUESTION Range: 0..20
SedWkM ENTER NUMBER OF MINUTES. IF AN EXACT HOUR, ENTER 0 FOR MINUTES Range: 0..59
TVWEH Last weekend how much time did (you / name of child) usually spend each day sitting watching TV including DVDs or videos? INTERVIEWER: RECORD HOURS BELOW. ENTER 0 IF LESS THAN 1 HOUR. RECORD MINUTES AT NEXT QUESTION Range: 0..20
TVWEM Last weekend how much time did (you / name of child) usually spend each day sitting watching TV including DVDs or videos? INTERVIEWER: ENTER NUMBER OF MINUTES. IF AN EXACT HOUR, ENTER 0 FOR MINUTES Range: 0..59
SedWEH Still thinking of last weekend, how much time did (you / name of child) usually spend each day sitting down doing other any other activity? INTERVIEWER: EXAMPLES OF ACTIVITIES INCLUDE READING, DOING HOMEWORK, DRAWING, USING A COMPUTER OR PLAYING VIDEO GAMES RECORD HOURS SPENT BELOW. ENTER 0 IF LESS THAN 1 HOUR. RECORD MINUTES AT NEXT QUESTION Range: 0..20 SedWEM ENTER NUMBER OF MINUTES. IF AN EXACT HOUR, ENTER 0 FOR MINUTES Range:0..59
Normal Last week, that is from (date of interview – 7) to yesterday (were you / was name of child) ...READ OUT... 1 More ...more active than usual 2 Less less active than usual or 3 Same about the same as usual?
IF Age 2-12 Involve INTERVIEWER: How involved was (name of child) in answering the physical activity questions? 1 NotPres Child was not present 2 NotPart Child was present but did not participate 3 Few Child was present and helped proxy answer a few questions 4 Some Child was present and helped proxy answer some questions 5 Most Child was present and helped proxy answer most questions DIARY COLLECTION & PHYSICAL ACTIVITY QUESTIONNAIRE PLACEMENT
DIARY COLLECTION: ALL PARTICIPANTS RPAQ PLACEMENT: PARTICIPANTS AGED 16 AND OVER
DryPUp INTERVIEWER: THE NEXT FEW SCREENS WILL GUIDE YOU THROUGH CHECKING THE FOOD DIARY FOR KEEVA AND PLACING THE PHYSICAL ACTIVITY SELF-COMPLETION BOOKLET FOR KEEVA. Press 1 and <ENTER> to continue.
IF (Age≥16) AND (Participant number = 1) THEN DiaryDA INTERVIEWER: BRIEFLY GO THROUGH THE DIARY AND CHECK HOW MANY DIARY DAYS (participant one's name) COMPLETED. RECORD NUMBER OF DIARY DAYS COMPLETED HERE. ENTER '0' IF NO DIARY DAYS WERE COMPLETED. Range: 0..4
IF (Participant number = 1) AND (DiaryDA < 3) THEN NoCAPI2A INTERVIEWER: (Participant one's) Name has not completed at least 3 days of the food diary so the physical activity self-completion, the rest of CAPI2 and introduction to the Nurse visit are not necessary for this participant. Please do NOT provide the £30 voucher/ gift card PRESS <ENTER> TO CONTINUE 1 Continue
IF (Age≥16) AND (Participant number = 2) THEN DiaryDC INTERVIEWER: BRIEFLY GO THROUGH THE DIARY JUST TO CHECK HOW MANY DIARY DAYS (participant two's name) COMPLETED. REMEMBER TO USE THE YOUNG PERSON'S FOOD ATLAS WHEN REVIEWING DIARIES FOR PARTICIPANTS AGED 15 YEARS AND UNDER RECORD NUMBER OF DIARY DAYS COMPLETED HERE. ENTER '0' IF NO DIARY DAYS WERE COMPLETED. Range: 0..4
IF (Age≥16) AND (Participant number = 2) AND (DiaryDA < 3) THEN NoCAPI2C INTERVIEWER: (participant two's) has not completed at least 3 days of the food diary so the physical activity self-completion, the rest of CAPI2 and introduction to the Nurse visit are not necessary for this participant Please do not provide the £30 voucher/ gift card. PRESS <ENTER> TO CONTINUE 1 Continue
IF (Age≥16) AND (Participant number = 1) THEN DiarChkA ( Participant one's name), I would like you to answer some questions by completing this booklet. The questions cover physical activity in your everyday life in the last 4 weeks. INTERVIEWER: Complete the front page of the booklet for (participant one's name). INTERVIEWER:
- Give (participant one’s name) the Physical Activity self-completion booklet and explain how to fill it in.
- While the participant completes the Physical Activity self-completion booklet, check their diary and decide what extra detail you will need to prompt for.
- When the participant has completed the Physical Activity self-completion, go through the diary with the participant and probe for any missing information.
(IF P2Sel > 0) AND (DiaryDC >= 3) AND (P2Age >= 16) THEN INTERVIEWER: YOU ALSO NEED TO DO THE SAME WITH THE CHILD PARTICIPANT PRESS <ENTER> TO CONTINUE
IF (Age ≥16) AND (Participant Number = 2) THEN DiarChkC (Participant two’s name), I would like you to answer some questions by completing this booklet. The questions cover physical activity in your everyday life in the last 4 weeks. INTERVIEWER: Complete the front page of the booklet for (Participant two’s name).
IF (Participant number = 1) AND (DiaryDA ≥ 3) THEN RPAQChkA INTERVIEWER: RECORD WHETHER (participant one’s name) COMPLETED THE PHYSICAL ACTIVITY SELF-COMPLETION. INTERVIEWER: IF COMPLETED THEN GO THROUGH THE COMPLETED PHYSICAL ACTIVITY SELF-COMPLETION WITH (participant one’s name) AND PROBE FOR ANY MISSING INFORMATION.
IF (Participant number = 2) AND (DiaryDA ≥ 3) THEN RPAQChkC INTERVIEWER: RECORD WHETHER (Participant two) COMPLETED THE PHYSICAL ACTIVITY SELF-COMPLETION. INTERVIEWER: IF COMPLETED THEN GO THROUGH THE COMPLETED PHYSICAL ACTIVITY SELF-COMPLETION WITH (Participant two) AND PROBE FOR ANY MISSING INFORMATION.
IF (Participant number = 2) THEN SlpWkCH Over the last seven days, that is since (date), how long did you (Participant two) usually sleep for on week nights. That is Sunday to Thursday nights? INTERVIEWER. Enter hours in this question followed by minutes in the next question (SlpWkCM) INTERVIEWER: ONLY INCLUDE TIME PARTICIPANT IS ASLEEP. AN AVERAGE TIME PER NIGHT IS BEING SOUGHT. IF PARTICIPANT CANNOT ANSWER BECAUSE THE PATTERN OF TIME SPENT VARIES WIDELY FROM NIGHT TO NIGHT, CODE 'DON'T KNOW' (CTRL K). IF PARTICIPANT WORKED ON NIGHT SHIFTS DURING THE LAST TWO WEEKS ENTER AVERAGE TIME SLEPT DURING THE DAY. Range: 0..24
SlpWkCM ... and enter minutes Range: 0..59
SlpWkECH And over the last seven days, how long did you (Participant two) usually sleep for on weekend nights. That is Friday and Saturday nights? INTERVIEWER. Enter hours in this question followed by minutes in the next question (SlpWkCM) INTERVIEWER: ONLY INCLUDE TIME PARTICIPANT IS ASLEEP. AN AVERAGE TIME PER NIGHT IS BEING SOUGHT. IF PARTICIPANT CANNOT ANSWER BECAUSE THE PATTERN OF TIME SPENT VARIES WIDELY FROM NIGHT TO NIGHT, CODE 'DON'T KNOW' (CTRL K). IF PARTICIPANT WORKED ON NIGHT SHIFTS DURING THE LAST TWO WEEK ENDS ENTER AVERAGE TIME SLEPT DURING THE DAY. : 0..24
SlpWkECM ... and enter minutes Range: 0..59
IF (AGE \<16 and DiaryDC ≥ 3) THEN DiarChk2 INTERVIEWER: Now go through the diary with (Participant two) and probe for any missing information Please remember to use Young Person's Food Atlases when reviewing diary PRESS <ENTER> TO CONTINUE 1 Continue
IF Age\<16 THEN DietFBC2 (Participant two name), would you like to be sent some information about some of the major foods and nutrients in your/ your child’s diet based on the information you have provided during the interviews? The information will tell you how you/ your child compare with current consumption in the UK and how your/ your child’s intake of nutrients fits with UK recommendations for a healthy diet. It will also provide some useful resources for finding out more about eating a healthy diet. INTERVIEWER: INFORMATION WILL BE SENT FROM THE OFFICE WITHIN 6 MONTHS. INTERVIEWER: SHOW PARTICIPANT EXAMPLE OF DIETARY FEEDBACK IN YOUR LAMINATE PACK 1 Yes “Yes, feedback required” 2 No “No, feedback not required”
AddrChkC2 We have this name for you ... Title: Forename: Surname: Is this correct? INTERVIEWER: THIS IS TO ENSURE THAT ANY LETTERS, REQUESTED BY PARTICIPANTS (SUCH AS DIETARY FEEDBACK FORMS), ARE SENT TO THE CORRECT PARTICIPANTS. 1 Yes 2 No
TtlC2 Firstly, what is your / X’s title? 1 Mr 2 Mrs 3 Ms 4 Miss 5 Other "Other title"
TtlTxtC2 INTERVIEWER: Enter the other title : STRING [15]
ForNameC2 And your / X’s first name? : STRING [20]
SurNameC2 And your / X’s surname? : STRING [20]
DietFBA (Participant one name), would you like to be sent some information about some of the major foods and nutrients in your diet based on the information you have provided during the interviews? The information will tell you how you compare with current consumption in the UK and how your intake of nutrients fits with UK recommendations for a healthy diet. It will also provide some useful resources for finding out more about eating a healthy diet. INTERVIEWER: INFORMATION WILL BE SENT FROM THE OFFICE WITHIN 6 MONTHS. INTERVIEWER: SHOW PARTICIPANT EXAMPLE OF DIETARY FEEDBACK IN YOUR LAMINATE PACK. 1 Yes “Yes, feedback required” 2 No “No, feedback not required”
AddrChkA We have this name for you... Title: Forename: Surname: Is this correct? INTERVIEWER: THIS IS TO ENSURE THAT ANY LETTERS, REQUESTED BY PARTICIPANTS (SUCH AS DIETARY FEEDBACK FORMS), ARE SENT TO THE CORRECT PARTICIPANTS. 1 Yes 2 No Firstly, what is your title? 1 Mr 2 Mrs 3 Ms 4 Miss 5 Other "Other title"
INTERVIEWER: Enter the other title : STRING [15]
And your first name? : STRING [20]
And your surname? : STRING [20]
IF Age 16-18 THEN DietFBC (Participant 2 name) would you like to be sent some information about some of the major foods and nutrients in your/ your child’s diet based on the information you have provided during the interviews? The information will tell you how you/ your child compare(s) with current consumption in the UK and how your/ your child’s intake of nutrients fits with UK recommendations for a healthy diet. It will also provide some useful resources for finding out more about eating a healthy diet. INTERVIEWER: INFORMATION WILL BE SENT FROM THE OFFICE WITHIN 6 MONTHS. INTERVIEWER: SHOW PARTICIPANT EXAMPLE OF DIETARY FEEDBACK IN YOUR LAMINATE PACK." 1 Yes "Yes, feedback required" 2 No "No, feedback not required"
We have this name for you ... Title: Forename: Surname: Is this correct? INTERVIEWER: THIS IS TO ENSURE THAT ANY LETTERS, REQUESTED BY PARTICIPANTS (SUCH AS DIETARY FEEDBACK FORMS), ARE SENT TO THE CORRECT PARTICIPANTS." 1 Yes 2 No
Firstly, what is your/ X’s title? 1 Mr 2 Mrs 3 Ms 4 Miss 5 Other "Other title" TtlTxtC INTERVIEWER: Enter the other title : STRING[15]
ForNameC And your/ X's first name? : STRING[20]
SurNameC And your/ X's surname? : STRING [20]
IF (Participant number = 1) THEN SlpWkAH Over the last seven days, that is since (date), how long did you usually sleep for on week nights. That is Sunday to Thursday nights? INTERVIEWER. Enter hours in this question followed by minutes in the next question (SlpWkAM) INTERVIEWER: ONLY INCLUDE TIME PARTICIPANT IS ASLEEP. AN AVERAGE TIME PER NIGHT IS BEING SOUGHT. IF PARTICIPANT CANNOT ANSWER BECAUSE THE PATTERN OF TIME SPENT VARIES WIDELY FROM NIGHT TO NIGHT, CODE 'DON'T KNOW' (CTRL K). IF PARTICIPANT WORKED ON NIGHT SHIFTS DURING THE LAST TWO WEEKS ENTER AVERAGE TIME SLEPT DURING THE DAY. Range: 0..24
SlpWkAM ... and enter minutes Range: 0..59
SlpWkEAH And over the last seven days, how long did you usually sleep for on weekend nights. That is Friday and Saturday nights? INTERVIEWER. Enter hours in this question followed by minutes in the next question (SlpWkEAM) INTERVIEWER: ONLY INCLUDE TIME PARTICIPANT IS ASLEEP. AN AVERAGE TIME PER NIGHT IS BEING SOUGHT. IF PARTICIPANT CANNOT ANSWER BECAUSE THE PATTERN OF TIME SPENT VARIES WIDELY FROM NIGHT TO NIGHT, CODE 'DON'T KNOW' (CTRL K). IF PARTICIPANT WORKED ON NIGHT SHIFTS DURING THE LAST TWO WEEK ENDS ENTER AVERAGE TIME SLEPT DURING THE DAY. Range: 0..24
SlpWkEAM ... and enter minutes Range: 0..59 NHS CENTRAL REGISTER & CANCER REGISTRY CONSENT FORM FOR PARTICIPANTS AGED 16 AND OVER
IF (Age ≥ 19) THEN NHSCanA We would like your consent for us to send your name, address and date of birth to two National Health Service registers. These are the NHS Central Register and the NHS Cancer Registry. Please read this form, it explains more about what is involved. INTERVIEWER: GIVE THE PARTICIPANT THE NHSCR CONSENT FORM AND ALLOW THEM TIME TO READ THE INFORMATION. 1 Con "Consent given" 2 NoCon "Consent not given"
IF (NHSCanA = Con) THEN NHSSigA Before I can pass on your details, I have to obtain written consent from you. INTERVIEWER: Enter the participant's serial number, check letter, and participant number on the top of the consent form. Serial: Check Letter: Person Number: 1 Ask the participant to sign and date the form. Give the bottom copy of the form to the participant. Code whether signed consents obtained. 1 Central "NHS Central Register and Cancer Registry consent obtained" 2 None "No signed consents"
IF (Age = 16-18) THEN NHSCanC We would like your consent for us to send your name, address and date of birth to two National Health Service registers. These are the NHS Central Register and the NHS Cancer Registry. Please read this form, it explains more about what is involved. INTERVIEWER: GIVE THE PARTICIPANT THE NHSCR CONSENT FORM AND ALLOW THEM TIME TO READ THE INFORMATION. 1 Con "Consent given" 2 NoCon "Consent not given"
IF (NHSCanC = Con) THEN NHSSigC Before I can pass on your details, I have to obtain written consent from you. INTERVIEWER: Enter the participant's serial number, check letter, and participant number on the top of the consent form. Serial: Check Letter: Person Number: 2 Ask the participant to sign and date the form. Give the bottom copy of the form to the participant. Code whether signed consents obtained. 1 Central "NHS Central Register and Cancer Registry consent obtained" 2 None "No signed consents" RECONTACT QUESTIONS FOR ALL PARTICIPANTS
IF (Age ≥ 19) THEN ReConA If at some future date the Public Health of England (PHE) or Food Standards Agency (FSA) wanted to conduct a further study from the results of this survey, would you be willing to be recontacted to help again? INTERVIEWER: IF ASKED, THERE ARE NO CURRENT PLANS FOR FURTHER STUDIES, BUT THERE MAY BE IN THE FUTURE. 1 Yes 2 No
IF (ReconA = Yes) THEN EmailCon ASK ADULT Would you be willing to be recontacted by email? 1 Yes 2 No
IF (EmailCon=Yes) THEN Email Thank you, and can I take your email address please? Email address can be checked at next question. : STRING [150]
Email2 Is this correct: (Email) Press 1 and <Enter> to continue 1 Continue
IF (ReconA = Yes) THEN StabAdd ASK ADULT Just in case we have difficulty in getting in touch with you - could you give us the name and/or phone number of someone who knows you well? INTERVIEWER: IF NECESSARY, PROMPT: Perhaps a relative or friend who is unlikely to move? COLLECT ADDRESS DETAILS IF POSSIBLE AND RECORD IN THE FOLLOWING QUESTIONS. 1 Agreed "Agreed to provide stable contact" 2 Refused "Refused to provide stable contact"
StName INTERVIEWER: Please enter the name of the contact person. : STRING [30]
StRel INTERVIEWER: Please enter the relationship to the participant. PROBE FULLY. : STRING [30] **StTelNum** INTERVIEWER: Please enter the stable/contact address. Telephone Number Include standard code. : STRING [20]
**StAdd** Could we also take down an address for them? 1 Yes 2 No
**StAdd1** INTERVIEWER: Please enter the stable/contact address. Address line 1: : STRING [30]
**StAdd2** INTERVIEWER: Please enter the stable/contact address. Address line 2: : STRING [30]
**StAdd3** INTERVIEWER: Please enter the stable/contact address. Address line 3: : STRING [30]
**StAdd4** INTERVIEWER: Please enter the stable/contact address. Address line 4: : STRING [30]
**StAdd5** INTERVIEWER: Please enter the stable/contact address. Address line 5: : STRING [30]
**StAddPC** INTERVIEWER: Please enter the stable/contact address. Postcode: : STRING [8]
**StInfo** INTERVIEWER: Please enter any other information about the stable/contact address. : STRING [100]
**ConSt** INTERVIEWER: Please read the stable contact below, and confirm whether correct. Name : StName Relationship : StRel Address : StAdd1 Postcode : tAddPc Telephone : StTelNum Other info: 1 Correct "Details correct" StabDisp INTERVIEWER: Give the participants the Stage 1 survey leaflet and read out: If we needed to contact this person in order to find your new contact details, it would be helpful if they knew about the National Diet and Nutrition Survey. Please could you pass this leaflet onto them, and let them know that you have given permission for us to contact them, and for them to pass your new contact details on to us. PRESS <ENTER> TO CONTINUE 2 Continue Stg2Int INTERVIEWER: INTRODUCTION TO STAGE 2 OF STUDY – NURSE VISIT FOR "NAME". Press 1 and <ENTER> to continue..
ASK ALL NursInt We would like you to help us with the second stage of this study. This is a visit by a qualified nurse to collect some medical information and, if you agree, carry out some measurements. The nurse would like to come round in a couple of months and explain some more about what is involved and answer any questions you have. May I get him/her to contact you in a couple of months? INTERVIEWER: REMEMBER TO GIVE THE PARTICIPANT THE STAGE 2 LEAFLET, APPROPRIATE FOR THEIR AGE. IF ASKED FOR DETAILS: For example, the nurse, with your agreement, will take some general measurements such as blood pressure, ask about prescribed medications and so on. The information the nurse collects is information we can not get from any other source. IF ASKED: The nurse will contact the participant within 2-4 months. Always mention the nurse by name (if known). If participant is unsure then code '3 Unsure' here. The nurse will still contact the participant but will be aware that the participant was unsure about the nurse visit. Press <F9> for help about the nurse visit I see my doctor all the time… We don't have access to your records and therefore we can't get this information any other way, so our nurse comes to visit you personally. Will I have to give blood? No, the nurse will ask for written or verbal consent before any measurements. You don't have to do anything you don't want to. We still get really useful information from the nurse visit even if you don't have any measurements taken as the nurse has a few questions to ask. I haven't time… any time to suit you. They will call to see when best suits you. Why is it necessary..? You have given us lots of really useful information, but because this is a survey about health, there are certain things interviewers can't do (like take blood pressure readings) so we have a nurse visit to get this information.
1 Agree "Agreed nurse could contact" 2 Refuse "Refused nurse contact" 3 Unsure "Unsure"
NurseRef RECORD REASON WHY PARTICIPANT REFUSED NURSE CONTACT. 0 Avail Own doctor already has information" 1 Time "Given enough time already to this survey/expecting too much" 2 Busy "Too busy, cannot spare the time (if Code 1 does not apply)" 3 Enough "Had enough of medical tests/medical profession" 4 Worried "Worried about what nurse may find out/might tempt fate" 5 Scared "Scared of medical profession/ particular medical procedures (e.g. blood sample)" 6 NoReas "Not interested/Can't be bothered/No particular reason" 7 Other "Other reason (specify)" INTERVIEWER: PLEASE SPECIFY OTHER REASON FOR REFUSAL. : STRING [30] NATIONAL DIET AND NUTRITION SURVEY
PROMPT CARDS | | Language | |---|----------------| | 1 | English | | 2 | Scottish | | 3 | Welsh | | 4 | Northern Irish | | 5 | British | | 6 | Other | | | White: | |---|----------------------------------------------------------------------| | 1 | White - British / English/ Welsh/ Scottish/ Northern Irish | | 2 | White - Irish | | 3 | White - Gypsy or Irish Traveller | | 4 | Any other white background (please describe….) |
**Mixed/multiple ethnic groups:**
| | Mixed/multiple ethnic groups: | |---|---------------------------------------------------------------------| | 5 | Mixed – White and Black Caribbean | | 6 | Mixed – White and Black African | | 7 | Mixed – White and Asian | | 8 | Any other mixed background (please describe….) |
**Asian/Asian British:**
| | Asian/Asian British: | |---|---------------------------------------------------------------------| | 9 | Asian or Asian British – Indian | | 10| Asian or Asian British – Pakistani | | 11| Asian or Asian British – Bangladeshi | | 12| Any other Asian/Asian British background (Please describe….) |
**Black/African/Caribbean/Black British:**
| | Black/African/Caribbean/Black British: | |---|---------------------------------------------------------------------| | 13| Black or Black British – Caribbean | | 14| Black or Black British – African | | 15| Any other Black/Black British background (Please describe….) |
**Other ethnic group:**
| | Other ethnic group: | |---|---------------------------------------------------------------------| | 16| Chinese | | 17| Arab | | 18| Any other (Please describe….) | | | Relationship | |---|-------------------------------| | 1 | Husband/Wife | | 2 | Civil partner | | 3 | Partner/Cohabitee | | 4 | Natural son/daughter | | 5 | Adopted son/daughter | | 6 | Foster child | | 7 | Stepson/stepdaughter | | 8 | Son-in-law/daughter-in-law | | 9 | Natural parent | |10 | Adoptive parent | |11 | Foster parent | |12 | Step-parent | |13 | Parent-in-law | |14 | Natural brother/sister | |15 | Half-brother/sister | |16 | Step-brother/sister | |17 | Adopted brother/sister | |18 | Foster brother/sister | |19 | Brother/sister-in-law | |20 | Grand-child | |21 | Grand-parent | |22 | Other relative | |23 | Other non-relative |
01. Own outright
02. Buying it with the help of a mortgage or loan
03. Pay part rent and part mortgage (shared ownership)
04. Rent it
05. Live here rent-free (including rent-free in relative’s or friend’s property)
06. Squatting
07. Large supermarket
08. Mini supermarket, e.g. Tesco Metro
09. Local/Corner shop (including newsagents)
10. Garage forecourt
11. Independent greengrocer
12. Independent butcher
13. Independent baker
14. Independent fishmonger
15. Market (including stalls)
16. Farm
17. Home delivery (including co-operatives, community schemes/ local initiatives)
18. Other shop | | Frequency | |---|----------------------------| | 1 | More than once a day | | 2 | Once a day | | 3 | 2 or 3 times a week | | 4 | Weekly | | 5 | 2 or 3 times a month | | 6 | Monthly | | 7 | Every 2 months | | 8 | Less often than every 2 months | 1 Freshly made from old potatoes 2 Freshly made from new potatoes 3 Frozen, fried 4 Oven ready chips 5 Microwave chips (e.g. McCain Microchips) 6 Make chips another way 7 Do not prepare/eat chips | Code | Qualification | |------|---------------| | 1 | Higher degree, e.g. MSc, MA, MBA, PGCE, PhD | | 2 | Level 5 NVQ / SVQ | | 3 | BTEC Advanced Professional Diploma/Certificate | | 4 | First degree, e.g. BSc, BA, BEd, MA at first degree level | | 5 | Level 4 NVQ / SVQ | | 6 | HNC / HND | | 7 | BTEC Higher National or Professional Diploma/Certificate | | 8 | RSA or OCR Higher | | 9 | GCE 'A'-level | | 10 | A2 | | 11 | AVCE | | 12 | SCE Advanced Higher Grades | | 13 | SCE Higher Grades (A-C) | | 14 | CSYS | | 15 | Key Skills Level 3 | | 16 | Level 3 NVQ / SVQ | | 17 | ONC / OND | | 18 | BTEC Advanced or National Diploma/Certificate | | 19 | RSA or OCR Advanced Diploma | | 20 | City & Guilds Advanced Craft / Part 3 | | 21 | Advanced GNVQ; Vocational A Level | | 22 | Advanced Modern Apprenticeship | | 23 | GCSE grade A\*-C |
see over for more codes CARD H continued.... | | Qualification | |---|---------------------------------------------------| | 24| GCE 'O'-level passes | | 25| CSE grade 1 | | 26| SCE O Grades (A-C) | | 27| SCE Standard Grades (1-3) | | 28| School Certificate / Matriculation | | 29| Key Skills Level 2 | | 30| Level 2 NVQ / SVQ | | 31| Level 2 Essential Skills Qualifications | | 32| BTEC Intermediate or First Diploma/Certificate | | 33| RSA Diploma | | 34| City & Guilds Craft / Part 2 | | 35| Intermediate GNVQ | | 36| Foundation Modern Apprenticeship | | 37| GCSE grade D-G | | 38| CSE grade 2-5 | | 39| SCE O Grades (D-E) | | 40| SCE Standard Grades (4-7) | | 41| SCOTVEC National Certificate Modules | | 42| Key Skills Level 1 | | 43| Level 1 NVQ / SVQ | | 44| Level 1 Essential Skills Qualifications | | 45| BTEC Foundation or Introductory Diploma/Certificate| | 46| RSA Stage 1-3 | | 47| City & Guilds Part 1 | | 48| Foundation GNVQ; Foundation VCE | | 49| Entry level Essential Skills Qualifications | | 97| Other qualifications |
01. Earnings from employment or self-employment
02. State retirement pension
03. Pension from former employer
04. Personal Pensions
05. Job-Seekers Allowance
06. Employment and Support Allowance
07. Income Support
08. Pension Credit
09. Working Tax Credit
10. Child Tax Credit
11. Child Benefit
12. Housing Benefit
13. Council Tax Benefit
14. Other state benefits
15. Interest from savings and investments (e.g. stocks & shares)
16. Other kinds of regular allowance from outside your household (e.g. maintenance, student's grants, rent)
17. No source of income | Letter | Description | Range | |--------|-------------------|------------------| | A | £15,000 - £19,999 | | | B | £30,000 - £34,999 | | | C | Under £5,000 | | | D | £45,000 - £49,999 | | | E | £25,000 - £29,999 | | | F | £5,000 - £9,999 | | | G | £20,000 - £24,999 | | | H | £10,000 - £14,999 | | | I | £75,000 - £99,999 | | | J | £35,000 - £39,999 | | | K | £50,000 - £74,999 | | | L | £100,000 or more | | | M | £40,000 - £44,999 | | | | Frequency | |---|----------------------------| | 1 | Every day or nearly every day | | 2 | 2 or 3 times a week | | 3 | Once a week | | 4 | 2 or 3 times a month | | 5 | Once a month or less | | | Description | |---|----------------------------------| | 1 | 5 or more times per week | | 2 | 3 to 4 times per week | | 3 | 1 to 2 times per week | | 4 | 1 to 2 times per month | | 5 | Rarely or never | | | Description | |---|-------------------------------------------------| | 1 | Never | | 2 | Less than once per month | | 3 | On 1 to 3 days per month | | 4 | On 1 to 2 days per week | | 5 | On 3 to 4 days per week | | 6 | On 5 to 6 days per week | | 7 | Every day in the last month | 1 Sprats 2 Seeds as a snack (e.g. sunflower seeds, pumpkin seeds, sesame seeds, melon seeds (also known as egusi)) 3 Cassava chips/Cassava crisps 4 Seaweed (includes hijiki, wakame) 5 Sushi (includes purchased sushi) 6 Papaya (includes fresh and canned) 7 Dried papaya 8 Game (includes venison, rabbit, pheasant, partridge, wood pigeon, hare or wild boar) 9 Non cow's milk (includes rice milk, soya milk, sheep's milk, goat's milk, oat milk, almond milk or coconut milk) 10 Fish eggs (e.g. caviar, cod's roe) 11 Smoked sausages 12 Goji berries 13 Fish liver (not oil) 14 Dark chocolate i.e. 50% or higher cocoa solids 15 Okra 16 Brown crab meat | | Description | |---|-------------------------------------------------| | 1 | Less than once per month | | 2 | On 1 to 3 days per month | | 3 | On 1 to 2 days per week | | 4 | On 3 or more days per week | | | Animal | |---|----------------| | 1 | Pheasant | | 2 | Partridge | | 3 | Quail | | 4 | Wood pigeon | | 5 | Rabbit | | 6 | Venison | | 7 | Hare | | 8 | Grouse | | 9 | Wild Boar | |10 | Other | | | Milk Type | |---|-------------------| | 1 | Rice milk | | 2 | Soya milk | | 3 | Sheep’s milk | | 4 | Goat’s milk | | 5 | Oat milk | | 6 | Almond Milk | | 7 | Coconut Milk | | 8 | Other | | | Sausage Type | |---|------------------------------| | 1 | Kabanos | | 2 | Kielbasa | | 3 | Bratwurst | | 4 | Cervelat or Summer Sausage | | 5 | Andouille | | 6 | Knackwurst | | 7 | Linguica | | 8 | Chorizo | | 9 | Mortadella | | 10| Hot Dogs | | 11| Bologna | | 12| Other | | | Description | |---|-----------------------------------------------------------------------------| | 1 | Meat or meat products (not including poultry) | | 2 | Chicken or other poultry and dishes containing them | | 3 | Fish and/or seafood dishes | | 4 | Eggs | | 5 | Milk (including yoghurt) | | 6 | Cheese | | 7 | Salad vegetables (e.g. lettuce, cucumber, tomato) | | 8 | Cooked green vegetables (e.g. spinach, cabbage, peas, broccoli) | | 9 | Root vegetables (e.g. carrots, parsnips) | | 10| Fresh fruit | | 11| Nuts | | 12| Offal | | 13| Other | | | Fruit | |---|-------------------------------------------| | 1 | Orange | | 2 | Lemon | | 3 | Kiwi fruit | | 4 | Grapefruit | | 5 | Mango | | 6 | Banana | | 7 | Lime | | 8 | Pineapple | | 9 | Soft citrus fruit (satsumas / mandarins / clementines) | | 10| Melon | | | Frequency | |---|----------------------------| | 1 | Every day / most days | | 2 | Once or twice a week | | 3 | Once or twice a month | | 4 | Less than once a month | | | Description | |---|-------------------------------------------------| | 1 | All of the peel or skin | | 2 | Most of the peel or skin | | 3 | Around half of the peel or skin | | 4 | Around a quarter of the peel or skin | | 5 | Less than a quarter of the peel or skin | 1 Vision (e.g. due to blindness or partial sight). 2 Hearing (e.g. due to deafness of partial hearing). 3 Mobility, such as difficulty walking short distances, climbing stairs, lifting & carrying objects. 4 Learning or concentrating or remembering. 5 Mental health 6 Stamina or breathing difficulty 7 Social or behavioural issues (for example, due to neuro diverse conditions such as Autism, Attention Deficit or Asperger’s Syndrome) 8 Other impairment | | Description | |---|-----------------------------------| | 1 | No difficulty | | 2 | A little difficulty | | 3 | A fair amount of difficulty | | 4 | A great amount of difficulty | | | Item | |---|-------------------------------| | 1 | Sliced bread | | 2 | Crusty bread | | 3 | Cheese | | 4 | Tomatoes | | 5 | Raw carrots | | 6 | Cooked green vegetables | | 7 | Lettuce | | 8 | Sliced cooked meats | | 9 | Well-cooked steaks | | 10| Apples | | 11| Oranges | | 12| Nuts | | | Frequency | |---|-----------| | 1 | Almost every day | | 2 | 5 or 6 days a week | | 3 | 3 or 4 days a week | | 4 | 1 or 2 times a week | | 5 | 1 or 2 times a month | | 6 | Once every couple of months | | 7 | 1 or 2 times a year | | 8 | Not at all in the last 12 months | | | Description | |---|-------------------------------------------------| | 1 | Normal strength beer / lager / cider / shandy | | 2 | Strong beer / lager / cider | | 3 | Spirits or liqueurs | | 4 | Sherry or martini | | 5 | Wine | | 6 | Alcopops / pre-mixed alcoholic drink | | 7 | Other alcoholic drinks | | 8 | Low alcohol drinks only | | | Description | |---|-----------------------------------------------------------------------------| | 1 | A nursery school | | 2 | A primary school (including infant school, junior school) | | 3 | A secondary school (including sixth form in a school) / High school | | 4 | A middle school | | 5 | A sixth form college / Higher Education college | | 6 | Other | | 7 | Home-educated | | | Description | |---|-------------------------------------------------| | 1 | Cooked school meal | | 2 | Cold school meal (including sandwiches, salads) | | 3 | Packed lunch (from home) | | 4 | Buy lunch from shop / café | | 5 | Go home | | 6 | Do not eat lunch | | | Description | |---|-------------------------------------------------| | 1 | Free school meal (at lunchtime) | | 2 | Reduced price or subsidised school meal (at lunchtime) | | 3 | Free school milk | | 4 | Subsidised school milk | | 5 | Free fruit | | 6 | Free food BEFORE school | | 7 | Free food AFTER school | | 8 | Other | • Vitamin D (single or with other vitamins or minerals e.g. calcium and vitamin D)
• Folic acid (single or with other vitamins or minerals)
• Multivitamins containing vitamin D and/or folic acid | | Frequency | |---|----------------------------| | 1 | Less than once a month | | 2 | 1 to 3 times a month | | 3 | Once a week | | 4 | 2 to 4 times a week | | 5 | Once a day | | 6 | 2 to 3 times a day | | 7 | 4 or more times a day | Supplement examples
- Multivitamins with/without Iron or other Minerals
- Vitamin C
- Vitamin B complex
- Selenium
- Calcium
- Cod liver oil
- Omega 3 fish oil
- Flaxseed oil
- Oil of Evening Primrose
- Menopause formulas
- Echinacea
- L – Arginine capsules
- Glucosamine with/without chondroitin
- Garlic
- Ginkgo Biloba | | Description | |---|---------------------------| | 1 | No time | | 2 | Less than 15 mins | | 3 | 15 to 30 mins | | 4 | 30 mins to 1 hour | | 5 | 1 to 2 hours | | 6 | 3 to 4 hours | | 7 | More than 4 hours | 1 Sitting down 2 Hanging around 3 Walking 4 Running around or playing games for example skipping, hide and seek, football or netball Informal activities
01. Cycling (but not to or from school)
02. Any walking (but not to or from School / nursery / playgroup)
03. Hoovering, cleaning car, gardening, etc.
04. Hopscotch
05. Bouncing on trampoline
06. Playing around, e.g. kicking a ball around, catch, hide and seek
07. Skating / Skateboarding / using a scooter
08. Dancing, including any dance lessons
09. Skipping with a skipping rope Sports, games and other organised activities
10. Football / Rugby / Hockey / Lacrosse
11. Netball / Basketball / Handball
12. Cricket / Rounders
13. Running / jogging / athletics
14. Swimming laps / lengths
15. Swimming (splashing about)
16. Gymnastics
17. Workout with gym machines / Weight training
18. Aerobics
19. Tennis / Badminton / Squash PLEASE ANSWER YES OR NO
YOU DO NOT NEED TO PROVIDE ANY FURTHER DETAILS
I am on a period day
I use a urinary catheter
I am pregnant
I am breastfeeding
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30eaaa327280dd5780af3fd1cefaccc432b06847 | NATIONAL DIET AND NUTRITION SURVEY
Food and Drink Diary Adult 16+ (v2)
DIARY START DATE: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
SERIAL NUMBER
CKL
PARTICIPANT No
FIRST NAME
Sex: Male / Female
Date of birth: \_\_\_\_\_\_\_\_\_\_\_\_
INTERVIEWER NUMBER: \_\_\_\_\_\_\_\_\_\_\_\_
INTERVIEWER NAME: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ NATIONAL DIET AND NUTRITION SURVEY
Food and Drink Diary
Instructions........................................................................................................................................................................2-3
Diary examples....................................................................................................................................................................4-15
Practice Pages....................................................................................................................................................................16-22
Examples and advice on food descriptions......................................................................................................................23-29
Pictures for food portion size guidance..........................................................................................................................30-33
- Breakfast cereals
- Rice
- Spaghetti
- Chips
- Broccoli or cauliflower
- Stew or curry
- Battered fish
- Quiche/Pie
- Cheese
- Sponge cake
Drink volume guidance..........................................................................................................................................................34-35
Pictures for spoon size.........................................................................................................................................................36
“The 4-day diary”.................................................................................................................................................................37-68
General questions about your diet during the recording period......................................................................................69-74
If you have any queries about how to complete the diary please contact a member of the NDNS Team at NatCen on freephone 0800 652 4572 between 8.30am-5.30pm. PLEASE READ THROUGH THESE PAGES BEFORE STARTING YOUR DIARY We would like you to keep this diary of everything you eat and drink over 4 days. Please include all food consumed at home and outside the home e.g. work, college or restaurants. It is very important that you do not change what you normally eat and drink just because you are keeping this record. Please keep to your usual food habits.
Day and Date Please write down the day and date at the top of the page each time you start a new day of recording.
Time Slots Please note the time of each eating occasion into the space provided. For easy use each day is divided into sections, from the first thing in the morning to late evening and through the night.
Where and with whom? For each eating occasion, please tell us what room or part of the house you were in when you ate, e.g. kitchen, living room, if you ate at your work canteen, a restaurant, fast food chain or your car, write that location down. We would also like to know who you share your meals with, e.g. whether you ate alone or with others. If you ate with others please describe their relationship to you e.g. partner, children, colleagues, or friends. We would also like to know when you ate at a table and when you were watching television whilst eating. For those occasions where you were not at a table or watching TV please write 'Not at table' or 'No TV' rather than leaving it blank.
What do you eat? Please describe the food you eat in as much detail as possible. Be as specific as you can. Pages 23-29 will help with the sort of detail we need, like cooking methods (fried, grilled, baked etc) and any additions (fats, sugar/sweeteners, sauces, pepper etc).
- Homemade dishes If you have eaten any homemade dishes e.g. chicken casserole, please record the name of the recipe, ingredients with amounts (including water or other fluids) for the whole recipe, the number of people the recipe serves, and the cooking method. Write this down in the recipe section at the end of the record day. Record how much of the whole recipe you have eaten in the portion size column (see examples on pages 4 - 15).
- Take-aways and eating out If you have eaten take-aways or made up dishes not prepared at home such as at a restaurant or a friend’s house, please record as much detail about the ingredients as you can e.g. vegetable curry containing chickpeas, aubergine, onion and tomato.
Brand name Please note the brand name (if known). Most packed foods will list a brand name, e.g. Bird’s Eye, Hovis, or supermarket own brands.
- Labels/Wrappers Labels are an important source of information for us. It helps us a great deal if you enclose, in the plastic bag provided, labels from all ready meals, labels from foods of lesser known brands and also from any supplements you take. Portion sizes Examples for how to describe the quantity or portion size you had of a particular food or drink are shown on pages 23-29. For foods, quantity can be described using:
- **household measures**, e.g. one teaspoon (tsp) of sugar, two thick slices of bread, 4 tablespoons (tbsp) of peas, ½ cup of gravy. Be careful when describing amounts in spoons that you are referring to the correct spoon size. Compare the spoons you use with the life size pictures on page 36 of this diary.
- **weights from labels**, e.g. 4oz steak, 420g tin of baked beans, 125g pot of yoghurt
- **number of items**, e.g. 4 fish fingers, 2 pieces of chicken nuggets, 1 regular size jam filled doughnut
- **picture examples** for specific foods on pages 30-33 (for adults only).
For drinks, quantity can be described using:
- the **size of glass, cup etc** (e.g. large glass) or the **volume** (e.g. 300ml). Examples of typical drinks containers are on pages 34-35. If you are able, please measure your usual drinking vessel and record the volume on page 34
- **volumes from labels** (e.g. 330ml can of fizzy drink).
We would like to know the **amount that was actually eaten** which means taking **leftovers** into account. You can do this in two ways:
1. Record what was served and make notes of what was not eaten e.g. 3 tbsp of peas, only 2 tbsp eaten; 1 large sausage roll, ate only ½
2. Only record the amount actually eaten i.e. 2 tbsp of peas, ½ a large sausage roll
**Was it a typical day?** After each day of recording you will be prompted to tell us whether this was a typical day or whether there were any reasons why you ate and drank more or less than usual. We have provided a list of commonly forgotten food and drink to help jog your memory at the end of each day for anything you may have forgotten to record.
**Supplements** At the end of each recording day there is a section for providing information about any supplements you took. Brand name, full name of supplement, strength and the amount taken should be recorded.
**When to fill in the diary** Please record your eating as you go, not from memory at the end of the day. Use written notes on a pad if you forget to take your diary with you. Each diary day covers a 24hr period, so please include any food or drinks that you may have had during the night. Remember to include foods and drinks between meals (snacks) including water.
Overleaf you can see 2 example days that have been filled in by different people. These examples show you how we would like you to record your food and drink, for example a ready meal and a homemade dish. Your instruction booklet contains further examples such as how to describe food eaten in a restaurant.
______________________________________________________________________
It only takes a few minutes for each eating occasion! For your convenience a separate booklet with instructions and examples is provided.
Thank you for your time – we really appreciate it! | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------|-----------------------------------|-------------------------------------|------------|-------------------------------| | 6.30 am | Kitchen Alone No TV Not at table | Filter coffee, decaffeinated milk (fresh, semi-skimmed) Sugar white | Douwe Egberts Silverspoon | Mug A little 1 level tsp | | 7.30 am | Kitchen Partner TV on At table | Filter coffee with milk and sugar Cornflakes Milk (fresh, semi-skimmed) Toast, granary medium sliced Light spread Marmalade | As above Tesco’s own Hovis Flora Hartleys | As above 1b drowned 1 slice med spread 1 heaped tsp | | 10.15 am | Office desk Alone No TV Not at table | Instant coffee, not decaffeinated Milk (fresh, whole) Sugar brown | Unknown brand | Mug A little 1 level tsp | | 11 am | Office desk Alone No TV Not at table | Digestive biscuit – chocolate coated on one side | McVities | 2 | | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|-----------------------------------|-------------------------------------|------------|-------------------------------| | **12 noon to 2pm** | | | | | | 12.30 pm | Tea room at work Colleagues No TV At table | Ham salad sandwich from home Bread, wholemeal, thick sliced Light spread Low fat Mayonnaise Smoked ham thinly sliced Lettuce, iceberg Cucumber with skin Unsweetened orange juice from canteen Apple with skin from home, Braeburn | Tesco’s own Flora Hellmans Tesco’s own | 2 slices thin spread on 1 slice 2 teaspoons 2 slices 1 leaf 4 thin slices | | 2pm to 5pm | | | | | | 3 pm | Meeting room at work With supervisor No TV Not at table | Tea, decaffeinated Milk (fresh, whole) Jaffa cake – mini variety | Twinings Tesco’s own McVities | Mug Some 6 | | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|-----------------------------------|-------------------------------------|------------|--------------------------------| | **5pm to 8pm** | | | | | | 6.30 pm | Pub Partner TV on At table | Gin Tonic water diet Lager 3.8% alcohol Salted peanuts | Gordon’s Schweppes Draught, Carlsberg KP | Single measure 1/2 small glass 1 pint 1 handful | | 8 pm | Dining room Family No TV At table | Spaghetti, wholemeal Bolognese sauce (see recipe) Courgettes (fried in butter) Tinned peaches in juice (juice drained) Single cream UHT Orange squash No Added Sugar | Tesco’s own Prince’s Sainsbury’s own cream Sainsbury’s own | 3b 6 tablespoons 4 tablespoons 3 halves 1 tablespoon 200ml glass, 1 part squash, 3 parts tap water | | **8pm to 10pm** | | | | | | 9 pm | Sitting room Alone TV on Not at table | Grapes, green, seedless Chocolates, chocolate creams Potato crisps, Prawn Cocktail | Bendicks Walkers | 15 2 25g bag (from multipack) | | **10pm to 6am** | | | | | | 10.30 pm | Bed room Partner No TV Not at table | Camomile tea (no milk or sugar) | Twinings | 1 mug | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: **Too busy at work to stop for a drink**
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Alcoholic drinks o Milk o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks o Sauce, dressing
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes ☐ No ☒
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. **NAME OF DISH:** Bolognese sauce\
**SERVES:** 4
| Ingredients | Amount | Ingredients | Amount | |------------------------------|--------------|------------------------------|--------------| | Co-op low fat beef mince | 500g | mixed herbs | 1 dessertspoon | | garlic | 3 cloves | Lea & Perrins worcester sauce| dash | | onion | 1 medium | | | | sweet red pepper | 1 medium | | | | Napoli chopped tomatoes | 400g tin | | | | Tesco tomato puree | 1 tablespoon | | | | Tesco olive oil | 1 tablespoon | | |
*Don’t forget to include any oil or water/stock used!!*
**Brief description of cooking method**
Fry onion & garlic in oil, add mince and fry till brown.
Add pepper, tomatoes, puree, Worcester sauce & herbs. Simmer for 30 mins | Time | Where? With Whom? At table? TV on? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|-----------------------------------|-------------------------------------|------------|-------------------------------| | 8.00 am | Café take away – eating on my way to work Alone | Cappuccino, no sugar | Starbucks | Medium size | | | | Blueberry muffin, regular not low fat | Starbucks | One | | 8.45 am | Office desk Alone No TV Not at table | Tap water | Typhoo Asda | 300 ml glass | | 9am to 12 noon | | | | | | 10 am | Office desk Alone No TV Not at table | Banana Black tea Semi-skimmed milk, no sugar | Typhoo Asda | One, medium size | | | | | Large Mug | A lot |
How to describe what you had and how much you had can be found on pages 23-29 | Time | Where? | With Whom? | At table? | TV on? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|--------|------------|-----------|--------|--------------------------------------|------------|-------------------------------| | 12 noon to 2pm | | | | | | | | | 1 pm | Work tea room | With colleague | No TV | At table | Crayfish sandwich multiseed bread, wholemeal, medium cut, crayfish in lemon mayonnaise, no other spread rocket leaves | M&S pre-packed Sandwich | 2 slices Medium filling 6 to 8 | | | | | | | Apple & Raspberry fruit drink | J2O | 1 bottle, 275ml | | 2pm to 5pm | | | | | | | | | 4.30 pm | Friend’s House Lounge | With Friend | Not at table | TV on | Coffee, instant Semi-skimmed milk | Kenco | Medium mug A lot 1 cake | | | | | | | Fairy Cake, homemade, see recipe | | | | Time slot | Where? | With Whom? | At table? | TV on? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |-----------|--------|------------|-----------|--------|-------------------------------------|------------|-------------------------------| | 5pm to 8pm | Kitchen/Diner | With boyfriend | At table | No TV | Chicken in creamy mushroom and white wine sauce for 2, oven | Sainsbury’s, 370g (wrapper collected) | ½ pack | | | | | | | White rice, boiled | Easy cook, Italian, Sainsbury’s | 2C | | | | | | | Wine 13% alcohol | Sauvignon Blanc, New Zealand | 1 small glass, 125ml | | 8pm to 10pm | Sitting Room | With boyfriend | Not at table | TV on | Squash, apple & blackcurrant, no added sugar, Crisps | Sainsbury’s | 1 average glass, 200ml | | | | | | | | Pringles, sour cream and chives | 5 | | 10pm to 6am | Bedroom | Alone | Not at table | TV on | Water | tap | 1 medium glass | Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
Usual [ ]
Less than usual [ ]
More than usual [ ]
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
Usual [ ]
Less than usual [ ]
More than usual [ ]
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Did you **finish all the food and drink** that you recorded in the diary today?
Yes [ ]
No [ ]
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Alcoholic drinks o Milk o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks o Sauce, dressing
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes ☒ No ☐
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |------------------|-------------------------------------------|-------------------------------------| | Holland & Barrett| Evening Primrose Oil – 1000mg | 1 capsule | | Holland & Barrett| Super EPA fish oil – 1000mg | 1 capsule |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. **NAME OF DISH:** Fairy Cakes\
**SERVES:** makes 20 cakes
| Ingredients | Amount | Ingredients | Amount | |------------------------------|--------|------------------------------|--------| | Tate & Lyle caster sugar | 175g | Silver Spoon icing sugar | 140g | | Anchor butter, unsalted | 175g | Yellow food colouring | 3 drops| | eggs | 3 | water | 2 tablespoons | | Homepride self-raising flour | 175g | | | | Baking powder | 1 teaspoon | | |
*Don't forget to include any oil or water/stock used!!*
**Brief description of cooking method**
*Mix together and bake for 15 min.*
*Mix icing sugar with water and add colouring. Approx. 1 teaspoon of icing on each cake* PRACTICE PAGES
Use this space to practise recording in the diary with your interviewer
Please do not use these pages for the recording period | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|------------|-------------------------------| | 6am to 9am | | | | | | 9am to 12 noon | | | | |
*How to describe what you had and how much you had can be found on pages 23-29* | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|------------|-------------------------------| | **12 noon to 2pm** | | | | | | **2pm to 5pm** | | | | |
Practice Page | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|------------|-------------------------------| | **5pm to 8pm** | | | | | | | | | | | | | | | | | | **8pm to 10pm** | | | | | | | | | | | | | | | | | | **10pm to 6am** | | | | | | | | | | | | | | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Alcoholic drinks o Milk o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks o Sauce, dressing
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes No
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don't forget to include any oil or water/stock used!!*
| Practice Page | |---------------|
*Brief description of cooking method* | Food/Drink | Description & Preparation | Portion size or quantity | |-----------------------------|-------------------------------------------------------------------------------------------|-----------------------------------------------| | Bacon | Back, middle, streaky; smoked or un-smoked; fat eaten; dry-fried or fried in oil/fat (type used) or grilled rashers | Number of rashers | | Baked beans | Standard, reduced salt or reduced sugar | Spoons, weight of tin | | Beefburger (hamburger) | Home-made (ingredients), from a packet or take-away; fried (type of oil/fat), microwaved or grilled; economy; with or without bread roll, with or without salad e.g. lettuce, tomato | Large or small, ounces or in grams if info on package | | Beer | What sort e.g. stout, bitter, lager; draught, canned, bottled; % alcohol or low-alcohol or home-made | Number of pints or half pints, size of can or bottle | | Biscuits | What sort e.g. cheese, wafer, crispbread, sweet, chocolate (fully or half coated), shortbread, home-made | Number, size (standard or mini variety) | | Bread (see also sandwiches) | Wholemeal, granary, white or brown; currant, fruit, malt; large or small loaf; sliced or unsliced loaf | Number of slices; thick, medium or thin slices | | Bread rolls | Wholemeal, white or brown; alone or with filling; crusty or soft | Size, number of rolls | | Breakfast cereal (see also porridge) | What sort e.g. Kellogg’s cornflakes; any added fruit and/or nuts; Muesli – with added fruit, no added sugar/salt variety | Spoons or picture 1 | | Buns and pastries | What sort e.g. iced, currant or plain, jam, custard, fruit, cream; type of pastry; homemade or bought | Size, number | | Butter, margarine & fat spreads | Give full product name | Thick/average/thin spread; spoons | | Food/Drink | Description & Preparation | Portion size or quantity | |------------|---------------------------|--------------------------| | Cake | What sort: fruit (rich), sponge, fresh cream, iced, chocolate coated; type of filling e.g. buttercream, jam | Individual or size of slice, packet weight, picture 10 | | Cereal bars | What sort; with fruit/nuts, coated with chocolate/yoghurt; fortified with vitamins/minerals | Weight/size of bar; from multipack | | Cheese | Type e.g. cheddar, cream, cottage, soft; low fat | Picture 9, or number of slices, number of spoons | | Chips | Fresh, frozen, oven, microwave, take-away (where from); thick/straight/crinkle/fine cut; type of oil/fat used for cooking | Picture 4, number of spoons, number of chips | | Chocolate(s) | What sort e.g. plain, milk, white, fancy, diabetic; type of filling; | Weight/size of bar | | Coffee | With milk (see section on milk); half milk/half water; all milk; ground/filter, instant; decaffeinated. If café/takeaway, was it cappuccino, latte etc | Cups or mugs, size of takeaway e.g. small. medium | | Cook-in sauces | What sort; pasta, Indian, Chinese, Mexican; tomato, white or cheese based; does meat or veg come in sauce; jar or can | Spoons, size of can or jar | | Cream | Single, whipped, double or clotted; dairy or non-dairy; low-fat; fresh, UHT/Longlife; imitation cream e.g. Elmlea | Spoons | | Crisps | What sort e.g. potato, corn, wheat, maize, vegetable etc; low-fat or low-salt; premium variety e.g. Kettle chips, Walker’s Sensations | Packet weight, standard or from multipack | | Custard | Pouring custard or egg custard; made with powder and milk/sugar, instant, ready to serve (tinned or carton); low fat, sugar free | Spoons | | Egg | Boiled, poached, fried, scrambled, omelette (with or without filling); type of oil/fat, milk added | Number of eggs, large, medium or small | | Food/Drink | Description & Preparation | Portion size or quantity | |------------------------------------|-------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------| | Fish (including canned) | What sort e.g. cod, tuna; fried (type of oil/fat), grilled, poached (water or milk) or steamed; with batter or breadcrumbs; canned in oil, brine or tomato sauce | Size of can or spoons (for canned fish) or picture 7 for battered fish | | Fish cakes & fish fingers | Type of fish; plain or battered or in breadcrumbs; fried, grilled, baked or microwaved; economy | Size, number, packet weight | | Fruit - fresh | What sort; eaten with or without skin | Small, medium or large | | Fruit - stewed/canned | What sort; sweetened or unsweetened; in fruit juice or syrup; juice or syrup eaten | Spoons, weight of can | | Fruit – juice (pure) | What sort e.g. apple, orange; sweetened or unsweetened; pasteurised or UHT/Longlife; freshly squeezed; added vitamins/minerals, omega 3 | Glass (size or volume) or carton size | | Ice cream | Flavour; dairy or non-dairy alternatives e.g. soya; luxury/premium | Spoons/ scoops | | Jam, honey | What sort; low-sugar/diabetic; shop bought/brand or homemade | Spoons, heaped or level, or thin or thick spread | | Marmalade | Type; low-sugar; thick cut; shop bought/brand or homemade | Spoons, heaped or level, or thin or thick spread | | Meat (see also bacon, burgers & sausages) | What sort; cut of meat e.g. chop, breast, minced; lean or fatty; fat removed or eaten; skin removed or eaten; how cooked; with or without gravy | Large/small/medium, spoons, or picture 6 for stew portion | | Food/Drink | Description & Preparation | Portion size or quantity | |---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------| | Milk | What sort; whole, semi-skimmed, skimmed or 1% fat; fresh, sterilized, UHT, dried; soya milk (sweetened/unsweetened), goats' milk, rice milk, oat milk; flavoured; fortified with added vitamins and/or minerals | Pints, glass (size or volume) or cup. On cereal: damp/normal/drowned. In tea/coffee: a little/some/a lot | | Nuts | What sort; dry roasted, ordinary salted, honey roasted; unsalted | Packet weight, handful | | Pie (sweet or savoury) | What sort/filling; one pastry crust or two; type of pastry | Individual or slice, or picture 8 | | Pizza | Thin base/deep pan or French bread; topping e.g. meat, fish, veg; stuffed crust | Individual, slice, fraction of large pizza e.g. ¼ | | Porridge | Made with oats or cornmeal or instant oat cereal; made with milk and/or water; added sugar, honey, syrup or salt; with milk or cream | Bowls, spoons | | Potatoes (see also chips) | Old or new; baked, boiled, roast (type of oil/fat); skin eaten; mashed (with butter/spread and with or without milk); fried/chips (type of oil/fat); instant; any additions e.g. butter | Mash – spoons, number of half or whole potatoes, small or large potatoes | | Pudding | What sort; e.g. steamed sponge; with fruit; mousse; instant desserts; milk puddings | Spoons, picture 10 for slice of sponge | | Rice | What sort; e.g. basmati, easy cook, long or short grain; white or brown; boiled or fried (type of oil/fat) | Spoons or picture 2 | | Salad | Ingredients; if with dressing what sort (oil and vinegar, mayonnaise) | Amount of each component | | Food/Drink | Description & Preparation | Portion size or quantity | |-----------------------------|-------------------------------------------------------------------------------------------|---------------------------------------------------------------| | Sandwiches and rolls | Type of bread/roll (see Bread & Rolls); butter or margarine; type of filling; including salad, mayonnaise, pickle etc. If shop-bought, where from? | Number of rolls or slices of bread; amount of butter/margarine (on both slices?); amount of filling | | Sauce – cold (including mayonnaise) | Tomato ketchup, brown sauce, soy sauce, salad cream, mayonnaise; low fat; | Spoons | | Sauce – hot (see also cook-in sauces) | What sort; savoury or sweet; thick or thin; for gravy - made with granules, stock cube, dripping or meat juices | Spoons | | Sausages | What sort; e.g. beef, pork; fried (type of oil/fat) or grilled; low fat | Large or small, number | | Sausage rolls | Type of pastry | Size - jumbo, standard, mini | | Scone | Fruit, sweet, plain, cheese; type of flour; homemade | Small, medium or large | | Savoury snacks - in packet | What sort: e.g. Cheddars, cheese straws, Twiglets, Pretzels | Size (standard or mini variety), packet weight | | Smoothies | If homemade give recipe. If shop-bought, what does it contain e.g. fruit, milk/yoghurt, fruit juice | Glass or bottle (size or volume) | | Soft drinks – squash/ concentrate/cordial | Flavour; no added sugar/low calorie/sugar free; “high” juice; fortified with added vitamins and/or minerals | Glass (size or volume) | | Soft drinks – carbonated/fizzy | Flavour; diet/low-calorie; canned or bottled; cola – caffeine free | Glass, can or bottle (size or volume) | | Soft drinks – ready to drink | Flavour; no added sugar/low calorie/sugar free; real fruit juice? If so, how much?; fortified with added vitamins and/or minerals | Glass, carton or bottle (size or volume) |
Spoon size does matter!!!! When describing amounts check the spoons you use with the life size pictures on page 36 | Food/Drink | Description & Preparation | Portion size or quantity | |-----------------------------|-------------------------------------------------------------------------------------------|---------------------------------------------------------------| | Soup | What sort; cream or clear; fresh/chilled, canned, instant or vending machine. If home-made, give recipe | Spoons, bowl or mug | | Spaghetti, other pasta | What sort; fresh/chilled or dried; white, wholemeal; canned in sauce; type of filling if ravioli, cannelloni etc | Spoons (or how much dry pasta) or picture 3 | | Spirits | What sort: e.g. whisky, gin, vodka, rum | Measures as in pub | | Sugar | Added to cereals, tea, coffee, fruit, etc; what sort; e.g. white, brown, demerara | Heaped or level teaspoons | | Sweets | What sort: e.g. toffees, boiled sweets, diabetic, sugar-free | Number, packet weight | | Tea | With/without milk (see section on milk); decaffeinated, herb | Mugs or cups | | Vegetables (not including potatoes) | What sort; how cooked/raw; additions e.g. butter, other fat or sauce | Spoons, number of florets or sprouts, weight from tins or packet | | Wine, sherry, port | White, red; sweet, dry; % alcohol or low-alcohol | Glass (size or volume) | | Yoghurt (inc drinking yoghurt), fromage frais | What sort: e.g. natural/plain or flavoured; creamy, Greek, low-fat, very low fat/diet, soya; with fruit pieces or fruit flavoured; twinpot; fortified with added vitamins and/or minerals; longlife/UHT; probiotic | Pot size or spoons | | Home-made dishes | Please say what the dish is called (record recipe or details of dish if you can in the section provided) and how many persons it serves | Spoons – heaped or level, number, size, or proportion of recipe e.g. ½ of recipe | | Ready-made meals | Full description of product; does it contain any accompaniments e.g. rice, vegetables, sauces; chilled or frozen; microwaved, oven cooked, boil-in-the-bag; low fat, healthy eating range. Enclose label and ingredients list if possible in your plastic bag | Packet weight (if didn’t eat whole packet describe portion consumed) | Spoon size does matter!!!! When describing amounts check the spoons you use with the life size pictures on page 36
| Food/Drink | Description & Preparation | Portion size or quantity | |-----------------------------------|-------------------------------------------------------------------------------------------|-----------------------------------------------| | Take-away food or food eaten out | Please say what the dish is called and give main ingredients if you can. Give name of a chain restaurant e.g. McDonald’s | Spoons, portion size e.g. small/medium/large | Use the pictures to help you indicate the size of the portion you have eaten. Write on the food record the picture number and size A, B or C nearest to your own helping.
Remember that the pictures are much smaller than life size. The actual size of the dinner plate is 10 inches (25cm), the side plate, 7 inches (18cm), and the bowl, 6.3 inches (16cm).
The tables on pages 23-29 also give examples of foods that you might eat and how much information is required about them.
1. Breakfast cereals
A
B
C 2. Rice 3. Spaghetti 4. Chips 5. Broccoli/ cauliflower 6. Stew / curry 7. Battered fish 8. Quiche / Pie 9. Cheese 10. Sponge cake Typical quantities of drinks in various containers measured in millilitres (ml)
| | Small glass | Average glass | Large glass | Vending cup | Cup | Mug | |----------------|-------------|---------------|-------------|-------------|-----|-----| | **Soft drinks**| 150 | 200 | 300 | | | | | **Wine** | 125 | 175 | 250 | | | | | **Hot drinks** | | | | 170 | 190 | 260 |
Glasses come in different shapes and sizes. On the next page is a life size glass showing approximate volumes. You can use this picture as a guide for estimating how much volume of drink the glass you are drinking from holds. Life Size Glass DAY 1 | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |------------|-----------------------------------|-------------------------------------|-------------|-------------------------------| | **Day 1:** | | | | | | **Date:** | | | | | | **Time** | | | | | | **6am to 9am** | | | | | | **9am to 12 noon** | | | | |
*How to describe what you had and how much you had can be found on pages 23-29* | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|-------------|-------------------------------| | **12 noon to 2pm** | | | | | | **2pm to 5pm** | | | | | | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|-------------|-------------------------------| | 5pm to 8pm | | | | | | 8pm to 10pm | | | | | | 10pm to 6am | | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Alcoholic drinks o Milk o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks o Sauce, dressing
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes ☐ No ☐
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don’t forget to include any oil or water/stock used!!*
| | | | | |---|---|---|---| | | | | | | | | | | | | | | | | | | | |
*Brief description of cooking method* Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------| | **Ingredients** | **Amount** | **Ingredients** | **Amount** | | Don't forget to include any oil or water/stock used!! |
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------| | | | | | | | | | | | | | | | | | | | | | | | | |
**Brief description of cooking method** DAY 2 | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |------------|-----------------------------------|-------------------------------------|-------------|-------------------------------| | **Day 2:** | | | | | | **Date:** | | | | | | **Time** | | | | | | **6am to 9am** | | | | | | **9am to 12 noon** | | | | |
*How to describe what you had and how much you had can be found on pages 23-29* | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |------------|-----------------------------------|-------------------------------------|-------------|-------------------------------| | **12 noon to 2pm** | | | | | | **2pm to 5pm** | | | | | | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |--------------|------------------------------------|-------------------------------------|-------------|-------------------------------| | 5pm to 8pm | | | | | | 8pm to 10pm | | | | | | 10pm to 6am | | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Alcoholic drinks o Milk o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks o Sauce, dressing
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes ☐ No ☐
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------| | **Ingredients** | **Amount** | **Ingredients** | **Amount** | | Don't forget to include any oil or water/stock used!! |
**Brief description of cooking method** Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------| | Ingredients | Amount | Ingredients | Amount |
*Don't forget to include any oil or water/stock used!!*
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------| | | | | | | | | | | | | | | | | | | | | | | | | |
*Brief description of cooking method* DAY 3 | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |------------|------------------------------------|-------------------------------------|-------------|-------------------------------| | Day 3: | | | | | | Date: | | | | | | Time | | | | | | 6am to 9am | | | | | | 9am to 12 noon | | | | |
*How to describe what you had and how much you had can be found on pages 23-29* | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|-------------|-------------------------------| | **12 noon to 2pm** | | | | | | **2pm to 5pm** | | | | | | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|-------------|-------------------------------| | 5pm to 8pm | | | | | | 8pm to 10pm | | | | | | 10pm to 6am | | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Alcoholic drinks o Milk o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks o Sauce, dressing
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------| | **Ingredients** | **Amount** | **Ingredients** | **Amount** | | Don't forget to include any oil or water/stock used!! |
**Brief description of cooking method** Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don't forget to include any oil or water/stock used!!*
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Brief description of cooking method* DAY 4 Please remember to complete the general questions on pages 69-74!
| Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |------------|------------------------------------|-------------------------------------|-------------|-------------------------------| | Day 4: | | | | | | Date: | | | | |
How to describe what you had and how much you had can be found on pages 23-29
6am to 9am
9am to 12 noon | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |--------------|------------------------------------|-------------------------------------|-------------|-------------------------------| | **12 noon to 2pm** | | | | | | **2pm to 5pm** | | | | | | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name? | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|-------------|-------------------------------| | 5pm to 8pm | | | | | | 8pm to 10pm | | | | | | 10pm to 6am | | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No |
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Alcoholic drinks o Milk o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks o Sauce, dressing
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------| | **Ingredients** | **Amount** | **Ingredients** | **Amount** | | Don't forget to include any oil or water/stock used!! |
**Brief description of cooking method** Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don't forget to include any oil or water/stock used!!*
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Brief description of cooking method* General questions about your food/drink during the recording period.
Special diet
1. Did you follow a special diet during the recording period? (please tick and provide more information if necessary) a) To lose weight b) To gain weight c) For medical reasons e.g. to lower cholesterol. Details: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ d) Other e.g. vegetarian. Details: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ e) No special diet
Milk 2. Which type of milk did you use most often during the recording period? Whole, fresh, pasteurised □ Semi-skimmed fresh, pasteurised □ Skimmed (fat free) fresh, pasteurised □ 1% fat milk, pasteurised □ Dried □ Type Soya □ Type Other □ Type Did not use □ Tea and coffee
03. How much milk did you usually have in coffee/tea?
Coffee A lot □ Some □ A little □ None/did not drink □ Tea A lot □ Some □ A little □ None/did not drink □
04. Did you usually sweeten your coffee/tea with sugar?
Coffee Yes □ How many teaspoons in a mug/cup? □ No/did not drink □ Tea Yes □ How many teaspoons in a mug/cup? □ No/did not drink □
05. Did you usually sweeten your coffee/tea with artificial sweetener?
Coffee Yes □ How many tablets or teaspoons in a mug/cup? □ No/did not drink □ Tea Yes □ How many tablets or teaspoons in a mug/cup? □ No/did not drink □
06. Did you drink decaffeinated coffee/tea during the recording period?
Coffee Always □ Sometimes □ Never □ Tea Always □ Sometimes □ Never □ Breakfast cereals
07. How much milk did you usually have on breakfast cereal? Drowned □ Average □ Damp □ None/did not eat □
08. How did you usually make your porridge? With all water □ With all milk □ With milk and water □ Did not eat □
09. Did you usually sweeten or salt your porridge? With sugar □ With honey □ With salt □ Neither/did not eat □
10. How did you usually make your instant oat cereal? With all water □ With all milk □ With milk and water □ Did not eat □
11. Did you usually sweeten or salt your instant oat cereal? With sugar □ With honey □ With salt □ Neither/did not eat □ Fats for spreading and cooking
12. Which type of butter, margarine or other fat spread did you use most often during the recording period? Please record the full product name and fat content
*Name:*
*Flora Omega 3 plus, low fat spread, 38% fat, polyunsaturated*
13. How thickly did you spread butter, margarine on bread, crackers etc?
- Thick
- Medium
- Thin
- N/A
14. Which type of cooking fat/oil did your household use most often over the recording period? Please record the full product name e.g. *Sainsbury’s sunflower oil*
*Name:*
16. Was it a large loaf or a small loaf?
- Large
- Small
Bread
15. Which type of bread did you eat most often during the recording period?
- White
- Granary
- Wholemeal
- Brown
- 50/50 bread e.g. Hovis Best of Both
- Other
*Type*
- Did not eat
17. If the bread was shop bought, how was it sliced?
- Thick
- Medium
- Thin
- Unsliced
- N/A
**Meat**
18. If you ate meat during the recording period, did you eat the visible fat?
- Always
- Sometimes
- Never
- Did not eat meat
19. If you ate poultry (e.g. chicken, turkey) during the recording period, did you eat the skin?
- Always
- Sometimes
- Never
- Did not eat poultry
**Fruit and vegetables**
20. If you ate apples during the recording period, did you eat the skin?
- Always
- Sometimes
- Never
- Did not eat
21. If you ate pears during the recording period, did you eat the skin?
- Always
- Sometimes
- Never
- Did not eat
22. If you ate new potatoes during the recording period, did you eat the skin? Always □ Sometimes □ Never □ Did not eat □
23. If you ate baked/jacket potatoes during the recording period, did you eat the skin? Always □ Sometimes □ Never □ Did not eat □
Salt
24. Do you add salt to your food at the table? Always □ Sometimes □ Never □
25. Do you add salt substitute to your food at the table? e.g. LoSalt Always □ Sometimes □ Never □
Water
26. Which type of water did you drink most often during the recording period? Tap □ Filtered □ Bottled □ brand □ Did not drink □ Cordial/squash/diluting juice
27. Which type of squash/cordial did you drink most often during the recording period?
- Standard
- No added sugar /diet/low calorie
- Did not drink
28. Which squash did you use most often during the recording period? Please record the full product name e.g. Robinsons Peach Fruit & Barley no added sugar
Name:
- Single Concentrate
- Double Concentrate
29. How much do you usually dilute your squash (e.g. half squash/half water, or 1 part squash with 4 parts water)?
Please tell us: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
If you are able to, please use a measuring jug to measure your usual drinking vessels e.g. mug, glass, cup etc. and provide the volumes below
Thank you for completing this diary. Acknowledgements
Thanks for permission to use pictures from:
Nelson, M., Atkinson, M. & Meyer, J. (1997). A Photographic Atlas of Food Portion Sizes. London, MAFF Publications. NATIONAL DIET AND NUTRITION SURVEY
Food and Drink Diary
Children aged 4 to 15 years (v2)
DIARY START DATE: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
SERIAL NUMBER CKL PARTICIPANT No
Sex: Male / Female
Date of birth: \_\_\_\_\_\_\_\_\_\_\_\_
INTERVIEWER NUMBER: \_\_\_\_\_\_\_\_\_\_\_\_
INTERVIEWER NAME: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ How to fill in your diary
It is very important that you do not change what you normally eat or drink just because you are keeping a diary. Try to write down what you are eating or drinking as soon as you can and not leave it until the end of the day. Record food and drink eaten at home and away from home, such as at school or at a friend’s house.
Whenever you have something to eat or drink write down:
**When:** Each day is divided into time slots from first thing in the morning until late at night until the following morning. Find the appropriate time slot and record the exact time when you eat or drink something in the “time” column.
**Where:** This could be
- Home
- Bedroom
- Away
- Street, Car/Bus, Café/Restaurant (specify McDonald’s, Pizza Hut etc.)
- School
- Canteen, Classroom, Playground
**With Whom:** This could be
- Alone
- With family
- With friends
**At table:** Were you sitting at a table whilst eating or drinking? If yes, record **At table.** If no, record **Not at table.**
**Watching TV:** Were you watching TV whilst you were eating or drinking? If yes, record **TV on.** If no, record **No TV.**
**What:**
Describe your food and drink giving as much detail as you can. Include any **extras** like sugar and milk in your tea or cereal, butter or other spreads on your bread and sauces such as ketchup and mayonnaise. **Do not forget to include drinking water.** If you know how the food was cooked (e.g. roast, baked, boiled, fried), please record this. If you’re unsure about how the food was cooked, please ask the person who prepared the food if possible.
On pages 20 - 25 you will find help with the sort of detail that is useful.
If you have eaten any homemade dishes e.g. a stew or sponge cake, please make sure the ingredients and cooking method are recorded in the space provided. You may need to ask the person who prepared the dish to help you with this. If another person at home is also keeping a diary and has recorded the recipes for the same dishes as you in their diary (the ADULT diary), you do NOT need to record these recipes again, just write in your diary “see adult diary”. If you have eaten any take-aways or any made up dishes not prepared at home such as at a friend’s house or in a restaurant, please record as much detail as you can about what was in the dish e.g. vegetable curry containing chickpeas, aubergine, onion and tomato.
Brand:
Please make a note of the brand name (e.g. Heinz, Walkers, Hovis) if you know it. Most packaged foods will list a brand name.
Amount eaten:
You can specify packet (e.g. Crisps, Yogurt), or number of individual items (e.g. biscuits), or slices (e.g. cake, pizza, ham), or teaspoons (e.g. sugar), or dessertspoons (e.g. peas). Be careful when describing amounts in spoons. Compare the spoon you are using with the life size spoons on page 27 of this diary so you use the correct name. You can also write S (small), M (medium) or L (large) portion.
For drinks you can write glass (tell us the size of the glass or volume using page 26 as a guide), cup or mug. You can also write the weight or volume from the labels on the packaging. On page 25, we have included a space for you to measure your usual drinking cup (you can do this by filling your cup with water to the level you normally have and then emptying the water into a measuring jug).
On pages 20 - 25 you will find help with describing how much you had to eat or drink. We would like to know the amount that you actually ate, so you need to think about how much you leftover. You can do this in 2 ways:
1. Record how much you were served and then how much you ate e.g. 3 dessertspoons of peas, only 2 dessertspoons eaten; 1 large sausage roll, ate only half
2. Only record how much you actually ate i.e. 2 dessertspoons of peas; half a large sausage roll
Food labels/wrappers: Please keep the labels or packaging from snacks, sweets, bought sandwiches and ready meals and put them in the plastic bag provided.
Was it a typical day? After each day of recording you will be prompted to tell us whether this was a usual day or whether there were any reasons why you ate and drank more or less than usual, e.g. I did eat less because I was sick; I drank a lot because I did sports. Please tick the correct box for your intake. We have provided a list of commonly forgotten food and drink to help jog your memory at the end of each day for anything you may have forgotten to record.
Supplements At the end of each recording day you need to tell us about any supplements you took. If you didn’t take any just tick NO. If yes, then please tell us the name of the supplement (e.g. vitamin C), brand (e.g. Boots), strength (it will tell you on the label - e.g. 50 mg) and how many you took (e.g. 1 tablet).
If you have any queries about how to complete the diary please contact a member of the NDNS team on freephone 0800 652 4572 between 8.30am and 5.30pm.
On pages 4-13 of the diary we have filled in two whole days to show you what to do. | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |------------|-----------------|------------|--------|--------|-------------------------------------------|------------|-----------------------------------| | 6am to 9am | Kitchen | Family | No TV | At table | Orange juice, unsweetened, UHT | Tesco | Large glass | | | | | | | Tea | Tesco | Mug | | | | | | | Milk, fresh semi skimmed | Tesco | A little | | | | | | | Sugar white | Silverspoon| 2 level teaspoons | | | | | | | Weetabix | | 2 | | | | | | | Milk as above | Hovis | Drowned | | | | | | | Sugar as above | Anchor | 2 heaped teaspoons | | | | | | | Toast wholemeal, large loaf | Co-op | 2 thin slices | | | | | | | Butter unsalted | | thick spread on both | | | | | | | Strawberry Jam | | 1 teaspoon on one slice | | 9am to 12 noon | School playground | With friends | | | Coca cola diet | Coca Cola | 330ml can | | | | | | | Potato crisps, Salt and Vinegar | Walkers | 25g packet from a multipack | | | | | | | Water from water cooler | | small plastic cup | | | | | | | Mars Bar | | 1 kingsize | | 12 noon to 2pm | School canteen | With friends | | At table | Sandwich, from home | Kingsmill | 2 med slices | | | | | | | White bread, large loaf | Flora Light| thin spread on both slices | | | | | | | Spread | Tescos | 1 slice | | | | | | | Ham unsmoked | | 2 medium slices | | | | | | | Cheddar cheese | | 1 teaspoon | | | | | | | Branston Pickle | | 1 (left core) | | | | | | | Apple with skin from home | | 220ml carton | | | | | | | Ribena Light, Ready to Drink, Blackcurrant, from canteen | | 2 fingers | | | | | | | Kitkat from home | | | | | | | | | Chewing gum | Orbit Sugar Free | 1 piece |
How to describe what you had and how much you had can be found on pages 20-25 | Time | Where? | With whom? | What | Brand Name | Amount eaten | |------------|-------------------------|--------------------------|-------------------------------------------|------------|--------------| | 2pm to 5pm | | | | | | | 3.45pm | Bus | Alone | Wine gums | Maynards | 140g packet | | 4.30pm | Home, sitting room, | With family | Tea (as above) | Mcvitites | mug | | | TV on | Not at table | Chocolate Hob Nobs | | 3 | | 5pm to 8pm | | | | | | | 6.30pm | Friend's kitchen | With friends | Chicken in tomato sauce made by friend's mum | See recipe | 3 tablespoons | | | | No TV | Tomato fresh | | 3 slices | | | | At table | Sweetcorn tinned | Mullerlight| 1 dessertspoon| | | | | Peach yoghurt low fat | Sainsbury's| 200g pot | | | | | Lemon squash No Added Sugar | | medium glass | | 8pm to 10pm| | | | | | | 8pm | Home, sitting room | Alone | Satsuma | Jacob's | 1 | | | TV on, Not at table | | Cream Crackers (no spread) | | 4 | | 9.30pm | Kitchen | Alone | Thick cut, frozen chips fried in vegetable oil | McCains | small portion| | | | No TV, At table | Brown sauce | HP | 1 dessertspoon| | 10pm to 6am| | | | | | | 10.30pm | Bedroom | Alone | Hot chocolate drink made with water | Cadbury's | Mug (made with 4 tsp powder) | | | TV on | Not at table | | | | | | Bedroom (in bed) | Alone | Water tap | | ½ small glass | | | No TV | | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: **Ate dinner at a friend's house**
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------------|--------------------------------------------------------------------------------------------------|-------------------------------------| | Bassetts | Soft and chewy vitamins A (800µg), C (60mg), D (5µg) and E (10mg) | 1 pastille | | Haliborange | DHA Omega-3 blackcurrant chewy caps (each capsule contains 200mg fish oil providing 130mg omega-3) | 2 capsules |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. **NAME OF DISH:** Chicken in tomato Sauce\
**Serves:** 4 people
| Ingredients | Amount | Ingredients | Amount | |----------------------|--------|----------------------|--------| | Pieces of chicken | 3 pieces | Olive oil | 2 tbsp | | **Sauce made with:** | | | | | Tinned tomatoes | 1 tin | | | | Green pepper | 1 medium | | |
*Don’t forget to include any oil or water/stock used!!*
**Brief description of cooking method**
Chicken pieces fried in olive oil, then mixed in with tomato and vegetable sauce. | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |------------|-------------------|------------------|--------|--------|----------------------------------------------------------------------|---------------------|-------------------------------| | 6am to 9am | Dining Room | Family | No TV | At table| Special K Bliss Strawberry and Chocolate Whole milk Banana Smoothie, made with semi-skimmed milk | Kelloggs Tesco's | 6 dessertspoons Drowned | | 9am to 12 noon | School playground | School friends | | | Orange Juice, UHT, unsweetened Mars Bar | Libby's Mars | 200ml carton 2 fun size | | 12 noon to 2pm | School canteen | School Friends | | At table| Roast Chicken Roast Potatoes Boiled Carrots Boiled Peas Gravy Plain sponge pudding with jam Warm chocolate custard | Don't know | 3 slices 2 potatoes 1 tablespoon 1 tablespoon 2 tablespoons Small portion 2 dessertspoons | | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |--------|--------|------------|--------|--------|-------------------------------------------|------------|------------------------------| | 2pm to 5pm | | 3.30pm | Car | Family | | | Bottle of water | Evian | ½ bottle - 500mls | | | | | | | Grapes, green, seedless | | 10 grapes | | | | | | | Ready salted Crisps | Pringles | About 15 crisps | | 4.30pm | Living room | Sister | TV on | Not at table | Cheese and tomato pizza, thin base | Pizza Express (cook at home) | ½ pizza (500g) uncooked | | | | | | | Green beans, boiled | | 2 tbsp | | | | | | | Broccoli, boiled | Cadburys | 2 florets | | | | | | | Chocolate Mousse, low fat | Robinson's | 55g pot | | | | | | | Orange High Juice Squash - standard | | 250ml (1/3 squash & 2/3 water) | | 5pm to 8pm | | 7pm | Dining room | Family | No TV | At table | Cheese and tomato pizza, thin base | Pizza Express (cook at home) | ½ pizza (500g) uncooked | | | | | | | Green beans, boiled | | 2 tbsp | | | | | | | Broccoli, boiled | Cadburys | 2 florets | | | | | | | Chocolate Mousse, low fat | Robinson's | 55g pot | | | | | | | Orange High Juice Squash - standard | | 250ml (1/3 squash & 2/3 water) | | 8pm to 10pm | | 9pm | Bedroom | Alone | TV on | Not at table (in bed) | Semi-skimmed milk | Tesco's | Small glass | | 10pm to 6am | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: **Felt unwell**
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: **Felt unwell**
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No |
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget
o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes No
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
**NAME OF DISH:** Banana Smoothie\
**Serves:** 1
| Ingredients | Amount | Ingredients | Amount | |------------------------------------|--------------|------------------------------------|--------------| | **Don’t forget to include any oil or water/stock used!!** | | | | | Banana | 1 small | | | | Tesco semi-skimmed milk | 150ml | | | | Gales honey – from Tesco | 1 tsp | | | | Tesco natural unsweetened yogurt | 1 tbsp | | |
**Brief description of cooking method**
*Mix all together with blender* PRACTICE PAGES
Use this space to practise recording in the diary with your interviewer
Please do not use these pages for the recording period | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |--------------|--------|------------|--------|--------|------|------------|--------------| | 6am to 9am | | | | | | | | | | Practice Page | | | | | | | | 9am to 12 noon | | | | | | | | | | Practice Page | | | | | | | | 12 noon to 2pm | | | | | | | | | | Practice Page | | | | | | |
*How to describe what you had and how much you had can be found on pages 20-25* | Time | Where? With whom? TV on? Table? | What | Brand Name | Amount eaten | |------------|---------------------------------|------|------------|--------------| | 2pm to 5pm | Practice Page | | | | | 5pm to 8pm | Practice Page | | | | | 8pm to 10pm| Practice Page | | | | | 10pm to 6am| Practice Page | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No |
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget
o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |--------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------| | | | | | | | | | | | | | | | | | | | | | | | | |
Don’t forget to include any oil or water/stock used!!
Brief description of cooking method | Food/Drink | Description & Preparation | Amount | |---------------------|-------------------------------------------------------------------------------------------|---------------------------------------------| | Bacon | Back, middle, streaky; smoked or unsmoked; fat eaten; dry-fried or fried in oil/fat (type used) or grilled rashers | Number of rashers | | Baked beans | Standard, reduced salt or reduced sugar | Spoons, tin size e.g. 244g | | Beefburger (hamburger) | Home-made (ingredients), from a packet or take-away; fried (type of oil/fat), microwaved or grilled; economy; with or without bread roll, with or without salad e.g. lettuce, tomato | Large or small, ounces or in grams if info on package | | Biscuits | What sort e.g. cheese, wafer, crispbread, sweet, chocolate (fully or half coated), shortbread, home-made | Number, size (standard or mini variety) | | Bread (see also sandwiches) | Wholemeal, granary, white or brown; currant, fruit, malt; large or small loaf; sliced or unsliced loaf | Number of slices; thick, medium or thin slices | | Bread rolls | Wholemeal, white or brown; alone or with filling; crusty or soft | Size, number of rolls | | Breakfast cereal (see also porridge) | What sort e.g. Kellogg's cornflakes; any added fruit and/or nuts; Muesli - with added fruit, no added sugar/salt variety | Spoons | | Buns and pastries | What sort e.g. iced, currant or plain, jam, custard, fruit, cream; type of pastry; homemade or bought | Size, number | | Butter, margarine & fat spreads | Give full product name | Thick, average, thin spread on bread/crackers; spoons | | Cake | What sort: fruit (rich), sponge, fresh cream, iced, chocolate coated; type of filling e.g. buttercream, jam | Individual or size of slice, packet weight | | Cereal bars | What sort: with fruit/nuts, coated with chocolate/yoghurt; fortified with vitamins/minerals | Weight/size of bar; from multipack | | Food/Drink | Description & Preparation | Amount | |------------------|-------------------------------------------------------------------------------------------|---------------------------------------------| | Cheese | Name and type e.g. cheddar, cream, cottage, soft; low fat | Slices, spoons | | Chips | Fresh, frozen, oven, microwave, take-away (where from); thick/straight/crinkle/fine cut; type of oil/fat used for cooking | Spoons, portion size, number of chips | | Chocolate(s) | What sort e.g. plain, milk, white, fancy, diabetic; type of filling; give brand name | Number, weight/size of bar | | Coffee | With milk (see section on milk); half milk/half water; all milk; ground/filter, instant; decaffeinated. If café/takeaway, was it cappuccino, latte etc | Cups or mugs, size of takeaway e.g. small, medium | | Cook-in sauces | What sort: pasta, Indian, Chinese, Mexican; tomato, white or cheese based; does meat or veg come in sauce; jar or can | Spoons, size of can or jar | | Cream | Single, whipped, double or clotted; dairy or non-dairy; low-fat; fresh, UHT/Longlife; imitation cream e.g. Elmlea | Spoons | | Crisps | What sort e.g. potato, corn, wheat, maize, vegetable etc; flavour; low-fat or low-salt; premium variety e.g. Kettle chips; baked variety | Packet weight, standard or from multipack | | Custard | Pouring custard or egg custard; made with powder and milk/sugar, instant, ready to serve (tinned or carton); low fat, sugar free | Spoons | | Egg | Boiled, poached, fried, scrambled, omelette (with or without filling); type of oil/fat, milk added | Number of eggs, large, medium or small | | Fish (including canned) | What sort e.g. cod, tuna, haddock; fried (type of oil/fat), grilled, poached (water or milk) or steamed; with batter or breadcrumbs; canned in oil, brine or tomato sauce | Size of can (e.g. 80g or spoons for canned fish) or size of fillet | | Fish cakes/fish fingers | Type of fish; fried, grilled, baked or microwaved; economy; battered or coated in breadcrumbs | Size, number | | Fruit - fresh | What sort; with or without skin | Small, medium or large | | Food/Drink | Description & Preparation | Amount | |------------------------------------|-------------------------------------------------------------------------------------------|---------------------------------------------| | Fruit - stewed/canned | What sort; sweetened or unsweetened; in fruit juice or syrup; juice or syrup eaten | Spoons | | Fruit - juice (pure) | What sort e.g. apple, orange; sweetened or unsweetened; pasteurised or UHT/Longlife; freshly squeezed | Glass (size or volume) or carton size | | Hot chocolate, cocoa malted drinks etc | Type; standard/low calorie/lite; instant; all water / half milk half water / all milk (see section on milk); any sugar added | Cup or mug plus how much powder e.g. teaspoons, weight on packet | | Ice cream | Flavour; dairy or non-dairy alternatives e.g. soya; luxury/premium | Spoons/ scoops | | Jam, honey | What sort; low-sugar/diabetic; shop bought or homemade | Spoons, heaped or level, or thin or thick spread | | Marmalade | What sort; low-sugar; thick cut; shop bought or homemade | Spoons, heaped or level, or thin or thick spread | | Meat (see also bacon, burgers & sausages) | What sort; cut of meat e.g. chop, breast, minced; lean or fatty; fat removed or eaten; skin removed or eaten; how cooked; with or without gravy | Large/small/medium, spoons, slices | | Milk | What sort; whole, semi-skimmed, skimmed or 1% fat; fresh, sterilized, UHT, dried; soya milk (sweetened/unsweetened), goats' milk, rice milk, oat milk; flavoured; fortified with added vitamins and/or minerals | Pints, glass (size or volume) or cup. On cereal: damp/average/drowned. In tea/coffee: a little/some/a lot | | Milkshake | Fresh or long life/UHT; dairy or non-dairy alternative e.g. soya; if powder, made up with whole, semi-skimmed, skimmed milk; flavour; fortified with vitamins and/or minerals | Glass (size or volume) cups or volume on bottle/carton | | Nuts | What sort; dry roasted, ordinary salted, honey roasted; unsalted | Packet weight, handful | | Pie (sweet or savoury) | What sort/filling; one pastry crust or two; type of pastry | Individual or slice |
Spoon size does matter!!!! When describing amounts check the spoons you use with the life size pictures on page 27 of this diary. | Food/Drink | Description & Preparation | Amount | |---------------------|-------------------------------------------------------------------------------------------|---------------------------------------------| | Pizza | Thin base/deep pan or French bread; topping e.g. meat, fish, veg; stuffed crust | Individual, slice, fraction of large pizza e.g. ¼ | | Porridge | Made with oats or cornmeal or instant oat cereal; made with milk and/or water; added sugar, honey, syrup or salt; with milk or cream | Spoons or bowl size (small, medium, large) | | Potatoes (see also chips) | Old or new; baked, boiled, roast (type of oil/fat); skin eaten; mashed/creamed (with butter, milk etc); fried/chips (type of oil/fat); instant; any additions e.g. butter | Spoons for mash, number of half or whole potatoes | | Pudding | What sort; e.g. steamed sponge; with fruit; mousse; instant desserts; milk puddings | Spoons, slices | | Rice | What sort; e.g. basmati, easy cook, long or short grain; white or brown; boiled or fried (type of oil/fat) | Spoons | | Salad | Ingredients; if with dressing what sort (oil and vinegar, mayonnaise) | Amount of each component; slices, leaves; spoons | | Sandwiches and rolls | Type of bread/roll (see Bread & Rolls); butter or margarine; type of filling; including salad, mayonnaise, pickle etc. If shop-bought, where from? | Number of rolls or slices of bread; amount of butter/margarine (on both slices?); amount of filling | | Sauce - hot (see also cook-in sauces) | What sort; savoury or sweet; thick or thin; give brand or recipe; for gravy - made with granules, stock cube, dripping or meat juices | Spoons | | Sauce - cold (including mayonnaise) | Tomato ketchup, brown sauce, soy sauce, salad cream, mayonnaise; low fat | Spoons | | Sausages | What sort; e.g. beef, pork; fried (type of oil/fat) or grilled; low fat; economy | Large or small, number | | Sausage rolls | Type of pastry | Number, size e.g. jumbo, standard, mini | | Food/Drink | Description & Preparation | Amount | |---------------------|-------------------------------------------------------------------------------------------|---------------------------------------------| | Scone | Fruit, sweet, plain, cheese; type of flour | Number, size | | Savoury snacks - in | What sort: e.g. Cheddars, cheese straws, Twiglets, Pretzels | Size (standard or mini variety), packet weight | | packet | | | | Smoothies | If homemade give recipe. If shop-bought, what does it contain e.g. fruit, milk/yoghurt, | Glass or bottle (size or volume) | | | fruit juice | | | Soft drinks - | Flavour; no added sugar/low calorie/sugar free; "high" juice; fortified with added | Glass (size or volume) | | concentrated/squash | vitamins and/or minerals | | | /cordial | | | | Soft drinks - | Flavour; diet/low-calorie; canned or bottled; cola - caffeine free | Glass, can or bottle (size or volume, e.g. 330ml) | | carbonated/fizzy | | | | Soft drinks - | Flavour; no added sugar/low calorie/sugar free; does it contain real fruit juice, if so, | Glass, carton or bottle (size or volume, e.g. 200ml) | | ready to drink | how much?; fortified with added vitamins and/or minerals | | | Soup | What sort; cream or clear; fresh/chilled, canned, instant or vending machine. If home- | Spoons, bowl or mug | | | made, give recipe | | | Spaghetti, other | What sort; fresh or dried; white, wholemeal; boiled, canned in sauce; type of filling if | Spoons (or how much dry pasta) | | pasta | ravioli, cannelloni etc | | | Sugar | Added to cereals, tea, coffee, fruit, etc; what sort: e.g. white, brown, demerara | Heaped or level teaspoons | | Sweets | What sort: e.g. toffees, boiled sweets, diabetic, sugar-free | Number, packet weight | | Tea | with/without milk (see section on milk); decaffeinated, herb | Mugs or cups | | Food/Drink | Description & Preparation | Amount | |------------------------------------|-------------------------------------------------------------------------------------------|---------------------------------------------| | Vegetables (not including potatoes)| What sort; how cooked or raw; additions e.g. butter, other fat or sauce | Spoons, number of florets or sprouts, weight from tins or packet | | Yoghurt (inc drinking yoghurt), fromage frais | What sort: e.g. natural/plain or flavoured; creamy, Greek, low-fat, very low fat/diet, soya; with fruit pieces or fruit flavoured; twinpot; fortified with added vitamins and/or minerals; longlife/UHT; probiotic | Pot size (e.g. 150g) or tablespoons | | Home-made dishes | Please say what the dish is called (record recipe or details of dish if you can in the section provided) | Spoons or proportion of the recipe e.g. ½ the recipe | | Ready-made meals | Please give brand name and full description of product; did it contain any accompaniments e.g. rice, vegetables, sauces; chilled or frozen; microwaved, oven cooked, boil-in-the-bag; low fat, healthy eating range. Enclose label and ingredients list if possible in your plastic bag | Packet weight, portion size | | Take-away food or food eaten out | Please say what the dish is called and give main ingredients if you can. Give name of a chain restaurant e.g. McDonalds | Spoons, portion size e.g. small/medium/large | Typical quantities of drinks in various containers measured in millilitres (ml)
| | Small Glass | Average Glass | Large Glass | Vending Cup | Cup | Mug | |------------------|-------------|---------------|-------------|-------------|-----|-----| | **Soft Drinks** | 150 | 200 | 300 | 170 | 190 | 260 | | **Hot Drinks** | | | | | | |
Here is a life size glass showing what typical quantities look like. You can use this picture as a guide for estimating how much volume of drink the glass holds you are drinking from. | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |------------|--------|------------|--------|--------|------|------------|--------------| | 6am to 9am | | | | | | | | | 9am to 12 noon | | | | | | | | | 12 noon to 2pm | | | | | | | |
How to describe what you had and how much you had can be found on pages 20-25 | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |------------|--------|------------|--------|--------|------|------------|--------------| | 2pm to 5pm | | | | | | | | | 5pm to 8pm | | | | | | | | | 8pm to 10pm| | | | | | | | | 10pm to 6am| | | | | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------| | Ingredients | Amount | Ingredients | Amount |
Don’t forget to include any oil or water/stock used!!
Brief description of cooking method | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |------------|--------|------------|--------|--------|------|------------|--------------| | 6am to 9am | | | | | | | | | 9am to 12 noon | | | | | | | | | 12 noon to 2pm | | | | | | | |
*How to describe what you had and how much you had can be found on pages 20–25* | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |------------|--------|------------|--------|--------|------|------------|--------------| | 2pm to 5pm | | | | | | | | | 5pm to 8pm | | | | | | | | | 8pm to 10pm| | | | | | | | | 10pm to 6am| | | | | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------| | Ingredients | Amount | Ingredients | Amount |
Don’t forget to include any oil or water/stock used!!
Brief description of cooking method | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |--------------|--------|------------|--------|--------|------|------------|--------------| | 6am to 9am | | | | | | | | | 9am to 12 noon | | | | | | | | | 12 noon to 2pm | | | | | | | |
How to describe what you had and how much you had can be found on pages 20-25 | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |------------|--------|------------|--------|--------|------|------------|--------------| | 2pm to 5pm | | | | | | | | | 5pm to 8pm | | | | | | | | | 8pm to 10pm| | | | | | | | | 10pm to 6am| | | | | | | | • Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget
o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |--------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Don’t forget to include any oil or water/stock used!!
Brief description of cooking method Remember to complete the general questions on pages 49-54!
| Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |------------|--------|------------|--------|--------|------|------------|--------------| | 6am to 9am | | | | | | | | | 9am to 12 noon | | | | | | | | | 12 noon to 2pm | | | | | | | |
How to describe what you had and how much you had can be found on pages 20-25 | Time | Where? | With whom? | TV on? | Table? | What | Brand Name | Amount eaten | |------------|--------|-------------|--------|--------|------|------------|--------------| | 2pm to 5pm | | | | | | | | | 5pm to 8pm | | | | | | | | | 8pm to 10pm| | | | | | | | | 10pm to 6am| | | | | | | | Was the amount of **food** that you had today about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Was the amount you had to **drink** today, including water, tea, coffee and soft drinks [and alcohol], about what you usually have, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If your intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Did you **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget
o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did you take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements you took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Don’t forget to include any oil or water/stock used!!
Brief description of cooking method General Questions about your food/ drink during the recording period.
Special diet
1. Did you follow a special diet during the recording period? (please tick)
| To lose weight | Other e.g. vegetarian (please give more details below) | |----------------|------------------------------------------------------| | To gain weight | No special diet | | For medical reasons e.g. diabetes (please give more details below) | |
Further details: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Milk 2. Which type of milk did you use most often during the recording period?
- Whole, fresh, pasteurised
- Semi-skimmed fresh, pasteurised
- Skimmed (fat free) fresh, pasteurised
- 1% fat milk, fresh pasteurised
- Dried
- Soya
- Other
Name
Did not use
Water 3. Which type of water did you drink most often during the recording period?
- Tap
- Filtered
- Bottled
- brand
- Did not drink Tea and coffee
4. How much milk did you usually have in coffee/tea?
Coffee A lot □ Some □ A little □ None/did not drink □
Tea A lot □ Some □ A little □ None/did not drink □
5. Did you usually sweeten your coffee/tea with sugar?
Coffee Yes □ How many teaspoons in a mug/cup? □ No/did not drink □
Tea Yes □ How many teaspoons in a mug/cup? □ No/did not drink □
6. Did you usually sweeten your coffee/tea with artificial sweetener?
Coffee Yes □ How many tablets or teaspoons in a mug/cup? □ No/did not drink □
Tea Yes □ How many tablets or teaspoons in a mug/cup? □ No/did not drink □
7. Did you drink decaffeinated coffee/tea during the recording period?
Coffee Always □ Sometimes □ Never □
Tea Always □ Sometimes □ Never □ Breakfast cereals 8. How much milk did you usually have on breakfast cereal?
Drowned ☐ Average ☐ Damp ☐ None/did not eat ☐
9. How did you usually make your porridge?
With all water ☐ With all milk ☐ With milk and water ☐ Did not eat ☐
10. Did you usually sweeten or salt your porridge?
With sugar ☐ With honey ☐ With salt ☐ Neither/did not eat ☐
11. How did you usually make your instant oat cereal? e.g. Ready Brek
With all water ☐ With all milk ☐ With milk and water ☐ Did not eat ☐
12. Did you usually sweeten or salt your instant oat cereal?
With sugar ☐ With honey ☐ With salt ☐ Neither/did not eat ☐
Fats for spreading and cooking 13. Which butter, margarine or fat spread did you use most often during the recording period? Please record the full product name and fat content e.g. Flora Omega 3 plus, low fat spread, 38% fat, polyunsaturated
Name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
None ☐ 14. How thickly did you spread butter, margarine on bread, crackers etc?
Thick □ Medium □ Thin □ None □
15. Which cooking fat/oil did your household use most often over the recording period? Please record the full product name.
Name: None □
e.g. Sainsbury’s sunflower oil
Bread
16. Which type of bread did you eat most often during the recording period?
White □ Granary □ Wholemeal □ Brown □
50/50 bread e.g. □ Other □ Type
Hovis Best of Both
Did not eat □
17. Was it a large loaf or a small loaf?
Large □ Small □
18. If the bread was shop bought, how was it sliced?
Thick □ Medium □ Thin □ Unsliced □ N/A □
Meat
19. If you ate red meat during the recording period, did you eat the visible fat?
Always □ Sometimes □ Never □ Did not eat meat □ 20. If you ate poultry (e.g. chicken, turkey) during the recording period, did you eat the skin?
Always □ Sometimes □ Never □ Did not eat poultry □
Fruit and vegetables 21. If you ate apples during the recording period, did you eat the skin?
Always □ Sometimes □ Never □ Did not eat □
22. If you ate pears during the recording period, did you eat the skin?
Always □ Sometimes □ Never □ Did not eat □
23. If you ate new potatoes during the recording period, did you eat the skin?
Always □ Sometimes □ Never □ Did not eat □
24. If you ate baked/jacket potatoes during the recording period, did you eat the skin?
Always □ Sometimes □ Never □ Did not eat □
Salt 25. Do you add salt to your food at the table?
Always □ Sometimes □ Never □ 26. Do you add salt substitute to your food at the table? *e.g. LoSalt*
Always ☐ Sometimes ☐ Never ☐
**Cordial/squash/diluting juice**
27. Which type of squash/cordial did you drink most often during the recording period?
Standard ☐ No added sugar /diet/low calorie ☐ Did not drink ☐
28. Which squash did you use most often during the recording period? Please record the full product name *e.g. Robinsons Peach Fruit & Barley no added sugar*
Name:
Single concentrate ☐ Double concentrate ☐
29. How much do you usually dilute your squash (e.g. half squash/half water, or 1 part squash with 4 parts water)?
Please tell us: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
**Other soft drinks**
30. For other soft drinks such as ready-to-drink juices and carbonated drinks, which type did you have most often during the recording period?
Standard ☐ No added sugar /diet/low calorie ☐ Did not drink ☐
If you are able to, please use a measuring jug to measure your usual drinking vessels *e.g. mug, glass, cup, beaker, bottle etc.* and provide the volumes below NATIONAL DIET AND NUTRITION SURVEY
Food and Drink Diary
Children aged 1.5 to 3 years (v2)
DIARY START DATE: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
SERIAL NUMBER (8 digits) CKL PARTICIPANT No
First name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Sex: Male / Female Date of birth: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
INTERVIEWER NUMBER: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ INTERVIEWER NAME: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ NATIONAL DIET AND NUTRITION SURVEY
Food and Drink Diary
Children aged 1.5 to 3 years
Instructions…………………………………………………………………………………………………… 2-3 Diary examples………………………………………………………………………………………….. 4-15 Practice pages…………………………………………………………………………………………..16-22 Examples and advice on food descriptions…………………………………………………………23-28 Pictures for spoon size………………………………………………………………………………..30-31 “The 4-day diary” ………………………………………………………………………………………32-63 General questions about the eating frequency outside the home…………………………… 64 General questions about your toddler’s food over the recording period... 65-71
If you have any queries about how to complete the diary please contact a member of the NDNS team on freephone 0800 652 4572 between 8.30am-5.30pm. PLEASE READ THROUGH THESE PAGES BEFORE STARTING THE FOOD DIARY
We would like you to record in this diary **everything your toddler eats and drinks**, at meal times and in between, day and night for **4 days**. Please include all food consumed **at home and outside the home**.
| Time spent in the care of other | |--------------------------------| | If your toddler spends time in the care of others during the recording period then we would very much appreciate if those carers (e.g. crèche staff, childminder, friend) would provide details of the food and drink consumed. For this purpose you have been given a pack to pass on to carers explaining about the study and asking for their support in gathering the required information. |
Please provide the following information for each day of recording:
**Day and Date** Please write down the day and date at the top each time you start a new day of recording.
**Time Slots** Please note the time of each eating occasion into the space provided. For easy use each day is divided into sections, from first thing in the morning to late evening and through the night.
**Where and with whom?** Please tell us what room or **part of the house** your toddler was in when eating, e.g. kitchen, living room. If s/he ate outside the home please write that location down. We would also like to know **who your toddler ate with**, e.g. whether s/he ate alone or with others. If they ate with others please describe their relationship to the child e.g. parents, siblings, or friends. We would also like to know **when they ate at a table** and **when they were watching television whilst eating**. For those occasions where they were **not** at a table or watching TV please write ‘Not at table’ or ‘No TV’ rather than leaving it blank.
**What does your toddler eat?** Please describe the food your toddler ate in as much detail as possible. Include all meals and all snacks. Be as specific as you can. Pages 23 – 28 will help with the sort of detail we need, like **cooking methods** (fried, grilled, baked etc) and any **additions** (fats, sugar/sweeteners, sauces, pepper etc).
- **Recipes/Homemade dishes** If your toddler has eaten any **homemade dishes** e.g. chicken casserole, please record the name of the recipe, ingredients with amounts (including water or other fluids) for the whole recipe, the number of people the recipe is for, and the cooking method. Write this down in the recipe section for each food record day. Record how much of the whole recipe your toddler ate in the portion size column (see examples on pages 9 and 15).
- **Take-aways and eating out** If your toddler has eaten **take-aways** or **made up dishes not prepared at home** such as at a restaurant or a friend’s house, please record as much detail about the ingredients as you can e.g. spaghetti with mince, onion and tomato sauce. Brand name Please note the brand name (if known). Most packed foods will list a brand name, e.g. Bird’s eye, Hovis, or Supermarket own brands.
Labels/Wrappers Labels are an important source of information. It helps us a great deal if you enclose, in the plastic bag provided, labels from all ready meals, from foods of lesser known brands and also from any supplements your toddler takes.
Portion sizes Examples for how to describe the quantity or portion size your toddler had of a particular food or drink are shown on pages 23 - 28.
For foods, quantity can be described using:
- household measure e.g. one level teaspoon (tsp) of sugar, two thick slices of bread, 1 dessertspoon (dsp) of peas, ½ cup of gravy. Be careful when describing amounts in spoons that you are referring to the correct spoon size. Compare the spoons you use with the life size photos on pages 30 - 31 of this diary.
- weights from labels - use the weight marked on canned or packet foods, e.g. quarter of a 420g tin of baked beans, one 125g pot of yoghurt
- number of items, e.g. 2 fish fingers, 2 pieces of chicken nuggets, 1 regular size jam filled doughnut
- fruit, indicate whether the piece of fruit is small, medium or large
For drinks, quantity can be described using:
- the size of glass, cup etc (e.g. large) or the volume (e.g. 300ml). Please provide a measurement of your toddler’s usual drinking ‘cup’ on page 31.
- volumes from labels (e.g. 330ml can of fizzy drink).
We would like to know the amount that your toddler actually ate which means taking leftovers into account. You can do this in two ways:
1. Record what was served and note what was not eaten e.g. 3 dsp of peas, only 2 dsp eaten; 1 weetabix, ate only ½
2. Only record the amount actually eaten i.e. 2 dsp of peas; ½ weetabix
Was it a typical day? After each day of recording you will be prompted to tell us whether this was a typical day or whether there were any reasons why your toddler consumed more or less than usual. We have provided a list of commonly forgotten food and drink to help jog your memory at the end of each day for anything you may have forgotten to record.
Supplements At the end of each recording day there is a section for providing information about any supplements your toddler took. Brand name, full name of supplement, strength and the amount taken should be recorded.
When to fill in the diary Please record your toddler’s eating as you go, not from memory at the end of the day. Use written notes on a pad if you forget to take the diary with you. Each diary day covers a 24hr period, so please include any food or drinks that your toddler may have had during the night. Remember to include foods and drinks between meals (snacks) including water.
Overleaf you can see 2 days that have already been filled in. These examples show you how we would like you to record your toddler’s food and drink, for example a meal from a jar and a homemade dish.
It only takes a few minutes for each eating occasion! Thank you for your time – we really appreciate it! | Time | Where? With whom? TV on? Table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|---------------------------------|-------------------------------------|------------|-------------------------------| | 6am to 9am | | | | | | 8am | Living Room Family TV on Not at table | Follow on Milk | SMA Progress | 240ml bottle (as pack instructions) | | 9am to 12 noon | | | | | | 10am | Kitchen Mother No TV At table | Weetabix Full fat milk white sugar | Weetabix | 1 biscuit drowned (about 1 dsp milk leftover) 2 tsp | | 11.30 am | Living Room Family TV on Not at table | bread margarine pure apple juice | Tate and Lyle Granary from bakers, medium cut Flora light spread Sainsbury’s | 1 slice medium spread 200ml carton (drank ½ of it) | | Time | Where? | With whom? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|--------|------------|--------------------------------------|------------------|-------------------------------| | 12 noon to 2pm | | | | | | | 1pm | Kitchen | Family | Chunky Vegetable Risotto | Heinz Mum's Own | 230g- only ate 2/3 of jar | | | | No TV | Peeled apple | | 3 slices | | | | At table | Strawberry and Raspberry Yoghurt | Petit Filous | 4 heaped tsp | | 2pm to 5pm | | | | | | | 4pm | Lounge | Grandfather| Very weak black tea (in plastic trainer cup with lid) Semi-skimmed milk | PG tips | ¾ cup mixed with 1/4 cup (1/2 leftover) | | | | No TV | Fairy cake (see recipe) | Sainsbury’s | ¾ of one cake eaten | | Time | Where? With whom? TV on? Table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|---------------------------------|-------------------------------------|------------|-------------------------------| | **5pm to 8pm** | | | | | | 6.15 pm | Kitchen Family No TV At table | Broccoli, Pear and Peas Puree | Ella’s Kitchen | 3 tsp | | | | Vegetables with Noodles and Chicken (12months) | HIPP | 250g jar | | | | Water | Tap | about 100ml (small glass) | | **8pm to 10pm** | | Follow on Milk | SMA Progress | 240ml bottle (as usual): 1/2 leftover | | 10.20 pm | Bedroom Father No TV Not at table | | | | | **10pm to 6am** | | | | |
- Was the amount of **food** that your toddler had today about what s/he usually has, less than usual, or more than usual?
Usual [ ]\
Less than usual [x]\
More than usual [ ]
If the intake was not usual, please explain why: **Feeling unwell**
- Was the amount your toddler had to **drink** today, including water, tea, coffee and soft drinks, about what s/he usually has, less than usual, or more than usual?
Usual [ ]\
Less than usual [x]\
More than usual [ ]
If the intake was not usual, please explain why: **Feeling unwell**
- Did your toddler **finish all the food and drink** that you recorded in the diary today?
Yes [x]\
No [ ]
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did your toddler take any vitamins, minerals or other food supplements today?
Yes ☒ No ☐
If yes, please describe the supplements s/he took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |---------|------------------------------------------------------------------------|-------------------------------------| | Bassets | Soft and chewy multivitamins (label in zip bag) | 1 pastille |
Please record over the page details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. **NAME OF DISH:** Fairy Cakes\
**SERVES:** makes 20 cakes
| Ingredients | Amount | Ingredients | Amount | |------------------------------|--------|------------------------------|--------| | Tate & Lyle caster sugar | 175g | Silver Spoon icing sugar | 140g | | Anchor butter, unsalted | 175g | Yellow food colouring | 3 drops| | Market eggs | 3 | water | 2 tablespoons | | Homepride self-raising flour | 175g | | | | Baking powder | 1 teaspoon | | |
*Don’t forget to include any oil or water/stock used!!*
**Brief description of cooking method**
*Mix together and bake for 15 min.*
*Mix icing sugar with water and add colouring. Approx. 1 teaspoon of icing on each cake* | Time | Where? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|-----------------|------------------------------------------------------------------------------------------------------|------------------|-------------------------------| | 6.30 am | Bedroom | Biscuit for Babies + Toddlers | Cow and Gate | 1 | | | Mother | | | | | | No TV | | | | | | Not at table | | | | | 7.00 am | Kitchen | Rice Krispies | Kelloggs | 7 dsp damp | | | Family | Whole milk | Asda | 1x 100g pot | | | No TV | Frutapura, Plum and Apple | Cow and Gate | 60ml juice | | | At table | Pure apple and blackcurrant juice diluted with tap water | Heinz | 240ml | | | | | | (drank most of it by lunch – about ¼ leftover) | | 9.30 am | Playroom | Banana | Asda | Medium size, ½ eaten | | | Childminder and 3 other children | | | 14g pack | | | No TV | | | | | | At table | | | | | Time | Where? With whom? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|--------------------|--------------------------------------------------------------------------------------------------------|------------|-------------------------------| | 12 noon to 2pm | | Prepared packed lunch: White bread, thick cut Butter unsalted Cheese triangle Ham, honey roast Cheese curls green seedless grapes Fromage frais with layer of peach puree Semi-skimmed milk Fruit shoot apple, no added sugar | Kingsmill | 2 slices Thinly spread on one slice only Ate 1/2 ½ slice 8 pieces | | 12.00 pm | Dining room Childminder and 3 other children No TV At table | | Lurpak | | | | | | Dairylea | | | | | | Asda | | | | | | Quakers | | | | | | Yoplait | 8 grapes 60g (ate half) | | | | | Sainsburys | 160ml (drank all) | | | | | Robinsons | 200ml | | 2pm to 5pm | Playroom Childminder and 3 other children No TV At table | Apple, peeled Milky way Water | Granny smith | Medium size, ¼ eaten 1 fun size about 100ml (numerous sips) | | Time | Where? With whom? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|--------------------|--------------------------------------|------------|-------------------------------| | 5pm to 8pm | | | | | | 6.00 pm | Dining room | Homemade sausage casserole (see recipe) | Sainsbury’s | 1 tbsp | | | Family | Penne pasta, boiled | | 2 tbsp (about half a tbsp pasta leftover) | | | No TV | | | | | | At table | | | | | 8pm to 10pm| | Whole milk | Asda | 250ml bottle (about 25 ml left over) | | 8.15 pm | Living room | | | | | | Mother | | | | | | TV on | | | | | | Not at table | | | | | 10pm to 6am| | | | | • Was the amount of **food** that your toddler had today about what s/he usually has, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If the intake was not usual, please explain why: **Feeling unwell**
• Was the amount your toddler had to **drink** today, including water, tea, coffee and soft drinks, about what s/he usually has, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If the intake was not usual, please explain why: **Feeling unwell**
• Did your toddler **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did your toddler take any vitamins, minerals or other food supplements today? Yes ☒ No ☐
If yes, please describe the supplements s/he took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | Abidec | Multivitamin syrup with omega 3 | 5ml (1 teasp) |
Please record over the page details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
**NAME OF DISH:** Sausage casserole\
**SERVES:** 4
| Ingredients | Amount | Ingredients | Amount | |------------------------------------|-------------------------|------------------------------|----------| | Butchers Choice pork sausages | 4 sausages | Cornflour | 2 tsp | | Onion | 1 medium size | Mixed herbs | About ½ tsp | | Mushrooms, Champignons | 1/4 of 500g pack | Sainsbury’s vegetable oil | 1.5 tbsp | | Napoli chopped tomatoes | 1 x 400g tin | | | | Sainsbury’s mixed salad beans | 1 x 125g tin | | | | Oxo gravy | 1 cube in ½ pint of water | | | | Heinz tomato ketchup | 1 tbsp | | |
*Don’t forget to include any oil or water/stock used!!*
**Brief description of cooking method**
Brown onions and sausages in vegetable oil. Add mushrooms, tomatoes, beans and gravy and simmer. Thicken with cornflour and add herbs. Use this space to practise recording in the diary with your interviewer
Please do not use these pages for the recording period | Time | Where? | With Whom? | TV on? | At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|--------|------------|--------|-----------|-------------------------------------|------------|-------------------------------| | 6am to 9am | | | | | | | | | 9am to 12 noon| | | | | | | |
*How to describe what you had and how much you had can be found on pages 23-28* | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|------------|-------------------------------| | **12 noon to 2pm** | | | | | | **2pm to 5pm** | | | | | | Time | Where? With Whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|------------|-------------------------------| | 5pm to 8pm | | | | | | 8pm to 10pm | | | | | | 10pm to 6am | | | | |
- Was the amount of **food** that your toddler had today about what s/he usually has, less than usual, or more than usual?
Usual [ ]\
Less than usual [ ]\
More than usual [ ]
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Was the amount your toddler had to **drink** today, including water, tea, coffee and soft drinks, about what s/he usually has, less than usual, or more than usual?
Usual [ ]\
Less than usual [ ]\
More than usual [ ]
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Did your toddler **finish all the food and drink** that you recorded in the diary today?
Yes [ ]\
No [ ]
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget
o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did your toddler take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements s/he took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | Serves: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don’t forget to include any oil or water/stock used!!*
| Practice Page | |---------------|
*Brief description of cooking method* | Food/Drink | Description & Preparation | Portion size or quantity | |-----------------------------|-------------------------------------------------------------------------------------------|---------------------------------------------------------------| | Bacon | Back, middle, streaky; smoked or un-smoked; fat eaten; dry-fried or fried in oil/fat (type used) or grilled rashers | Number of rashers | | Baked beans | Standard, reduced salt or reduced sugar | Spoons, weight of tin | | Beefburger (hamburger) | Home-made (ingredients), from a packet or take-away; fried (type of oil/fat), microwaved or grilled; economy; with or without bread roll, with or without salad e.g. lettuce, tomato | Large or small, ounces or in grams if info on package | | Biscuits | What sort e.g. cheese, wafer, crispbread, sweet, chocolate (fully or half coated), shortbread, home-made | Number, size (standard or mini variety) | | Bread (see also sandwiches) | Wholemeal, granary, white or brown; currant, fruit, malt; large or small loaf; sliced or unsliced loaf | Number of slices; thick, medium or thin slices | | Bread rolls | Wholemeal, white or brown; alone or with filling; crusty or soft | Size, number of rolls | | Breakfast cereal (see also porridge) | What sort e.g. Kellogg’s cornflakes; any added fruit and/or nuts; Muesli – with added fruit, no added sugar/salt variety | Spoons or size of bowl | | Buns and pastries | What sort e.g. iced, currant or plain, jam, custard, fruit, cream; type of pastry; homemade or bought | Size, number | | Butter, margarine & fat spreads | Give full product name | Thick/average/thin spread; spoons | | Cake | What sort: fruit (rich), sponge, fresh cream, iced, chocolate coated; type of filling e.g. buttercream, jam | Individual or size of slice, packet weight | | Food/Drink | Description & Preparation | Portion size or quantity | |---------------------|-------------------------------------------------------------------------------------------|-----------------------------------------------| | Cereal bars | What sort; with fruit/nuts, coated with chocolate/yoghurt; fortified with vitamins/minerals | Weight/size of bar; from multipack | | Cheese | Type e.g. cheddar, cream, cottage, soft; low fat | Number of slices, number of spoons | | Chips | Fresh, frozen, oven, microwave, take-away (where from); thick/straight/crinkle/fine cut; type of oil/fat used for cooking | Spoons or number of chips | | Chocolate(s) | What sort e.g. plain, milk, white, fancy, diabetic; type of filling | Weight/size of bar | | Cook-in sauces | What sort; pasta, Indian, Chinese, Mexican; tomato, white or cheese based; does meat or veg come in sauce; jar or can | Spoons, size of can or jar | | Cream | Single, whipped, double or clotted; dairy or non-dairy; low-fat; fresh, UHT/Longlife; imitation cream e.g. Elmlea | Spoons | | Crisps | What sort e.g. potato, corn, wheat, maize, vegetable etc; low-fat or low-salt; premium variety e.g. Kettle chips, Walker’s Sensations | Packet weight | | Custard | Pouring custard or egg custard; made with powder and milk/sugar, instant, ready to serve (tinned or carton); low fat, sugar free | Spoons | | Egg | Boiled, poached, fried, scrambled, omelette (with or without filling); type of oil/fat, milk added | Number of eggs, large, medium or small | | Fish (including canned) | What sort e.g. cod, tuna; fried (type of oil/fat), grilled, poached (water or milk) or steamed; with batter or breadcrumbs; canned in oil, brine or tomato sauce | Size of can or spoons (for canned fish) or size of fillet | | Food/Drink | Description & Preparation | Portion size or quantity | |------------------------------------|-------------------------------------------------------------------------------------------|-----------------------------------------------| | Fish cakes & fish fingers | Type of fish; plain or battered or in breadcrumbs; fried, grilled, baked or microwaved; economy | Size, number, packet weight | | Fruit - fresh | What sort; eaten with or without skin | Small, medium or large | | Fruit - stewed/canned | What sort; sweetened or unsweetened; in fruit juice or syrup; juice or syrup eaten | Spoons, weight of can | | Fruit – juice (pure) | What sort e.g. apple, orange; sweetened or unsweetened; pasteurised or UHT/Longlife; freshly squeezed; added vitamins/minerals, omega 3 | Glass (size or volume) or carton size | | Ice cream | Flavour; dairy or non-dairy alternatives e.g. soya; luxury/premium | Spoons/ scoops | | Jam, honey | What sort; low-sugar/diabetic; shop bought/brand or homemade | Spoons, heaped or level, or thin or thick spread | | Marmalade | Type; low-sugar; thick cut; shop bought/brand or homemade | Spoons, heaped or level, or thin or thick spread | | Meat (see also bacon, burgers & sausages) | What sort; cut of meat e.g. chop, breast, minced; lean or fatty; fat removed or eaten; skin removed or eaten; how cooked; with or without gravy | Large/small/medium, spoons, slices | | Milkshake | Fresh or long life/UHT; dairy or non-dairy alternative e.g. soya; if powder, made up with whole, semi-skimmed, skimmed milk; flavour; fortified with vitamins and/or minerals | Glass (size or volume) cups or volume on bottle/carton | | Food/Drink | Description & Preparation | Portion size or quantity | |------------------|-------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------| | Milk | Type (whole, semi-skimmed, skimmed, 1% fat); fresh, sterilized, UHT, dried; soya milk (sweetened/unsweetened), goats' milk, rice milk; flavoured; fortified with added vitamins and/or minerals; formula milks for toddlers | Pints, glass (size or volume) or cup. On cereal: damp/average/drowned or fluid ounces/ml. In tea/coffee: a little/some/a lot Formula: proportion of formula to water | | Nuts | What sort; dry roasted, ordinary salted, honey roasted; unsalted | Packet weight, handful | | Pie (sweet or savoury) | What sort/filling; one pastry crust or two; type of pastry | Individual or slice | | Pizza | Thin base/deep pan or French bread; topping e.g. meat, fish, veg; stuffed crust | Individual, slice, fraction of large pizza e.g. ¼ | | Porridge | Made with oats or cornmeal or instant oat cereal; made with milk and/or water; added sugar, honey, syrup or salt; with milk or cream | Bowls, spoons | | Potatoes (see also chips) | Old or new; baked, boiled, roast (type of oil/fat); skin eaten; mashed (with butter/spread and with or without milk); fried/chips (type of oil/fat); instant; any additions e.g. butter | Mash – spoons, number of half or whole potatoes, small or large potatoes | | Pudding | What sort; e.g. steamed sponge; with fruit; mousse; instant desserts; milk puddings | Spoons | | Rice | What sort; e.g. basmati, easy cook, long or short grain; white or brown; boiled or fried (type of oil/fat) | Spoons | | Salad | Ingredients; if with dressing what sort (oil and vinegar, mayonnaise) | Amount of each component | | Food/Drink | Description & Preparation | Portion size or quantity | |----------------------------|------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------| | Sandwiches and rolls | Type of bread/roll (see Bread & Rolls); butter or margarine; type of filling; including salad, mayonnaise, pickle etc. If shop-bought, where from? | Number of rolls or slices of bread; amount of butter/margarine (on both slices?); amount of filling | | Sauce – cold (including mayonnaise) | Tomato ketchup, brown sauce, soy sauce, salad cream, mayonnaise; low fat; | Spoons | | Sauce – hot (see also cook-in sauces) | What sort; savoury or sweet; thick or thin; for gravy - made with granules, stock cube, dripping or meat juices | Spoons | | Sausages | What sort; e.g. beef, pork; fried (type of oil/fat) or grilled; low fat | Large or small, number | | Sausage rolls | Type of pastry | Size - jumbo, standard, mini | | Scone | Fruit, sweet, plain, cheese; type of flour; homemade | Small, medium or large | | Savoury snacks - in packet | What sort: e.g. Cheddars, cheese straws, Twiglets, Pretzels | Size (standard or mini variety), packet weight | | Smoothies | If homemade give recipe. If shop-bought, what does it contain e.g. fruit, milk/yoghurt, fruit juice | Glass or bottle (size or volume) | | Soft drinks – squash/ concentrate/cordial | Flavour; no added sugar/low calorie/sugar free; “high” juice; fortified with added vitamins and/or minerals | Glass (size or volume) | | Soft drinks – carbonated/fizzy | Flavour; diet/low-calorie; canned or bottled; cola – caffeine free | Glass, can or bottle (size or volume) | | Soft drinks – ready to drink | Flavour; no added sugar/low calorie/sugar free; real fruit juice? If so, how much?; fortified with added vitamins and/or minerals | Glass, carton or bottle (size or volume) |
Spoon size does matter!!!! When describing amounts check the spoons you use with the life size pictures on page 30 of this diary. | Food/Drink | Description & Preparation | Portion size or quantity | |------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------| | Soup | What sort; cream or clear; fresh/chilled, canned, instant or vending machine. If home-made, give recipe | Spoons, bowl or mug | | Spaghetti, other pasta | What sort; fresh/chilled or dried; white, wholemeal; canned in sauce; type of filling if ravioli, cannelloni etc | Spoons (or how much dry pasta) | | Toddler foods | **Food in jars**: description and ingredients (e.g. vegetable risotto, fruit puree); **Dry Foods**: description (e.g. baby rice, cauliflower cheese); made up with milk and/or water | Size of jar or packet, spoons for powdered foods (volume of water/milk used to mix with cereal or powder) | | Vegetables (not including potatoes)| What sort; how cooked/raw; additions e.g. butter, other fat or sauce | Spoons, number of florets or sprouts, weight from tins or packet | | Yoghurt (inc drinking yoghurt), fromage frais | What sort: e.g. natural/plain or flavoured; creamy, Greek, low-fat, very low fat/diet, soya; with fruit pieces or fruit flavoured; twinpot; fortified with added vitamins and/or minerals; longlife/UHT; probiotic | Pot size or spoons | | Home-made dishes | Please say what the dish is called (record recipe or details of dish if you can in the section provided) and how many persons it serves | Spoons – heaped or level, number, size, amount of recipe consumed e.g. ¼ | | Ready-made meals | Full description of product; does it contain any accompaniments e.g. rice, vegetables, sauces; chilled or frozen; microwaved, oven cooked, boil-in-the-bag; low fat, healthy eating range. Enclose label and ingredients list if possible in your plastic bag | Packet weight (if didn’t eat whole packet describe portion consumed) | | Take-away food or food eaten out | Please say what the dish is called and give main ingredients if you can. Give name of a chain restaurant e.g. McDonalds | Spoons, portion size e.g. small/medium/large | DAY 1 | Time | Where? | With whom? | TV on? | At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|--------|------------|--------|-----------|-------------------------------------|------------|-------------------------------| | 6am to 9am | | | | | | | | | 9am to 12 noon | | | | | | | |
*How to describe what you had and how much you had can be found on pages 23-28* | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|------------------------------------|-------------------------------------|------------|-------------------------------| | 12 noon to 2pm | | | | | | 2pm to 5pm | | | | | | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|------------------------------------|-------------------------------------|------------|-------------------------------| | 5pm to 8pm | | | | | | 8pm to 10pm | | | | | | 10pm to 6am | | | | | • Was the amount of **food** that your toddler had today about what s/he usually has, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount your toddler had to **drink** today, including water, tea, coffee and soft drinks, about what s/he usually has, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did your toddler **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget
o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did your toddler take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements s/he took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | SERVES: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don’t forget to include any oil or water/stock used!!*
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Brief description of cooking method* Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | SERVES: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don’t forget to include any oil or water/stock used!!*
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Brief description of cooking method* DAY 2 | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|------------------------------------|-------------------------------------|------------|-------------------------------| | **Day 2** | | | | | | **Date** | | | | | | **Time** | | | | | | **Where?** | | | | | | **With whom?** | | | | | | **TV on?** | | | | | | **At table?** | | | | | | **Food/Drink description & preparation** | | | | | | **Brand Name** | | | | | | **Portion size or quantity eaten** | | | | |
*How to describe what you had and how much you had can be found on pages 23-28*
**6am to 9am**
**9am to 12 noon** | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|------------------------------------|-------------------------------------|------------|-------------------------------| | 12 noon to 2pm | | | | | | 2pm to 5pm | | | | | | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|------------------------------------|-------------------------------------|------------|-------------------------------| | 5pm to 8pm | | | | | | 8pm to 10pm | | | | | | 10pm to 6am | | | | |
- Was the amount of **food** that your toddler had today about what s/he usually has, less than usual, or more than usual?
Usual [ ]\
Less than usual [ ]\
More than usual [ ]
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Was the amount your toddler had to **drink** today, including water, tea, coffee and soft drinks, about what s/he usually has, less than usual, or more than usual?
Usual [ ]\
Less than usual [ ]\
More than usual [ ]
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Did your toddler **finish all the food and drink** that you recorded in the diary today?
Yes [ ]\
No [ ]
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did your toddler take any vitamins, minerals or other food supplements today?
Yes ☐ No ☐
If yes, please describe the supplements s/he took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | SERVES: | |---------------|---------| | Ingredients | Amount | Ingredients | Amount |
*Don’t forget to include any oil or water/stock used!!*
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------| | | | | | | | | | | | | | | | | | | | | | | | | |
*Brief description of cooking method* Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | SERVES: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don’t forget to include any oil or water/stock used!!*
*Brief description of cooking method* DAY 3 | Time | Where? | With whom? | TV on? | At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|--------|------------|--------|-----------|-------------------------------------|------------|-------------------------------| | Day 3 | | | | | | | | | Date | | | | | | | |
*How to describe what you had and how much you had can be found on pages 23-28*
**6am to 9am**
**9am to 12 noon** | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |------------|------------------------------------|-------------------------------------|------------|-------------------------------| | 12 noon to 2pm | | | | | | 2pm to 5pm | | | | | | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|------------------------------------|-------------------------------------|------------|-------------------------------| | 5pm to 8pm | | | | | | 8pm to 10pm | | | | | | 10pm to 6am | | | | |
- Was the amount of **food** that your toddler had today about what s/he usually has, less than usual, or more than usual?
Usual [ ]\
Less than usual [ ]\
More than usual [ ]
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Was the amount your toddler had to **drink** today, including water, tea, coffee and soft drinks, about what s/he usually has, less than usual, or more than usual?
Usual [ ]\
Less than usual [ ]\
More than usual [ ]
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
- Did your toddler **finish all the food and drink** that you recorded in the diary today?
Yes [ ]\
No [ ]
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget
o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did your toddler take any vitamins, minerals or other food supplements today?
Yes [ ] No [ ]
If yes, please describe the supplements s/he took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | SERVES: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
*Don’t forget to include any oil or water/stock used!!*
*Brief description of cooking method* Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | SERVES: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don’t forget to include any oil or water/stock used!!*
*Brief description of cooking method* DAY 4 Please remember to complete the general questions on pages 64-71!
| Day 4: | Date: | |-------|-------| | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | | 6am to 9am | | | | | 9am to 12 noon | | | |
How to describe what you had and how much you had can be found on pages 23-28 | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|------------|-------------------------------| | **12 noon to 2pm** | | | | | | **2pm to 5pm** | | | | | | Time | Where? With whom? TV on? At table? | Food/Drink description & preparation | Brand Name | Portion size or quantity eaten | |--------------|-----------------------------------|-------------------------------------|------------|-------------------------------| | 5pm to 8pm | | | | | | 8pm to 10pm | | | | | | 10pm to 6am | | | | | • Was the amount of **food** that your toddler had today about what s/he usually has, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Was the amount your toddler had to **drink** today, including water, tea, coffee and soft drinks, about what s/he usually has, less than usual, or more than usual?
| Usual | Less than usual | More than usual | |-------|-----------------|-----------------|
If the intake was not usual, please explain why: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
• Did your toddler **finish all the food and drink** that you recorded in the diary today?
| Yes | No | |-----|----|
If no, please **go back to the diary and make a note of any leftovers** • There are some foods that people often forget o Coffee, tea, soft drinks, water o Milk o Sauce, dressing o Biscuits, cakes, sweets, chocolate, other confectionary o Crisps/nuts/other snacks
If you have forgotten to record any food or drink today, please go back and add them to the diary.
• Did your toddler take any vitamins, minerals or other food supplements today?
Yes No
If yes, please describe the supplements s/he took below
| Brand | Name (in full) including strength | Number of pills, capsules, teaspoons | |-------|----------------------------------|-------------------------------------| | | | | | | | | | | | | | | | |
Please record on the next pages details of any recipes or (if not already described) ingredients of made up dishes or take-away dishes. Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | SERVES: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
*Don’t forget to include any oil or water/stock used!!*
*Brief description of cooking method* Write in recipes or ingredients of made up dishes or take-away dishes
| NAME OF DISH: | SERVES: | |---------------|---------|
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
Don’t forget to include any oil or water/stock used!!
| Ingredients | Amount | Ingredients | Amount | |-------------|--------|-------------|--------|
Brief description of cooking method
PLEASE complete the questions over the page General questions about the frequency of eating outside the home
Is your toddler regularly cared for outside the home e.g. child minder, nursery, relative?
NO ☐
YES ☐
If YES
1(a) How many meals would she/he have in 'out-of-home care' per week?
Please specify
1(b) Are these out-of-home meals prepared by yourself?
NO ☐
YES ☐
SOMETIMES ☐
Please specify
2 What type of soft drinks (e.g. squash, ready to drink, carbonated) does she/he usually have in 'out-of-home care'?
STANDARD ☐
NO ADDED SUGAR/DIET/LOW CAL ☐
EITHER (see below) ☐
If either, please specify e.g. has No Added Sugar at nursery but standard at the childminder’s
If your nursery provides a copy of the nursery menu for the recording period we would appreciate if you could give this copy to the interviewer. This will help us later with the analysis of your toddler’s diet. General questions about your toddler’s food/drink during the recording period.
Special diet
1. Did your toddler follow a special diet during the recording period e.g. vegetarian, milk-free, other? Yes [ ] Please specify No [ ]
2. What type of milk does your toddler usually drink? Tick only one Infant formula [ ] 1% fat milk [ ] Soya formula [ ] Follow-on formula [ ] Whole milk (cow’s milk) [ ] Soya milk [ ] Semi skimmed milk (cow’s milk) [ ] Goat’s milk [ ] Skimmed milk (cow’s milk) [ ] Other [ ]
Please specify the brand/type if not cow’s milk Breakfast cereals
03. How much milk does your toddler usually have on breakfast cereal?
- Drowned
- Average
- Damp
- None/did not eat
04. How do you usually make porridge for your toddler?
- With all water
- With all milk
- With milk and water
- Did not eat
05. Did you usually sweeten or salt the porridge?
- With sugar
- With honey
- With salt
- Neither/did not eat
06. How did you usually make instant oat cereal for your toddler?
- With all water
- With all milk
- With milk and water
- Did not eat
07. Did you usually sweeten or salt the instant oat cereal?
- With sugar
- With honey
- With salt
- Neither/did not eat Fats for spreading and cooking
08. Which butter, margarine or fat spread did you use most often for your toddler during the recording period? Please record the full product name and fat content. e.g. Flora Omega 3 plus, low fat spread, 38% fat, polyunsaturated
Name: None
09. How thickly did you spread butter, margarine on bread, crackers for your toddler?
Thick □ Medium □ Thin □ N/A □
10. Which cooking fat/oil did your household use most often during the recording period? Please record the full product name. e.g. Sainsbury’s sunflower oil
Name: None
Bread
11. Which type of bread did your toddler eat most often during the recording period?
White □ Granary □ Wholemeal □ Brown □
50/50 bread e.g. □ Other □ Type
Did not eat □ 12. Was it a large loaf or a small loaf?
Large [ ] Small [ ]
13. If the bread was shop bought, how was it sliced?
Thick [ ] Medium [ ] Thin [ ] Unsliced [ ]
**Meat**
14. If your toddler ate meat during the recording period, did s/he eat the visible fat?
Always [ ] Sometimes [ ] Never [ ] Did not eat meat [ ]
15. If your toddler ate poultry (e.g. chicken, turkey) during the recording period, did s/he eat the skin?
Always [ ] Sometimes [ ] Never [ ] Did not eat poultry [ ]
**Fruit and vegetables**
16. If your toddler ate apples during the recording period, did s/he eat the skin?
Always [ ] Sometimes [ ] Never [ ] Did not eat [ ] 17. If your toddler ate pears during the recording period, did s/he eat the skin?
Always □ Sometimes □ Never □ Did not eat □
18. If your toddler ate new potatoes during the recording period, did s/he eat the skin?
Always □ Sometimes □ Never □ Did not eat □
19. If your toddler ate baked (jacket) potatoes during the recording period, did s/he eat the skin?
Always □ Sometimes □ Never □ Did not eat □
Salt
20. Do you add salt to your toddler’s food at the table?
Always □ Sometimes □ Never □
21. Do you add salt substitute to your toddler’s food at the table? e.g. LoSalt
Always □ Sometimes □ Never □ Cordial/squash/diluting juice
22. Which type of squash/cordial did your toddler drink most often during the recording period?
- Standard
- No added sugar /diet/low calorie
- Did not drink
23. Which squash did you use most often during the recording period? Please record the full product name e.g. Robinsons Peach Fruit & Barley no added sugar
Name:
- Single Concentrate
- Double Concentrate
24. How much do you usually dilute your toddler's squash (e.g. half squash/half water, or 1 part squash with 4 parts water)?
Please tell us: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Other soft drinks
25. For other soft drinks such as ready-to-drink juices and carbonated drinks, which type did your toddler have most often during the recording period?
- Standard
- No added sugar /diet/low calorie
- Did not drink
Water
26. Which type of water did your toddler drink most often during the recording period?
- Tap
- Filtered
- Bottled
brand Tea
27. How much milk does your toddler usually have in tea? A lot [ ] Some [ ] A little [ ] None/did not drink [ ]
28. Do you usually sweeten your toddler’s tea with sugar? Yes [ ] Number of teaspoons [ ] None/did not drink [ ]
Drinks in general
29. Does your toddler finish all their cup/bottle each time you make it up? Yes [ ] No [ ]
If No, please tell us how much of it they usually drink e.g. half, three-quarters: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
If you are able to, please use a measuring jug to measure your toddler’s usual drinking vessels e.g. mug, glass, cup, bottle, beaker etc. and provide the volumes below
Thank you for completing this diary.
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} |
81e5811591de327b6873805fd616cf7b3fd7ffe4 | Here are some questions for you to answer on your own.
We are interested in your honest answers.
**We will not tell anyone what your answers are.**
Look at the instructions on the next page and read what to do.
Ask the interviewer for help if you do not understand a question or are not sure what to do.
Thank you for taking part in this survey How to answer these questions
- Please read each question carefully
- Most of the questions can be answered by putting a tick in the box next to the answer that applies to you, like this
Yes [ \\checkmark ]
No
- Sometimes you have to write a number in the box, for example
I was [ 8 ] years old
- Next to some of the boxes are arrows and instructions. They show or tell you which question to answer next. If there are no special instructions, just answer the next question.
No [ _ ]
Yes [ \\checkmark ]
I was [ 10 ] years old
Go to question 4
write in Cigarette Smoking
Q1 Have you ever tried smoking a cigarette, even if it was only a puff or two?
Tick one box
No 2 ➔ Go to question 2
Yes 1
How old were you when you tried smoking a cigarette, even if it was only a puff or two?
I was \_\_\_\_\_\_ years old
Write in
Q2 Now read all the following sentences very carefully and tick the box next to the one which best describes you.
Tick one box
I have never smoked 1 ➔ Go to question 4
I have only smoked once or twice 2
I used to smoke sometimes, but I never smoke a cigarette now 3 ➔ Go to question 3
I sometimes smoke, but I don’t smoke every week 4
I smoke between one and six cigarettes a week 5
I smoke more than six cigarettes a week 6
Q3 Did you smoke any cigarettes last week?
Tick one box
No 2 ➔ Go to question 4
Yes 1
How many cigarettes did you smoke last week?
I smoked \_\_\_\_\_\_ cigarettes
Write in
Spare 1059 - 1074 Drinking
Q4 Have you ever had a proper alcoholic drink – a whole drink, not just a sip? Please don’t count drinks labelled low alcohol.
Tick one box
Yes 1 ➔ Go to question 6 No 2 ➔ Go to question 5
Q5 Have you ever drunk alcopops (such as Bacardi Breezer, Smirnoff Ice, WKD, Reef etc)?
Tick one box
Yes 1 ➔ Go to question 6 No 2 ➔ END
Q6 How old were you the first time you had a proper alcoholic drink or alcopop?
I was write in years old
Q7 How often do you usually have an alcoholic drink or alcopop?
Tick one box
Almost every day 1 ➔ Go to question 8 About twice a week 2 About once a week 3 About once a fortnight 4 About once a month 5 Only a few times a year 6 I never drink alcohol now 7 Q8 When did you last have an alcoholic drink or alcopop?
Tick one box
Today 1
Yesterday 2
Some other time during the last week 3
1 week, but less than 2 weeks ago 4
2 weeks, but less than 4 weeks ago 5
1 month, but less than 6 months ago 6
6 months ago or more 7
Thank you for answering these questions.
Please return the booklet to the interviewer. Here are some questions for you to answer on your own.
We are interested in your honest answers.
**We will not tell anyone what your answers are.**
Look at the instructions on the next page and read what to do.
Ask the interviewer for help if you do not understand a question or are not sure what to do.
Thank you for taking part in this survey. How to answer these questions
- Please read each question carefully
- Most of the questions can be answered by putting a tick in the box next to the answer that applies to you like this
Yes [ \\checkmark ]
No
- Sometimes you have to write a number in the box, for example
I was [ 13 ] years old
- Next to some of the boxes are arrows and instructions. They show or tell you which question to answer next. If there are no special instructions, just answer the next question.
No [ \\rightarrow \\text{Go to Q4} ]
Yes [ \\checkmark ]
I was [ 13 ] years old Cigarette Smoking
Q1 Have you ever tried smoking a cigarette, even if it was only a puff or two?
Tick one box
Yes 1 ➔ Go to question 2 No 2
Q2 Now read all the following sentences very carefully and tick the box next to the one which best describes you.
Tick one box
I have never smoked 1 ➔ Go to question 5 I have only smoked once or twice 2 I used to smoke sometimes, but I never smoke a cigarette now 3 ➔ Go to question 3 I sometimes smoke, but I don’t smoke every week 4 I smoke between one and six cigarettes a week 5 I smoke more than six cigarettes a week 6
Q3 How old were you when you tried smoking a cigarette, even if it was only a puff or two?
I was years old ➔ Go to question 4
Q4 Did you smoke any cigarettes last week?
Tick one box
No 2 ➔ Go to question 5 Yes 1
How many cigarettes did you smoke last week?
I smoked cigarettes
Write in Spare 1059 - 1074 Drinking
Q5 Have you ever had a proper alcoholic drink – a whole drink, not just a sip? Please don’t count drinks labelled low alcohol.
Tick one box
Yes 1 ➔ Go to question 7 No 2 ➔ Go to question 6
Q6 Have you ever drunk alcopops (such as Bacardi Breezer, Smirnoff Ice, WKD, Reef etc)?
Tick one box
Yes 1 ➔ Go to question 7 No 2 ➔ END
Q7 How old were you the first time you had a proper alcoholic drink or an alcopop?
I was \_\_\_\_\_\_ years old ➔ Go to question 8
Q8 How often do you usually have an alcoholic drink or alcopop?
Tick one box
Almost every day 1 ➔ Go to question 9 About twice a week 2 About once a week 3 About once a fortnight 4 About once a month 5 Only a few times a year 6 I never drink alcohol now 7 Q9 When did you last have an alcoholic drink or alcopop?
Tick one box
Today\
Yesterday\
Some other time during the last week\
1 week, but less than 2 weeks ago\
2 weeks, but less than 4 weeks ago\
1 month, but less than 6 months ago\
6 months ago or more
Go to question 10
END
Q10 Which, if any, of the drinks shown below, have you drunk in the last 7 days?
Please (✔) either yes or no for each kind of drink.
For each kind of drink, write in the box how much you drank in the last 7 days.
Beer, lager, cider or shandy (exclude bottles or cans of shandy)
Have you drunk this in the last 7 days?
Tick one box
No\
Yes
Go to question 11
How much did you drink in the last 7 days?
Write in:
Pints (if half a pint, write in ½)
Large cans or bottles
Small cans or bottles Q11 Spirits or liqueurs, such as gin, vodka, whisky, rum, brandy or cocktails
Have you drunk this in the last 7 days?
Tick one box
No 2 ➔ Go to question 12
Yes 1
How much did you drink in the last 7 days?
Write in:
Glasses (count doubles as two glasses)
Q12 Sherry or martini (including port, vermouth, cinzano, dubonnet)
Have you drunk this in the last 7 days?
Tick one box
No 2 ➔ Go to question 13
Yes 1
How much did you drink in the last 7 days?
Write in:
Glasses (count doubles as two glasses)
Q13 Wine (including babycham and champagne)
Have you drunk this in the last 7 days?
Tick one box
No 2 ➔ Go to question 14
Yes 1
How much did you drink in the last 7 days?
Write in:
Glasses
Spare 1105-1115 Q14 Alcopop (such as Bacardi Breezer, Smirnoff Ice, WKD, Reef etc.)
Have you drunk this in the last 7 days?
Tick one box
No 2 ➔ Go to question 15
Yes 1
How much did you drink in the last 7 days? Write in:
Large cans or bottles
AND/OR Small cans or bottles
Q15 Other kinds of alcoholic drink?
Have you drunk this in the last 7 days?
Tick one box
No 2 ➔ END
Yes ➔ Complete details below
Write in name of drink
How much did you drink in the last 7 days? Write in:
Spare 1117
Spare 1120
Spare 1157 - 1170 Thank you for answering these questions.
Please return the booklet to the interviewer. Example Questions: How to fill in this questionnaire
Most of the questions on the following pages can be answered simply by ticking the box below or alongside the answer that applies to you.
Tick one box
| Very healthy life | Fairly healthy life | Not very healthy life | An unhealthy life | |-------------------|---------------------|-----------------------|-------------------| | | | | |
Example 1: Do you feel that you lead a …
Sometimes you are asked to write in a number or the answer in your own words. Please enter numbers as figures rather than words.
Example 2:
Write in no. 6
On most pages you should answer ALL the questions but sometimes you will find the box you have ticked has an arrow next to it with an instruction to go to another question.
Example 3: Would you like to lead a healthier life than you do now?
Tick one box
| Yes | Go to question 4 | |-----|------------------| | | |
| No | Go to question 5 | |-----|------------------| | | |
By following the instructions carefully you will miss out questions which do not apply to you. SMOKING
Q1 Have you ever smoked a cigarette, a cigar or a pipe, or anything with tobacco in it?
Tick one box
Yes 1 ➔ Go to question 2 No 2 ➔ Go to question 11 on page 3
Q2 Have you ever smoked a cigarette?
Tick one box
Yes 1 ➔ Go to question 3 No 2 ➔ Go to question 11 on page 3
Q3 How old were you when you first tried smoking a cigarette, even if it was only a puff or two?
Write in how old you were then ➔ Go to question 4
Q4 Do you smoke cigarettes at all nowadays?
Tick one box
Yes 1 ➔ Go to question 6 No 2 ➔ Go to question 5
Q5 Did you smoke cigarettes regularly or occasionally?
Tick one box
Regularly, that is at least one cigarette a day 1 ➔ Go to question 9 on page 2 Occasionally 2 ➔ Go to question 11 on page 3 I never really smoked cigarettes, just tried them once or twice 3
CURRENT SMOKERS
Q6 About how many cigarettes a day do you usually smoke on weekdays?
Write in number smoked a day ➔ Go to question 7
Q7 And about how many cigarettes a day do you usually smoke at weekends?
Write in number smoked a day ➔ Go to question 8 on page 2 Q8 Do you mainly smoke …
Tick one box
1 filter-tipped cigarettes,
2 plain or untipped cigarettes,
3 or hand-rolled cigarettes?
Go to question 11
Q9 About how many cigarettes did you smoke IN A DAY when you smoked them regularly?
Write in number smoked a day
Go to question 10
Q10 How long ago did you stop smoking cigarettes regularly?
Was it…
Tick one box
1 …less than 6 months ago,
2 …6 months to 1 year ago,
3 …1 to 2 years ago,
4 …2 to 5 years ago,
5 …5 to 10 years ago,
6 …or more than 10 years ago,
Go to question 11
Spare 1068 - 1074 DRINKING
EVERYONE PLEASE ANSWER
Q11 Do you ever drink alcohol nowadays, including drinks you brew or make at home?
Tick one box
Yes 1 ➔ Go to question 14 No 2 ➔ Go to question 12
Q12 Just to check, does that mean you never have an alcoholic drink nowadays, or do you have an alcoholic drink very occasionally, perhaps for medicinal purposes or on special occasions like Christmas and New Year?
Tick one box
Very occasionally 1 ➔ Go to question 14 Never 2 ➔ Go to question 13
Q13 Have you always been a non-drinker or did you stop drinking for some reason?
Tick one box
Always a non-drinker 1 ➔ END Used to drink but stopped 2
Q14 How old were you the first time you ever had a proper alcoholic drink?
Write in how old you were then ➔ Go to question 15 Q15 Thinking now about all kinds of drinks, how often have you had an alcoholic drink of any kind during the last 12 months?
Tick one box
- Almost every day 01
- Five or six days a week 02
- Three or four days a week 03
- Once or twice a week 04
- Once or twice a month 05
- Once every couple of months 06
- Once or twice a year 07
- Not at all in the last 12 months 08
Go to question 16
Q16 Did you have an alcoholic drink in the seven days ending yesterday?
Tick one box
- Yes 1
- No 2
Go to question 17
Q17 On how many days out of the last seven did you have an alcoholic drink?
Tick one box
- One 1
- Two 2
- Three 3
- Four 4
- Five 5
- Six 6
- Seven 7
Go to question 18 Q18 Please think about the day in the last week on which you drank the most. (If you drank the same amount on more than one day, please answer about the most recent of those days.)
From this list, please tick all the types of alcoholic drink which you drank on that day. For the ones you drank, write in how much you drank on that day. EXCLUDE NON-ALCOHOLIC OR LOW-ALCOHOL DRINKS, EXCEPT SHANDY.
| TICK ALL DRINKS DRUNK ON THAT DAY | WRITE IN HOW MUCH DRUNK ON THAT DAY | |-----------------------------------|-------------------------------------| | Normal strength beer, lager, stout, cider or shandy (less than 6% alcohol)-exclude bottles/cans of shandy. | Glasses (count doubles as 2 singles) | Pints | Large cans or bottles | Small cans or bottles | | Strong beer, lager, stout or cider (6% alcohol or more, such as Tennants Super, Special Brew, Diamond White) | | | | | | Spirits or liqueurs, such as gin, whisky, rum, brandy, vodka, or cocktails | | | | | | Sherry or martini (including port, vermouth, cinzano, dubonnet) | | | | | | Wine (including babycham and champagne). You can write in parts of a bottle e.g. half a bottle | Large glasses (250ml) | Standard glasses (175ml) | Small glasses (125ml) | Bottles (750ml) | | Alcoholic soft drink (‘alcopop’) such as Hooch, or a pre-mixed alcoholic drink such as Bacardi Breezer, WKD or Smirnoff Ice | | | | | | Other kinds of alcoholic drink | Glasses (count doubles as 2 singles) | Pints | Large cans or bottles | Small cans or bottles | | 1. | | | | | | 2. | | | | |
Spare 1151 - 1170 Thank you for answering these questions.
Please return the booklet to the interviewer. This questionnaire is designed to find out about your physical activity in your everyday life in the last 4 weeks ending yesterday.
Date from __/__/\_\_ to __/__/\_\_
This questionnaire is divided into 3 sections Please try to answer every question.
- **Section A** asks about your physical activity patterns in and around the house.
- **Section B** is about travel to work, school or college and your activity at work, school or college.
- **Section C** asks about activities during your leisure time that you may have engaged in during the last 4 weeks.
1Based on the Recent Physical Activity Questionnaire developed by the MRC Epidemiology unit, Cambridge. Section A: Home Activities
Q1 Getting about Which form of transport have you used most often in the last 4 weeks ending yesterday, apart from your journey to and from work? Please tick (✓) one box only.
| Usual mode of travel | Car / motor vehicle | Walk | Public transport | Cycle | |----------------------|---------------------|------|------------------|-------| | | | | | |
Q2 TV, DVD or Video Viewing Please put a tick (✓) on every line
| Hours of TV, DVD or video watched per day | Average over the last 4 weeks ending yesterday | |------------------------------------------|-----------------------------------------------| | | None | Less than 1 hour a day | 1 to 2 hours a day | 2 to 3 hours a day | 3 to 4 hours a day | More than 4 hours a day | | On a weekday before 6 pm | | | | | | | | On a weekday after 6 pm | | | | | | | | On a weekend day before 6 pm | | | | | | | | On a weekend day after 6 pm | | | | | | |
Q3 Computer use at home but not at work (e.g. internet, email, Playstation, Xbox, Gameboy etc, Please don’t include computers requiring movement such as Nintendo wii and Xbox Kinect Please put a tick (✓) on every line.
| Hours of home computer use per day | Average over the last 4 weeks ending yesterday | |-----------------------------------|-----------------------------------------------| | | None | Less than 1 hour a day | 1 to 2 hours a day | 2 to 3 hours a day | 3 to 4 hours a day | More than 4 hours a day | | On a weekday before 6 pm | | | | | | | | On a weekday after 6 pm | | | | | | | | On a weekend day before 6 pm | | | | | | | | On a weekend day after 6 pm | | | | | | |
Q4 Stair climbing at home Please put a tick (✓) on every line.
| Number of times you climbed up a flight of stairs (approx 10 steps) each day at home | Average over the last 4 weeks ending yesterday | |--------------------------------------------------------------------------------------|-----------------------------------------------| | | None | 1 to 5 times a day | 6 to 10 times a day | 11 to 15 times a day | 16 to 20 times a day | More than 20 times a day | | On a weekday (Mon-Fri) | | | | | | | | On a weekend day (Sat & Sun) | | | | | | | Section B: Activity at work / school or college
This section asks about activities at work, school or college and travel to work, school or college. This includes office jobs, farming, working for yourself, volunteer work, any other paid or unpaid work you did and school/college.
If you have more than one job, please choose what you consider to be your main job over the past four weeks ending yesterday, and answer the following questions about that job.
If you are at school or college and also work part-time, please choose what you consider to be your main activity, and answer the following questions about that activity.
Q5 Have you been in employment, done unpaid work or attended school or college during the last 4 weeks ending yesterday?
Tick one box
No ➔ Go to page 7
Yes ➔ Go to Q6
Q6 During the last 4 weeks ending yesterday, how many hours of work, unpaid work or school/college did you do per week?
| Work hours (excluding travel) | In the last week | 2 weeks ago | 3 weeks ago | 4 weeks ago | |------------------------------|-----------------|-------------|-------------|-------------|
Type of work while at work or school/college
Q7 We would like to know the type and amount of physical activity involved in your work or at school/college. Please tick (✓) the box next to the one that best corresponds with your main occupation(s) or school/college in the last 4 weeks ending yesterday:
Tick one box
Sedentary occupation You spend most of your time sitting (such as in an office)
Standing occupation You spend most of your time standing or walking. However, your work does not require intense physical effort (e.g. shop assistant, hairdresser, guard)
Manual work This involves some physical effort including handling of heavy objects and use of tools (e.g. plumber, electrician, carpenter)
Heavy manual work This implies very vigorous physical activity including handling of very heavy objects (e.g. dock worker, miner, bricklayer, construction worker) Section B cont’d: Activity at work / school or college
Q8 What proportion of your time at work or school/college was spent outside while you were at work or school/college during the last 4 weeks ending yesterday? This does not include travelling to/from work or school/college.
Tick one box
- None
- Less than half
- About half
- More than half
- All
Go to Q9
Q9 When you were outside at work or school/college, what parts of your body were usually UNCOVERED?
Tick (✓) all that apply.
- Face
- Shoulders
- Head
- Legs
- Hands
- Most upper body
- Arms
Travel to and from your main place of work or school/college in the last 4 weeks
Q10 What is the approximate distance from your home to your main place of work or school/college? Record 0 if you work/study from home.
Miles
OR
Kilometres
Q11 How many times a week did you travel from home to your main place of work or school/college? Count outward journeys only.
Section B cont’d: Activity at work / school or college
Q12 How did you normally travel to work or school/college during the last 4 weeks ending yesterday? Tick (✓) one box only per line
| Always | Usually | Occasionally | Never or rarely | |--------|---------|--------------|-----------------| | By car/motor vehicle | | | | | By works or public transport | | | | | By bicycle | | | | | Walking | | | |
Q13 What is the postcode for your main place of work or school/college during the last 4 weeks ending yesterday?
If not known please give your work or school/college address
Work address - \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
______________________________________________________________________
Please turn to page 7 Section C: Leisure time activities
The following questions ask about how you spent your leisure time.
Please indicate how often you did each activity on average over the last 4 weeks ending yesterday. Please indicate the average length of time that you spent doing the activity on each occasion.
Example 1
If you went walking for pleasure for 40 minutes once a week during the last four weeks, and you also had done weeding or pruning every fortnight during the last four weeks and took 1 hour and 10 minutes on average for each occasion, you would complete the table below as follows:
| Number of times you did the activity in the last 4 weeks | Average time per episode | |--------------------------------------------------------|--------------------------| | None | Once in the last 4 weeks | 2 to 3 times in the last 4 weeks | Once a week | 2 to 3 times a week | 4 to 5 times a week | Every day | | Walking for pleasure | ✓ | | | | | 40 | | Weeding and pruning | ✓ | | | | | 1 10 |
Example 2
If you did not play golf during the last four weeks, you would complete the table below as follows:
| Number of times you did the activity in the last 4 weeks | Average time per episode | |--------------------------------------------------------|--------------------------| | None | Once in the last 4 weeks | 2 to 3 times in the last 4 weeks | Once a week | 2 to 3 times a week | 4 to 5 times a week | Every day | | Golf | ✓ | | | | | |
Now complete the table on pages 8 and 9 Section C cont’d: Leisure time activities
Q14 Please give an answer for the average time you spent on each activity and the number of times you did that activity in the last 4 weeks ending yesterday
Please complete each line
| Activity | Number of times you did the activity in the last 4 weeks ending yesterday | Average time per episode | |--------------------------------------------------------------------------|---------------------------------------------------------------------------|--------------------------| | | None | Once in the last 4 weeks | 2 to 3 times in the last 4 weeks | Once a week | 2 to 3 times a week | 4 to 5 times a week | Every day | Hours | Minutes | | Swimming - competitive | | | | | | | | | | | Swimming leisurely | indoor | | | | | | | | | | | outdoor | | | | | | | | | | Backpacking or mountain climbing | | | | | | | | | | | Walking for pleasure (not as a means of transport) | | | | | | | | | | | Racing or rough terrain cycling | | | | | | | | | | | Cycling for pleasure (not as a means of transport) | | | | | | | | | | | Mowing the lawn | | | | | | | | | | | Watering the lawn or garden | | | | | | | | | | | Digging, shovelling or chopping wood | | | | | | | | | | | Weeding or pruning | | | | | | | | | | | DIY e.g. carpentry, home or car maintenance | | | | | | | | | | | High impact aerobics or step aerobics | | | | | | | | | | | Other types of aerobics | | | | | | | | | | | Exercise with weights | | | | | | | | | | | Conditioning exercises e.g. using a bike or rowing machine | | | | | | | | | | | Floor exercises e.g. stretching, bending, keep fit or yoga | | | | | | | | | | | Dancing e.g. ballroom or disco | | | | | | | | | | | Competitive running | | | | | | | | | |
### Section C cont’d: Leisure time activities
| Activity | Number of times you did the activity in the last 4 weeks ending yesterday | Average time per episode | |-----------------------------------------------|---------------------------------------------------------------------------|--------------------------| | | None | Once in the last 4 weeks | 2 to 3 times in the last 4 weeks | Once a week | 2 to 3 times a week | 4 to 5 times a week | Every day | Hours | Minutes | | Jogging | None | Once in the last 4 weeks | 2 to 3 times in the last 4 weeks | Once a week | 2 to 3 times a week | 4 to 5 times a week | Every day | Hours | Minutes | | Bowling | Indoor | Outdoor | | | | | | | | | Tennis | Indoor | Outdoor | | | | | | | | | Badminton | | | | | | | | | | | Squash | | | | | | | | | | | Table tennis | | | | | | | | | | | Golf | | | | | | | | | | | Football, rugby or hockey | Indoor | Outdoor | | | | | | | | | Cricket | | | | | | | | | | | Rowing | | | | | | | | | | | Netball, volleyball or basketball | Indoor | Outdoor | | | | | | | | | Fishing | | | | | | | | | | | Horse-riding | | | | | | | | | | | Snooker, billiards or darts | | | | | | | | | | | Musical instrument playing or singing | | | | | | | | | | | Ice skating | | | | | | | | | | | Sailing, windsurfing or boating | | | | | | | | | | | Martial arts, boxing or wrestling | | | | | | | | | | | Active gaming (i.e. Nintendo wii) | | | | | | | | | |
**Q15** We assume for outdoor activities (except swimming, tennis, football, rugby and hockey) that you had your legs covered. If you did not, please indicate the activities for which your legs were exposed: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Now turn to page 10 Q16 Other than the activities you have already recorded, have you done anything else that involves physical activity during the last 4 weeks ending yesterday?
Tick one box
No ➔ End of questionnaire
Yes ➔ Go to Q17
Q17 Please record here any other physical activities that you have done (and how often you have done them), other than those already recorded, over the last 4 weeks ending yesterday (e.g. housework):
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Thank you for answering these questions.
Please return the booklet to the interviewer.
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b27039dbcd34576ee5de30c51ad4efeccd53fb86 | National Diet and Nutrition Survey (NDNS)
Dear «TopLine»,
A few weeks ago «Fill1» completed the first part of the National Diet and Nutrition Survey (NDNS). Thank you for the time and effort «Fill2» have so far put into this important study, your help is very much appreciated.
When you were last visited by the interviewer, you «Fill3» contact you to discuss «Fill4» taking part in stage 2 of the study. In the next few days, a nurse from NatCen Social Research will contact you and will be able to explain more about the second stage of NDNS.
We very much hope that «Fill2» will be willing to help us again with this study. The information «Fill2» have already given us is very useful, but with the extra information obtained from the nurse visit, it will be even more valuable.
All parts of the second stage are optional and «Fill1» can choose to take part in some parts and not others. As a token of our appreciation, we are enclosing a £5 High Street Gift Card as a thank you for agreeing to be contacted by the nurse.
All personal details will be kept strictly confidential and no one looking at the study findings will be able to identify you or your household in any way. Information will only be used for research purposes and food policy planning.
For more information please read the frequently asked questions on the back of this letter. You can also visit: www.nationaldiet.co.uk or call freephone 0800 652 4572.
We hope «Fill2» will be willing to take part – with your help we can gain a better understanding of the diet and nutrition of people in the United Kingdom.
Yours sincerely,
Gillian Swan Health and Wellbeing Directorate Public Health England [email protected]
Beverley Bates NDNS Research Director NatCen [email protected] FREQUENTLY ASKED QUESTIONS
What is the purpose of the nurse visit? We want to ask you a few questions about your health. With your permission we would like to take a few measurements and, if you consent, a small blood sample.
Why should I take part? We need information from a wide range of people to get a true picture of the eating habits and health status of people in the UK. The information collected at the nurse stage completes the picture with the dietary information you provided. It helps us to understand how diet can affect health outcomes and nutritional status.
What will happen to any information I give? Any information you give us is treated in strict confidence. The published results of the study will never include any names or addresses. The information collected is used for statistical and research purposes only and will be dealt with according to the principles of the 1998 Data Protection Act.
Contact number and contact names If you would like to talk to someone about the study, please phone NatCen on freephone 0800 652 4572. Thank you for helping us with our survey so far. We would now like to ask you to take part in the nurse visit.
Any questions? Our nurse will try to answer any questions you have. Or, if you like you can email or speak to one of us using the contact details below:
Beverley Bates NDNS Research Director NatCen Social Research, Kings House, 101-135 Kings Road, Brentwood, CM14 4LX
Freephone: 0800 652 4572
Dr Sumantra Ray Senior Medical Advisor, MRC Human Nutrition Research, Elsie Widdowson Laboratory, 120 Fulbourn Road, Cambridge, CB1 9NL
Telephone: 01223 426356
Thank you very much for your time and help with this important survey.
What will happen to my results? If you are interested, we will send you the results of some of the tests (e.g. vitamin and mineral levels, cholesterol, haemoglobin). As a thank you for providing a blood sample we will give you a £20 gift card.
We will ask for written consent to tell your GP the results from your blood tests that are clinically relevant. If you wish we will also tell them your blood pressure and body mass index (BMI) measurements. If we tell your GP this could affect your future insurance status (e.g. for life insurance or private medical insurance).
If you are aged 16 years and over, you can choose not to receive your test results or have them sent to your GP.
You can take part in as few or as many measurements as you feel happy with and you are free to withdraw at any time. Your personal details and test results will be kept strictly confidential and no one looking at the study findings will be able to identify you or your household in any way.
For more info have a look at www.nationaldiet.co.uk The nurse will ask you a few questions about your health and explain a bit more about the other parts of the nurse visit which are:
**Blood pressure**
The nurse will ask if you are willing to have your blood pressure taken using an inflatable cuff that goes around the upper arm.
This measures how hard the heart pumps blood around the body. Blood pressure is important because the higher a person’s blood pressure is, the higher their risk of health problems in the future. If you agree, we can send a copy of your blood pressure reading to your GP.
**Demispan measurement**
If you are aged 65 years or over, or you did not have your height measured at the interviewer visit, the nurse will ask if you are willing to have your demispan measured. Demispan is half the distance between your hands outstretched to either side. This is measured with a tape measure when fully clothed.
A Demispan measurement gives an estimate of your height.
**Waist and hip measurement**
The nurse will ask if you are willing to have your waist and hip measurements taken. This is done using a tape measure when fully clothed.
Waist and hip measurements tell us about the distribution of weight over the body.
**A blood sample**
The nurse will ask if you would be willing to provide a small blood sample. If you provide a blood sample, we will ask whether you are willing for any remaining blood to be stored for future research. Blood samples are important to the survey as they can tell us very important information, that we cannot get in any other way, about nutritional health, and about the ways in which our body benefits from the food we eat.
You will be asked to fast overnight. This means not eating or drinking anything other than water for a minimum of 8 hours before the blood sample is taken. If you are diabetic the nurse will speak to you about providing a non-fasting sample. The nurse will visit in the morning, at a time that is convenient for you. The nurse will take no more than 35ml (2.5 tablespoons) of blood. We will ask you to sign a consent form to say you agree to providing a blood sample.
Our nurses are very experienced and it is the same as giving a blood sample at the doctor’s. You should hardly feel anything other than a scratch. If you would like, we can spray your arm with Cryogesic spray to numb it (or Ametop gel if under 16 years) – the nurse can explain more about this. Will I get any results from my blood sample?
We are usually able to give you feedback about some of your blood sample results, if you would like this. We may also be able to send some of your results to your GP if you agree.
It's unlikely that you will have any adverse effects, however if you experience any of the following, you should seek further help, for instance from your GP or NHS Direct:
- Severe pain
- Numbness or persistent ‘pins and needles’ in the arm, hand or fingers
- Swelling which is large or increasing in size
- Painful redness/inflammation.
Any questions?
Our nurse will try to answer any questions you have. Or, if you like you can email or speak to one of us using the contact details below:
Beverley Bates\
NDNS Research Director\
NatCen Social Research,\
Kings House,\
101-135 Kings Road,\
Brentwood,\
CM14 4LX\
Freephone: 0800 652 4572
Dr Sumantra Ray\
Senior Medical Advisor,\
MRC Human Nutrition Research,\
Elsie Widdowson Laboratory,\
120 Fulbourn Road,\
Cambridge,\
CB1 9NL\
Telephone: 01223 426356
Thank you very much for your time and help with this important survey.
For more info have a look at www.nationaldiet.co.uk
National Diet and Nutrition Survey (NDNS)
Giving a blood sample\
Frequently asked questions
The NatCen survey nurses and midwives follow ‘best practice’ principles which meet current national standards used within the NHS.
This leaflet gives answers to some of the questions people often ask about giving a blood sample.
If you have any further queries, please ask the NatCen survey nurse.
For more info have a look at www.nationaldiet.co.uk Why do you need to take a blood sample? The analysis of the blood samples will tell us a lot about the health of the general population. It adds importantly to the information you have already given us. Your survey nurse will explain about the tests we will carry out for this particular study.
What about hygiene standards? The survey nurses maintain the highest hygiene standards to reduce any risk of infection. We use a new sterile needle and new tubes for every person.
Is any special equipment needed? Before a needle is inserted into your vein, the survey nurse will apply a tourniquet (a band put round your arm to control your blood flow). This keeps more blood in the vein, making it easier for the nurse to see and access it.
What if I feel faint? Anyone might feel faint during or immediately after giving a blood sample, although most people don’t. If you begin to feel faint at all, tell the nurse as soon as possible, if you can. The nurse will be watching you for any signs of fainting, and if necessary will stop taking the blood sample.
If you actually faint, which can happen but is very unlikely, you will be advised not to drive for at least 30 minutes once you have come round.
Does it hurt? Blood sampling may cause some discomfort. Very rarely, you may feel a stronger sensation. Please tell the nurse immediately if you are at all concerned. We may be able to use a spray or a gel to numb the arm (the nurse has more information about this).
How long should I keep the dressing on afterwards? The nurse will apply a dressing after taking the sample. You should leave this dressing on for at least 30 minutes after the blood sample has been taken.
Will I get a bruise? Bruising occurs when blood leaks from a vein into the surrounding tissues. The nurse will make every attempt to reduce bruising through applying pressure to the affected vein after taking the blood sample. However, bruising does sometimes occur. This may be slightly uncomfortable for a day or so after giving the sample but usually no action is required. If it gets worse (for example if the bruise hurts more or gets much bigger), you should seek further help, for instance from your GP or NHS Direct.
Should I avoid any activities after giving the sample? To reduce any risk of bruising, where possible we suggest you avoid any heavy lifting or strenuous exercise for the rest of the day you give your blood sample. The aim of the study is to keep track of the diets and nutritional health of people in the UK so that changes can be made where necessary to try and help keep the population healthy.
Why provide a blood sample?
The only way we know if someone has enough vitamin D for their body’s needs is to measure it in the blood. This is one of the most important things we look at in the blood sample because the diet tells us so little about it. It is especially important that we measure vitamin D in children, particularly since many children spend more time indoors these days.
We get vitamin D from two places. We get it from some foods but importantly the body also makes vitamin D when sunshine reaches our skin. We need vitamin D for healthy bones.
Any questions?
Our nurse will try to answer any questions you have. Or, if you like you can email or speak to one of us using the contact details below:
Beverley Bates NDNS Research Director NatCen Social Research, Kings House, 101-135 Kings Road, Brentwood, CM14 4LX
Freephone: 0800 652 4572
Dr Sumantra Ray Senior Medical Advisor, MRC Human Nutrition Research, Elsie Widdowson Laboratory, 120 Fulbourn Road, Cambridge, CB1 9NL
Telephone: 01223 426356
Thank you very much for your time and help with this important survey.
For more info have a look at www.nationaldiet.co.uk Iron is needed to help carry oxygen around the body. A lack of iron leads to anaemia, causing tiredness, and can affect concentration, intellectual performance and how well you can fight infections.
The amount of iron a person needs is different for different ages and for males and females. Iron is found in many foods such as cereals and some vegetables, but the iron in meat is much better absorbed than iron from other foods. All of these things mean that measuring iron in blood is the best way to know if people are getting enough iron.
It is not uncommon for people to have too little iron – this is called ‘iron deficiency’. To prevent iron deficiency being a major problem, it is important we know about iron levels in different age and sex groups so the right advice can be given to the right people.
What blood can tell us about Iron
Iron is needed to help carry oxygen around the body. A lack of iron leads to anaemia, causing tiredness, and can affect concentration, intellectual performance and how well you can fight infections.
The amount of iron a person needs is different for different ages and for males and females. Iron is found in many foods such as cereals and some vegetables, but the iron in meat is much better absorbed than iron from other foods. All of these things mean that measuring iron in blood is the best way to know if people are getting enough iron.
It is not uncommon for people to have too little iron – this is called ‘iron deficiency’. To prevent iron deficiency being a major problem, it is important we know about iron levels in different age and sex groups so the right advice can be given to the right people.
What is the benefit to me and to others?
If you wish to receive them, we will send you the results of your or your child’s blood measurements. Also, with your agreement, we will send them to your GP. If a result suggests there may be a problem, we will advise you to see your GP. The GP can then follow up what we found. Vitamin D and indicators of iron levels are examples of what we can feed back to you. You will find more information about these below and on the next page.
What blood can tell us about Iron
Iron is needed to help carry oxygen around the body. A lack of iron leads to anaemia, causing tiredness, and can affect concentration, intellectual performance and how well you can fight infections.
The amount of iron a person needs is different for different ages and for males and females. Iron is found in many foods such as cereals and some vegetables, but the iron in meat is much better absorbed than iron from other foods. All of these things mean that measuring iron in blood is the best way to know if people are getting enough iron.
It is not uncommon for people to have too little iron – this is called ‘iron deficiency’. To prevent iron deficiency being a major problem, it is important we know about iron levels in different age and sex groups so the right advice can be given to the right people.
What about children?
For a number of nutrients children are more likely to have low amounts. Also, children may avoid certain foods. It is especially important that we know if the number of children with low levels of important nutrients is changing in the UK. We can only do this if we measure nutrient levels in their blood and to do this we need blood samples from children.
We know it is not much fun for children to have blood taken. Some children may be frightened of needles and think it is going to be very sore. We can help make it easier by using a cream or spray to numb the arm and by using specialist nurses who take blood from children all the time.
Why provide a blood sample?
The food and drink diary you provided will help us know about the eating habits of people in the UK, the calories they eat and their intake of nutrients like fat, protein and carbohydrate, minerals such as iron, calcium and zinc, and vitamins, including B, C, A and E.
However, the amount of vitamins and minerals absorbed varies from person to person depending on the types of foods the nutrient is in, other foods eaten at the same time, and natural differences in the way different people’s bodies work.
Only by measuring the same vitamins and minerals in blood samples can we see if people in the UK have enough of these important nutrients.
We can also look at people’s risk for certain conditions. Serum cholesterol, for example, tells us about risk for heart disease, and glucose tells us about diabetes. We cannot tell these things from just looking at your food and drink diary. The blood sample will help us complete the picture. There are some other examples of the vitamins and minerals we can look at in your blood sample on the next page.
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b4fe1516fd3dacfcdb7e80dc230d82d5115b5c55 | National Diet and Nutrition Survey
NHS Central Register and Cancer Register
(Adults 16+)
- The NHS Central Register lists all the people in the country and their National Health Service (NHS) number.
- We would like to ask for your consent for us to send your name, address and date of birth to the National Health Service Central Register. A marker will be put against your name to show that you took part in the National Diet and Nutrition Survey.
- If a person who took part in the National Diet and Nutrition Survey (NDNS) gets cancer, or dies, the type of cancer or cause of death will be linked with their answers to the survey. By linking this information the research is more useful as we can look at how people’s lifestyle can have an impact on their future health.
- This information will be confidential and used for research purposes only.
- By signing this form you are only giving permission for the linking of this information to routine administrative data and nothing else. We will not be able to obtain any other details from your medical records.
- You can cancel this permission at any time in the future by writing to us at the following address: NatCen Social Research, 35 Northampton Square, London EC1V 0AX
Your consent
I, (name) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ consent to the NDNS team passing my name, address and date of birth to the National Health Service Central Register. I understand that information held by the NHS Central Register may be used to follow up my health status.
Signed \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
I understand that these details will be used for research purposes only. NDNS(N)
National Diet and Nutrition Survey (NDNS)
CONSENT BOOKLET: PERSONAL COPY
Serial Number:
First Name:
Annex 49_Nurse visit consent booklet_personal_v8 National Diet and Nutrition Survey (NDNS) Nurse Visit ADULT CONSENT FORM (16+ years)
MREC Reference Number: 13/EE/0016
Please use capital letters and write in ink
SERIAL NUMBER
CHECK LETTER
RESPONDENT No.
Please initial/tick boxes if consent given
1. I confirm that I have read and understand the NDNS Nurse Visit information sheet(s) dated 05.02.2014 (version 2) for the above study. I have been given the opportunity to ask questions and have had these answered satisfactorily.
2. I understand that my participation is voluntary and that I am free to withdraw from any part of the study, at any time, without giving a reason and without my medical care or legal rights being affected.
MEASUREMENTS
3. I agree for my blood pressure results to be sent to my GP.
4. I agree for my body mass index (BMI) measurement to be sent to my GP.
Name of participant (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_
Name of nurse (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_ National Diet and Nutrition Survey (NDNS) Nurse Visit ADULT CONSENT FORM (16+ years)
MREC Reference Number: 13/EE/0016 Please use capital letters and write in ink
SERIAL NUMBER
CHECK LETTER
RESPONDENT No.
Please initial/tick boxes if consent given
BLOOD SAMPLE
5. I agree to have a blood sample taken as part of the study.
6. I give permission that my blood sample taken as part of this study may be stored and, with ethical approval as appropriate, used in future research studies.
7. I would like to receive my blood results which are clinically relevant.
8. I consent to my GP being notified of my blood results which are clinically relevant.
9. You will be required to consent to the statement below if you do not want to receive your blood results AND if you do not want them sent to your GP. I confirm that against the advice of the NDNS survey team, I do not want to receive my blood results which are clinically relevant or have them sent to my GP. I understand that if there are findings outside of the normal range, this will not be brought to the attention of any health care provider.
Name of participant (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Name of nurse (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ National Diet and Nutrition Survey (NDNS) Nurse Visit PARENTAL/GUARDIAN CONSENT FOR CHILD (4-15 YEARS)
MREC Reference Number: 13/EE/0016
Please use capital letters and write in ink
SERIAL NUMBER
CHECK LETTER
RESPONDENT No.
Name of Child \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
1. I am the parent/guardian of the child named above and I confirm that I have read and understand the NDNS Nurse Visit information sheet(s) dated 05.02.2014 (version 2) for the above study. I have been given the opportunity to ask questions and have had these answered satisfactorily.
2. I understand that my child’s participation is voluntary and that s/he is free to withdraw from any part of the study, at any time, without giving a reason and without my medical care or legal rights being affected.
MEASUREMENTS
3. I agree for my child’s blood pressure results to be sent to his/her GP.
Name of Parent/Guardian (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Name of nurse (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ National Diet and Nutrition Survey (NDNS) Nurse Visit PARENTAL/GUARDIAN CONSENT FOR CHILD (4-15 YEARS)
MREC Reference Number: 13/EE/0016 Please use capital letters and write in ink
| SERIAL NUMBER | CHECK LETTER | RESPONDENT No. | |---------------|--------------|----------------| | | | |
Name of Child \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
BLOOD SAMPLE
4. I agree to my child having a blood sample taken as part of the study.
5. I give permission that my child’s blood sample taken as part of this study may be stored and, with ethical approval as appropriate, used in future research studies.
6. I would like to receive my child’s blood results which are clinically relevant.
7. I consent to my child’s GP being notified of his/her blood results which are clinically relevant.
8. IF you do not want to receive your child’s blood results AND if you do not want them sent to their GP, for us to take a blood sample from your child, you will be required to consent to both of the statements below.
(i) I confirm that against the advice of the NDNS survey team, I do not want to receive my child’s blood results which are clinically relevant or have them sent to his/her GP.
(ii) I agree to the survey doctor contacting me to discuss, if necessary, any results that are directly relevant to my child’s health.
Name of Parent/Guardian (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_
Name of nurse (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_ National Diet and Nutrition Survey (NDNS) Nurse Visit
CHILD ASSENT FORM (5-15 years)
MREC Reference Number: 13/EE/0016
Please use capital letters and write in ink
| SERIAL NUMBER | CHECK LETTER | RESPONDENT No. | |---------------|--------------|----------------| | | | |
Please circle
1. Has somebody explained what happens at the nurse visit? Yes / No
2. Do you understand what this study is about? Yes / No
3. Have you asked all the questions you want? Yes / No
4. Have you had your questions answered in a way you understand? Yes / No
5. Do you understand it's OK to stop taking part at any time? Yes / No
6. Are you happy to take part? Yes / No
If any answers are 'No' or you don't want to take part, don't sign your name!
If you do want to take part, you can write your name below.
Your name
______________________________________________________________________
Date
The nurse who explained this study to you needs to sign too:
Nurse name
______________________________________________________________________
Signature
______________________________________________________________________
Date
______________________________________________________________________
Thank you for helping us! National Diet and Nutrition Survey (NDNS) Nurse Visit PARENTAL/GUARDIAN CONSENT FOR CHILD (1.5-3 YEARS)
MREC Reference Number: 13/EE/0016
Please use capital letters and write in ink
| SERIAL NUMBER | CHECK LETTER | RESPONDENT No. | |---------------|--------------|----------------| | | | |
Name of Child \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
1. I am the parent/guardian of the child named above and I confirm that I have read and understand the NDNS Nurse Visit information sheet(s) dated 05.02.2014 (version 2) for the above study. I have been given the opportunity to ask questions and have had these answered satisfactorily.
2. I understand that my child’s participation is voluntary and that s/he is free to withdraw from any part of the study, at any time, without giving a reason and without our medical care or legal rights being affected.
Name of Parent/Guardian (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_
Name of nurse (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_
BLOOD SAMPLE
3. I agree to my child having a blood sample taken as part of the study.
4. I give permission that my child’s blood sample taken as part of this study may be stored and, with ethical approval as appropriate, used in future research studies.
5. I would like to receive my child’s blood results which are clinically relevant.
6. I consent to my child’s GP being notified of his/her blood results which are clinically relevant.
7. **IF you do not want to receive your child’s blood results AND if you do not want them sent to their GP, for us to take a blood sample from your child, you will be required to consent to both of the statements below.**
(i) I confirm that against the advice of the NDNS survey team, I do not want to receive my child’s blood results which are clinically relevant or have them sent to his/her GP.
(ii) I agree to the survey doctor contacting me to discuss, if necessary, any results that are directly relevant to my child’s health.
Name of Parent/Guardian (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_
Name of nurse (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_ National Diet and Nutrition Survey – Consent Booklet: Office Copy
Please use capital letters and write in ink
ADDRESS
INDIVIDUAL SERIAL NUMBER: Affix label NCON here for this person:
STICK NCON (1) LABEL HERE
1. Nurse number: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
2. Date schedule completed (all visits complete): DAY: \_\_\_\_\_\_\_ MONTH: \_\_\_\_\_\_\_ YEAR: \_\_\_\_\_\_\_
3. Full name (of person tested) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Name by which GP knows person (if different) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
4. Sex Male 1 Female 2
5. Date of birth: DAY: \_\_\_\_\_\_\_ MONTH: \_\_\_\_\_\_\_ YEAR: \_\_\_\_\_\_\_
6. Full name of parent/guardian (if person under 16) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
7. GP NAME AND ADDRESS Dr: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Practice Name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Address: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
______________________________________________________________________
______________________________________________________________________
Town: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ County: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Postcode: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Telephone no: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
NURSE USE ONLY GP Address complete 1 GP Address not complete 2 No GP 3
8. SUMMARY OF CONSENTS—RING CODE FOR EACH ITEM a) Read and understood nurse visit information sheet YES 01 NO 02 b) Understand right to withdraw YES 03 NO 04 c) Blood pressure to GP YES 05 NO 06 d) Body Mass Index (BMI) to GP YES 07 NO 08 e) Sample of blood to be taken YES 09 NO 10 f) Blood sample for storage YES 11 NO 12 g) Blood sample result to participant YES 13 NO 14 h) Blood sample result to GP YES 15 NO 16 i) Does not wish to receive results or have them sent to GP YES 17 NO 18 j) Agrees survey doctor can contact to discuss results if necessary – YES 19 NO 20 Children aged 1.5-15 years
# BLOOD SAMPLE LABORATORY REFERENCE LIST
The tables below show which blood samples should be taken (in priority order) and need to be sent to each lab for each age group:
## PARTICIPANTS AGED 16+
| Priority | Blood Tube | Colour | Label Reference | Laboratory | |----------|--------------|--------|-----------------|--------------| | 1 | EDTA 2.6 mL | Red | EN1 (3) | Addenbrookes | | 2 | Serum 9.0 mL | White | SEN 1 (4) | Field Lab | | 3 | Li Hep TM 7.5 mL | Orange | LHN1 (5) | Field Lab | | 4 | Li Hep TM 7.5 mL | Orange | LHN2 (6) | Field Lab | | 5 | Fluoride 1.2 mL | Yellow | FN1 (7) | Field Lab | | 6 | Li Hep 4.5 mL | Orange | LHN3 (8) | Field Lab | | 7 | EDTA 2.6 mL | Red | EN2 (9) | Field Lab |
## PARTICIPANTS AGED 7-15
| Priority | Blood Tube | Colour | Label Reference | Laboratory | |----------|--------------|--------|-----------------|--------------| | 1 | EDTA 2.6 mL | Red | EN1 (3) | Addenbrookes | | 2 | Serum 7.5 mL | White | SEN1 (4) | Field Lab | | 3 | Li Hep TM 7.5 mL | Orange | LHN1 (5) | Field Lab | | 4 | Li Hep 2.7 mL | Orange | LHN2 (6) | Field Lab | | 5 | Fluoride 1.2 mL | Yellow | FN1 (7) | Field Lab |
## PARTICIPANTS AGED 18 mths – 6 yrs
| Priority | Blood Tube | Colour | Label Reference | Laboratory | |----------|--------------|--------|-----------------|--------------| | 1 | EDTA 2.6 mL | Red | EN1 (3) | Addenbrookes | | 2 | Serum 4.5 mL | White | SEN1 (4) | Field Lab | | 3 | Li Hep 4.5 mL | Orange | LHN1 (5) | Field Lab | National Diet and Nutrition Survey (NDNS) Nurse Visit ADULT CONSENT FORM (16+ years)
MREC Reference Number: 13/EE/0016
Please use capital letters and write in ink
| SERIAL NUMBER | CHECK LETTER | RESPONDENT No. | |---------------|--------------|----------------| | | | |
1. I confirm that I have read and understand the NDNS Nurse Visit information sheet(s) dated 05.02.2014 (version 2) for the above study. I have been given the opportunity to ask questions and have had these answered satisfactorily.
2. I understand that my participation is voluntary and that I am free to withdraw from any part of the study, at any time, without giving a reason and without my medical care or legal rights being affected.
MEASUREMENTS
3. I agree for my blood pressure results to be sent to my GP.
4. I agree for my body mass index (BMI) measurement to be sent to my GP.
Name of participant (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Name of nurse (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Please initial/tick boxes if consent given National Diet and Nutrition Survey (NDNS) Nurse Visit ADULT CONSENT FORM (16+ years)
MREC Reference Number: 13/EE/0016
Please use capital letters and write in ink
| SERIAL NUMBER | CHECK LETTER | RESPONDENT No. | |---------------|--------------|----------------| | | | |
BLOOD SAMPLE
5. I agree to have a blood sample taken as part of the study.
6. I give permission that my blood sample taken as part of this study may be stored and, with ethical approval as appropriate, used in future research studies.
7. I would like to receive my blood results which are clinically relevant.
8. I consent to my GP being notified of my blood results which are clinically relevant.
9. You will be required to consent to the statement below if you do not want to receive your blood results AND if you do not want them sent to your GP.
I confirm that against the advice of the NDNS survey team, I do not want to receive my blood results which are clinically relevant or have them sent to my GP. I understand that if there are findings outside of the normal range, this will not be brought to the attention of any health care provider.
Name of participant (please print) Date Signature
Name of nurse (please print) Date Signature National Diet and Nutrition Survey (NDNS) Nurse Visit PARENTAL/GUARDIAN CONSENT FOR CHILD (4-15 YEARS)
MREC Reference Number: 13/EE/0016
Please use capital letters and write in ink
| SERIAL NUMBER | CHECK LETTER | RESPONDENT No. | |---------------|--------------|----------------| | | | |
Name of Child \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
1. I am the parent/guardian of the child named above and I confirm that I have read and understand the NDNS Nurse Visit information sheet(s) dated 05.02.2014 (version 2) for the above study. I have been given the opportunity to ask questions and have had these answered satisfactorily.
2. I understand that my child’s participation is voluntary and that s/he is free to withdraw from any part of the study, at any time, without giving a reason and without my medical care or legal rights being affected.
MEASUREMENTS
3. I agree for my child's blood pressure results to be sent to his/her GP.
Name of Parent/Guardian (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Name of nurse (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ National Diet and Nutrition Survey (NDNS) Nurse Visit PARENTAL/GUARDIAN CONSENT FOR CHILD (4-15 YEARS)
MREC Reference Number: 13/EE/0016 Please use capital letters and write in ink
| SERIAL NUMBER | CHECK LETTER | RESPONDENT No. | |---------------|--------------|----------------| | | | |
Name of Child \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
BLOOD SAMPLE
4. I agree to my child having a blood sample taken as part of the study. [ ]
5. I give permission that my child’s blood sample taken as part of this study may be stored and, with ethical approval as appropriate, used in future research studies [ ]
6. I would like to receive my child’s blood results which are clinically relevant. [ ]
7. I consent to my child’s GP being notified of his/her blood results which are clinically relevant. [ ]
8. IF you do not want to receive your child’s blood results AND if you do not want them sent to their GP, for us to take a blood sample from your child, you will be required to consent to both of the statements below.
(i) I confirm that against the advice of the NDNS survey team, I do not want to receive my child’s blood results which are clinically relevant or have them sent to his/her GP. [ ]
(ii) I agree to the survey doctor contacting me to discuss, if necessary, any results that are directly relevant to my child’s health. [ ]
Name of Parent/Guardian (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Name of nurse (please print) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date \_\_\_\_\_\_\_\_\_\_ Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ National Diet and Nutrition Survey (NDNS) Nurse Visit
CHILD ASSENT FORM (5-15 years)
MREC Reference Number: 13/EE/0016
Please use capital letters and write in ink
SERIAL NUMBER
CHECK LETTER
RESPONDENT No.
Please circle
1. Has somebody explained what happens at the nurse visit? Yes / No
2. Do you understand what this study is about? Yes / No
3. Have you asked all the questions you want? Yes / No
4. Have you had your questions answered in a way you understand? Yes / No
5. Do you understand it’s OK to stop taking part at any time? Yes / No
6. Are you happy to take part? Yes / No
If any answers are ‘No’ or you don’t want to take part, don’t sign your name!
If you do want to take part, you can write your name below.
Your name
______________________________________________________________________
Date
The nurse who explained this study to you needs to sign too:
Nurse name
______________________________________________________________________
Signature
______________________________________________________________________
Date
______________________________________________________________________
Thank you for helping us! National Diet and Nutrition Survey (NDNS) Nurse Visit
PARENTAL/GUARDIAN CONSENT FOR CHILD (1.5-3 YEARS)
MREC Reference Number: 13/EE/0016
Please use capital letters and write in ink
| SERIAL NUMBER | CHECK LETTER | RESPONDENT No. | |---------------|--------------|----------------|
Name of Child
1. I am the parent/guardian of the child named above and I confirm that I have read and understand the NDNS Nurse Visit information sheet(s) dated 05.02.2014 (version 2) for the above study. I have been given the opportunity to ask questions and have had these answered satisfactorily.
2. I understand that my child’s participation is voluntary and that s/he is free to withdraw from any part of the study, at any time, without giving a reason and without our medical care or legal rights being affected.
Name of Parent/Guardian (please print) Date Signature
Name of nurse (please print) Date Signature
BLOOD SAMPLE
3. I agree to my child having a blood sample taken as part of the study.
4. I give permission that my child’s blood sample taken as part of this study may be stored and, with ethical approval as appropriate, used in future research studies.
5. I would like to receive my child’s blood results which are clinically relevant.
6. I consent to my child’s GP being notified of his/her blood results which are clinically relevant.
7. **IF you do not want to receive your child’s blood results AND if you do not want them sent to their GP, for us to take a blood sample from your child, you will be required to consent to both of the statements below.**
(i) I confirm that against the advice of the NDNS survey team, I do not want to receive my child’s blood results which are clinically relevant or have them sent to his/her GP.
(ii) I agree to the survey doctor contacting me to discuss, if necessary, any results that are directly relevant to my child’s health.
Name of Parent/Guardian (please print) Date Signature
Name of nurse (please print) Date Signature **RESEARCH ANALYSIS REQUEST**
**Nurses - fill in YELLOW section only**
| Volunteer Details | Study Details | |-------------------|---------------| | **Surname:** HNR \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (use 10 digit ID at top of label) | **Consultant** Dr Sumantra Ray | | **First name:** P952 | **Location** Project 952 | | **External ID:** EN1 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (use 7 digit no. at bottom of EN1 label) | **Title** NDNS | | **DOB** / / dd/mm/yyyy | **Contact** HNR Switchboard 01223 426356 Sonja Nicholson Karen Chamberlain Kate Guberg | | **Male** 1 circle as appropriate | **Contact OOH** Dr Sumantra Ray 0799 062 6671 | | **Female** 2 circle as appropriate | |
| Sample Details | | |----------------|----------------| | **Date** / / dd/mm/yyyy | **Volunteer Fasted** Yes 1 circle as appropriate | | **Time** : 24hr clock | **No** 2 circle as appropriate |
| Sample Tube | Tests | Lab order | Lab barcode | Lab processing | |-------------|-------|-----------|-------------|----------------| | EDTA EN1 red | Circle as appropriate | HbA1C - print 2 labels | LAB90 | ENDO BARCODE | | | Full tube | Folate Store - print 3 labels | LAB6108 Database search box will appear, click database lookup tab and select | BIOCHEM BARCODE | | | Partial tube | FBC - print 2 labels | LAB294 | HAEM BARCODE |
**EDTA separation**
Depending on sample volume split the whole blood in the following priority
**FBC**
Minimum volume required is 1ml – there will be three options:
- Volume less than 1ml (e.g. partial sample) proceed to folate aliquoting and cancel FBC adding comment: Insufficient sample for Haem in the cancellation comments and white box req comments field.
- Volume very close to 1ml send primary tube to Haem with the pink duplicate request form, cancel the HbA1C TEST adding the comment: Insufficient sample for HbA1c in the cancellation comments and white box req comments field.
- Volume more than ~1.5ml proceed to aliquoting whole blood for folate.
**Folate**
Take 2x 2ml tubes of ascorbic acid from the bottom half of the -80°C Protect freezer and defrost. Each contains 1ml ascorbic acid – check it has not expired. Label 2x defrosted 2ml ascorbic acid tubes with HNR barcode labels (FOL1 & FOL2) supplied in the delivery pack. Only label with patient biochem barcodes if there have been no HNR labels (FOL1 & FOL2) sent. Invert the primary EDTA tube a few times to re-suspend the contents Transfer exactly 100µl from primary EDTA tube into each tube containing 1ml ascorbic acid and invert to mix Store in the -80°C Protect freezer If there is sufficient volume proceed to aliquoting whole blood for HbA1C then primary tube to Haem with the pink duplicate request form If there is insufficient volume left for HbA1C, cancel adding the comment: Insufficient sample for HbA1C in the cancellation comments and white box req comments field.
**HbA1C**
Label 1x 2ml secondary tube with Endo HbA1C barcode Invert the primary EDTA tube a few times to re-suspend the contents Transfer 0.5ml from primary EDTA tube into secondary tube Place secondary tube in HbA1C skip in office National Diet and Nutrition Survey (NDNS) ADULT FIELD LAB DESPATCH NOTE – 16+ YEARS
Nurse Section
Participant details
Sex: Male / Female Fasted sample: Yes / No Sample collection date: DD / MM / YY Sample collection time: HH : MM 24 hr clock
Have you delivered all the items on the checklist to the field lab?
Time samples delivered to field lab: HH : MM 24 hr clock
Field Lab Section
Date sample arrived: DD / MM / YY Time sample arrived: HH : MM 24 hr clock
| Blood Monovette Tubes | SEN1 | LHN1 | LHN2 | LHN3 | FN1 | EN2 | |-----------------------|------|------|------|------|-----|-----| | Sample received? | Yes/No | Yes/No | Yes/No | Yes/No | Yes/No | Yes/No | | Is tube full or partial? | Full / Partial | Full / Partial | Full / Partial | Full / Partial | Full / Partial | Full / Partial | | Is tube damaged? | Yes/No | Yes/No | Yes/No | Yes/No | Yes/No | Yes/No |
Take 1300µl whole blood from well mixed LHN3 tube. Use 2ml microtube. Label with LHWB (15).
µl Volume aliquotted HH:MM Time aliquotted HH:MM Time in freezer
Centrifuge tubes for 20mins at 4°C and 2000g
Time tubes placed in the centrifuge HH:MM HH:MM HH:MM HH:MM HH:MM HH:MM
Did you use a refrigerated centrifuge? Yes / No
If NO, explain here what you did to keep samples cool:
Annex 50_Nurse visit consent booklet_office_v10\_ NDNS RP Y6-9 Describe here any problems or deviations from protocol:
| Blood Monovette Tubes | |------------------------| | SEN1 | LHN1 | LHN2 | LHN3 | FN1 | EN2 | | Is sample normal? | Yes/No | Yes/No | Yes/No | Yes/No | Yes/No | Yes/No |
If NO, describe e.g. haemolysed, cloudy, clotted, not clotted (SEN1 only)
| Microtube size | 5ml | 5ml | 5ml | 5ml | 2ml | 2ml | |----------------|-----|-----|-----|-----|-----|-----| | Attach label | SERUM | LIHEP1 | LIHEP2 | LIHEP3 | FLOX | EDTA | | Time aliquotted: | HH:MM | HH:MM | HH:MM | HH:MM | HH:MM | HH:MM |
Take EXACTLY 300µl plasma from LIHEP1. Use 2ml microtube with green lid containing MPA. Attach label LHMPA (18).
| µl | Volume aliquotted | HH:MM | Time aliquotted | HH:MM | Time in freezer | HH:MM | |----|-------------------|-------|-----------------|-------|-----------------|-------| | | | | | | | |
Wash red blood cells in monovettes LHN1, LHN2 and LHN3 using saline 3 times. After each wash, centrifuge for 10mins and then discard the supernatant. Place washed red blood cells in their original monovettes in the freezer.
| Time monovettes in freezer: | HH:MM | HH:MM | HH:MM | HH:MM | HH:MM | HH:MM | |-----------------------------|-------|-------|-------|-------|-------|-------|
Storage Freezer temperature: ————°C
Have you completed all relevant fields? Yes / No
Print name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Signature: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Field lab name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Please fax/ email both sides of this despatch form after sample processing to HNR
FAX: 01223 437546 EMAIL: [email protected]
HNR will arrange for the collection of samples and these forms via courier National Diet and Nutrition Survey (NDNS) FIELD LAB DESPATCH NOTE – 7 to 15 YEARS
Nurse Section Participant details
Affix label FL1 (13) here Affix label FL2 (14) on reverse
Sex: Male / Female Fasted sample: Yes / No Sample collection date: DD / MM / YY Sample collection time: HH : MM 24 hr clock
Have you delivered all the items on the checklist to the field lab? Yes / No Time samples delivered to field lab: HH : MM 24 hr clock
Field Lab Section Date sample arrived: DD / MM / YY Time sample arrived: HH : MM 24 hr clock
| Blood Monovette Tubes | SEN1 | LHN1 | LHN2 | FN1 | |-----------------------|------|------|------|-----| | Sample received? | Yes / No | Yes / No | Yes / No | Yes / No | | Is tube full or partial? | Full / Partial | Full / Partial | Full / Partial | Full / Partial | | Is tube damaged? | Yes / No | Yes / No | Yes / No | Yes / No |
Centrifuge tubes for 20mins at 4°C and 2000g
| Time tubes placed in the centrifuge | HH : MM | HH : MM | HH : MM | HH : MM | |------------------------------------|---------|---------|---------|---------|
Did you use a refrigerated centrifuge? Yes / No
If NO, explain here what you did to keep samples cool:
______________________________________________________________________
Annex 50_Nurse visit consent booklet_office_v10\_ NDNS RP Y6-9
For use from 01/07/16 Describe here any problems or deviations from protocol:
| Blood Monovette Tubes | SEN1 | LHN1 | LHN2 | FN1 | |-----------------------|------|------|------|-----| | Is sample normal? | Yes / No | Yes / No | Yes / No | Yes / No | | If NO, describe e.g. haemolysed, cloudy, clotted, not clotted (SEN1 only) | | | | |
**Aliquot ALL plasma/serum unless otherwise stated; do not contaminate with cells**
| Microtube size | 5ml | 5ml | 5ml | 2ml | |----------------|-----|-----|-----|-----| | Attach label | SERUM | LIHEP1 | LIHEP2 | FLOX | | Time aliquotted: | HH : MM | HH : MM | HH : MM | HH : MM |
**Take EXACTLY 300µl plasma from LIHEP1. Use 2ml microtube with green lid containing MPA. Attach label LHMPA (18).**
| Volume aliquotted | HH : MM | Time aliquotted | HH : MM | Time in freezer | HH : MM | |-------------------|---------|-----------------|---------|-----------------|---------|
**Time aliquots in freezer:**
| HH : MM | HH : MM | HH : MM | HH : MM | |---------|---------|---------|---------|
Wash red blood cells in monovettes LHN1 and LHN2 using saline 3 times. After each wash, centrifuge for 10mins and then discard the supernatant. Place washed red blood cells in their original monovettes in the freezer.
| Time monovettes in freezer: | HH : MM | HH : MM | |-----------------------------|---------|---------|
Storage Freezer temperature: \_\_\_\_\_\_\_ °C
Have you completed all relevant fields? Yes / No
Print name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Signature: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Field lab name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Please fax/ email both sides of this despatch form after sample processing to HNR
FAX: 01223 437546 EMAIL: [email protected] HNR will arrange for the collection of samples and these forms via courier National Diet and Nutrition Survey (NDNS) FIELD LAB DESPATCH NOTE – 1.5 to 6 YEARS
Nurse Section Participant details
Sex: Male / Female Fasted sample: Yes / No Sample collection date: DD / MM / YY Sample collection time: HH : MM 24 hr clock
Have you delivered all the items on the checklist to the field lab? Yes / No Time samples delivered to field lab: HH : MM 24 hr clock
Field Lab Section Date sample arrived: DD / MM / YY Time sample arrived: HH : MM 24 hr clock
| Blood Monovette Tubes | | |-----------------------|--| | SEN1 | LHN1 | | Sample received? | Yes / No | Yes / No | | Is tube full or partial? | Full / Partial | Full / Partial | | Is tube damaged? | Yes / No | Yes / No |
Centrifuge tubes for 20mins at 4°C and 2000g
Time tubes placed in the centrifuge: HH : MM
Did you use a refrigerated centrifuge? Yes / No
If NO, explain here what you did to keep samples cool:
______________________________________________________________________
Annex 50_Nurse visit consent booklet_office_v10\_ NDNS RP Y6-9 Describe here any problems or deviations from protocol:
| Blood Monovette Tubes | | |-----------------------|--| | SEN1 | LHN1 | | Is sample normal? | Yes / No | Yes / No | | If NO, describe e.g. haemolysed, cloudy, clotted, not clotted (SEN1 only) | |
**Aliquot ALL plasma/serum unless otherwise stated; do not contaminate with cells**
| Microtube size | 5ml | 5ml | |----------------|-----|-----| | Attach label | SERUM | LIHEP1 | | Time aliquotted: | HH : MM | HH : MM |
**Take EXACTLY 300µl plasma from LIHEP1. Use 2ml microtube with green lid containing MPA. Attach label LHMPA (18).**
| µl | Volume aliquotted | |----|-------------------| | HH : MM | Time aliquotted | | HH : MM | Time in freezer |
| Time aliquots in freezer: | HH : MM | |---------------------------|---------|
Wash red blood cells in monovette LHN1 using saline 3 times. After each wash, centrifuge for 10mins and then discard the supernatant. Place washed red blood cells in their original monovette in the freezer.
| Time monovette in freezer: | HH : MM | |-----------------------------|---------|
Storage Freezer temperature: ————°C
Have you completed all relevant fields? Yes / No
Print name:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Signature:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Field lab name:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Please fax/ email both sides of this despatch form after sample processing to HNR
FAX: 01223 437546 EMAIL: [email protected]
HNR will arrange for the collection of samples and these forms via courier
1. **Participant details**
Please affix OFFDESP (2) label here
2. **Age group:**
| 16+ | EDTA | Serum | Li Hep TM | Li Hep TM | |-----|------|-------|-----------|-----------| | | | | | | | | | | | | | | | | | |
| 7-15 | EDTA | Serum | Li Hep TM | Li Hep | |------|------|-------|-----------|-------| | | | | | | | | | | | | | | | | | |
| 18mths – 6 yrs | EDTA | Serum | Li Hep | |----------------|------|-------|-------| | | | | | | | | | | | | | | |
3. **Date blood sample taken:**
DAY: [ ] MONTH: [ ] YEAR: [ ]
4. **Time blood sample taken:**
TIME: [ ]
5. **Date blood despatched to Addenbrookes:**
DAY: [ ] MONTH: [ ] YEAR: [ ]
6. **Did you experience any problems in taking the Venepuncture? If yes, please record these below and state what action you took. (PROMPTED FROM CAPI)**
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410f80b9b1cc7819b1be2a7759e1a45c0bf04028 | Appendix I Nurse (stage 2) overview and documents
I1 Overview of information collected during the nurse stage
Table I.1 summarises the information collected during the nurse stage. Where information was only collected in one fieldwork year (rather than in both Year 5 and 6) or was limited to particular age groups, this is specified.
| Measurement or procedure | Participant | |-------------------------------------------|--------------------------------------------------| | Details of prescribed medications | All ages | | Blood pressure | Aged 4 years and over | | Infant length measurements | Aged 18-23 months | | Waist and hip circumferences | Aged 11 years and over | | Demispan(^i) | Aged 65 years and over and those aged 16-64 years where height could not be measured | | Mid Upper Arm Circumference (MUAC) | Aged 2-15 years; Year 5 only. | | 24-hour urine collection | Aged 4 years and over fully out of nappies; Year 5 only | | Non-fasting blood sampling | Aged 1.5-3 years and diabetics not willing to Fast | | Fasting blood sampling | Aged 4 years and over |
The CAPI nurse interview and documents used during the nurse stage are shown in the remainder of this Appendix.
(^i) Demispan was measured in participants for whom, for postural reasons, a measure of height would give a poor measure of stature (e.g. in some elderly people, or for people with certain disabilities). Demispan is strongly related to a person’s height and is the distance between the sternal notch and the finger roots with the arm out-stretched laterally. National Diet and Nutrition Survey (NDNS)
N10041 Year 9
Program Documentation
Nurse Schedule
This ‘paper version of the program’ has been created to indicate the wording and content of the nurse questionnaire.
• Instructions for the nurse are given in capital letters, and questions the nurse is to ask the respondent are given as normal text.
• Items which appear in the actual program but which have been excluded here for clarity include: Repetition of respondent’s name on each question; Checks on the accuracy of answer codes in relation to each other; Prompts for back-coding during the edit process.
Contents:
HOUSEHOLD GRID ........................................................................................................2 NURSE SCHEDULE ........................................................................................................4 INFANT LENGTH ...........................................................................................................10 FOR RESPONDENTS AGED 18 MONTHS TO 2 YEARS ..............................................10 PRESCRIBED MEDICATIONS .....................................................................................12 BLOOD PRESSURE ......................................................................................................15 FOR RESPONDENTS AGED 5 AND OVER WHO ARE NOT PREGNANT ...............15 DEMI-SPAN ..................................................................................................................20 FOR ALL RESPONDENTS AGED 65 AND OVER OR THOSE WITH AN UNRELIABLE HEIGHT MEASUREMENT .................................................................20 WAIST AND HIP ..........................................................................................................22 FOR RESPONDENTS AGED 11 AND OVER WHO ARE NOT PREGNANT ...........22 BMI TO GP CONSENT ..................................................................................................25 BLOOD SAMPLE ...........................................................................................................38 FOR ALL RESPONDENTS WHO ARE NOT PREGNANT ........................................38 DRUGS ..........................................................................................................................53 **HOUSEHOLD GRID**
**Person** Person number : 1..2
**HHGridNo** Household grid number : 1..10
**Name** Name : STRING [20]
**Sex** 1 Male 2 Female
**AgeOf** Age : 0..120
**AgeOfM** Age in months : 00..1440
**OC** Agreed nurse? 1 Agreed 2 Refused 3 Unsure
Press <Ctrl Enter> to select a nurse schedule for the person you want to interview, or to quit this form. NURSE SCHEDULE
IF (participant agreed nurse visit) THEN Info NURSE: You are in the Nurse Schedule for... Person (Person number) Name (Participant name) Age (Participant age at date of 1st interviewer visit) DOB (Participant date of birth) Sex (Participant sex) Height (Participant Height cm) Weight (Participant Weight kg) BMI (Participant BMI)
1 Yes “Yes, I will do the interview now” 2 No “No, I will not be able to do this interview”
IF (participant was unsure about nurse visit) THEN Info NURSE: You are in the Nurse Schedule for... Person (Person number) Name (Participant name) Age (Participant age at date of 1st interviewer visit) DOB (Participant date of birth) Sex (Participant sex) Height (Participant Height cm) Weight (Participant Weight kg) BMI (Participant BMI)
NURSE: THIS PARTICIPANT WAS UNSURE ABOUT THE NURSE VISIT WHEN ASKED BY THE INTERVIEWER.
1 Yes “Yes, I will do the interview now” 2 No “No, I will not be able to do this interview”
IF (Info = Yes) THEN StrtNur Start time of the interview : TIMETYPE
MachDate Automatically recorded date of interview : DATETYPE
NEndDate Date at end of interview : DATETYPE
NurDate NURSE: Enter the date of this interview : DATETYPE NDoBD Can I just check your date of birth? NURSE: Enter day, month and year of (participant’s name)’s date of birth separately. Enter the day here. : 1…31
NDoBM NURSE: Enter the code for the month of (participant’s name)’s date of birth. 1 January 2 February 3 March 4 April 5 May 6 June 7 July 8 August 9 September 10 October 11 November 12 December
NDoBY NURSE: Enter the year of (participant’s name)’s date of birth. : 1890..2015
NDoB Date of birth (derived) : DATETYPE
IF (NDoB \<> RDoB) THEN DoBDisc NURSE: Please explain the difference between date of birth the Interviewer recorded (Date of birth of participant) and date of birth you have just recorded (Date of birth derived). :OPEN
HHAge (Derived) Age of participant based on Nurse entered date of birth and date at time of household interview. : 0..120
ConfAge (Derived) : 0..120
IF (Age ≤ 15) THEN CParInt NURSE: A child can only be interviewed with the permission of, and in the presence of, their parent or a person who has (permanent) legal parental responsibility (specify names), “parent”. No measurements should be carried out without the agreement of both the parent and the child. N.B Written child assent, where appropriate, should also be sought from children who are able to give it. Press \<1> and <Enter> to continue. 1 Continue InfSH Have you read and understood the (parent/guardian) nurse information sheet and have I answered any questions you may have? 1 Yes "Read and understood info sheet", 2 No "Not read or understood info sheet"
If (InfoSh=Yes) Code01 NURSE: ASK PARTICIPANT (Parent/Guardian) TO INITIAL STATEMENT 1 BOX IN THE CONSENTS' SECTION IN THE OFFICE BOOKLET AND THE PERSONAL CONSENT BOOKLET. MAKE SURE YOU USE THE CORRECT AGE CONSENT FORM. MAKE SURE PARTICIPANT'S NAME IS FILLED IN IN BOTH COPIES. ASK PARTICIPANT TO SIGN AND DATE AT THE BOTTOM OF THE PAGE IN BOTH COPIES. CIRCLE CONSENT CODE 01 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue, 1 Continue
If (InfoSh=No) NURSE: Please double-check participant's willingness to take part in the visit. Code02 NURSE: CIRCLE CONSENT CODE 02 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (InfoSh=Yes) THEN WDraw NURSE: Are you aware your / your child's participation is voluntary and that you/they can withdraw at any time?" 1 Yes "I understand voluntary and can withdraw", 2 No "I don't understand voluntary and can withdraw"
If (WDraw=Yes) Code03 NURSE: ASK PARTICIPANT (Parent/Guardian) TO INITIAL STATEMENT 2 BOX IN THE CONSENTS' SECTION IN THE OFFICE CONSENT BOOKLET AND THE PERSONAL CONSENT BOOKLET. MAKE SURE YOU USE THE CORRECT AGE CONSENT FORM. MAKE SURE PARTICIPANT'S NAME IS FILLED IN IN BOTH COPIES. ASK PARTICIPANT'S TO SIGN AND DATE AT THE BOTTOM OF THE PAGE IN BOTH COPIES. CIRCLE CONSENT CODE 03 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (WDraw=No) NURSE: Please double-check participant's willingness to take part in the visit. Code04 CIRCLE CONSENT CODE 04 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (WDraw=Yes) AND (HHAge IN (5..15)) THEN ChAss NURSE: GO THROUGH THE CHILD ASSENT FORM. IF POSSIBLE AND CHILD AGREES, ASK THE CHILD TO COMPLETE (CIRCLING EACH STATEMENT), SIGN AND DATE THE FORM.
YOU AS THE NURSE MUST ALSO SIGN THE FORM.
HAS CHILD ASSENT BEEN GIVEN? 1 Yes 2 No
If (ChAss=No) ChAssN NURSE: WHY HAS CHILD ASSENT NOT BEEN GIVEN? BECAUSE THE PARENT / LEGAL GUARDIAN HAS CONSENTED TO THEIR CHILD'S PARTICIPATION YOU CAN STILL CONTINUE WITH THIS VISIT.
1 Yng "Child too young to read and/or write", 2 Und "Child too young to understand the study or their participation", 3 Other "Other answer"
IF (ChAssN=Other) ChAssNO NURSE: Please state other reason why child assent has not been given. :OPEN
IF (Sex=Female) AND (Age = 16-49) THEN PregNTJ Can I check, are you pregnant or breastfeeding at the moment? 1 Yes 2 No
IF (Sex = Female) AND (Age = 10 – 15) THEN UPreg NURSE: Has the respondent (or her parent/ guardian) told you that she is pregnant or breastfeeding? Do Not ask for this information – only code whether or not it has been volunteered.
Pregnant – Yes told me she is pregnant/ breastfeeding NotTold – No not told me she is pregnant/ breastfeeding IF PregNTJ = Yes OR UPreg = Pregnant THEN PregMes NURSE: Participant is pregnant. No measurement to be done. Press \<1> and <Enter> to continue. NCpregJ = Pregnant (Computed) ELSE NCpregJ = NotPreg (Computed) NoCodeB NURSE: NO MEASUREMENT TO BE TAKEN. CIRCLE CONSENT CODES 02, 04, 06, 08, 10, 12, 14 AND 16 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue.
IF (NCpregJ = NotPreg) THEN HlthCh (Can I just check,) have there been any changes to your/your child’s general health since you/he/she were/was visited by the interviewer? 1 Yes 2 No
IF (HlthCh = Yes) THEN HlthChWh INTERVIEWER: PLEASE RECORD DETAILS OF THE PARTICIPANT’S CHANGE IN GENERAL HEALTH. : OPEN
MedCNJD Are you /is (child’s name) taking or using any medicines, pills, syrups, ointments, puffers or injections prescribed for you/ (him/her) by a doctor or a nurse? NURSE: If statins have been prescribed by a doctor please code them here. If they have been bought without a prescription code at Statins question. NURSE: INCLUDE DIETARY SUPPLEMENTS AS LONG AS PRESCRIBED. MEDICINES SHOULD BE BEING TAKEN NOW, OR BE CURRENT PRESCRIPTIONS FOR USE 'AS REQUIRED.' 1 Yes 2 No
IF (NCpregJ=NotPreg) AND (age >= 16) THEN Statins Are you taking statins (drugs to lower cholesterol) bought over the counter from a pharmacist, without the prescription of a doctor? 1 Yes 2 No
IF (Statins = Yes) THEN StatinA Have you taken/used any statins in the last 7 days? 1 Yes 2 No
IF (MedCNJD = Yes) THEN MedIntro Could I take down the names of the medicines, including pills, syrups, ointments, puffers or injections, prescribed for you/(child’s name) by a doctor? Press \<1> and <Enter> to continue. 1 Continue PRESCRIBED MEDICATIONS
{Following questions asked as a loop:}
IF (MedCNJD = Yes) THEN MedBI NURSE: Enter name of drug no. (number) Ask if you can see the containers for all prescribed medicines currently being taken. If Aspirin, record dosage as well as name. : STRING[50]
MedBIA Have/Has you/(child's name) taken/used (text from MedBI) in the last 7 days? 1 Yes 2 No
MedBIC NURSE CHECK: Any more drugs to enter? 1 Yes 2 No REFUSALS
NoBP NURSE: No blood pressure reading to be done. Press \<1> and <Enter> to continue. 1 Continue
IF (Age >=8) AND ((BSWill = No) OR (ClotB = Yes or NONRESPONSE) OR (Fit = Yes OR NONRESPONSE) OR (Age = 2-3) OR (GuardCon = No) OR ((AmetopUse= Yes) AND Allergy = Yes) AND (NoAmetop = No)) OR (CBSConst = No)) THEN NoCodes NURSE: NO BLOOD TO BE TAKEN. CIRCLE CONSENT CODES 10, 12, 14, and 16 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF NCPregJ = Pregnant THEN NoCodeB NURSE: NO MEASUREMENTS TO BE TAKEN. CIRCLE CONSENT CODES 02, 04, 06, 08, 10, 12, 14 and 16 AT QUESTION 8 ON THE FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF NCPregJ = NotPreg THEN AllCheck NURSE: Check before leaving the respondent: #That (participant’s name) has their Personal Consent Booklet. #That full GP details are entered on front of the Office Consent Booklet. #The name by which GP knows participant is entered on the front of the Office Consent Booklet. #That all participant details are completed on front of the Office Consent Booklet. #That all necessary initials and signatures have been collected in both consent booklets. #That appropriate codes have been circled at Question 8 on the front of the office consent booklet. (For those who have agreed a return visit to give a blood samples, there will be further consents to collect at the return visit). Press \<1> and <Enter> to continue. 1 Continue EndReach NURSE: End of questionnaire reached.
IF (DoBlood [NSeqNo]= NotDone) THEN Don’t forget to make an appointment to come back and take the blood sample. Press \<1> and <Enter> to continue. 1 Continue
NurOut NURSE: Why were you not able to complete the nurse schedule for person (Person Number: participant Name)? 1 NotToBe (800) "Refuses nurse visit - not to be interviewed", 2 Complete (810) "Nurse schedule completed" 3 NoContact (820) "No contact made", 4 PerRef (830) "Refusal by person", 5 ProxRef (840) "Proxy refusal", 6 Broken (850) "Broken appointment", 7 IllHome (860) "Ill (at home)", 8 IllHosp (870) "Ill (in hospital)", 9 Away (880) "Away (other reason)", 10 Other (890) "Other reason for schedule not being completed"
IF (Info = Yes) OR (InfSh = No) OR (WDraw = No) THEN Thank NURSE: Thank participant for his/her co-operation. Then press \<1> and <Enter> to finish. 1 Continue
StrtTime Start time for : (Module name) Just press <Enter> : ARRAY [0..10] OF TIMETYPE
Elapsed Timing for : (Module name) Just press <Enter>. : ARRAY [0..10] OF TTime, INFANT LENGTH FOR participants AGED 18 MONTHS TO 2 YEARS
IF (Age< 2) THEN LgthMod NURSE: Now follows the Infant Length module Please press \<1> and <Enter> to continue. 1 Continue
IF (Age< 2) THEN LgthInt (As I mentioned earlier,) I would like to measure (child’s name)’s length. IF ASKED: This gives us information about your child's growth. 1 Agree “Length measurement agreed” 2 Refuse “Length measurement refused” 3 Unable “Unable to measure length for other reason”
IF (LgthInt = Agree) THEN Length NURSE: Measure infant’s length and record in centimetres. If measurement not obtained, enter ‘999.9’. Range: 40.0..999.9
IF (Length = RESPONSE) and (Length \<> 999.9) THEN LgthRel NURSE: Is this measurement reliable? 1 Yes 2 No
IF (Length=999.9 or EMPTY) THEN YNoLgth NURSE: Give reason for not obtaining a length measurement 1 Refuse “Measurement refused” 2 TryNot “Attempted, not obtained” 3 NoTry “Measurement not attempted”
IF (YNoLgth = Refuse.. NoTry) OR (LgthInt = Refuse, Unable) THEN NoAttL NURSE: Give reason for (refusal/not obtaining measurement/not attempting the measurement). 1 Asleep “Child asleep” 2 Fright “Child too frightened or upset” 3 Shy “Child too shy” 4 Lie “Child would not lie still” 95 Other “Other reason(s)” IF (NoAttL = Other) THEN OthNLth NURSE: Enter details of other reason(s) for not obtaining/attempting the length measurement. : STRING [100]
IF (Length = RESPONSE) and (Length \<> 999.9) THEN MbkLgth NURSE: Write the results of the length measurement on participant’s Measurement Record Card. Press \<1> and <Enter> to continue 1 Continue BLOOD PRESSURE FOR PARTICIPANTS AGED 4 AND OVER WHO ARE NOT PREGNANT
ASK ALL AGED 4+ EXCEPT PREGNANT WOMEN
BPMod NURSE: Now follows the Blood Pressure module. Press \<1> and <Enter> to continue. 1 Continue
IF (Age >=16) THEN BPIntro (As I mentioned earlier) We would like to measure your/(child’s name)’s blood pressure. The analysis of blood pressure readings will tell us a lot about the health of the population. Press \<1> and <Enter> to continue
IF (Age 4 -15) THEN BPBlurb NURSE: Read out to parent (parent): (As I mentioned earlier) we would like to measure your/(child’s name)’s blood pressure. If you wish, I will write the results on your/(his/her) Measurement Record Card. I will not, however, be able to tell you what the results mean. This has to be calculated using your/(his/her) age, sex and height. Also blood pressure can vary from day to day and throughout the day, so one high reading would not necessarily mean that you/(he/she) have/(has) high blood pressure. However, if you would like us to, we will send your/(his/her) results to your/(his/her) GP who is better placed to interpret them. In the unlikely event that (respondent’s name) should be found to have a high blood pressure for your/(his/her) age and height, we shall advise your/(his/her) GP (with your permission) that your/(his/her) blood pressure should be measured again. Press \<1> and <Enter> to continue. 1 Continue
BPConst NURSE: Does the participant agree to blood pressure measurement? 1 Agree “Yes, agrees” 2 Refuse “No, refuses” 3 Unable “Unable to measure BP for reason other than refusal”
IF (BPConst = Agree) AND (Age =13 - 65) THEN ConSubX May I just check, have you eaten, smoked, drunk alcohol or done any exercise in the past 30 minutes? CODE ALL THAT APPLY. 1 Eat “Eaten” 2 Smoke “Smoked” 3 Drink “Drunk alcohol” 4 Exercise “Done vigorous exercise” 5 None “(None of these)” IF (BPConst = Agree) AND (Age > 65) THEN ConSubX May I just check, have you eaten, smoked, drunk alcohol or done any exercise in the past 30 minutes? CODE ALL THAT APPLY. 1 Eat “Eaten” 2 Smoke “Smoked” 3 Drink “Drunk alcohol” 4 Exercise “Done exercise” 5 None “(None of these)”
IF (BPConst = Agree) AND (Age 4 - 12) THEN ConSubX2 May I just check, has (participant’s name) eaten, or done any vigorous exercise, in the past 30 minutes? CODE ALL THAT APPLY. 1 Eat “Eaten” 2 Exercise “Done vigorous exercise” 3 None “Neither”
DINNo NURSE: Please record the Omron serial number. E.g. if it says ‘LOM 111’, enter ‘111’ : 001..999
CufSize NURSE: Select cuff and attach to the participant’s right arm. Ask the participant to sit still for five minutes. READ OUT: ‘I am going to leave you to sit quietly now for 5 minutes. During that time you must not read and your legs are to remain uncrossed. After the 5 minutes, I will carry out 3 recordings with a minute between them. While I am doing these recordings I will not speak to you, and you must not speak to me. Once I have completed the recordings I will tell you what they are.’ Record cuff size chosen. Cuff size 1 Small “Small (15-22 cm)” 2 Medium “Medium (22-32 cm)” 3 Large “Large (32-42 cm)”
(Sys to Pulse repeated for up to three blood pressure readings)
Sys NURSE: Enter the (first/second/third) systolic reading (mmHg). If reading not obtained, enter 999. : 001..999
Dias NURSE: Enter the (first/second/third) diastolic reading (mmHg). If reading not obtained, enter 999. : 001..999
Pulse NURSE: Enter the (first/second/third) pulse reading (bpm). If reading not obtained, enter 999. NDNS YEAR 9 CAI_NURSE
: 001..999
Full All readings OK 1 Yes 2 No
IF (AT LEAST ONE '999' RESPONSE IN ALL THREE SETS OF READINGS) THEN
YNoBP NURSE: Enter reason for not recording any full BP readings. 1 Tried "Blood pressure measurement attempted but not obtained" 2 NoTry "Blood pressure measurement not attempted" 3 Refused "Blood pressure measurement refused"
RespBPS (derived) 1 Three "Three" 2 Two "Two" 3 One "One" 4 Tried "Tried" 5 NoTry "NoTry" 6 Refused "Refused"
IF (RespBPS = Two..Refused) OR (BPConst = Refuse or Unable) THEN
NAttBPD2 NURSE: Record why (only two readings obtained/only one reading obtained/reading not obtained/reading not attempted/reading refused/unable to take reading). CODE ALL THAT APPLY. 0 PC "Problems with PC/ laptop" 1 Upset "participant upset/anxious/nervous" 2 Error1 "Error reading" 3 Shy "Too shy (children)" 4 Fidget "Child would not sit still long enough" 5 Other "Other reason(s) (specify at next question)" 6 Cuff "Problems with Cuff fitting/painful" 7 Omron "Problems with Omron readings (zeros, no readings)"
IF (NAttBPD2 = Other) THEN
OthNBP NURSE: Enter full details of other reason(s) for not obtaining/attempting three BP readings. : STRING [140]
IF (RespBPS = One, Two or Three) THEN
DifBPC NURSE: Record any problems taking readings. CODE ALL THAT APPLY. 1 NoProb "No problems taking blood pressure" 2 LeftOnly "Reading taken on left arm because right arm not suitable" 3 Upset "participant was upset/anxious/nervous" 4 Other "Other problems (specify at next question)" 5 Cuff "Problems with cuff fitting/painful" 6 Omron "Problems with Omron readings (zeros, no readings)" IF (DifBPC = Other) THEN OthDifBP NURSE: Record full details of other problem(s) taking readings. : STRING [140]
GPRegBP Are/is you/(child's name) registered with a GP? 1 Yes 2 No
IF (GPRegBP = Yes) THEN GPSend May we send your/(child's name)'s blood pressure readings to your/(his/her) GP? 1 Yes 2 No
IF (GPSend = No) THEN GPRefC NURSE: Specify reason(s) for refusal to allow BP readings to be sent to GP. CODE ALL THAT APPLY. 1 NeverSee "Hardly/Never sees GP" 2 GPKnows "GP knows participant's BP level" 3 Bother "Does not want to bother GP" 4 Other "Other (specify at next question)"
IF (GPRefC = Other) THEN OthRefC NURSE: Give full details of reason(s) for refusal. : STRING [140]
IF (GPReg \<> Yes) OR (GPSend = No) THEN Code06 NURSE: CIRCLE CONSENT CODE 06 (NO CONSENT FOR BLOOD PRESSURE TO GP) AT QUESTION 8 ON FRONT OF OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (GPSend = Yes) THEN Code05 NURSE: FOR ADULTS OR CHILDREN AGED 4 TO 15 ASK PARTICIPANT TO INITIAL CONSENT STATEMENT 3 'BLOOD PRESSURE RESULTS TO GP' IN THE OFFICE AND PERSONAL CONSENT BOOKLET. PARTICIPANT TO SIGN AND DATE AT THE BOTTOM OF THE PAGE IN BOTH COPIES (IF NOT ALREADY DONE). CHECK THAT GP NAME, ADDRESS AND PHONE NUMBER ARE RECORDED ON FRONT OF OFFICE CONSENT BOOKLET. CHECK NAME BY WHICH GP KNOWS PARTICIPANT, AND ENTER ON FRONT OF OFFICE CONSENT BOOKLET. CIRCLE CONSENT CODE 05 AT QUESTION 8 ON FRONT OF OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue BPOffer NURSE: Offer blood pressure results to participant/(participant’s parent). (Displays readings) Systolic Diastolic Pulse i)\
ii)\
iii)\
Enter these on (participant’s name)’s Measurement Record Card Press \<1> and <Enter> to continue 1 Continue
IF (age >= 16) AND (conrais = 1) THEN TICK THE CONSIDERABLY RAISED BOX AND READ OUT TO participant: Your blood pressure is high today. Blood pressure can vary from day to day and throughout the day so that one high reading does not necessarily mean that you suffer from high blood pressure. You are strongly advised to visit your GP within 5 days to have a further blood pressure reading to see whether this is a once-off finding or not. NURSE: If RESPONDENT IS ELDERLY, ADVISE HIM/ HER TO CONTACT GP WITHIN NEXT 7-10 DAYS.
IF (age >= 16) AND (modrais = 1) THEN TICK THE MODERATELY RAISED BOX AND READ OUT TO participant Your blood pressure is a bit high today. Blood pressure can vary from day to day and throughout the day so that one high reading does not necessarily mean that you suffer from high blood pressure. You are advised to visit your GP within 2-3 weeks to have a further blood pressure reading to see whether this is a once-off finding or not.
IF (age >= 16) AND (milrais = 1) THEN TICK THE MILDLY RAISED BOX AND READ OUT TO participant Your blood pressure is a bit high today. Blood pressure can vary from day to day and throughout the day so that one high reading does not necessarily mean that you suffer from high blood pressure. You are advised to visit your GP within 3 months to have a further blood pressure reading to see whether this is a once-off finding or not.
IF (age >= 16) AND (normbp = 1) THEN TICK THE NORMAL BOX AND READ OUT TO participant Your blood pressure is normal. DEMI-SPAN
FOR ALL participant AGED 65 AND OVER OR THOSE WITH AN UNRELIABLE HEIGHT MEASUREMENT
SpanIntro NURSE: Now follows the Measurement of Demi-span. Press \<1> and <Enter> to continue. 1 Continue
SpanInt I would now like to measure the length of your arm. Like height, it is an indicator of size. NURSE CODE: 1 Agree "participant agrees to have demi-span measured" 2 Refuse "participant refuses to have demi-span measured" 3 Unable "Unable to measure demi-span for reason other than refusal"
Repeat for up to three demi-span measurements. Third measurement taken only if first two measurements differ by more than 3cm.
IF (SpanInt = Agree) THEN Span NURSE: Enter the (first/second/third) demi-span measurement in centimetres. If measurement not obtained, enter '999.9'. : Range: 5.0..1000.0
IF (Span \<> 999.9) THEN SpanRel NURSE: Is the (first/second/third) measurement reliable? 1 Yes 2 No
IF (Span = 999.9 (both attempts)) THEN YNoSpan NURSE: Give reason for not obtaining at least one demi-span measurement. 1 Refuse "Measurement refused" 2 TryNot "Attempted but not obtained" 3 NoTry "Measurement not attempted"
IF (YNoSpan = Refuse OR TryNot OR NoTry) THEN NotAttM NURSE: Give reason for (refusal/not obtaining measurement/measurement not being attempted). 1 Bent "Cannot straighten arms" 2 Bed "participant confined to bed" 3 Stoop "participant too stooped" 4 NotUnd "participant did not understand the procedure" 5 Other "Other" IF (NotAttM = Other) THEN OthAttM NURSE: Give full details of other reason for (refusal/not obtaining measurement/measurement not being attempted). : STRING [140]
IF (Span \<> 999.9) THEN SpnM NURSE CHECK: Demi-span was measured with the participant: CODE ALL THAT APPLY. 1 Wall "Standing against the wall or another flat surface" 2 NoWall "Not standing against the wall or another surface" 3 Sitting "Sitting" 4 Lying "Lying down" 5 LeftArm "Demi-span measured on left arm due to unsuitable right arm"
IF (Span \<> 999.9) THEN DSCard NURSE: Write results of demi-span measurement on participant’s Measurement Record Card. Demi-span (Result 1) (Result 2) Press \<1> and <Enter> to continue. 1 Continue WAIST AND HIP FOR participants AGED 11 AND OVER WHO ARE NOT PREGNANT
WHMod NURSE: Now follows the Waist and Hip Circumference Measurement. Press \<1> and <Enter> to continue. 1 Continue
WHIntro I would now like to measure your waist and hips. The waist relative to hip measurement is very useful for assessing the distribution of weight over the body. NURSE CODE: 1 Agree "participant agrees to have waist/hip ratio measured" 2 Refuse "participant refuses to have waist/hip ratio measured" 3 Unable "Unable to measure waist/hip ratio for reason other than refusal"
Repeat for up to three waist-hip measurements. Third measurement taken only if first two measurements differ by more than 3cm.
IF (WHIntro = Agree) THEN Waist NURSE: Measure the waist and hip circumferences to the nearest mm. Enter the (first/second/third) waist measurement in centimetres. (Remember to include the decimal point.) If measurement not obtained, enter '999.9'. Range: 40.0..1000.0
IF (WHIntro = Agree) THEN Hip NURSE: Measure the waist and hip circumferences to the nearest mm. Enter the (first/second/third) measurement of hip circumference in centimetres. (Remember to include the decimal point.) If measurement not obtained, enter '999.9'. Range: 50.0..1000.0
IF (WHIntro = Agree) THEN RespWH Imputed 1 Both "Both obtained" 2 One "One obtained" 3 Refused "Refused" 4 NoTry "NoTry"
IF (Waist = 999.9 (either attempt)) OR (Hip = 999.9 (either attempt)) THEN YNoWH NURSE: Enter reason for not getting both measurements. 1 Refused "Both measurements refused" 2 TryNot "Attempted but not obtained" 3 NoTry "Measurement not attempted" IF (RespWH = One OR Refused OR NoTry) OR (YNoWH = Refused) THEN
WHPNABM NURSE: Give reason(s) (for refusal/why unable/for not obtaining measurement/for not attempting/why only one measurement obtained). CODE ALL THAT APPLY. 1 ChairBnd "participant is chairbound" 2 Bed "participant is confined to bed" 3 Stoop "participant is too stooped" 4 NotUnd "participant did not understand the procedure" 5 Other "Other (SPECIFY AT NEXT QUESTION)"
IF (WHPNABM = OthWH) THEN
OthWH NURSE: Give full details of 'other' reason(s) for not getting full waist/hip measurement. : STRING [140]
IF AT LEAST ONE WAIST MEASUREMENT OBTAINED (IF (Waist (1st) \<> 999.9 AND Waist (1st) \<> EMPTY) OR (Waist (2nd) \<> 999.9 AND Waist (2nd) \<> EMPTY)) THEN
WJRel NURSE: Record any problems with waist measurement: 1 NoProb "No problems experienced, reliable waist measurement" 2 ProbRel "Problems experienced - waist measurement likely to be reliable" 3 ProbSlUn "Problems experienced - waist measurement likely to be slightly unreliable" 4 ProbUn "Problems experienced - waist measurement likely to be unreliable"
IF (WJRel = ProbRel OR ProbSlUn OR ProbUn) THEN
ProbWJ NURSE: Record whether problems experienced are likely to increase or decrease the waist measurement. 1 Increase "Increases measurement" 2 Decrease "Decreases measurement"
IF AT LEAST ONE HIP MEASUREMENT OBTAINED IF ((Hip (1st) \<> 999.9 AND Hip (1st) \<> EMPTY) OR (Hip (2nd) \<> 999.9 AND Hip (2nd) \<> EMPTY)) THEN
HJRel NURSE: Record any problems with hip measurement: 1 NoProb "No problems experienced, reliable hip measurement" 2 ProbRel "Problems experienced - hip measurement likely to be reliable" 3 ProbSlUn "Problems experienced - hip measurement likely to be slightly unreliable" 4 ProbUn "Problems experienced - hip measurement likely to be unreliable"
IF (HJRel = ProbRel OR ProbSlUn OR ProbUn) THEN
ProbHJ NURSE: Record whether problems experienced are likely to increase or decrease the hip measurement. 1 Increase "Increases measurement" 2 Decrease "Decreases measurement"
IF (RespWH = Both OR One) THEN
WHRes NURSE: Offer to write results of waist and hip measurements, where applicable, onto respondent's Measurement Record Card. (results displayed) Press \<1> and <Enter> to continue. 1 Continue BMI TO GP CONSENT
IF (GPRegBP \<> Yes) THEN GPRegBM NURSE CHECK: Is participant registered with a GP? 1 Yes "participant registered with GP" 2 No "participant not registered with GP"
IF (GPRegBP = Yes) THEN ConsBMI During the first stage, the interviewer measured your height and weight and from this, your Body Mass Index (BMI) was calculated. BMI is a way of telling if you're a healthy weight for your height. May we send your BMI calculation to your GP? NURSE: Tell them that it was calculated to be (BMI measurement)/ tell them that it is not available from first stage interview. 1 Yes 2 No
IF (ConsBMI = Yes) THEN Code07 NURSE: ASK participant TO INITIAL STATEMENT 4 IN 'BMI (TO GP) CONSENT' SECTION IN THE OFFICE CONSENT BOOKLET AND THE PERSONAL CONSENT BOOKLET. ASK participant TO SIGN AND DATE AT THE BOTTOM OF THE PAGE IN BOTH COPIES (IF NOT ALREADY DONE). CIRCLE CONSENT CODE 07 AT QUESTION 8 ON FRONT OF OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue 1 Continue
IF (ConsBMI = No) OR (PBMI\<>RESPONSE) THEN Code08 NURSE: THE participant DOES NOT WANT THEIR BMI CALCULATION SENT TO THEIR GP/ WE DO NOT HAVE A BMI MEASUREMENT FOR THIS participant SO WE CANNOT SEND IT TO THEIR GP. CIRCLE CONSENT CODE 08 (NO CONSENT FOR FOR BMI TO GP) AT QUESTION 8 ON FRONT OF OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue 1 Continue BLOOD SAMPLE FOR ALL participants WHO ARE NOT PREGNANT
IF (Age >4) AND (Pregnant = No) BLIntro NURSE: NOW FOLLOWS THE BLOOD SAMPLE MODULE. NURSE: EXPLAIN THE PURPOSE AND PROCEDURE OF THE FASTING BLOOD SAMPLE. GIVE PARTICIPANT RELEVANT LEAFLETS. Press \<1> and <Enter> to continue. 1 Continue
IF (age \<16) THEN ClotB ASK PARENT (‘parent name’): May I just check, do/does you/(child’s name) have a clotting or bleeding disorder or are/is you/he/she currently on anti-coagulant drugs such as Warfarin? NURSE: DO NOT TAKE SAMPLE IF PARTICIPANT IS TAKING: Warfarin, Sinthrome (Acenocoumarol), Pehnindione, Pradaxa (Dabigatran Etxililate), Xarelto (Rivaroxaban), Apixaban (Eliquis), Dabigatran etexilate (Pradaxa), Rivatoxaban (Xarelto) TAKE BLOOD SAMPLE IF RESPONDENT IS TAKING: Aspirin (Caprin; Nu-Seals), Flamasacard, Clopidogrel (Plavix) Dipyridamole (Persantin, Persantin Retard, Asasantin Retard), Prasugrel (Efient), Eptifibate (Inteligrin), Tirofiban (Aggrastat) 1 Yes 2 No
IF (age < 16) AND (ClotB = No) THEN Fit ASK PARENT (‘parent name’): May I just check, have/has you/(child’s name) ever had a fit (including epileptic fit, convulsion, convulsion associated with high fever)? 1 Yes 2 No
IF (age >=16) THEN ClotBA May I just check, do you have a clotting or bleeding disorder or are you currently on anti-coagulant drugs such as Warfarin? NURSE: DO NOT TAKE BLOOD SAMPLE IF RESPONDENT IS TAKING: Warfarin, Sinthrome (Acenocoumarol), Pehnindione, Pradaxa (Dabigatran Etxililate), Xarelto (Rivaroxaban), Apixaban (Eliquis), Dabigatran etexilate (Pradaxa), Rivatoxaban (Xarelto) TAKE BLOOD SAMPLE IF RESPONDENT IS TAKING: Aspirin (Caprin; Nu-Seals), Flamasacard, Clopidogrel (Plavix) Dipyridamole (Persantin, Persantin Retard, Asasantin Retard), Prasugrel (Efient), Eptifibate (Inteligrin), Tirofiban (Aggrastat) 1 Yes 2 No
IF (age >= 16) AND (ClotBA=No) THEN FitA May I just check, have you had a fit (including epileptic fit or convulsion,) in the last five years? 1 Yes 2 No IF (age >= 16) AND (ClotBA = No) AND (FitA = No) THEN BSWill Would you be willing to have a fasting blood sample taken? NURSE: THE PARTICIPANT SHOULD FAST FOR 8 HOURS. REMIND HE/SHE THAT THEY CAN AND SHOULD DRINK WATER AS NORMAL. 1 Yes “Yes” 2 No “No” 3 Unable “Participant unable to give a blood sample for reason other than refusal (please specify at next question)”
IF (age>=4 – 16) AND (ClotB = No) AND (Fit = No) THEN CBSConst ASK PARENT (‘parent’): Are you willing for your child to have a blood sample taken? IF (AXMDAge=10) AND (CAgeNow = 11) THEN NURSE: AS PARTICIPANT HAS TURNED 11 YEARS SINCE THE INTERVIEWER STAGE, YOU SHOULD TAKE THE BLOOD SAMPLE NOT A PAEDIATRIC PHLEBOTOMIST OR AN ‘EXTENDED ROLE’ NURSE (I.E. COMPLETED TRAINING TO TAKE BLOOD FROM CHILDREN AGED 6-10INC). N.B. FOR ALL OTHER PARTS OF THE VISIT INTERVIEW AGE IS STILL SET AS 10 YEARS FROM THE INTERVIEWER STAGE. IF (Age \<11) THEN NURSE: AS PARTICIPANT IS 10 YEARS OR UNDER, A PAEDIATRIC PHLEBOTOMIST OR AN “EXTENDED ROLE” NURSE (I.E. COMPLETED TRAINING TO TAKE BLOOD FROM CHILDREN AGED 6-10 INC) MUST TAKE THE BLOOD SAMPLE. IF (Age >=4) THEN CHILDREN AGED 4 AND OVER SHOULD PROVIDE A FASTING SAMPLE. 1 Yes “Yes” 2 No “No” 3 Unable “Participant unable to give blood sample for reason other than refusal (please specify at next question)”
IF (BSWill = Yes) or (CBSConst = Yes) THEN LabChk NURSE: CHECK THE PARTICIPANT’S DATE OF BIRTH AND GENDER AGAINST THE BARCODED LABELS ON THE MONOVETTE TUBES. Date of birth: Gender: IF ANY DETAIL IS INCORRECT CONTACT HNR IMMEDIATELY Press \<1> and <Enter> to continue
IF (BSWill = No) OR (CBSConst = No) THEN RefBSC NURSE: Record why blood sample refused. CODE ALL THAT APPLY. 1 PrevDiff “Previous difficulties with venepuncture” 2 Fear “Dislike/fear of needles” 3 RecTest “Participant recently had blood test/health check” 4 Ill “Refused because of current illness” 5 HIV “Worried about HIV or AIDS” 6 NoPaed “No paediatric phlebotomist or ‘extended role’ nurse available” 7 Parent “Parent doesn’t agree with it/thinks child too young” 8 Busy “Too busy” 9 Time “Time constraints (i.e. appointment timings not convenient)” 97 Other “Other” IF (RefBSC = Other) THEN OthRefBS NURSE: Give full details of other reason(s) for refusing blood sample. : STRING [135]
IF (BSWill = Unable) OR (CBSConst = Unable) THEN UnReas NURSE: Record why participant unable to give a blood sample (i.e. reason other than refusal). : STRING[100]
IF ((age < 16) AND (ClotB = Yes) OR (Fit = Yes)) OR ((age >= 16) AND (ClotBA = Yes) OR (FitA = Yes)) THEN BSStop NURSE: No Blood Samples should be taken from (participant name) Ring consent codes 10, 12, 14 and 16 on the consent booklet To continue with this schedule on the first visit, press \<1> and <Enter> 1 Continue
IF (age >= 4) AND ((BSWill = Yes) OR (CBSConst = Yes)) THEN Diabetes NURSE: HAS THE PARTICIPANT TOLD YOU THAT THEY ARE DIABETIC AND UNWILLING TO FAST? IF PARTICIPANT IS DIABETIC AND CONCERNED ABOUT FASTING, PRESS F9 FOR GUIDANCE ABOUT THE DIFFERENT MEASURES THAT A DIABETIC COULD TAKE AND STILL GIVE A FASTING BLOOD SAMPLE. CODE BELOW WHETHER PARTICIPANT WILLING TO GIVE A FASTING BLOOD SAMPLE. Acceptable procedures according to medication: …participants on oral hypoglycaemic medication should be able to fast without complications. …participants on a combination of nighttime insulin and daytime tablets should also be able to fast unless they are known to have low blood sugar levels first thing in the morning. If they do have low blood sugar in the morning, they could still fast but should reduce their nighttime insulin by a small amount and have breakfast as soon as possible after the blood is taken. …participants on insulin alone can also provide a fasting sample, but should be given special consideration. They should postpone their morning insulin and should be seen as early in the day as possible. In every case, diabetics should have breakfast as soon as possible after blood is taken.
Note that the option of providing a non-fasting sample is only open to diabetics and participants under the age of 4. Blood should not be taken from participants who are willing to provide a sample but are not prepared to fast. 1 NotDiab "Not diabetic/not mentioned" 2 Yes "Diabetic and willing to give fasting blood" 3 No "Diabetic and not willing to give fasting blood sample"
IF (Diabetes = No) THEN DiabNF NURSE: THIS PERSON SHOULD GIVE A NON -FASTING BLOOD SAMPLE. THIS BLOOD SAMPLE SHOULD BE TAKEN AT THE SAME TIME AS A FASTING BLOOD SAMPLE FROM OTHER HOUSEHOLD MEMBERS (IF APPLICABLE). Press \<1> and <Enter> to continue. 1 Continue
IF (Diabetes = NotDiab OR Yes) THEN IsTime NURSE: IS THE TIME CURRENTLY BEFORE 10 AM? (The computer says time is (time on laptop)) IsTimeT Time that IsTime was first asked.
: TIMETYPE
IF (IsTime = Yes) AND (Computer time = before 10am) THEN
Eat Can I check, have you had anything to eat or drink (excluding water) in the last 8 hours? 1 Yes 2 No
IF (Age >=4 -11) AND (BSWill = Yes) OR (CBSConst= Yes) AND (Diabetes = No) THEN
NFastBl NURSE: THIS participant COULD GIVE A NON -FASTING BLOOD SAMPLE NOW. BEFORE DECIDING WHETHER TO TAKE BLOOD, CHECK: IF ((age < 11) AND (Nurse = paediatric phlebotomist)) ARE YOU A TRAINED PAEDIATRIC PHLEBOTOMIST OR A NURSE WHO HAS TAKEN ON THE ‘EXTENDED ROLE’ (I.E. CAN TAKE BLOODS FROM CHILDREN AGED 6-10 YEARS INC)? (IF NO, CODE 2) Are the labs open (i.e. is it Monday - Thursday)/expecting a sample? Is there anyone else in the household who will give blood? If so, could you take blood from both participants at the same time (i.e. a return visit)? CONSIDER THESE QUESTIONS AND CODE: 1 Yes Yes, I will take the blood sample now 2 No No, I will return at a later date to take the blood sample
IF (Age >=11) AND (BSWill = Yes) OR (CBSConst= Yes) AND (Diabetes = No) THEN
NFastBl NURSE: THIS participant COULD GIVE A NON -FASTING BLOOD SAMPLE NOW. BEFORE DECIDING WHETHER TO TAKE BLOOD, CHECK: Are the labs open (i.e. is it Monday - Thursday)/expecting a sample? Is there anyone else in the household who will give blood? If so, could you take blood from both respondents at the same time (i.e. a return visit)? CONSIDER THESE QUESTIONS AND CODE: 1 Yes Yes, I will take the blood sample now 2 No No, I will return at a later date to take the blood sample
IF (NFastBl = No) THEN
NFSAppt NURSE: ARRANGE AN APPOINTMENT WITH (respondent's name) TO TAKE A BLOOD SAMPLE. THIS CAN ONLY BE ON A MONDAY TO THURSDAY MORNING. Press \<1> and<Enter> to continue. 1 Continue
IF (Eat = No) AND (AGE\<11)) THEN
FastBl NURSE: THIS PARTICIPANT COULD GIVE A FASTING BLOOD SAMPLE NOW. BEFORE DECIDING WHETHER TO TAKE BLOOD, CHECK: ARE YOU A TRAINED PAEDIATRIC PHLEBOTOMIST OR A NURSE WHO HAS TAKEN ON THE ‘EXTENDED ROLE’ (I.E. CAN TAKE BLOODS FROM CHILDREN AGED 6-10 YEARS INC)? Are the labs open and expecting a sample? Is there anyone else in the household who will give blood? If so, you should take blood from both participants at the same time. CONSIDER THESE QUESTIONS AND CODE: 1 Yes "Yes, I will take the fasting blood sample now" 2 No "No, I will return at a later date to take the blood sample"
IF (Eat = No) AND ((AGE >11) OR ((CAgeNow =11) AND (PSeqNo\<>1)) THEN FastBl NURSE: THIS PARTICIPANT COULD GIVE A FASTING BLOOD SAMPLE NOW. BEFORE DECIDING WHETHER TO TAKE BLOOD, CHECK: Are the labs open/expecting a sample? Is there anyone else in the household who will give blood? If so, you should take blood from both participants at the same time. CONSIDER THESE QUESTIONS AND CODE: 1 Yes "Yes, I will take the fasting blood sample now" 2 No "No, I will return at a later date to take the blood sample"
IF (FastBl = No) THEN FBApt NURSE: ARRANGE AN APPOINTMENT WITH (participant's name) TO TAKE A BLOOD SAMPLE. THIS SHOULD BE BEFORE 10AM, MONDAY TO THURSDAY ONLY PRESS \<1> AND <ENTER> TO CONTINUE. 1 Continue
IF (age < 6) THEN AmeInt NURSE: Explain that there is the option of using Ametop gel, but that a sample can be given without it. Give parent/participant the Ametop information sheet and allow them time to read it. Ask participant/parent whether they think they will want to use Ametop. If they do, you need to schedule your return appointment before 9.30am. Press \<1> and <Enter> to continue. 1 Continue
IF (age = 6-15) THEN AmeInt NURSE: Explain that there is the option of using Cryogesic spray or Ametop gel, but that a sample can be given without them. Give parent/participant the Cryogesic and Ametop information sheets and allow them time to read them. Ask participant/parent whether they think they will want to use Cryogesic spray or Ametop gel. If they do, you need to schedule your return appointment before 9.30am. Press \<1> and <Enter> to continue. 1 Continue
IF (age >= 16) THEN AmeInt NURSE: Explain that there is the option of using Cryogesic spray, but that a sample can be given without it. Give parent/participant the Cryogesic information sheet and allow them time to read it. Ask participant/parent whether they think they will want to use Cryogesic spray. If they do, you need to schedule your return appointment before 9.30am. Press \<1> and <Enter> to continue. 1 Continue
IF BLOOD SAMPLE NOT TAKEN ON FIRST VISIT THEN IntFBT NURSE: NOW FOLLOWS THE MODULE TO OBTAIN BLOOD SAMPLES. Press \<1> and <Enter> to continue. 1 Continue
DateFBT Date at start of QFBTaken block : DATETYPE
TimeFBT Date at start of QFBTaken block : DATETYPE
IF (PVisit\<>1) AND (age \<16) THEN TClotB ASK PARENT: May I just check again, does (child's name) have a clotting or bleeding disorder or is he/is she currently on anti-coagulant drugs such as Warfarin? NURSE: DO NOT TAKE SAMPLE IF PARTICIPANT IS TAKING: Warfarin, Sinthrome (Acenocoumarol), Pehnindione, Pradaxa (Dabigatran Eteixilate), Xarelto (Rivaroxaban), Apixaban (Eliquis), Dabigatran etexilate (Pradaxa), Rivatoxaban (Xarelto) TAKE BLOOD SAMPLE IF RESPONDENT IS TAKING: Aspirin (Caprin; Nu-Seals), Flamasacard, Clopidogrel (Plavix) Dipyridamole (Persantin, Persantin Retard, Asasantin Retard), Prasugrel (Efient), Eptifibate (Integrin), Tirofiban (Aggrastat) 1 Yes 2 No
IF (age < 16) AND (TClotB=No) THEN TFit ASK PARENT: May I just check also, has (child's name) ever had a fit (including epileptic fit, convulsion, convulsion associated with high fever)? 1 Yes 2 No
IF (PVisit\<>1) AND (age >= 16) THEN TClotBA May I just check, do you have a clotting or bleeding disorder or are you currently on anti-coagulant drugs such as Warfarin? (NURSE: Aspirin therapy is not a contraindication for blood sample) NURSE: DO NOT TAKE BLOOD SAMPLE IF RESPONDENT IS TAKING: Warfarin, Sinthrome (Acenocoumarol), Pehnindione, Pradaxa (Dabigatran Eteixilate), Xarelto (Rivaroxaban), Apixaban (Eliquis), Dabigatran etexilate (Pradaxa), Rivatoxaban (Xarelto) TAKE BLOOD SAMPLE IF RESPONDENT IS TAKING: Aspirin (Caprin; Nu-Seals), Flamasacard, Clopidogrel (Plavix) Dipyridamole (Persantin, Persantin Retard, Asasantin Retard), Prasugrel (Efient), Eptifibate (Integrin), Tirofiban (Aggrastat) 1 Yes 2 No
IF (age > 16) AND (TClotBA= No) THEN TFitA May I just check, have you had a fit (including epileptic fit or convulsion,) in the last five years? 1 Yes 2 No
IF (PVisit\<>1) AND (TFitA = No) AND (Age >=4) AND (PDiabetes = 3) AND (TClotB OR TClotBA = No)THEN TEat Can I check, have you had anything to eat or drink (excluding water) in the last 8 hours?
NURSE: Please note this participant is a diabetic and is willing to give a non-fasting blood sample
1 Yes 2 No
IF (PVisit\<>1) AND (TFitA = No) AND (Age >=4) THEN
TEat Can I check, have you had anything to eat or drink (excluding water) in the last 8 hours?
1 Yes 2 No
IF (PVisit = 2 AND TEat =YES) Then
TBSStop NO BLOOD SAMPLES SHOULD BE TAKEN FROM (participant’s name). CIRCLE CONSENT CODES 10, 12, 14 AND 16 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET.
To continue with this schedule on the first visit, press \<1> and <Enter>
1 Continue
IF (Age \<4) THEN
ChEat Can I check, has (participant name) had anything to eat or drink (excluding water) in the last 8 hours?
1 Yes 2 No
IF (PVisit \<> 3) AND (PDiabetes \<> 3) AND (TEat = Yes) OR (ChEat = Yes) THEN
ReArr NURSE: The participant has eaten something and cannot give a fasting blood sample today. Try to rearrange the appointment for another day.
1 Appt "Appointment rearranged to take blood" 2 NoAppt "Not able to make another appointment"
IF (2nd visit AND ReArr = NoAppt) OR (3rd visit) THEN
TBSStop NO BLOOD SAMPLES SHOULD BE TAKEN FROM (participant name). CIRCLE CONSENT CODES 10, 12, 14 and 16 AT QUESTION 8 ON THE FRONT OF THE OFFICE CONSENT BOOKLET.
To continue with this schedule on the first visit, press \<1> and <Enter>.
1 Continue
IF (2nd visit AND ReArr = Appt) THEN
TBSNoV2 NO BLOOD SAMPLES SHOULD BE TAKEN FROM (participant’s name) NOW. YOU WILL NEED TO MAKE ANOTHER VISIT TO TAKE BLOOD.
To continue with this schedule on the first visit, press \<1> and <Enter>.
1 Continue
IF (age >= 16) THEN
TBSWill Would you be willing to have a fasting/(non-fasting) blood sample taken?
1 Yes 2 No 3 Unable “participant unable to give blood for reason other than refusal (please specify at next question)” IF (age < 16) THEN TCBSConst ASK PARENT Are you willing for your child to have a fasting/(non-fasting) blood sample taken? NURSE: CHECK THAT CHILD IS WILLING ALSO, EXPLAIN PROCESS AND REASSURE THEM. IF (age < 11) THEN EXTENDED ROLE NURSES CANNOT TAKE CHILD BLOODS AFTER 20 SEPT 2013 UNLESS THEY HAVE BEEN ON THE PAEDIATRIC VENEPUNCTURE PROGRAMME. ELSEIF (CAgeNow\<11) THEN ONLY TRAINED PAEDIATRIC PHLEBOTOMISTS OR "EXTENDED ROLE" NURSES (I.E. COMPLETED TRAINING TO TAKE BLOOD FROM CHILDREN AGED 6-10 INC) SHOULD TAKE BLOOD FROM CHILDREN UNDER 11.
Remember up to 2 attempts at blood are now allowed for under 16's. The 2nd attempt must be from the other arm to the 1st.
1 Yes 2 No 3 Unable “participants unable to give blood for reason other than refusal (please specify at next question)”
IF (age>=6) THEN CryUse (ASK PARENT) Do you want Cryogesic spray to be used? 1 Yes 2 No
IF (CryUse= Yes) THEN CryAll (ASK PARENT) Has (child name)/ have you ever had a bad reaction to ethyl chloride? NURSE: If participant doesn't know enter Ctrl+k. The participant can still use cryogesic spray. 1 Yes 2 No
IF (CryAll=Yes) AND (Age = 6-15) THEN NoCry1 NURSE: Cryogesic spray cannot be used. Is participant willing to give a blood sample with the use of Ametop gel? Code 1 if 'Yes, willing to give blood sample with Ametop gel' Code 2 if 'Not with Ametop but will give a blood sample' Code 3 if 'Not willing to give blood sample without Cryogesic'.
1 Yes "Willing to sample with Ametop" 2 NoAm "Not with Ametop but will give sample" 3 None "No blood sample"
IF (CryAll=Yes) AND (age>=16) THEN NoCry2 NURSE: Cryogesic spray cannot be used. Is respondent willing to give a blood sample without Cryogesic spray? Code 1 if 'Yes, willing to give blood sample without Cryogesic spray' Code 2 if 'Not willing to give blood sample without Cryogesic'.
1 Yes "Willing to sample without Cryogesic" 2 None "No blood sample"
IF (CryAll=No) OR (CryAll= Don’t know) THEN DoCry NURSE: Blood sample with Cryogesic spray.
- Apply Cryogesic spray following instructions. Press \<1> and <Enter> to continue. 1 Continue
IF (Age \<6 OR Age = 6 -16) AND (CryUse= No OR NOCry1 = Yes) THEN AmetopUse ASK PARENT Do you want Ametop gel to be used? 1 Yes 2 No
IF (AmetopUse = Yes) THEN Allergy ASK PARENT Have/(Has) you/(he/she) ever had a bad reaction to a local or general anaesthetic bought over the counter at a chemist, or given at the doctor, the dentist or in hospital? $ Yes 2 No
IF (Allergy = Yes) THEN NoAmetop NURSE: Ametop gel cannot be used. Is participant willing to give blood sample without Ametop gel? Code 1 if Yes, willing to give blood sample without Ametop gel Code 2 if No, not willing to give blood sample without Ametop. 1 Yes "Yes, willing" 2 No "No, no blood sample"
IF (Allergy = No) THEN DoAmetop NURSE: Blood sample with Ametop gel.
- Apply Ametop gel following instructions.
- Wait at least half an hour before attempting blood sample.
Press \<1> and <Enter> to continue. 1 Continue
Derived: CryOrAm Whether used Cryogesic or Ametop (DV) 1 Cryogesic 2 Ametop 3 Neither 4 NoBlood
If (CryOrAm = NoBlood) THEN CryAmNo NURSE: participant cannot give blood. Press \<1> and <Enter> to continue. 1 Continue
IF (TBSWill = No) OR (TCBSConst = No) OR (TBSWill = Yes) OR (TCBSConst=Yes) AND (CryOrAm=NoBlood) THEN TRefBSC NURSE: Record why blood sample refused. CODE ALL THAT APPLY. 1 PrevDiff "Previous difficulties with venepuncture", 2 Fear "Dislike/fear of needles", 3 RecTest "participant recently had blood test/health check" 4 Ill "Refused because of current illness", 5 HIV "Worried about HIV or AIDS", 6 NoPaed "No paediatric phlebotomist or 'extended role nurse available", 7 Parent "Parent doesn't agree with it/thinks child too young", 8 Busy "Too busy", 9 Time "Time constraints (i.e. appointment timings not convenient)", 10 Other "Other"
IF (TRefBSC = Other) THEN T0thRef NURSE: Give full details of other reason(s) for refusing blood sample. : STRING [135]
IF (TBSWill = Unable) OR (TCBSConst= Unable) THEN TUnReas NURSE: Record why participant unable to give a blood sample (i.e. reason other than refusal). : STRING [100]
IF (TBSWill = Yes) OR (TCBSConst = Yes) AND (CryOrAm \<> NoBlood) BSConsC NURSE: EXPLAIN NEED FOR WRITTEN CONSENT (from parent): Before I can take any blood, I have to obtain written consent from you/ (the written consent from both parent and child).
IF (Age 5-16) THEN NURSE: IF THE CHILD IS ABLE PLEASE SEEK CHILD ASSENT. Press \<1> and <Enter> to continue. 1 Continue
IF (Age = 18 months - 15 years) THEN GuardCon NURSE CHECK: Is a parent or person with legal responsibility willing to give consent? 1 Yes 2 No
IF (GuardCon = No) THEN Ignore NURSE: Record details of why consent refused. : STRING [140]
IF (GuardCon = Yes) THEN Code 09C NURSE:
- ASK PARENT/LEGAL GUARDIAN TO INITIAL STATEMENT 4 FOR CHILDREN AGED 4-15 OR STATEMENT 3 FOR CHILDREN AGED 1.5-3 IN 'BLOOD SAMPLING CONSENTS' SECTION IN THE OFFICE CONSENT BOOKLET AND THE PERSONAL CONSENT BOOKLET.
- MAKE SURE CHILD’S NAME IS FILLED IN IN BOTH COPIES
- ASK PARENT/LEGAL GUARDIAN TO SIGN AND DATE AT THE BOTTOM OF THE PAGE IN BOTH COPIES (IF NOT ALREADY DONE SO).
- CIRCLE CONSENT CODE 09 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET.
- IF THE CHILD IS AGED 5-15 YEARS ASK THEM TO FILL IN THE CHILD ASSENT FORM WHERE POSSIBLE. Press \<1> and <Enter> to continue. 1 Continue IF(Age > 15) THEN Code09A NURSE:
- ASK PARTICIPANT TO INITIAL STATEMENT 5 IN ‘BLOOD SAMPLING CONSENTS’ SECTION IN THE OFFICE CONSENT BOOKLET AND THE PERSONAL CONSENT BOOKLET.
- MAKE SURE YOU USE THE CORRECT AGE CONSENT FORM
- MAKE SURE PARTICIPANT’S NAME IS FILLED IN IN BOTH COPIES
- ASK PARTICIPANT TO SIGN AND DATE AT THE BOTTOM OF THE PAGE IN BOTH COPIES (IF NOT ALREADY DONE SO).
- CIRCLE CONSENT CODE 09 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (TBSStop was triggered) THEN Code10 NURSE: CIRCLE CONSENT CODE 10 (NO CONSENT FOR BLOOD SAMPLING) AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF ((TBSWill = Yes) OR (TCBSConst=Yes)) AND (CryOrAm \<>NoBlood) AND ((Code09A=RESPONSE) OR (Code09C = RESPONSE)) THEN ConStorB NURSE: ASK PARENT/LEGAL GUARDIAN / ASK PARTICIPANT May we have your consent to store any remaining blood for future analysis?
NURSE: IF ASKED, ‘THE BLOOD WOULD BE USED FOR TESTS RELATING TO NUTRITION AND HEALTH. THE SAMPLE WOULD BE ANONYMISED. THIS MEANS FUTURE RESEARCHERS WOULD NOT KNOW WHO YOU ARE. THE TESTS WOULD BE APPROVED BY AN ETHICS COMMITTEE’.
NURSE: IF ASKED, EXPLAIN THE PARTICIPANT CAN WITHDRAW THEIR CONSENT AT ANY TIME, WITHOUT GIVING ANY REASON, BY ASKING THE INVESTIGATORS IN WRITING FOR BLOOD TO BE REMOVED FROM STORAGE AND DESTROYED.
1 Yes “Storage consent given” 2 No “Consent refused”
IF (ConStorB=Yes) THEN Code11 NURSE: ASK PARENT/LEGAL GUARDIAN / ASK PARTICIPANT TO INITIAL STATEMENT 6 FOR ADULTS, STATEMENT 5 FOR CHILDREN AGED 4-15 OR STATEMENT 4 FOR CHILDREN AGED 1.5-3 BOX IN ‘BLOOD SAMPLING CONSENTS’ SECTION IN THE OFFICE CONSENT BOOKLET.
- CIRCLE CONSENT CODE 11 AT QUESTION 8 ON FRONT OF OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue IF (ConStorB=No) THEN Code12 CIRCLE CONSENT CODE 12 (NO CONSENT FOR BLOOD STORAGE) AT QUESTION 8 ON FRONT OF OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF ((TBSWill = Yes) OR (TCBSConst=Yes)) AND (CryOrAm \<> NoBlood) AND ((Code09A=RESPONSE) OR (Code09C = RESPONSE)) THEN SnDrSam (ASK PARENT) Would you like to be sent the results of your / child’s name blood sample analysis? 1 Yes 2 No
IF (SnDrSam = Yes) THEN Code 13 NURSE:
- ASK PARENT/LEGAL GUARDIAN / ASK PARTICIPANT TO INITIAL STATEMENT 7 FOR ADULTS, STATEMENT 6 FOR CHILDREN AGED 4-15 OR STATEMENT 5 FOR CHILDREN AGE 1.5-3 IN ‘BLOOD SAMPLING CONSENTS’ SECTION IN THE OFFICE CONSENT BOOKLET AND THE PERSONAL CONSENT BOOKLET.
- CIRCLE CONSENT CODE 13 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (SnDrSam = No) THEN Code 14 NURSE: CIRCLE CONSENT CODE 14 AT QUESTION 8 ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF ((PGPRegBP \<>1) AND (PGPRegBM \<>1)) OR (Age = 18 months – 3 years) THEN GPRegFB NURSE CHECK: Is participant registered with a GP? 1 participant registered with GP 2 participant not registered with GP
IF (GPRegFB = Yes) THEN SendSam ASK PARENT/LEGAL GUARDIAN / ASK PARTICIPANT May we send the results of your child’s/your blood sample analysis to his/her/your GP? 1 Yes 2 No
IF (SendSam= No) THEN SenSaC ASK PARENT/LEGAL GUARDIAN / ASK PARTICIPANT Why do you not want your child’s/your blood sample results sent to his/her/your GP? 1 NeverSee “Hardly/never sees GP” 2 RecSamp “GP recently took blood sample” 3 Bother “Does not want to bother GP” 4 Other “Other”
IF (SenSac=Other) THEN OthSam NURSE: Give full details of reasons(s) for not wanting results sent to GP. : STRING [140]
IF (SendSam=Yes) THEN Code15 NURSE:
- ASK PARENT/LEGAL GUARDIAN / PARTICIPANT TO INITIAL STATEMENT 8 FOR ADULTS, STATEMENT 7 FOR CHILDREN AGED 4-15 OR STATEMENT 6 FOR CHILDREN AGED 1.5-3 IN ‘BLOOD SAMPLING CONSENTS’ SECTION IN THE OFFICE CONSENT BOOKLET AND THE PERSONAL CONSENT BOOKLET.
- CHECK THAT GP NAME, ADDRESS AND PHONE NUMBER ARE RECORDED ON FRONT OF OFFICE CONSENT BOOKLET (IF NOT ALREADY DONE).
- CHECK NAME BY WHICH GP KNOWS PARTICIPANTS, AND ENTER ON FRONT OF OFFICE CONSENT BOOKLET (IF NOT ALREADY DONE).
- CIRCLE CONSENT CODE 15 AT QUESTION 8 ON FRONT OF OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (GPRegFB=No) OR (SendSam = No) THEN Code16 NURSE:
- CIRCLE CONSENT CODE 16 AT QUESTION 8 (NO CONSENT FOR BLOOD SAMPLE RESULTS TO GP) ON FRONT OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (Code14 = RESPONSE) AND (Code16 = RESPONSE) THEN NoRes You have indicated that you do not wish to receive your child’s/your blood sample results or have them sent to your GP. NURSE: CHECK THAT THIS IS THE CASE WITH THE PARTICIPANT. IF NECESSARY GO BACK AND AMEND. IF SPEAKING TO THE PARENT/GAURDIAN OF A CHLD AGED 15 OR UNDER EXPLAIN TO THE PARTICIPANT THAT IN THIS CASE THEY WILL NEED TO AGREE FOR THE SURVEY DOCTOR TO CONTACT THEM IF NEEDED (E.G. RESULT IS OUT OF RANGE). IF THEY DON’T AGREE TO THIS A BLOOD SAMPLE CAN NOT BE TAKEN FOR CHILDREN. Press \<1> and <Enter> to continue. 1 Continue
IF (Code14 = RESPONSE) AND (Code16 = RESPONSE) THEN Code17 NURSE:
- THIS PARTICIPANT DOES NOT WANT THEIR RESULTS SENT TO THEM OR THEIR GP. PLEASE ASK THEM TO READ AND INITIAL THE STATEMENT IN THE GREY BOX ON THE RELEVANT CONSENT FORM IN THE OFFICE AND PARTICIPANT CONSENT BOOKLETS:
- STATEMENT 9 FOR 16+ YEARS
- STATEMENT 8i FOR 4-15 YEARS
- STATEMENT 7i FOR 1.5-3 YEARS
- CIRCLE CONSENT CODE 17 ON THE FRONT PAGE OF THE OFFICE CONSENT BOOKLET.
Press \<1> and <Enter> to continue.
IF (Code13 = RESPONSE) OR (Code15 = RESPONSE) THEN Code18 NURSE: THE PARTICIPANT HAS AGREED TO FEEDBACK FROM BLOOD SAMPLE RESULTS (TO GP AND/OR TO THEMSELVES). CIRCLE CONSENT CODES 18 AND 20 ON THE FRONT OF PAGE OF THE OFFICE CONSENT BOOKLET Press \<1> and <Enter> to continue. 1 Continue
IF (Code14 = RESPONSE) AND (Code16 = RESPONSE) AND (age \<16) THEN SurDoc NURSE: TO TAKE A BLOOD SAMPLE FROM THE CHILD THE PARENT/LEGAL GUARDIAN MUST INITIAL OR TICK STATEMENT 8ii ON THE 4-15 CONSENT FORM OR STATEMENT 7ii ON THE 1.5-3 CONSENT FORM. IF THEY DO NOT CONSENT TO THE SURVEY DOCTOR CONTACTING THEM IF NEEDED (E.G. WITH AN OUT OF NORMAL RANGE BLOOD ANALYTE RESULT) YOU MUST NOT TAKE A BLOOD SAMPLE.
Do you agree to the survey doctor contacting you to discuss, if necessary, any results that are directly relevant to your child’s health? 1 Yes 2 No
IF (SurDoc=Yes) THEN Code19 NURSE: ASK PARENT/LEGAL GUARDIAN TO INITIAL STATEMENT 8ii FOR CHILDREN AGED 4-15 OR STATEMENT 7ii FOR CHILDREN AGED 1.5-3 IN ‘BLOOD SAMPLING CONSENTS’ SECTION IN THE OFFICE CONSENT BOOKLET AND THE PERSONAL CONSENT BOOKLET. CIRCLE CONSENT CODE 19 ON THE FRONT OF PAGE OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (SurDoc=No) Code20 NURSE: A BLOOD SAMPLE CAN NOT BE TAKEN FROM THE CHILD.
- CIRCLE CONSENT CODE 20 ON THE FRONT OF PAGE OF THE OFFICE CONSENT BOOKLET. Press \<1> and <Enter> to continue. 1 Continue
IF (CryOrAm = Cryogesic) THEN DoCry NURSE: Blood sample with Cryogesic spray.
- Apply Cryogesic spray following instructions. Press \<1> and <Enter> to continue. 1 Continue IF (Age >=16) THEN TakSAd1 NURSE: First check you have all applicable signatures and the relevant boxes have been initialled or ticked on the consent form. Secondly, check the Date of Birth and Gender on the labels to make sure they are correct. If they aren’t contact HNR before a blood sample is taken. Then … A) Taken blood samples in the following order:
1. EDTA (2.6ml) tube red cap, label EN1 (3)
2. Serum (9.0ml) tube white cap, label SEN1 (4)
3. Lithium heparin (7.5ml) tube orange cap, label LHN1 (5)
4. Lithium heparin (7.5ml) tube orange cap, label LHN2 (6)
5. Fluoride (1.2ml) tube yellow cap, label FN1 (7)
6. Lithium heparin (4.5ml) tube orange cap, label LHN3 (8)
7. EDTA (2.6ml) tube red cap, label EN2 (9) B) Check the date of birth and gender again with the participant to ensure you have the right labels for the right participant. Contact HNR immediately if they don’t match. C) Stick the barcoded label HORIZONTALLY on the tube. Line the top of the barcoded label with the top of the label already on the tube. This will give a clear area along the length of the tube. D) Stick appropriate barcoded label on the field lab (FL1 (13) and FL2 (14)) and Addenbrookes despatch notes (Adx1, Adx2 and Adx3 (10-12)). E) Remember to attach labels FOL 1 (23) and FOL 2 (24) to the 3 carbonised copies of the completed Addenbrookes research analysis request form using a paperclip. Press \<1> and <Enter> to continue. 1 Continue
IF (Age >=16) THEN TakSAd2 NURSE: All 3 copies of the Addenbrookes research Analysis request form, the FOL1 FOL2 labels and EDTA tube should be posted in the white jiffy envelope to the Addenbrookes hospital. Please take careful note of the order (and therefore numbering) of the Addenbrookes and Monovette labels.
- Check to ensure you have used the correct barcoded labels for THIS participant…… Serial number: PLEASE REMEMBER TO DELIVER A PACK OF MICROTUBES (PARTICIPANT AGED 16 + - PINK LABELLED MICROTUBES PACK), FIELD LAB LABELS 15-22 AND FIELD LAB DESPATCH NOTE TO YOUR LOCAL LAB WHEN YOU DELIVER THESE SAMPLES! Press \<1> and <Enter> to continue. 1 Continue
IF (Age = 7-15) THEN TakSCO1 NURSE: First check you have all applicable signatures and the relevant boxes have been initialled OR ticked on the consent form. Secondly, check the Date of Birth and Gender on the labels to make sure they are correct. If they aren’t contact HNR before a blood sample is taken. Then… A) Take blood samples in the following order (Child 7-15 years - GREEN labelled monovette pack):
1. EDTA (2.6ml) tube red cap, label EN1 (3)
2. Serum (7.5ml) tube white cap, label SEN1 (4)
3. Lithium heparin (7.5ml) tube orange cap, label LHN1 (5)
4. Lithium heparin (7.5ml) tube orange cap, label LHN2 (6)
5. Fluoride (1.2ml) tube yellow cap, label FN1 (7) B) Check the date of birth and gender again with the participant to ensure you have the right labels for the right participant. Contact HNR immediately if they don’t match. C) Stick the barcoded label HORIZONTALLY on the tube. Line the top of the barcoded label with the top of the label already on the tube. This will give a clear area along the length of the tube.
D) Stick appropriate barcoded label on the field lab (FL1 (13) and FL2 (14)) and Addenbrookes despatch notes (Adx1, Adx2 and Adx3 (10-12)).
E) Remember to attach labels FOL 1 (23) and FOL 2 (24) to the 3 carbonised copies of the completed Addenbrookes research analysis request form using a paperclip.
Press \<1> and <Enter> to continue.
IF (Age = 7-15) THEN
TakSCO2
NURSE:
All 3 copies of the Addenbrookes research Analysis request form, the FOL1 FOL2 labels and EDTA tube should be posted in the white jiffy envelope to the Addenbrookes hospital.
Please take careful note of the order (and therefore numbering) of the Addenbrookes and Monovette labels.
- Check to ensure you have used the correct barcoded labels for this participant……. Serial number:
PLEASE REMEMBER TO DELIVER A PACK OF MICROTUBES (PARTICIPANT AGED 7-15 – GREEN LABELLED MICROTUBE PACK), FIELD LAB LABELS 15-22 AND FIELD LAB DESPATCH NOTE TO YOUR LOCAL LAB WHEN YOU DELIVER THESE SAMPLES!
Press \<1> and <Enter> to continue
IF (Age= 18 months – 6 years)
TakSCY
NURSE: First check you have all applicable signatures and the relevant boxes have been initialled OR ticked on the consent form. Secondly, check the Date of Birth and Gender on the labels to make sure they are correct. If they aren’t contact HNR before a blood sample is taken. Then…
A) Take blood samples in the following order (Child 1.5-6 years – BLUE labelled monovette pack):
1. EDTA (2.6ml) tube red cap, label EN1 (3)
2. Serum (4.5ml) tube white cap, label SEN1 (4)
3. Lithium heparin (4.5ml) tube orange cap, label LHN1 (5)
B) Check the date of birth and gender again with the participant to ensure you have the right labels for the right participant. Contact HNR immediately if they don’t match.
C) Stick the barcoded label HORIZONTALLY on the tube. Line the top of the barcoded label with the top of the label already on the tube. This will give a clear area along the length of the tube.
D) Stick appropriate barcoded label on the field lab (FL1 (13) and FL2 (14)) and Addenbrookes despatch notes (Adx1, Adx2 and Adx3 (10-12)).
- Check to ensure you have used the correct barcoded labels for this participant……. Serial number:
PLEASE REMEMBER TO DELIVER A PACK OF MICROTUBES (PARTICIPANT AGED 18mths-6yrs – BLUE LABELLED MICROTUBES PACK), FIELD LAB LABELS 15-22 AND FIELD LAB DESPATCH NOTE TO YOUR LOCAL LAB WHEN YOU DELIVER THESE SAMPLES!
Press \<1> and <Enter> to continue
IF (Age >=16) THEN
SampF1A
NURSE: Code if the 1st EDTA (red, 2.6ml) tube filled (label EN1 (3)).
1 YesF “Yes, FULLY filled”, 2 YesP “Yes, PARTIALLY filled”, 3 No “No, not filled”
IF (Age >=16) THEN SampF2A NURSE: Code if the serum (white, 9.0ml) tube filled (label SEN1 (4)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF AND (Age >=16) THEN SampF3A NURSE: Code if the 1st Lithium heparin (orange, 7.5ml) tube filled (label LHN1 (5)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age >=16) THEN SampF4A NURSE: Code if the 2nd Lithium heparin (orange, 7.5ml) tube filled (label LHN2 (6)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age >=16) THEN SampF5A NURSE: Code if the fluoride (yellow, 1.2ml) tube filled (label FN1 (7)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age >=16) THEN SampF6A NURSE: Code if the 3rd Lithium heparin (orange, 4.5ml) tube filled (label LHN3 (8)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age >=16) THEN SampF7A NURSE: Code if the 2nd EDTA (red, 2.6ml) tube filled (label EN2 (9)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age = 7-15) THEN SampF1CO NURSE: Code if the EDTA (red, 2.6ml) tube filled (label EN1 (3)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age = 7-15) THEN SampF2CO NURSE: Code if the serum (white, 7.5ml) tube filled (label SEN1 (4)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age = 7-15) THEN SampF3CO NURSE: Code if the 1st Lithium heparin (orange, 7.5ml) tube filled (label LHN1 (5)). IF (Age = 7-15) THEN SampF4CO NURSE: Code if the 2nd Lithium heparin (orange, 7.5ml) tube filled (label LHN2 (6)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age = 7-15) THEN SampF5CO NURSE: Code if the fluoride (yellow, 1.2ml) tube filled (label FN1 (7)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age= 18 months – 6 years) SampF1CY NURSE: Code if the EDTA (red, 2.6ml) tube filled (label EN1 (3)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age= 18 months – 6 years) SampF2CY NURSE: Code if the Serum (white, 4.0ml) tube filled (label SEN1 (4)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
IF (Age= 18 months – 6 years) SampF3CY NURSE: Code if the Lithium heparin (orange, 1.1ml) tube filled (label LHN1 (5)). 1 YesF "Yes, FULLY filled", 2 YesP "Yes, PARTIALLY filled", 3 No "No, not filled"
SampTak (Derived from SampF1A – SampF3CY) Blood sample outcome: 1 YesF "Blood sample obtained - all full" 2 YesP "Blood sample obtained - not all full" 3 No "No blood sample obtained"
IF (SampTak = YesF) OR IF (SampTak = YesP) SamDifC NURSE: Record any problems in taking blood sample. CODE ALL THAT APPLY. 1 NoProb "No problem", 2 Small "Incomplete sample", 3 BadVein "Collapsing/poor veins", 4 TakeTwo "Second attempt necessary", 5 Faint "Some blood obtained, but participant felt faint/fainted", 6 NoTour "Unable to use tourniquet", 7 Other "Other (SPECIFY AT NEXT QUESTION)" IF (SamDifC = Other) THEN OthBDif NURSE: Given full details of other problem(s) in taking blood sample. : STRING [140]
IF (SampTak = No) THEN NoBSC NURSE: Code reason(s) why no blood obtained. CODE ALL THAT APPLY. NoVein "No suitable or no palpable vein/collapsed veins", Anxious "participant was too anxious/nervous", Faint "participant felt faint/fainted", Other "Other"
IF (NoBSC = Other) THEN OthNoBSM NURSE: Give full details of reason(s) no blood obtained. : STRING [140]
ThanksB NURSE: THANK THE PARTICIPANT FOR THEIR COOPERATION AND GIVE THEM THEIR £20 GIFT CARD. Press \<1> and <Enter> to continue. 1 Continue
GCard Gift card number for participant : STRING [30]
VpSTime Time of answering VpProb TIMETYPE
VpSDate Date of answering VpProb DATETYPE
IF (PVPerNo = 2) AND (age \<11) THEN PhlebID Enter the paediatric phlebotomist’s or ‘extended role’ nurse’s ID number who took the blood sample. Or, if you as an ‘extended role’ nurse took the blood sample enter your ID number. Just enter the 4 digit number. : 0001…9997
IF (PVPerNo = 2) AND (age \<11) THEN VPForm Please remind the paediatric phlebotomist or ‘extended role’ nurse to complete the paper copy of the venepuncture checklist. If you as an ‘extended role’ nurse took the blood sample then please complete the checklist yourself. Press \<1> and <Enter> to continue. 1 Continue
VpHand Was the participant left handed or right handed? 1 Left "Left handed" 2 Right "Right handed" VpArm Which arm did you use to take blood? 1 Left “Left arm” 2 Right “Right arm”
VpSkin Code the skin condition of the arm used. 1 Intact “Skin intact” 2 NotIntac “Skin not intact”
VpAlco Did you use an alcohol wipe? 1 Yes 2 No
IF (PDoCryAme = 1) THEN CryTimH You used cryogesic spray on this participant. What time did you apply the Cryogesic spray? Record the time using a 24 hour clock. Enter the hour here. 0..23
IF (PDoCryAme = 1) THEN CryTimM NURSE: Enter the minutes here. 0..59
IF (PDoCryAme = 1) THEN CryTime What time did you apply the Cryogesic spray? (DV) : TIMETYPE
IF (PDoCryAme = 1) THEN CrySens Was the participant sensitive to Cryogesic spray? IF THERE WAS A SEVERE LOCAL REACTION, participant IS LIGHTHEADED OR SEDATED, CONTACT SURVEY DOCTOR 1 Yes 2 No
IF (PDoCryAme = 1) THEN CryExpD Record the expiry date of the Cryogesic spray used. Enter the day here. 1..31
IF (PDoCryAme = 1) THEN CryExpM NURSE: Enter the code for the month here. 1 January, 2 February, 3 March, 4 April, 5 May, 6 June, 7 July, NDNS YEAR 9 CAPI_NURSE
8 August, 9 September, 10 October, 11 November, 12 December
IF (PDoCryAme = 1) THEN CryExpY NURSE: Enter the year here. 2016-2021
IF (PDoCryAme = 1) THEN CryExp Expiry date of the Cryogesic spray used (Derived) : DATETYPE
IF (PDoCryAme = 1) THEN CryBat Record the batch number of the Cryogesic : STRING [20]
IF (PDoCryAme = 2) THEN AmeTimH You used AMETOP gel on this participant. What time did you apply the AMETOP gel? Record the time using a 24 hour clock. Enter the hour here. 0..23
IF (PDoCryAme = 2) THEN AmeTimM NURSE: Enter the minutes here. : 0..59
IF (PDoCryAme = 2) THEN AmeTime What time did you apply the Ametop gel? (Derived) : TIMETYPE
IF (PDoCryAme = 2) THEN AmeSens Was the participant sensitive to AMETOP Gel? IF THERE WAS A SEVERE LOCAL REACTION, PARTICIPANT IS LIGHTHEADED OR SEDATED, CONTACT SURVEY DOCTOR
IF (PDoCryAme = 2) THEN AmeExpM NURSE: Enter the code for the month here. 1 January, 2 February, 3 March, 4 April, 5 May, 6 June, 7 July, 8 August, 9 September, 10 October, 11 November, 12 December
IF (PDoCryAme = 2) THEN AmeExpY NURSE: Enter the year here. 2016..2050
IF (PDoCryAme = 2) THEN AMEeXP Expiry date of the Ametop used (Derived) DATETYPE
IF (PDoCryAme = 2) THEN AmeBatch Record the batch number of the Ametop : STRING [20]
VpSam Code the number of attempts made to take blood. REMEMBER UP TO 2 ATTEMPTS AT TAKING BLOODS CAN NOW BE MADE FOR BOTH ADULTS AND CHILDREN. 1 First “Sample taken on first attempt” 2 Second “Sample taken on second attempt” 3 Failed “Both attempts failed”
VpPress Code who applied pressure to the puncture site. 1 Nurse 2 Phleb “Phlebotomist or ‘extended role’ nurse” 3 Respondent 4 Parent 5 Partner “Partner or spouse”
VpSens Was the participant sensitive to the tape or plaster? 1 Sense “Sensitive to tape/plaster” 2 Notsense “Not sensitive to tape/plaster” 3 NotChec “(Did not check)”
VpProb Was there any abnormality noted after 5 minutes? (Please remember to recheck the site after completion of the blood sample module.) 1 Sense “Sensory deficit” 2 Haematoma 3 Swelling 4 Other “Other (describe at next question)” 5 None
IF (VpProb= Other) THEN VpOther Record the details of the other abnormality fully. : STRING [135]
IF (VpProb\<>None) THEN VpDetail You have coded that an abnormality was noted after 5 minutes. Please record the action you took when you noticed this abnormality in the Office Consent Booklet. There is space at the back of the Office Consent Booklet for you to write up these details fully. Press \<1> and <Enter> to continue 1 Continue
VpCheck Did you re-check the puncture site after completion of the blood sample module? 1 Yes "Yes, site was re-checked" 2 No "No, site was not re-checked"
IF (PVPerNo = 2) AND (Age < 11) THEN PhlebVP NURSE: PLEASE REMEMBER TO COLLECT THE COMPLETED VENEPUNCTURE CHECKLIST FROM THE PAEDIATRIC PHLEBOTOMIST OR 'EXTENDED ROLE' NURSE AND RETURN IT TO THE OFFICE. EXTENDED ROLE NURSE: PLEASE COMPLETE THE VENEPUNCTURE CHECKLIST AND RETURN TO THE OFFICE Press \<1> and <Enter> to continue. 1 Continue
DRUGS
DrC1 NURSE : Enter code for (Drug name). Enter 999996 if unable to code/ Enter 999999 if unable to code : STRING [6]
IF (SUBSTRING (DrC1, 1,2) = '02') and (DrC1 \<> '021200') AND (Age >15) THEN YTake1 Do you take (Drug name) because of a heart problem, high blood pressure or for some other reason?
1. Heart "Heart problem"
2. HBP "High blood pressure"
3. Other "Other reason"
IF (YTake1 = Other THEN TakeOth1 NURSE : Give full details of reason(s) for taking (Drug name). Press <Esc> when finished.
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092fd017c3fe1beb010590e126f87ab06b3a624b | Results from your diet Record
NATIONAL DIET AND NUTRITION SURVEY As part of the National Diet and Nutrition Survey, you very kindly completed a diet record. We have now analysed your diet record and have calculated your intake of energy (calories) and nutrients. The figures given are for your sex and age group and are for food and drinks, including alcohol, but do not include dietary supplements. You said you would like to receive feedback from this record. This document provides you with information about some of the nutrients in your diet. If your food intake during the recording period (16/08/2011 to 19/08/2011) was typical for you, the results will tell you how your intake of nutrients fits with UK guidelines for a healthy diet. We have also provided some useful resources for finding out more about eating a healthy diet.
Understanding the graphs: First an explanation on how to read the graphs provided.
What it means: If your intake is to the right of the solid blue line you consume more than the guideline; if it is to the left, you consume less. Eating more than the guideline is good for some nutrients, for example, fibre and folate, but not for others, such as saturated fat, where intake should be limited.
Please refer to the last page for additional resources if you wish to read more about eating a healthy diet. **Fat** intake is expressed as a % of total energy consumed. Some fat is essential in the diet but we tend to eat too much in the UK.
To assist with the maintenance of a healthy body weight and reduce the risk of chronic diseases such as heart disease, fat should only make up **33%** or less of total energy.
People in the UK also tend to eat too much **saturated fat**. Saturated fat is associated with an increased risk of heart disease. The guideline is to consume no more than **10%** total energy intake from saturated fat.
**Major contributors to saturated fats in the UK diet should be consumed in moderation.** These include various meat products (processed meats), cereal products (e.g. cakes), full fat dairy desserts and butter, chips and chocolate.
**NMES** = **Non-Milk Extrinsic Sugars** are added to foods during manufacture and preparation and also include naturally occurring sugars in foods such as fruit juices. **Major sources** of NMES include sweets, biscuits, soft drinks, and sweetened breakfast cereals.
To reduce the risk of **tooth decay** and as part of a healthy diet, the guideline is to consume no more than **10%** of total energy as NMES. **Dietary Fibre** is expressed in the UK as **Non-Starch Polysaccharide** or NSP. It is recommended to aim at an average intake of **18 grams per day**. Fibre helps to maintain a **healthy digestive system** and may also reduce the risk of chronic disorders and diseases, like heart disease and some cancers.
**Major sources** of fibre in UK diets are wholemeal and whole grain cereal & cereal products (especially bread and breakfast cereals), vegetables and potatoes.
______________________________________________________________________
**Vitamin C** is important for many functions in the body and helps to absorb iron from food. Most people who consume some fruits and vegetables each day achieve the recommendation for Vitamin C of 40 mg/day. **Good sources** of Vitamin C include peppers, broccoli, cabbage, white and sweet potatoes, oranges, kiwi and blackcurrants. **Smokers** have an increased turnover of Vitamin C and need 80 mg per day.
______________________________________________________________________
**Folate** (including folic acid) is one of the **B vitamins** and is emerging as an important factor to reduce the risk of chronic diseases such as cancer and heart disease. In women of child bearing age folate reduces the risk of delivering a baby with birth defects such as spina bifida.
**Good sources** of folate are green leafy vegetables as well as pulses and legumes such as chickpeas and beans. **Calcium** is important for many functions in the body, including building strong bones and teeth, helping muscles to contract and blood to clot properly.
An important source of calcium is **low fat dairy products** including cottage cheese, yoghurt and fromage frais. Good **non-dairy sources** of calcium are broccoli, kale, soya products with added calcium and fish with bones such as sardines/pilchards.
**Iron** is required for healthy blood and to help carry oxygen around our body. Lack of iron leads to anaemia, which causes tiredness, and can affect work capacity, intellectual performance, behaviour and resistance to infection.
**Iron is derived from many foods** including cereals and pulses, but the iron in meat, called haem iron, is much better absorbed into the body than iron from other sources.
**Energy or calories** are obtained from the protein, fat, carbohydrates, and alcohol we take in each day and everything we do uses calories. **How many calories we need depends on how active we are.**
To lose or maintain weight each person may need to do different amounts of physical activities.
**Regular physical activity** may also make you more energetic, improve your mood and reduce the risk of developing some chronic diseases.
______________________________________________________________________
The current intake figures in these charts are taken from previous National Diet and Nutrition Surveys (www.food.gov.uk/science/dietarysurveys/ndnsdocuments/ndnsprevioussurveyreports/). Ranges shown exclude 2.5% of individuals at each end of the spectrum as these are considered extremes of intake. The dietary guidelines shown come from the report: Dietary Reference Intakes for Food Energy and Nutrients in the UK from the Committee of Medical Aspects of Food Policy and published by the Department of Health in 1991. These are also given for your sex and age group. Healthy Eating
If you wish to obtain more information about a healthy diet and tips for achieving this, there are a number of organisations that can help. It is best to look at websites from registered health professional and Government organisations where you can trust the information and know that it is supported by good scientific evidence. There is a lot of information about nutrition on the web that is not supported by evidence coming from research. If you do not have access to the Internet, these organisations have other resources to help you. You should be able to find these in your GP’s surgery.
http://www.nhs.uk/Livewell/healthy-eating/Pages/Healthyeating.aspx This is the healthy eating part of the NHS Choices website and it has many tips on following a healthy diet. In particular there is a page giving 8 tips for eating well:
1. Base your meals on starchy foods
2. Eat lots of fruit and vegetables
3. Eat more fish
4. Cut down on saturated fat and sugar
5. Eat less salt – no more than 6g a day (we have not given your salt or sodium intake because this is very difficult to do using a dietary record alone)
6. Get active and be a healthy weight
7. Don’t get thirsty
8. Don’t skip breakfast
If you live in Scotland then the following website has lots of healthy eating advice http://www.takelifeon.co.uk
If you live in Wales then the following website has lots of healthy eating advice http://www.wales.gov.uk/hcwsubsite/healthchallenge/individuals/change/?lang=en
If you live in Northern Ireland then the following website has lots of healthy eating advice http://www.nidirect.gov.uk/index/information-and-services/health-and-well-being/healthy-living/eatwell
Increasing fruit and vegetable intake is one of the positive steps you can take to improve your diet. The 5 a day programme is intended to help people increase their intake of fruit and vegetables. Visit http://www.nhs.uk/Livewell/5ADAY/Pages/5ADAYhome.aspx
http://www.bda.uk.com This is the website of the British Dietetic Association (BDA). Dietitians are health professionals trained to give individual dietary advice. If seeking individual help or counselling, a qualified dietitian gives you confidence that the advice is supported by scientific evidence.
http://www.nutrition.org.uk This is the website of the British Nutrition Foundation, a charitable organisation funded by the food industry, government and other sources. The Healthy Eating section of this site provides useful information about nutrition and health, food labels and dietary modifications for age at various stages of life. Who we are:
The National Diet and Nutrition Survey (www.natcen.ac.uk/study/national-diet-and-nutrition-survey) collects information on the eating habits and nutritional status of people in the United Kingdom. NatCen Social Research is Britain’s largest independent research organisation studying social policy. The Department of Health has asked NatCen with the Cambridge based Medical Research Council Human Nutrition Research Centre (HNR) to carry out the survey. The role of HNR is to advance knowledge of the relationships between human nutrition and health by providing a national centre of excellence for the measurement and interpretation of biochemical, functional and dietary indicators of nutritional status and health (www.mrc-hnr.cam.ac.uk). If you have any questions about your feedback, please call the NDNS nutrition team on 01223 437573. Re: «KasAll» («FancyDob») of «longraddr», «postcode»
This patient of yours recently took part in the National Diet and Nutrition Survey (NDNS). «BmiBpBl» obtained to enable analysis of a number of health and nutritional status indicators for research purposes. «infillo» gave us written permission to send you the following potentially clinically relevant examination results from a nurse visit on «Vizdate». Please see overleaf for details of the survey.
| Body Mass Index | bmi | |-----------------|-----|
| Blood Pressure¹ | Result 1 | Result 2 | Result 3 | Units | |-----------------|----------|----------|----------|-------| | Systolic | «Sys1» | «Sys2» | «Sys3» | mmHg | | Diastolic | «Dias1» | «Dias2» | «Dias3» | mmHg | | Pulse | «pulse1» | «pulse2» | «pulse3» | bpm |
¹ These 3 measurements/results were taken 1 minute apart after a 5 minute rest
| Test | Analyte | Results² | Reference Range³ | Units | |-----------------|-----------------------|----------|------------------|-------| | Blood count | Haemoglobin | «Haemgp» | M 13+ yrs: 130-170 F 13+ yrs: 115-160 | g/L | | | | «Haemtx» | | | | | Haematocrit | «HcrGP» | M 13-17 yrs: 0.37-0.49 F 13-17 yrs: 0.35-0.46 M 18+ yrs: 0.39-0.50 F 18+ yrs: 0.35-0.46 | L/L | | | | «HcritTx»| | | | | Mean Cell Volume | «MCVgp» | M 13-17 yrs: 78-100 F 13-17 yrs: 78-100 M&F 18+ yrs: 80-100 | fl | | | | «MCVtx» | | | | | Mean Cell Haemoglobin | «Mchaegp»| 13-17 yrs: 27-35 18+ yrs: 27-32 | pg/cell | | | | «Mchaetx»| | | | | Red blood cell count | «RCCgp» | M 13-17 yrs: 4.1-5.3 F 13-17 yrs: 4.1-5.1 M 18+ yrs: 4.2-5.8 F 18+ yrs: 3.8-5.3 | 10^12/L | | | | «RCCtx» | | | | | Platelet Count | «Platgp» | 150 - 400 | 10^9/L | | | | «Platx» | | | | Test | Reference Range | Normal Value | |-----------------------------|----------------------------------|--------------| | White blood cell count | 13+ yrs: 4.0-11.0 | 10^9/L | | Neutrophils | 14-18 yrs: 1.8-8.0 19+ yrs: 2.0-8.0 | 10^9/L | | Lymphocytes | 16+ yrs: 1.0-4.5 | 10^9/L | | Monocytes | 0.1-0.8 | 10^9/L |
| Glycated Haemoglobin | HbA1c | Non-diabetics: 30-45 | mmol/mol | |-----------------------------|----------------------------------|----------------------|----------| | «WBCgp»«WB Ctx» | «Neutgp»«Neuttx» | | | | «Lymphgp»«Lymphtx» | «Monogp»«Monotx» | | |
2 Results that fall outside the reference range are marked with an * 3 Results apply to men and women of all ages, except where specified
NA = not applicable, NM = not measured, NR = for technical reasons it was not possible to carry out this analysis
Note: The results in this letter have been reviewed clinically in a database format prior to the letter being generated electronically.
This patient «Res1» «hisher» «Res2»
We leave any follow-up of these results to your discretion. But if you wish to discuss any of the results, please contact me at MRC Elsie Widdowson Laboratory on 01223 437507.
All other outstanding results from additional analytes (fasting blood lipids, glucose, plasma ferritin, 25-hydroxyvitamin D, creatinine and vitamin B12) will be sent to you in a few months time when analysis is complete.
Yours sincerely,
Dr. Sumantra Ray Senior Medical Advisor MRC Elsie Widdowson Laboratory, 120 Fulbourn Road, Cambridge, CB1 9NL
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84efc7e967f8e2bea6a86b8185757c4de2093148 | NDNS P2751
Interviewer Measurements PROTOCOL FOR TAKING HEIGHT MEASUREMENT
A. THE EQUIPMENT
You are provided with a portable stadiometer. It is a collapsible device with a sliding head plate, a base plate and three connecting rods marked with a measuring scale.
Please take great care of this equipment. It is delicate and expensive. Particular care needs to be paid when assembling and dismantling the stadiometer and when carrying repacking it in the box provided.
- Do not bend the head or base plate
- Do not bend the rods
- Do not drop it and be careful not to knock the corners of the rods or base plate pin
- Assemble and dismantle the stadiometer slowly and carefully
The stadiometer will be sent to you in a special cardboard box. Always store the stadiometer in the box when it is not in use and always pack the stadiometer carefully in the box whenever you are sending it on by courier. Inside the box with the stadiometer is a special bag that you should use for carrying the stadiometer around when you are out on assignment.
If you have any problems with your stadiometer, report these to Brentwood immediately. Do not attempt measurements with a stadiometer that is broken or damaged.
The rods There are three rods marked with a measuring scale divided into centimetres and then further subdivided into millimetres. (If you are not familiar with the metric system note that there are ten millimetres in a centimetre and that one hundred centimetres make a metre). The rods are made of aluminium and you must avoid putting any kind of pressure on them which could cause them to bend. Be very careful not to damage the corners of the rods as this will prevent them from fitting together properly and will lead to a loss of accuracy in the measurements.
The base plate Be careful not damage the corners of the base plate as this could lead to a loss of accuracy in the measurements.
Protruding from the base plate (see diagram overleaf) is a pin onto which you attach the rods in order to assemble the stadiometer. Damage to the corners of this pin may mean that the rods do not stand at the correct angle to the base plate when the stadiometer is assembled and the measurements could be affected.
The head plate There are two parts to the head plate; the blade and the cuff. The blade is the part that rests on the respondent's head while the measurement is taken and the cuff is the part of the head plate that slips over the measurement rods and slides up and down the rods. The whole unit is made of plastic and will snap if subjected to excessive pressure. Grasp the head plate by the cuff whenever you are moving the headplate up or down the rods, this will prevent any unnecessary pressure being applied to the blade which may cause it to break.
Assembling the stadiometer You will receive your stadiometer with the three rods banded together and the head plate attached to the pin so that the blade lies flat against on the base plate. Do not remove the head plate from this pin.
Note that the pin on the base plate and the rods are numbered to guide you through the stages of assembly. (There is also a number engraved onto the side of the rods, this is the serial number of the stadiometer). The stages are as follows:
1. Lie the base plate flat on the floor area where you are to conduct the measurements.
2. Take the rod marked number 2. Making sure the yellow measuring scale is on the right hand side of the rod as look at the stadiometer face on, place rod 2 onto the base plate pin. It should fit snugly without you having to use force.
3. Take the rod marked number 3. Again make sure that the yellow measuring scale connects with the scale on rod 2 and that the numbers run on from one another. (If they do not check that you have the correct rod). Put this rod onto rod number 2 in the same way you put rod 2 onto the base plate pin.
4. Take the remaining rod and put it onto rod 3.
Dismantling the stadiometer Follow these rules:-
1. Before you begin to dismantle the stadiometer you must remember to lower the head plate to its lowest position, so that the blade is lying flat against the base plate
2. Remove one rod at a time
B. THE PROTOCOL - ADULTS (16+)
1. Ask the respondent to remove their shoes in order to obtain a measurement that is as accurate as possible.
2. Assemble the stadiometer and raise the headplate to allow sufficient room for the respondent to stand underneath it. Double check that you have assembled the stadiometer correctly.
3. The respondent should stand with their feet flat on the centre of the base plate, feet together and heels against the rod. The respondent's back should be as straight as possible, preferably against the rod but NOT leaning on it. They should have their arms hanging loosely by their sides. They should be facing forwards.
4. Move the respondent's head so that the Frankfort Plane is in a horizontal position (i.e. parallel to the floor). The Frankfort Plane is an imaginary line passing through the external ear canal and across the top of the lower bone of the eye socket, immediately under the eye (see diagram). This position is important if an accurate reading is to be obtained. An additional check is to ensure that the measuring arm rests on the crown of the head, i.e. the top back half. To make sure that the Frankfort Plane is horizontal, you can use the Frankfort Plane Card to line up the bottom of the eye socket with the flap of skin on the ear. The Frankfort Plane is horizontal when the card is parallel to the stadiometer arm.
5. Instruct the respondent to keep their eyes focused on a point straight ahead, to breath in deeply and to stretch to their fullest height. If after stretching up the respondent's head is no longer horizontal, repeat the procedure. It can be difficult to determine whether the stadiometer headplate is resting on the respondent's head. If so, ask the respondent to tell you when s/he feels it touching their head. FRANKFORT PLANE – ADULTS
6. Ask the respondent to step forwards. If the measurement has been done correctly the respondent will be able to step off the stadiometer without ducking their head. Make sure that the head plate does not move when the respondent does this.
7. Look at the bottom edge of the head plate cuff. There is a green arrowhead pointing to the measuring scale. Take the reading from this point and record the respondent's height in centimetres and millimetres, that is in the form 123.4, at the question Height. You may at this time record the respondent's height onto their Measurement Record Card and at the question MbookHt you will be asked to check that you have done so. At that point the computer will display the recorded height in both centimetres and in feet and inches. At RelHiteB you will be asked to code whether the measurement you obtained was reliable or unreliable.
8. Height must be recorded in centimetres and millimetres, e.g. 176.5 cms. If a measurement falls between two millimetres, it should be recorded to the nearest even millimetre. E.g., if respondent's height is between 176.4 and 176.5 cms, you should round it down to 176.4. Likewise, if a respondent's height is between 176.5 and 176.6 cms, you should round it up to 176.6 cms.
9. Push the head plate high enough to avoid any member of the household hitting their head against it when getting ready to be measured.
C. THE PROTOCOL - CHILDREN (2-15)
The protocol for measuring children differs slightly to that for adults. You must get the cooperation of an adult household member. You will need their assistance in order to carry out the protocol, and children are much more likely to be co-operative themselves if another household member is involved in the measurement. If possible measure children last so that they can see what is going on before they are measured themselves.
Children's bodies are much more elastic than those of adults. Unlike adults they will need your help in order to stretch to their fullest height. This is done by stretching them. This is essential in order to get an accurate measurement. It causes no pain and simply helps support the child while they stretch to their tallest height.
It is important that you practice these measurement techniques on any young children among your family or friends. The more practice you get before going into the field the better your technique will be.
01. In addition to removing their shoes, children should remove their socks as well. This is not because the socks affect the measurement. It is so that you can make sure that children don't lift their heels off of the base plate. (See 3 below).
02. Assemble the stadiometer and raise the head plate to allow sufficient room for the child to stand underneath it.
03. The child should stand with their feet flat on the centre of the base plate, feet together and heels against the rod. The child's back should be as straight as possible, preferably against the rod, and their arms hanging loosely by their sides. They should be facing forwards.
04. Place the measuring arm just above the child's head.
05. Move the child's head so that the Frankfort Plane is in a horizontal position (see diagram). This position is as important when measuring children as it is when measuring adults if the measurements are to be accurate. To make sure that the Frankfort Plane is horizontal, you can use the Frankfort Plane Card to line up the bottom of the eye socket with the flap of skin on the ear. The Frankfort Plane is horizontal when the card is parallel to the stadiometer arm.
06. Cup the child's head in your hands, placing the heels of your palms either side of the chin, with your thumbs just in front of the ears, and your fingers going round towards the back of the neck. (See diagram).
07. Firmly but gently, apply upward pressure lifting the child's head upwards towards the stadiometer headplate and thus stretching the child to their maximum height. Avoid jerky movements, perform the procedure smoothly and take care not to tilt the head at an angle: you must keep it in the Frankfort plane. Explain what you are doing and tell the child that you want them to stand up straight and tall but not to move their head or stand on their tip-toes.
08. Ask the household member who is helping you to lower the headplate down gently onto the child's head. Make sure that the plate touches the skull and that it is not pressing down too hard.
09. Still holding the child's head, relieve traction and allow the child to stand relaxed. If the measurement has been done properly the child should be able to step off the stadiometer without ducking their head. Make sure that the child does not knock the head plate as they step off.
10. Read the height value in metric units to the nearest millimetre and enter the reading into the computer at the question “Height.” At the question “MbookHt” you will be asked to check that you have entered the child's height onto their Measurement Record Card. At that point the computer will display the recorded height in both centimetres and in feet and inches.
11. Push the head plate high enough to avoid any member of the household hitting their head against it when getting ready to be measured.
REMEMBER YOU ARE NOT TAKING A HEIGHT MEASUREMENT FOR CHILDREN UNDER 2 YEARS OLD.
D. HEIGHT REFUSED, NOT ATTEMPTED OR ATTEMPTED BUT NOT OBTAINED
At RespHts you are asked to code whether the measurement was taken, refused, attempted but not obtained or not attempted. If for any reason you cannot get a height measurement, enter the appropriate code at this question and you will automatically be routed to the relevant follow up questions (ResNHt and NoHtBC) which will allow you to say why no measurement was obtained. Cup the child's head in your hands, placing the heels of your palms either side of the chin, with your thumbs just in front of the ears, and your fingers going round towards the back of the neck.
**PROTOCOL**
- SHOES OFF
- CHILDREN – SOCKS OFF
- FEET TO THE BACK
- BACK STRAIGHT
- HANDS BY THE SIDE
- FRANKFORT PLANE
- LOOK AT A FIXED POINT
- CHILDREN – STRETCH & BREATHE IN
- ADULTS - BREATHE IN
- LOWER HEADPLATE
- BREATHE OUT
- STEP OFF
- READ MEASUREMENT E. ADDITIONAL POINTS - ALL RESPONDENTS
1. If the respondent cannot stand upright with their back against the stadiometer and have their heels against the rod (e.g. those with protruding bottoms) then give priority to standing upright.
2. If the respondent has a hair style which stands well above the top of their head, (or is wearing a turban), bring the headplate down until it touches the hair/turban. With some hairstyles you can compress the hair to touch the head. If you can not lower the headplate to touch the head, and think that this will lead to an unreliable measure, record this at question RelHite. If it is a hairstyle that can be altered, e.g. a bun, if possible ask the respondent to change/undo it.
3. If the respondent is tall, it can be difficult to line up the Frankfort Plane in the way described. When you think that the plane is horizontal, take one step back to check from a short distance that this is the case.
PLEASE NOTE: the child head stretch on NDNS is the same as used on HSE but different to that used on Child of the New Century. Please use the NDNS/HSE stretch when measuring children for NDNS interviews. PROTOCOL FOR TAKING WEIGHT MEASUREMENTS
A. THE EQUIPMENT
There are several different types of scales used on NDNS. They differ in the type of power supply they use, where the weight is displayed and the way the scales are turned on. Before starting any interviewing check which scales you have been given and that you know how they operate. The most common types are:
Soehnle Scales
- These scales display the weight in a window on the scales.
- The Soehnle scales are turned on by pressing the top of the scale (e.g. with your foot). There is no switch to turn the scales off, they turn off automatically.
- The scales take 1 x 9v rectangular MN1604 6LR61 batteries.
Seca 850
- These scales display the weight in a window on the scales.
- The Seca 850 is switched on by pressing the top of the scales (e.g. with your foot). There is no switch to turn the scales off, they turn off automatically.
- The scales take 4 x 1.5v AA batteries/1 x 9v rectangular MN1604 6LR61.
Seca 870
- These scales display the weight in a window on the scales.
- The Seca 870 is switched on by briefly covering the solar cell (for no more than one second). The solar cell is on the right hand side of the weight display panel. NB You may experience difficulties switching the scales on if there is insufficient light for the solar cell. Make sure that the room is well lit.
- The scales have an fixed battery which cannot be removed.
Tanita THD-305
- These scales display the weight in a window on the scales.
- The Tanita is switched on by pressing the button on the bottom right hand corner of the scales. The scales will automatically switch off after a few seconds.
- The scales take 4 x 1.5v AA batteries.
When you are storing the scales or sending them through the post please make sure you remove the battery to stop the scales turning themselves on. (This does not apply to the Seca 870 scales) **Batteries (Soehnle, Seca 850 and Tanita)**
It should not be necessary to have to replace the batteries, but always ensure that you have some spare batteries with you in case this happens. If you need to change the battery, please buy one and claim for it. The batteries used are commonly available.
The battery compartment is on the bottom of the scales. When you receive your scales you will need to reconnect the battery. Before going out to work, reconnect the battery and check that the scales work. If they do not, check that the battery is connected properly and try new batteries. If they do still not work, report the fault to your Area Manager/NDNS Manager or directly to Brentwood.
The reading is only in metric units, but as for height, the computer provides a conversion. If the respondent would like to know their weight in stones and pounds you will be able to tell them when the computer has done the calculation. You also have a conversion chart on the back of the coding booklet.
**WARNING**
The scales have an inbuilt memory which stores the weight for 10 minutes. If during this time you weigh another object that differs in weight by less than 500 grams (about 1lb), the stored weight will be displayed and not the weight that is being measured. This means that if you weigh someone else during this time, you could be given the wrong reading for the second person.
So if you get an identical reading for a second person, make sure that the memory has been cleared. Clear the memory from the last reading by weighing an object that is more than 500 grams lighter (i.e. a pile of books, your briefcase or even the stadiometer). You will then get the correct weight when you weigh the second respondent.
You will only need to clear the memory in this way if:
a) You have to have a second or subsequent attempt at measuring the same person
b) Two respondents appear to be of a very similar weight
c) Your reading for a respondent in a household is identical to the reading for another respondent in the household whom you have just weighed.
If you have any problems with your scales, report these to Brentwood immediately. Do not attempt measurements with scales that are broken or damaged.
**B. THE PROTOCOL**
1. Turn the display on by using the appropriate method for the scales. The readout should display 888.8 (1888 for the Seca 870) momentarily. If this is not displayed check the batteries, if this is not the cause you will need to report the problem to the National Centre at Brentwood. While the scales read 888.8 do not attempt to weigh anyone.
2. Ask the respondent to remove shoes, heavy outer garments such as jackets and cardigans, heavy jewellery, loose change and keys.
3. If necessary, turn the scales on again. Wait for a display of 0.0 before the respondent stands on the scales.
4. Ask the respondent to stand with their feet together in the centre and their heels against the back edge of the scales. Arms should be hanging loosely at their sides and head facing forward. Ensure that they keep looking ahead - it may be tempting for the respondent to look down at their weight reading. Ask them not to do this and assure them that you will tell them their weight afterwards if they want to know.
The posture of the respondent is important. If they stand to one side, look down, or do not otherwise have their weight evenly spread, it can affect the reading.
5. The scales will take a short while to stabilise and will read 'C' until they have done so. (The Seca 870 displays alternate flashing lines in the display window. With the Tanita scales the weight will flash on and off when stabilised). If the respondent moves excessively while the scales are stabilising you may get a false reading. If you think this is the case reweigh, but first ensure that you have erased the memory.
6. The scales have been calibrated in kilograms and 100 gram units (0.1 kg). Record the reading into the computer at the question \\textit{XWt1} before the respondent steps off the scales. At question \\textit{MBookWt} you will be asked to check that you have entered the respondent's weight into their Measurement Record Card. At that point the computer will display the measured weight in both kilos and in stones and pounds.
\\begin{center} \\textbf{WARNING} \\end{center}
The maximum weight registering accurately on the scales is 130kg (20½ stone). (The Seca 870 can weigh up to a maximum of 150kg or 23 ½ stone). If you think the respondent exceeds this limit code them as “Weight not attempted” at \\textit{RespWts}. Do not attempt to weigh them.
\\begin{center} \\textbf{Weighing Children} \\end{center}
You must get the co-operation of an adult household member. This will help the child to relax and children, especially small children are much more likely to be co-operative themselves if an adult known to them is involved in the procedure.
Children wearing nappies should be wearing a dry disposable. If the nappy is wet, please ask the parent to change it for a dry one and explain that the wetness of the nappy will affect the weight measurement.
In most cases it will be possible to measure children's weight following the protocol set out for adults. However, if accurate readings are to be obtained, it is very important that respondents stand still. Ask the child to stand perfectly still - “Be a statue.” For very young children who are unable to stand unaided or small children who find this difficult you will need to alter the protocol and first weigh an adult then weigh that adult holding the child as follows:-
\\begin{enumerate} \\item Code as “Weight obtained (child held by adult)” at \\textit{RespWts} \\item Weigh the adult as normal following the protocol as set out above. Enter this weight into the computer at \\textit{WtAd1}. \\item Weigh the adult and child together and enter this into the computer at \\textit{WtChA1}. \\end{enumerate}
The computer will then calculate the weight of the child and you will be asked to check that you have recorded the weight onto the child's Measurement Record Card at \\textit{MBookWt}. Again the computer will give the weight in both kilos and in stones and pounds. Weight refused, not attempted or attempted but not obtained At RespWts you are asked to code whether the measurement was taken, refused, attempted but not obtained or not attempted. If for any reason you cannot get a height measurement, enter the appropriate code at this question and you will automatically be routed to the relevant follow up questions (ResNWt and NoWtBC) which will allow you to say why no measurement was obtained.
MEASUREMENT RECORD CARD When you have taken the respondent's height and weight, offer the respondent a record of his/her measurements. Make out a Measurement Record Card and give it to the respondent. There is room on the Measurement Record Card to write height and weight in both metric and imperial units if the respondent wants both. The computer does the conversion for you. There is space to write in the respondent’s Body Mass Index (BMI) as well, if the respondent is aged 16+ (the computer will calculate this for you). Remember to give respondents the BMI leaflet if you give them their BMI. NDNS P8753
Protocols for Nurse Measurements
(Blood sampling, waist & hip circumferences, demispan, blood pressure, infant length, mid-upper arm circumference) BLOOD SAMPLING BLOOD SAMPLING
1.1 Introduction
Blood sample donation and subsequent correct sample distribution is a very important part of the NDNS. One of the main objectives of the NDNS programme is to measure indicators of blood function, nutrition and other measures of health to relate these to dietary and social data.
The blood will be analysed for a large number of analytes including haematology measures (white blood count, haemoglobin, platelets etc), serum lipids (cholesterol, triglycerides), markers of inflammatory status, and markers of mineral and vitamin status.
The samples will not be tested for any viruses, such as HIV/AIDS, or for bacterial infections, nor will they be used for genetic testing.
Respondents will receive £15 in high street vouchers as a thank you for providing a blood sample.
Blood sampling is extremely important on NDNS and we need to obtain high response rates. Some respondents will be reluctant to provide a blood sample but try to introduce it simply as ‘the next stage’ of the nurse visit. Reassure respondents that you (or the paediatric phlebotomist, where relevant) are highly trained and experienced in taking blood samples. Explain that a blood sample will make the information they have already provided us with even more useful. Also use the fact that they can receive clinically relevant results as a selling point – many respondents feel this is a very positive incentive to providing a blood sample, often even more so than the £15 token of appreciation.
1.2 Eligibility for blood sampling
♦ General eligibility
All respondents aged 1.5 years and over, with the exceptions outlined in the Nurse Protocols, section 18.2, are eligible to give blood.
Respondents aged 4 and older will be asked to fast for 8 hours overnight before providing a blood sample. Respondents under the age of 4 will not be asked to fast.
♦ Obtaining blood samples from diabetics
Most diabetics can provide fasting blood samples, but there are some precautions to take into account, as outlined below. CAPI will take you through the relevant questions. The preference is to obtain a fasting sample, if possible. You will provide reassurance about this, but if the respondent remains anxious a non-fasting sample can be taken. Acceptable procedures according to medication:
- Respondents on oral hypoglycaemic medication should be able to fast without complications.
- Respondents on a combination of night time insulin and daytime tablets should also be able to fast unless they are known to have low blood sugar levels first thing in the morning. If they do have low blood sugar in the morning, they could still fast but should reduce their night-time insulin by a small amount and have breakfast as soon as possible after the blood is taken.
- Respondents on insulin alone can also provide a fasting sample, but should be given special consideration. They should postpone their morning insulin and should be seen as early in the day as possible.
In every case, diabetics should have breakfast as soon as possible after blood is taken.
Note that the option of providing a non-fasting sample is only open to diabetics and respondents under the age of 4. Blood should not be taken from respondents who are willing to provide a sample but are not prepared to fast.
1.3 Overview of blood taking procedures
A fasting blood sample will be obtained from those aged 4 years and above. Those aged less than four years will not be asked to fast but CAPI includes questions about whether the child has had something to eat or drink that morning, to ascertain whether it is a fasting or non-fasting sample.
A maximum of two attempts at blood taking are permitted with adults (16+) and only one attempt with children.
The volume of blood taken will vary according to the age of the respondent, as follows:
| Age | Volume | No. of specimen tubes to be filled | |----------------|--------|-----------------------------------| | Adult 16+yrs | 35.1 mL| 8 | | Child 7-15yrs | 21.1 mL| 6 | | Child 1.5-6yrs | 10.9 mL| 4 |
The volume differs to ensure that we abide by guidelines for taking blood from children for research purposes. To keep children’s blood sample volume as low as possible, some analytes will not be measured in younger children.
Blood samples will be taken by you from respondents aged 11 and over. For respondents aged 1.5 to 10 years, the sample will be taken by someone with skills and recent experience in paediatric phlebotomy. If this is not you, you will accompany the paediatric phlebotomist during the visit to the respondent’s home.
Some blood samples will be posted to Addenbrookes Hospital in Cambridge for analysis of routine analytes. Most of the blood tubes will be taken to local laboratories where samples will be centrifuged and aliquots of blood, serum, and red blood cells will be frozen for temporary storage.
An outline of the blood sampling tasks carried out prior to and at each visit is provided below: During the first nurse visit Assess eligibility for blood sampling and explain procedure in detail. Obtain verbal consent to make appointment to revisit for blood sampling and instruct about overnight fast (age 4 and above only). If respondent is aged \<11, inform respondent (and parent/guardian) that blood will be taken by a paediatric phlebotomist (if necessary). Arrange appointment with paediatric phlebotomist (if necessary). Record details in CAPI.
Prior to second visit If not yet done, arrange appointment with nurse/paediatric phlebotomist (if necessary). Ensure you have all phlebotomy items. Ensure cold packs are ready for use (i.e. placed in freezer). Prepare label strips.
Second nurse visit Re-check eligibility for blood sampling and ensure respondent understands procedures. Confirm and obtain appropriate written consents. Obtain blood sample, filling tubes in priority order. Label Monovettes with pre-printed labels (only once blood has been obtained). Record details in CAPI. Leave blood sampling promissory note with respondent.
Immediately after the visit Send tubes and associated documentation (3x carbonised Addenbrookes research analysis request forms) to Addenbrookes using the correct postal pack. Take blood specimens, storage tubes, relevant labels, contaminated waste, and documentation to the local laboratory. Record details in CAPI. Use Milton wipes to wipe the cold packs before placing them into a new plastic bag in the freezer in preparation for the next appointment. Use Milton wipes to clean the insides of the carrying box.
1.4 The blood tubes (Sarstedt Monovettes®) Up to 8 tubes need to be filled, depending on the age of the respondent. The tubes should be filled in the following order so that, if a situation arises where there will be insufficient blood to fill all the tubes, the analyses with the highest priority can still be undertaken.
The tubes, plus details of the analytes carried out on the sample contained in each, are detailed below. The destination for each tube is also provided.
| Tube: | Goes to: | Label: | |-------|----------|--------| | Respondents aged 16+ years | | | | 1. 2.6mL EDTA (red top) | Addenbrookes | E N1 (3) | | 2. 4.7mL serum gel (brown top) | Addenbrookes | SE N1 (5) | | 3. 4.5mL serum (white top) | Field Lab | SE N2 (6) | | 4. 7.5mL Li Hep TM (orange top) | Field Lab | LH N1 (7) | | 5. 7.5mL LiHep TM (orange top) | Field Lab | LH N2 (8) | We are aware that typical clinical practice is not to use EDTA tubes first due to risk of contamination of subsequent samples. However, this is considered less of an issue with Sarstedt monovettes compared to other tubes because of the way the rubber comes down over the end of the tube as you remove each one. So far, obtaining blood in EDTA tubes first has not proved to be a problem with samples in other surveys (National Survey of Health and Development) where a very similar priority protocol is used. Although there is a slight risk of contamination, there is agreement that priority should be set by the analyte order agreed by the consortium, including the FSA.
1.5 Equipment and Consumables
The blood samples will be collected using the Sarstedt Monovette® blood-collection system with multifly needle (or Monovette fixed needle if preferred). Using the syringe rather than vacuum mode reduces the chance of haemolysis. This Monovette system offers trace element contamination control and is manufactured from plastic which allows for safe transport of sample through the postal system.
You will be provided with the following equipment for blood taking:
- Monovettes for blood specimen collection:
- 2.6mL, EDTA Monovette (red top)
- 7.5mL Lithium heparin Monovette for trace metal analysis (orange top)
- 4.5mL, 2.7mL Lithium heparin Monovette (orange top)
- 4.5mL, 2.7mL serum Monovette (white top)
- 4.7mL, 2.6mL, 1.1mL serum Monovette (brown top)
- 1.2mL fluoride Monovette (yellow top)
- Tourniquet
- Disinfectant gel
- Alcohol swabs/cotton wool balls or gauze swabs/plasters
- Micropore tape
- Adhesive dressing
- Ametop gel & tegaderm dressing (See section 17.9)
- Disposable vinyl gloves • Sarstedt multifly needles: 21G with 60mm or 200mm tube length and 23G with 60mm tube length • Sarstedt fixed needles: 21G and 22G • Milton wipes • Scissors • Pen (permanent marker) • Biohazard sharps box • Biohazard labelled mini-grip bag
You will also be provided with the following equipment for the packaging and delivery/posting of samples: • Plastic postal containers • Pre-addressed padded envelopes • Specimen and document bags • Parcel tape • Pre-printed labels for all tubes including those to be passed on to the laboratory • Pulp tray for specimen tubes • Pre-packs of 2ml empty micro tubes to be delivered to local lab • Carrying box for specimen delivery to local lab • Cold packs • Instant cold packs (limited to use in emergencies and on overnight assignments)
1.6 Obtaining written consents for blood sampling
Written consents are needed for the following: • Giving a blood sample • Notifying GP of clinically relevant blood analyte results • Providing clinically relevant blood analyte results to the respondent (or parent/guardian of child respondents) • Storage of blood sample.
There are three variants of the blood sampling consent forms in the consent booklets: • Consent sheet CF (A2) is for respondents aged 16+ • CF (C2) is for respondents aged 4-15 years • CF (YC1) is for respondents aged 1.5-3 years
The appropriate blood consent form must be signed at the visit at which blood is taken, before blood is taken.
The different sections of the consent forms should be pointed out to the respondent and the form should be given to the respondent to read. After the respondent (parent/guardian) has read the consent form please encourage him/her to ask any questions they may have with regards to the procedure. Once they are content to sign, please ensure the respondent (or parent/guardian) initials all those boxes (procedures) they would like to consent to. There are also tick boxes on the child consent sheets CF(C2) and CF(YC1) to indicate whether the respondent/parent consented to give a blood sample with or without the use of Ametop gel. **Please ensure the appropriate box is ticked.**
You must check that all appropriate boxes are initialled and signatures collected. If a respondent is aged 1.5-15 years, you must make sure that you obtain the signature of their parent or the person who has parental responsibility. Children should be encouraged to provide written assent if they wish (and are able) to do so.
Please also note that if the respondent (or parent/guardian of a child respondent) does not wish to receive a report of their (child’s) blood analyte results nor do they want results to be sent to the GP, **they must sign the disclaimer form on page 8 of the consent booklet.** This is to ensure that they understand that if there are any findings outside the normal range, we will not be able to notify their GP or anyone else as we do not have their permission to do so.
### 1.7 Labelling the blood tubes
**Introduction**
All possible labels are pre-printed for a particular respondent. This means that you will receive sets of labels that will not be used if the respondent does not provide a blood sample. These can be disposed of.
On each label there will be:
- the serial number (including the respondent number), followed by the check letter
- a code showing the sample type (see table in section 17.4) and the sequential label number in brackets; and
- a barcode with unique number (for HNR’s use).
The labels will be used on documents and on blood and urine tubes. For each respondent a full set of labels (38) in a pre-specified order will be provided rolled up as a continuous strip. This strip provides all labels needed by the nurse and the field laboratory for processing the samples. Note that it is your responsibility to label Monovette tubes for all respondents, even when blood is being taken from young children by a paediatric phlebotomist.
CAPI will guide you through which labels are to be used for each respondent, and which should be affixed to which tube or sent onto the laboratory. The protocol is also outlined in the following section.
**Note that the full set of labels covers 24 hour urine samples, as well as blood.**
♦
**Identifying labels to be used**
All of the 38 labels will be used for respondents aged 16+ who give blood and urine. This means all respondent 1s, as well as respondent 2s aged 16-18. Respondents aged 1.5 - 15 years require fewer labels: 32 for respondents aged 7-15, 22 for respondents aged 4-6 years, and 18 for respondents aged 1.5 to 3 years.
The sequential label number (in brackets next to the sample type) will assist you in crossing through the labels that are not required for the 3 younger age groups. The following labels are **NOT** required for:
- 7 – 15 years
- 4 – 6 years
- 1.5 – 3 years
| 7 – 15 years | 4 – 6 years | 1.5 – 3 years | |--------------|-------------|--------------| | E N2 (4) | E N2 (4) | E N2 (4) | | LH N3 (9) | LH N2 (8) | LH N2 (8) | | LH WB (15) | LH N3 (9) | LH N3 (9) | | E1 (16) | F N1 (10) | F N1 (10) | | LH8 (25) | LH WB (15) | LH WB (15) | | LH9 (26) | E1 (16) | E1 (16) | | | LH4 (21) | LH4 (21) | | | LH5 (22) | LH5 (22) | | | LH6 (23) | LH6 (23) | | | LH7 (24) | LH7 (24) | | | LH8 (25) | LH8 (25) | | | LH9 (26) | LH9 (26) | | | SE3 (29) | SE3 (29) | | | F1 (30) | F1 (30) | | | U1 (31) | U1 (31) | | | U2 (32) | U2 (32) | | | U3 (33) | U3 (33) | | | U4 (34) | U4 (34) | | | UCOLL (35) | UCOLL (35) | | | UDESP (36) | UDESP (36) |
For labels not required for the above age groups, the top two label sections (i.e. serial number and sample type) can be crossed through – the bar code should **not** be crossed through (see below). Crossing through the serial number and sample type so they become illegible should also be avoided, in case of mistakes. Labels remaining on the strip include those for Monovettes and micro tubes not needed clearly marked by a diagonal line as shown below. The lab is instructed to return those with the samples to HNR (see also next section). The other remaining valid labels will be used by the field laboratory to label the microtubes for plasma and serum storage. Labelling blood tubes
For each respondent you will be given a pre-packed set of blood specimen tubes (Monovettes) and a pre-packed set of empty storage tubes (micro-tubes). You must pass the micro-tubes on to the field laboratory when you deliver the filled Monovette tubes. See chapter 18 ‘Despatching Blood Samples’.
The plastic bags containing the Monovettes and micro-tubes will show the corresponding age range. On the Monovette packs, the expiry date of the tube with the shortest expiry date will also be shown. Please check the date and if the expiry date has passed, use a different pack. The expired Monovette tube set should be returned to the Brentwood office.
It is your responsibility to label the Monovette tubes only. We recommend that for child respondents you prepare the phlebotomy visit by crossing out the labels not needed as described above. As there are no spare labels, the Monovette tubes should only be labelled after the blood is taken.
The correct label for each tube should be peeled off and the top of the label should be positioned onto the tube first and then wrapped round the tube horizontally, ensuring the label does not crease. It is important that the label is not creased, otherwise the bar-code scanner cannot read the bar-code. If applied correctly even on the smallest tube there is no risk of overlap that would obscure any label information.
It is very important that the correct labels are used for each respondent. If incorrect serial numbers/labels are used there is a risk of matching the blood results to the wrong respondent. The respondent’s GP could therefore be sent the wrong results, possibly leading to unnecessary worry or a problem not being picked up. To prevent mislabelling always ask the respondent to confirm that the date of birth on the serial ID labels is correct before you start labelling.
NB. The following 6 labels (31-36) are for the 24 hour urine collection:
- U1 (31)
- U2 (32) The following 2 labels (37-38) should be sent to Addenbrookes along with the blood sample:
- FOL1 (37)
- FOL2 (38)
Please remember to take the label strip to all visits, especially if blood sampling and 24hr urine are being carried out at different visits.
Label strips for respondents that do not consent to either urine or blood sampling or both should be sent back to Sue Duffy in the Blue team as soon as their non-participation in these procedures has been confirmed. This minimises the risk of mixing up labels for new respondents.
1.8 Protocol for taking the blood sample.
Before taking blood, check that the respondent has understood the purpose of the blood sample, and the protocols for taking it, and read the information leaflets. You will also obtain the necessary consents and follow the protocol outlined below:
- Check one last time if the respondent has a bleeding or clotting disorder, is on anticoagulant drugs or has ever had a fit (for under 16s) / has had a fit in the last 5 years (for 16+). If such a problem is identified then do not attempt to obtain a blood sample.
- Follow appropriate protocols if respondent is diabetic.
- Explain the purpose and procedures for taking blood.
- If aged 4+, check not had anything to eat or drink for 8hours. If not fasted, ask to make a new appointment if respondent still willing to provide a fasting blood sample.
- If respondent is aged \<16, explain the option of using Ametop
- Obtain necessary written consents.
- Prepare the phlebotomy items required, for ready accessibility.
- Make sure that the respondent is at ease and seated comfortably or reclining for the phlebotomy procedure and ensure they cannot hurt themselves if they should faint.
- Ask the respondent to roll up their left sleeve and rest their arm on a suitable surface. Ask them to remove their jacket or any thick clothing, if it is difficult to roll up their sleeve. The antecubital fossae may then be inspected. It may be necessary to inspect both arms for a suitable choice to be made, and the respondent may have to be repositioned accordingly. Do not ask the respondent to clench his/her fist.
Select a suitable vein and apply the tourniquet around the respondent's arm, using minimal pressure and for the shortest duration of time. Do not leave the tourniquet in place for longer than 2 minutes.
Ask the respondent to keep his/her arm as still as possible during the procedure.
Put on your gloves at this point.
Clean the venepuncture site gently with an alcohol swab. Allow the area to dry completely before the sample is drawn.
Make sure the Sharps bin is readily available to receive used Multifly or other needles, and take the usual rigorous precautions against needle-stick accidents. Never resheath a used needle.
Tape the Multifly to the arm with Micropore tape across only half the width of the butterfly section, and with one end folded over, so as to make a non-adhesive flap for easy removal.
Collect the blood samples according to priority by placing the specimen tubes in the correct order in the sample tray provided.
You may use the Monovettes in the ‘vacuum’ mode, by withdrawing the plunger to the ‘click’-point. It is a good practice to attach the first Monovette to the Multifly before insertion into the vein: this ensures a ‘flash’ of blood when the needle enters the vein.
Check for plaster allergies before applying a plaster. If allergic, use a cotton ball secured with micropore tape.
Ask the respondent to press afterwards on the bleeding point with their arm slightly raised, which helps reduce bruising.
Mix all tubes by gentle inversion five times except for the white and brown topped serum tubes (which do not need to be inverted).
Record details in CAPI.
1.9 Ametop gel
♦ Use of Ametop gel
All children (aged 15 and younger) who consent to give a blood sample must be offered a local anaesthetic; Ametop gel. Ametop gel cannot be used on open wounds, eczematous skin, or if the respondent has had an allergic reaction to any local or general anaesthetic. This means that you may not take a blood sample from these respondents, unless they consent to giving a sample without using Ametop. Ametop is a prescription medication and contains amethocaine (the active ingredient), which is applied to the skin. It is important that you ask the question below (also within CAPI) to determine whether the respondent has any known anaesthetic allergies.
Has the person giving this blood sample ever had a bad reaction to a local or general anaesthetic bought over the counter at a chemist, or given at the doctor, the dentist or in hospital?
Use a new Ametop tube for each respondent and make sure you remove tubes from the household on completion of phlebotomy. For safety, Ametop must not be left lying around where young children could get at it. Any Ametop tubes you have left at the end of your assignment should be returned to the Brentwood office.
♦ The pros and cons of using Ametop gel
The advantages of Ametop are that it reduces sensation of needle prick, it is easy to apply and it is generally safe.
One disadvantage is that it takes 30 minutes to work, and so may increase anxiety. Ametop gel also has minimal side-effects and occasionally mild local skin reactions are experienced in people known to be allergic to similar drugs. Other possible side effects include reddening of skin (this is the action of the amethocaine & is to be expected) and a slight swelling or itching where the gel has been applied.
None of the local skin side-effects (if they occur) requires treatment. The reddening will disappear by itself over a period of hours. A local allergic reaction may involve itching, but is unlikely to require treatment. In the very rare instance of a blister forming, remove the Ametop immediately.
You will need to explain the pros and cons of using Ametop to each respondent and parent, in addition to giving them the leaflet to read. It is important that respondents understand that you are not a doctor and cannot treat unexpected reactions.
♦ Applying Ametop gel
Ametop gel must only be applied to healthy skin; therefore it must not be applied to sore or broken skin (eg. eczema or cuts). Make sure the Ametop gel is kept away from eyes or ears.
If the young person requires Ametop to be applied prior to venepuncture, inspect the antecubital fossae and decide which arm you will use for blood-taking. If both arms are suitable, use the left arm.
Apply Ametop gel over the antecubital fossa. Cover with a Tegaderm dressing (a vapour permeable and self-sticking film dressing) to keep the Ametop in place. See details about how to apply Ametop below. Please note the illustration shows Ametop being used on the hand. National Centre policy is to only take blood samples from the arm.
1. Squeeze ¾ of a tube in a mound on the area to anaesthetise. Do not rub in.
2. Peel the beige coloured ‘centre cut-out’ from the dressing.
3. Peel the paper layer marked 3M Tegaderm from the dressing.
4. Apply the adhesive dressing with its paper frame to cover the Ametop. Do not spread the gel.
5. Remove the paper frame using the cut mark. Smooth down the edges of the dressing carefully and leave in place for 30 minutes. The time of application can be written on the occlusive dressing.
6. After 30 minutes (max. 60mins), remove the dressing. Wipe off the Ametop. Clean entire area with alcohol and begin procedure.
As you may well be aware, removing the Tegaderm is sometimes painful so take care on hairy arms!
NB. THE CONCEPT OF BLOOD TAKING AND USE OF AMETOP GEL MUST NOT BE RAISED WITH THE RESPONDENT BEFORE THE APPROPRIATE POINT IN THE CAPI SCHEDULE. DO NOT INTRODUCE BLOOD TAKING BEFORE THIS, AS THIS MIGHT RISK AFFECTING OTHER MEASUREMENTS (E.G. BLOOD PRESSURE). YOU MUST NOT APPLY AMETOP GEL TO ANY RESPONDENT BEFORE YOU ARE PROMPTED TO DO SO IN THE CAPI SCHEDULE.
1.10 Taking blood from children
Unless the NDNS nurse is a trained paediatric phlebotomist, bloods from those aged 10 and younger will be taken by a trained paediatric phlebotomist. NDNS nurses will be taking blood samples themselves from those aged 11 and over. It is important to make the child feel as comfortable and as at ease as possible. Smiling, making eye contact and speaking so that the child can understand easily are ways to facilitate this. Also, ask the child for permission to do something rather than insisting or telling. This can encourage a sense of control in the child and minimises fear.
Precautionary Restraint (A.K.A. Cuddle Restraint) If the parent/guardian is willing (note this is optional), they can help you to gently restrain the child to reduce any accidents due to pulling away at the pin prick or panicked movements. Ask the child to sit on the parent’s lap. The child should be sitting so that their legs are between the parent’s legs. The child should have their arm wrapped around the parent’s back and vice versa for the parent. This exposes the chosen arm to the nurse while occupying the child’s arms and legs.
NOTE: It is important to ask the child to sit on the same side of the parent as the arm identified for venepuncture.
Please note that if the child has turned 11 since the interviewer visit and is 11 when you are gaining agreement for blood sampling, you, the nurse, should take the blood from this child. This is the only scenario where you should base age on actual, current age rather than the age set at the interviewer visit. CAPI will prompt you to arrange to take blood if the child has turned 11 since the interviewer stage.
1.11 Scheduling appointments
Due to restrictions on when laboratories can process samples and the fact that the vast majority of respondents will be providing fasting samples, **blood sampling can only take place on Monday-Thursday mornings.**
We appreciate that these restrictions mean you will need to make a second or even third visit to a household to collect blood samples (e.g. you may have to make one evening visit to collect all the measurements except the blood sample then another morning visit to take the blood sample(s)).
In order to minimise the number of visits, if a household contains two respondents you should schedule appointments for when both respondents are available.
When a household contains a respondent aged 10 or younger, you also need to schedule the blood taking appointment to fit in with the availability of your paediatric phlebotomist partner.
1.12 Liaison with paediatric phlebotomist
Blood from young children, aged 10 or younger, will be taken from someone with recent experience in paediatric phlebotomy. If this is not you, you will be allocated a paediatric phlebotomist partner who will accompany you on visits to take blood from young children.
The earlier you know whether you have a child aged 18 months to 10 years, the better. This means both you and the phlebotomist, as well as the office, can be better prepared to deal with this. As soon as you know you will be visiting an address with a child aged 18 months to 10 years, you should call XXXX. XXXX has a list of paediatric phlebotomists who have been recruited and trained for NDNS. She will be able to tell you the name, phone number and address of the best placed phlebotomist.
You should then call the phlebotomists to make them aware that you potentially have an address where there might be some work for them to do. At this initial contact, you should ascertain the phlebotomists general availability during the fieldwork period (e.g. any days when the phlebotomist is on holiday or otherwise engaged). This will help when arranging blood-taking visits.
During the first visit when willingness to give a blood sample is ascertained, you can call the phlebotomist to arrange the follow-up visit whilst you are still in the household. Ideally, you will have the phlebotomist availability in advance and can make an appointment then and there. If this is not possible, you will need to arrange the visit as soon as possible afterwards and confirm details with the household over the phone.
**Important points when working with a phlebotomist:**
- The NDNS nurse is responsible for providing and taking all equipment, including tubes, labels, and needles to the respondent’s address.
- The NDNS nurse is responsible for obtaining written consent and making sure signed consents are obtained in the consent booklet. The NDNS nurse is responsible for entering information into the laptop and must follow the usual blood taking block in the CAPI.
The phlebotomists will be asked to complete and sign a paper version of the venepuncture checklist. NDNS nurses will need to enter this information into the CAPI and should post the paper version to the office.
The NDNS nurse is responsible for all labelling, despatch and delivery of samples.
In essence – the phlebotomists will take the blood sample only – the NDNS nurse does everything else. This is because you are more experienced and have better training in all these areas.
1.13 Blood sampling token of appreciation
Respondents of all ages will receive £15 in high street vouchers as a thank you for providing a blood sample. Remember this should not be presented as ‘payment’ but as a token of appreciation. Vouchers will be sent out from the office but you will need to complete the yellow promissory note and leave it with the respondent.
1.14 Other important points
Please refer to the Nurse Protocols for important information regarding:
- Venepuncture checklist
- Fainting respondents
- Needle stick injuries
The Nurse Protocol also provides general information regarding the handling and disposal of needles and other materials. Also note that for NDNS, sharps bins can be filled with needles from several respondents and taken to the local field laboratory for disposal when full. Other contaminated waste generated should be placed in the biohazard labelled mini-grip bag provided and taken to the local field laboratory for disposal.
Labelling & Despatch of BLOOD samples
Most blood tubes (Sarstedt Monovettes®) will be taken by you to the field laboratories, for the blood to be processed; but some will need to be sent in the post to Addenbrookes Hospital, Cambridge.
It is absolutely crucial that tubes are delivered to the correct destination.
1.15 Despatching blood samples to Addenbrookes
Overview
The type of blood tubes to be posted to Addenbrookes depends on the age of the respondent and is summarised in the table below. | Tube: | No of tubes: | Goes to: | Label: | |-------|-------------|----------|--------| | **Respondents aged 16+ years** | | | | | 2.6mL EDTA blood tube (red top) | 1 | Addenbrookes | E N1 (3) | | 4.7mL serum gel blood tube (brown top) | 1 | Addenbrookes | SE N1 (5) | | **Respondents aged 7-15 years** | | | | | 2.6mL EDTA blood tube (red top) | 1 | Addenbrookes | E N1 (3) | | 2.6mL serum gel blood tube (brown top) | 1 | Addenbrookes | SE N1 (5) | | **Respondents aged 1.5-6 years** | | | | | 2.6mL EDTA blood tube (red top) | 1 | Addenbrookes | E N1 (3) | | 1.1mL serum gel blood tube (brown top) | 1 | Addenbrookes | SE N1 (5) |
It is essential that the tubes are properly labelled as the Addenbrookes pathology laboratory will be receiving blood tubes from many different studies and respondents from around the UK.
♦ **Packaging the tubes for posting**
The packaging for posting the tubes has to comply with Royal Mail guidelines. The packaging consists of the following:
- *Primary receptacle* – blood-filled Monovette tube
- *Secondary packaging* – Noax tube (recyclable)
- *Rigid outer packaging* – plastic ‘video-cassette’ box
- Labelled jiffy bag
Each blood-filled Monovette tube must be placed into a Noax tube (screw cap) before placing it into the rigid outer box. Labels FOL1 (37) and FOL2 (38) (see next section) should be attached to the 3 carbonised copies of the completed Addenbrookes biochemistry despatch note (see below) with a paperclip. The rigid outer box and the Addenbrookes biochemistry despatch notes, with attached label should be placed into the labelled jiffy bag and posted.
Tubes from respondents from the same household going to Addenbrookes can be posted together. Documentation for both respondents must be included in the packet.
The blood samples must be posted as soon as possible after they were taken, so that they arrive at Addenbrookes within 24 hours. The jiffy bags will fit in a post box. Before posting you must always check that you have not missed the same day collection. Only if it is unlikely that you will find a post box with a same day collection that has not passed yet in an acceptable driving distance can you post the sample in a post-box where collection will take place the next day. Sub-sample Labels for Addenbrookes
Labels FOL1 (37) and FOL2 (38) are used by the Addenbrookes laboratory staff for labelling blood sub-sample tubes. These 2 labels should be cut from the bottom of the label strip, attached to the 3 carbonised copies of the Addenbrookes research analysis request form with a paperclip and enclosed with blood samples sent to Addenbrookes.
Blood Sample Despatch Notes for Addenbrookes
The Office Consent booklet contains three carbonised copies of the Addenbrookes biochemistry despatch note (Research Analysis Request – 952), all of which must be enclosed with samples posted to Addenbrookes.
You should clearly and legibly complete the following information in the top section of the first copy of the biochemistry despatch note (the bottom section will be completed by the laboratory):
- The respondent’s date of birth.
- Whether the respondent is male or female.
- Whether the respondent provided a fasting or non-fasting blood sample.
- The date the sample was taken.
- The time the sample was taken.
- Whether a full or partial sample was obtained for each of the two tubes.
The Addenbrookes despatch notes are carbonised but please ensure the information you have recorded has transferred through to each of the three copies.
You should then affix the following labels onto the three copies of the despatch note:
- **FIRST COPY:** Affix serial number label AddxB1 (11) in the specified box.
- **SECOND COPY:** Affix serial number label AddxB2 (12) in the specified box.
- **THIRD COPY:** Affix serial number label AddxB3 (13) in the specified box.
Please ensure that you complete all necessary information fully as each part is a vital piece of information.
**IMPORTANT:** Please remember to fill in the carbonised despatch notes contained in the Office Consent booklet – Addenbrookes need all three of these in order to process the samples correctly. If they do not receive all three copies, correctly labelled and completed, they will not process the samples.
When the samples have been posted, you should record details of the samples collected, and the date of posting to Addenbrookes on the “Despatch Note for all Samples” form (DESP OFFICE) which is at the back of the Office Consent booklet. 1.16 Taking blood samples to local field laboratory for immediate processing
♦ Overview
Most blood tubes will be taken to the field laboratories, for the blood to be processed. The number of blood tubes to be taken to the local laboratory depends on the age of the respondent and is summarised in the table below.
| Tube: | Goes to: | Label: | |-------|----------|--------| | **Respondents aged 16+ years** | | | | 4.5mL serum (white top) | Field Lab | SE N2 (6) | | 7.5mL Li Hep TM (orange top) | Field Lab | LH N1 (7) | | 7.5mL Li Hep TM (orange top) | Field Lab | LH N2 (8) | | 1.2mL Fluoride (yellow top) | Field Lab | F N1 (10) | | 4.5mL Li Hep (orange top) | Field Lab | LH N3 (9) | | 2.6mL EDTA blood tube (red top) | Field Lab | E N2 (4) | | **Respondents aged 7-15 years** | | | | 7.5mL Li Hep TM (orange top) | Field Lab | LH N1 (7) | | 4.5mL serum (white top) | Field Lab | SE N2 (6) | | 2.7mL Li Hep (orange top) | Field Lab | LH N2 (8) | | 1.2mL Fluoride (yellow top) | Field Lab | F N1 (10) | | **Respondents aged 1.5 to 6 years** | | | | 4.5mL Li Hep (orange top) | Field Lab | LH N1 (7) | | 2.7mL serum (white top) | Field Lab | SE N2 (6) |
♦ Packaging and delivering the tubes to the field laboratory
The samples must be delivered to the laboratory within 2 hours of the sample being taken. You must not take a blood sample if you cannot deliver it to the local laboratory within this time.
After the blood samples have been taken and when transporting them to the field laboratory it is important that they are kept in the cool box provided. The samples for the respondent should be put in a plastic bag and placed in the cool box so they stay upright during transportation. If two respondents (from the same or different households) have given blood samples in a morning, their samples can be transported together in the cool box; in this case it is particularly important that the samples are labelled and bagged correctly.
Each respondent’s set of samples must be handed over to the designated person at the field laboratory together with the relevant despatch note, FL2 (see next section), the corresponding set of labelled pre-packed empty storage tubes, and remaining labels. Blood Sample Despatch Notes for field laboratory
You should clearly and legibly complete all parts in section 1 of the Despatch Note. Always complete ALL parts of this section in full as each piece is a vital bit of information (section 2 will be completed by the laboratory).
Liaison with field laboratory
Samples may be delivered to your designated field laboratory on Mondays to Thursdays in the morning. It is very important that you always notify the field laboratory of sample deliveries in advance. Delivery times should be discussed with your contact person. As you will usually be taking fasting blood samples in the morning there is minimal risk that you are likely to deliver samples outside the normal opening hours of the laboratory but if this does happen (e.g. you get stuck in traffic), you must endeavour to contact the field laboratory to let them know. You must also notify the laboratory immediately you know that a scheduled delivery is not going to take place, e.g. because of a broken appointment or the respondent not being able/willing to provide a sample. This notification is a matter of courtesy to save the laboratory preparing the stabilising agents unnecessarily and then waiting for a delivery that is never going to arrive.
Contact details (i.e. name, address and telephone number) of the local laboratory recruited for your area will be given in a separate document, along with any special delivery instructions. Each document contains the name and telephone number of the contact person (including a deputy) at the local laboratory, opening hours of the laboratory, and any helpful information on parking and location.
Any difficulties encountered with the local laboratory during the study should be reported to HNR as soon as possible. It is the responsibility of HNR to resolve any difficulties between local laboratories and study nurses. You will be provided with a named contact person at HNR that can be contacted by phone or e-mail.
Please remember to record details of the samples collected on the “Despatch Note for all Samples” form (DESP OFFICE) which can be found at the back of the Office Consent booklet. WAIST & HIP CIRCUMFERENCES WAIST AND HIP CIRCUMFERENCES (AGED 11+) PROTOCOL
Purpose
There has been increasing interest in the distribution of body fat as an important indicator of increased risk of cardiovascular disease. The waist-to-hip ratio is a measure of distribution of body fat (both subcutaneous and intra-abdominal). Analyses suggest that this ratio is a predictor of health risk like the body mass index (weight relative to height).
Equipment
Insertion tape calibrated in mm (with a metal buckle at one end – if used).
The tape is passed around the circumference and the end of the tape is inserted through the metal buckle at the other end of the tape.
Eligibility
Waist and hip measurements will only be carried out on respondents aged 11 and over. The respondent is ineligible for the waist and hip measurement if:
a. Chairbound b. Has a colostomy/ileostomy c. Pregnant
If (a) and/or (b) apply, record this on the computer (question WHPNABM). If there are any other reasons why the measurement was not taken, record this on the computer and type in the reason.
Preparing the respondent
The interviewer will have asked the respondent to wear light clothing for your visit. Explain to the respondent the importance of this measurement and that clothing can substantially affect the reading.
If possible, without embarrassing you or the respondent, ensure that the following items of clothing are removed:
- all outer layers of clothing, such as jackets, heavy or baggy jumpers, cardigans and waistcoats
- shoes with heels
- tight garments intended to alter the shape of the body, such as corsets, lycra body suits and support tights
If the respondent is wearing a belt, ask them if it would be possible to remove it or loosen it for the measurement.
Pockets should be emptied.
Some respondents may be wearing religious or other symbols which they cannot remove and which may affect the measurement. Do not embarrass or offend the respondent by asking them to remove such things. If the respondent is not willing to remove bulky outer garments or tight garments and you are of the opinion that this will significantly affect the measurement, record this on the Schedule at questions WJRel and/or HJRel. Some respondents may be wearing articles of clothing which cannot be removed and will affect the measurement (e.g. saris) – this should also be recorded.
If possible, ask the respondent to empty their bladder before taking the measurement.
**Using the insertion tape**
All measurements should be taken to the nearest millimetre. If the length lies half-way between two millimetres, then round to the nearest even millimetre. For example, if the measurement is halfway between 68.3 and 68.4, round up to 68.4. And if the measurement is halfway between 68.8 and 68.9, round down to 68.8. Please note that you must enter the measurement to one decimal place - do not round it to the nearest centimetre. For example, enter ‘78.2’, not just ‘78’. If you do not enter a decimal point, the computer will give you a warning. If the measurement is exactly, say, 78cm, then all you need to do is suppress the warning and it will automatically fill in the ‘.0’ for you. Otherwise, you must go back and amend your answer. As a further check, the computer will also ask you to confirm that a measurement ending in ‘.0’ is correct.
Ensure the respondent is standing erect in a relaxed manner and breathing normally. Weight should be evenly balanced on both feet and the feet should be about 25-30cm (1 foot) apart. The arms should be hanging loosely at their sides.
If possible, kneel or sit on a chair to the side of the respondent.
Pass the tape around the body of the respondent and insert the plain end of the tape through the metal ring at the other end of the tape.
To check the tape is horizontal you have to position the tape on the right flank and peer round the participant's back from his/her left flank to check that it is level. This will be easier if you are kneeling or sitting on a chair to the side of the respondent.
Hold the buckle flat against the body and flatten the end of the tape to read the measurement from the outer edge of the buckle. Do not pull the tape towards you, as this will lift away from the respondent's body, affecting the measurement.
**Measuring waist circumference**
The waist is defined as the point midway between the iliac crest and the costal margin (lower rib). To locate the levels of the costal margin and the iliac crest use the fingers of the right hand held straight and pointing in front of the participant to slide upward over the iliac crest. Men's waists tend to be above the top of their trousers whereas women's waists are often under the waistband of their trousers or skirts.
Do not try to avoid the effects of waistbands by measuring the circumference at a different position or by lifting or lowering clothing items. For example, if the respondent has a waistband at the correct level of the waist (midway between the lower rib margin and the iliac crest) measure the waist circumference over the waistband.
Ensure the tape is horizontal. Ask the participant to breathe out gently and to look straight ahead (to prevent the respondent from contracting their muscles or holding their breath). Take the measurement at the end of a normal expiration. Measure to the nearest millimetre and record this on the schedule.
Repeat this measurement again.
If you are of the opinion that clothing, posture or any other factor is significantly affecting the waist measurement, record this on the schedule.
**Measuring hip circumference**
The hip circumference is defined as being the widest circumference over the buttocks and below the iliac crest. To obtain an accurate measurement you should measure the circumference at several positions and record the widest circumference.
Check the tape is horizontal and the respondent is not contracting the gluteal muscles. Pull the tape, allowing it to maintain its position but not to cause indentation. Record the measurement on the schedule to the nearest millimetre, e.g. 95.3. If the length lies half-way between two millimetres, then round to the nearest even millimetre.
If clothing is significantly affecting the measurement, record this on the schedule.
Repeat this measurement again.
**General points**
The tape should be tight enough so that it doesn't slip but not tight enough to indent clothing. If clothing is baggy, it should be folded before the measure is taken.
If the respondent is large, ask him/her to pass the tape around rather than having to "hug" them. Remember though to check that the tape is correctly placed for the measurement being taken and that the tape is horizontal all the way around.
If your second waist or hip measurement differs by 3cm or more from the first, the computer will give you a warning. If you have made a mistake when entering the figures (e.g. typed 78.2 instead of 68.2), you should type over the mistake. If it was not a mistake, you should suppress the warning and take a third measurement.
If you have problems palpating the rib, ask the respondent to breathe in very deeply. Locate the rib and as the respondent breathes out, follow the rib as it moves down with your finger. If your respondent has a bow at the back of her skirt, this should be untied as it may add a substantial amount to the waist circumference.
Female respondents wearing jeans may present a problem if the waistband of the jeans is on the waist at the back but dips down at the front. It is essential that the waist measurement is taken midway between the iliac crest and the lower rib and that the tape is horizontal. Therefore in this circumstance the waist measurement would be taken on the waist band at the back and off the waist band at the front. Only if the waistband is over the waist all the way around can the measurement be taken on the waistband. If there are belt loops, the tape should be threaded through these so they don't add to the measurement. Recording problems
We only want to record problems that will affect the measurement by more than would be expected when measuring over light clothing. As a rough guide only record a problem if you feel it affected the measurements by more than 0.5cm. We particularly want to know if waist and hip are affected differently.
At WJRel and HJRel, record how reliable the waist and hip measures are, and whether any problems that were experienced were likely to increase or decrease the measurement. This information is important for analysis of the results. As a general rule, if you believe that the measurements you took are 0.5cm more or less than the true measurement because of problems you encountered (e.g., clothing the respondent was wearing), this should be counted as unreliable.
Respondent feedback
Offer to write the measurements on the Measurement Record Card.
The measurements will be given in inches as well as centimetres by the computer. You can record the measurements on the MRC using centimetres, inches or both. DEMISPAN MEASUREMENT Purpose The demispan measurement is an alternative measure of height. It is the distance between the midline of the sternal notch and the base of the fingers between the middle and ring fingers, with the arm out-stretched laterally (see Figure below).
The demispan measurement is taken when it is difficult to measure height accurately. For example if the respondent cannot stand straight or is unsteady on their feet as is quite often in the case of the elderly and some disabled people. It is used as a proxy for a height measurement as there is a relationship between demispan and ‘true height’. Additionally, height decreases with age to a varying degree depending on individuals, and thus the standard measure of height may be less useful for some older respondents. The long bones in the arm do no get shorter however, and thus can be used to estimate accurately a respondent’s ‘true height’.
Eligibility Demispan measurements will be carried out on respondents aged 65 and over. Demispan measurements will be carried out on those aged 16-64 where the interviewer collected a valid weight measurement but was not able to collect a valid height measurement.
Exclusion criteria Respondents are excluded from the demispan measurement if: • They cannot straighten either arm without pain or discomfort.
Equipment You will need: • A thin retractable demispan tape calibrated in cm and mm • A skin marker pencil • Micropore tape • Alcohol and non-alcohol swab
Using the demispan tape A hook is attached to the tape and this is anchored between the middle and ring fingers at the finger roots. The tape is then extended horizontally to the sternal notch.
The tape is fairly fragile. It can be easily damaged and will dent or snap if bent or pressed too firmly against the respondent’s skin. Also the ring connecting the hook to the tape is a relatively weak point. Avoid putting more strain on this ring than necessary to make the measurements. When extending the tape, hold the tape case rather than the tape itself as this puts less strain on the hook and tape. When placing the tape against the sternal notch, do not press into the sternal notch so much that the tape kinks.
Preparing the respondent
Explain to the respondent the purpose of conducting the demispan measurement and explain the procedure. Further explain that the measurement requires minimal undressing because certain items may affect the accuracy of the measurement. The items of clothing that will need to be removed include:
- Ties
- Jackets, jumpers and other thick garments
- Jewellery items such as chunky necklaces/bracelets
- Shoulder pads
- High heeled shoes
- Shirts should be unbuttoned at the neck
If the respondent does not wish to remove any item that you think might affect the measurement, record that the measurement was not reliable in CAPI.
For the purpose of consistency, where possible the right arm should always be used. If this is not possible, carry out the measure on the left arm and make a note of this in CAPI.
Procedure
01. Locate a wall where there is room for the respondent to stretch his/her arm. They need to stand with their back to the wall but not support themselves on it, standing approximately 3 inches (7cm) from the wall.
02. Ask the respondent to stand with weight evenly distributed on both feet, head facing forward.
03. Have them raise their right arm and extend it horizontally to their side until it is parallel with the floor. The right wrist should be in neutral rotation and neutral flexion. Rest your left arm against the wall allowing the respondent’s right wrist to rest on your left wrist.
04. When the respondent is in the correct position, mark the skin at the centre of the sternal notch using the skin marker pencil. This mark must be made when the respondent is standing in the correct position. Explain to the respondent that the mark will wash off afterwards.
05. If clothing, jewellery or subcutaneous fat obscures the sternal notch, use a piece of micropore tape on the clothing or jewellery. If the respondent refuses to the use of the marker pen or the tape, proceed with the measurement but record it as unreliable in CAPI.
06. Ask the respondent to relax while you get the demispan tape.
07. Place the hook between the middle and ring fingers of the respondent so that the tape runs smoothly across the arm.
08. Ask the respondent to get into the position they were in previously, with their arm raised horizontally, the wrist in neutral flexion and rotation. Check they are in the correct position.
09. Extend the tape to the sternal notch. If no mark was made, feel for the correct position and extend the tape to this point.
10. Ask the respondent to stretch his/her arm checking that they remain in the same position, the hook has not moved on their fingers and that the respondent is not leaning on the wall or bending at the waist.
11. Record the measurement in CAPI, in centimetres and millimetres. Always report to one decimal place. If the length lies halfway between 2 millimetres, then round to the nearest even millimetre (see section 2.4).
12. Ask the respondent to relax and loosen up the right arm by shaking it gently.
13. Repeat steps 2-11. Explain to the respondent that the measure needs to be taken again for accuracy. If the second measure is significantly different to the first, CAPI will give you an error message. At this point you can check to make sure that you have entered the readings correctly or take a third measure if there is another reason for the measurements being different. This is to be taken in the same way as the previous two. CAPI will work out which two of the three readings to use.
14. If the respondent wishes, record the results on their measurement record card. You can use the conversion chart on your showcards to convert the results into inches.
15. If the skin marker is used, offer the alcohol or non alcohol wipe to the respondent to wipe the skin mark off.
Additional points
- If the respondent is unable to stand in the correct position or finds it difficult to stand steadily, ask them to sit for the measurement. Use an upright chair and position it close to a wall. If a respondent is unable to sit or stand, the measurement can be taken when the respondent is lying down. In both cases still try to support the arm if possible. You may need to sit or kneel to take the reading.
- Record in CAPI how the measurement was taken (i.e., with respondent standing, sitting, etc).
- If there is no wall available for the respondent to stand in front of and extend their arm horizontally, have them stand in front of any other flat surface e.g. in front of a cupboard or window, ensuring that they are not supporting their body weight on this surface.
- If the respondent is much taller than you take the measurement with the respondent sitting.
- If the respondent’s arm is much longer than yours is, support the arm close to the elbow rather than wrist level. Your arm must not be between the elbow and shoulder, as this will not provide sufficient support.
- Before packing the tape away ensure the hand hook and length of tape is wiped to reduce potential cross infection between households. BLOOD PRESSURE BLOOD PRESSURE PROTOCOL
Blood Pressure (Aged 4+)
High blood pressure is an important risk factor for cardiovascular disease. It is important that we look at the blood pressure of everyone in the survey using a standard method so we can see the distribution of blood pressure across the population. This is vital for monitoring change over time, and monitoring progress towards lower blood pressure targets set in the Health of the Nation.
Timing- Blood pressure can be higher than normal immediately after eating, smoking, drinking alcohol or taking vigorous exercise. This is why respondents are asked to avoid doing these for 30 minutes before you arrive. As already suggested, if you can juggle respondents within a household around to avoid having to break this "half-hour" rule, do so. But sometimes this will not be possible and you will have to take their blood pressure within this time period. In which case enter all the codes that apply at ConSubX.
Eligibility
The only people not eligible for blood pressure measurement are those who are pregnant (who will have been screened out anyway) or aged less than 4 years old.
Protocol For Blood Pressure Recording: Omron Hem-907
This section describes the protocol for measuring blood pressure using the Omron HEM 907. More detailed information may be obtained from the instructions booklet inside the box. If you have any further questions or problems then please contact XXXX.
Equipment
Omron HEM 907 blood pressure monitor Child/ small adult cuff (17-22 cm) Standard adult cuff (22-32 cm) Large adult cuff (32-42 cm) AC adapter
The Omron HEM -907 blood pressure monitor is an automated machine. It is designed to measure systolic blood pressure, diastolic blood pressure and pulse rate automatically at pre-selected time intervals. On this study three readings are collected at one-minute intervals.
The Omron 907 is equipped with a rechargeable battery, which is usable for approximately 300 measurements when fully charged. To recharge the battery, connect the monitor to the mains. A battery symbol will appear in the CHARGING display when the battery is charging. When ready to use the symbol will disappear. A dark battery symbol in the BATTERY display indicates that the battery is charged and the machine is usable. The battery can be charged in approx. 12 hours. When the battery symbol in the BATTERY display starts to flash there are 20- 30 measurements left, you need to charge the battery soon. When a light battery symbol appears in the BATTERY display the battery needs to be put on charge immediately. The Omron 907 is NOT designed to work off the mains adaptor; it should be run off the battery power pack. The mains adaptor should ONLY be used to charge the battery pack.
PLEASE REMEMBER TO CHARGE THE BATTERY !!
The picture on page 28 shows the main features of the Omron HEM-907. Preparing the respondent
The respondent should not have eaten, smoked, drunk alcohol or taken vigorous exercise in the 30 minutes preceding the blood pressure measurement as blood pressure can be higher than normal immediately after any of these activities. As already suggested, if you can juggle respondents within a household around to avoid having to break this "half-hour" rule, do so. But sometimes this will not be possible and you will have to take their blood pressure within this time period. In which case enter all the codes that apply.
Ask the respondent to remove outer garments (e.g. jumper, cardigan, jacket) and expose the right upper arm. The sleeve should be rolled or slid up to allow sufficient room to place the cuff. If the sleeve constricts the arm, restricting the circulation of blood, ask the respondent if they would mind taking their arm out of the sleeve for the measurement.
Selecting the correct cuff
Adults aged 16 and over: Do not measure the upper arm circumference. Instead, choose the correct cuff size based on the acceptable range which is marked on the inside of the cuff. You will note that there is some overlap between the cuffs. If the respondent falls within this overlap range then use the standard cuff where possible.
Children aged 4 to 15: It is important to select the correct cuff size. The appropriate cuff is the largest cuff which fits between the axilla (underarm) and the antecubital fossa (front of elbow) without obscuring the brachial pulse and so that the index line is within the range marked on the inside of the cuff. You will be provided with a child’s cuff as well as the other adult cuffs. Many children will not need the children’s cuff and instead will require an adult cuff. You should choose the cuff that is appropriate to the circumference of the arm.
Adults and Children: The appropriate cuff should be connected via the grey air tube to right end side of the monitor.
Procedure
Wrap the correct sized cuff round the upper right arm and check that the index line falls within the range lines. Use the left arm only if it is impossible to use the right. If the left arm is used, record this on the schedule. Locate the brachial pulse just medial to the biceps tendon and position the arrow on the cuff over the brachial artery. The lower edge should be about 1-2 cm above the cubital fossa (elbow crease).
Do not put the cuff on too tightly as bruising may occur on inflation. Ideally, it should be possible to insert two fingers between cuff and arm. However, the cuff should not be applied too loosely, as this will result in an inaccurate measurement.
The respondent should be sitting in a comfortable chair with a suitable support so that the right arm will be resting at a level to bring the antecubital fossa (elbow) to approximately heart level. They should be seated in a comfortable position with cuff applied, legs uncrossed and feet flat on the floor.
Explain that before the blood pressure measurement we need them to sit quietly for five minutes to rest. They should not smoke, eat or drink during this time. Explain that during the measurement the cuff will inflate three times and they will feel some pressure on their arm during the procedure. It is important that children as well as adults rest for five minutes before the measurement is taken. However, making children sit still for five minutes can be unrealistic. They may move around a little, but they should not be running or taking vigorous exercise. As with adults, they should not eat or drink during this time.
After five minutes explain you are starting the measurement. Ask the respondent to relax and not to speak until the measurement is completed as this may affect their reading.
How to operate the monitor See Picture of Omron HEM-907 monitor above.
1. Switch the monitor on by pushing the ON/OFF button. Wait for the READY TO MEASURE symbol to light, indicating the machine is ready to start the measurement (approx 2 sec).
2. Check that the MODE Selector is set to AVG and the P-SET (pressure setting) Volume is set to AUTO.
3. Press the START button to start the measurement. The cuff will now start to inflate and take the first measurement. When the first measurement is complete the LCD displays show systolic pressure, diastolic pressure, and pulse rate. Record the readings on the interview schedule.
4. Blood pressure will then be recorded at one-minute intervals thereafter. After each interval record the reading from the LCD displays on the interview schedule.
5. After the three measurements are complete press the ON/OFF button to turn off the power and remove the cuff.
If there are any problems during the blood pressure measurements or the measurement is disturbed for any reason, press the STOP button and start the procedure again. If the respondent has to get up to do something, then ask them to sit and rest for five minutes again.
Error readings They appear on the LCD display:
Er1, Er2. Check that the tube connecting the cuff to the monitor is properly inserted and it is not bent. Check that the cuff is properly wrapped around the arm. Repeat the measurement.
Er3. Check that the tube connecting the cuff to the monitor is not bent. Repeat the measurement.
Er4. This could be because of a motion artefact. Ask the respondent to sit as still as possible and take the measurement again. If you still get another Er4 error reading, it could be because the respondent has a very high blood pressure. Set the P-SET Volume to 260 and repeat the measurement.
Er5, Er6. Check that the cuff is properly wrapped around the arm. Repeat the measurement.
If any of these errors readings persist, record that it wasn’t possible to get a reading and explain to the respondent that this sometimes happens. Then contact Brentwood and inform them that there is a problem with the monitor.
Er7, Er8. Check that the respondent does not move, ask the respondent to sit as still as possible and take the measurement again. If you still get an error reading the pulse may be irregular. Do NOT palpate the pulse. Record that it wasn’t possible to get a reading and explain to the respondent that this sometimes happens.
Er9. Technical fault. Contact Brentwood immediately and inform them that there is a problem with the monitor.
CAPI: Readings - Record the blood pressure readings in the order shown on the screen. Double check each entry as you make it to ensure you have correctly entered the reading. If you have got to this point and then become aware that you are not going to be able to get a reading after all, you should enter ‘996’ then press <End>. This will automatically enter ‘999’ in each box, to save you having to type it in 12 times. Blood pressure readings given by the Omron are systolic blood pressure, diastolic blood pressure and pulse: the Omron does not give MAP. **NAttBP** - If you failed to get a reading, or you only managed to obtain one or two readings, enter a code to show what the problem was. If necessary, write in full details at *OthNBP*.
**Feedback to respondents**
Offer the respondent his/her blood pressure readings. If (s)he would like them, enter them on the Measurement Record Card (MRC). If an adult respondent has a raised blood pressure you must give her/him advice based on the result. This will be calculated by the computer and will appear on the screen for you to read out exactly as written. Write any advice given onto the MRC. The interviewer should have given them a MRC with the height and weight recorded on it. If the respondent has lost it, or claims never to have had one, make out a new one, ensuring the name is on the front of the card.
It is not the purpose of this survey to provide respondents with medical advice. Nevertheless, many respondents will ask you what their blood pressure readings mean. Make sure you are very familiar with the guidance below. We wish it to be strictly followed. It is very important that as little anxiety as possible is caused but at the same time we have a duty to advise people to see their GPs if blood pressure is raised.
**a) Child respondents (age 4 to 15)**
We do not wish you to comment on the child's blood pressure readings to the parents. If they seek comment, reiterate what you have already said about not being able to interpret a single blood pressure measurement without checking to see whether it is normal for the child's age and height. Reassure them that if it is found to be abnormal, the Survey Doctor will get in touch with them or their child's GP, if they give permission for the results to be sent to their child's GP, and advise them as to what steps they should take. This rule applies for all readings you obtain.
**b) Adult respondents (aged 16+)**
In answering queries about an adults blood pressure it is very IMPORTANT to remember that it is not the purpose of the survey to provide respondents with medical advice, nor are you in a position to do so as you do not have the respondent's full medical history. But you will need to say something. What you say in each situation has been agreed with the survey doctor. The computer screen will tell you what to say in each situation. It is very important that you make all the points relevant to the particular situation and that you do not provide a more detailed interpretation as this could be misleading. Read the information below very carefully and make sure you always follow these guidelines. This information will be based on the highest systolic and highest diastolic reading from the last two readings. This will usually, but not always, be from the same reading. For example, occasionally it may be the systolic from the second reading and the diastolic from the third reading.
Definitions of raised blood pressure differ slightly. We are using the ones given below for this survey. They are the same as those used in the Health Survey for England. It is important that you adhere to these definitions, so that all respondents are treated in an identical manner. These are shown below. SURVEY DEFINITION OF BLOOD PRESSURE RATINGS
For men and women aged 16+
| Rating | Systolic | Diastolic | |----------------------|-----------|-----------| | Normal | \<140 | \<85 | | Mildly raised | 140 - 159 | 85 – 99 | | Raised | 160 - 179 | 100 – 114 | | Considerably raised | 180 or more | 115 or more |
Points to make to a respondent about their blood pressure (given on screen):
**Normal:** 'Your blood pressure is normal'
**Mildly raised:** 'Your blood pressure is a bit high today.' 'Blood pressure can vary from day to day and throughout the day so that one high reading does not necessarily mean that you suffer from high blood pressure.' 'You are advised to visit your GP within 2 months to have a further blood pressure reading to see whether this is a once-off finding or not.'
**Raised:** 'Your blood pressure is a bit high today.' 'Blood pressure can vary from day to day and throughout the day so that one high reading does not necessarily mean that you suffer from high blood pressure.' 'You are advised to visit your GP within 2 weeks to have a further blood pressure reading to see whether this is a once-off finding or not.'
**Considerably raised:** 'Your blood pressure is high today.' 'Blood pressure can vary from day to day and throughout the day so that one high reading does not necessarily mean that you suffer from high blood pressure.' 'You are strongly advised to visit your GP within 5 days to have a further blood pressure reading to see whether this is a once-off finding or not.'
**Note:** If the respondent is elderly and has considerably raised blood pressure, amend your advice so that they are advised to contact their GP within the next week or so about this reading. This is because in many cases the GP will be well aware of their high blood pressure and we do not want to worry the respondent unduly. It is however important that they do contact their GP about the reading within 7 to 10 days. In the meantime, we will have informed the GP of their result (providing the respondent has given their permission).
**Action to be taken by the nurse after the visit**
If you need to contact the Survey Doctor, do not do this from the respondent's home - you will cause unnecessary distress.
**a) Children**
No further action is required after taking blood pressure readings on children. All high readings are viewed routinely by the Survey Doctor. However, in the rare event that you encounter a child with a very high blood pressure, i.e. systolic 160 or above or diastolic 100 or above please call the Survey Doctor.
**b) Adults**
The chart on the next page summarises what action you should take as a result of the knowledge you have gained from taking an adult's blood pressure readings. For this purpose you should only take into account the last two of the three readings you take. We do not want you to use the first reading as it is prone to error for the reason stated above.
| BLOOD PRESSURE | ACTION | |----------------|--------| | Normal/mildly raised/raised BP | No further action necessary | | 2\\textsuperscript{nd} or 3\\textsuperscript{rd} reading: Systolic less than 180 mmHg and Diastolic less than 115 mmHg | If you feel that the circumstances demand further action, inform the Survey Doctor who will then inform the respondent's GP urgently if she deems it necessary.\*\* | | Considerably raised BP | Contact the Survey Doctor at the earliest opportunity and she will inform the respondent's GP.\*\* | | 2\\textsuperscript{nd} or 3\\textsuperscript{rd} reading: Systolic at or greater than 180 mmHg or Diastolic at or greater than 115 mmHg | If the respondent has any symptoms of a hypertensive crisis\* call an ambulance immediately. The Survey Doctor must be informed at a later stage. |
- A hypertensive crisis is an extremely rare complication of high blood pressure. Its signs and symptoms include diastolic bp > 135 mmHg, headache, confusion, sleepiness, stupor, visual loss, seizures, coma, cardiac failure, oliguria, nausea & vomiting.
\*\* You must still contact the Survey Doctor even if respondents tell you that their GP knows about their raised BP.
All high or unusual readings will be looked at by the Survey Doctor when they reach the office. If the reading is high, then the Survey Doctor will contact the respondent directly.
In all instances, follow the protocol. Survey Doctor contact details
The Survey Doctor is Dr. Jennifer Mindell of the Department of Epidemiology and Public Health, at UCL. She is available on XXXX during working hours. Out of office hours, Dr. Mindell has a mobile phone (on which you can leave a message, if necessary), phone no. XXXX. Her phone is not switched on all the time but she will usually check for messages and call back within a couple of hours. You are likely to need to speak to a doctor more urgently than that only in circumstances in which you should be calling an ambulance.
If you need to leave a message, leave the following details:
- Your name
- Contact telephone number
- The survey
- Briefly, the type of problem
- If you want the Survey Doctor to ring you back at a specific time etc, leave those details as well.
Do not hesitate to contact Dr Mindell whenever you feel you need advice about what to do after seeing a respondent. If you need to speak with the Survey Doctor in the evening please try to do so before 10 pm.
If you cannot make contact with Dr. Mindell, speak to XXXX, who will contact her on your behalf.
When Dr Mindell will be unavailable for more than a couple of hours (e.g. annual leave), she will divert her calls to XXX (another doctor in the same department) or another doctor. Just dial Dr Mindell’s mobile phone number as usual but do not be surprised if XXXX or someone else answers on occasion. 3 INFANT LENGTH MEASUREMENT
3.1 Introduction The infant length measurement, when taken in conjunction with other growth parameters, can be used as an indicator of an infant’s nutritional status. Taking this measurement across many years allows trends in infant length to be monitored and provides a means for the evaluation of current policies, interventions and treatments relating to infant health and nutrition. The measurement is taken for children aged six weeks or more and under two years.
3.2 Equipment You will need:
- A Rollameter baby measure mat
- A Frankfort Plane card
- Milton wipes
3.3 Preparing the respondent Explain to the parent or legal guardian of the infant the reason for taking the length measurement. Further explain that you will need their assistance in taking this measure and how they can help.
3.4 Procedure
1. Ask the parent to remove any bulky clothing or shoes that the infant is wearing as it may result in an inaccurate measurement. It is not necessary for them to remove the infant’s nappy.
2. Unroll the Rollameter and lay it flat on any suitable flat, firm surface, preferably the floor. It is essential that the Rollameter is fully unrolled and as flat as possible, therefore doing the measurement on a deep pile carpet or rug is not appropriate. If the carpet is too thick, take the measurement in another uncarpeted room, e.g. kitchen or bathroom.
3. Wipe the surface of the Rollameter with a Milton Wipe and allow to dry for 30 secs.
4. The measurement can be taken with the infant on a Rollameter on a raised surface, e.g. a table, ONLY if the baby is held by an adult at all times, even if the baby has never previously rolled over.
5. Place the child on the foam bed of the Rollameter with his/her head touching the headpiece on which the name Rollameter is printed.
6. Move the child’s head so that Frankfort Plane is in a position at right angles to the floor/table. The Frankfort Plane is an imaginary line passing through the external ear canal and across the top of the lower bone of the eye socket, immediately under the eye (see Figure 1). This position is important if an accurate reading is to be obtained. Ask the parent to hold the child in this position and make sure their head is in contact with the headpiece.
6. Straighten the child’s legs by holding the legs by the ankles with one hand and applying a gentle downward pressure.
7. With your free hand, move the footrest on which the measuring tape is mounted to touch the child’s heels by depressing the red button on the tape measure.
8. The measurement is read from the red cursor in the tape window. The measurement is recorded in centimetres and millimetres to the nearest millimetre. If the measurement lies between two millimetres then you should round to the nearest even millimetre (see section 2.4)
9. Wipe Rollamat with Milton wipe before placing back into carry pot. 7 MID UPPER ARM CIRCUMFERENCE
7.1 Introduction Mid upper arm circumference is an anthropometric measure providing information on muscle mass and subcutaneous fat. Changes in arm circumference are relatively easy to detect and as such the mid upper arm circumference is a key indicator of the nutritional status of children and adults. The measure is reduced substantially in the undernourished and substantially increased in people who are overweight. Like other anthropometric measures it can be used as a tool to examine the effectiveness of public health policies, particularly with regards to child nourishment.
7.2 Equipment You will need:
- A ‘Lasso-o’ MUAC tape measure One end of the tape is broad and on it you will see the words ‘READ HERE’ with a small arrow. This is the start of the tape.
- A skin marker pen
- An Alcohol and non alcohol swab
- Milton wipes
7.3 Preparing the respondent The respondent must have a bare arm and shoulder for this measurement. When the nurse appointment is made (by either the nurse or the interviewer), if a child is to be measured, the child will be asked to wear a sleeveless garment for the visit. Make sure that you explain to the respondent (and their parent if appropriate) the importance of accuracy when taking the measure and that clothing can result in an inaccurate result. If the child is wearing a sleeved garment, ask them to slip their arm out of the garment or to change into something more suitable.
If the respondent is a child, ensure that the parent is with you at all times whilst the measurement is being taken as you are asking them to expose their bare arm.
The non dominant arm is to be used to measure mid upper arm circumference. If the respondent is not displaying arm dominance e.g. in the case of small children, the right arm should be used and a note of this to be made in CAPI. Additionally if, for any reason, the non dominant arm cannot be measured, use the alternative arm and record this in CAPI.
7.4 Procedure
1. Ask the respondent if they are left or right handed and explain that the non dominant arm is going to be measured as it provides a more accurate indication of nutrition. 7.4.1 Measuring the length of the upper arm
2. The respondent should be standing with the arm to be measured across their body and held at a right angle at the elbow.
3. Using the skin marker pen, mark the process of the Acromion; this is the tip of the shoulder.
4. Mark the process of the Olecranon of the respondent; this is the tip of the elbow.
5. Using the tape, measure the distance between the two points marked. Divide this measurement in half. This is the mid point of the upper arm.
6. Mark this using the fine point of the skin marker pen.
7.4.2 Measuring the arm circumference
07. Let the non dominant arm hang loosely by the side, just away from the body. Thread the tape through and slip it up the respondents arm, to the mid point that you have marked. The tape should lie on top of the mark, covering it.
08. Check that the tape is passing horizontally around the arm, not sloping, and that it is in continuous contact with the skin. It should not be loose but neither should it be puckering the skin.
09. Read off the measurement where the 'READ HERE' arrow appears on the tape.
10. Enter the measurement into CAPI in centimetres and millimetres. Always report to one decimal place. If the arrow falls between two millimetres always give to the nearest even millimetre (see section 2.4).
11. Repeat steps 2-10 to obtain a second measurement. DO NOT use the same markings as you did in the first measurement, remark them. Explain to the respondent that the second measurement is required for accuracy.
12. If there is a significant difference between the two readings, CAPI will report an error message. At this point you should check to ensure that you have entered the results correctly or take a third measurement according to the procedure above. Enter this result into CAPI and it will work out which two readings to use.
13. If the respondent wishes, record the results on their measurement record card. You can use the conversion charts to report the measurements in inches.
14. If the skin marker is used, offer the alcohol or non alcohol wipe to the respondent, or respondent’s parent (if a young child), to wipe the skin mark off.
15. Before packing the tape away ensure the length of tape is wiped to reduce potential cross infection between households.
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c5d98fa20a6ec5ed61a893973bcb840e07d6627d | Appendix M The spot urine sample: collecting and processing for urinary iodine measurement
M.1 Introduction
Spot urine samples were collected from participants aged 4 years and over for measurement of urinary iodine concentration in order to estimate population iodine status. Iodine concentration in a single spot urine sample does not provide any information about the individual’s iodine intake because the iodine concentration fluctuates widely depending on liquid intake and therefore how dilute the urine is, as well as being influenced by the individual’s recent iodine intake. However the median concentration of iodine in spot urine samples collected for a population group is used to estimate population iodine status and thresholds for interpretation have been defined by the World Health Organization (WHO).¹
M.2 Ethical approval
As described in appendix B ethical approval was granted by a Multi-centre Research Ethics Committee (MREC)² for all aspects of the survey protocol, including collection of the spot urine sample, measurement of iodine in the spot sample and for storing spot urine sample residues for potential use in future analyses related to nutrition and health (where consent was given).
¹ The population urinary iodine median has been determined from spot urine samples. The proportion of the population with insufficient iodine intake cannot be determined from these data.
² Ethical approval for Years 6 to 9 was obtained from Cambridge South NRES Committee (Ref. No. 13/EE/0016). M.3 Consent
Information leaflets were provided for participants, including an appropriate version for children. Eligible participants aged 16 years and over were asked to give written consent. For children aged under 16 years, written consent was sought from a parent or legal guardian, with written assent from the child where possible.
M.4 Exclusion from participation in providing a spot urine sample
Participants were asked a series of screening questions to assess their eligibility for providing a spot urine sample. Participants under the age of 4 years, those using a urinary catheter, and those who were incontinent were not asked to provide a spot urine sample. Women and girls were requested not to provide a urine sample if they were menstruating.
M.5 Interviewer training, procedures and instructions
Information about the recruitment and training of interviewers is provided in appendix B.
At the first interviewer visit, interviewers were instructed to:
- check the participant’s eligibility for providing a spot urine sample. If the participant did not meet the eligibility criteria they were not asked to provide a sample
- ensure that the participant understood the spot urine collection procedures
- confirm and obtain the appropriate written consents
- ask the participant to pass urine (not from the first urine pass after waking) directly into a labelled 30mL “universal” tube without touching the inside surface.
If the urine sample could not be collected at the first visit, interviewers re-established eligibility and sought consent at visit 3 (see appendix B for more information on interviewer visits).
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis Participants were asked to avoid using sources of iodine contamination such as antiseptic sprays and wipes
- (after obtaining the spot urine sample) label the universal tube and the rigid outer packaging with the participant’s serial ID, date of birth, sex and collection date
- record the details of the collection in the CAPI program
- leave the £5 spot urine sample promissory note with the participant
Immediately after the visit the interviewers were instructed to send the universal tube (inside the rigid outer packaging) to the Medical Research Council Elsie Widdowson Laboratory (MRC EWL) in the pre-addressed postal pack by first class post at ambient temperature and to post the associated consent form to NatCen.
M.6 Sample tracking, reception and storage
On receipt of samples at MRC EWL, associated details (serial ID, date of birth and sample collection date) were recorded and cross checked with the database, to confirm the correct data. Urine samples were refrigerated at 5-8°C for up to 2 weeks before being aliquoted (after reaching room temperature) into 3 1.7mL aliquots of urine; this was modified if the spot urine sample was smaller than 5mL. The aliquots were then entered into ItemTracker and stored frozen at -20°C.
The collection and aliquot tubes were always new (and unwashed) and were of manufacturing types which had been spot checked for iodine content at MRC EWL, to avoid any inadvertent iodine contamination arising from the containers.
M.6.1 Assay auditing at MRC EWL
Samples were analysed in approximate order of receipt. Internal quality control samples were included to monitor precision and external quality assurance schemes were included where available in order to confirm the accuracy of the assays. 1 World Health Organization (WHO), Assessment of iodine deficiency disorders and monitoring their elimination. [Internet]. Available from: http://whqlibdoc.who.int/publications/2007/9789241595827_eng.pdf.
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9a193778224c01fc2479c0b2d1cfea38a01138c0 | Appendix N Methods of urinary iodine analysis and quality control
N.1 Introduction
From the start of Year 6 of the NDNS RP a spot urine sample was collected for iodine analysis from participants aged 4 years and over from whom consent had been obtained. Information regarding the collection, processing and storage of spot urine samples is provided in appendix M.
N.2 Iodine
Spot urine iodine concentrations were determined by measuring the $^{127}$I isotopes using an inductively coupled plasma mass spectrometer (ICP-MS). Samples were introduced to the ICP-MS via a flow injection system combined with the Sea spray nebulizer and cyclonic spray chamber arrangement.
Urine samples and quality control (QC) materials were prepared in diluent which included Tellurium (Te) as internal standard. The iodine isotope signal was compared against the internal standard, enabling any signal fluctuation due to instrument drift to be accounted for.
Matrix matched external calibration standards were prepared in pooled human urine (collected at the Medical Research Council Elsie Widdowson Laboratory (MRC EWL)) for each analytical batch.
Prior to analysis the ICP-MS instrument was tuned for optimum signal sensitivity and minimum oxide species and doubly charged ion formation. Unknown samples, blanks, calibration standards and QCs were analysed in each batch and the signal data generated was converted to concentration data via the calibration plot.
N.2.1 Quality controls for Iodine
In order to establish quality assurance of each analytical batch and inter-batch variation across the year’s cohort as a whole, ClinChek Urine Control Lyophilised for Trace Elements Level 1 and 2 (Recipe Chemicals and National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis Instruments GmbH) QC samples were analysed in conjunction with the blanks, calibration standards and samples.
N.2.2 Inter-batch variability
Table N.1 summarises the measured concentration of iodine following analysis of the QC samples for each individual year of the NDNS RP. For Year 9 of the NDNS RP the mean measured concentration of the QC was within the target concentration range defined by the manufacturer and CV was ≤5% for this survey year, showing that there was acceptable analytical accuracy and precision for samples from Year 9 of the NDNS RP. The QC data for Years 6 to 8 are presented in Appendix N of the NDNS Years 5 and 6 (combined)(^1) and Years 7 and 8 (combined)(^2) reports respectively.
**Table N.1: QC analysis for NDNS RP Year 9**
| ClinChek urine | Level 1 | Level 2 | |----------------|---------|---------| | Lot number | 432 | | | Target Concentration /Range (µg/L) | 120 (89.9 – 150) | 497 (373 – 622) | | Mean Measured Concentration (µg/L) | 114 | 484 | | N (QC samples) | 62 | 62 | | SD | 3 | 13 | | %CV | 2 | 3 | N.2.3 External Quality Controls for Iodine in Urine
EWL participates in the Inter-laboratory Comparison Program for Ensuring the Quality of Urinary Iodine Procedures (EQUIP), operated by the US Centers for Disease Control and Prevention (CDC). Iodine analysis of urine samples gives values which are within the criteria defined in this multi-laboratory programme achieving a “Successful Participation Certificate” with a laboratory score greater than 80%.
Table N.2 shows the percentage bias relative to the target concentration in urinary iodine results from MRC EWL during Year 9 of the NDNS RP.
Table N.2: Summary of EQUIP bias assessment in NDNS RP Year 9
| Urine Iodine EQUIP | Year 9 | |--------------------|--------| | mean % bias from target values | -5.2 | | SD % bias | 3.2 | | Number of EQUIP samples | 8 |
1 National Diet and Nutrition Survey: Results from Years 5 and 6 (combined) of the Rolling Programme (2012/2013 – 2013/2014). [Internet]. Available from: www.gov.uk/government/statistics/ndns-results-from-years-5-and-6-combined. 2 National Diet and Nutrition Survey: Results from Years 7 and 8 (combined) of the Rolling Programme (2014/2015 – 2015/2016). [Internet]. Available from: www.gov.uk/government/statistics/ndns-results-from-years-7-and-8-combined.
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3908ecbfb5289b264739c0ec34162186d3250490 | Appendix O Priority order of blood analytes
Tables O.1 to O.3 provide information about the priority order for analysis of blood analytes in Year 9 of the NDNS RP. Blood analyte priorities are shown for participants aged 1.5 to 6 years, 7 to 15 years and 16 years and over. For each age group, analytes are shown firstly, by the order in which the blood tubes were collected from the participant and, secondly, by the order in which the analyses were performed within each tube. The priority order for analysis of blood analytes in Years 5 to 8 are presented in appendix O of the NDNS Years 5 and 6 (combined)(^1) and Years 7 and 8 (combined)(^2) reports respectively.
(^1) National Diet and Nutrition Survey: Results from Years 5 and 6 (combined) of the Rolling Programme (2012/2013 – 2013/2014). [Internet]. Available from: www.gov.uk/government/statistics/ndns-results-from-years-5-and-6-combined.
(^2) National Diet and Nutrition Survey: Results from Years 7 and 8 (combined) of the Rolling Programme (2014/2015 – 2015/2016). [Internet]. Available from: www.gov.uk/government/statistics/ndns-results-from-years-7-and-8-combined.
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b9c6b1dd2e06afdbaccb4a48210dfd92e9840c59 | Appendix P The blood sample: collecting and processing the blood
P.1 Introduction
This appendix gives further information about the blood collection procedures, including details of the selection and training of the phlebotomists, procedures for obtaining blood, procedures at the field laboratories, storage and assay auditing and the protocol for reporting clinically significant blood results to participants and their GP.
P.2 Ethical approval
As described in appendix B ethical approval was granted by a Multi-centre Research Ethics Committee (MREC) for all aspects of the survey protocol, including blood sample collection by venepuncture, measurement of blood analytes and for storing blood sample residues for potential use in future analyses related to nutrition and health.
The ethical approval allowed for a maximum of:
- 34.9mL of blood to be taken from participants aged 16 years and over
- 21.5mL from children aged 7 to 15 years
- 11.1mL from children aged 1.5 to 6 years
A number of the analytes measured in the blood are known to be unstable. To ensure prompt stabilisation of the blood sample, suitably located and resourced field laboratories were approached within each geographical area to process part of the blood sample from each participant within 2 hours of venepuncture. The recruitment of all field laboratories was subject to the signing of a service level agreement including pre-agreed remuneration for the services provided. Where field laboratories were located within the National Health Service (NHS), their Research and Development (R&D) department
______________________________________________________________________
- Ethical approval for Years 1 to 5 was obtained from the Oxfordshire A Research Ethics Committee (Ref. No. 07/H0604/113). Ethical approval for Years 6 to 9 was obtained from Cambridge South NRES Committee (Ref. No. 13/EE/0016).
**National Diet and Nutrition Survey**
Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis was contacted to seek approval for the laboratory to take part in processing; in most cases formal approval was not required.
P.3 Consent
Written consent was required for the following aspects of blood sampling:
- taking a venous blood sample
- storing blood residues for potential future analysis of additional analytes related to nutrition and health
- informing GPs of potentially clinically relevant blood results
- informing participants of potentially clinically relevant blood results
For children aged under 16 years, written consent was sought from a parent or legal guardian, with written assent from the child where possible.
P.4 Exclusion from participation in venepuncture
Participants were asked a series of screening questions prior to venepuncture to assess their eligibility for giving a blood sample. Participants with a bleeding or clotting disorder or those taking anti-coagulant medications were excluded from the blood sample component. Participants aged 16 years and over who had had a fit in the previous 5 years and those aged 15 years and under who had ever had a fit were also ineligible to give a blood sample. Blood samples were not taken from participants who volunteered that they had hepatitis B or HIV; however, participants were not asked about their hepatitis B or HIV status.
P.5 Equipment used
Blood samples were collected by a nurse (or in the case of young children aged 1.5 to 10 years by a paediatric phlebotomist) using a Sarstedt fixed or butterfly needle, depending on the nurse’s or phlebotomist’s preference. The monovette system was chosen because it is a closed system, allowing the safe collection of blood in the home. Children for whom consent had been given to provide a blood sample were offered the option of Ametop anaesthetic gel being applied prior to venepuncture. All participants were offered the option of Cryogesic local anaesthetic spray. The contents of the monovette packs varied depending upon the age of the participant. Details of the equipment nurses were provided with to take blood are provided in appendix I and details of the monovette packs are provided below in table P.1. It should be noted that due to a change in processing method from Year 6 onwards, the number of serum tubes was reduced from 2 to 1 and the volume of the tube was larger. Therefore see table P.1 in appendix P of the Years 5 and 6 (combined) report for information about the number and volume of tubes used in Years 1 to 5 of the NDNS RP.¹
Table P.1: NDNS RP Year 9 monovette packs
| Tube number | Age group (years) | |-------------|-------------------| | | 1.5-6 years | 7-15 years | 16 years and over | | 1 | 2.6mL EDTA | 2.6mL EDTA | 2.6mL EDTA | | 2 | 4.0mL Serum | 7.5mL Serum | 9.0mL Serum | | 3 | 4.5mL Lithium Heparin | 7.5mL Lithium Heparin TM | 7.5mL Lithium Heparin TM | | 4 | | 2.7mL Lithium Heparin | 7.5mL Lithium Heparin TM | | 5 | | 1.2mL fluoride | 1.2mL fluoride | | 6 | | | 4.5mL Lithium Heparin\* | | 7 | | | 2.6mL EDTA\* |
\*Samples from these blood monovettes will be stored as repository tubes. P.6 Phlebotomy: training, procedures and instructions
Information about the recruitment and training of nurses is provided in appendix B. Blood samples were taken by the nurse from participants aged 11 years and over. For children aged 1.5 to 10 years, samples were taken by a paediatric phlebotomist recruited for their skill and recent experience in taking paediatric blood samples.
During the first nurse visit to the participant’s home the nurses were instructed to:
- assess the participant’s eligibility for blood sampling and explain the procedure in detail
- obtain the participant’s verbal agreement for a revisit for blood sampling
- instruct the participant about overnight fasting (non-diabetic participants and diabetics who are willing to fast, aged 4 years and over only)
- record the details of the visit in the CAPI program
Prior to the phlebotomy visit the nurses were instructed to make the following preparations:
- arrange the appointment with a paediatric phlebotomist unless the nurse was qualified to take paediatric blood themselves (for participants aged 1.5 to 10 years)
- contact the local laboratory to inform them of the intended sample delivery date and time
- select the correct set of barcoded labels and cross through any labels that would not be required
- select the age-appropriate monovette and microtube packs
- freeze the cold packs for transporting the blood samples to the field laboratory
At the phlebotomy visit the nurses were instructed to:
- re-check the participant’s eligibility for blood sampling. If the participant did not meet the eligibility criteria the nurse did not attempt to take a sample
- ensure that the participant understood the blood sampling procedures
- confirm and obtain the appropriate written consents • obtain the blood sample, filling the monovette tubes in the specified priority order • label the monovette tubes with the appropriate barcoded labels • record the details of the visit in the CAPI program and complete the blood tracking forms for the field laboratory and the Department of Clinical Biochemistry and Immunology and the Department of Haematology at Addenbrooke’s Hospital in Cambridge (Addenbrooke’s) • leave the £15 blood sampling promissory note with the participant
Immediately after the visit the nurses were instructed to:
• send the specified monovette tube and blood tracking forms to Addenbrooke’s in the pre-addressed postal pack provided • take the remaining monovettes (blood specimens), microtubes, relevant labels, contaminated waste and blood tracking form to the field laboratory, to arrive no later than 2 hours after venepuncture • use Milton wipes to clean the cold packs before placing them into a new plastic bag in the freezer in preparation for the next appointment • use Milton wipes to clean the inside of the carrying box
The approved protocol allowed for 2 attempts with all participants, provided that the participant and parent/legal guardian of children aged under 16 years consented.
P.7 Recruitment of, and procedures at, the field laboratories and Addenbrooke’s
P.7.1 Recruitment of the field laboratories
Several of the analytes measured in the blood, particularly certain vitamins and vitamin status index analytes, are known to be very labile and therefore need to be stabilised by low temperature storage, chemical treatment, or both, and by separation of the cells from the plasma or serum at the earliest opportunity following venepuncture. This process was carried out by suitably located field laboratories recruited to process and store blood samples for later analysis by the Medical Research Council Elsie Widdowson Laboratory (MRC EWL).
In order to process samples for the NDNS RP, field laboratories were required to be within 2 hours travelling time of the fieldwork area and have access to a
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis refrigerated centrifuge, piston pipettes and storage facilities at or below -40°C. Where such a laboratory could not be recruited, a laboratory was recruited with facilities to store samples at a minimum of -20°C storage and to chill the centrifuge buckets and inserts to 4°C prior to processing the samples.
P.7.2 Procedures at Addenbrooke’s
Following venepuncture, 1 EDTA tube from each participant’s sample set was sent in the post by next day delivery to Addenbrooke’s for immediate analysis. Each sample was sent in a postal pack which met Royal Mail guidelines for sending biological samples by post.
The analysis conducted by Addenbrooke’s included: full blood count and glycated haemoglobin (HbA1c). In addition to the analysis conducted at Addenbrooke’s, 2 aliquots of whole blood for folate analysis were collected and preserved with ascorbic acid. These tubes were labelled with barcoded labels provided by the nurse and stored at -80°C. The tubes were then transported to MRC EWL at monthly intervals and stored at -80°C before being sent to the Centers for Disease Control and Prevention (CDC) in Atlanta, USA for analysis.
P.7.3 Liaison with the field laboratories
Nurses delivered the blood samples within 2 hours of venepuncture to the field laboratories in a cool box, together with the appropriate blood tracking form, sub-aliquot tubes and barcoded labels. Two members of laboratory staff were nominated as contact points whom the nurse could contact to arrange sample deliveries. The nurses were required to give at least 24 hours’ notice of a sample delivery and to hand the samples to one of their named contacts upon arrival at the laboratory.
P.7.4 Procedures at the field laboratories
Field laboratories were provided with a detailed processing protocol, providing instruction on the separation, aliquoting and storage of samples for the NDNS RP, with specific instructions for washing red blood cells, labelling aliquots and sending samples to MRC EWL on dry ice. Set-up visits at newly recruited laboratories were compulsory. The set-up visits were conducted by a member of MRC EWL research staff and provided the analyst or technician at the field laboratory with instruction on the nurse liaison procedures, aliquot labelling, sample processing protocol, completion of the blood tracking form and shipment of samples on dry ice to MRC EWL.
In addition to the initial set-up visit, each year a random sample of laboratories received a review visit to ensure that the laboratory remained properly equipped to process samples for the survey and to address any quality issues that may have arisen in the intervening period. Where a laboratory was not complying with the protocol a feedback letter was sent and changes were implemented.
Prior to the start of fieldwork in their respective areas, field laboratories were provided with aliquots of 10% w/v meta-phosphoric acid for vitamin C stabilisation in 2mL screw-capped containers. The stabilising solution was delivered frozen in dry ice from MRC EWL and was kept frozen, below -40°C where facilities were available (and below -20°C where they were not), until use.
Immediately upon receiving a participant’s blood sample, the analyst/technician was required to:
- take 1.3mL aliquot of heparinised whole blood (from participants aged 16 years and over)
- centrifuge remaining blood at 2000g, 4°C, for 20 minutes
- label plasma / serum tubes with the barcoded labels provided, transfer plasma/serum to the tubes provided (1 per Monovette)
- transfer aliquot of 300µL of heparinised plasma in to the meta-phosphoric acid treated microtube for subsequent vitamin C analysis
- wash the heparinised red cell pellets 3 times in 0.9% saline to yield a red cell concentrate depleted of buffy coat
- store plasma, serum and red cell pellet tubes in a polythene bag and freeze at -40°C or below (or -20°C where -40°C facilities were not available)
- complete a blood tracking form giving processing date and time and plasma / serum volumes and fax/email back to MRC EWL on the day of processing
- at the end of each fieldwork period, courier the samples on dry ice, as well as the original copies of the blood tracking forms, to MRC EWL
P.8 Sample tracking, reception and storage
Blood sample tubes and documents were identified and tracked via the use of pre-printed barcode labels.
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis Prior to the start of each fieldwork assignment, nurses were sent a work pack containing sheets of unique barcode labels for every participant within their designated fieldwork area that had agreed to a nurse visit. These labels were used to identify all blood tubes and documents associated with each participant. A unique barcode label was affixed to each blood tube collected from the participant at the time of venepuncture and each sub-sample tube taken by the field laboratory was barcode labelled by the technician/analyst at the time of processing.
Blood aliquots were assigned to the appropriate analysis in priority order (see appendix O) based on the information provided in the field laboratory blood tracking form.
Upon receipt of the samples from the field laboratories at MRC EWL, the samples were then cross-checked in Excel against the list of expected samples to ensure that all samples had been received and were correctly labelled. The plasma or serum supernatant from each tube was received as a single aliquot for subsequent thawing and sub-aliquotting at MRC EWL. This facilitated the most efficient use of serum and plasma. The aliquots destined for sub-aliquotting were weighed to determine the volume of the aliquot and therefore the number and volume of sub-aliquots. Each sample tube was scanned in to a computerised sample tracking system (ItemTracker (International) Ltd, Birkenhead, UK).
P.9 Assay auditing
P.9.1 Assay auditing at Addenbrooke’s
At Addenbrooke’s, analytes that were reported to participants and their GPs were analysed on the day of arrival, with the exception of vitamin B\\textsubscript{12} which was analysed in batches on a monthly basis. Quality controls were run according to laboratory schedules for the individual assays. HbA1c samples were batched into work lists so quality controls were run at the start of a batch and then run after each group of 50 samples. Vitamin B\\textsubscript{12} quality controls were run at the beginning and at the end of the working day. Where a result of the quality control sample was outside the acceptable range, samples were re-analysed to ensure integrity of results. Automated assays were performed as singletons, as per normal practice with clinical analysers for these assays. External quality assurance schemes were included where available in order to confirm the accuracy of the assays. P.9.2 Assay auditing at MRC EWL
Samples were analysed in order of receipt. Analytes that were reported to participants and their GP were analysed monthly at MRC EWL. Those that were not reported to participants/GPs were analysed in batches at intervals. Internal quality control samples were included with all analytes to monitor precision and external quality assurance schemes were included where available in order to confirm the accuracy of the assays. Manual assays (erythrocyte transketolase activation coefficient (ETKAC), erythrocyte glutathione reductase activation coefficient (EGRAC), vitamin C, and holotranscobalamin (holoTC) enzyme-linked immunosorbent assay were performed in duplicate and if agreement between duplicates failed to meet the pre-set criterion for each assay, the assay was repeated.
P.10 Procedures for reporting results to participants and/or their GP
Consent was sought from the participant (or the parent in the case of children) to inform them and their GP by letter of their potentially clinically relevant blood results. An example of a feedback letter is provided in appendix J.
Results were reported in 2 letters, the first of which was sent approximately 2 months after the blood sample was taken. This letter included the results of analytes which had been measured immediately. A second letter was sent approximately 3 to 4 months after the blood was taken and included the results of the blood analyses conducted in monthly batches at MRC EWL.
Letters to GPs and participants contained a result table together with information on the normal range for each analyte. Any result for an individual which was outside the reference range was flagged in the letter and advice for follow-up was provided if appropriate. The letter also included the contact details of the survey doctor should the participant/parent or GP wish to discuss the results further.
If results exceeded the action limits defined by Addenbrooke’s as the levels indicative of serious conditions which could require immediate action, MRC EWL notified the survey doctor as a matter of urgency. The survey doctor then notified the participant’s GP or the participant/the participant’s parent or guardian, subject to their signed permission. The following analytes had action limits:
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis • haemoglobin: low \<60 g/L, high >200 g/L • platelet count: low \<20 x 10^9/L, high >1,500 x 10^9/L • white cell count: low \<1.0 x 10^9/L, high >50 x 10^9/L • neutrophil count: \<0.5 x 10^9/L • creatinine: >500 μmol/L • fasting glucose: low 2.5mmol/L, high 10.0mmol/L if not a known diabetic or 20.0mmol/L if a known diabetic • HbA1c: >10% or >82 mmol/mol • 25-hydroxy vitamin D (25-OHD): \<12.5 nmol/L
Participants aged 16 years or older who wished neither to receive their own results nor to have them sent to their GP were required to sign a disclaimer before a blood sample was taken. This disclaimer stated that, in line with their wishes, neither they nor their GP would be notified of any abnormality detected in the blood sample. However, children aged under 16 years were only allowed to take part in the blood protocol if their parent/guardian agreed to the survey doctor contacting them if it was necessary to discuss any findings that were directly relevant to their child’s health. If the parent did not agree to this, a blood sample was not taken from the child participant.
1 National Diet and Nutrition Survey: Results from Years 5 and 6 (combined) of the Rolling Programme (2012/2013 – 2013/2014). [Internet]. Available from: www.gov.uk/government/statistics/ndns-results-from-years-5-and-6-combined
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6eaea374d976e80f795a3df2417f5d6ba21fbf8b | Appendix Q Methods of blood analysis and quality control (QC)/quality assessment (QA)
Q.1 Introduction
Samples of coagulated and ethylenediaminetetraacetate (EDTA) anticoagulated blood were sent directly by post to the Department of Haematology and Department of Clinical Biochemistry and Immunology, Addenbrooke’s Hospital, Cambridge (Addenbrooke’s) after their collection. Serum samples were obtained by centrifugation of the coagulated blood sample.
The assays listed below were conducted at Addenbrooke’s:
- full blood count including haemoglobin and haematocrit (see section Q.2.1)
- serum vitamin B\\textsubscript{12} (see section Q.2.3)
- HbA1c (see section Q.2.7)
Samples of coagulated, EDTA anticoagulated and lithium heparin anticoagulated blood were collected and stored in a cool box, at approximately 4°C, and delivered to a local processing field laboratory within 2 hours of collection. The field laboratories processed blood samples into whole blood, red cells, plasma, serum and metaphosphoric acid stabilised plasma portions. The metaphosphoric acid had been previously prepared and aliquotted at the Medical Research Council Elsie Widdowson Laboratory (MRC EWL) and delivered by courier on dry ice to each field laboratory. Blood sample sub-fractions were stored frozen at a maximum of -20°C (typically at -40°C) at field laboratories for a period of 6 to 8 weeks, before the samples were transported to MRC EWL on dry ice, where they were stored frozen, at -80°C, until further subdivided and analysed.
The assays listed below were conducted at MRC EWL:
- serum C-reactive protein (CRP), using a high-sensitivity assay (see section Q.2.2)
- holotranscobalamin (holoTC; “active B12”; see section Q.2.4)
- serum total cholesterol, high-density lipoprotein (HDL) cholesterol and low-density lipoprotein (LDL) cholesterol (see section Q.2.5)
- serum triglycerides (triacylglycerols) (see section Q.2.6)
- plasma glucose (see section Q.2.8)
- plasma ferritin (see section Q.2.9)
- plasma vitamin C (see section Q.2.10)
- erythrocyte transketolase activation coefficient (ETKAC) for thiamin status (see section Q.2.11)
- erythrocyte glutathione reductase activation coefficient (EGRAC) for riboflavin status (see section Q.2.12)
- plasma vitamin B₆ (pyridoxal-5-phosphate (PLP) and 4-pyridoxic acid (PA)) (see section Q.2.13)
- serum folate (see section Q.2.14)
- plasma retinol (see section Q.2.15)
- plasma α-tocopherol (see section Q.2.15)
- plasma γ-tocopherol (see section Q.2.15)
- plasma individual carotenoids; α-carotene, β-carotene, α-cryptoxanthin, β-cryptoxanthin, lycopene, lutein and zeaxanthin (see section Q.2.15)
- plasma 25-hydroxyvitamin D (25-OHD) (see section Q.2.16)
- plasma creatinine (see section Q.2.17)
- plasma selenium (see section Q.2.18)
- plasma zinc (see section Q.2.18)
Whole blood folate concentrations in the NDNS RP blood samples were measured at the Centers for Disease Control and Prevention (CDC) in Atlanta, USA (see section Q.2.14).
Appendix T provides details for analytes that were measured but are not included in the present report. Data for all analytes measured in fieldwork years 1-9 will be deposited at the UK Data Service.
During the 9-year period there were a few changes in analytical procedures where the analytical portfolio was amended or where methods were superseded. All changes in analytical method or platform were monitored by rigorous comparison studies to ensure that data obtained during the RP were comparable over time. These changes are shown in Table A which, for completeness, lists all analytical changes irrespective of whether the analytes are included in this report.
Some analytes were not measured over the whole 9 years covered by this report:
Analytes measured only during Years 1 to 5: • Homocysteine • Serum transferrin receptors
Analytes measured only during Years 6 to 9:
• Holotranscobalamin ("active vitamin B\\textsubscript{12}") • Urinary iodine (spot urine sample) Table A: Changes in laboratory analytical methodology introduced during Years 1 to 9 of the NDNS RP
| Analyte | Method at start of RP | Method changed to: | Comment | Change reported: | |----------------------------------------------|-----------------------------------------------------------|--------------------------------------------------------|----------------------------------------------|------------------------------------------------------| | Ferritin | Immunonephelometry on Dade Behring ProSpec Year 1 to 5 | Immunoturbidimetry on Siemens Dimension Xpand Years 6 to 9 | No difference to data. | Years 5 and 6 (combined) report. Appendix Q, section Q.2.7 | | 25-OHD | Diasorin Liaison method, plasma: Years 1,2,3 and part of Year 4 | Reformulated Diasorin Liaison method, serum: part of Year 4 and Years 5 and 6 | All standardised through Vitamin D Standardisation Program | Years 1 to 4 (combined) report, Appendix P, section P.2.14 and Years 7-8 report, Appendix Q, section Q.2.16 | | Retinol, tocopherol and carotenoids (“fat-soluble vitamins”) | HPLC, Thurnham method Years 1 to 4 | HPLC, Sowell method Years 5 to 9 | Conversion factors provided | Years 5 and 6 (combined) report. Appendix Q section Q.2.14 | | Creatinine | Jaffe on Siemens Dimension Years | Enzymatic on Siemens Dimension | Manufacturer withdrew Jaffe reagent. Enzymatic | Years 7 to 8 (combined) report. Appendix Q | | Analyte | Method at start of RP | Method changed to: | Comment | Change reported: | |---------|-----------------------|--------------------|---------|-----------------| | CRP, total cholesterol, HDL cholesterol, triglycerides | Dimension RXL at Addenbrooke’s Years 1 to 5 | Dimension Xpand at MRC EWL Years 6 to 9 | Same manufacturer and analytical methods; change of location of analysis | Years 5 and 6 (combined) report. Appendix Q, section Q.2.2 (CRP) and Q.2.5 (lipids) | | Serum folate | LC-MS/MS(^1) at CDC Years 1 to 6 | LC-MS/MS(^1) at EWL for Years 7 to 9 | CDC results for Years 1 to 4 revised and reissued Nov 2017 CDC method introduced to EWL; no difference in results between revised CDC and EWL methods. | Folate report Years 1 to 4 (combined), version 2.0 published November 2017 Years 7 to 8 (combined) report. Appendix Q, section Q.14.1 |
(^1) Liquid chromatography-tandem mass spectrometry Q.2 Method
Details of the method of analysis and the associated quality control (QC) procedures for each analyte are given in sections Q.2.1 to Q.2.18. Where appropriate, the results of these procedures are also shown. Internal quality control samples were run in every batch to assess assay precision for each analyte; results are tabulated below. Accuracy was assessed by comparisons with target values (determined by the manufacturer using appropriate reference materials) and/or results obtained by other laboratories by taking part in EQAS (external quality assessment (QA) schemes) for those analytes where such schemes were available.
Q.2.1 Full blood count including haemoglobin and haematocrit
Full Blood Count was analysed using a Siemens Advia 2120, which uses the Coulter Principle(^1,2) to count the red blood cells, mean cell volume (MCV), white blood cells and platelet counts. Haemoglobin was measured by photometric measurement. Other parameters such as the mean cell haemoglobin (MCH), haematocrit (Hct) and red cell distribution width (RDW) were calculated from the above measured parameters.
Haemoglobin was measured spectrophotometrically at 525nm by a photocell in a sample that was diluted 1:256 (final) with isotonic diluent and lysing solution. The red cells were destroyed with a lysing agent releasing the haemoglobin into solution, which enabled the white blood cell count to be estimated using the Coulter Principle (impedance counting of the white blood cells)(^1,2) without interference by red cells. The same lysing reagent also converted the haemoglobin to cyanmethaemoglobin.
Q.2.1.1 QCs for full blood count including haemoglobin and haematocrit
The QC results of the instruments measuring full blood count at Addenbrooke’s are monitored continually, and analysis is stopped if the results are not satisfactory, ensuring that results are only reported if the analysis is within the QC parameters set by the Laboratory Manager. However it is not possible to extract these results for reporting. Therefore no internal QC data can be provided but validation of results is achieved automatically.
Quality of results was also assessed externally through UKNEQAS. NEQAS results are compared against the All Laboratories Trimmed Mean (ALTM) calculated for laboratories in the NEQAS scheme using the same analyser and method as that used by Addenbrooke’s. Figure Q.1 shows, as an example, the cumulative performance charts from UK NEQAS returns for August 2017 of 1 of the 4 Siemens Advia 2120 instruments in use in the laboratory). The “distribution” axis indicates the year and month of the UKNEQAS return. Results within the white area of the charts indicate acceptable performance as determined by UKNEQAS. “Performance index” is derived by the NEQAS administrators as a function of the deviation of the laboratory from the consensus mean; the number given is for the most recent return and the plot shows the scores obtained from November 2016 to August 2017. The dark shaded area indicates unacceptable performance and the paler area indicates a borderline situation.
Figure Q.1 Illustrative overall performance charts for UKNEQAS (NDNS RP Year 9) Q.2.2 Serum C-reactive protein (CRP) using a high-sensitivity assay
C-reactive protein (CRP) was assayed using a high-sensitivity (extended range) assay on a Dimension Xpand clinical Chemistry analyser. The CRP method is based on a particle enhanced turbidimetric immunoassay (PETIA) technique, giving high sensitivity by extending the detection range down to 1.0mg/L. Latex particles coated with antibody to CRP aggregate in the presence of CRP in the sample. The increase in turbidity that accompanies aggregation is proportional to the CRP concentration.
Q.2.2.1 Internal QCs for CRP Table Q.1 shows imprecision data in Year 9.
**Table Q.1 Internal QCs for CRP (NDNS RP Year 9)**
| QC1 | QC2 | QC3 | |-----|-----|-----| | Mean (mg/L) | 1.22 | 17.15 | 49.28 | | SD (mg/L) | 0.33 | 0.38 | 1.02 | | % cv | 27.15 | 2.21 | 2.08 | | n | 37 | 38 | 38 |
**Q.2.2.2 External QCs for CRP**
External QC was achieved through the UKNEQAS CRP scheme which distributes samples to a large number of laboratories for comparison of the results obtained.
**Table Q.2 External QCs for CRP (NDNS RP Year 9)**
| CRP | NEQAS | Year 9 | |-----|-------|--------| | mean % bias | 3.0 | | SD % bias | 5.7 | | n | 22 |
“Ultra-sensitive” CRP
**National Diet and Nutrition Survey**
Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis | mean % bias | 15.2 | |------------|------| | SD % bias | 17.6 | | n | 22 |
Q.2.3 Serum vitamin B\\textsubscript{12}
The ADVIA Centaur B\\textsubscript{12} assay is a competitive immunoassay using direct chemiluminescence. Vitamin B\\textsubscript{12} from a participant’s sample competes with vitamin B\\textsubscript{12} labelled with acridinium ester for a limited amount of labelled intrinsic factor. The intrinsic factor is covalently bound to paramagnetic particles. The assay uses a releasing agent (sodium hydroxide) and dithiothreitol (DTT) to release the B\\textsubscript{12} from the endogenous binding proteins in the sample.
Q.2.3.1 Internal QCs for vitamin B\\textsubscript{12}
The QC results of the instrument measuring Vitamin B\\textsubscript{12} at Addenbrooke’s are monitored continually, and analysis is stopped if the results are not satisfactory, ensuring that results are only reported if the analysis is within the QC parameters set by the Laboratory Manager. However it is no longer possible to extract these results for reporting. Therefore in order to monitor between-batch precision, control material was aliquoted at MRC EWL laboratories and included in the monthly delivery of NDNS RP samples to Addenbrooke’s. Table Q.3 Internal QCs for vitamin B\\textsubscript{12} (NDNS RP Year 9)
| | QC 1 | QC 2 | QC 3 | QC 4 | QC 5 | |-------|------|------|------|------|------| | Mean (ng/L) | 124 | 201 | 127 | 565 | 799 | | SD (ng/L) | 13.1 | 15.9 | 14.6 | 20.1 | 36.9 | | % cv | 10.6 | 7.9 | 11.5 | 3.6 | 4.6 | | n | 11 | 11 | 11 | 9 | 9 |
Q.2.3.2 External QCs for vitamin B\\textsubscript{12}
QC was achieved through the UK NEQAS Haematinics scheme.
Charts relating to performance during Year 9 are reproduced below with permission of Addenbrooke’s and the NEQAS Haematinics Scheme organisers.
Figures Q.2 and Q.3 show the performance of the assay as demonstrated by the overall performance “A” score which assesses bias, consistency of bias and clinical acceptability of performance over approximately 6 months for each graph. Bias is calculated to the All Laboratories Trimmed Mean (ALTM). Small numbers (area shaded white) indicate close agreement with the ALTM. Figure Q.2 Illustrative overall performance chart for UKNEQAS for vitamin B\\textsubscript{12} (NDNS RP Year 9; October 2016 to April 2017)
Figure Q.3 Illustrative overall performance chart for UKNEQAS for vitamin B\\textsubscript{12} (NDNS RP Year 9; May 2017 to October 2017) Q.2.4 Holotranscobalamin (holoTC); “active B\\textsubscript{12}”
Vitamin B\\textsubscript{12} (cobalamin) is transported in the circulation bound to transcobalamin (TC) (10-30%) and to haptocorrin (HC) (70-90%). When TC and HC bind vitamin B\\textsubscript{12} the resulting complexes are known as holotranscobalamin (holoTC) and holohaptocorrin (holoHC) to distinguish them from the proteins carrying no vitamin.
HoloTC is the only form of vitamin B\\textsubscript{12} that can be taken up by cells in the body; holoHC is biologically inert. The TC protein alone transports vitamin B\\textsubscript{12} from its site of absorption in the ileum to tissues and cells where it is used as a co-enzyme for essential cellular functions such as DNA synthesis. It has been suggested that as holoTC has a shorter circulating half-life than holoHC the earliest change that occurs on entering negative vitamin B\\textsubscript{12} balance is very likely to be a decrease in serum holoTC concentration.\\textsuperscript{3} Several studies have been published which conclude that holoTC would be a better indicator of vitamin B\\textsubscript{12} status than total serum B\\textsubscript{12}.\\textsuperscript{4,5} As expected, holoTC concentrations are low in patients with biochemical signs of vitamin B\\textsubscript{12} deficiency.\\textsuperscript{6} Low values have been reported in vegetarians,\\textsuperscript{7} vegans\\textsuperscript{8} and in populations with a low intake of vitamin B\\textsubscript{12}.\\textsuperscript{9} Low levels of holoTC but not total B\\textsubscript{12} in serum were reported in patients with Alzheimer’s disease compared to levels in a healthy control group.\\textsuperscript{10} HoloTC concentrations are said to reflect vitamin B\\textsubscript{12} status, independent of recent absorption of the vitamin.\\textsuperscript{11}
The holoTC assay is an enzyme-linked immunosorbent assay (ELISA) manufactured by Axis Shield. It is conducted in 96 well microplates. HoloTC reacts with a specific antibody immobilised on the plate surface; a second, labelled antibody then react to form a “sandwich”. The enzyme label is quantitated using a coloured substrate and the absorbance read in a microplate spectrophotometer. Concentration is interpolated from a calibration curve. The assays for Year 9 were conducted manually at MRC EWL.
Q.2.4.1 Internal QCs for holoTC
QC samples were supplied by the manufacturer and included in every assay. Table Q.4 shows QC data for a period covering the analysis of Year 9 samples.
Table Q.4 Internal QCs for holoTC (NDNS RP Year 9)
| | Low Control 25 pmol/L (15-35) | High Control 60 pmol/L (36-84) | QA 73.8 pmol/L (52.2-95.5) | |----------------|-------------------------------|-------------------------------|---------------------------|
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis Q.2.4.2 External QA for holoTC
NEQAS are conducting a pilot study for external assessment of holoTC results. The short time-scale over which the NDNS RP Year 9 assays were conducted did not allow for “live” participation in this pilot scheme. NEQAS samples received during the year were stored at -80°C and assayed retrospectively alongside the Year 9 samples, the results being compared with the NEQAS ALTM for results obtained by other laboratories, most of whom used the method automated on the Abbot Architect analyser. This validates the accuracy of Year 9 results.
Table Q.5 External QA for holoTC (NDNS RP Year 9)
| Holotranscobalamin (holoTC) | UK NEQAS pilot | Year 9 | |-----------------------------|----------------|-------| | mean % bias\* | 0.25 | | | SD of % bias | 5.4 | | | n | 9 | |
- relative to method mean i.e. ELISA
Q.2.5 Serum total, high density lipoprotein (HDL) and low density lipoprotein (LDL) cholesterol
The total cholesterol method on the Siemens Dimension analyser is based on the principle first described by Stadtman\\textsuperscript{12} and later adapted by other workers, including... Rautela and Liedtke. Cholesterol esterase (CE) catalyses the hydrolysis of cholesterol esters to produce free cholesterol which, along with pre-existing free cholesterol, is oxidised in a reaction catalysed by cholesterol oxidase (CO) to form cholest-4-ene-3-one and hydrogen peroxide. In the presence of horseradish peroxidase (HPO), the hydrogen peroxide thus formed is used to oxidize N,N-diethylaniline-HCl/4-aminoantipyrine (DEA-HCl/AAP) to produce a chromophore that absorbs at 540nm.
The AHDL cholesterol assay is a homogeneous method for directly measuring HDL cholesterol concentrations.
The method is based on accelerating the reaction of cholesterol oxidase (CO) with non-HDL unesterified cholesterol and dissolving HDL selectively using a specific detergent. In the first reaction, non-HDL unesterified cholesterol is subject to a cholesterol oxidase reaction and the peroxide generated is consumed by a peroxidase reaction with DSBmT yielding a colourless product. The second reagent consists of a detergent capable of solubilising HDL specifically, cholesterol esterase (CE) and chromogenic coupler to develop colour for the quantitative determination of HDL-C. The assays were conducted on a Siemens Dimension Xpand analyser.
Q.2.5.1 Internal QCs for total cholesterol
Table Q.6 Internal QCs for total cholesterol (NDNS RP Year 9)
| | QC 1 | QC 2 | QC 3 | |-------|------|------|------| | Mean | 3.30 | 4.46 | 7.18 | | SD | 0.07 | 0.06 | 0.09 | | % CV | 2.03 | 1.45 | 1.26 | | n | 58 | 58 | 57 |
Q.2.5.2 Internal QCs for HDL cholesterol
Table Q.7 Internal QCs for HDL cholesterol (NDNS RP Year 9) Q.2.5.3 External QCs for total and HDL cholesterol
External QC was achieved through UKNEQAS and also the Randox International QA Scheme (RIQAS); NEQAS pooled samples are unsuitable for the total cholesterol method used by the Siemens Dimension instruments. Table Q.8 indicates the percentage deviation of results obtained by MRC EWL from the target concentration for Year 9. These have been calculated at MRC EWL.
Table Q.8 NEQAS and RIQAS results for lipid analyses - deviation from target
| Concentration (NDNS RP Year 9) | RIQAS | Cycle 35 | Cycle 36 | |-------------------------------|-------|----------|----------| | total cholesterol | Mean % bias | -0.91 | -1.09 | | | SD of bias | 0.33 | 0.35 | | | n | 11 | 11 | Q.2.6 Serum triglycerides (triacylglycerols)
The triglycerides (triacylglycerols) method is based on an enzymatic procedure in which a combination of enzymes are employed for the measurement of serum or plasma triglycerides (triacylglycerols). The sample is incubated with lipoprotein lipase (LPL) enzyme reagent that converts triglycerides (triacylglycerols) into free glycerol and fatty acids. Glycerol kinase (GK) catalyses the phosphorylation of glycerol by adenosine-5-triphosphate (ATP) to glycerol-3-phosphate. Glycerol-3-phosphate-oxidase oxidises glycerol-3-phosphate to dihydroxyacetone phosphate and hydrogen peroxide (H₂O₂). The catalytic action of peroxidase (POD) forms quinoneimine from H₂O₂, aminoantipyrine and 4-chlorophenol.
The change in absorbance due to the formation of quinoneimine is directly proportional to the total amount of glycerol and its precursors in the sample and is measured using a bichromatic (510nm, 700nm) endpoint technique. The assays were conducted on a Siemens Dimension Xpand.
Q.2.6.1 Internal QCs for serum triglycerides (triacylglycerols)
Table Q.9 Internal QCs for serum triglycerides (triacylglycerols) (NDNS RP Year 9)
| QC 1 | QC 2 | QC 3 | |------|------|------| | Mean | 1.49 | 2.45 | 3.95 |
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis Q.2.6.2 External QA for serum triglycerides (triacylglycerols)
External QA was achieved through UKNEQAS and RIQAS. Table Q.10 indicates the percentage deviation of results obtained from the target concentration. These have been calculated at MRC EWL and are included with the permission of the Scheme organisers.
Table Q.10 UKNEQAS and RIQAS results for triglycerides
(triacylglycerols) (NDNS RP Year 9)
| Triglycerides | UKNEQAS | Year 9 | |---------------|---------|--------| | mean % bias | -4.6 | | | SD of % bias | 4.5 | | | n | 37 | |
| Triglycerides | RIQAS | Cycle 35 | Cycle 36 | |---------------|-------|----------|----------| | mean % bias | -2.55 | -5.08 | | | SD of bias | 0.65 | 1.18 | | Q.2.7 Haemoglobin A1c (HbA1c)
Haemoglobin A1c (HbA1c) was measured by HPLC at Addenbrooke’s, using the Tosoh Automated Glycohemoglobin Analyser. Results are traceable to the US National Glycohemoglobin Standardization Program and to the International Federation of Clinical Chemistry.
Q.2.7.1 Internal Quality Control for HbA1c
The internal QC results in table Q.11 show good precision over Year 9.
Table Q.11 Internal QCs for HbA1c (NDNS RP Year 9) \*
| HbA1c | TOSOH low (G8L) LOT AB5040 | TOSOH high (G8L) LOT AB5040 | Biorad Low (G8L) LOT 33911 | Biorad High (G8L) LOT 33912 | |-------|-----------------------------|-----------------------------|-----------------------------|-----------------------------| | Mean mol/mol | 28.9 | 82.9 | 33.9 | 82.1 | | SD | 0.6 | 0.9 | 0.5 | 0.9 | | %CV | 2.2 | 1.1 | 1.5 | 1.1 | | n | 192 | 192 | 192 | 192 |
\*Example – 1 of 3 instruments, QCs used between Aug 2016 and April 2017 Q.2.7.2 External QA for HbA1c
The HbA1c external assessment scheme calculates standard deviation index (SDI) for each distribution – this is “total error” and includes both inaccuracy and imprecision. Figure Q.4 shows the SDI calculated for each distribution in NDNS RP Year 9. Figure Q.4 is an example of an external QA plot for the instruments at Addenbrooke’s and a summary of the scores for each of their instruments in one of the quarterly distributions. Scores \<1 indicate good performance. The solid line shows the performance of Addenbrooke’s and the dotted lines are the national median and 97.5 percentile performance. These graphs demonstrate that Addenbrooke’s performs close to the median UK performance for this assay. Figure Q.4 External QA for HbA1c (NDNS RP Year 9) compared with all users of Siemens Dimension EXL
Lab: HV. Scheme: Glycated Haemoglobin. Distribution Code: H254. Distribution Date: 27/06/17. Final Report Issued: 17/07/17
| This Distribution | All SDI Ranges | |-------------------|----------------| | Overall Lab SDI: | < 1 Good | | 0.43 | 1 - 2 Acceptable| | Median All Laboratory: | 0.68 | | 97.5th centile: | > 2 Poor | | 1.49 | |
Section SDI scores for this distribution
| Section | EXL | G8 Left-10173304 | G8 Right -12842102 | WDEC/WESTON G8 | |------------------|-----|------------------|--------------------|----------------| | Overall | 0.51| 0.45 | 0.46 | 0.30 | | HbA1c IFCC | 0.51| 0.45 | 0.46 | 0.30 | Q.2.8 Plasma glucose
Glucose was measured at MRC EWL on the Siemens Dimension Xpand using hexokinase coupled to glucose-6 phosphate dehydrogenase. Quantitation was by measurement of NADH at the endpoint using bichromatic spectrophotometry at 340nm and 383nm.
Q.2.8.1 Internal QC for plasma glucose
Control serum was obtained commercially containing low, medium and high concentrations of glucose and was included in each run. Results were checked to ensure they fell within the manufacturer’s target range. The results in table Q.12 indicate good between-batch consistency for glucose results during Year 9.
Table Q.12 Internal QCs for glucose (NDNS RP Year 9)
| | QC 1 | QC 2 | QC 3 | |-------|------|------|------| | Mean mmol/L | 3.19 | 7.56 | 20.65 | | SD mmol/L | 0.11 | 0.15 | 0.26 | | CV % | 3.38 | 1.99 | 1.28 | | n | 47 | 45 | 44 |
Q.2.8.2 External QA for plasma glucose
External QA was through the UK NEQAS scheme. Table Q.13 shows the percentage bias relative to the target concentration in glucose results from MRC EWL during Year 9.
Table Q.13 External QA (UKNEQAS) results for glucose (NDNS RP Year 9) Q.2.9 Plasma ferritin
This assay was performed on the Siemens Dimension Xpand analyser which uses chromium dioxide particles coated with specific antibodies to human ferritin. The assay is coupled to a colour reaction and the intensity of colour is determined by the concentration of ferritin in the sample. Ferritin is quantitated by comparison to calibrants of known concentration.
Q.2.9.1 Internal QCs for plasma ferritin
Control serum was obtained commercially containing low, medium and high concentrations of ferritin and was included in each run. Results were checked to ensure they fell within the manufacturer’s target range. The results in table Q.14 indicate good between-batch consistency for ferritin results during Year 9.
Table Q.14 Internal QCs for ferritin (NDNS RP Year 9)
| Target (µg/L) | 1 | 2 | 3 | |--------------|-----|-----|-----| | Mean (µg/L) | 58.8| 114.7| 292.6| | Range (µg/L) | 44-76| 95-152| 250-372| Q.2.9.2 External QA for plasma ferritin
External QA was through the UK NEQAS Haematinics scheme.
Table Q.15 shows the percentage bias relative to the target concentration in ferritin results from MRC EWL during Year 9.
Table Q.15 Summary of NEQAS bias assessment (NDNS RP Year 9)
| Ferritin µg/L | UK NEQAS | Year 9 | |--------------|----------|--------| | mean % bias | -1.7 | | | SD of % bias | 8.2 | | | n | 36 | |
Q.2.10 Plasma vitamin C
This assay is based on the procedure described by Vuilleumier and Keck.\\textsuperscript{14} Samples are stabilised immediately after separation using an equal volume of 10% metaphosphoric acid.
Ascorbic acid in the sample is converted to dehydroascorbic acid by ascorbate oxidase, followed by coupling of the resulting dehydroascorbate with o-phenylene diamine to form a fluorescent derivative quinoxaline. The formation of quinoxaline is linearly related to the amount of vitamin C in the sample. The assay was performed on the BMG Labtech FLUOstar OPTIMA plate reader, which measures the fluorescence.
Q.2.10.1 Internal QCs for plasma vitamin C
QC samples were made in-house by spiking ascorbic acid-depleted plasma. The results in table Q.16 indicates good between-batch consistency for vitamin C (ascorbic acid) measurements during Year 9.
Table Q.16 Internal QCs for vitamin C (NDNS RP Year 9)
| | QC1 11.9 (7.6-16.2) | QC2 35.7 (23.0-48.4) | QC3 59.0 (45.3-72.7) | |-------|---------------------|----------------------|----------------------| | Mean (µmol/L) | 11.0 | 32.3 | 50.3 | | SD (µmol/L) | 1.5 | 1.6 | 1.7 | | % CV | 13.3 | 4.8 | 3.4 | | n | 82 | 82 | 82 |
Q.2.10.2 External QCs for vitamin C
Table Q.17 External QCs for vitamin C (NDNS RP Year 9)\*
| RCPAQAP | cycle 35 | cycle 36 | cycle 37 | |---------|----------|----------|----------| | Mean imprecision (%) | 3.4 | 4.7 | 6.4 | | %CV of imprecision | 4.7 | 6.5 | 9.2 | The bias is calculated from the ALTM. The great majority of the participating laboratories use the Chromsystems HPLC method and calibrator, which are different from the MRC EWL fluorescence method and calibrator; MRC EWL results show a bias relative to the Chromsystems methods. The MRC EWL calibrators are made up gravimetrically from the AnalaR ascorbic acid, the purest grade available. This methodological difference shows as a deviation of our results from the Chromsystems consensus. The consistency of the bias indicates consistency in MRC EWL results, as does the low “% imprecision” result. The MRC EWL method shows excellent back compatibility with previous studies which used the same methodology.
Q.2.11 Erythrocyte transketolase activation coefficient (ETKAC) for thiamine status
This assay is based on that of Vuilleumier et al\\textsuperscript{15} and depends on the coupling of pyridine nucleotide oxidation to glycerol phosphate dehydrogenase (GDH) (NADH linked), which produces glycerol-3-phosphate after the transketolase-catalysed conversion of ribose-5-phosphate. The rate of oxidation of NADH is monitored at 340nm, on the Multiskan FC plate-reader, in which instrument temperature equivalence across the plate can be achieved. Thiamin status is assessed using the activation coefficient, which is the ratio of cofactor-stimulated activity to the basal activity without any added cofactor.
This method is identical in principle with its predecessor on the Cobas Fara platform. An analysis of bias between the results determined on the 2 platforms was performed ahead of the NDNS RP.
There are no available sources of erythrocytes with known ETKAC; therefore unassayed material was prepared in-house. Erythrocytes from the National Blood Transfusion Service (NBTS) or commercial sources were washed to remove the buffy coat and lysed by threefold dilution with water. This lysate was stored at -80°C in single-use aliquots. The lysate was stored and assayed both neat and further diluted x2 with water. No source of thiamin deficient erythrocytes has been identified with which to prepare a lysate giving high ETKAC; similarly none of the participant’s samples had resulted in an ETKAC in the deficient range (greater than 1.25).
QC material “K” is a dilute lysate in which the reaction rates are very low, included to assess assay performance in similarly dilute samples. Q.2.11.1 Quality control results for ETKAC
Descriptive statistics in table Q.18 for internal QCs indicate good batch-to-batch consistency of ETKAC results during Year 9.
There are no external QA or QC schemes available for ETKAC.
Table Q.18 Internal QCs for ETKAC (NDNS RP Year 9)
| Internal control | C | K\* | P | |------------------|-----|-----|-----| | Mean | 1.07| 1.07| 1.08| | SD | 0.04| 0.08| 0.03| | % CV | 3.86| 7.54| 3.01| | n | 25 | 20 | 24 |
- selected to have very low reaction rates
Q.2.12 Erythrocyte glutathione reductase activation coefficient (EGRAC) for riboflavin status
This assay was developed from the original manual technique developed by Glatzle et al. and was adapted to the ‘in-house’ method using a Cobas Fara centrifugal analyser, which in turn has been modified to an assay carried out on microplates and read on a Thermo iEMS plate reader. The ratio of flavin adenine dinucleotide (FAD) stimulated to unstimulated activity is the EGRAC and is a measure of riboflavin status. The method is a kinetic test with decreasing absorbance and the preincubation with FAD is carried out for a relatively long period, 30 minutes at 37°C, in order to ensure full reactivation of apo-enzyme. The assay is conducted at a low final concentration of FAD (1.5μM), which is necessary to eliminate activation coefficients (ratios) \<1.0; this can result from enzyme inhibition by FAD, or its breakdown products, which may occur if the final concentration of FAD is too high.
The assay is in principle identical to its predecessor which used the Cobas Fara. A comparison of results obtained on the two platforms was performed using NDNS RP Year 1 quarter 1 samples, which showed good agreement. The accepted threshold for riboflavin adequacy is EGRAC below 1.30.
Recent research has indicated that the 1.30 threshold may be set too low, so giving an overestimate of the prevalence of functionally-significant low riboflavin status. It has been recommended that the EGRAC threshold should be raised to a level above 1.30 to better recognise riboflavin inadequacy; this requires further consideration.\\textsuperscript{17}
Q.2.12.1 QCs for EGRAC
There is no control with known EGRAC available, therefore washed erythrocytes were prepared in-house, aliquoted for single use and stored at -80°C. In addition to the native samples a saturated control was made by incubation with FAD before aliquoting. These 3 controls were run on each assay plate. There is no external QA scheme available for EGRAC.
Q.2.12.1.1 Internal QC results during Year 9
Descriptive statistics in table Q.19 for internal QCs indicate good batch-to-batch consistency of EGRAC results during Year 9.
Table Q.19 Internal QCs for EGRAC (NDNS RP Year 9)
| Internal control | A | C | X | |------------------|-----|-----|-----| | Mean | 2.20| 1.54| 0.97| | SD | 0.04| 0.03| 0.01| | % CV | 1.98| 2.14| 1.12| | n | 20 | 19 | 20 |
Q.2.13 Plasma vitamin B6 (PLP and PA) A reverse-phase high performance liquid chromatography (HPLC) method with post column derivatisation and fluorimetric detection was used to determine pyridoxal-5-phosphate (PLP) and 4-pyridoxic acid (PA) in plasma.\\textsuperscript{18}
Q.2.13.1 Internal QCs for vitamin B6
QC was achieved through internal procedures. QC material was produced by spiking human plasma with aqueous solutions of PLP and PA. The final QC concentration was designed to match typical mid-range human samples. The QC material was spiked so that the additional aqueous content represented only 0.02% of the total medium. Duplicate analysis of the QC material was performed with each analytical run, and the mean recovery of added PLP and PA was calculated for each run. When the mean percentage recovery was outside of the range 95 to 105% of nominal the analytical results for that run were corrected accordingly.
From Year 5 plasma from 2 individuals (designated as A02 and A07) was used as additional quality assurance. These samples, analysed in duplicate in each run, plus the existing unspiked plasma (K4082310) allowed drift monitoring over the range of PLP and PA concentrations seen in the NDNS RP. The spiked QC plasma was used to monitor accuracy and to adjust the concentration of samples and unspiked QC controls if required.
Table Q.20 Internal QCs for PLP and PA (unspiked plasma) (NDNS RP)
| | PLP A02 | PA A02 | PLP A07 | PA K4082310 | |-------|---------|--------|---------|-------------| | mean | 49.7 | 127.8 | 25.5 | 36.7 | | SD | 3.6 | 7.5 | 2.0 | 1.9 | | % CV | 7.2 | 5.9 | 7.8 | 5.1 | | n | 26 | 26 | 24 | 26 |
Table Q.21 Internal QCs for PLP and PA (spiked plasma) (NDNS RP) During Year 9 the expected PLP concentration of the spiked plasma was 55.9nmol/L (the sum of the basal level in the plasma plus the spike concentration). The expected PA concentration of the spiked plasma was 55.0nmol/L (the sum of the basal level in the plasma plus the spike concentration). Table Q21 indicates consistent accuracy for both spiked controls, i.e. a quantitative recovery of vitamin B₆ from plasma samples.
Q.2.13.2 External QC for PLP
Participation in studies conducted by the Royal College of Pathologists of Australasia Quality Assurance Program (RCPAQAP) during Year 9 allowed inter-laboratory comparison of results. MRC HNR/MRC EWL participated in monthly ‘round robin’ studies using lyophilised samples received from RCPAQAP on an annual basis. Internationally, a small number of laboratories (5 to 7) are involved in the scheme. Therefore the returns from this scheme are only useful for indicating whether each laboratory’s results are broadly similar to those obtained by other participating laboratories. There are no other participating laboratories in the UK.
For each return in figure Q.5, 2 points are plotted on the graph representing 2 supplied specimens at different concentrations. The zero line represents the median value from all the participating laboratories. The vertical axis represent the ratio of the given result to the median compared to the allowable limit of performance at that concentration level. Results within +/- 1 are within the allowable limits. This suggests that MRC EWL results agree favourably with other laboratories in the scheme.
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis Figure Q.5 MRC HNR/MRC EWL participating in monthly ‘round robin’ studies using lyophilised samples received from RCPAQAP during the period of analysis of NDNS RP Year 9 samples
| January to June 2017 (NDNS Yr9) | July to October 2017 (NDNS Yr9) | |---------------------------------|---------------------------------|
**Summary Data**
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis Q.2.14 Serum and whole blood folate
Q.2.14.1 Serum folate
Serum folate was measured at MRC EWL by liquid chromatography-tandem mass spectrometry (LC-MS/MS). The assay uses solid phase extraction with phenyl columns to isolate the folate forms in serum samples. Stable isotope labelled internal standards are added during the extraction step and undergo processing identical to the analytes thereby normalising for sample preparation and instrument variability. Highly specific detection of the six vitamers: methyltetrahydrofolate, tetrahydrofolate, formyltetrahydrofolate, folic acid, 5,10 methenyltetrahydrofolate and an oxidation product of 5-methyltetrahydrofolate (MeFox) is accomplished by LC-MS/MS analysis. The ratio of analyte to internal standard signal is compared to that of a calibration curve to determine analyte concentration. Analytes are analysed using reversed phase ultra-performance liquid chromatography (UPLC) on a Waters ACQUITY UPLC® HSS T3 C8 1.7µ 2.1 x 100mm column at 300C with a 49.5:40:10:0.5 Water:Methanol:Acetonitrile:Acetic Acid isocratic mobile phase prior to mass spectrometry analysis. The retention times for all the analytes are very similar and the internal standards are identical to their corresponding analytes but due to their differing masses, there is clear distinction between them in the assay. Formyltetrahydrofolate and MeFox have the same molecular weights and cannot be chromatographically separated so transitions unique to each form have to be used.
Total folate for reporting is calculated from the sum of the 6 folate vitamers.
Q.2.14.1.1 Internal QC for serum folate
Three controls containing folic acid as well as naturally-occurring vitamers were analysed at the beginning and at the end of each batch of samples for assessment of assay precision.
Because of the limitations of external QA schemes for serum folate, accuracy was continually monitored in-house by including Standard Reference Material (SRM) as an accuracy control. SRM 1950 was stored in single-use aliquots and run once with each batch of samples in order to assess assay accuracy. Results are presented in tables Q.22 and Q.23.
Table Q.22 Precision assessment (NDNS RP Year 9)
| | QC1 | QC 2 | QC 3 | |-------|-----|------|------|
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis Table Q.23 Accuracy assessment (SRM 1950) (NDNS RP Year 9)
| SRM 1950 (nmol/L) | MTHF | Folic Acid | |-------------------|------|------------| | Mean | 28.51| 3.20 | | SD | 1.29 | 0.19 | | % CV | 4.54 | 5.84 | | n | 10 | 10 |
SRM target values 26.91 +/- 0.7 3.42 +/- 1.02
Q.2.14.1.2 External QA of serum folate
The laboratory participated in the VITAL-EQA program organised by CDC; Round 28 was sent in Spring 2017, during Year 9; three samples are sent for each round.
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis Comparison is against a target concentration determined using the Bio-Tek Power Wave microbiological method. Bias and precision were classified as “optimum” at the lowest and middle concentration and “desirable” at the highest concentration.
The laboratory is a member of UKNEQAS for serum folate but because all other participating laboratories use clinical competitive protein binding methods rather than LC-MS/MS, which is more accurate when compared to the “gold-standard” microbiological method, comparison with the ALTM is not a valid measure of accuracy.
Table Q.24 Serum folate VITAL-EQA data, Round 28 (all concentrations are in ng/mL) (NDNS RP Year 9)
| Your Overall Mean | 4.75 | 6.07 | 11.9 | |-------------------|------|------|------| | Your Within-Lab SD | 0.23 | 0.30 | 0.76 | | Your Within-Lab Imprecision (CV) | 4.9% | 4.9% | 6.4% | | Your Imprecision Evaluation | Optimum | Optimum | Desirable | | Your Deviation from Target (%) | 5.2% | -0.7% | 9.7% | | Your Bias Evaluation | Optimum | Optimum | Desirable |
Q.2.14.2 Whole blood folate and red blood cell (RBC) folate quantitation
RBC folate is calculated from whole blood folate concentration (see below), serum folate concentration and Hct (as quantitated as part of the full blood count) using the equation:
[ \\text{RBC folate} = \\frac{\\text{whole blood folate} - (\\text{serum folate} \\times (1-\\text{Hct}))}{\\text{Hct}} ]
Where a serum folate concentration was not available a surrogate of 18nmol/L was used in the calculation. Where Hct was not available, a surrogate of 0.4L/L was used.
Q.2.14.2.1 Whole blood folate – analytical method
Whole blood haemolysate specimens (whole blood diluted and stabilized with ascorbic acid) were analysed for total folate at the Centers for Disease Control, Atlanta, Georgia, USA, (CDC) using the \\textit{Lactobacillus rhamnosus} microbiologic
[\\text{QC information provided by CDC.}]
[\\text{National Diet and Nutrition Survey}]
[\\text{Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis}] growth assay by an adaptation of O’Broin et al.\\textsuperscript{19} and Molloy et al.,\\textsuperscript{20} as described by Pfeiffer et al.\\textsuperscript{21} Diluted specimen (4 replicates at 2 dilutions) was added to an assay medium containing the microorganism and all of the nutrients necessary for the growth of the microorganism except for folate. Since the growth of L. rhamnosus is proportional to the amount of total folate present in the specimen, the total folate level was assessed by measuring the turbidity of the inoculated medium at 590nm in a microplate reader. The assay was calibrated with 5-methyl-tetrahydrofolate (5-methylTHF), using an 11-point calibration curve (0–1.0nmol/L; 8 replicates/point) with a third degree polynomial curve fit.
Sample dilutions with a concentration below the lowest calibrator or above the highest calibrator were repeated for confirmation, at lower or higher dilution. The standard dilution used for whole blood haemolysate specimens in this study was 1/94.
Results from 4 replicates at 2 different dilutions were averaged to generate the final result and the CV from the 4 replicates had to be ≤15% (≤10% if only 3 replicates were used). No result was reported from less than 3 replicates. Assays were repeated where necessary.
Samples with a whole blood folate concentration \<127nmol/L (corresponding to a RBC folate concentration of \<317nmol/L RBC if a Hct of 0.4L/L is assumed) were considered to represent potential folate deficiency and assays were repeated for confirmation. This is the standard practice in the CDC laboratory.
All blood samples were posted at ambient temperature to the laboratory at Addenbrooke’s where aliquots of the blood were preserved with 1% ascorbic acid and frozen at -80°C for storage, before sending on dry ice to CDC. Any possible deterioration in folate concentration during overnight postage is likely to be less than 10%.\\textsuperscript{22}
Q.2.14.2.2 Internal QC for whole blood folate\\textsuperscript{Error! Bookmark not defined.}
Three whole blood bench QC pools were analysed in duplicate in each run, bracketing the unknown samples ((n = 32) runs). The between-run imprecision for whole blood folate and the target concentration are shown in table Q.25. Table Q.25 Whole blood total folate concentration (nmol/L) (NDNS RP Year 9)
| Analyte | Parameter | LB14810a_MA | MB14811a_MA | HB14812a_MA | |---------|-----------------|-------------|-------------|-------------| | WBF | Mean, nmol/L | 256 | 440 | 742 | | WBF | SD, nmol/L | 20 | 30 | 42 | | WBF | % CV | 8% | 7% | 6% | | WBF | Target nmol/L | 232 | 429 | 722 | | WBF | Difference from target | 10.5% | 2.7% | 2.8% |
Four additional whole blood QC pools were analysed “blind” (i.e. target concentration unknown to analyst) as part of this study at a rate of 1 blind QC sample in every 20 unknown samples. The between-run imprecision and target concentration are shown in table Q.26.
Table Q.26 Whole blood total folate concentration (nmol/L) (NDNS RP Year 9)
| Analyte | Parameter | 936 | 937 | 938 | 939 | |---------|-----------------|-----|-----|-----|-----| | WBF | Mean, nmol/L | 527 | 257 | 391 | 186 | | WBF | SD, nmol/L | 9 | 23 | 19 | 11 | Accuracy has been established by spiking recovery, by periodic assaying of the 1st International Standard for Whole Blood Folate 95/528, and by successful participation in UK NEQAS Haematinics programme (http://www.ukneqas-haematinics.org.uk).
Q.2.14.2.3 Note regarding folate status assessment
Our data demonstrate a decrease over time in geometric mean folate concentration for all age/sex groups in the population. This finding is significant in terms of public health and therefore we regard it as relevant to consider the possibility that the interpretation could be confounded by analytical or pre-analytical causes.
The laboratories who performed these assays have good quality control evidence for long-term consistency of their results. Crucially, the analytical matrix, the pre-analytical procedures and the analytical methodology for RBC folate and serum folate were completely independent of each other. The serum folate concentration was measured using LC-MS/MS on a serum sample separated promptly at the Field Laboratory and kept frozen until analysis. The RBC folate concentration was derived principally from whole blood folate measured using the gold-standard reference microbiological assay and from haematocrit; both of these were measured in a whole blood sample posted by the nurse to Addenbrooke’s where the haematocrit was measured and an aliquot of the blood stabilised and frozen for folate assay. Because these processes were so different for the 2 analytes we do not consider that the decrease in folate status recorded by the NDNS RP over the 9-year period can be ascribed to analytical or pre-analytical causes. The agreement between the time trends in these 2 measures of folate status is evidence that the data represent a genuine decline in UK population folate status between 2007/08 to 2016/17. Q.2.15 Plasma retinol, $\\alpha$– and $\\gamma$–tocopherol, and individual carotenoids
Fat soluble micronutrients were determined by HPLC coupled to a photodiode array detector, capable of multi-wavelength detection. The analytical method used was derived from Sowell et al.\\textsuperscript{23} Samples were assayed as singletons. Plasma concentrations of vitamin A (retinol), $\\alpha$–, and $\\gamma$–tocopherol, and 6 carotenoids ($\\alpha$– and $\\beta$–carotene, $\\alpha$– and $\\beta$–cryptoxanthin, lycopene and the sum of co-eluting lutein and zeaxanthin [xanthophyll]) were determined. Internal standards of tocopherol acetate and apo-8-carotenal were used to monitor losses during the extraction process and to account for any changes in volumes. The analytical methods used were the same as during Years 5 to 8; these differ from the methods used for Years 1 to 4. Details of the conversion factors needed for comparison with data collected during Years 1 to 4 are detailed in NDNS RP Years 5 and 6 (combined) report.\\textsuperscript{24}
Q.2.15.1 Internal QCs for plasma retinol, $\\alpha$– and $\\gamma$–tocopherol and individual carotenoids
The FSV results for Year 9 were reported as plasma retinol, $\\alpha$– and $\\gamma$–tocopherol and individual carotenoids (Lutein and zeaxanthin co-elute and therefore are measured as a sum). Internal controls were selected containing appropriate concentrations of each analyte; these were aliquoted for use in each analytical run. Between-batch precision was calculated from these values, as for all other analytes measured in the NDNS RP.
Accuracy was determined using the external QA scheme led by NIST with UKNEQAS returns as corroboration, see section Q.2.15.2.
Table Q.27 Precision of internal QC for plasma retinol (NDNS RP Year 9)
| Retinol Year 9 | QC 11 | NIST 257 | QC7 | |---------------|-------|----------|-----| | mean | 1.45 | 1.80 | 2.35| | SD | 0.06 | 0.09 | 0.11|
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis | % CV | 4.1 | 5.1 | 4.5 | |------|-----|-----|-----| | n | 18 | 22 | 22 |
Table Q.28 Precision of internal QC for plasma α-tocopherol
(NDNS RP Year 9)
| Alpha tocopherol Year 9 | NIST 170 | QC7 | QC 2 | QC 11 | |-------------------------|----------|-----|------|-------| | mean | 14.36 | 34.72 | 33.36 | 15.64 | | SD | 0.81 | 1.56 | 0.82 | 0.71 | | % CV | 5.7 | 4.5 | 2.5 | 4.5 | | n | 22 | 22 | 18 | 18 |
Table Q.29 Precision of internal QC for plasma γ-tocopherol
(NDNS RP Year 9)
| Gamma tocopherol Year 9 | QC 7 | QC 11 | |-------------------------|------|-------| | mean | 1.76 | 1.08 | | | SD | 0.20 | 0.23 | |-------|-----|------|------| | % CV | 11.1| 21.1 | | n | 22 | 17 |
Table Q.30 Precision of internal QC for plasma α-carotene
(NDNS RP Year 9)
| | Alpha carotene Year 9 | | | | |-------|-----------------------|-------|-------|-------| | | QC7 | NIST 265 | QC2 | | | mean | 0.10 | 0.16 | 0.11 | | | SD | 0.01 | 0.01 | 0.01 | | | % CV | 5.8 | 4.3 | 5.4 | | | n | 18 | 22 | 18 | |
Table Q.31 Precision of internal QC for plasma β-carotene
(NDNS RP Year 9)
| | Beta carotene Year 9 | | | | |-------|----------------------|-------|-------|-------| | | QC 11 | NIST 265 | NIST 170 | | | mean | 0.15 | 0.56 | 1.08 | |------|------|------|------| | SD | 0.01 | 0.02 | 0.03 | | % CV | 5.0 | 4.4 | 3.2 | | n | 18 | 22 | 22 | Table Q.32 Precision of internal QC for plasma α-cryptoxanthin
(NDNS RP Year 9)
Note: Lower sensitivity for alpha-cryptoxanthin in Year 9 meant the limit of quantitation was raised to 0.10 μmol/L. The internal QC concentrations are below the limit of quantitation established for Year 9 and should be seen as indicative only.
| | Alpha cryptoxanthin Year 9 | |----------------|-----------------------------| | | QC2 | NIST 265 | | mean | 0.06 | 0.05 | | SD | 0.01 | 0.003 | | % CV | 19.9 | 6.5 | | n | 16 | 9 |
Table Q.33 Precision of internal QC for plasma β-cryptoxanthin
(NDNS RP Year 9)
| | Beta cryptoxanthin Year 9 | |----------------|-----------------------------| | | QC11 | QC7 | | mean | 0.16 | 0.12 | | SD | 0.01 | 0.01 | | % CV | 7.1 | 7.0 | Table Q.34 Precision of internal QC for plasma lycopene (NDNS RP Year 9)
| | Lycopene Year 9 | |----------|-----------------| | | NIST 170 | NIST 265 | QC7 | QC11 | | mean | 0.45 | 0.68 | 1.85 | 0.62 | | SD | 0.02 | 0.03 | 0.09 | 0.03 | | % CV | 4.5 | 5.0 | 4.6 | 4.7 | | n | 22 | 22 | 22 | 18 |
Table Q.35 Precision of internal QC for plasma lutein + zeaxanthin (NDNS RP Year 9)
| | Lutein plus zeaxanthin Year 9 | |----------|-------------------------------| | | NIST 257 | NIST 170 | QC7 | QC11 | | mean | 0.11 | 0.24 | 0.37 | 0.17 | | SD | 0.01 | 0.01 | 0.02 | 0.01 | | % CV | 7.9 | 4.7 | 5.2 | 5.9 | Q.2.15.2 External QCs for plasma retinol, α– and γ–tocopherol and individual carotenoids
Participation in studies conducted by NIST and UKNEQAS allowed inter-laboratory comparison of results. MRC EWL also received samples from UKNEQAS on a monthly basis. For UKNEQAS the following carotenoids: α-carotene, β-cryptoxanthin, lutein/zeaxanthin and lycopene are measured by 6 laboratories or fewer and therefore the returns from these schemes are only useful for indicating whether each laboratory’s results are broadly similar to those obtained by other participating laboratories.
NIST EQA return LXXXII was submitted during Year 9 and the extract below in figure Q.6 shows that agreement with the target concentration was very good. Figure Q.6 NDNS RP Year 9 NIST return LXXXII
Individualized Round Robin LXXXII Report: 134 Graphical Comparability Summary
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis In the graphical representations in figures Q.6 our result for each analyte measured is represented as an open larger circle with other laboratories in the scheme represented as closed black circles. The vertical axis indicates average deviation from the mean; the horizontal axis indicates the variability of that deviation. The closer to the origin the better the result, in terms of precision and accuracy. Five samples are analysed for every NIST return; the analyte ‘result’ above is a summary of all 5.
Q.2.16 Serum 25-hydroxyvitamin D (25-OHD)
Q.2.16.1 Method changes during the NDNS Rolling Programme
At the beginning of the NDNS RP, plasma 25-hydroxyvitamin D (25-OHD) was measured using the Diasorin Liaison. During Year 4 the manufacturers reformulated the assay and the matrix was changed to serum. From the beginning of Year 7 the Liaison assay was discontinued and serum 25-OHD was measured using an in-house LC-MS/MS method. The LC-MS/MS and Liaison assays have been standardised against the international reference methods under the Vitamin D Standardisation Program. The LC-MS/MS method has been shown to produce results equivalent to the international reference methods and a standardisation factor has been determined for the Diasorin Liaison; standardised results are used in the data analysis.
Q.2.16.2 Serum 25-hydroxyvitamin D (25-OHD) Year 9
During Year 9, 25-OHD was measured in serum by LC-MS/MS at MRC EWL
The assay uses a methanol protein precipitation step followed by liquid-liquid extraction in hexane to separate 25-Hydroxyvitamin D from other analytes in serum samples. Stable isotope labelled internal standards are added during the extraction step and undergo processing identical to the analytes thereby normalizing for sample preparation and instrument variability. Highly specific detection of the analytes and internal standards is accomplished by LC-MS/MS analysis using a Waters ACQUITY UPLC system coupled to an AB Sciex QTrap mass spectrometer and the ratio of analyte to internal standard signal is compared to that of a calibration curve to determine analyte concentration. Analytes are resolved using reversed phase UPLC on a Thermo Scientific Hypersil GOLD PFP 2.1 x 100mm 1.9µm column at 400C with a 72% Methanol +0.1% formic acid isocratic mobile phase at 0.25mL/min prior to mass spectrometry analysis.
Total 25-OHD is calculated from the sum of 25-OHD2 and 25-OHD3. This assay has been calibrated against International Reference Methods at NIST and the University of Ghent under the auspices of the Vitamin D Standardisation Program.
Q.2.16.3 Quality control for 25-OHD
Internal QCs were run with every batch and MRC EWL also subscribed to the DEQAS external QA scheme.
Q.2.16.3.1 Internal QCs for 25-OHD
Controls (Chromsystems Level 1 and Level 2 and an in-house control) were run with every assay batch. 25-OHD2 and 25-OHD3 are quantitated separately and presented in table Q.36, alongside in-house controls.
Table Q.36 Internal QCs for 25-OHD (NDNS RP Year 9)
| Year 9 | lot 2714 | lot 0716 | QC151014 | |--------|----------|----------|-----------| | | level 1 | level 2 | level 1 | level 2 | in-house | | | D2 | D3 | D2 | D3 | D2 | D3 | D2 | D3 | | mean | 44.0 | 37.6 | 101.8 | 85.1 | 37.4 | 39.6 | 84.7 | 88.8 | 12.8 | 19.0 | | SD | 2.5 | 1.3 | 6.0 | 3.7 | 2.8 | 2.3 | 5.9 | 3.6 | 1.0 | 1.4 | | % CV | 5.8 | 3.6 | 5.9 | 4.4 | 7.5 | 5.9 | 7.0 | 4.0 | 8.0 | 7.6 | | n | 12 | 12 | 14 | 14 | 13 | 13 | 13 | 13 | 24 | 24 |
Q.2.16.3.2 External QA for 25-OHD
MRC EWL subscribed to the DEQAS external QA scheme and performance was assessed by the scheme organisers as meeting the performance target set by the National Diet and Nutrition Survey
Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis DEQAS Advisory Panel (i.e. 80% or more of results were within +/- 30% of the target. The target is measured by the National Institute of Science and Technology, Maryland USA using their isotope-dilution LC-MS/MS Reference Method for 25-OHD2 and 25-OHD3; the two are added together to provide the Target Concentration for total 25-OHD). DEQAS do not issue cumulative performance data as do NEQAS.
Table Q.37 shows the relationships between 25-OHD as reported on individual DEQAS samples by EWL and the target concentration as provided by NIST.
**Table Q.37 Relationships between 25-OHD as reported on individual DEQAS samples by MRC EWL between April 2016 and October 2017**
| 25 (OH)D nmol/L | Year 9 | |-----------------|--------| | Mean bias from target concentration | 0.3 | | SD of bias | 4.9 | | n | 30 |
**Q.2.17 Plasma creatinine**
At the start of Year 8 the creatinine assay was changed to an enzymatic method which uses creatininase coupled to creatinase, sarcosine oxidase and peroxidase. The coloured end product is measured bichromatically (540nm, 700nm) at the endpoint of the reaction. Enzymatic creatinine methods are reported to be less susceptible to non-creatinine interfering substances.
**Q.2.17.1 Internal QCs for plasma creatinine**
Multiqual QCs containing low, moderate and high concentrations of creatinine are run with each sample set. If the results obtained are not within manufacturer’s range and also within the range determined within our laboratory, the run is rejected. Table Q.38 shows internal QC results for creatinine, covering the period when Year 9 samples were analysed. Table Q.38 Internal QCs for plasma creatinine (NDNS RP Year 9)
| | qc 1 | qc2 | qc3 | |-------|-------|-------|-------| | Mean | 52.89 | 127.97| 401.65| | SD | 3.16 | 3.04 | 8.02 | | % cv | 5.98 | 2.38 | 2.00 | | n | 43 | 44 | 42 |
Q.2.17.2 External QA for plasma creatinine
MRC EWL subscribes to the UKNEQAS clinical chemistry. Table Q.39 shows that during Year 9 the Dimension assay at MRC EWL gave results acceptably close to the consensus of all laboratories using the same method.
Table Q.39 External quality assurance for creatinine performance relative to method mean (enzymatic method) (NDNS RP Year 9)
| | UK NEQAS | Year 9 | |-------|----------|--------| | creatinine | Mean % bias | 2.5 | | | SD % bias | 4.5 | | | n | 57 | Q.2.18 Plasma selenium and plasma zinc
Total selenium (Se) and zinc (Zn) concentrations of human blood plasma were determined by measuring the $^{78}\\text{Se}$ and $^{68}\\text{Zn}$ isotopes using an inductively coupled plasma mass spectrometer (ICP-MS) equipped with a dynamic reaction cell (DRC). Methane (CH$\_4$) was used as a DRC gas to overcome Argon based interferences.
Samples were introduced to the ICP-MS through a flow injection system combined with the Sea spray nebulizer and cyclonic spray chamber arrangement.
Human blood plasma samples and QC materials were prepared in diluent which included rhodium (Rh) as internal standard. The Se and Zn isotope signals were compared against the internal standard, enabling any signal fluctuation due to instrument drift to be accounted for.
Matrix matched external calibration standards were prepared in commercially prepared human serum or plasma (Seralabs).
Prior to analysis the ICP-MS instrument was tuned for optimum signal sensitivity and minimum oxide species and doubly charged ion formation. Unknown samples, blanks, calibration standards and QCs were analysed in each batch and the signal data generated was converted to concentration data via the calibration plot.
Q.2.18.1 QCs for selenium and zinc
In order to establish quality assurance of each analytical batch and inter-batch variation across the year’s cohort as a whole, ClinChek Plasma Control Lyophilised for Trace Elements Level 1 and 2 (Recipe Chemicals and Instruments GmbH) QC samples were analysed in conjunction with the blanks, calibration standards and samples.
Q.2.18.1.1 Inter-batch variability
Table Q.40 summarises the measured concentration of selenium and zinc following analysis of these QC samples for each individual year of the NDNS RP. For each year the mean measured concentration of the QC was within the target concentration range defined by the manufacturer and CV was ≤10% for each of the years described, showing that for each year there was acceptable analytical accuracy and precision.
### Table Q.40 QC analysis (NDNS RP Year 9)
| | L1 423 | L1 1286 | L2 423 | L2 1286 | |----------------|--------|---------|--------|---------| | **Selenium** | | | | | | Target (µg/L) | 81.4 | 73.8 | 120 | 120 | | Acceptable range (µg/L) | 65.1-97.7 | 59.0-88.5 | 96-144 | 96-144 | | Mean Measured (µg/L) | 76.4 | 70.6 | 113 | 114 | | Standard deviation (SD) | 4.2 | 1.7 | 5.8 | 2.2 | | % CV | 5.6 | 2.4 | 5.2 | 1.9 | | Agreement with Target (%) | 93.8 | 95.6 | 94.2 | 95.6 | | n | 23 | 7 | 21 | 6 |
| | L1 423 | L1 1286 | L2 423 | L2 1286 | |----------------|--------|---------|--------|---------| | **Zinc** | | | | | | Target (µg/L) | 1160 | 1760 | 1540 | 2130 | | Acceptable range (µg/L) | 928-1390 | 1500-2020 | 1230-1850 | 1810-2450 | | Mean Measured (µg/L) | 1177 | 1773 | 1591 | 2158 | | Standard deviation (SD) | 51.5 | 28.3 | 58.6 | 43.1 | | % CV | 4.4 | 1.6 | 3.7 | 2.0 |
*National Diet and Nutrition Survey* *Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis* | Agreement with Target (%) | 101.5 | 100.8 | 103.3 | 101.3 | |---------------------------|-------|-------|-------|-------| | n | 23 | 7 | 21 | 6 |
Q.2.18.1.2 External QCs for Selenium and Zinc in Serum
MRC EWL participates in the Interlaboratory Comparison Program for Metals in Biological Matrices (PCI), operated by Centre de toxicologie du Québec at the Institut national de santé publique du Québec (INSPQ). Selenium and zinc analysis of serum samples gives values which are within the criteria defined in this multi-laboratory programme.
Note: at the method dilution used there is no significant difference between serum and plasma as a biological matrix and use of these external QCs is valid.
Q.3 Acknowledgements
We are indebted to the personnel at the following institutions for their assistance in local sample processing and storage:
Basildon and Thurrock General Hospitals NHS Trust, Belfast Health and Social Care Trust, Betsi Cadwaladr University Health Board, Brighton and Sussex University Hospitals NHS Trust, Calderdale and Huddersfield NHS Foundation Trust, Cancer Research UK Clinical Centre, St James's University Hospital, Cardiff and Vale University Health Board, Clinical Research Facility, Manchester, Countess of Chester NHS Foundation Trust, Coventry and Warwickshire University Hospitals NHS Trust, Cwm Taf Health Board, Great Western Hospitals NHS Foundation Trust, Hywel Dda Health Board, Lewisham & Greenwich NHS Trust, Lothian Health Board, Maidstone and Tunbridge Wells NHS Trust, Middlesex University Higher Education Corporation, Midland Pathology Services (Birmingham), NationWide Laboratories (Poulton-le-Fylde), NHS Grampian, Norfolk and Norwich University Hospital NHS Trust, Northern Lincolnshire and Goole Hospitals NHS Foundation Trust, Nuffield Health Glasgow Hospital, Nuffield Health Newcastle upon Tyne Hospital, Portsmouth Hospitals NHS Trust, Royal Devon and Exeter Foundation Trust, Salisbury NHS Foundation Trust, Sheffield Hallam University, Sherwood Forest Hospitals NHS Foundation Trust, Shrewsbury and Telford Hospitals NHS Trust, South Devon Healthcare NHS Foundation Trust, South Tees Hospitals NHS Foundation Trust, Spire Bristol Hospital, Spire Gatwick Park Hospital, The Hillingdon Hospitals NHS Foundation Trust, The Pennine Acute Hospitals NHS Trust, The Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust, University Hospitals of Leicester NHS Trust, University Hospitals of North Midlands NHS Trust, University of Dundee.
National Diet and Nutrition Survey Years 1 to 9 of the Rolling Programme (2008/2009 – 2016/2017): Time trend and income analysis
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387ad13c6833c08b2ebae7ae0d71d65a15191dee | Office of Rail and Road Rail investigation report: Govia Thameslink Railway: Provision of passenger information – May 2018 timetable change Published March 2019
## Contents
### Executive Summary
- Our findings – pre-20 May ................................................................. 4
- Our findings – post-20 May ................................................................. 5
- Next steps ......................................................................................... 8
### 1. Background
- Introduction ..................................................................................... 9
- ORR Inquiry into the timetable disruption in May 2018 .................. 9
- Enforcement remit .......................................................................... 10
- Condition 4 of the train operators’ licence SNRP ............................ 10
- Regulatory context .......................................................................... 11
- Conduct of the investigation ............................................................ 13
- Structure of this document .............................................................. 14
### 2. Passenger experience and impact
- Introduction ..................................................................................... 15
- Performance data ........................................................................... 15
- Experience of passengers ............................................................... 17
- GTR passengers’ awareness of the timetable change .................... 18
- GTR passengers’ experiences and perceptions of information provision following the timetable change ........................................ 19
- Understanding the impact of the disruption on passengers .......... 22
- Impact of the disruption on disabled passengers ......................... 25
- Complaints and delay compensation ............................................. 27
- Consideration of passenger impacts ............................................. 29
### 3. Information for passengers pre-20 May - analysis of evidence
- Introduction ..................................................................................... 30 Information for passengers pre-20 May ................................................................. 30 Findings ..................................................................................................................... 37
4. Information for passengers post-20 May – analysis of evidence 38 Introduction ........................................................................................................... 38 Information for passengers post-20 May ............................................................ 38 Findings .................................................................................................................. 60
5. Wider observations 64 Introduction ......................................................................................................... 64 Wider observations ............................................................................................. 64
ANNEXES 67 Annex A: Glossary 68 Annex B: Terms of Reference for the Investigation 69 Annex C: Condition 4 of GB Statement of National Regulatory Provisions: Passenger 71 Annex D: ORR’s Approach to Economic Enforcement 73 Executive Summary
1. This report sets out the findings of ORR’s investigation into GTR’s provision of passenger information relating to the May 2018 timetable; with particular reference to Thameslink and Great Northern services.
2. We wrote to GTR on 3rd October 2018(^1) initiating this investigation following an ORR Inquiry(^2) into the timetable disruption in May 2018 that found that information provided by GTR to its passengers was inadequate. The remit of the Inquiry did not require it to formally investigate whether there had been a breach of GTR’s passenger licence information obligations in this area.
3. Our investigation has focused on GTR’s duty to provide appropriate, accurate and timely information to enable passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption, and to do so to the greatest extent reasonably practicable having regard to all relevant circumstances.
4. We have considered GTR’s provision of information in the lead up to the implementation of the May Timetable (‘pre-20 May’), and during the period of disruption following the introduction of the 20 May timetable (‘post-20 May’).
5. In carrying out this investigation we have reviewed the information gathered by the ORR Inquiry. We have undertaken a detailed analysis of the GTR passenger experience pertaining to the timetable change to better understand the nature and impacts of the primary information failures. We have examined data collected in the course of our regulatory monitoring and we have met with GTR to discuss the provision of passenger information. Further evidence has also been gathered from the company via detailed information requests.
Our findings – pre-20 May
6. In the lead up to the implementation of the May Timetable (‘pre-20 May’) we consider that RailPlan2020 and the ‘time of every train will change’ campaign was successful in raising awareness amongst passengers of the major change in the timetable, and was markedly different from usual timetable change communications. As noted in Chapter 2, 75% of passengers in our research were aware that the timetable was changing and the RailPlan2020 website attracted more than 800,000 hits. However, the personal impact of the timetable change
(^1) [http://orr.gov.uk/\_\_data/assets/pdf_file/0009/39357/concerns-with-gtr-compliance-with-passenger-information-obligations-2018-10-03.pdf](http://orr.gov.uk/__data/assets/pdf_file/0009/39357/concerns-with-gtr-compliance-with-passenger-information-obligations-2018-10-03.pdf)
(^2) [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf) was not well understood by some passengers. Passengers who had familiarised themselves with RailPlan2020 were potentially unaware that some of the services would not be introduced until sometime after 20 May; almost three in five passengers believed that the new timetable would be introduced in full. On the last few days leading up to the transition weekend passengers were advised again to recheck the website. Passengers who had heeded the earlier messages and already worked out their plans for the new timetable, were faced with uncertainty as fewer trains were running on some lines.
7. Nonetheless, we consider that GTR used the RailPlan2020 website, the ‘time of every train will change’ campaign and a wide variety of communication channels (e.g. social media, print media, station advertising, stakeholder briefings as well as paper timetables, leaflets and more attention-grabbing marketing) to proactively disseminate the clear message that something significant was going to happen on 20 May. Prospective passengers were made aware of the change, had access to the expected timetable and reasonable efforts were made to keep passengers up to date as late changes were made in the period leading up to the 20 May. Based on the balance of information assessed and summarised here, we consider that GTR took reasonably practicable steps to provide appropriate, accurate and timely information to passengers prior to the timetable change on 20 May.
Our findings – post-20 May
08. We consider that the exceptional circumstances that followed the introduction of the 20 May timetable meant that providing perfect advance information for all services was, from the outset, an impossible task. Evidence demonstrates that GTR’s overriding focus throughout the period that followed 20 May was on providing as much capacity as it could to meet customer demand.
09. Our guidance(^3) to support compliance with the passenger licence obligations recognises that timetabling services and providing information to passengers are difficult, complex tasks. There is a balance to be struck between service delivery and the ability to provide appropriate, accurate and timely information for passengers during sustained periods of disruption. The licence condition is not intended to undermine the primary objective of providing the best available services for passengers.
10. We accept that the immediate response to the timetable change required a period of reactivity as both the scale and severity of the disruption emerged. However, we consider that better passenger information should be a core element of the service recovery process and as time progressed an increasingly improving picture should
(^3) [https://orr.gov.uk/\_\_data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf](https://orr.gov.uk/__data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf) have emerged. Against this context we consider that there is evidence to suggest that GTR failed to achieve an appropriate balance between service recovery and the need for appropriate passenger information to an unacceptable extent and duration throughout the initial phases of their Service Recovery Plan.
In particular, we found the following failings.
**Aligning service recovery with passenger information obligations**
11. We consider that GTR took operational decisions with the best of intentions. Nevertheless, evidence from a range of internal and external sources revealed that while the continued efforts being made to improve and stabilise services at an operational level throughout Phase 1 and 2 of the Service Recovery Plan were having some success, the full benefit of this improvement was not felt in passenger outcomes due to the fact that it was often not supported by appropriate, accurate or timely passenger information.
12. We consider that too often there was a failure in operational decision making to give adequate regard to the fact that running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive, where it is going and how long the journey will take. Moreover, the persistence of these information failures over such a sustained period of time, coupled with the lack of evidence as to the company developing any timely or proportionate response to these issues, lead us to conclude there had been a fundamental problem at both a strategic and functional level in aligning operational recovery with passenger information obligations.
**Provision of ‘Alpha list’ and other journey information**
13. One of the key methods used by GTR to achieve stability in its service recovery process was the reduction in train services that resulted from the use of the ‘Alpha list’. This required the identification of specific train services that it was unable to run and which could be removed from the timetable. Evidence demonstrates that the Alpha list was used, but was not clearly communicated to passengers between 6 June and 25 June (at which point GTR made PDF timetables available with the Alpha trains removed). The delay in sharing clear information regarding the cancelled Alpha trains meant that passengers were unable to identify trains that were never planned to run on a weekly basis and ones that were removed on a daily basis (from the Beta list). This is evidenced by consistent feedback from passengers regarding their frustration at having very little notice or certainty about which services would be running or cancelled for a prolonged period.
14. GTR wrote to us stating that while the Alpha ‘list proved to be generally consistent throughout the period to the 25 June 2018, this was not known at the time, the list was not believed to be a static one and was being constantly reviewed and at times was altered to reflect daily operational circumstances’. However, we also found evidence from internal documentation to indicate that the Alpha list was ‘fixed,’ including a service recovery governance document that identified 326 trains as ‘permanently removed’ from the timetable from 11 June. We therefore consider that GTR’s failure to clearly communicate known cancellations in a timely manner undermined the ability of prospective passengers to plan ahead and make informed journey decisions. The Alpha list information could have been published sooner than 25 June, which would have provided greater certainty to passengers about services which were not planned to run.
15. The provision of rail replacement buses on some routes was a notable example where GTR had allocated significant resource to mitigate disruption and stabilise service provision, yet passengers were unable to take full advantage of this for a sustained period due to delays in making this information available in journey planners.
Day to day amendments
16. A related aspect of GTR’s Service Recovery Plan was that additional services were removed or cancelled on a day by day basis. This list of services was known as the ‘Beta list’. The Beta list trains were removed individually by GTR staff in its Three Bridges Control Centre (‘Control’) on an overnight basis. This process led to very short notice changes to the timetable and a severe lack of certainty for passengers up until the point of travel. This is evidenced by GTR’s advice to passengers to ‘check as close to the time of travel as possible’ or to ‘check immediately before travel’. However, at times, trains in the process of being cancelled in systems were not removed until the train was due to have departed, leading to Customer Information System (CIS) screens showing ‘delayed’ for a period before the train was subsequently cancelled.
17. GTR persevered with this process until the introduction of an interim timetable on 15 July, in effect accepting the ability to make overnight and very late notice changes despite the impact that this had on the provision of passenger information for a prolonged period. Other day to day changes were utilised - for example reinstating Beta trains as crew and rolling stock became available - to increase capacity and thereby benefit passengers, but at times these changes were poorly executed resulting in what passengers referred to as ‘ghost trains’.
18. Operational decisions taken and implemented to support the recovery process were, in many cases, to the detriment of providing passengers with appropriate, accurate and timely information to an unacceptable extent and duration. Deleting trains from the timetable rather than cancelling services in advance meant that services did not show as cancelled on journey planners or appear at all on CIS screens. Passengers were uncertain what services would run each day; travelling on a particular train on one day was no guarantee that it would run or be shown on station screens on the next day. This added to the confusion for passengers who were still trying to come to terms with a timetable in which the time of every train had changed.
19. There is substantial evidence to demonstrate the dedication and commitment of GTR staff in managing significant operational issues in difficult circumstances. However, on a day to day basis the issues described here, and elsewhere in this report, also served to undermine the ability of some frontline staff to have access to the information needed to assist passengers in making their journey.
20. We consider that the cumulative effect of the factors described here manifested in the unacceptable passenger outcomes described in this evidence report and in the numerous examples of passenger information failures.
**Next steps**
21. This investigation report has been published alongside a letter setting out the decision made by the ORR Board on what, if any, regulatory action should be taken following this investigation.
22. In conjunction with this we have written to all train operators and Network Rail asking them to review their crisis management plans in light of the findings of our investigations into the provision of passenger information. We have also asked them to provide ORR with copies of their arrangements and related contingency plans to support passengers that require additional assistance to travel during periods of disruption (both planned and unplanned). We intend to work with the industry to identify and share good practice in this area.
23. We will continue to monitor performance in this key consumer area and will hold operators to account to ensure that they meet their regulatory obligations.
24. Background
Summary
This chapter explains the background, remit and conduct of this investigation.
Introduction
1.1. As the independent economic and safety regulator for Britain’s railways, ORR plays a critical role in improving services for rail users. Our long-term vision for the mainline railway industry is a partnership of Network Rail (NR), operators, suppliers and funders working together to deliver a safe, high performing, efficient and developing railway. We are also the consumer authority for the rail industry as a whole. Our consumer function enables us to focus on basic rights for rail passengers such as access, information and redress.
1.2. There are industry systems for compiling timetables and providing passengers with information. The System Operator (SO) works with Network Rail route teams and train operators to decide the best allocation of capacity and creates a base timetable twice a year (May and December) and co-ordinates short-term changes to it.
1.3. Train operators are responsible for making accurate and timely information available to passengers to enable them to plan and make their journeys with a reasonable degree of assurance, including when there is disruption, to the greatest extent reasonably practicable having regard to all relevant circumstances. This requirement is set out in condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP).
ORR Inquiry into the timetable disruption in May 2018
1.4. On 4 June, the Secretary of State for Transport asked ORR to lead an Inquiry into why the railway system as a whole failed to produce and implement a satisfactory operational timetable in May 2018. The scope of the Inquiry required it to gather evidence to draw conclusions and make recommendations as it saw fit. This included the impact on passengers, both in advance of and following the timetable change, especially in the areas served by Northern and GTR.
______________________________________________________________________
4 http://orr.gov.uk/\_\_data/assets/pdf_file/0020/39035/may-2018-timetable-inquiry-annex-b-terms-of-reference.pdf 1.5. The Inquiry focused on what actually took place when the timetable was introduced, compared to what should have happened. For GTR the Inquiry(^5) found that information provided to passengers was inadequate which meant that passengers were unable to plan and make their journeys with any certainty.
1.6. The remit of the Inquiry did not require it to consider whether GTR had met its licence requirements and therefore whether there had been, is, or is likely to be, a breach of a licence obligation. A determination of a breach of licence is subject to a different evidential test.
**Enforcement remit**
1.7. Train operators are licence holders and are legally obliged to comply with the conditions of their licences. We are responsible for investigating potential licence breaches and taking appropriate enforcement action when a licence breach is identified. Licence enforcement is governed by a separate legal framework with clear procedures that are set out in our economic enforcement policy and penalties statement(^6). Further details of our legal framework and policy are set out in Annex D.
1.8. This investigation has focused on the following key licence provision in the context of the May 2018 timetable change; it has not considered the root causes of the timetable problems as these have been covered in detail by the Inquiry.
**Condition 4 of the train operators’ licence SNRP**
1.9. Condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP)(^7), obliges train operators to secure the provision of appropriate, accurate and timely information to enable railway passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption.
1.10. Train operators are also obliged by condition 4 to cooperate as necessary with Network Rail and each other to enable Network Rail to undertake appropriate planning, including when there is disruption.
______________________________________________________________________
(^5) [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf)
(^6) [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf)
(^7) [http://orr.gov.uk/\_\_data/assets/pdf_file/0010/2233/lic-pass_SNRP.pdf](http://orr.gov.uk/__data/assets/pdf_file/0010/2233/lic-pass_SNRP.pdf) 1.11. Train operators are under a duty to achieve the obligations in condition 4 to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
1.12. To assist licensees we published guidance(^8) to support the passenger information licence condition (condition 4) in passenger, station and network operator licences by giving more information about what is expected and how it will be enforced. Our guidance recognises that timetabling services and providing good information is a complex task. Paragraph 25 of the guidance states:
[\\ldots\\text{The licence obligations are not intended to undermine the primary objective of providing the best available service for passengers. Making justified changes to the train plan to meet passengers’ needs should not be conditional on providing perfect advance information about these. However, we would expect licence holders to use reasonable endeavours to get such information out as widely as possible and as quickly as possible. We will take circumstances into account during any assessment of compliance}]
1.13. The licence requires a train operator to publish a code of practice which sets out how it will provide information to passengers, including during disruption. Most GB operators use the Association of Train Operating Companies (ATOC) code of practice(^9) (the Code). The code requires the licensee to publish a “local plan” which sets out how the company will deliver the requirements of the code, and makes provision for an annual review of the local plan. We report on activity in our annual consumer report Measuring Up(^10). GTR’s documents published on its website(^11), show the last update in July 2017.
**Regulatory context**
1.14. The Network Code is a set of contractual rules incorporated into each track access agreement between Network Rail and all train operators. It covers those areas where all parties are obliged to work together to the same standards and timescales. The national timetable process is set out in the Network Code Part D.
1.15. In February 2018 the industry moved away from standard ‘informed traveller’ timescales, where amended timetables are made available to passengers at 12 weeks in advance (often referred to as T-12). The Network Rail System Operator reduced the
______________________________________________________________________
(^8) [http://orr.gov.uk/\_\_data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf](http://orr.gov.uk/__data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf)
(^9) [https://www.raildeliverygroup.com/about-us/publications.html?task=file.download&id=469771025](https://www.raildeliverygroup.com/about-us/publications.html?task=file.download&id=469771025)
(^10) [http://orr.gov.uk/\_\_data/assets/pdf_file/0003/28245/measuring-up-annual-rail-consumer-report-july-2018.pdf](http://orr.gov.uk/__data/assets/pdf_file/0003/28245/measuring-up-annual-rail-consumer-report-july-2018.pdf)
(^11) [https://www.thameslinkrailway.com/-/media/goahead/gtr-all-shared-pdfs-and-documents/gtr_pidd_delivery_plan.pdf?la=en](https://www.thameslinkrailway.com/-/media/goahead/gtr-all-shared-pdfs-and-documents/gtr_pidd_delivery_plan.pdf?la=en) notice period for changes to train times from 12 weeks to 6 weeks, with certain safeguards for passengers buying advance tickets.
1.16. ORR started to escalate monitoring and intervention activity around whether train operators and Network Rail were meeting their ‘informed traveller’ obligations in February 2018. Subsequently ORR’s formal licence investigation into the root causes of the timetabling problems concluded that Network Rail had breached its licence in relation to its timetabling obligations.
1.17. In relation to the train operators and third party retailers, ORR also highlighted shortcomings particularly when these parties were selling advance tickets online. In February 2018 we wrote to Managing Directors at all train operators. The letter set out three key principles that needed to be applied during the period when normal industry timescales were not being met. These principles covered transparency, the sale of advance tickets, and information provision when timetables remain unconfirmed:
- train operators should be open about the impact on all passengers of the challenges they face, and take responsibility for ensuring that their passengers can get the information they need to plan and make their journey as that information comes available;
- clear information on the availability of advance tickets, what is available and when, is necessary to help passengers plan journeys even when the timetable is uncertain; and
- timetable information should be correct as far ahead as possible, and where timetables are not confirmed information about their current status should be accurate and updated frequently.
1.18. Work continues in this area as we monitor Network Rail’s delivery of its T-12 recovery plan and work with train operators to ensure that the information provided on websites and mobile apps is as informative as possible. The Network Rail recovery plan for restoring T-12 timescales has now been extended to June 2019.
______________________________________________________________________
12 [http://orr.gov.uk/\_\_data/assets/pdf_file/0003/28425/2018-07-27-breach-of-timetabling-conditions-in-network-rails-network-licence.pdf](http://orr.gov.uk/__data/assets/pdf_file/0003/28425/2018-07-27-breach-of-timetabling-conditions-in-network-rails-network-licence.pdf) 13 [http://orr.gov.uk/\_\_data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf](http://orr.gov.uk/__data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf) 14 See ORR website for more information on the three strands of Informed Traveller work - [http://orr.gov.uk/rail/consumers/rail-timetable-issues](http://orr.gov.uk/rail/consumers/rail-timetable-issues) Conduct of the investigation
1.19. The purpose of our investigation was to establish if GTR did, or is doing, everything reasonably practicable to achieve compliance with its obligations set out in licence condition 4, as set out above.
1.20. In particular, our investigation has focused on GTR’s provision of appropriate, accurate and timely information:
- to passengers and prospective passengers prior to the implementation of 20 May 2018 timetable; and
- to passengers during the subsequent disruption i.e. following the implementation of the 20 May 2018 timetable.
1.21. We have also considered the steps GTR has taken or is taking to:
- address the issues, make improvements and recover;
- whether there are any systemic issues; and/or
- whether there are any mitigating factors which should be considered in this case.
1.22. In carrying out its investigation, ORR has drawn on source information provided as part of the ORR Inquiry into the May 2018 disruption. This has provided a substantial evidence base and a considerable volume of information from a range of sources. This has been particularly useful in setting out the experiences and impact of the timetable change on passengers. We have also considered data that we routinely collect in our regulatory monitoring role for example information from complaints, and analysis of posts made by passengers on Twitter.
1.23. We met separately with GTR to discuss the provision of passenger information and followed this up with a detailed Information Request requiring specific evidence to provide insight into:
- the extent to which information that was available to GTR was shared with passengers to enable them to better plan and make their journeys;
- the extent to which feedback from passengers and staff focused on information provision, the scale of such feedback and how such feedback was acted upon; and
- the extent to which the provision of appropriate, accurate and timely information for passengers was central to the service recovery process.
1.24. A follow-up request to GTR was required to obtain clarity where some of the original information requested remained outstanding; its capability to provide some of the
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15 [http://orr.gov.uk/rail/consumers/inquiry-into-may-2018-network-disruption](http://orr.gov.uk/rail/consumers/inquiry-into-may-2018-network-disruption) information was in question; and in one instance the determination made by GTR that the information requested was not relevant.
Structure of this document
1.25. This document is structured as follows:
- in Chapter 2 we describe GTR’s performance before and during the 20 May 2018 timetable change, and the experience of passengers who were affected by it;
- in Chapter 3 we set out the events prior to the 20 May 2018 timetable change and the provision of information to passengers by GTR about their services during this period;
- in Chapter 4 we set out the events following the introduction of the 20 May timetable and the provision of information to passengers by GTR about their services during the subsequent disruption; and
- in Chapter 5 we set out related observations arising from this investigation.
2. Passenger experience and impact
Summary
This chapter sets out GTR’s service performance before and after the 20 May 2018 timetable change, and the experience and impact on passengers who were affected.
Introduction
2.1. The ORR Inquiry(^\\text{16}) found that information provided to passengers was inadequate which meant that passengers were unable to plan and make their journeys with reasonable certainty.
2.2. We have undertaken a detailed analysis of the GTR passenger experience pertaining to the timetable change to better understand the nature and impacts of the primary information failures they were exposed to. From there, this allows us to assess in Chapters 3 and 4 the extent to which these failures were a consequence of GTR actions and decision-making in relation to condition 4 of its Passenger Licence and SNRP.
Performance data
2.3. The following chart shows the number of trains that GTR planned to run and the number that actually operated. Data is aggregated on a weekly basis. Figure 2.1 shows the increase in the number of services planned to run from 20 May 2018. However, the number of actual trains run is similar to that operated before 20 May. GTR operates approximately 3,500-4,000 trains a day so considering the percentage of trains operated illustrates the scale of the cancellations. Before the timetable change, GTR operated 94% of its planned services, something it was not able to achieve again in the timescales of the chart.
2.4. Following 20 May, GTR removed some trains from the timetable and therefore the number of trains planned to run was reduced. Although the planned number was still higher than the pre-20 May number, the actual number of trains run was similar to or in some cases less than the pre-20 May number through June and into July 2018. The general improvement in the reliability of services following the introduction of the interim timetable on 15 July was also evident. It should be noted that trains deleted
(^{16}) [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf) from systems are not counted as planned to run and are therefore not reflected in Figures 2.1 and 2.2.
**Figure 2.1 – GTR trains planned to run vs. trains which ran**
*Note: the drop in performance on 5 July in Figure 2.1 was confirmed as being a NR signalling issue that closed Victoria for part of the day – this also explains the corresponding increase in NR delay minutes for that week in Figure 2.3.*
**Figure 2.2 - GTR trains planned to run vs. trains which ran table**
| GTR | Pre 20 May timetable change | Post 20 May timetable change | Interim timetable | |-----------|-----------------------------|------------------------------|-------------------| | Week | Trains Planned | Trains Ran | Percentage Trains Ran | Trains Planned | Trains Ran | Percentage Trains Ran | Trains Planned | Trains Ran | Percentage Trains Ran | | commencing| 06-May | 12,331 | 21,207 | 95.0% | 06-May | 24,799 | 21,786 | 87.9% | 06-May | 22,313 | 24,130 | 93.8% | | | 13-May | 22,584 | 21,020 | 95.0% | 13-May | 24,095 | 21,112 | 90.9% | 13-May | 22,548 | 24,348 | 92.7% | | | 20-May | 23,223 | 23,250 | 99.2% | 20-May | 23,223 | 23,250 | 99.2% | 20-May | 23,223 | 23,250 | 99.2% | | | 27-May | 23,678 | 20,936 | 90.6% | 27-May | 23,678 | 20,936 | 90.6% | 27-May | 23,678 | 20,936 | 90.6% | | | 03-Jun | 20,448 | 19,032 | 94.4% | 03-Jun | 20,448 | 19,032 | 94.4% | 03-Jun | 20,448 | 19,032 | 94.4% | | | 10-Jun | 23,514 | 21,621 | 90.9% | 10-Jun | 23,514 | 21,621 | 90.9% | 10-Jun | 23,514 | 21,621 | 90.9% | | | 17-Jun | 24,150 | 21,621 | 90.9% | 17-Jun | 24,150 | 21,621 | 90.9% | 17-Jun | 24,150 | 21,621 | 90.9% | | | 24-Jun | 24,150 | 21,621 | 90.9% | 24-Jun | 24,150 | 21,621 | 90.9% | 24-Jun | 24,150 | 21,621 | 90.9% | | | 01-Jul | 24,150 | 21,621 | 90.9% | 01-Jul | 24,150 | 21,621 | 90.9% | 01-Jul | 24,150 | 21,621 | 90.9% | | | 08-Jul | 24,150 | 21,621 | 90.9% | 08-Jul | 24,150 | 21,621 | 90.9% | 08-Jul | 24,150 | 21,621 | 90.9% | | | 15-Jul | 24,150 | 21,621 | 90.9% | 15-Jul | 24,150 | 21,621 | 90.9% | 15-Jul | 24,150 | 21,621 | 90.9% | | | 22-Jul | 24,150 | 21,621 | 90.9% | 22-Jul | 24,150 | 21,621 | 90.9% | 22-Jul | 24,150 | 21,621 | 90.9% | | | 29-Jul | 24,150 | 21,621 | 90.9% | 29-Jul | 24,150 | 21,621 | 90.9% | 29-Jul | 24,150 | 21,621 | 90.9% | | | 05-Aug | 24,150 | 21,621 | 90.9% | 05-Aug | 24,150 | 21,621 | 90.9% | 05-Aug | 24,150 | 21,621 | 90.9% | | | 12-Aug | 24,150 | 21,621 | 90.9% | 12-Aug | 24,150 | 21,621 | 90.9% | 12-Aug | 24,150 | 21,621 | 90.9% | | | 19-Aug | 24,150 | 21,621 | 90.9% | 19-Aug | 24,150 | 21,621 | 90.9% | 19-Aug | 24,150 | 21,621 | 90.9% | | | 26-Aug | 24,150 | 21,621 | 90.9% | 26-Aug | 24,150 | 21,621 | 90.9% | 26-Aug | 24,150 | 21,621 | 90.9% |
2.5. The weekly delay minutes graph, Figure 2.3, shows not just the total amount of delay but also the cause. While the Network Rail (NR) caused delays (signal failures, etc.) is significant, the large increase in TOC-on-Self issues (where GTR has delayed its own services) is noteworthy, often three times as much as before the timetable change.
**Figure 2.3 - GTR weekly delay minutes** Experience of passengers
2.6. As part of the Inquiry, ORR conducted two pieces of research with GB rail passengers to understand their experiences of the 20 May timetable change. Due to the fact the Inquiry research took place in June and July 2018 during the worst periods of disruption it meant that respondent (passenger) recall was optimised, thereby ensuring the accuracy of their answers. We re-examined the Inquiry research to produce a more detailed analysis of the specific responses of GTR passengers from that time period to provide us with a clearer and more focused understanding of their experiences. Our analysis is set out below.
2.7. The first research piece involved the commissioning of a specialist research agency, GfK(^\\text{17}), to undertake quantitative and qualitative research into the experiences of both passengers and staff who were directly affected by the events surrounding the 20 May timetable change(^\\text{18}). The research methodology included:
- quantitative surveys with 255 GTR passengers;
- two qualitative focus groups (comprised of 6-8 participants) with GTR passengers; and
- two qualitative tele-depth interviews with GTR rail staff.
2.8. The passengers surveyed were a mix of commuters, leisure/business travellers and passengers with disabilities across a range of routes on the GTR network. This
(^{17}) GfK has since been taken over by Ipsos MORI.
(^{18}) The final research report produced by GfK can be viewed here: [http://orr.gov.uk/\_\_data/assets/pdf_file/0004/39037/may-2018-timetable-inquiry-annex-d-orr-customer-research.pdf](http://orr.gov.uk/__data/assets/pdf_file/0004/39037/may-2018-timetable-inquiry-annex-d-orr-customer-research.pdf) provides insight into the different types of experiences of GTR passengers before and after the 20 May timetable change.
2.9. ORR also conducted its own research with GB rail passengers affected by the 20 May timetable change via an online survey. This produced 1,573 responses from GTR passengers (comprised of 1,008 responses by passengers travelling with Thameslink and 565 with Great Northern)(^\\text{19}).
**GTR passengers’ awareness of the timetable change**
2.10. Pre-20 May, GTR was effective in communicating to their passengers about the introduction of a new timetable on 20 May, with 75%(^\\text{20}) of passengers being aware of a change. This followed the successful ‘everything will change’ campaign and introduction of the new RailPlan2020 website.
2.11. The first possible indication of an information failure arose regarding the more detailed nature of the changes. Of those GTR passengers aware of the upcoming timetable change, almost three-fifths (58%) believed the full timetable would be introduced from 20 May compared to around one-third (35%) who were aware that GTR would not be introducing their new timetable in full from this date.
**Figure 2.4 – Understanding of the timetable change**
| Thinking about when you became aware of the change to the train timetables from the 20th of May, which of the following did you think was true | |---------------------------------------------------------------| | New timetable would be introduced in full from the 20th May 2018 | 58% | | The new timetable would be introduced in stages | 35% | | Neither | 1% | | Don’t know | 7% |
Question A07. Base size: All those who travelled with the train company (GTR 188)
(^{19}) In this ORR survey respondents were asked to identify the train company they had intended to travel with and had the option of selecting more than one train operator e.g. they may have been undertaking a multi-leg trip. However, in the interests of accuracy we have refrained from reporting on those questions where we were unable to adequately attribute the responses to GTR journeys. We have however included the qualitative responses as they were directly attributable to either Thameslink or Great Northern.
(^{20}) See slide 12 of GfK research report in footnote 18. GTR passengers’ experiences and perceptions of information provision following the timetable change
2.12. Figure 2.5 below shows a majority of passengers who experienced disruption(^{21}) whilst travelling with GTR post-20 May were dissatisfied with the key elements of information provision.
**Figure 2.5 – Satisfaction with key elements of information provision**
| Aspect | Net Satisfaction | Net dissatisfaction | |-------------------------------|------------------|---------------------| | Amount of information | 23% | 56% | | Accuracy of information | 31% | 53% | | Usefulness of information | 27% | 51% | | Speed information provided | 25% | 56% |
Now thinking about the times you experienced disruption, since the 20th May, how would you rate the train company on each of the aspects below:
Question A18. Base size: All those who experienced disruption with GTR (117) Responses above show net satisfaction (very well and fairly well responses) and net dissatisfaction (poor and fairly poor)
2.13. In order to test the impact of these apparent information failures, those passengers were then asked what effect this had on their journey planning. This revealed a majority of them (55%) did not consider they had been provided with sufficient information to inform their decision-making with regards to their travel arrangements.
**Figure 2.6 – Provision of information to inform travel arrangements**
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(^{21}) Figures 2.5 – 2.8 are based on respondents who stated they experienced disruption only, or most frequently, with GTR. A11: Which train company were you travelling with when you experienced this disruption? If experienced disruption with more than one train company please tell us which train company you experienced disruption with most frequently. 2.14. The chart below illustrates GTR passenger experience of staff availability at stations during disruption. While this shows that staff were often available to help, our analysis of passenger qualitative feedback indicates that even when staff could be located they often did not have any additional information to share with passengers.
**Figure 2.7 – Availability of station staff during disruption**
2.15. Overall, almost two-thirds (62%) of GTR passengers felt the operator had handled the disruption they had experienced poorly compared to less than a quarter (23%) who felt they had handled it well.
**Figure 2.8 – Passenger perceptions about how well GTR handled the disruption** 2.16. To provide some additional context to these findings we also examined some of the qualitative feedback we received from GTR passengers to give us a more detailed understanding of how these information failures had impacted them. Below is a small sample of the common issues reported:
"You could check before you travel yet after a 10 minute walk to the station the train would be either surprisingly cancelled within that time, or even worse a train which read as being cancelled would pull out in front of your very eyes as you approached the station. What used to be a service every 10-20 minutes turned into a service of something, maybe, possibly at times once an hour if that. There was no reliable communication at all." – GTR Thameslink passenger
"Trains tended to disappear without notice from the board. In one instance, when advised that a 'semi-fast' train was fastest way to get into London, extra stops were added without warning when I was on the train, meaning a later, fast train actually got to London quicker by 10-15mins in terms of arrival time which was very frustrating. So the information provided to me was completely wrong." – GTR Thameslink passenger
"You can't plan ahead and we're having to get up at 5am every morning to check what time trains we can get to work."
- GTR Great Northern passenger
"[Information] is totally inaccurate, trains cancelled 5 mins before they were due, services added but not included in the tracking apps or stations boards. Services turning up and no one knowing where they would stop. Services diverted to alternative destinations part way though a journey."
- GTR Great Northern passenger “I would get to the station for a particular train that I believed was running and it would be cancelled. On one occasion the train I went for was showing running on the website, but when I got to the station it was showing cancelled so I went to a different platform for the next train and then unbelievably the so-called cancelled train arrived, but there was not enough time to get across to that platform to catch it, down 3 flights of stairs and up 3 on the other side.” – GTR Thameslink passenger
“Not enough communication on a daily basis about which trains are running and which are cancelled e.g. many cancellations don’t show early enough on the app. Some trains change where they’re stopping once you’re on.” – GTR Thameslink passenger
“Station staff have no information either. How can they advise passengers when they don’t know themselves.” – GTR Great Northern passenger
“Because as the station staff kept telling us, they knew no more than we did. The screens showed the 0640 as Delayed until 20 mins after it should have gone, and then it went to that stupid message about watch screens for any further info or something like that, it is the GN standard no info message. As it turns out, GN twitter was probably right, and what I caught in the end was the 0707. But there was no way to know or tell….How are we supposed to keep rearranging our working hours to cope with this?” – GTR Great Northern passenger
It’s a question of turning up at the station and seeing what is running that day. I use an app to track departures but this is virtually useless to use to plan to. On platform GTR staff at London Bridge are not proactive in communicating with customers. They are clearly under pressure but are not helpful at all. – GTR Thameslink passenger
“Trains exist and are on time according to apps but are frequently cancelled, changed or simply disappear without any explanation. The station staff are trying their best on the day but there is no control and no ability to plan. Even once on a train you have no idea of your destination or time of arrival as there can be additional or removed stops, early termination of journey, general delays. All whilst in horribly, barely humane overcrowded carriages.” – GTR Great Northern passenger
2.17. These sentiments noted in passenger feedback above were also reflected in GTR social media engagement. We have seen evidence from internal GTR documents that their social media team was reporting to senior management about the volume of contacts from passengers dissatisfied with the quality of journey information provided to them from 20 May until early July.
Understanding the impact of the disruption on passengers
2.18. The Inquiry identified a number of impacts on passengers caused by the disruption. Figure 2.9 shows the findings of the independent quantitative and qualitative research, and responses from passengers to ORR’s own survey and to the Inquiry itself. 2.19. We have not sought to assess the extent to which the following types of impact can be directly attributed to failures in the provision of passenger information but it is clear that better information may have alleviated the overall detriment that passengers experienced.
- **Financial**
2.20. The costs to passengers resulting from the timetable disruption have a range of financial impacts on passengers. These might be short-term such as increased childcare costs due to late arrival home or paying for a taxi when the train is cancelled or delayed, buying refreshments at the station whilst waiting for a delayed train, buying dinner because of getting home too late to cook, and paying for public transport to travel to alternative stations. Some financial impacts may be longer-term such as taking a new route to work resulting in an increased travel ticket cost, routinely choosing to take a taxi when travelling home late at night to avoid being ‘stuck’ at a station late at night, and a loss of earnings.
- **Stress and inconvenience**
2.21. Being unable to rely on a consistent train service such as late notice cancellations or delays or station skipping can increase the stress experienced by passengers and heighten levels of anxiety as passengers are unable to meet work commitments or family events. There were also many references to parents who were put under extreme stress to make unexpected adjustments to childcare with minimal notice due to the daily uncertainty of their journey times. This can have a detrimental impact on health as increased stress levels manifest themselves. 2.22. We also noted many complaints from passengers regarding overcrowding or being unable to board trains after long gaps between services.
- Employment
2.23. The detrimental impact on passengers’ working lives was often in the form of arriving late to work or meetings. Aside from the possible reputational damage to the individual or the employer, including the loss of business, this might be a time cost meaning that the person will be required to stay later at work to complete tasks or to do so because they felt they had to having arrived late.
- Social
2.24. Getting up earlier and getting home later was a consistent issue for passengers, particularly commuters who build their family and social lives around the time of their daily travel. Journeys were being planned on the basis that services will be cancelled or delayed which meant getting earlier trains in the morning and later ones in the evening. Some rail users did not feel comfortable travelling and chose not to do so at all. Such a situation may be exacerbated for those passengers who rely on assistance either booked with the rail company or via friends/family.
2.25. Moreover, the impact of the disruption was in addition to the fact that passengers had already had to make adjustments to account for the changes being made for the planned 20 May timetable. Having made those plans as forewarned by GTR the impact of the disruption was an additional layer of inconvenience due to the unreliability of the service.
- Personal safety
2.26. Passengers were concerned that the unreliability of services – cancellations or delays – particularly late at night leaves them vulnerable and their safety is at increased risk. For example, Thameslink services are scheduled to run through the night but the overnight frequency was cut back during the disruption. There was also a potential impact on passengers with reduced mobility who may have been physically unable to respond to last minute platform announcements or changes.
2.27. ORR’s Chief Inspector of Railways wrote to GTR on 5 July to raise concerns about last minute platform changes and passenger safety.
- Trust in the railway (and changing travel behaviour)
2.28. Passengers’ experiences during the disruption caused by the rail timetable changes had a negative impact on their feeling of trust, and relationship with the rail company. The lack of consistency with cancelled trains being changed every day at short notice contributed significantly to that. In addition, use of the delay reason “operating incident” which could then not be explained by the Twitter team added to a feeling of a lack of control. Likewise, the lack of a clear explanation on why the timetable changes were happening or the scale of the changes, and the lack of improvement in services as a result of the timetable changes had exacerbated the impact. This lack of trust, combined with a change in travel behaviour, may have a financial impact on the rail company.
**Impact of the disruption on disabled passengers**
2.29. We undertook analysis of the number of Passenger Assist bookings and the volume of accessibility-related complaints GTR received.
2.30. Figure 2.10 indicates that despite the worst of the disruption having occurred throughout Rail Periods 2, 3 and 4, Passenger Assist booking volumes increased slightly relative to the same timeframe the previous year. This indicates that, for the most part, the disruption did not dramatically undermine the willingness of those passengers who rely on assistance to book it. Nevertheless, it is possible that some disabled passengers may have chosen not to travel due to concerns about the reliability of services and its potential impact upon assistance provision.
**Figure 2.10 – Comparison of GTR Passenger Assist booking volumes 2017-18 versus 2018-19 for Rail Periods 1-7**
2.31. Figure 2.11 indicates there was a slight uplift in the volume of accessibility-related complaints GTR received in Rail Period 3 relative to the same timeframe in the previous year. Otherwise, throughout the disruption, complaints about accessibility issues remained largely in line with booking volumes which suggests that some of the mitigations GTR had put in place to protect these passengers were effective. 2.32. Nevertheless, under the circumstances passengers with disabilities were likely to have been severely impacted by the poor or changing information during the May 2018 timetable disruption. For example, changes to departing platform numbers at short notice may not have allowed some passengers with mobility issues enough time to safely board the train. This would also be the case for the ‘ghost trains’ (see Chapter 4) that arrived at stations unannounced.
2.33. We have found a number of examples of station staff being unaware of the plan for services until after the event; in this situation the negative impact of the lack of information is magnified for disabled passengers who often rely on station staff for information and assistance to make their journey. Station staff not having the necessary information would cause difficulties for disabled passengers regardless of whether assistance was booked or not. 2.34. Recognising these issues, GTR put in place additional measures to assist disabled passengers to plan and make their journeys (discussed further in Chapter 4). While GTR also encouraged passengers to book assistance it remains the case that travel on a turn-up-and-go basis, particularly for passengers with reduced mobility, would have been extremely challenging for the entire period of the disruption.
Complaints and delay compensation
2.35. We also undertook analysis of the number of complaints and Delay Repay claims received by GTR before and after the 20 May timetable change (late in Rail Period 2\\textsuperscript{22}) to further understand the impact upon passengers. As illustrated in Figure 2.12 and 2.13, there was a significant uplift in both complaint volumes and Delay Repay claims for both Rail Period 3 (27 May to 23 June) and 4 (24 June to 21 July) which correspond with the worst periods of disruption. The difference in complaint volumes relative to the same time period the previous year is also noteworthy. This is because it provides evidence that these increases were not attributable to latent seasonal trends and were instead most likely a consequence of the negative impact of the timetable change on passenger outcomes.
\\textsuperscript{22} Rail Period 2 started on 29 April 2018 and ended on 26 May 2018 2.36. The chart below illustrates the spike in delay compensation claims during the introduction of the new timetable towards the end of Rail Period 2. The volumes then begin to normalise after Rail Period 4 following the introduction of the interim timetable on 15 July.
Figure 2.13 – Delay Repay claims received by GTR P1-P7 in 2018/19
2.37. Promotion of the Delay Repay scheme proved effective, despite some uncertainty over whether the automatic Delay Repay facility was working for smartcard holders. The extension of the scheme to allow a claim to be made against the published May timetable rather than the ‘timetable of the day’ was a welcome addition and also more generous than normal industry practice (see also Chapter 4). Consideration of passenger impacts
2.38. The analysis in this chapter has enabled us to develop a deeper and wider understanding of the impact of the disruption on GTR passengers in the period before and after the 20 May timetable change. This has informed our analysis in Chapters 3 and 4 about the appropriateness of GTR’s actions in relation to condition 4 of its Passenger Licence and SNRP. 3. Information for passengers pre-20 May - analysis of evidence
Summary
This chapter sets out the events prior to the 20 May 2018 timetable change and the provision of information to passengers by GTR about its services during this period. We set out our analysis of the factors relevant to the investigation for this period alongside our key findings.
Introduction
3.1. In this chapter we set out our findings in relation to the period leading up to the introduction of the 20 May timetable in respect of condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP). We have analysed a range of information including material received from GTR as part of this investigation and information obtained during the timetable Inquiry. In so doing we have also considered guidance23 published by ORR, and our expectations for compliance with the licence condition under three broad principles24 as set out in Chapter 1.
Information for passengers pre-20 May
Timeline of events
3.2. The timeline of relevant key events associated with the provision of information to passengers has been produced from the sources of evidence given to us as part of our investigation work and from the timetable Inquiry. It is provided as a summary below.
| DATE | ACTIONS | |--------|------------------------------------------------------------------------------------------------------------------------------------------| | Jan 18 | GTR dedicated public-facing website for the timetable change, RailPlan2020, and a comprehensive communications campaign that ‘every train will change’ were developed and launched. |
23 [http://orr.gov.uk/\_\_data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf](http://orr.gov.uk/__data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf)
24 [http://orr.gov.uk/\_\_data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf](http://orr.gov.uk/__data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf) | DATE | ACTIONS | |--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | 16/3/18| GTR/DfT progress meeting on the timetable deployment plan. Includes TBC plans for communication activities and route specific messages. | | 23/3/18| National Rail Enquiries (NRE) bulletin text added; information in journey planners post-20 May not yet complete and subject to change. | | 6/4/18 | GTR submit a recommendation for rolling deployment to DfT involving the cancellation of 80-100 trains a day. | | 9/4/18 | GTR ask for all their current trains (running up to 20 May) to be ‘yellow triangled’ on NRE – service update message added to check trains as all times are changing. (See also Chapter 5). Decision to flag all timetables and A-Z posters with ‘major changes during this timetable – check before you travel’ message. | | 10/4/18| DfT confirm that rolling deployment can proceed, noting the need to consider very carefully the communications to passengers and other stakeholders. | | 25/4/18| Rolling deployment pages set up on RailPlan2020 and bulletin posted to signpost to it from NRE. Live departure board bulletin at affected stations and NRE bulletin on affected services regarding the gradual introduction of trains on some routes. Revised posters sent to stations, and mini paper timetables available at stations and PDFs on the RailPlan2020 website. | | 27/4/18| NRE asked to flag those trains currently in the timetable but which will not run for first 3 weeks under rolling deployment. | | 30/4/18| Timetable GTR internal feedback mailbox established for post-20 May. | | 2/5/18 | RailPlan2020 website updated to include rolling deployment PDF timetables. | | 4/5/18 | Full service PDF timetables available for passengers to download from RailPlan2020 website. | | 9/5/18 | Staff ‘call to action’ for management volunteers post-20 May. |
25 [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf) | DATE | ACTIONS | |------------|------------------------------------------------------------------------------------------------------------------------------------------| | 10/5/18 | GTR submit a request to run an amended rolling deployment ‘extra’ for the duration of the May 2018 timetable. | | 11/5/18 | DfT provides conditional approval for rolling deployment ‘extra’. | | 11-20/5/18 | Posters with train services (A-Z’s) installed at stations. | | 16/5/18 | Rolling deployment ‘extra’ text live on 2020 website, CIS and OIS. GTR has no base weekend timetable as Network Rail offer has 450 trains rejected. | | | GTR write to stakeholders to advise of a gradual deployment of a small number of services. | | | GTR press release issued announcing 400 new daily services. | | 17/5/18 | ‘How we inform’ GTR TT Comms internal steering group decided on use of operating incident in systems to describe cancellations. | | 17/5/18 | NRE advised that further trains are affected by rolling deployment and messaging needs to be extended. |
**Analysis**
3.3. As part of this investigation we requested that GTR provided evidence of their communications pre-20 May 2018 timetable implementation. In conjunction with the information previously received from GTR and other stakeholders as part of the Inquiry, this enabled us to form a good understanding of GTR’s communications activities for passengers and staff in the weeks leading up to the timetable change on 20 May 2018.
3.4. GTR provided evidence of its ‘time of every train will change’ campaign and the use of its dedicated website, RailPlan2020, in which it held all of the information regarding the timetable change. The evidence provided to us included photographic evidence of posters displayed in situ at various stations and on-board trains, screenshots of digital screen banners displayed on trains and documentation requesting on-board train announcements to be made.
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26 Transport Focus response to ORR Inquiry, 12 July 2018 27 [http://www.mynewsdesk.com/uk/govia-thameslink-railway/pressreleases/gtr-announces-13-per-cent-increase-in-train-services-in-ukss-biggest-ever-timetable-change-2507786](http://www.mynewsdesk.com/uk/govia-thameslink-railway/pressreleases/gtr-announces-13-per-cent-increase-in-train-services-in-ukss-biggest-ever-timetable-change-2507786) 3.5. The RailPlan2020 website was initiated in January 2018. The website served to inform passengers of the timetable change and provide access to downloadable timetables for passengers to plan their journeys. Prior to 20 May, the RailPlan2020 website had received more than 800,000 hits on the timetable pages.
3.6. In March 2018, a proposal was taken to the ‘GTR TT Comms’ internal steering group, established to manage the timetable communications plan, that timetables and A-Z posters should carry a timetable change warning. On 9 April this change was signed off and a warning message ‘major changes during this timetable. Check before you travel nationalrail.co.uk’ was added. However, within the timetable booklet itself there was nothing to explain what these changes would be or when they might happen.
3.7. GTR also submitted evidence of its leaflet drop plan for the weeks leading up to 20 May. This indicated that between 9 April and 19 May, 172,000 leaflets were handed out to passengers across 25 stations including 40,000 at five major stations in the week before the change.
3.8. GTR supplied information which demonstrated the extent of its engagement with staff. This included regular briefings and trackers to monitor the number, job role and location of staff who had been briefed about the timetable change. Employees were asked to provide feedback about posters and announcements they observed on board and at their arrival and departure stations. GTR also provided an example of a weekly survey output from the last week of April and the first week of May. Staff feedback highlighted examples of good practice, for example ‘Good announcements at Luton Parkway & Harpenden’. However, there were also many examples where staff reported that there was a lack of on-board announcements or passenger information messages and a lack of advertisements at stations.
3.9. In addition to the research highlighted in Chapter 2 of this report, GTR provided evidence of its own monitoring of passenger awareness of the timetable change. Conducted in late April, this found that 80% of passengers were aware of the 20 May change, and this was fairly comparable across both Great Northern and Thameslink passengers. It also indicated that 49% of Great Northern and 61% of Thameslink passengers were aware of what the timetable change would mean for their journey.
3.10. However, social media messages collected by GTR in the week leading up to the timetable change suggest that some travellers into London were unclear about the effects of new routes on their season tickets going into London. In particular, confusion regarding which stations would be valid for those holding a ‘London Terminals’ ticket.
3.11. We did not find any evidence which indicated what advice, if any, passengers who were booking assistance to travel were provided with about the new timetable. Nonetheless, as noted in Chapter 2, passengers who required assistance to travel continued to book in increasing numbers during the period.
3.12. Analysis of documents including GTR’s ‘Weekly Washup’ summary reports produced by the communications team, which outlined planned and completed activities as well as key issues and risks, enabled us to identify and examine key documents and evidence used to communicate with passengers.
3.13. From 6 May, GTR increased its activity to promote the timetable change. It distributed 25,000 leaflets and confectionary tagged with RailPlan2020 across five stations. Vinyl wraps were fixed to surfaces at East Croydon station inscribed with ‘the time of every train will change’. Digital poster boards, a giant-sized, Alice-In-Wonderland-style white rabbit and 3D rabbit-hole floor stickers were also instituted at Victoria and Brighton stations.
3.14. GTR provided evidence of its use of social media. These Twitter messages focussed on highlighting that the timetable would change on 20 May with an encouragement to passengers to check train times. 3.15. GTR received DfT approval to proceed with the rolling deployment and rolling deployment ‘extra’ proposal - a phased timetable implementation plan. The first rolling deployment was approved on 10 April and RailPlan2020 pages were set up on 25 April; rolling deployment ‘extra’ was approved on 11 May. This resulted in some new Thameslink services on specific routes such as Horsham to Peterborough being removed from the timetable for the first few weeks. Relevant text went live on the website on 16 May. The rolling deployment service was also promoted through station posters, Customer Information System (CIS) screens and Operational Information System (OIS) screens at stations, and via social media. The RailPlan2020 website also provided access to downloadable timetables for passengers. 3.16. As part of the evidence submission GTR provided a draft undated April communication to MPs, and a draft 19 April stakeholder question and answer note. The former noted that some new services would be introduced progressively over the following three weeks whilst the latter referred to specific routes.
3.17. From 16 May, GTR updated customer and operational information systems and updated the RailPlan2020 website with PDF timetables to inform passengers of the impending timetable changes. Passengers were further advised to ‘recheck’ the website as journey planners may not have been up-to-date.
3.18. GTR issued a press release on 16 May to highlight the timetable change and announce an increase of 400 new train services it was providing under the timetable. Alongside the headline, GTR used graphics to remind passengers that the time of every train would change and to check before they travelled.
3.19. GTR wrote to stakeholders on 16 May to inform them that there would be gradual deployment on Great Northern and Thameslink of a small number of services to provide a smooth transition to the new pattern. GTR asked stakeholders to share information about the timetable changes with internal and external contacts. Findings
3.20. We consider that RailPlan2020 and the ‘time of every train will change’ campaign was successful in raising awareness amongst passengers of the major change in the timetable, and was markedly different from usual timetable change communications. As noted in Chapter 2, 75% of passengers in our research were aware that the timetable was changing and the RailPlan2020 website attracted more than 800,000 hits.
3.21. As noted in Chapter 2, the personal impact of the timetable change was not well understood by some passengers. Passengers who had familiarised themselves with RailPlan2020 were potentially unaware that some of the services would not be introduced until sometime after 20 May; almost three in five passengers believed that the new timetable would be introduced in full.
3.22. On the last few days leading up to the transition weekend passengers were advised again to recheck the website. Passengers who had heeded the earlier messages and already worked out their plans for the new timetable, were faced with uncertainty as fewer trains were running on some lines.
3.23. Nonetheless, we consider that GTR used the RailPlan2020 website, the ‘time of every train will change’ campaign and a wide variety of communication channels (e.g. social media, print media, station advertising, stakeholder briefings as well as paper timetables, leaflets and more attention-grabbing marketing) to proactively disseminate the clear message that something significant was going to happen on 20 May. Prospective passengers were made aware of the change, had access to the expected timetable and reasonable efforts were made to keep passengers up to date as late changes were made in the period leading up to the 20 May.
3.24. Based on the balance of information assessed and summarised in this chapter, we consider that GTR took reasonably practicable steps to provide appropriate, accurate and timely information to passengers prior to the timetable change on 20 May. 4. Information for passengers post-20 May – analysis of evidence
Summary
This chapter sets out the events following the introduction of the 20 May timetable and the provision of information to passengers by GTR about its services during the subsequent disruption. We set out our analysis of the factors relevant to the investigation for this period alongside our key findings.
Introduction
4.1. In this chapter we set out our findings in relation to the period following the introduction of the 20 May timetable in respect of condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP). We have analysed a range of information to inform our findings. This includes material received from GTR as part of this investigation and information obtained during the timetable Inquiry. We have also considered guidance published by ORR, and our expectations for compliance with the licence condition under three broad principles as set out in Chapter 1.
Information for passengers post-20 May
Background
4.2. Rail disruption can take many forms including a failed train, problems with signalling, track defects, power supply problems and severe adverse weather. Delays are often categorised as minor or major, and the industry has established plans and thresholds for escalation and response that aim to provide appropriate, accurate and timely information and advice so that passengers can make informed choices about their journey. Such plans are aimed at operational delays that can occur on a daily basis. Where more severe disruption occurs for example the extreme weather experienced in February 2018 as a result of the ‘Beast from the East’, rail services can be disrupted for several days and the aim of the train operators and Network Rail is to recover operations to normal as soon as possible.
4.3. The disruption that occurred because of the timetable change in May 2018 was both severe and prolonged. Our primary focus has been on the period of 8 weeks between 20 May and the introduction of an interim timetable on 15 July. This was because the
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28 http://orr.gov.uk/\_\_data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf 29 http://orr.gov.uk/\_\_data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf reliability of services generally improved following the introduction of the interim timetable on the 15 July (shown in Chapter 2) and we saw evidence that GTR had sought to proactively communicate its introduction to passengers in advance of its implementation.
4.4. During interviews with GTR in July and October 2018, senior company representatives described the unprecedented challenges they faced and characterised GTR’s response to the disruption in the period post-20 May to 15 July as one of ongoing trial and error to try to provide consistent information to customers.
4.5. When disruption is likely to be prolonged it is possible to create contingent or emergency timetables which can be operated robustly and reliably for the duration of the disruptive event and within the available resources of the train operator in terms of train sets and available crew. We understand that this option was considered in the immediate period after the disruption began. In correspondence to ORR on 16 October, GTR outlined the following reasons for not introducing a revised timetable before 15 July:
“The decision was taken not to introduce an emergency timetable in the weeks that followed the May 2018 timetable introduction. A temporary timetable may have provided passengers with “guaranteed” services with information to match. However, any short-term timetable change would have resulted in a severely reduced service with huge negative consequences for our passengers. As a commuter TOC, that already had challenges with providing sufficient capacity for passengers, we did not believe that this was in their best interests. This decision did mean that in the aftermath of the May 2018 timetable introduction there were occasions where services arrived at stations which did not appear in the rail information systems.”
4.6. The remit of this investigation is to consider the provision of passenger information during the disruption that occurred in the period following 20 May irrespective of the reasons for that disruption or the decision not to implement an emergency timetable. Condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP) is not intended to undermine the primary objective of providing the best available service for passengers. For that reason we have not sought to question GTR’s decision in this area. The remainder of this chapter discusses the provision of information to passengers in the period of service recovery; between 20 May and the introduction of an interim timetable on 15 July.
Timeline of events
4.7. The timeline of relevant key events associated with the provision of information to passengers has been produced from the sources of evidence given to us as part of our investigation work and from the timetable Inquiry. It is provided as a summary below. | DATE | ACTIONS | |--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | 20/5/18| The May 2018 timetable was introduced. Some services previously operated by Southern or Great Northern were joined together to form cross-London Thameslink services, e.g. Horsham to Peterborough. | | 22/5/18| In response to passenger feedback about the confusion it was causing, GTR decided to remove ‘operating incident’ as the default reason for timetable related cancellations. Instead, it was decided no reason would be displayed. However, there was evidence of some instances where ‘operating incident’ continued to be used after this date. | | 25/5/18| The decision was made to remove cancelled trains from systems. This was to show passengers only what was running on Customer Information Systems (CIS) screens and journey planners. | | 28/5/18| GTR established a Service Recovery Crisis Management Team to formulate a service recovery plan. | | 29/5/18| 219 buses were secured for the Great Northern route to address timetable gaps. At this stage bus times and locations were not made available to passengers via journey planners. | | 30/5/18| The decision made on 25 May to remove cancelled trains from systems caused problems in how services were shown on Customer Information System (CIS) screens and journey planners, which required further manual interventions by GTR’s information team in the Three Bridges Control Centre (Control). Additionally, at this point automatic Delay Repay was not working for its smartcard ticket holders. GTR emailed customers to inform them of this issue and to advise them to claim manually. | | 31/5/18| Following feedback from customers and ORR highlighting Delay Repay confusion over which timetable to claim against, GTR clarified that Delay Repay would be paid on either the timetable running on the day or the original May 2018 timetable. This was made clear in website messages on the Delay Repay page. | | 4/6/18 | GTR identified a consistent list of diagrams for removal from the timetable. GTR stated these removals had the aim of improving the consistency of the timetable. Further services were removed or cancelled on a day-by-day basis. Passengers were not provided with a list of the services that would be removed for the week ahead. GTR provided posters at stations with the following message: “Please regularly check before you travel. Interim timetables are in place while we phase in a new long-term timetable”. GTR tickets were accepted on a range of other train operators and buses. Ticket acceptance updates were sent to stations and updated on websites. |
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30 [https://www.bbc.co.uk/news/uk-england-44347990](https://www.bbc.co.uk/news/uk-england-44347990) | DATE | ACTIONS | |----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | 8/6/18 | Gatwick Express restrictions were lifted for GTR tickets giving passengers from Brighton an extra 2 trains an hour they could use if they were using “Thameslink only” or “Not Gatwick Express” routed tickets. Holders of more expensive season tickets could trade them in for cheaper “Thameslink only” routed tickets. | | 10/6/18 | Bus allocation plans were issued to Control and station staff to allow them to plan staffing rosters and inform passengers. The plans were not available in journey planners at this point. | | 11/6/18 | Messaging was added on the National Rail Enquiries website: “Online journey planners will be updated by 20:00 on the Sunday of each week to show the short term amended timetable operating on the following Monday to Friday”. Additionally, passengers were warned that it was still “vital that you recheck your train as close to the time of your journey as possible using journey planner or live departures.” | | 11/6/18 | Further guidance on Special Stop Orders was issued to Control relating to a number of trains being added back into the service but arriving unannounced at stations. | | 12/6/18 | Some bus plans were now shown in journey planners where a bus was running to a fixed timetable. Other buses remained on standby for flexible use. | | 25/6/18 | GTR wrote to stakeholders notifying them that from Monday 25 June passengers would be able to plan their weekday journeys in advance for the coming three weeks. A PDF timetable was published on GTR’s websites. | | 28/6/18 | To ease overcrowding DfT approved the declassification of first class across all GTR routes until 15 July 2018. | | 3/7/18 | PDFs for the 15 July interim timetable were added to GTR’s websites. | | 6/7/18 | Additional pages were added to GTR’s websites to introduce the interim timetable to passengers. | | 15/7/18 | An interim timetable was introduced, based on the original May 2018 timetable but with fewer services, primarily in the off peak period. The weekend service continued to be simplified and will remain at the lower levels until the May 2019 timetable change. | | 30/7/18 | The normal industry arrangements for Delay Repay were re-implemented. |
31 [https://www.alistair-burt.co.uk/sites/www.alistair-burt.co.uk/files/2018-06/Letter%20from%20Nick%20Brown.pdf](https://www.alistair-burt.co.uk/sites/www.alistair-burt.co.uk/files/2018-06/Letter%20from%20Nick%20Brown.pdf) 32 [https://www.alistair-burt.co.uk/sites/www.alistair-burt.co.uk/files/2018-06/Letter%20from%20Nick%20Brown.pdf](https://www.alistair-burt.co.uk/sites/www.alistair-burt.co.uk/files/2018-06/Letter%20from%20Nick%20Brown.pdf) 33 [https://www.thameslinkrailway.com/travel-information/plan-your-journey/timetables](https://www.thameslinkrailway.com/travel-information/plan-your-journey/timetables) GTR’s Service Recovery Plan
4.8. Prior to the 20 May timetable change, GTR arranged for the establishment of a ‘gold command structure’ (the standard industry control structure for response to major incidents) to manage any disruption. GTR told us that it was not until the end of the first week of the timetable change that it began to realise that the disruption they were experiencing was likely to be prolonged and would require an exceptional response. On 28 May, GTR therefore established a Service Recovery Crisis Management Team to formulate a recovery plan which involved three phases:
- **Phase 1** of the plan, entitled ‘Coping’, related to week one and two of the new timetable, where GTR was reacting to the erratic train service and uncovered rosters;
- **Phase 2** of the plan, ‘Achieve Stability’, commenced on 4 June and lasted until 15 July. This was aimed at learning lessons from Phase 1 and removing a consistent set of diagrams from the timetable. During this phase GTR also planned for the implementation of the interim timetable on 15 July;
- **Phase 3** of the plan, ‘Deliver Consistent service’, began from the introduction of the interim timetable on 15 July (week eight) onwards, where there was a planned reduction in the train service compared to the 20 May timetable, ‘to support the delivery of a reliable and consistent service across TL [Thameslink] & GN [Great Northern].
4.9. To support the increase in customer contacts during the disruption following the timetable change, GTR told us that 27 additional staff members were recruited across the contact centre, Delay Repay, head office and social media teams. Additional resources were also brought in to assist Control.
4.10. We reviewed internal GTR documents to assess the extent to which GTR’s operational decision-making and passenger information plans and activities were aligned, compatible and mutually supportive. Our review of an array of documentation revealed a wide range of passenger information and communication activities throughout Phase 1 and 2 of the service recovery plan. However, it was clear from a number of other internal documents coupled with other evidence available to us regarding the passenger experience, that these actions were not delivering adequate passenger information outcomes. For example, throughout Phases 1 and 2 of the Service Recovery Plan it was clear that feedback from a number of the internal channels GTR had put in place demonstrated that passenger information failures were significant and occurring on a persistent basis. This message was widely recognised in:
- Staff station thread emails;
- Staff timetable inbox emails;
- Passenger feedback via social media channels; and Senior management and Board reports.
4.11. For example, station thread and timetable emails from the period 20 May to 15 July revealed that information failures continued to occur at a number of stations across the network. Some examples of the types of information-related issues that GTR staff were recognising over a sustained period of time are provided below. The examples are not exhaustive and are provided for illustrative purposes, with feedback on certain dates relating to multiple occurrences:
- trains arriving or making unplanned stops at stations without station staff knowing ahead of time (11 June, 12 June, 19 June, 10 July);
- trains not making planned stops at stations without station staff knowing ahead of time (1 June, 15 June, 19 June, 20 June, 22 June, 27 June, 3 July, 9 July);
- trains cancelled with little notice or after departure time when passengers had boarded (31 May, 6 June, 18 June, 22 June, 26 June, 27 June);
- trains listed as cancelled or not advertised but ended up running without station staff knowing ahead of time (30 May, 6 June, 7 June, 22 June, 29 June); and
- staff being unable to get through to the Rail Operating Centre / Control for information when needed (22 May, 31 May, 27 June, 3 July, 14 July).
4.12. The ongoing nature of the information failures throughout Phase 1 and 2 of the Recovery Plan was also apparent from a passenger perspective in GTR’s social media engagement. GTR’s daily internal social media reports for senior management repeatedly highlighted passenger dissatisfaction with the quality of journey information. We analysed 42 of these reports which covered the period 15 May to 18 July. They show that throughout Phases 1 and 2 of the Recovery Plan that passenger information failures was a persistent theme being reported back to GTR management. Some examples of these are cited below:
- 23 May: “Feedback about Railplan2020 was again the dominant trend with delays, cancellations and poor information being the main complaints.”
- 24 May: “Another very busy morning with disruption related to Railplan2020 being the main theme. The overcrowding, cancellations and perceived poor information seem to be passengers main complaint today”.
- 1 June: “Another very busy morning with the same trend occurring throughout the week, this being trains ‘disappearing’ from the timetable. The advice is to check services before you travel which customers are doing only to find their train has been cancelled when they turn up at the station.”
- 5 June: “Disruption continued again today with further anger from passengers. Again our Twitter feed was approaching record levels of busyness with passengers desperate for information and advice.” 12 June: “Busy as with the other 2 major brands, with issues early in the morning surrounding additional services calling and the information not updating fast enough to reflect this at the platforms, leaving customers confused.”
26 June: “Passengers are still getting fed up of the last minute cancellations and lack of information.”
6 July: “Very busy and very negative. Delays and disruption, changing information and in some cases no information being delivered out on the network until it is too late for passengers.”
11 July: “If anything sums up the service we are currently offering it was the 16.35 service from King’s Cross. An incredibly busy service which was showing as running on time. 25 mins after the departure time the service was eventually cancelled. Customers left in the dark. No information! No explanation!”
12 July: “Passengers showing continued frustration with poor information, late notice changes and packed services.”
4.13. GTR held a ‘Black Hat’ session on 12 June, led by the Chief Operating Officer, to review the plans and readiness to implement the interim timetable on 15 July. For the purposes of this session a paper was produced by the customer experience team which highlighted the existing priority issues for passengers. These were:
- ‘Lack of reliable information;
- Unable to plan;
- Large service gaps;
- Are additional stop orders always effective?; and
- Change to stopping pattern during train service’.
4.14. GTR clearly recognised at the time the paper was submitted, over three weeks after 20 May timetable change and one week after Phase 2 of its recovery plan, that passengers were experiencing ongoing journey information failures. The customer experience team paper noted that frontline teams and customers were receiving inconsistent information which differed across sources, plus incredibly short notice changes.
4.15. We also had access to five GTR Weekly Board reports from the period 20 June to 17 July. Our analysis of these also revealed that passenger information failures were being reported to the Board as ongoing issues.
- Board reports on 20 June, 26 June and 3 July all cited the top two priority customer issues as: “1) Reliability of information: Frontline teams and customers have inconsistent information – differs across sources, & further impacted by short notice changes. 2) Unable to plan: customers advised to check ‘as close to travel as possible.’
The Board report on 10 July stated the top priority customer issue as: “1) Improved control, decisioning and two-way info flows between stations and control. Accuracy of information to customers and station teams continues to be poor.”
4.16. We noted that passenger information issues were not reported in the GTR Board report (17 July) following the introduction of the interim timetable on 15 July.
4.17. In summary, we found evidence from a range of sources which revealed that while the continued efforts being made to improve and stabilise services at an operational level throughout Phases 1 and 2 were having some success, the full benefit of this improvement was not felt in passenger outcomes due to the fact that it was often not supported by accurate, timely or appropriate passenger information.
4.18. We consider that too often there was a failure in operational decision-making to give adequate regard to the fact that running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive, where it is going and how long the journey will take. Moreover, the persistence of these information failures over such a sustained period of time, coupled with the lack of evidence as to the company developing any timely or proportionate response to these issues, lead us to conclude there had been a fundamental problem at both a strategic and functional level in aligning operational recovery with passenger information obligations.
Alpha and Beta lists
4.19. As part of Phase 2 of the Service Recovery Plan, GTR identified specific services which it was unable to run and which could be removed from the timetable. This list of services was known as the ‘Alpha list’ and evidence suggests this was central to GTR’s overall service recovery efforts. GTR explained to us that it knew that the majority of the services on the Alpha list would not be able to run for a prolonged period of time, or indeed had not run at all since the timetable change. The Alpha list consisted of both uncovered driver diagrams that had been identified by GTR and other services they were unable to run informed by the first two weeks of disruption.
4.20. Internal GTR documents make reference to the fact that the Alpha list of removed services was fixed until the introduction of the interim timetable on 15 July. In terms of the numbers of trains this involved, a recovery planning document, updated on 30 May, specified that 58 driver diagrams were to be consistently removed from systems from 4 June and that the number of train services to be removed from the weekday schedule would increase to 326 trains from 11 June.
4.21. On 7 June, GTR met ORR to provide a briefing on the current arrangements following a number of concerns that we had raised. GTR indicated that it was not planning to publish the Alpha list but was expecting to publish a post-Alpha timetable. On 19 June ORR e-mailed GTR to ask when this timetable was likely to be available: “Although passengers are probably used to those A [Alpha] trains not running by now we think that there is still value in making it clear which trains were expected to be introduced but will not run until further notice, especially as they have been effectively removed from the public timetable.” GTR published revised PDF timetables with the Alpha trains removed, although this did not happen until 25 June (see below).
4.22. By 11 June, the timetables for weekday services were uploaded to journey planners on the Sunday evening. However, the times for more than a week ahead still showed the full Monday to Friday timetable as expected to be introduced in May. In its 13 June letter to GTR (which formed part of its submission to the Inquiry34), Transport Focus urged GTR to bid timetables more than a week ahead:
“That you ‘bid’ your interim timetable to Network Rail considerably further ahead than one week. A journey plan today will show that next Monday you will be operating the full, intended 20 May timetable, when clearly you will not. We suggest bidding the interim timetable on a rolling six-weeks-ahead basis, given the industry’s current Informed Traveller target. There is nothing to stop you adding extra trains if you are confident that they can be delivered, but it is not fair on passengers to advertise the full service when you know it cannot be delivered.”
4.23. Passengers were not informed of the trains that GTR had planned would not run on a consistent basis until 25 June, when GTR uploaded PDF timetables incorporating these changes (which provided a three-week ahead view on planned services up to 15 July). While this was useful, it required passengers to spot the difference to see which trains were no longer there. There was no high level summary of changes for example by route.
4.24. On 25 June, GTR also began communicating this development to key stakeholders as a positive step in providing passengers with more certainty and confidence in knowing which services they could rely on35.
4.25. A further element of GTR’s Service Recovery Plan was that additional services were removed or cancelled on a day by day basis. This list of services was known as the ‘Beta list’. This list depended on criteria such as balancing empty stock moves,
34 http://d3cez36w5wymxj.cloudfront.net/wp-content/uploads/2018/07/20155005/Submission-to-Glaister-Inquiry-passenger-impact-July-2018.pdf 35 E.g. this can be seen in the content of written responses GTR were issuing to stakeholders and MPs: (1) https://www.alistair-burt.co.uk/sites/www.alistair-burt.co.uk/files/2018-06/Letter%20from%20Nick%20Brown.pdf (2) https://www.oliverheald.com/sites/www.oliverheald.com/files/2018-06/Letter%20from%20Nick%20Brown%20to%20MPs_0.pdf enabling driver relief, carriage of drivers to meet forward workings and maintenance cycles of rolling stock.
4.26. The Beta list trains were removed individually by GTR staff in its Three Bridges Control Centre (‘Control’) overnight. This approach meant that the final list of confirmed trains for that day’s services was not available to passengers until 04:00. As a result, passengers who intended to travel on those services for work the next morning could check the evening before they intended to travel and the journey planners would show their service running as normal. If GTR subsequently deleted the train during the night it could mean that if the same passenger checked their journey planner by 6am the next morning then it would have disappeared from the timetable.
4.27. Additionally, because passengers were not provided with clear details of the Alpha list (the services that were consistently planned not to run), passengers were not able to identify which trains were never planned to run that week and ones that were removed on a daily basis. This is evidenced by consistent feedback from passengers in our research (Chapter 2) about their frustration at having very little notice or certainty about which services would be running or cancelled for a prolonged period.
4.28. GTR provided the investigation with daily operational plans between 6 June and 13 July. These plans comprised of both Alpha and Beta lists. We analysed the ‘Driver Diagram Alterations’ section of these plans and found that 62% of the train headcodes, each denoting a particular train service, that appeared on at least one Alpha plan we analysed, were listed as cancelled for all of the 28 weekdays that GTR provided plans for. 62% of headcodes equates to 152 services, though we know that GTR planned to remove considerably more services on a consistent basis; 326 trains were ‘permanently removed’ from 11 June according to a service recovery plan document. What we have found from the limited number of trains analysed is that there was a high degree of consistency in service cancellations every day from 6 June until the interim timetable was introduced on 15 July. In its 7 June document titled “short term timetable – train alterations process” GTR sets out the assumptions used at Control, including that the Alpha list is fixed until 15 July and will be uploaded into TRUST\\textsuperscript{36} and Darwin\\textsuperscript{37} by Network Rail.
**Figure. 4.1 – Alpha/Beta list daily cancellations**
**Cancelled and ‘delayed’ trains**
4.29. The number of trains affected by the Beta list meant that controllers faced extremely compressed timeframes for updating systems. As a result they often did not have time to complete the deletion of all services on their lists. This meant that a passenger would have even less notification about the cancellation of these services. For
\\textsuperscript{36} TRUST (Train Running Under System TOPS a computer system used for monitoring the progress of trains and tracking delays).
\\textsuperscript{37} Darwin is the rail industry’s official train running information system. example, they could check a journey planner the evening before or very early on the morning of travel and find a service listed as running, only to find it cancelled when they arrived at the station.
4.30. In addition, some trains in the process of being cancelled in the systems sometimes were not removed until the train was due to have started its journey, leading to Customer Information System (CIS) screens showing ‘Delayed’ for a period before the train was then cancelled.
4.31. The processes that GTR relied on throughout the time Alpha and Beta lists were employed were heavily reliant on manual intervention and crosschecking complex information. This increased the risk of errors, omissions and duplication. Evidence suggests that this was borne out in the often incorrect or confusing information that passengers and staff were then receiving. This also goes some way to explain why many passengers found that information in journey planners sometimes did not reflect what they found when arriving at the station.
Golden trains
4.32. Controllers at GTR were concerned about the large gaps that were appearing between services and undertook gap analysis to define the scale of the problem. GTR developed a list of priority services (known as ‘golden trains’) that should be protected from cancellations where possible and also provided replacement buses and taxis in some cases. One of the purposes for the golden trains was to transport school children to exams. GTR contacted schools and parent groups to notify them of the trains, and while these steps represented positive action by GTR for these affected passengers we have not seen evidence that this list of protected services was disseminated more widely.
Ghost trains
4.33. Where crew and rolling stock became available it was sometimes possible to reinstate trains from the Beta list. This was a positive approach even if in some cases trains ran where advertised buses were also operating. Instructions issued within Control identified that the staff did not always remember to include platform information for each station call when they were reinstating the trains. As a result the trains would not appear on platform departure screens, meaning that a train could arrive unannounced. In some cases a standard message on the Customer Information System (CIS) screens would even advise passengers not to board the train. Passengers often referred to these services as ‘ghost trains’. This occurred if the service had not been successfully entered into systems by Control. To mitigate against this, when station staff had the information they were able to make announcements about the expected arrival of these ghost services and where they were expected to stop. From a passenger perspective, this increased the lack of trust with the automated information systems. Special Stop Orders (SSO)
4.34. One of the ways GTR sought to mitigate the impact of cancelled services on passengers affected was by scheduling other services to make unplanned stops at certain stations where there were service gaps. While this can have a performance impact it was decided that the need to fill gaps in the service was more of a priority. However, it could result in delays to following trains while the expected non-stop train made additional calls.
4.35. In normal circumstances, station staff can request a SSO from Control if they have identified a need, such as a gap in service caused by cancelled trains. Later in the period a standard list of SSOs was included in the daily Alpha plan which was issued to staff and stops were shown in journey planners and on station screens. Implementation of a stop order still requires a member of staff to give a piece of paper to a driver detailing the changes. Initially there was often confusion about whether additional stops would be made when they were not always shown on station Customer Information System (CIS) screens and on-board train screens. In addition, some drivers refused to accept the orders (for example if it would have taken them over their hours or delayed a subsequent working) meaning that arranged stops were not honoured.
4.36. Passengers expect their journey to take a specific amount of time based on timetable information. As a result of additional stop orders, those particular services ended up taking longer than expected and many passengers stated if they had known this in advance of boarding they may have chosen an alternative train. In addition, when information screens did not show the additional stop, passengers may not have boarded a train that was subsequently given a SSO to call at the station they wanted to travel to.
Equipping passenger-facing staff with information
4.37. Decisions made in the recovery plan also impacted heavily on passenger-facing staff. The daily Alpha plan was circulated via the staff ‘station thread’ email each day and included details of changes to driver diagrams, special stop orders and trains that would be cancelled. Documents reveal many instances where from 20 May until the introduction of the interim timetable on 15 July staff reported not having access to the correct information in advance of when it was needed. Our analysis has revealed situations where staff had no more knowledge than passengers waiting at stations as they were not informed of decisions being made in Control. This caused confusion and created a situation where staff could have provided passengers with information believed to be correct, only later to find that it was wrong. This then served to also undermine passengers’ confidence in GTR staff. Additional measures for disabled passengers
4.38. As discussed in Chapter 2 passengers with disabilities were also severely impacted by the poor or changing information during the May 2018 timetable disruption. As a result of short-notice cancellations and GTR’s decision to revise the service plan overnight for the following day, this may have created significant additional challenge for some passengers with booked assistance where the train that they had booked on was then no longer running.
4.39. However, GTR put in place proactive arrangements for passengers who required assistance. Their support team structure was changed and additional staff were added to the customer contact centre to review every booking for the day ahead. Customers who would be impacted by cancellations were contacted to discuss alternative arrangements, such as booking on another service or arranging a taxi. This process commenced at 0600 each morning, with four checkpoints throughout the day to check for booked assistance. We saw evidence that GTR had sought to be as proactive as possible in seeking to mitigate some of the impact of the disruption upon its passengers who were reliant on booked assistance to make their journeys.
Rail replacement bus services
4.40. GTR staff in Control worked to identify where cancellations were causing unacceptable gaps in service frequency. This was a particular issue on Great Northern, especially at the smaller stations on the Peterborough line where Thameslink services now provide the full off-peak service but were seeing many cancellations. Staff at these stations used the ‘station thread’ e-mail facility to update Control when they saw large gaps or had large crowds of passengers. GTR utilised buses to fill gaps in train services at certain stations, with 219 secured for the Great Northern route on 29 May. Buses were arranged to be held on standby at key locations and to operate guaranteed services for schoolchildren, many of whom were facing exams in the disrupted period. This was a positive operational move as an attempt to address timetable gaps and increase reliability for passengers.
4.41. However, bus times and routes were not shown in journey planners, so passengers were unable to check for details and may not have known that buses were running at all. By 10 June, bus allocation plans were issued to Control and station staff but services were still not shown in journey planners. At bus hub stations, staff would be able to provide assistance but passengers at intermediate stations would be unable to plan as the information they needed was not available.
4.42. Feedback, including from Transport Focus, alerted GTR to this issue and some scheduled buses, still supported by ad hoc standby vehicles, were added to journey
38 Transport Focus submission to the Inquiry - http://d3cez36w5wymxj.cloudfront.net/wp-content/uploads/2018/07/20155005/Submission-to-Glaister-Inquiry-passenger-impact-July-2018.pdf planners from 12 June, two weeks after GTR secured the buses for the Great Northern route. This provided passengers with the opportunity to make more informed journey decisions. GTR’s action to implement bus services to address timetable gaps was positive, although the information passengers needed was lagging behind the service recovery efforts.
14 June 2018
4.43. The location of replacement bus stops is normally shown on posters at stations. While for most stations it will be the station forecourt, some stations have the buses stopping away from the station.
4.44. When we checked the GTR and NRE websites for this information, the posters providing this information were not available for a number of stations including Hatfield, Welwyn Garden City, Letchworth and Hitchin. We know from issues raised with GTR previously that unlike its west coastway route where replacement bus stops have a distinctive Southern railway replacement bus flag, most replacement bus stops away from stations (for example Bishopstone and Salfords) are not marked as such. 4.45. The good practice guide for passenger information(^{39}) says that planned replacement bus times should be entered into Darwin and bus departures should be shown on real time information screens at stations. Without this information passengers may not benefit from the use of a replacement bus service.
**Weekend timetables**
4.46. In the pre-20 May period although weekday timetables were provided, the weekend timetable was not. For a period after 20 May, the journey planners were showing incorrect times as the timetable itself had not been finalised by NR. On Thursday 24 May, GTR produced PDF timetables for the following Saturday and posted them on RailPlan2020. Sunday timetables were posted on the Friday. The weekend services represented a much reduced level of service with many of the new Thameslink routes (e.g. Cambridge to Brighton) not operating and service frequencies reduced below that operated before 20 May (e.g. only one fast train each hour from Kings Cross to Cambridge rather than two). On Saturday 26 May, GTR noted that the overnight download of the timetable by Network Rail had resulted in the journey planners showing incorrect times for travel on that day. Corrections for Saturday and Sunday were made manually by Control.
4.47. GTR noted that the base timetable (before engineering work adjustments) for weekends had not been received from Network Rail by Monday 11 June.
4.48. In September, ORR wrote to GTR(^{40}) to highlight the short notice being given to passengers who were trying to plan or make journeys at weekends. In the letter dated 5 September, we noted that alterations for 8 September when the Brighton mainline was to be closed between Three Bridges and Brighton had not been made. Despite the complete closure of the line, through running Thameslink trains were still being shown in journey planners. We also raised this with the Brighton Mainline project which was responsible for providing communications for this work.
**Delay compensation**
4.49. Giving passengers good information about compensation in the event of delay is accepted as an important component of the overall passenger experience (whether this information is given during or after the journey itself). Passengers who experienced delays on their journey were encouraged to claim Delay Repay by GTR. In normal circumstances Delay Repay can only be claimed against the ‘timetable of the day’ meaning that all the trains that had been deleted could not be claimed against. Initially
______________________________________________________________________
(^{39}) ATOC document - not publicly available.
(^{40}) [http://orr.gov.uk/\_\_data/assets/pdf_file/0010/39349/inadequate-notice-of-weekend-timetables-letter-to-gtr-2018-09-05.pdf](http://orr.gov.uk/__data/assets/pdf_file/0010/39349/inadequate-notice-of-weekend-timetables-letter-to-gtr-2018-09-05.pdf) passengers enquiring on Twitter were given that information and told that they could not claim (although we did see inconsistencies in the advice that was given):
4.50. Other passengers were advised they could make claims against services in the original timetable that had been removed from journey planners as well as those listed in journey planners on the day:
4.51. After ORR sought clarification on this issue the messaging was changed on 31 May to make it clear that compensation could be claimed against the original May timetable (which was made available on RailPlan2020) irrespective of what had operated on the day. 4.52. Passengers using the GTR Key smartcard also found that their automatic Delay Repay process became unreliable in this period. In response, the GTR Twitter team advised passengers to make manual claims instead. GTR subsequently informed us that season ticket holders who might have been affected received an e-mail highlighting the issue.
Due to the recent levels of disruption to services, and short notice alterations, our Auto Delay Repay notification service may not operate as effectively as normal. During this time, we advise Key Smartcard customers to make manual Delay Repay claims via our online webform
GN website 10 August
4.53. Although GTR has a 15 minute threshold for compensation it also operates an enhanced compensation scheme(^{41}) for passengers that are delayed by more than 30 minutes on 12 occasions within a 28 day railway period. As it does not offer a claim history service on its Delay Repay website this required passengers to keep a separate note and evidence of these delays which then had to be submitted separately using a paper form. Signposting on the GTR website did draw attention to the enhanced
(^{41}) [https://www.thameslinkrailway.com/help-and-support/journey-problems/delay-repay/enhanced-compensation](https://www.thameslinkrailway.com/help-and-support/journey-problems/delay-repay/enhanced-compensation) compensation provision but because the claims process was potentially confusing and onerous it may have dissuaded some passengers from claiming.
4.54. In July, GTR announced that additional industry compensation would be available to season ticket holders who had been affected by the disruption. Depending on the journey made this could be up to the cost of 4 weeks travel(^{42}). In August 2018 this was extended to some other regular travellers(^{43}). Claims for travel between 20 May and 28 July 2018 could be made until 31 January 2019. GTR reported that over 74,000 claims have been made under this scheme.
**Related issues**
- Passenger information at King’s Cross and St Pancras
4.55. The change of some Great Northern services to Thameslink meant some trains that previously ran from Kings Cross now departed from St Pancras. With the departure boards at King’s Cross no longer showing these trains, passengers who previously travelled from King’s Cross may not have been aware that their train now operated from St Pancras.
4.56. On the Great Northern where gaps arose in the Thameslink service through Central London, GTR Control arranged for services to run but terminate at or start from Kings Cross rather than St Pancras, as they had before the timetable change. However, passengers were not made aware of this because information about trains departing from the adjacent station was not shown on the Customer Information System (CIS) screens at either station(^{44}). The two adjacent stations are unusual in railway operations terms as once the trains have departed from London they follow the same route and stopping pattern to their destination. This is why the inclusion of St Pancras departures (for Great Northern stations) is appropriate at Kings Cross but why trains from Liverpool Street to Cambridge which follow a completely different route are not shown.
4.57. Changes to the Customer Information System (CIS) screens at Kings Cross and St Pancras made to highlight these services were not made until September 2018. GTR also arranged for station specific messaging to be added to online live departure boards for those stations. In addition, NRE recognises a new London station in the journey planner, allowing journeys to be planned to or from London Kings Cross St Pancras (All stations) when using the NRE website. However, this station is not available in apps, including those provided by GTR.
(^{42}) [https://www.mynewsdesk.com/uk/govia-thameslink-railway/pressreleases/govia-thameslink-railway-announces-details-of-compensation-for-great-northern-and-thameslink-passengers-2581899](https://www.mynewsdesk.com/uk/govia-thameslink-railway/pressreleases/govia-thameslink-railway-announces-details-of-compensation-for-great-northern-and-thameslink-passengers-2581899)
(^{43}) [https://www.alistair-burt.co.uk/news/gtr-extends-industry-compensation-scheme-non-season-ticket-holders](https://www.alistair-burt.co.uk/news/gtr-extends-industry-compensation-scheme-non-season-ticket-holders)
(^{44}) ORR wrote to GTR on this issue in September 2018 and improvements have now been made. [http://orr.gov.uk/\_\_data/assets/pdf_file/0010/39349/inadequate-notice-of-weekend-timetables-letter-to-gtr-2018-09-05.pdf](http://orr.gov.uk/__data/assets/pdf_file/0010/39349/inadequate-notice-of-weekend-timetables-letter-to-gtr-2018-09-05.pdf) 4.58. While we welcome the changes that have been made, the switch of London stations was a foreseeable issue and one that the Thameslink project should have addressed before the timetable change.
- Reasons displayed regarding the causes of delayed or cancelled services
4.59. Aware that some trains would not operate because of suitably trained crew not being in the right places, GTR adopted the term ‘operating incident’ to describe these occasions. There is no suitable standard industry message that relates to train planning issues and GTR felt that ‘due to a shortage of train crew’ did not correctly explain the situation. However, in the subsequent disruption when passengers tweeted GTR to ask about the ‘operating incident’ affecting their intended service, GTR’s Twitter team often took a standard approach of responding. Sometimes this served to irritate passengers more and missed an opportunity to explain the issues that were affecting the network. In response to negative passenger feedback about this practice, use of ‘operating incident’ was officially discontinued on 22 May. However, it was still used and the explanations did not improve. In its submission to the Inquiry, Transport Focus noted the continued use of the phrase “due to an operating incident”. @GNRailUK @TURailUK we are all waiting here at Finsbury park, told due to operating incident, the train to Cambridge north is delayed (the stuff on the platform) doesn’t know how long it will be delayed for. Could you tell us what is the ‘operating incident’ at kgx station
Great Northern @GNRailUK - 18 Jun 2018 Hi there. The next service to Cambridge North is the 09:01, but the next service to Cambridge main is the 07:46. Very sorry for this. ^Alex
Thank you Alex, yet we don’t know what the operating incident is. Why is it kept hidden from the commuters who spend thousands of pounds every year on trains?
8:22 AM - 18 Jun 2018
Replied to @GNRailUK
Operating incident = no driver
Replied to @GNRailUK
Hi Joseph. Agree with your comment and we do our best to give as much detail normally about disruption. For an operating incident this will be an incident is requiring further investigation. As this can include human error we would be limited in the info that we can give. ^Neil
12:24 PM - 21 May 2018 Information displayed on the train Passenger Information Systems
4.60. Thameslink services are provided using class 700 trains. These include a modern Passenger Information System (PIS) which gives information such as London Underground status, train loading and toilet availability in addition to route information. Being a fixed formation 8 or 12 car train also means that the trains are too long for the platforms at some of the stations that they routinely call at and selective door operation notices are provided by the system. Drivers programme the system by entering a code for the journey that they are making. There is also a depot code, sometimes referred to as the ‘get me home’ code which can be used if the journey is different to the standard route. However, this results in the screens displaying a ‘please listen to announcements’ message.
4.61. The ATOC Code of Practice on Customer Information45 (‘the Code’) notes the importance of displaying correct information on the train, especially during disruption. Unfortunately, the short notice changes to calling patterns and changes to train destinations cannot easily be shown on screens on trains which were then either set to ‘please listen to announcements’ or turned off completely. In addition, a new software download during the period resulted in the screens often getting stuck on particular screens even if the announcements were working.
45 https://www.raildeliverygroup.com/about-us/publications.html?task=file.download&id=469771025 4.62. We observed that the faults were being regularly reported to GTR via passengers using Twitter. Due to an apparent lack of improvement in the performance of the screens we wrote to GTR in September 2018 to ask for reassurance that these issues were being taken seriously and that drivers knew that they needed to make announcements.
4.63. In its reply of 17 September, GTR noted that some of its trains would be unable to show the correct information until December 2018, “A new database is currently being loaded onto the 700 fleet which will add the additional services needed post the May TT introduction. GTR are a third of the way through installation, with all services envisaged to be loaded by December 2018.”
Findings
4.64. We consider that the exceptional circumstances that followed the introduction of the 20 May timetable meant that providing perfect advance information for all services was, from the outset, an impossible task. Evidence demonstrates that GTR’s overriding focus throughout the period that followed 20 May was on providing as much capacity as it could to meet customer demand.
4.65. Our guidance to support compliance with condition 4 recognises that timetabling services and providing information to passengers are difficult, complex tasks. There is a balance to be struck between service delivery and the ability to provide appropriate, accurate and timely information for passengers during sustained periods of disruption. The licence condition is not intended to undermine the primary objective of providing the best available services for passengers.
4.66. We accept that the immediate response to the timetable change required a period of reactivity as both the scale and severity of the disruption emerged. However, we consider that better passenger information should be a core element of the service recovery process and as time progressed an increasingly improving picture should have emerged. Against this context we consider that there is evidence to suggest that GTR failed to achieve an appropriate balance between service recovery and the need for appropriate passenger information to an unacceptable extent and duration throughout the initial phases of the Service Recovery Plan.
4.67. In particular, we found the following failings.
46 http://orr.gov.uk/\_\_data/assets/pdf_file/0010/39349/inadequate-notice-of-weekend-timetables-letter-to-gtr-2018-09-05.pdf
47 https://orr.gov.uk/\_\_data/assets/pdf_file/0009/39348/inadequate-notice-of-weekend-timetables-letter-from-gtr-2018-09-17.pdf Aligning service recovery with passenger information obligations
4.68. We consider that GTR took operational decisions with the best of intentions. Nevertheless, evidence from a range of internal and external sources revealed that while the continued efforts being made to improve and stabilise services at an operational level throughout Phase 1 and 2 of the Recovery Plan were having some success, the full benefit of this improvement was not felt in passenger outcomes due to the fact that it was often not supported by appropriate, accurate or timely passenger information.
4.69. We consider that too often there was a failure in operational decision-making to give adequate regard to the fact that running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive, where it is going and how long the journey will take. Moreover, the persistence of these information failures over such a sustained period of time, coupled with the lack of evidence as to the company developing any timely or proportionate response to these issues, lead us to conclude there had been a fundamental problem at both a strategic and functional level in aligning operational recovery with passenger information obligations.
Provision of ‘Alpha list’ and other journey information
4.70. One of the key methods used by GTR to achieve stability in its service recovery process was the reduction in train services that resulted from the use of the ‘Alpha list’. This required the identification of specific train services that it was unable to run and which could be removed from the timetable. Evidence demonstrates that the Alpha list was used, but was not clearly communicated to passengers between 6 June and 25 June (at which point GTR made PDF timetables available with the Alpha trains removed).
4.71. The delay in sharing clear information regarding the cancelled Alpha trains meant that passengers were unable to identify trains that were never planned to run on a weekly basis and ones that were removed on a daily basis (from the Beta list). This is evidenced by consistent feedback from passengers regarding their frustration at having very little notice or certainty about which services would be running or cancelled for a prolonged period.
4.72. GTR wrote to us stating that while the Alpha ‘list proved to be generally consistent throughout the period to the 25 June 2018, this was not known at the time, the list was not believed to be a static one and was being constantly reviewed and at times was altered to reflect daily operational circumstances’. However, we found evidence from internal documentation to indicate that the Alpha list was indeed ‘fixed’, including a service recovery governance document that identified 326 trains as ‘permanently removed’ from the timetable from 11 June. 4.73. We therefore consider that GTR’s failure to clearly communicate known cancellations in a timely manner undermined the ability of prospective passengers to plan ahead and make informed journey decisions. The Alpha list information could have been published sooner than 25 June, which would have provided greater certainty to passengers about services which were not planned to run.
4.74. The provision of rail replacement buses on some routes was a notable example where GTR had allocated significant resource to mitigate disruption and stabilise service provision, yet passengers were unable to take full advantage of this for a sustained period due to delays in making this information available in journey planners.
Day to day amendments
4.75. A related aspect of GTR’s Service Recovery Plan was that additional services were removed or cancelled on a day by day basis. This list of services was known as the ‘Beta list’. The Beta list trains were removed individually by GTR staff in its Three Bridges Control Centre (‘Control’) on an overnight basis. This process led to very short notice changes to the timetable and a severe lack of certainty for passengers up until the point of travel. This is evidenced by GTR’s advice to passengers to ‘check as close to the time of travel as possible’ or to ‘check immediately before travel’. However, at times, trains in the process of being cancelled in systems were not removed until the train was due to have departed, leading to Customer Information System (CIS) screens showing ‘delayed’ for a period before the train was subsequently cancelled.
4.76. GTR persevered with this process until the introduction of an interim timetable on 15 July, in effect accepting the ability to make overnight and very late notice changes despite the impact that this had on the provision of passenger information for a prolonged period. Other day to day changes were utilised - for example reinstating Beta trains as crew and rolling stock became available - to increase capacity and thereby benefit passengers, but at times these changes were poorly executed resulting in what passengers referred to as ‘ghost trains’.
4.77. Operational decisions taken and implemented to support the recovery process were, in many cases, to the detriment of providing passengers with appropriate, accurate and timely information to an unacceptable extent and duration. Deleting trains from the timetable rather than cancelling services in advance meant that services did not show as cancelled on journey planners or appear at all on CIS screens. Passengers were uncertain what services would run each day; travelling on a particular train on one day was no guarantee that it would run or be shown on station screens on the next day. This added to the confusion for passengers who were still trying to come to terms with a timetable in which the time of every train had changed.
4.78. There is substantial evidence to demonstrate the dedication and commitment of GTR staff in managing significant operational issues in difficult circumstances. However, on a day by day basis the issues described here, and elsewhere in this chapter, also served to undermine the ability of some frontline staff to have access to the information needed to assist passengers in making their journey.
4.79. We consider that the cumulative effect of the factors described here manifested in the unacceptable passenger outcomes described in our evidence report and in the numerous examples of passenger information failures. 5. Wider observations
Summary
This chapter summarises related observations arising from this investigation.
Introduction
5.1 In considering the evidence gathered as part of this investigation, we have also identified a number of areas for possible future improvements. These are summarised below.
Wider observations
PIDD arrangements not ideal for longer term disruption
5.2 Industry arrangements for dealing with disruption are mainly focussed on dealing with situations that arise during the day. The procedure for 20 minute updates of the core message may not be suitable for disruption that is likely to run for several weeks. The ACOP notes that
- In the event of longer term disruption – railway undertakings, where possible, should develop a process that enables passenger information to be fed into downstream systems at the earliest practical opportunity for the duration of the disruption.
Using ‘yellow triangles’ on National Rail Enquiries (NRE)
5.3 Yellow triangles with exclamation marks inside are normally used on NRE to identify services which are disrupted. Other icons that are routinely used include a red triangle for cancelled trains and a blue “information” triangle which is often used for bus services.
5.4 On 9 April, GTR asked that NRE put the following messages on all GTR train services in the current timetable (before 20 May), even those where new Thameslink services would not be operating. The initial impression from seeing a screen full of warning triangles is that there is current disruption. 5.5 We recognise that the use of icons in this instance was intended to draw attention to the timetable change. The message itself was unhelpful because the “more details” link just took the user back to the journey planner rather than linking to a site such as RailPlan2020 that gave more information. Its tone was more promotional than informative which is out of step with normal NRE messaging. The blanket labelling of trains in the current timetable with a message that only applies to a future journey, rather than the one that the passenger has researched, was unprecedented.
5.6 Blanket use of yellow triangles can mask actual service disruption. Industry should ensure that appropriate icons are used for service messages and that the icons do not mislead passengers. It should also decide whether it is appropriate to label current trains with a message that only applies to a future journey – when that is not what the passenger has asked for information about. If appropriate this may be better delivered via a live departures station message.
**Use of replacement buses**
5.7 While replacement buses generally depart from the station forecourt, this is not always the case. In order to give confidence to passengers and to assist rail replacement bus drivers who may not be familiar with the route, bus stops should be clearly marked with a distinctive flag, such as those used by Southern on its West Coastway route.
5.8 The location of the replacement bus stop should be easily available, via station posters and the station facilities feed online. When buses are in use this could be supplemented with additional signs/posters at the station. Our check of station information showed that this was not available for a number of stations where the NRE feed was missing information. Paragraph 7.3 of the ACOP notes the importance of keeping this information up to date. We suggest that routine checks are made to ensure that the functionality is working as expected.
**Disruption mode**
5.9 Station Customer Information System (CIS) screens may become overwhelmed or result in numerous announcements about cancelled trains when the service is disrupted. Paragraph 7.3 of the ACOP makes provision for the use of “disruption mode” when large numbers of trains are cancelled. When activated this removes some scheduled messaging and only shows trains that have been confirmed as running.
5.10 In this case GTR reported that widespread use of disruption mode caused some unexpected results and so it switched to deleting cancelled trains instead. The benefit of using disruption mode is that, while trains do not appear on station screens, the cancelled services still show in journey planners and apps. This allows passengers to get a better understanding of what is happening to their normal service. Having arrangements for the implementation of disruption mode is a requirement of the ACOP and should be provided in the local plan. ANNEXES
Annexes:
Annex A: Glossary
Annex B: Terms of reference of investigation
Annex C: Condition 4 of GB Statement of National Regulatory Provisions: Passenger
Annex D: Legal framework and policy - Railways Act 1993 legislation Annex A: Glossary
CIS – customer information system – screens on platforms at stations
DARWIN - Darwin is the rail industry’s official train running information system.
DfT - Department for Transport
GN – Great Northern –a trading name of Govia Thameslink Railway Ltd
GTR - Govia Thameslink Railway Ltd, operator of the Thameslink, Southern and Great Northern franchise
NR - Network Rail
NRE - National Rail Enquires website www.nationalrail.co.uk
OIS – operational information system – information screens giving general information at some stations
ORR - Office of Rail and Road
PIDD - Passenger Information During Disruption
Railplan 2020 – the GTR website set up to manage passenger communication of the timetable change - www.railplan2020.com
RDG - Rail Delivery Group
SNRP - Statement of National Regulatory Provisions
SO – The Network Rail System Operator
TF - Transport Focus
TLP - Thameslink programme
TOC - Train Operating Company
TOPS - a computer system used for monitoring the progress of trains and tracking delays.
TRUST - Train Running Under System TOPS Annex B: Terms of Reference for the Investigation
Annex: Terms of reference for a formal investigation into the issues relating to GTR’s provision of passenger information ahead of and after implementation of the 20 May 2018 train timetable.
Purpose
To establish whether GTR did everything reasonably practicable to meet its obligations contained in condition 4 of its’ Statement of National Regulatory Provisions, namely the provision of passenger information.
Scope
Based on initial analysis of the evidence gathered as part of our inquiry into the timetable disruption in May 2018, ORR is particularly interested in the following areas (although the investigation may be wider depending on the evidence that emerges):
The provision of appropriate, accurate and timely information provided:
a) to passengers and prospective passengers prior to the implementation of 20 May 2018 timetable; and
b) to passengers during the subsequent disruption over the weeks following 20 May 2018. This is a formal investigation and is separate to the ongoing monitoring and investigative informed traveller (T12) activities initiated by ORR in February 2018.
Methodology
ORR will use evidence gathered from its current monitoring and inquiry to date and any further information provided to us in the course of this investigation including by GTR, Network Rail, other operators, funders and other parties to assess:
• the steps GTR has taken or is taking to address the issues, make improvements and recover;
• whether there are any systemic issues; and/or
• whether there are any mitigating factors which should be considered in this case.
Investigation team
This investigation is led by Stephanie Tobyn as Deputy Director, using a project team drawn from consumer and network regulation functions, ORR. How the investigation will be conducted
In carrying out its investigation, ORR expects to draw upon information and reviews already carried out internally as part of its usual regulatory roles as well as any new information relevant parties provide to us during the course of this investigation. The review will engage primarily with GTR, as well as Network Rail and funders. This will be a focused investigation with the aim to completing it by the end of November 2018. Annex C: Condition 4 of GB Statement of National Regulatory Provisions: Passenger
Condition 4: Information for Passengers
Purpose
1. The purpose is to secure the provision of appropriate, accurate and timely information to enable railway passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption.
General duty
2. The SNRP holder shall achieve the purpose to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
Specific obligations
3. The following obligations in this condition are without prejudice to the generality of the general duty in paragraph 2 and compliance with these obligations shall not be regarded as exhausting that general duty. In fulfilling these obligations the SNRP holder shall at all times comply with the general duty in paragraph 2.
Planning services
04. The SNRP holder shall cooperate, as necessary, with Network Rail and other train operators to enable Network Rail to undertake appropriate planning of train services and to establish or change appropriate timetables, including when there is disruption.
05. In particular, the SNRP holder shall:
(a) provide Network Rail with such information about the SNRP holder’s licensed activities as may be reasonably necessary for Network Rail to fulfil its obligations relating to timetabling in its network licence;
(b) participate constructively in any timetabling consultation carried out by Network Rail;
(c) use reasonable endeavours to resolve promptly any timetabling disputes; and
(d) respond expeditiously to any timetabling matter which Network Rail reasonably considers to be urgent. Code(s) of practice and improvement plan(s)
06. The SNRP holder shall, unless ORR otherwise consents, publish one or more code(s) of practice or other documents setting out the principles and processes by which it will comply with the general duty in paragraph 2.
07. Where the SNRP holder considers, or is directed by ORR, that improvements to its arrangements for the provision of information to railway passengers and prospective passengers are necessary or desirable to enable it better to fulfil the general duty in paragraph 2, it shall develop, publish and deliver a plan, which sets out the improvements it intends to make and the dates by which such improvements will be made.
08. The SNRP holder shall, from time to time and when so directed by ORR, review and, if necessary, revise, following consultation, anything published under paragraph 6 and any plan under paragraph 7 so that they may better fulfil the general duty in paragraph 2.
09. ORR shall not make any direction under paragraphs 7 or 8 without first consulting the SNRP holder. Provision of information to intermediaries
10. The SNRP holder shall as soon as reasonably practicable:
(a) provide to the holders of passenger and station licences; and
(b) provide to all timetable information providers on request reasonable access to appropriate, accurate and timely information to enable each on request to provide passengers with all relevant information to plan their journeys including, so far as reasonably practicable, the fare or fares and any restrictions applicable.
11. In this condition:
“Network Rail” means Network Rail Infrastructure Limited (a company registered in England and Wales under number 02904587), and its successors and assigns. Annex D: ORR’s Approach to Economic Enforcement
The statutory framework
ORR enforcement powers and the processes for using these powers are contained in the Railways Act 1993 (“the Act”).
ORR must exercise its functions (including its enforcement function) in the manner which it considers best calculated to achieve a series of duties set out at section 4 of the Act. Those duties include protecting the interests of users, the promotion of competition, efficiency and economy in the provision of services and enabling operators to plan their businesses with a reasonable degree of assurance.
Final orders
There is an obligation on ORR to make an enforcement order if we are “satisfied” that a licence condition is being contravened or is likely to be contravened, unless one of the statutory exceptions applies:
- We consider it requisite that we should make a provisional order(^{48}) (see below); or
- One of the relevant statutory exceptions applies, namely:
- Our section 4 duties preclude us from making the order(^{49});
- we are is satisfied that the most appropriate way of proceeding is under the Competition Act 1998(^{50}); or
- The section 55 (5B) exceptions applies. This applies if we are satisfied that:
- the licence holder has agreed to take, and is taking, all such steps as it appears to ORR for the time being appropriate to take for the purpose of securing or facilitating compliance with a condition; or
- the contravention or apprehended contravention will not adversely affect the interests of users of railway services or lead to any increase in public expenditure,
(^{48}) Section 55(2). (^{49}) Section 55(5)(a). (^{50}) Section 55(5A). in which case, we will only make the final order if we consider it appropriate to do so.\\textsuperscript{51}
Whenever the statutory exceptions (except section 55(5B)) apply, we are precluded from making a final order. Under section 55(5B), we may still impose a final order even where the substantive elements of the exception are satisfied, “if [ORR] considers it appropriate to do so”.
We cannot make an order if the breach happened in the past but is not on-going. We can however impose a penalty for a past breach.
If we decide not to make a final order, or not to make or confirm a provisional order in respect of a licence breach, because we consider that one of the statutory exceptions applies, we must, under section 55(6) of the Act, serve notice of that fact on the licence holder and publish the notice. Although the Act does not specifically require us to set out in the notice our reasons for making such a decision, we would, as a matter of policy, expect to do so.
**Provisional orders**
A provisional order is, in effect, an interim measure and may last for no more than three months unless it is confirmed. We must make a provisional order, without going through the procedural steps required for a final order, where it appears to us that it is requisite that a provisional order be made. In considering what is requisite, we must have regard, in particular, to the extent to which any person is likely to sustain loss or damage from the breach before a final order may be made.
The requirements for confirming a provisional order are substantially the same as for making a final order (see above).\\textsuperscript{52}
**Penalties**
ORR has the discretion to impose a penalty if it is “satisfied” that a licence condition was or is being contravened. This penalty cannot exceed 10% of a licensees’ turnover.
The Act states that ORR must publish a statement of policy\\textsuperscript{53} in respect of the imposition of penalties. This statement can include provisions to be considered when deciding whether or not to impose a penalty. ORR must have regard to this statement of policy when deciding whether or not to impose a penalty.
\\textsuperscript{51} Section 55(5B). \\textsuperscript{52} Section 55(4). \\textsuperscript{53} https://orr.gov.uk/\_\_data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf Alternative Remedies
Other Statutory Remedies
We have considered our powers under the Competition Act 1998 and are satisfied that these do not offer the most appropriate means of proceeding.
What our economic enforcement policy says
The purpose of enforcement is to ensure delivery and secure compliance with public interest obligations. The possibility of enforcement provides an assurance and acts as an incentive for the industry to deliver in accordance with the public interest. ORR will have regard to this policy when determining whether to pursue formal enforcement action or use alternative remedies.
The Principles of Enforcement
ORR’s approach in deciding whether or not to use our formal enforcement powers in the Act is informed by best regulatory practice and the following principles:
Proportionality
We apply the principle of proportionality to all types of licence obligations. When considering whether or not to use our formal enforcement powers we assess the circumstances of each individual case. In general we take account of the following factors:
a) The significance of the failure, including whether it was a one-off incident or part of a systemic or sustained failure. We generally pursue enforcement action in instances where there is evidence of a sustained failure to meet licence obligations, rather than a one-off incident. For one-off incidents, we will generally only take action where it is in the public interest to do so, and where it is symptomatic of a systemic breach. We will also take into account the progress the licence holder has made to rectify the situation.
b) The extent to which the licence holder has a robust, adequately resourced plan to achieve compliance within a reasonable period of time
c) Whether enforcement action would encourage greater effort on the part of the licence holder to remedy the breach
d) Any persistent non-compliance
e) The effect on third parties and their potential right to compensation Targeting
ORR generally uses its enforcement powers to resolve systemic issues that are not dealt with effectively in contractual relationships. These relationships include access contracts, the Network Code, the Station Code and Depot Code, as well as industry wide arrangements on ticketing. ORR will also focus upon enforcing licence obligations where there is a detrimental effect on passengers, freight customers, funders and other stakeholders.
Consistency
ORR aims to take a similar approach in similar circumstances to achieve similar ends. We apply the same principles in coming to a decision and ensure consistency in our approach to regulation of the industry.
Transparency
We ensure that the industry understands what is expected of it and what is expected of ORR. This report, setting out the evidence and our decision, will therefore be published.
Accountability
ORR is accountable to the public and our decision in respect of the overruns will be subject to scrutiny. ORR will consider any representations made to us about our approach to enforcement and use of our powers.
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54841901a613c7e2ae597c6fc67d2c7036e8db9c | Office of Rail and Road Rail investigation report: Northern: Provision of passenger information – May 2018 timetable Published March 2019
## Contents
### Executive Summary
- Our findings – pre-20 May ................................................................. 4
- Our findings – post-20 May ................................................................. 5
- Next steps .......................................................................................... 7
### 1. Background
- Introduction ....................................................................................... 9
- ORR Inquiry into the timetable disruption in May 2018 ..................... 9
- Enforcement remit ........................................................................... 10
- Condition 4 of the train operators’ licence SNRP ............................... 10
- Regulatory context .......................................................................... 11
- Conduct of the investigation ............................................................ 13
- Structure of this document ............................................................... 14
### 2. Passenger experience and impact
- Introduction ..................................................................................... 15
- Performance data ........................................................................... 15
- Experience of passengers ............................................................... 17
- Northern passengers’ awareness of the timetable change ................. 18
- Northern passengers’ experiences and perceptions of information provision following the timetable change from 20 May ......................... 19
- Introduction of interim timetable from 4 June .................................. 22
- Understanding the impact of disruption on passengers .................. 23
- Impact of the disruption on disabled passengers ............................ 25
- Complaints and delay compensation .............................................. 27
- Consideration of passenger impacts .............................................. 28
### 3. Information for passengers pre-20 May – analysis of evidence
- Introduction ..................................................................................... 29
- Information for passengers pre-20 May .......................................... 29 Findings ................................................................................................................................. 37
4. Information for passengers post-20 May – analysis of evidence 38
Introduction .......................................................................................................................... 38
Information for passengers post-20 May ........................................................................ 38
Findings ................................................................................................................................. 52
ANNEXES 55
Annex A: Glossary 56
Annex B: Terms of Reference for the Investigation 57
Annex C: Condition 4 of GB Statement of National Regulatory Provisions: Passenger 58
Annex D: ORR’s Approach to Economic Enforcement 60 Executive Summary
1. This report sets out the findings of ORR’s investigation into Northern’s provision of passenger information relating to the May 2018 timetable.
2. We wrote to Northern on 3rd October 2018(^1) initiating this investigation following an ORR Inquiry(^2) into the timetable disruption in May 2018 that found that information provided by Northern to its passengers was inadequate. The remit of the Inquiry did not require it to formally investigate whether there had been a breach of Northern’s passenger licence information obligations in this area.
3. Our investigation has focused on Northern’s duty to provide appropriate, accurate and timely information to enable passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption, and to do so to the greatest extent reasonably practicable having regard to all relevant circumstances.
4. We have considered Northern’s provision of information in the lead up to the implementation of the May Timetable (‘pre-20 May’), and during the period of disruption following the introduction of the 20 May timetable (‘post-20 May’).
5. In carrying out this investigation we have reviewed the information gathered by the ORR Inquiry. We have undertaken a detailed analysis of the Northern passenger experience pertaining to the timetable change to better understand the nature and impacts of the primary information failures. We have examined data collected in the course of our regulatory monitoring and we have met with Northern to discuss the provision of passenger information. Further evidence has also been gathered from the company via detailed information requests.
Our findings – pre-20 May
6. We consider that Northern’s communications plan and campaign to encourage passengers to ‘check their new train times’ was successful in raising awareness amongst passengers and was appropriate in its methods and reach. The campaign commenced four weeks prior to the introduction of the new timetable, which is not out of line with standard industry practice. Our research found that 62% of passengers were aware that the timetable was changing.
7. Timetables were made available online to help passengers to plan their journeys. Some of the distributed flyers at specific stations also highlighted the train times and
______________________________________________________________________
(^1) [https://orr.gov.uk/\_\_data/assets/pdf_file/0010/39358/concerns-with-northern-compliance-with-passenger-information-obligations-2018-10-03.pdf](https://orr.gov.uk/__data/assets/pdf_file/0010/39358/concerns-with-northern-compliance-with-passenger-information-obligations-2018-10-03.pdf)
(^2) [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf) where particular pinch points would be found in the new timetable. However, there was a delay in producing printed timetables, which hampered passengers’ ability to plan their journey, particularly for those who are not able to access information through online methods.
08. Our research found that the personal impact of the new timetable was not well understood by some passengers and there was confusion about the scale of the change. In this respect, there was the opportunity to convey a more urgent message both on social media and in literature to passengers generally about the new timetable.
09. Northern demonstrated the ability and willingness to act in response to feedback from passengers and via staff about the impact of the new timetable on specific local services. Direct communications with passengers using services in hotspot areas was positive but passengers using these lines were not also informed via Twitter due to the inability to target Twitter messages to the relevant areas. However, messaging which goes to all passengers but is only relevant to some is normally a regular feature of rail communications (e.g. incident or service disruption on specific lines/routes) and would have supplemented more direct communication.
10. Nonetheless, we consider that Northern’s communications plan and campaign to bring the timetable change to passengers’ attention was broadly successful. The methods used did signal to passengers that a timetable change was happening and the detailed communications relevant on specific routes was helpful. Prospective passengers were made aware of the change, had access to the expected timetable and reasonable efforts were made to keep passengers up to date in the period leading up to 20 May.
11. Based on the balance of information assessed and summarised here, we consider that Northern took reasonably practicable steps to provide appropriate, accurate and timely information to passengers prior to the timetable change on 20 May.
Our findings – post-20 May
12. We consider that the exceptional circumstances that followed the introduction of the 20 May timetable meant that providing perfect advance information for all services was, from the outset, an impossible task. There were two weeks from 20 May to 4 June where in many cases Northern passengers suffered from the provision of inadequate information, which affected their travel and journey planning. Passengers also faced disruption as a result of two RMT strike days on 24 and 26 May.
13. Our guidance to support compliance with condition 4 recognises that timetabling services and providing information to passengers are difficult, complex tasks. There is a balance to be struck between service delivery and the ability to provide appropriate, accurate and timely information for passengers during sustained periods of disruption. The licence condition is not intended to undermine the primary objective of providing best available service for passengers.
14. Against this context we consider that although passenger information was in many cases inadequate in the period between 20 May and 4 June, there is evidence to suggest that Northern took steps to provide appropriate, accurate and timely information to the greatest extent reasonably practicable having regard to the circumstances that it faced. Northern’s interim timetable was introduced on 4 June, which stabilised service levels, improved performance, reduced last-minute cancellations and enabled the provision of better information to passengers (although it is widely recognised that on some routes passengers continued to experience significant disruption following this period e.g. on the Lakes Line).
In particular, we found that:
**Northern’s service recovery up to the introduction of the interim timetable on 4 June**
15. In response to the timetable disruption, Northern took a number of operational decisions to try to stabilise the train service. These steps included:
- Implementation of a Gold Command Structure to provide a strategic response to the disruption including through focused leadership, co-ordination and communication (for both passengers and staff);
- Use of ‘sweeper trains’ to manage passenger demand – initially provided on an ad hoc basis but subsequently included in journey planners from the end of the first week of the new timetable; and
- Identification of services ‘at-risk’ of cancellation and use of a three-hour cut-off for decision-making regarding such services, at which point services still ‘at-risk’ were cancelled to provide certainty to passengers and accurate information on Customer Information System (CIS) screens.
16. Northern was able to implement measures aimed at improving the situation that they faced on 20 May. The decision to hold an emergency directors’ meeting on 23 May and subsequently plan the interim timetable for 4 June proved fundamental to providing passengers with greater certainty over the services that they were capable of running.
17. Evidence indicates that whilst the quality of information provided to passengers was in many cases inadequate during the period between 20 May and 4 June, Northern did have regard to the fact that running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive, where it is going and how long the journey will take. Communication and impact of the interim timetable
18. Northern’s interim timetable involved removing 6% of services (168 a day) from its 20 May timetable. Northern has said that this ‘enabled us to accelerate our driver training, stabilise service levels, improve performance and significantly reduce last-minute-cancellations’.
19. Northern operated a reduced service until 30 July, when 75% of the removed services in its interim timetable were reinstated. The Inquiry found that overall more trains were running after the interim timetable was introduced than were operating before the timetable of 20 May, and the number of minutes Northern’s services were delayed recovered to pre-20 May levels from week three onwards.
20. Northern developed a comprehensive communications plan for passengers to support the introduction of the interim timetable. The evidence we have reviewed suggests that this communications plan was appropriate both in terms of its scale and reach. Firstly, it had clear provisions for ensuring the information reached as many different types of passengers as possible by utilising multiple communications channels. Secondly, it was also targeted through key actions to ensure information was especially focused on the routes which would be most affected by the change. In particular, it gave Northern passengers access to accurate information to enable them to make or plan their journeys from the 4 June with a greater degree of certainty than had been the case in the prior two week period.
21. On the balance of evidence assessed, and as summarised in this chapter, whilst the quality of information provided to passengers was in many cases inadequate during the period between 20 May and 4 June, there is evidence to indicate that the provision of information was appropriately considered by Northern and that it subsequently took reasonable steps to provide appropriate, accurate and timely information to its passengers.
Next steps
22. This investigation report has been published alongside a letter setting out the decision made by the ORR Board on what, if any, regulatory action should be taken following this investigation.
23. In conjunction with this we have written to all train operators and Network Rail asking them to review their crisis management plans in light of the findings of our investigations into the provision of passenger information. We have also asked them to provide ORR with copies of their arrangements and related contingency plans to support passengers that require additional assistance to travel during periods of disruption (both planned and unplanned). We intend to work with the industry to identify and share good practice in this area.
24. We will continue to monitor performance in this key consumer area and will hold operators to account to ensure that they meet their regulatory obligations.
25. Background
Summary
This chapter explains the background and remit for this investigation, the timetable process and passenger information obligations.
Introduction
1.1. As the independent economic and safety regulator for Britain’s railways, ORR plays a critical role in improving services for rail users. Our long-term vision for the mainline railway industry is a partnership of Network Rail, operators, suppliers and funders working together to deliver a safe, high performing, efficient and developing railway. We are also the consumer authority for the rail industry as a whole. Our consumer function enables us to focus on basic rights for rail passengers such as access, information and redress.
1.2. There are industry systems for compiling timetables and providing passengers with information. The System Operator (SO) works with Network Rail route teams and train operators to decide the best allocation of capacity and creates a base timetable twice a year (May and December) and co-ordinates short-term changes to it.
1.3. Train operators are responsible for making accurate and timely information available to passengers to enable them to plan and make their journeys with a reasonable degree of assurance, including when there is disruption, to the greatest extent reasonably practicable having regard to all relevant circumstances. This requirement is set out in condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP).
ORR Inquiry into the timetable disruption in May 2018
1.4. On 4 June, the Secretary of State for Transport asked ORR to lead an Inquiry into why the railway system as a whole failed to produce and implement a satisfactory operational timetable in May 2018. The scope of the Inquiry required it to gather evidence to draw conclusions and make recommendations as it saw fit. This included the impact on passengers, both in advance of and following the timetable change, especially in the areas served by Northern and GTR.
______________________________________________________________________
3 http://orr.gov.uk/\_\_data/assets/pdf_file/0020/39035/may-2018-timetable-inquiry-annex-b-terms-of-reference.pdf 1.5. The Inquiry focused on what actually took place when the timetable was introduced, compared to what should have happened. For Northern the Inquiry(^4) found that information provided to passengers was inadequate which meant that passengers were unable to plan and make their journeys with any certainty.
1.6. The remit of the Inquiry did not require it to consider whether Northern had met its licence requirements and therefore whether there had been, is, or is likely to be, a breach of a licence obligation. A determination of a breach of licence is subject to a different evidential test.
**Enforcement remit**
1.7. Train operators are licence holders and are legally obliged to comply with the conditions of their licences. We are responsible for investigating potential licence breaches and taking appropriate enforcement action when a licence breach is identified. Licence enforcement is governed by a separate legal framework with clear procedures that are set out in our economic enforcement policy and penalties statement(^5). Further details of our legal framework and policy are set out in Annex D.
1.8. This investigation has focused on the following key licence provision in the context of the May 2018 timetable change, it has not considered the root causes of the timetable problems as these have been covered in detail by the Inquiry.
**Condition 4 of the train operators’ licence SNRP**
1.9. Condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP)(^6), obliges train operators to secure the provision of appropriate, accurate and timely information to enable railway passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption.
1.10. Train operators are also obliged by condition 4 to cooperate as necessary with Network Rail and each other to enable Network Rail to undertake appropriate planning, including when there is disruption.
______________________________________________________________________
(^4) [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf)
(^5) [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf)
(^6) [http://orr.gov.uk/\_\_data/assets/pdf_file/0010/2233/lic-pass_SNRP.pdf](http://orr.gov.uk/__data/assets/pdf_file/0010/2233/lic-pass_SNRP.pdf) 1.11. Train operators are under a duty to achieve the obligations in condition 4 to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
1.12. To assist licensees we published guidance(^7) to support the passenger information licence condition (condition 4) in passenger, station and network operator licences by giving more information about what is expected and how it will be enforced. Our guidance recognises that timetabling services and providing good information is a complex task. Paragraph 25 of the guidance states:
[ \\text{…‘The licence obligations are not intended to undermine the primary objective of providing the best available service for passengers. Making justified changes to the train plan to meet passengers’ needs should not be conditional on providing perfect advance information about these. However, we would expect licence holders to use reasonable endeavours to get such information out as widely as possible and as quickly as possible. We will take circumstances into account during any assessment of compliance’} ]
1.13. The licence requires a train operator to publish a code of practice which sets out how it will provide information to passengers, including during disruption. Most GB operators use the Association of Train Operating Companies (ATOC(^8)) code of practice(^9) (the Code). The code requires the licensee to publish a “local plan” which sets out how the company will deliver its requirements, and makes provision for an annual review of the local plan. We report on activity in our annual consumer report Measuring Up(^10). Northern’s local plan is published on its website(^11) and was last updated in April 2018.
**Regulatory context**
1.14. The Network Code is a set of contractual rules incorporated into each track access agreement between Network Rail and all train operators. It covers those areas where all parties are obliged to work together to the same standards and timescales. The national timetable process is set out in the Network Code Part D.
1.15. In February 2018 the industry moved away from standard ‘informed traveller’ timescales, where amended timetables are made available to passengers at 12 weeks in advance (often referred to as T-12). The Network Rail System Operator, reduced the
______________________________________________________________________
(^7) [http://orr.gov.uk/\_\_data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf](http://orr.gov.uk/__data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf)
(^8) Now known as the Rail Delivery Group
(^9) [https://www.raildeliverygroup.com/about-us/publications.html?task=file.download&id=469771025](https://www.raildeliverygroup.com/about-us/publications.html?task=file.download&id=469771025)
(^10) [http://orr.gov.uk/rail/consumers/annual-rail-consumer-report](http://orr.gov.uk/rail/consumers/annual-rail-consumer-report)
(^11) [https://d2cf7kiw5xizhy.cloudfront.net/images/policy/2018-04/Local-Delivery-Plan-2018-PDF.pdf](https://d2cf7kiw5xizhy.cloudfront.net/images/policy/2018-04/Local-Delivery-Plan-2018-PDF.pdf) notice period for changes to train times from 12 weeks to 6 weeks, with certain safeguards for passengers buying advance tickets.
1.16. In February 2018, ORR started to escalate monitoring and intervention activity around whether train operators and Network Rail were meeting their ‘informed traveller’ obligations. Subsequently ORR’s formal licence investigation into the root causes of the timetabling problems concluded that Network Rail had breached its licence in relation to its timetabling obligations.(^\\text{12})
1.17. In relation to train operators and third party retailers, ORR also highlighted shortcomings particularly when these parties were selling advance tickets online. In February 2018 we wrote to Managing Directors at all train operators. The letter(^\\text{13}) set out three key principles that needed to be applied during the period when normal industry timescales were not being met. These principles covered transparency, the sale of advance tickets and information provision when timetables remain unconfirmed:
- train operators should be open about the impact on all passengers of the challenges they face, and take responsibility for ensuring that their passengers can get the information they need to plan and make their journey as that information comes available;
- clear information on the availability of advance tickets, what is available and when, is necessary to help passengers plan journeys even when the timetable is uncertain; and
- timetable information should be correct as far ahead as possible, and where timetables are not confirmed information about their current status should be accurate and updated frequently.
1.18. Work continues(^\\text{14}) in this area as we monitor NR’s delivery of its T-12 recovery plan and work with train operators to ensure that the information provided on websites and mobile apps is as informative as possible. The Network Rail recovery plan for restoring T-12 timescales has now been extended to June 2019.
(^{12}) [http://orr.gov.uk/\_\_data/assets/pdf_file/0003/28425/2018-07-27-breach-of-timetabling-conditions-in-network-rails-network-licence.pdf](http://orr.gov.uk/__data/assets/pdf_file/0003/28425/2018-07-27-breach-of-timetabling-conditions-in-network-rails-network-licence.pdf)
(^{13}) [http://orr.gov.uk/\_\_data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf](http://orr.gov.uk/__data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf)
(^{14}) See ORR website for more information on the three strands of Informed Traveller work - [http://orr.gov.uk/rail/consumers/rail-timetable-issues](http://orr.gov.uk/rail/consumers/rail-timetable-issues) Conduct of the investigation
1.19. The purpose of our investigation was to establish if Northern did, or is doing, everything reasonably practicable to achieve compliance with its obligations set out in licence condition 4, as set out above.
1.20. In particular, our investigation has focused on Northern’s provision of appropriate, accurate and timely information:
- to passengers and prospective passengers prior to the implementation of 20 May 2018 timetable; and
- to passengers during the subsequent disruption i.e. following the implementation of the 20 May 2018 timetable.
1.21. We have also considered the steps Northern has taken or is taking to:
- address the issues, make improvements and recover;
- whether there are any systemic issues; and/or
- whether there are any mitigating factors which should be considered in this case
1.22. In carrying out its investigation, ORR has drawn on source information provided as part of the ORR Inquiry into the May 2018 disruption(^\\text{15}). This has provided a substantial evidence base and a considerable volume of information from a range of sources. This has been particularly useful in setting out the experiences and impact of the timetable change on passengers. We have also considered data that we routinely collect in our regulatory monitoring role for example information from complaints, and analysis of posts made by passengers on Twitter.
1.23. We met separately with Northern to discuss the provision of passenger information and followed this up with a detailed Information Request requiring specific evidence to provide insight into:
- the extent to which information that was available to Northern was shared with passengers to enable them to better plan and make their journeys;
- the extent to which feedback from passengers and staff focused on information provision, the scale of such feedback and how such feedback was acted upon; and
- the extent to which the provision of appropriate, accurate and timely information for passengers was central to the service recovery process.
(^{15}) [http://orr.gov.uk/rail/consumers/inquiry-into-may-2018-network-disruption](http://orr.gov.uk/rail/consumers/inquiry-into-may-2018-network-disruption) Structure of this document
1.24. The document is structured as follows:
- in Chapter 2 we describe Northern’s performance before and during the 20 May 2018 timetable change, and the experience of passengers who were affected by it;
- in Chapter 3 we set out the events prior to the 20 May 2018 timetable change and the provision of information to passengers by Northern about their services during this period; and
- in Chapter 4 we set out the events following the introduction of the 20 May timetable and the provision of information to passengers by Northern about their services during the subsequent disruption.
2. Passenger experience and impact
Summary
This chapter analyses Northern’s service performance before and after the 20 May 2018 timetable change, and examines the experience of passengers who were affected.
Introduction
2.1 The ORR Inquiry(^{16}) found that information provided to passengers was inadequate which meant that passengers were unable to plan and make their journeys with reasonable certainty.
2.2 We have undertaken a detailed analysis of the Northern passenger experience pertaining to the timetable change to better understand the nature and impacts of the primary information failures they were exposed to. From there, this allows us to assess in Chapters 3 and 4 the extent to which these failures were a consequence of Northern actions and decision-making in relation to condition 4 of its Passenger Licence and SNRP.
Performance data
2.3 This section is intended to present some context regarding the service levels passengers were experiencing in the time period around the disruption. As the data indicates, the passenger experience effectively distils into three key phases. It covers the time period immediately before the 20 May timetable change, the two week period after Northern attempted to implement the new timetable, and then the time period from 4 June onwards where it introduced a new interim timetable.
2.4 The following chart shows the number of trains that Northern planned to run and the number that actually operated. Data is aggregated on a weekly basis. Figure 2.1 shows the increase in the number of services planned to run from 20 May 2018 with the new timetable. Northern operates approximately 2,800 trains a day therefore considering the percentage of trains operated illustrates the scale of the cancellations that occurred.
2.5 Although the planned number of services from 20 May was higher than the pre-20 May number in the first two weeks after the timetable change, the actual number of trains which ran was similar to the pre-20 May number. Figures 2.1 and 2.2 clearly illustrate the reduction in planned services following the introduction of the interim timetable on the 4 June where the number of trains planned to run was reduced by around 168
(^{16}) [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf) services per day, but that the percentage of service which ran increased significantly. The positive impact of the interim timetable on service reliability is therefore evident.
**Figure 2.1 – Northern trains planned to run vs. trains which ran**
**Figure 2.2 – Data for Northern trains planned to run vs. trains which ran**
| | Pre-Timetable | 20 May timetable | 4 June interim timetable | |------------------|---------------|-------------------|--------------------------| | | 06-May | 13-May | 20-May | 27-May | 03-Jun | 10-Jun | 17-Jun | 24-Jun | 01-Jul | 08-Jul | 15-Jul | 22-Jul | | Trains Planned | 16,672 | 16,920 | 18,025 | 17,962 | 17,194 | 16,869 | 16,986 | 17,094 | 17,220 | 17,302 | 17,097 | 17,269 | | Trains Ran | 15,925 | 15,922 | 16,228 | 15,780 | 16,408 | 16,434 | 16,421 | 16,389 | 16,581 | 16,584 | 16,374 | 16,255 | | Percentage Trains Ran | 95.5% | 94.1% | 90.0% | 87.8% | 95.8% | 97.4% | 96.7% | 95.9% | 96.3% | 95.8% | 95.6% | 94.1% |
2.6 The cause of delay minutes(^{17}) is shown in figure 2.3 and reveals a sudden increase in delays resulting from actions taken by Northern in the first two weeks after the 20 May timetable change. It is then evident how these ‘TOC-on-self’(^{18}) delays began to normalise following the introduction of the interim timetable on 4 June.
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(^{17}) Delay minutes are a performance measure for punctuality of passenger and freight trains. A delay is defined as a loss of time against a schedule between two consecutive locations on the train’s journeys.
(^{18}) Delay incidents producing three or more minutes of delay on Britain’s railways are attributed to either Network Rail or a train operator. Experience of passengers
2.7 As part of the original timetable Inquiry we conducted two pieces of research with passengers to understand their experiences of the 20 May timetable change. Due to the fact the Inquiry research took place in June and July 2018 during the worst periods of disruption it meant that respondent (passenger) recall was optimised, thereby ensuring the accuracy of their answers. We re-examined the Inquiry research to produce a more detailed analysis of the specific responses of Northern passengers from that time period to provide us with a clearer and more focused understanding of their experiences. Our analysis is set out below.
2.8 The first research piece involved the commissioning of a specialist research agency, GfK(^{19}), to undertake quantitative and qualitative research into the experiences of both passengers and staff who were directly affected by the events surrounding the 20 May timetable change(^{20}). The research methodology included:
- quantitative surveys with 126 Northern passengers;
- two qualitative focus groups (comprised of 6-8 participants) with Northern passengers; and
- two qualitative tele-depth interviews with Northern rail staff.
(^{19}) GfK has since been taken over by Ipsos MORI.
(^{20}) The final research report produced by GfK can be viewed here: [http://orr.gov.uk/\_\_data/assets/pdf_file/0004/39037/may-2018-timetable-inquiry-annex-d-orr-customer-research.pdf](http://orr.gov.uk/__data/assets/pdf_file/0004/39037/may-2018-timetable-inquiry-annex-d-orr-customer-research.pdf) 2.9 Respondents included Northern passengers who were a mix of commuters, leisure/business travellers and people with disabilities across a range of routes on the Northern network. The aim was to ensure a good representation of the overall Northern passenger experience before and after the 20 May timetable change.
2.10 We also conducted additional research with GB rail passengers affected by the 20 May timetable change via an online survey. This produced 149 responses from Northern passengers.
2.11 However, the quantitative research strands did not achieve a sufficiently large number of responses from Northern passengers who had experienced disruption concerning the time period we were investigating. This meant we were only able to generate a limited number of robust quantitative metrics about passenger experiences or perceptions of Northern’s journey information provision. To compensate for this we conducted a more detailed review of passengers’ experiences using insight from the qualitative phases of the research coupled with an in-depth review of their feedback from social media.
**Northern passengers’ awareness of the timetable change**
2.12 Pre-20 May, Northern was fairly effective in communicating to their passengers about the introduction of a new timetable on 20 May, with almost two-thirds (62%) of passengers being aware of a change. This is compared to industry-wide passenger awareness of the timetable change which was around half (51%).
2.13 Of those Northern passengers aware of the upcoming timetable change, almost three-fifths (59%) believed the full timetable would be introduced from 20 May – which was correct. However, around a quarter (25%) wrongly believed that Northern would be introducing their new timetable in stages.
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21 See slide 12 of GfK research report in link above Northern passengers’ experiences and perceptions of information provision following the timetable change from 20 May
2.14 To provide additional context we also examined some of the qualitative feedback we received from Northern passengers to give us a more detailed understanding of how information issues had impacted them. Below is a small sample of the common issues reported.
“The electronic boards at the station are frequently wrong or do not advise of delays or cancellation in good time. Station staff have seemed just as confused as the commuters. I have been put on the incorrect train by a member of Northern staff.”
- Northern passenger
“Very confusing communications. Delayed leaving Victoria and confusion over right Train in the first place and confusing announcements. Then told the train was terminating two stops later at Salford Crescent. Everyone got off and we were then told to get back on - total chaos.”
- Northern passenger
“[Information is] very limited and contradictory. Trains shown as on time until just before due, when switched to ‘delayed’, allowing no time to try alternatives. On at least one occasion I ended up boarding a train going in the opposite direction as no announcements or signs.”
- Northern passenger
“Nobody could tell me why my train was cancelled or when it would run. The service in question was part of the new timetable but for the first week simply didn’t exist, it wasn’t even showing as cancelled, just not on boards, apps or website. When I presented a printed copy of the May timetable to a member of station staff their answer was ‘that it was probably a typo.’”
- Northern passenger
22 Caution, note base size was under 100 (92 respondents) “Too little, too late. It’s no good telling me the 1709 has been cancelled at 1705, or telling me it’ll be one minute late, then two, then three, etc.”
- Northern passenger
“Incorrect information, information is not reliable (e.g. delay becomes a cancellation and then the service is reinstated) and information is communicated too late. I have gone to get a coffee due to the train being shown as 20+ mins late and then it arrives on time. Other times I leave work and make the 6 min walk to the station to find the train is significantly delayed but the info is not made available until a few minutes before the train is due to arrive. Trains being cancelled mid journey are the worst as announcements are difficult to hear on the train yet station staff are giving clear directions once people are asked to disembark”
- Northern passenger
“[Announcement] explained what was about to happen. However the announcement should have been made prior to the train departing the station to enable passengers to decide whether to travel.”
- Northern passenger
2.15 We also examined the feedback Northern received from its passengers via social media to further understand the types of issues they were experiencing. This analysis revealed passenger frustration with similar issues to those identified in our research. However, it was noticeable that the volume of contacts about information reduced following the introduction of the interim timetable from the 4 June. Figure 2.5 - Examples of passenger information issues reported via Twitter 20 May – 4 June Introduction of interim timetable from 4 June
2.16 Analysis of the feedback Northern received from its passengers via social media after the interim timetable was introduced indicates a shift in the nature and sentiment of passenger contacts. Post-4 June, the issues driving dissatisfaction were more noticeably about the number of cancelled and delayed services, use of short-form carriages, reduced frequency of services (as many had been removed from the timetable) and Delay Repay.
2.17 This compares to a higher volume of Tweets received in the period 20 May to 3 June concerning inconsistent or inaccurate journey information. This supports the performance data analysis which shows that as the number of on the day cancellations reduced with the introduction of the new interim timetable this resulted in more reliable services and better passenger information. This was reflected in the Inquiry which found that Northern acted quickly to introduce a revised interim timetable on 4 June, with more services operating than before 20 May, and reliability recovered somewhat.
2.18 Some examples of the more positive feedback is shown below.
Figure 2.6 - Examples of more positive passenger feedback via Twitter following introduction of interim timetable post-4 June Understanding the impact of disruption on passengers
2.19 The ORR Inquiry identified a number of impacts on passengers as a consequence of the widespread disruption in May 2018. We have not sought to assess the extent to which those impacts can be directly attributed to failures in the provision of passenger information but it is clear that better information may have alleviated the overall detriment that passengers experienced. The following section draws on the findings of the independent quantitative and qualitative research, and responses from passengers to ORR’s own survey and to the Inquiry itself. Financial
2.20 The costs to passengers resulting from the timetable disruption have a range of financial impacts on passengers. These might be short-term such as increased childcare costs due to late arrival home or paying for a taxi when the train is cancelled or delayed, buying refreshments at the station whilst waiting for a delayed train, buying dinner because of getting home too late to cook, and paying for public transport to travel to alternative stations. Some financial impacts may be longer-term such as taking a new route to work resulting in an increased travel ticket cost, routinely choosing to take a taxi when travelling home late at night to avoid being ‘stuck’ at a station late at night, and a loss of earnings.
Stress and inconvenience
2.21 Being unable to rely on a consistent train service such as late notice cancellations or delays or station skipping can increase the stress experienced by passengers and heighten levels of anxiety as passengers are unable to meet work commitments or family events. There were also many references to parents who were put under extreme stress to make unexpected adjustments to childcare with minimal notice due to the daily uncertainty of their journey times. This can have a detrimental impact on health as increased stress levels manifest themselves.
2.22 We also noted many complaints from passengers regarding overcrowding or being unable to board trains after long gaps between services.
Employment
2.23 The detrimental impact on passengers’ working lives was often in the form of arriving late to work or meetings. Aside from the possible reputational damage to the individual or the employer, including the loss of business, this might be a time cost meaning that the person will be required to stay later at work to complete tasks or to do so because they felt they had to having arrived late.
Social
2.24 Getting up earlier and getting home later was a consistent issue for passengers, particularly commuters who build their family and social lives around the time of their daily travel. Journeys were being planned on the basis that services will be cancelled or delayed which meant getting earlier trains in the morning and later ones in the evening. Some rail users did not feel comfortable travelling and chose not to do so at all. Such a situation may be exacerbated for those passengers who rely on assistance either booked with the rail company or via friends/family.
2.25 Moreover, the impact of the disruption was in addition to the fact that passengers had already had to make adjustments to account for the changes being made for the planned 20 May timetable. Having made those plans as forewarned by Northern the impact of the disruption was an additional layer of inconvenience due to the unreliability of the service.
**Personal safety**
2.26 Passengers were concerned that the unreliability of services – cancellations or delays – particularly late at night leaves them vulnerable and their safety is at increased risk. There was also an impact on passengers with reduced mobility who were physically unable to respond to last minute platform announcements or changes.
**Trust in the railway (and changing travel behaviour)**
2.27 Passengers’ experiences during the disruption caused by the rail timetable changes had a negative impact on their feeling of trust, and relationship with the rail company. The lack of consistency with cancelled trains being changed every day at short notice contributed significantly to that. Likewise, the lack of a clear explanation on why the timetable changes were happening or the scale of the changes, and the lack of improvement in services as a result of the timetable changes had exacerbated the impact. This lack of trust, combined with a change in travel behaviour, may have a financial impact on the rail company.
**Impact of the disruption on disabled passengers**
2.28 We undertook analysis of the number of passenger assist bookings, the number of times Alternative Accessible Transport (AAT) was used and the volume of accessibility-related complaints Northern received.
2.29 Figure 2.7 suggests that Passenger Assist booking volumes(^{23}) did not significantly change following the worst of the disruption which commenced during Rail Period 3 (27 May to 23 June). This indicates that for the most part the disruption did not dramatically undermine the willingness to travel of those passengers who rely on booked assistance. Nevertheless, it is likely that some disabled passengers would have chosen not to travel due to concerns about the reliability of services and its potential impact upon assistance provision.
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(^{23}) This refers to bookings that were made in advance of travel. We do not have any data on the number of bookings that were actually fulfilled i.e. assisted journeys successfully undertaken. 2.30 However, as is outlined in Chapter 4, Northern had a policy of attempting to proactively contact passengers who had booked assistance to alert them in advance about any disruption to their journey. For passengers who required assistance but had not booked in advance, commonly referred to as turn-up-and-go assistance, Northern would alert them to any impact on their journey when they arrived at the station. In both instances Northern informed us that they attempted to mitigate the impact of the disruption by, where appropriate, offering these passengers the option to use AAT, usually a taxi, as an alternative means of transport to enable them to complete their journey.
2.31 Figure 2.8 below shows how the volumes of AAT utilised by Northern increased significantly over the worst periods of disruptions at the end of Period 2 and into the start of Period 3 (from 27 May). For these passengers this would mean they would be able to complete their journeys but not as they had originally intended and so could have incurred some additional inconvenience.
Figure 2.8 – Northern Alternative Accessible Transport volumes 2018-19 (Periods 1-10) 2.32 Figure 2.9 reveals there was also an increase in accessibility-related complaints during the same period. These increases in accessibility complaint volumes provide some indication that the disruption was having some impact upon the journeys of passengers with disabilities and was therefore a potential causal factor in the increased number of accessibility complaints.
Figure 2.9 – Comparison of Northern accessibility-related complaint volumes 2017-18 versus 2018-19 for Rail Periods 1-7
Complaints and delay compensation
2.33 We also undertook analysis of the number of complaints and Delay Repay claims received by Northern before and after the 20 May timetable change to further understand the impact upon passengers. As the charts below illustrate, there was a significant uplift in both complaint volumes and Delay Repay claims from Rail Period 2 (29 April to 26 May) which corresponds with the worst periods of disruption.
2.34 The difference in complaint volumes relative to the same time period the previous year is also noteworthy. This is because it provides evidence that these increases were not attributable to latent seasonal trends and were instead most likely a consequence of the negative impact of the timetable change on passenger outcomes. 2.35 The chart below illustrates the spike in delay compensation claims received during the introduction of the new timetable towards the end of Rail Period 2 (ending 26 May) and continued into Rail Period 3 (27 May to 23 June). The volumes then begin to stabilise from Rail Period 4 (24 June) onwards following the introduction of the interim timetable.
**Figure 2.11 – Volume of delay compensation claims received by Northern for Rail Periods 1-7 in 2018/19**
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**Consideration of passenger impacts**
2.36 While not exhaustive the analysis in this chapter has enabled us to develop a greater understanding of the impact of the disruption on Northern passengers in the period before and after the 20 May timetable change. This has informed our analysis in Chapters 3 and 4 to enable us to make judgements about the appropriateness of Northern’s actions and operational decision-making in relation to condition 4 of its Passenger Licence and SNRP. 3. Information for passengers pre-20 May – analysis of evidence
Summary
This chapter sets out the events prior to the 20 May 2018 timetable change and the provision of information to passengers by Northern about their services during this period. We set out our analysis of the factors relevant to the investigation for this period alongside our key findings.
Introduction
3.1. In this chapter we set out our findings in relation to the period leading up to the introduction of the 20 May timetable in respect of condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP). We have analysed a range of information including material received from Northern as part of this investigation and information obtained during the timetable Inquiry. In so doing we have also considered guidance24 published by ORR, and our expectations for compliance with the licence condition under three broad principles25 as set out in Chapter 1.
Information for passengers pre-20 May
Timeline of events
3.2. The timeline of relevant key events associated with the provision of information to passengers has been produced from the sources of evidence given to us as part of our investigation work and from the timetable Inquiry. It is provided as a summary below.
| Date | ACTIONS | |--------|-------------------------------------------------------------------------| | 1/2/18 | Northern request to rollover the December 2017 timetable beyond May 2018. | | 16/2/18| Northern’s request to rollover the timetable refused by industry. |
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24 [http://orr.gov.uk/\_\_data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf](http://orr.gov.uk/__data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf)
25 [http://orr.gov.uk/\_\_data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf](http://orr.gov.uk/__data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf) | Date | ACTIONS | |--------------|------------------------------------------------------------------------------------------------------------------------------------------| | 5/3/18 | Network Rail provide a revised May 2018 timetable offer to Northern. There remained a number of rejected schedules to finalise, including for passenger services. | | 21/3/18 | Northern consultation with stakeholders and local employers regarding delays to infrastructure enhancements and re-planned timetable. | | 21/3/18 | Briefing to staff on delays to service enhancements. | | 7/4/18 | Northern timetable available on National Rail Enquiries (NRE) from 7 April, and advise that downloadable PDF versions on the Northern website from 7 May, printed versions by 1 June. | | Week commencing 22/4/18 | Northern’s customer campaign ‘Have you checked your new train times’ commenced. | | 24/4/18 | Special briefing note for staff ‘Communicating with our customers’ issued to staff includes information about the launch of the customer communications campaign ‘Have you checked your new train times’. | | 25/4/18 | Note to staff setting out timetable enhancements per region together with an FAQ on how it affects customers. | | Pre-20 May | Additional permanent customer support staff recruited, and a call to arms for volunteers. | | 7/5/18 | Timetables available to download on Northern and NRE websites. | | 8-10/5/18 | “Meet the manager” sessions for staff at 12 locations. | | 8/5/18 | Briefing notes to staff covering each of the regions Northern serve setting out timetable enhancements and changes to services on each line. | | 9/5/18 | Northern wrote to Transport for the North setting out the challenges it had faced in preparing for the May 2018 timetable, and advising that at this stage Northern expected to be in a position to run a full service on the re-planned timetable on 20 May. | | Date | ACTIONS | |------|---------| | **Week commencing 13/5/18** | Two email prompts to 300,000 passengers registered on the Northern database to check their train times. | | 14-17/5/18 | Further “meet the manager” sessions at various stations. | | 17/5/18 | Map and table provided to DfT identifying potential hotspots in terms of capacity and service decrements compared to the existing service. | | 18/5/18 | Stakeholder update, press release and special brief to staff issued advising that there will be some localised service disruption as the timetable beds in. |
**Analysis**
3.3. As part of this investigation we requested that Northern provided evidence of their communications pre-20 May 2018 timetable implementation. In conjunction with the information previously received from Northern and other stakeholders as part of the Inquiry, this enabled us to form a good understanding of Northern’s communications activities for passengers and staff in the weeks leading up to the timetable change on 20 May 2018.
3.4. Prior to the timetable change, passengers had already experienced a number of issues with Northern’s services for example on the Blackpool line where replacement buses had been running for a number of months. Both Transport Focus and the Mayor for Greater Manchester expressed concerns about the performance of Northern.
3.5. On 21 March, Northern consulted with stakeholders and local employers on the re-planning of the May 2018 timetable following the announcement of infrastructure delays. This consultation detailed service enhancements that would be postponed or reduced and those which would still be delivered, and service changes by region. Northern’s Regional Directors also wrote to MPs and other stakeholders on this date to explain that some services planned for May would be delayed until December 2018 due to the delay in the North West Electrification Project.
3.6. On 7 April 2018, the re-cast timetable was published on the National Rail Enquires (NRE) website. Northern noted that once the timetables were published local user groups became aware of reductions in services and the impact of changes in train times at local stations. Northern reported that its usual timetable process would involve extensive stakeholder consultation which would have picked up any local issues so it had to respond to concerns as they were raised.
3.7. Northern commenced its campaign to inform passengers that services were changing, ‘Have you checked your new train times?’ on 20 April, four weeks before the introduction of the 20 May timetable. This is in step with industry practice and Northern conveyed to us the timeframe was chosen to ensure the campaign did not lose its relevance by starting too early.
3.8. An internal timetable communications plan, produced on 23 April covering the period to the end of May 2018, set out Northern’s strategy in this area. The plan was designed to maximise the opportunity for customers to see messaging about the timetable change and the need to ‘check their train times’ when searching for tickets and times, when moving through the station, and when they got on and off the train. The plan set out the key messages, including the ‘what, when and how’ for customers via social media, website, media, on trains, and at stations. Within the plan, Northern also laid out the activity for colleagues and the expectation that they should be ‘ambassadors’ for the timetable change. The activity included tools for sharing information with passengers such as leaflets, business cards, and customer announcement scripts.
3.9. A large programme of enhancement work is underway in the North West under the ‘Great North Rail Project’ banner. The impact of delays to the programme is discussed in the Inquiry report26. However, in terms of passenger information we note that Network Rail worked with the affected train operators including Northern to produce passenger information with a distinct branding.
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26 [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf) 3.10. Northern provided examples of its campaign material which included a range of generic and route specific posters and leaflets, flyers, and business cards, as well as messages on social media.
3.11. In addition, Northern informed us that posters were placed in train carriages and in stations. A review of a Network Rail led communications group meeting summary note in April 2018 indicates that Northern, as part of this group, would have received promotional posters to install at stations from 13 April 2018.
3.12. Several rail user groups shared their views on the quality of information provided by Northern before the 20 May 2018. The mixed nature of the feedback suggests that the experience of passengers varied across the different lines and routes. Those who spoke favourably about the communications confirmed that posters were displayed at stations and on platforms. This included signposting to the website for further information, station announcements were made to inform passengers of changes to the timetable, and that information comprehensively and accurately reflected the planned changes. Some feedback was less positive and stated that posters were not consistently displayed or lacked detail on specific changes, information was late in becoming available or was not made available at all resulting in passengers being unaware of changes to services.
3.13. However, relevant station-specific posters were informative and helpful, and displayed morning peak train times and identified services that were anticipated to be busy due to gaps in services.
3.14. Northern provided a social media extract demonstrating its daily outbound activity between 19 April and 19 May 2018, which related to the introduction of the new timetable. This extract included a total of 175 Twitter and Facebook messages. These highlighted when services would be changing and when passengers would be able to download timetables. 3.15. A more detailed banner message was also displayed on the Northern website.
3.16. Social media activity accelerated during the three weeks prior to the introduction of the new timetable with approximately seven to eight posts a day. The Twitter message was altered on 2 May, with the availability of PDF timetables replaced by the message that printed timetables would be available from 1 June.
3.17. In addition to the 20 May timetable information referred to in the preceding paragraph, both Facebook and Twitter messages from Northern included messages promoting ‘Meet the Manager’ sessions at specific times and stations.
3.18. Passenger feedback on social media indicates that as at 19 May passengers were able to access the timetable for peak hour services but not the full timetable. It was noted in responses by Northern that there was a delay to the printing and distribution of printed versions of the timetable. This would have impacted on the ability to plan a journey for those who were unable to access timetables online.
3.19. Messages about forthcoming strikes on 24 and 26 May were placed on Northern’s website from 11 May 2018 and via its Twitter account. Northern advised passengers that strike timetables were usually available to passengers four or five days before industrial action. Feedback on Northern’s Twitter account indicates that some passengers found it difficult and frustrating to plan their journeys around the strike days, and timetables on third party websites such as Trainline were still displaying normal service times up until 23 May 2018.
3.20. Northern informed ORR that during the week commencing 13 May it sent two email alerts to 300,000 registered Northern customers. It stated that these alerts encouraged passengers to check their train times.
3.21. Northern supplied information which demonstrated the role of staff in their timetable communications plan. This included a staff briefing dated 25 April
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27 24 and 26 May RMT strike days which set out the timetable changes by region from 20 May together with ‘Frequently Asked Questions’ containing information about the planned communications with passengers. Later briefings in May included specific information about routes detailing what was better/worse/unchanged, and a special brief to staff on 18 May included the information provided to stakeholders about the timetable changes.
3.22. Northern supplied copies of staff emails providing feedback on the timetable. Our analysis of emails from 14-17 May shows evidence of Northern acting in response to issues raised by staff and passengers including a request to reinstate a stop and re-time services on the Harrogate line, and re-printing timetables where a number of errors had been identified. Staff also relayed general feedback from passengers on the timetable change as well as specific concerns around capacity on the revised services.
3.23. Northern provided details of its development and use of a ‘hotspot’ map which predicted areas where there were changes to service frequency or mismatches between demand and capacity where it was too late to do fixes. This was informed by verbal feedback from staff. In a later submission Northern stated that ‘the hotspot map identified areas where we anticipated disruption could (but not necessarily would) occur based on a basic capacity versus demand analysis – it could not have been used to anticipate the impact of emergency rostering.’
3.24. The map was not intended as an aid to passengers as to whether their train was running, and Northern remarked that any social media message about hotspot locations would have gone out to all passengers. Northern stated that its approach was to have face-to-face contact with passengers at particular stations. It provided evidence of a ‘call to arms’ for volunteers to assist passengers together with the resulting staff plan for w/c 14 May. This plan set out staffing including times of attendance for six locations, as well as ‘meet the managers’ events.
3.25. Northern supplied a copy of a map and covering email sent to DfT on 17 May which identified areas ‘we think could be potential hotspots in terms of capacity and service decrements compared to the existing service’…and there ‘is also a high-risk of poor operational performance due to the short timescales to create the timetable after the late notification of the delivery’. On 18 May Northern wrote to stakeholders to advise that it expected some localised service disruption, which could happen at very short-notice whilst the timetable bedded in. That day it also issued a press release with the same message. Northern considered that the phrase ‘localised service disruption’ was commensurate with what it knew at that time.
3.26. Northern explained that it had made provision for the establishment of a gold command structure for the timetable change on 20 May. This included conference calls three times a day - after morning peak, before evening peak, and after evening peak - to assess how the service had worked, and respond to any issues.
Findings
3.27. We consider that Northern’s communications plan and campaign to encourage passengers to ‘check their new train times’ was successful in raising awareness amongst passengers and was appropriate in its methods and reach. The campaign commenced four weeks prior to the introduction of the new timetable, which is not out of line with standard industry practice. Our research found that 62% of passengers were aware that the timetable was changing.
3.28. Timetables were made available online to help passengers to plan their journeys. Some of the distributed flyers at specific stations also highlighted the train times and where particular pinch points would be found in the new timetable. However, there was a delay in producing printed timetables, which hampered passengers’ ability to plan their journey, particularly for those who are not able to access information through online methods.
3.29. Our research found that the personal impact of the new timetable was not well understood by some passengers and there was confusion about the scale of the change. In this respect, there was the opportunity to convey a more urgent message both on social media and in literature to passengers generally about the new timetable.
3.30. Northern demonstrated the ability and willingness to act in response to feedback from passengers and via staff about the impact of the new timetable on specific local services. Direct communications with passengers using services in hotspot areas was positive but passengers using these lines were not also informed via Twitter due to the inability to target Twitter messages to the relevant areas. However, messaging which goes to all passengers but is only relevant to some is normally a regular feature of rail communications (e.g. incident or service disruption on specific lines/routes) and would have supplemented more direct communication.
3.31. Nonetheless, we consider that Northern’s communications plan and campaign to bring the timetable change to passengers’ attention was broadly successful. The methods used did signal to passengers that a timetable change was happening and the detailed communications relevant on specific routes was helpful. Prospective passengers were made aware of the change, had access to the expected timetable and reasonable efforts were made to keep passengers up to date in the period leading up to 20 May.
3.32. Based on the balance of information assessed and summarised here, we consider that Northern took reasonably practicable steps to provide appropriate, accurate and timely information to passengers prior to the timetable change on 20 May. 4. Information for passengers post-20 May – analysis of evidence
Summary
This chapter sets out the events following the introduction of the 20 May timetable and the provision of information to passengers by Northern about their services during the subsequent disruption. We set out our analysis of the factors relevant to the investigation for this period alongside our key findings.
Introduction
4.1. In this chapter we set out our analysis and findings in relation to the period following the introduction of the 20 May timetable in respect of condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP).
Information for passengers post-20 May
Background
4.2. Rail disruption can take many forms including a failed train, problems with signalling, track defects, power supply problems and adverse weather. Delays are often categorised as minor or major, and the industry has established plans and thresholds for escalation and response that aim to provide appropriate, accurate and timely information and advice so that passengers can make informed choices about their journey. Such plans are aimed at relatively short term operational delays that can occur on a daily basis. Where more severe disruption occurs - e.g. the extreme weather experienced in February 2018 as a result of the ‘Beast from the East’ - rail services can be disrupted for several days and the aim of the train operators and Network Rail is to recover operations to normal as soon as possible. However, these longer period events can require a different approach as the techniques for dealing with on the day disruption may no longer be appropriate.
4.3. The disruption that occurred because of the timetable change in May 2018 was severe. In looking at the information provided to passengers our primary focus has been on the period of two weeks between 20 May and the introduction of an interim timetable on 4 June. As performance data in Chapter 2 demonstrates, following the introduction of the interim timetable on 4 June the number of planned trains which ran increased by around 8% which then resulted in a corresponding improvements in service reliability and passenger information, allowing passengers to plan ahead with greater certainty. However, this does not lessen the consequential impact of an interim timetable on broader passenger satisfaction. 4.4. In parallel with the disruption caused by the failure of the May 2018 timetable, Northern services experienced additional disruption caused by an ongoing industrial relations dispute. This exacerbated the impact on staff and passengers, and complicated the short-term planning of trains and crews.
Timeline of events
4.5. The timeline of relevant key events associated with the provision of information to passengers has been produced from the sources of evidence given to us as part of our investigation work and from the timetable Inquiry. It is provided as a summary below.
| DATE | ACTIONS | |--------|------------------------------------------------------------------------------------------------------------------------------------------| | 20/5/18 | The May 2018 timetable was introduced, with emergency rostering affecting approximately 700 drivers and 2,300 trains each day. | | 20/5/18 | From 20 May to 3 June 2018, Northern staff were deployed to hotspot locations to provide additional customer service assistance to stations. | | 20/5/18 | In the days after the timetable change, attempts were made to announce cancellations three hours before the due time. Twitter updates were deployed every 30 minutes. Manual announcements at Victoria station replaced the normal automated messages. Customer Information System (CIS) screens throughout this period were struggling to keep up with the volume of changes. | | 21/5/18 | On the first weekday (Monday 21 May) of the new timetable almost one in ten (9%) of planned services were cancelled. This compared to 4% the previous Monday (14 May). | | 22/5/18 | Tickets were accepted on Metrolink (trams) and restrictions were lifted on time bound tickets such as advanced purchase. | | 23/5/18 | Northern held an emergency directors’ meeting to develop a recovery strategy, leading to the production of the interim timetable. | | 24/5/18 | RMT strike (which required a special timetable to be operated) | | 26/5/18 | RMT strike (which required a special timetable to be operated) | | 29/5/18 | Northern presented the interim timetable to the Secretary of State, before uploading it into relevant online systems. | | 1/6/18 | Northern announced the interim timetable publicly. | | 2/6/18 | Great North Rail project – start of planned closure of Liverpool Lime Street station until 30 July. | | 4/6/18 | Northern’s interim timetable was introduced which removed 6% (168 a day) of Northern’s services in an attempt to stabilise service levels and reduce late-notice cancellations. | | DATE | ACTIONS | |--------|------------------------------------------------------------------------------------------------------------------------------------------| | 8/6/18 | From 8 June 2018, tickets were accepted on all other operators’ routes and publicised via an RDG press release. | | 13/6/18| The Rest Day Working Agreement was re-instated. | | 12/7/18| Northern was asked by the Department for Transport and Rail North Partnership (RNP) to work with Network Rail and TransPennine Express to identify a joint solution to reintroduce services. An additional compensation scheme was introduced for season ticket holders on specified routes who experienced prolonged disruption. | | 30/7/18| 75% of the removed services in Northern’s interim timetable were re-instated. | | 3/9/18 | A further 30 services were reintroduced. | | 9/10/18| An additional compensation scheme was introduced for non-season ticket holders who travelled three days per week or more on specified routes and experienced prolonged disruption. |
**Northern’s service recovery up to the introduction of the interim timetable on 4 June**
4.6. Northern told us that the full impact of the compressed preparations for the timetable change only became apparent when the timetable went live.
4.7. On 21 May, Transport Focus described the impact of the new timetable for customers of Northern:
‘Some Northern passengers had a torrid time. Many trains delayed or cancelled in the North West. One in seven of its services were cancelled this morning (21 May), with a further 17 per cent delayed by at least five minutes. There were lots of staff around and good information at places like Bolton but no substitute for sticking to the basic promise of the railways: running the trains on time’.
4.8. The graphic below from the Transport Focus article shows that Northern was continuing with the standard practice of showing cancellation of services on journey planners and Customer Information System (CIS) screens. This provided certainty for passengers about which services were operating and those which were not. 4.9. Northern explained the scale and nature of the challenges it was facing in the first week of the timetable change both in operational terms and what this meant for information provision to both staff and passengers:
“[A]fter the introduction of the timetable on 20 May we were trying to deal with issues as they arose in real time. As a result, the quality of the information we were able to provide to staff and passengers, and the speed with which we were able to provide it, were materially impacted. To put this into context, Northern was cancelling on average 1.7% of planned services before December 2017, but in the period from 20 May 2018 until the introduction of the interim timetable (referred to below) on 4 June 2018, Northern was cancelling 11% of services.”
4.10. In the first week of the timetable change, Northern’s initial response to the disruption could be characterised as reactionary as events unfolded and it worked to urgently develop mitigations. This manifested itself in some key actions and processes conceived in response to the most pressing areas of service failure that had become apparent.
**Gold Command Structure**
4.11. A ‘Gold Command structure’ (the standard industry control structure for response to major incidents) was set up to manage any disruption from the timetable change. Northern advised us that this process had already been agreed prior to the introduction of the new timetable and so was put into practice from week commencing 21 May.
4.12. This structure centred on telephone conferences held three times a day with pre-selected staff covering different levels of seniority, key functions and included local managers across the breadth of the network. These calls took place after the morning peak, before the evening peak and after the evening peak. There were also additional ad hoc calls to supplement this where necessary. It considered any feedback from the previous peak performance and fed this into operational decision-making. This allowed tweaks to be made to the train plan in a managed way, which gave time for information to be updated in the downstream systems. Other issues that were discussed routinely included emergency rostering and risks to the operation of the timetable.
4.13. Northern explained that these Gold Command calls were crucial in cascading information down to stations and frontline staff and then receiving feedback on the next call on the effectiveness of any measures previously taken. For example, it provided information on when to use special passenger information messages on Customer Information Systems (CIS) screens, manual announcements in stations or information whiteboards. It also led to the creation of an information hub at Manchester Victoria station which was staffed with customer service advisors. Northern also used its gold command structure to inform its press officers of key passenger information that should be proactively disseminated to regional local newspapers and websites e.g. the Warrington Guardian.
4.14. The Gold Command structure was used throughout the main periods of disruption. This included strike days, when major events were taking place and when further timetable changes were made, such as when additional services were added on 30 July.
Social media
4.15. Northern told us that it was concerned about overloading industry systems with the scale of changes that were occurring as a consequence of the disruption. This led it to use social media as one of its primary outlets for the latest service updates by posting service status information every half an hour via Twitter. 4.16. The messages included a link to the Northern JourneyCheck page which provides details of all cancelled or altered services and can filter messages by route.
4.17. In our correspondence and interviews with Northern’s senior management, they outlined how important social media was in disseminating the latest service updates and travel information to passengers during the worst of the disruption. Northern runs its social media team from its control centre in York and staffs the service between 6am and 10pm. According to its social media policy, it aims to provide a response to all messages within 30 minutes.
4.18. As part of this investigation, Northern has provided copies of its standard social media messaging throughout the relevant period. Within the document, Northern highlighted a number of questions that it expected to receive and it provided a sample answer in response to those questions for ease of use by its staff on social media. Our analysis indicates these were not used extensively, with Northern instead opting to tailor its messages to each customer concerned.
‘At-risk’ list
4.19. One of the methods Northern used to attempt to stabilise the service was the development of an ‘at-risk’ list. Services where resources could not be matched to work requirements were internally designated to be at-risk of cancellation. Due to the dynamic nature of the disruption, Northern told us that at-risk services could only be identified either the day before or on the day of departure. The pace of change during the disruption meant that the list of services that were at-risk was changing on an hourly basis as Northern staff sought to get the train service covered. As the list of trains was not fixed, Northern was not able to inform passengers in advance of the day of service.
4.20. To mitigate against short-notice cancellations, Northern introduced a three-hour cut off for at-risk services when it became apparent that the services could not be covered. This meant that cancelled services could be publicised allowing passengers greater ability to plan around the cancellations.
**Sweeper trains**
4.21. With peak capacity already reduced on the Bolton Corridor by the new timetable, any cancellations or delays resulted in crowds building up on the stations. This was brought to the attention of the Gold Command. In the first few days of the timetable, where crew and rolling stock were available, Northern ran some additional peak time ‘sweeper train’ shuttles between Buckshaw Parkway and Manchester Victoria. Initially these additional services were ad hoc but when the timetable was reintroduced on 25 May (after a strike day timetable was in use on 24 May) the sweeper trains became part of the advertised timetable.
**Increase in staff headcount**
4.22. Having created a ‘hotspot’ map, the response to the disruption was to deploy staff to those locations to provide additional customer service and to feedback live issues to the Gold Command structure that had been established. The extra staff updated whiteboards at stations with the latest information. At Manchester Victoria an information pod was established to give information to passengers and also feed live information back to the centre.
4.23. In addition to standard industry communication methods, staff were able to feedback via an internal Facebook group. This allowed two-way communication and feedback on changes that were planned.
**Strike action in immediate period after disruption began**
4.24. Passengers also faced disruption as a result of two RMT strike days in the first week of the timetable change on 24 and 26 May. The Inquiry found that Northern appeared to cope well with the additional challenge the strikes presented. Northern provided notification to passengers of RMT strikes on 21 and 23 May (for 24 and 26 May strikes respectively) via website travel alerts and press releases.
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28 [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/39042/inquiry-into-may-2018-timetable-disruption-september-2018-findings.pdf) Communication and impact of the interim timetable
4.25. It became clear to Northern’s senior management that the disruption it was experiencing was likely to be both prolonged and severe unless an urgent service recovery plan was developed. In response to those events in the first few days of the timetable change, Northern held an emergency directors’ meeting on 23 May. During this meeting, a decision was taken to develop an interim timetable for implementation from the 4 June subject to approval. This built on changes that were already planned for the closure of Liverpool Lime Street station as part of the Great North Rail Project.
4.26. During this investigation, Northern senior management explained to us the process they undertook over that bank holiday weekend 25-28 May to develop the interim timetable in time to present it to the Secretary of State during a conference call on the morning of Tuesday 29 May. It was also shared with officials at the DfT and Rail North. Northern then received formal approval from DfT on Friday 1 June to introduce the emergency interim timetable from Monday 4 June.
4.27. In operational terms, the interim timetable involved removing 6% of services (168 a day) from its 20 May timetable (see figures 2.1 and 2.2 in chapter 2). Northern stated that this ‘enabled us to accelerate our driver training, stabilise service levels, improve performance and significantly reduce last-minute-cancellations’.
4.28. We undertook an analysis of internal Northern documents and interview transcripts to understand how quickly and effectively it disseminated information about the interim timetable change to passengers. This was especially important given that passengers had already been coping with an unfamiliar timetable that had proven to be unreliable.
4.29. As part of Northern’s submission to this investigation we were provided with a document dated Friday 1 June, which showed that the company had acted on the day of the DfT approval of the interim timetable to implement a communications plan for passenger information about the new timetable. This set out a number key actions including that:
- The new timetable had already been uploaded into industry systems and was accessible to passengers on NRE, Trainline and other prominent apps and websites;
- Advice was sent to key stakeholders on the afternoon of 1 June to inform them about the decision to proceed with an interim timetable;
- A press release was sent to major news outlets, uploaded to the Northern website and promoted on the company’s Twitter and Facebook accounts;
- The website included a link to a live interactive map and searchable station finder to help passengers plan journeys from their local station;
- An email was planned to be sent out to all registered customers listed on the company’s CRM system;
- Northern had invested in additional ‘paid for’ advertising to boost its messaging about the interim timetable in the most affected areas;
- Posters were being produced and were planned to be placed in stations and ticket offices on affected lines over that weekend of 2-3 June; and
- Leaflets were being printed for distribution at stations and on trains and this messaging was planned to be supported by digital wall coverage and Customer Information System (CIS) screens in stations.
4.30. The document also shows that Northern had been examining options for placing advertisements in ‘key regional titles’ (i.e. local newspapers). On 4 June the interim timetable was introduced and Northern’s Managing Director appeared on several radio and television stations to explain the changes being made.
Lakes Line
4.31. The interim timetable resulted in trains being replaced by buses on the Lakes Line between Oxenholme and Windermere. Northern explained to the Inquiry that the decision to remove Windermere services was taken as part of a bigger package of service reductions across the north-west and allowed release of former TransPennine Express drivers so they could undertake required training on rolling stock. In its Lakes Line report, Transport Focus noted that the replacement bus operation was ‘generally efficient and effective, keeping passengers moving, supported by friendly and helpful staff’. Where stations had information screens then bus departures were shown. At some stations the bus did not depart from immediately outside the station.
29 Since the Lakes Line was taken over from TPE at the start of the franchise in 2016. but the bus stop was marked as rail replacement and the route from the station was marked.
4.32. Initially, buses were planned to be used for a period of two weeks from 4 June. This was later extended for a further two weeks, it was not until 2 July that Northern was able to reinstate a rail service on this line, albeit to a temporary timetable.
**Automatic announcements**
4.33. While the stations in the Manchester area have customer information screens, not all of them have automatic announcements. This places reliance on staff being available to individually announce trains. While manual announcements can be more helpful during periods of disruption, it is useful to have the automated system to ensure that the basic messages are communicated. We note that Northern plans to address this issue through an upgrade programme of the customer information system which is underway.
**Great North Rail project** 4.34. The volume of engineering work in the region, including electrification of the Bolton line and capacity works at Liverpool Lime Street meant that a normal service was not able to operate, especially at weekends.
4.35. The planned closure of Liverpool Lime Street for most of June and July 2018 meant that services operating in that area had already been planned to change. Further revisions were added to this timetable to provide a more stable interim timetable which was introduced on Monday 4 June. The interim timetable was in place until the end of the Liverpool Lime Street works.
**Additional measures for disabled passengers**
4.36. Passengers with disabilities were significantly impacted by the poor or changing information during the May 2018 timetable disruption. Any short-notice information changes can impact passengers with disabilities in a particularly difficult way. We discussed the assisted travel booking system with Northern as part of the Inquiry. At that time Northern told us that there were no specific measures put in place for passengers with accessibility requirements, but that its staff had the autonomy to make decisions about alternative transport arrangements. Such autonomy would have enabled staff to assist ‘turn up and go passengers’ in particular.
4.37. Northern has since outlined in a written response to this investigation’s information request that it proactively engaged with Passenger Assist users (i.e. those passengers who had booked assistance) during the period of disruption. Northern proactively engaged with Passenger Assist users during the relevant period. We do not have a record of the number of such calls that were made. Staff contacting such passengers did not use scripts but were briefed to focus on three key points: i) advise the passenger of the disruption; ii) ascertain if they were still intending to travel; and iii) advise them as to alternative travel arrangements.
The Passenger Assist staff were briefed to advise passengers at the time of booking assistance of the importance of checking the status of their intended service prior to travelling because of the disruption and to contact either the Passenger Assist or Customer Experience Centre telephone numbers with any issues (both of which are manned 24 hours a day). Those passengers were then proactively contacted by Northern prior to travelling in the way described above. Where necessary and where possible, Northern also provided accessible taxis to affected passengers as alternative transport. Northern’s station staff were authorised to arrange accessible taxis as they deemed necessary.
Of the 2,578 Passenger Assist bookings made during the relevant period, complaints were made by passengers in respect of 36 journeys (i.e. a complaint rate of 1.4%).”
4.38. Northern also provided a customer experience report where one of the headline issues indicated that Northern was tracking and monitoring the booked assistance system, with calls being made directly to anyone affected to agree alternative travel arrangements. For passengers who required assistance but had not booked in advance, commonly referred to as ‘turn-up-and-go’ assistance, Northern would alert them to any impact on their journey when they arrived at the station.
4.39. In both instances Northern informed us that it attempted to mitigate the impact of the disruption by, where appropriate, offering these passengers the option to use AAT, usually a taxi, as an alternative means of transport to enable them to complete their journey. Figure 2.10 in Chapter 2 provided some evidence of this in practice where the volumes of AAT utilised by Northern increased significantly over the worst periods of disruptions at the end of period 2 and into the start of period 3. However, for these passengers affected this would mean they would be able to complete their journeys but not as they had originally intended and so could have incurred some additional inconvenience.
4.40. Furthermore, one additional consequence of the disruption could be that passengers with disabilities simply chose not to travel. Stephen Brookes MBE, Rail Sector Disability Champion, described his perspective of the experience for rail users with disabilities in oral evidence to the Transport Select Committee on 5 September. “People were booking journeys but the trains were not there to connect. Of course, once the first train has missed, every other train progressively fails to communicate and interlink. People were left with no option but not to travel.”
4.41. We also note that there was an increase in accessibility related complaint volumes pertaining to the worst periods of disruption. Therefore while the number of complaints received about accessibility issues remained at relatively low levels, it is likely that disruption of the nature experienced did present an additional challenge for disabled passengers. However, Northern put in place proactive measures to contact those passengers who had booked assistance and evidence suggests that they provided assistance to others, likely to be ‘turn-up-and-go’ passengers, at a local level through the use of alternative transport30.
Equipping passenger-facing staff with information
4.42. As part of our investigation, we considered both the commitments Northern has made in relation to providing its staff with the information they need and the actual steps they took to do so in and around May 2018.
4.43. Within the standard requirements on companies regarding the provision of passenger information during disruption it is clear that employees should have access to all the information that the customer has. Northern has already set out how it aims to achieve this in its ‘local plan’ which indicates that this will be through the use of mobile phones and its internal app.
4.44. A recurring theme following the 20 May timetable change was that passengers felt that the Northern staff had little or no better information than the passengers themselves.
4.45. Whilst we accept that passengers will have access to more information now than ever before, the industry code of practice expects that staff will be able to receive at least the same level of information as passengers as a minimum. Nonetheless, even in situations where Northern staff have the same level of information, they should be able to explain the meaning behind the information so that passengers understand the context better than an average passenger could on their own.
Delay compensation
4.46. Passengers who arrived at their destination more than 30 minutes late were encouraged to claim Delay Repay by Northern. Throughout the period of disruption Northern promoted Delay Repay through social media and the front page of their website. Compensation could be claimed against the timetable of the day. This also applied during the interim timetable where service levels in some areas were reduced below those expected in the May timetable.
30 See Figure 2.8. 4.47. Passengers using multi-modal tickets such as the MCard in West Yorkshire were not eligible for compensation under the normal terms and conditions for these tickets.
4.48. In addition to the Delay Repay scheme, two additional compensation schemes for Season Ticket Holders and Non-Season Ticket Holders were introduced in July and October 2018 respectively.
4.49. Delays and a lack of detail around the introduction of the additional Season Ticket Holder compensation scheme caused some confusion and frustration for passengers who were initially advised that the scheme would be introduced on Friday 6 July. The scheme was actually announced six days later. 4.50. Once the scheme was introduced some passengers took to social media to express their frustration that the additional compensation scheme for Season Ticket Holders was limited to particular routes and would preclude them from claiming via this scheme despite having also experienced travel disruption.
4.51. Generally, awareness amongst passengers of the differing compensation schemes was high. This was evidenced by the increased number of Delay Repay claims made particularly in periods two and three. Research conducted by Transport Focus in August 2018 also found that 87% of season ticket holders using Northern or TPE services were aware of the additional compensation scheme.
Findings
4.52. We consider that the exceptional circumstances that followed the introduction of the 20 May timetable meant that providing perfect advance information for all services was, from the outset, an impossible task. There were two weeks from 20 May to 4 June where in many cases Northern passengers suffered from the provision of inadequate information, which affected their travel and journey planning. Passengers also faced disruption as a result of two RMT strike days on 24 and 26 May.
4.53. Our guidance to support compliance with condition 4 recognises that timetabling services and providing information to passengers are difficult, complex tasks. There is a balance to be struck between service delivery and the ability to provide appropriate, accurate and timely information for passengers during sustained periods of disruption. The licence condition is not intended to undermine the primary objective of providing best available service for passengers.
4.54. Against this context we consider that although passenger information was in many cases inadequate in the period between 20 May and 4 June, there is evidence to suggest that Northern took steps to provide appropriate, accurate and timely information to the greatest extent reasonably practicable having regard to the circumstances that it faced. Northern’s interim timetable was introduced on 4 June, which stabilised service levels, improved performance, reduced last-minute cancellations and enabled the provision of better information to passengers (although it is widely recognised that on some routes passengers continued to experience significant disruption following this period e.g. on the Lakes Line).
4.55. In particular, we found that:
**Northern’s service recovery up to the introduction of the interim timetable on 4 June**
4.56. In response to the timetable disruption, Northern took a number of operational decisions to try to stabilise the train service. These steps included:
- Implementation of a Gold Command Structure to provide a strategic response to the disruption including through focused leadership, co-ordination and communication (for both passengers and staff);
- Use of ‘sweeper trains’ to manage passenger demand – initially provided on an ad hoc basis but subsequently included in journey planners from the end of the first week of the new timetable; and
- Identification of services ‘at-risk’ of cancellation and use of a three-hour cut-off for decision-making regarding such services, at which point services still ‘at-risk’ were cancelled to provide certainty to passengers and accurate information on Customer Information System (CIS) screens.
4.57. Northern was able to implement measures aimed at improving the situation that they faced on 20 May. The decision to hold an emergency directors’ meeting on 23 May and subsequently plan the interim timetable for 4 June proved fundamental to providing passengers with greater certainty over the services that they were capable of running.
4.58. Evidence indicates that whilst the quality of information provided to passengers was in many cases inadequate during the period between 20 May and 4 June, Northern did have regard to the fact that running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive, where it is going and how long the journey will take.
**Communication and impact of the interim timetable**
4.59. Northern’s interim timetable involved removing 6% of services (168 a day) from its 20 May timetable. Northern has said that this ‘enabled us to accelerate our driver training, stabilise service levels, improve performance and significantly reduce last-minute-cancellations’.
4.60. Northern operated a reduced service until 30 July, when 75% of the removed services in its interim timetable were reinstated. The Inquiry found that overall more trains were running after the interim timetable was introduced than were operating before the timetable of 20 May, and the number of minutes Northern’s services were delayed recovered to pre-20 May levels from week three onwards.
4.61. Northern developed a comprehensive communications plan for passengers to support the introduction of the interim timetable. The evidence we have reviewed suggests that this communications plan was appropriate both in terms of its scale and reach. Firstly, it had clear provisions for ensuring the information reached as many different types of passengers as possible by utilising multiple communications channels. Secondly, it was also targeted through key actions to ensure information was especially focused on the routes which would be most affected by the change. In particular, it gave Northern passengers access to accurate information to enable them to make or plan their journeys from the 4 June with a greater degree of certainty than had been the case in the prior two week period.
4.62. On the balance of evidence assessed, and as summarised in this chapter, whilst the quality of information provided to passengers was in many cases inadequate during the period between 20 May and 4 June, there is evidence to indicate that the provision of information was appropriately considered by Northern and that it subsequently took reasonable steps to provide appropriate, accurate and timely information to its passengers. ANNEXES
Annexes:
Annex A: Glossary
Annex B: Terms of reference of investigation
Annex C: Condition 4 of GB Statement of National Regulatory Provisions: Passenger
Annex D: Legal framework and policy - Railways Act 1993 legislation Annex A: Glossary
CIS – customer information system – screens on platforms at stations
DARWIN - Darwin is the rail industry’s official train running information system
DfT - Department of Transport
NR - Network Rail
NRE - National Rail Enquires
NTF - National Task Force
ORR - Office of Rail and Road
PIDD - Passenger Information During Disruption
RDG - Rail Delivery Group
SNRP - Statement of National Regulatory Provisions
SO - System Operator
TF - Transport Focus
TOC - Train Operating Company
TOPS - a computer system used for monitoring the progress of trains and tracking delays.
TRUST - Train Running Under System TOPS Annex B: Terms of Reference for the Investigation
Annex: Terms of reference for a formal investigation into the issues relating to Arriva Rail North (Northern) provision of passenger information ahead of and after implementation of the 20 May 2018 train timetable.
Purpose
To establish whether Arriva Rail North (Northern) did everything reasonably practicable to meet its obligations contained in condition 4 of its’ Statement of National Regulatory Provisions, namely the provision of passenger information.
Scope
Based on initial analysis of the evidence gathered as part of our inquiry into the timetable disruption in May 2018, ORR is particularly interested in the following areas (although the investigation may be wider depending on the evidence that emerges):
The provision of appropriate, accurate and timely information provided:
a) to passengers and prospective passengers prior to the implementation of 20 May 2018 timetable; and
b) to passengers during the subsequent disruption over the weeks following 20 May 2018. This is a formal investigation and is separate to the ongoing monitoring and investigative informed traveller (T12) activities initiated by ORR in February 2018.
Methodology
ORR will use evidence gathered from its current monitoring and inquiry to date and any further information provided to us in the course of this investigation including by Arriva Rail North, Network Rail, other operators, funders and other parties to assess:
- the steps Arriva Rail North has taken or is taking to address the issues, make improvements and recover;
- whether there are any systemic issues; and/or
- whether there are any mitigating factors which should be considered in this case.
Investigation team
This investigation is led by Stephanie Tobyn as Deputy Director, using a project team drawn from consumer and network regulation functions, ORR.
How the investigation will be conducted
In carrying out its investigation, ORR expects to draw upon information and reviews already carried out internally as part of its usual regulatory roles as well as any new information relevant parties provide to us during the course of this investigation. The review will engage primarily with Arriva Rail North, as well as Network Rail and funders. This will be a focused investigation with the aim to completing it by the end of November 2018. Annex C: Condition 4 of GB Statement of National Regulatory Provisions: Passenger
Condition 4: Information for Passengers
Purpose
1. The purpose is to secure the provision of appropriate, accurate and timely information to enable railway passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption.
General duty
2. The SNRP holder shall achieve the purpose to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
Specific obligations
3. The following obligations in this condition are without prejudice to the generality of the general duty in paragraph 2 and compliance with these obligations shall not be regarded as exhausting that general duty. In fulfilling these obligations the SNRP holder shall at all times comply with the general duty in paragraph 2.
Planning services
4. The SNRP holder shall cooperate, as necessary, with Network Rail and other train operators to enable Network Rail to undertake appropriate planning of train services and to establish or change appropriate timetables, including when there is disruption.
5. In particular, the SNRP holder shall:
(a) provide Network Rail with such information about the SNRP holder’s licensed activities as may be reasonably necessary for Network Rail to fulfil its obligations relating to timetabling in its network licence;
(b) participate constructively in any timetabling consultation carried out by Network Rail;
(c) use reasonable endeavours to resolve promptly any timetabling disputes; and
(d) respond expeditiously to any timetabling matter which Network Rail reasonably considers to be urgent.
Code(s) of practice and improvement plan(s)
06. The SNRP holder shall, unless ORR otherwise consents, publish one or more code(s) of practice or other documents setting out the principles and processes by which it will comply with the general duty in paragraph 2.
07. Where the SNRP holder considers, or is directed by ORR, that improvements to its arrangements for the provision of information to railway passengers and prospective passengers are necessary or desirable to enable it better to fulfil the general duty in paragraph 2, it shall develop, publish and deliver a plan, which sets out the improvements it intends to make and the dates by which such improvements will be made.
08. The SNRP holder shall, from time to time and when so directed by ORR, review and, if necessary, revise, following consultation, anything published under paragraph 6 and any plan under paragraph 7 so that they may better fulfil the general duty in paragraph 2.
09. ORR shall not make any direction under paragraphs 7 or 8 without first consulting the SNRP holder. Provision of information to intermediaries
10. The SNRP holder shall as soon as reasonably practicable:
(a) provide to the holders of passenger and station licences; and
(b) provide to all timetable information providers on request reasonable access to appropriate, accurate and timely information to enable each on request to provide passengers with all relevant information to plan their journeys including, so far as reasonably practicable, the fare or fares and any restrictions applicable.
11. In this condition:
“Network Rail” means Network Rail Infrastructure Limited (a company registered in England and Wales under number 02904587), and its successors and assigns. Annex D: ORR’s Approach to Economic Enforcement
The statutory framework
ORR enforcement powers and the processes for using these powers are contained in the Railways Act 1993 (“the Act”).
ORR must exercise its functions (including its enforcement function) in the manner which it considers best calculated to achieve a series of duties set out at section 4 of the Act. Those duties include protecting the interests of users, the promotion of competition, efficiency and economy in the provision of services and enabling operators to plan their businesses with a reasonable degree of assurance.
Final orders
There is an obligation on ORR to make an enforcement order if we are “satisfied” that a licence condition is being contravened or is likely to be contravened, unless one of the statutory exceptions applies:
- We consider it requisite that we should make a provisional order(^{31}) (see below); or
- One of the relevant statutory exceptions applies, namely:
- Our section 4 duties preclude us from making the order(^{32}); or
- we are is satisfied that the most appropriate way of proceeding is under the Competition Act 1998(^{33}); or
- The section 55 (5B) exceptions applies. This applies if we are satisfied that:
- the licence holder has agreed to take, and is taking, all such steps as it appears to ORR for the time being appropriate to take for the purpose of securing or facilitating compliance with a condition; or
- the contravention or apprehended contravention will not adversely affect the interests of users of railway services or lead to any increase in public expenditure,
in which case, we will only make the final order if we consider it appropriate to do so.(^{34})
Whenever the statutory exceptions (except section 55(5B)) apply, we are precluded from making a final order. Under section 55(5B), we may still impose a final order even where the substantive elements of the exception are satisfied, “if [ORR] considers it appropriate to do so”.
We cannot make an order if the breach happened in the past but is not on-going. We can however impose a penalty for a past breach.
(^{31}) Section 55(2). (^{32}) Section 55(5)(a). (^{33}) Section 55(5A). (^{34}) Section 55(5B). If we decide not to make a final order, or not to make or confirm a provisional order in respect of a licence breach, because we consider that one of the statutory exceptions applies, we must, under section 55(6) of the Act, serve notice of that fact on the licence holder and publish the notice. Although the Act does not specifically require us to set out in the notice our reasons for making such a decision, we would, as a matter of policy, expect to do so.
**Provisional orders**
A provisional order is, in effect, an interim measure and may last for no more than three months unless it is confirmed. We must make a provisional order, without going through the procedural steps required for a final order, where it appears to us that it is requisite that a provisional order be made. In considering what is requisite, we must have regard, in particular, to the extent to which any person is likely to sustain loss or damage from the breach before a final order may be made.
The requirements for confirming a provisional order are substantially the same as for making a final order (see above).
**Penalties**
ORR has the discretion to impose a penalty if it is “satisfied” that a licence condition was or is being contravened. This penalty cannot exceed 10% of a licensees’ turnover.
The Act states that ORR must publish a statement of policy in respect of the imposition of penalties. This statement can include provisions to be considered when deciding whether or not to impose a penalty. ORR must have regard to this statement of policy when deciding whether or not to impose a penalty.
**Alternative Remedies**
**Other Statutory Remedies**
We have considered our powers under the Competition Act 1998 and are satisfied that these do not offer the most appropriate means of proceeding.
ORR has also carried out a separate health and safety investigation into the overruns and this will report separately.
**What our economic enforcement policy says**
The purpose of enforcement is to ensure delivery and secure compliance with public interest obligations. The possibility of enforcement provides an assurance and acts as an incentive for the industry to deliver in accordance with the public interest. ORR will have regard to this policy when determining whether to pursue formal enforcement action or use alternative remedies.
______________________________________________________________________
35 Section 55(4). 36 [https://orr.gov.uk/\_\_data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf](https://orr.gov.uk/__data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf) 37 Using our powers under the Health and Safety at Work etc. Act 1974 The Principles of Enforcement
ORR’s approach in deciding whether or not to use our formal enforcement powers in the Act is informed by best regulatory practice and the following principles:
Proportionality
We apply the principle of proportionality to all types of licence obligations. When considering whether or not to use our formal enforcement powers we assess the circumstances of each individual case. In general we take account of the following factors:
a) The significance of the failure, including whether it was a one-off incident or part of a systemic or sustained failure. We generally pursue enforcement action in instances where there is evidence of a sustained failure to meet licence obligations, rather than a one-off incident. For one-off incidents, we will generally only take action where it is in the public interest to do so, and where it is symptomatic of a systemic breach. We will also take into account the progress the licence holder has made to rectify the situation.
b) The extent to which the licence holder has a robust, adequately resourced plan to achieve compliance within a reasonable period of time
c) Whether enforcement action would encourage greater effort on the part of the licence holder to remedy the breach
d) Any persistent non-compliance
e) The effect on third parties and their potential right to compensation
Targeting
ORR generally uses its enforcement powers to resolve systemic issues that are not dealt with effectively in contractual relationships. These relationships include access contracts, the Network Code, the Station Code and Depot Code, as well as industry wide arrangements on ticketing. ORR will also focus upon enforcing licence obligations where there is a detrimental effect on passengers, freight customers, funders and other stakeholders.
Consistency
ORR aims to take a similar approach in similar circumstances to achieve similar ends. We apply the same principles in coming to a decision and ensure consistency in our approach to regulation of the industry.
Transparency
We ensure that the industry understands what is expected of it and what is expected of ORR. This report, setting out the evidence and our decision, will therefore be published. Accountability
ORR is accountable to the public and our decision in respect of the overruns will be subject to scrutiny. ORR will consider any representations made to us about our approach to enforcement and use of our powers.
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79651ccf277c04028665d4636b0e0906976258b7 | Dear Marcus
Re: Compliance with Condition 6 Station Licence and GB Statement of National Regulatory Provisions: Passenger
I am writing in response to your letter dated 14th November, following our meeting in London in October.
In my previous letter of 8th October I advised that the measures we are taking would bring us back within the SLA (95% of complaints responded to within 20 working days) within 3 rail periods. At the subsequent meeting John Smith and I did suggest that we hoped that this may be achieved sooner.
I agree that the weekly reports that we have continued to send through have shown a slow movement back towards the SLA, but when we are still dealing with a significant, albeit reducing, quantity of complaints older than 20 working days it will naturally bring down that percentage. Throughout this we continue to receive a high number of new complaints.
The latest weekly report has shown an improvement to 79.2%, and I am pleased to advise that the report for week ending 30th November will show us back within SLA. This is ahead of the original forecast of 3 rail periods.
I believe this shows the measures we have taken to be effective. Our efforts will now be on continuous improvement.
I would be happy to provide any further information you may require.
Yours sincerely
Martin Howard Head of Customer Experience Northern
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31324d0eb380811caf87636e93ab1d0d5208499f | 08 April 2019
Martin Howard Head of Customer Experience Arriva Rail North Ltd
Dear Martin
Arriva Rail North Limited (Trading as Northern)
Compliance with Condition 6 your Station Licence and GB Statement of National Regulatory Provisions: Passenger
As you will be aware, we were concerned about Northern’s failure to comply with Condition 6 (Complaints Handling) regarding the requirement to make a full response to 95% of complaints within 20 working days. In our correspondence we asked Northern to set out its plans to both meet and remain within the required timescales, and to provide weekly updates on performance until we were satisfied that these issues had been resolved.
In your responses you set out the measures Northern is taking to ensure that it meets its regulatory requirements. Our complaints monitoring indicates that Northern has now met and remains within the complaint handling response requirement. As a result, we are content to discontinue with the weekly reporting and return to the standard monthly monitoring arrangement. We are grateful to Northern for working cooperatively with us to resolve this matter and we are pleased it has led to a positive outcome for your passengers.
We are keen to continue the constructive dialogue we have developed with you throughout this process. Therefore it would be helpful if you could proactively alert us to any further problems of this nature which may arise in future. As with previous correspondence, we may publish this letter on our website.
Yours sincerely
Marcus Clements
CC. John Smith
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59e63e20d8f257bbd45bf01015a5b4b44e6c0930 | 14 November 2018
Martin Howard Head of Customer Experience Arriva Rail North Ltd
Dear Martin
Arriva Rail North Limited (Trading as Northern)
Compliance with Condition 6 your Station Licence and GB Statement of National Regulatory Provisions: Passenger
I refer to our recent exchanges of correspondence and subsequent discussion regarding the performance of Northern particularly in relation to complaints handling. I am grateful to you and John for meeting with me and my team to talk through your response of 8 October to my letter.
It was helpful to understand the background to the difficulties that Northern Rail has experienced with the handling of its complaints and the measures you are taking to address these problems. We recognise the challenges presented by the collapse of Carillion which necessitated bringing complaints handling in-house, and the disruption of the 20 May timetable change. We note the addition of further staff, improvements to signposting to reduce customer contacts, the adoption of a new CRM system, and work with other train operators amongst the steps you cited in seeking to address the complaints issues.
The 2015 ‘Guidance on Complaints Handling Procedures for Licence Holders’ (the Guidance) sets out that licence holders must respond to 95% of complaints within 20 working days. As you are aware Northern have failed to meet this obligation since rail period 11 2017-18.
In your letter of 8 October you anticipated a return to compliance within the next three rail periods, although in our meeting John suggested that this may be achieved sooner.
We would expect to see progress toward compliance in your weekly reports of performance. However, we note that there has been negligible improvement in the last two rail periods including the four weeks since our meeting. We are concerned that the measures you have in place have not demonstrated sufficient progress toward achieving the necessary compliance with requirements. As you are aware, a failure to comply with your Complaints Handling Procedure may constitute a breach of Condition 6 of your station licence and GB Statement of National Regulatory Provisions: Passenger. A copy of our economic enforcement and penalties statement is published on our website(^1). An important consideration for us will be the likely impact of our intervention. Factors which we will take into consideration in measuring that impact include evidence to suggest a systemic rather than an isolated incident, and circumstances that suggest conduct that is recurrent rather than occasional and/or whether the conduct is ongoing or in the past.
I shall be grateful if you will review your plans for achieving compliance with regulatory requirements to ensure that Northern do so swiftly, that compliance is sustained thereafter, and that measures are in place to ensure that there is resilience to future increases in complaints volumes.
**I look forward to hearing from you by midday Friday 23 November 2018.**
As with previous correspondence, we may publish this letter and your response on our website.
Yours sincerely
Marcus Clements
CC. John Smith
______________________________________________________________________
(^1) [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf)
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dfc8e83e3088db31dc8a76a769b47da8617c83bf | Dear Clare
Provision of information to passengers when booking tickets
We are writing to you regarding the information provided to passengers by the Trainline when booking train tickets through your website. For these purposes, we are writing in our role as a designated enforcer under Part 8 of the Enterprise Act 2002 of consumer protection legislation, including the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).
Consumer Protection Regulations
The CPRs prohibit unfair commercial practices, in particular practices which are unfair by virtue of being misleading actions and misleading omissions, which cause, or are likely to cause, the average consumer to take a transactional decision they would not have taken otherwise.
We previously wrote to third party retailers, including the Trainline, on 29 March 2018¹ to remind you that obligations under the CPRs apply to companies who are third party retailers of rail tickets. In that letter we set out some broad principles for providing information to passengers to which we suggested you may wish to have regard, as they should help you to meet obligations under CPRs, which include:
- clear information on the availability of advance tickets, what is available and when, is necessary to help passengers plan journeys even when the timetable is uncertain; and
¹ [https://orr.gov.uk/\_\_data/assets/pdf_file/0019/27361/compliance-with-consumer-law-regarding-providing-information-to-passengers-2018-03-29.pdf](https://orr.gov.uk/__data/assets/pdf_file/0019/27361/compliance-with-consumer-law-regarding-providing-information-to-passengers-2018-03-29.pdf) • timetable information should be correct as far ahead as possible, and where timetables are not confirmed information about their current status should be accurate and updated frequently.
**Selling tickets more than 12 weeks before travel**
We are aware that the Trainline sells tickets for services which are unconfirmed i.e. beyond the standard industry 12 week (T-12) window. We note that there is a blue banner on the Trainline webpage which advises customers that train times may be revised until about 12 weeks before travel and to check back closer to the time of travel for any changes.
However, we are concerned about the lack of information provided on the Trainline website during the ticket purchasing process for travel beyond the 12 week window where there is already known planned engineering works and resulting disruption to train services. An example is the planned engineering works on the West Coastway between Barnham and Havant in October/November 2019 which will involve a nine day line closure. The Trainline website currently offers train tickets for this period with no indication of any engineering works or disruption. However, other train companies are not yet retailing tickets for this period as it is outside the 12 week window. Passengers that are looking to travel in that period could buy from the range of available anytime and off peak tickets and plan their journey accordingly. It is only when they come to travel that they would discover that the trains they have chosen are no longer running and they face a longer trip by bus.
**King’s Cross disruption**
As you aware, there will be no train services operating into or out of London King’s Cross station over the August 2019 Bank Holiday Saturday/Sunday and a reduced operation on the Bank Holiday Monday due to planned engineering works. The rail operators have been working on their handling of this weekend for some time, as highlighted in the March 2019 letter to the Trainline from London North Eastern Railway (LNER). They are now issuing ‘do not travel’ advice to consumers for the Saturday and Sunday.
______________________________________________________________________
2 As of 18 June, tickets are available up to 14 December from your website, but up to 9 September on the National Rail website
3 [https://www.southernrailway.com/travel-information/plan-your-journey/chichester-track-improvement](https://www.southernrailway.com/travel-information/plan-your-journey/chichester-track-improvement)
4 [https://eastcoastupgrade.co.uk/the-programme/](https://eastcoastupgrade.co.uk/the-programme/) We note that previously the Trainline was selling tickets (beyond the 12 week window) for unconfirmed services on this weekend with no indication provided to consumers about the planned engineering works and resulting disruption. This includes tickets for services which will now not operate and services that will now be replaced by a bus. We understand that LNER and Transport Focus raised concerns with the Trainline about the sale of these tickets in March and in May respectively.
Although the Trainline website is now showing the updated journey information for the August weekend, this is following the publication of the industry’s amended timetable (at T-12) rather than as a result of changes made by the Trainline itself. However, passengers who bought tickets from the Trainline for these services prior to this information being made available on its website will not be able to travel in the manner they expected when they made their purchase. They may also not be aware that the tickets they have purchased are for services that have been changed.
**Summary**
We are concerned that the Trainline is not providing sufficiently clear material information to consumers about planned disruption and is selling tickets for services which it knows will not run as advertised. This has the potential to harm the collective interests of consumers.
A material, indeed main, characteristic of the product (rail ticket) is that the train service is running as advertised and sold, rather than the service being provided as an alternative means of transport such as a replacement bus service or not running at all. Information about planned disruption is likely to be material to the average consumer in the context of purchasing a rail ticket, and its omission therefore raises concern that consumers are not being provided with the information they need to make an informed transactional decision.
**Next steps**
We expect the Trainline to make changes as soon as possible to:
- improve the information provided on its website during the ticket purchasing process for travel beyond the 12 week window:
- where there is known planned engineering works and resulting disruption to train services; and
- where services are unconfirmed to specifically highlight the possibility of planned works and disruption; and
- proactively provide specific information about planned engineering works and resulting disruption to passengers who have already purchased tickets prior to this information being made available on its website, and provide a copy of this communication to us.
I would be grateful for your response to this letter by **Tuesday 2 July**. Please set out the changes you are making and the timescales for resolution. Your response will inform our consideration of whether further action is requisite(^5).
Please note that we will publish this letter and your reply on our website.
If you have any questions about this letter please contact
Yours sincerely
Marcus Clements
(^5) [http://orr.gov.uk/rail/rail-enforcement-powers](http://orr.gov.uk/rail/rail-enforcement-powers)
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11843648d84da4eb8734ed5e3c340bf1f8a973e2 | BUSINESS IMPACT TARGET NON-QUALIFYING REGULATORY PROVISIONS (NQRPs) SUMMARY REPORT
Regulator: Office of Rail and Road
Business Impact Target reporting period covered: 8 May 2015 – 8 June 2017
ORR is required by section 24A of the Small Business, Enterprise and Employment Act 2015, as amended by the Enterprise Act 2016, to publish a summary of all regulatory provisions that do not qualify for a Business Impact Target (BIT) assessment. This summary is termed non-qualifying regulatory provisions (NQRPs summary). A list of qualifying regulatory provisions, which have been verified by the Regulatory Policy Committee (RPC), is available on our website at – [http://www.orr.gov.uk/about-orr/how-we-work/better-regulation](http://www.orr.gov.uk/about-orr/how-we-work/better-regulation)
| Excluded category | Summary of measure(s), including any impact data where available | |-------------------|---------------------------------------------------------------| | A – EU and International | We carried out the following reviews of our published processes or guidance for addressing specific requirements of EU railway safety legislation: | | | • We reviewed our risk prioritisation evidence that underpins the safety supervision strategy we are required to implement by Commission Regulation 2012/1077/EU on a common safety method for supervision and published revised parts of that strategy. | | | • We updated our guidance on the requirements of Directive 2007/59/EC on the licensing and certification of train drivers. | | | • We reviewed our process for certifying “entities in charge of maintenance” of rail vehicles in accordance with Commission Regulation 2011/445/EU. | | | • We reviewed our process for producing our annual safety report to the European Railway Agency, as required by Directive 2004/49/EC. We gathered the information necessary to compile and publish two such reports in the period (September 2015 and September 2016). | | | • We implemented Commission Regulation 2015/1136/EU, which updated one specific | aspect of an existing regulation (from 2012) on railway safety risk assessment.
The Railways (Access, Management and Licensing of Railway Undertakings) Regulations 2016 which transposed EU Directive 2012/34/EU came into force in July 2016. This new legislation meant that we had to make changes to our track access guidance and economic enforcement policy.
We published new guidance and policy on access to the rail network and infrastructure management resulting only from changes to domestic legislation implementing revised EU law (December 2016).
Due to changes in EU Directive 2012/34/EU there is also an extension of ORR’s powers to Northern Ireland (NI). Legislative changes mean that ORR now performs several broad roles in Northern Ireland; it acts as the appeal body, controls the network statement and monitors the competitive situation of rail services, overseeing the efficient management and fair and non-discriminatory use of rail infrastructure. There is also a strong duty of co-operation. We are not the safety regulator in NI. We expect to consult on further changes to our enforcement policy and guidance in 2017. Changes to domestic legislation implementing Directive 2012/34/EU also provide ORR with new powers to impose a penalty where a party fails to comply with a decision, direction or notice issued under this legislation. We consulted on changes to our economic enforcement policy and penalties statement in November 2016 to reflect this new legislation (November 2016).
| B – Economic Regulation | Nothing to report | |-------------------------|-------------------| | C – Price Control | Nothing to report | | D – Civil Emergencies | Nothing to report | | E – Fines and Penalties | On safety, we have no NQRPs in this category. It is not applicable to ORR’s health and safety regulation as our powers of enforcement do not include the ability levy fines and penalties. Our most serious enforcement sanction (prosecution) can and does lead to fines on regulated businesses being imposed by the courts (rather than ourselves). Information about our enforcement activity is included in the casework section at L1. In December 2015, following consultation with stakeholders, we made changes to our economic |
enforcement policy and penalties statement (December 2015). Key changes to the policy included providing greater clarity on pre investigation work and our process and introducing the concept of reparations.
We consider these changes to be out of scope as most of them relate to fines and penalties (satisfying a specific exemption); this is not guidance (as defined in the BIT guidance), not least as it relates to actions following evidence of non-compliance with other/ different regulatory provisions instead of requirements/advice on 'complying' with regulation; there were no changes made to the actual policy, just clarification of existing policy; and the policy would only ever be applied through casework, which is itself exempt
| F – Pro-competition | Nothing to report | |---------------------|-------------------| | G – Large infrastructure projects | Nothing to report | | H – Misuse of drugs | Nothing to report | | I – Systemic financial risk | Nothing to report | | K – Industry codes | On safety, our role in industry codes (referred to as "standards") is limited to the approval of the independent Railway Safety & Standards Board’s (RSSB) Standards Code and Manual and observing at meetings of RSSB’s Board and (some of) its standard-setting committees. Because we are not responsible for the preparation, negotiation or approval of the standards themselves, we have not reported on changes to industry standards in the reporting period here. We encourage readers to consult RSSB’s website (www.rssb.co.uk) for further information. Approval of changes to Network Rail's Network Code and the Delay Attribution Guide: The Network Code and the Guide are a set of rules and procedures in the industry. Network Rail manages and maintains the Network Code. ORR has an approval role for changes prepared and sponsored by other parties. A full list of cases is available on our website at: http://orr.gov.uk/rail/access-to-the-network/the-network-code/modifications. We did not initiate any changes in the period. | | L1 – Casework | Our safety casework falls in four key areas: | • Giving regulatory approvals for regulated businesses’ operational safety arrangements (we call this “safety certification” or “safety authorisation”); • Granting approvals (or exemptions) against requirements in railway-specific technical safety legislation, for example around train protection and level crossings; • Enforcing compliance with health and safety law through proactive inspection of regulated businesses and reactive investigation of incidents; • Licensing of train drivers on the mainline railway.
We provide details of these activities and their extent in our annual reports, which are laid before Parliament and published on our website at – [http://orr.gov.uk/rail/publications/corporate-publications/annual-report](http://orr.gov.uk/rail/publications/corporate-publications/annual-report).
Our economic casework activities:
| Licensing: | | --- | | — We issued licences to 8 operators of railway assets. All licences that are in force can be found on our website at [http://orr.gov.uk/rail/licensing/licensing-the-railway/current-licences](http://orr.gov.uk/rail/licensing/licensing-the-railway/current-licences) | | — We granted licence exemptions to 8 operators of railway assets. All licence exemptions in force can be found on our website at [http://orr.gov.uk/rail/licensing/licensing-the-railway/licence-exemptions](http://orr.gov.uk/rail/licensing/licensing-the-railway/licence-exemptions) | | — We revoked 5 licences/exemptions. Copies are available on our public register: [https://sites.google.com/a/orr.gov.uk/orr-public-register/](https://sites.google.com/a/orr.gov.uk/orr-public-register/) |
| Stations and depots | | --- | | We gave our specific approval to the following: | | • 58 new agreements. | | • 93 amending agreements | | • We ratified the closure of one station. | Track Access
We approved several new track access contracts and amendments to existing contracts, which facilitate access to the rail network:
Framework agreements of Train Operating Companies (TOCs) and Freight Operating Companies (FOCs) with Network Rail:
- Specific approvals: 196
- Notices of consent: 43
Connection contracts, where networks between different parties meet:
- Specific: 15 cases
Facility access contracts between TOCs/FOCs and facility owners:
- Specific: 5
Our decisions were published here: [http://orr.gov.uk/rail/access-to-the-network/track-access/track-access-decisions](http://orr.gov.uk/rail/access-to-the-network/track-access/track-access-decisions)
Parties were also able to use General Approvals for a number of other contracts.
We also made decisions on one appeal under Access and Management Regulations 2005 October 2015 and five appeals under Part M of the Network Code – concerning disputes between industry parties.
On 3 July 2015, ORR published an open letter to GB rail franchised TOCs and owner groups, Rolling Stock Companies (ROSCOs), and funders setting out its findings from the review of compliance with the Rolling Stock Leasing Market Investigation Order 2009. ORR found that in the majority of cases the Order was being complied with, and in light of that, ORR did not intend to commission an audit of ROSCO compliance.
On 18 December 2015, ORR published its decision to accept commitments from Freightliner following an investigation into a suspected abuse of a dominant position in the provision of deep sea container rail transport services between ports and key inland destinations in Great Britain.
We consulted on an interpretation of the Railways (Interoperability) Regulations 2011, as amended in January 2017. This was to develop a staged approach to authorisations. The relevant documents are available at – [http://www.orr.gov.uk/rail/consultations/closed-consultations/railway-safety-consultations/approach-to-authorisations-under-the-railways-interoperability-regulations-2011](http://www.orr.gov.uk/rail/consultations/closed-consultations/railway-safety-consultations/approach-to-authorisations-under-the-railways-interoperability-regulations-2011)
In the period from 8 May 2015 to 8 June 2017, we have issued 45 authorisations to place in service of new, upgraded or renewed rolling stock.
| L2 – Education, communications, promotion | We introduced or updated seven factsheets on railway health and safety issues, including electrical safety and effluent discharge. We updated our Licensing Guidance to reflect the 4-week response timescales as required by EU legislation. The guidance is available at – [http://orr.gov.uk/\_\_data/assets/pdf_file/0011/2216/licensing-guidance.pdf](http://orr.gov.uk/__data/assets/pdf_file/0011/2216/licensing-guidance.pdf) We reformatted our track access guidance | | L3 – Policy development | We carried out a statutory post-implementation review of the Railways & Other Guided Transport Systems (Safety) Regulations 2006, which included a public consultation (including of affected regulated businesses). | | L4 – Changes to management of regulator | Nothing to report |
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1bff2a8434a281507017e74f7af0abd9749a5e2c | NOTICE IN ACCORDANCE WITH SECTION 57C OF THE RAILWAYS ACT 1993
14 March 2019
1. This is a notice, given in accordance with section 57C of the Railways Act 1993, (the Act), stating that the Office of Rail and Road (ORR) proposes to impose a penalty of £5m on Govia Thameslink Railway Limited (GTR) for contravention of condition 4 of its Passenger Statement of National Regulatory Provisions (SNRP).
2. The contravention is in respect of GTR’s provision of appropriate, accurate and timely information to passengers following the implementation of the 20 May 2018 timetable and during the subsequent disruption.
3. The acts and omissions which, in the opinion of ORR, constitute the contravention and justify the imposition of the penalty are more fully set out in paragraphs 11 to 35 of this notice.
4. In accordance with the Act, the penalty should be paid to the Secretary of State. ORR will specify the date by which the penalty must be paid in any final penalty notice given under Section 57C(6) of the Act.
5. Representations or objections with respect to the proposed penalty should be made by close of business on 5 April 2019 by post to: Stephanie Tobyn Deputy Director, Railway Markets and Economics Office of Rail and Road One Kemble Street London WC2B 4AN
Or by e-mail to: [email protected]
6. ORR will take into consideration any representations or objections made and not withdrawn and will make a final decision on whether a penalty is appropriate, and if so how much it should be, as soon as practicable following the end of the consultation period.
7. ORR will publish any representations or objections made in response to this consultation on its website and may quote from them. Anyone making representations or objections should indicate clearly if they wish all, or any part, of their submission to remain confidential to ORR. If such persons make a representation or objection in confidence, they should also send a statement, excluding the confidential information, which they are content for ORR to publish.
Relevant Legal Provisions
08. Under Section 57A of the Act, ORR may levy a penalty of such amount as is reasonable, if it is satisfied that the licence holder is contravening or has, within the last two years, contravened a licence condition. The amount may not exceed 10 per cent of the licence holder’s turnover, defined in accordance with the Railways Act 1993 (Determination of Turnover) Order 2005 (SI 2005 No 2185.)
09. Section 57B(3) of the Act provides that, in deciding whether to impose a penalty, and in determining its amount, ORR must have regard to its statement of policy published at the time when the contravention occurred. For the purposes of this notice our Economic Enforcement Policy and Penalties Statement, published in November 2017¹, applies.
10. Under Section 57A(6) of the Act, ORR shall not impose a penalty if it is satisfied that the most appropriate way of proceeding is under the Competition Act 1998. In this case, ORR does not consider that the Competition Act 1998 is applicable.
The Contravention
11. Condition 4 of GTR’s SNRP sets out a purpose and general duty as follows²:
**Purpose**
1. The purpose is to secure the provision of appropriate, accurate and timely information to enable railway passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption.
**General duty**
2. The SNRP holder shall achieve the purpose to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
3. To assist licence holders with compliance, ORR published guidance³ to support condition 4 by giving more information about what is expected and how it will be enforced. Our guidance recognises that timetabling services and providing good information is a complex task and states:
______________________________________________________________________
¹ [https://orr.gov.uk/\_\_data/assets/pdf_file/0004/18697/penalty-notice-2015-08-10.pdf](https://orr.gov.uk/__data/assets/pdf_file/0004/18697/penalty-notice-2015-08-10.pdf) - the penalties statement starts on page 29. ² Condition 4 is set out in full in Annex A ³ [https://orr.gov.uk/\_\_data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf](https://orr.gov.uk/__data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf) ‘The licence obligations are not intended to undermine the primary objective of providing best available service for passengers. Making justified changes to the train plan to meet passengers’ needs should not be conditional on providing perfect advance information about these. However, we would expect licence holders to use reasonable endeavours to get such information out as widely as possible and as quickly as possible. We will take circumstances into account during any assessment of compliance’
13. ORR considers the provision of passenger information to be a fundamental objective of delivering effective service recovery following disruption and if information is available that could be used by passengers to better plan and make their journeys, this should be shared in a timely manner.
14. This is reflected in the additional principles that ORR set out for train operators in February 2018 where ORR wrote that they ‘should be open about the impact on all passengers of the challenges they face, and take responsibility for ensuring that their passengers can get the information they need to plan and make their journey as that information comes available’.
**ORR inquiry and the initiation of its investigation into GTR’s provision of passenger information**
15. In June 2018, ORR was asked by the Secretary of State to set up an independent Inquiry into the disruption that followed the introduction of the new timetable on 20 May 2018.
16. In September 2018, the findings of the Phase 1 Report of the timetable Inquiry found that information provided to passengers was inadequate which meant that passengers were unable to plan and make their journeys with any certainty.
17. Arising from these findings, on 3 October 2018 ORR launched a formal investigation into GTR - whose passengers were particularly impacted - to assess whether GTR is in contravention of, or contravened its obligation under condition 4 of its SNRP in relation to the provision of appropriate, accurate and timely information: a. to passengers and prospective passengers **prior** to the implementation of 20 May 2018 timetable; and b. to passengers during the subsequent disruption i.e. **following** the implementation of the 20 May 2018 timetable.
18. As part of the investigation, ORR considered a range of information, evidence, and direct communication with GTR. ORR has analysed both source evidence provided to the timetable Inquiry and significant volumes of further information.
______________________________________________________________________
4 This letter was issued as part of ORR’s informed traveller / T-12 investigations February 2018 https://orr.gov.uk/\_\_data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf provided by GTR, including internal documents and staff communications. ORR has also undertaken a detailed analysis of the GTR passenger experience pertaining to the timetable change to better understand the nature and impacts of the primary information failures.
19. In assessing these issues, ORR considered whether GTR did, and is doing, everything reasonable practicable to comply with its obligations in condition 4.
20. Full details about the investigation may be found in ORR Investigation Report(^5), which has been published alongside this notice.
21. A summary of the investigation findings is provided below.
**Investigation findings**
22. In relation to the provision of appropriate, accurate and timely information to passengers and prospective passengers prior to the implementation of 20 May 2018 timetable, ORR considers that GTR took reasonably practicable steps to provide appropriate, accurate and timely information to passengers.(^6) This part of the investigation is therefore not discussed any further in this notice.
23. In relation to its investigation into the provision of appropriate, accurate and timely information to passengers following the implementation of the 20 May 2018 timetable, ORR considers that GTR contravened condition 4 of its SNRP by not achieving the purpose in condition 4.1 to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
24. ORR’s investigation is set out in full in its Investigation Report. Our findings from this part of the investigation are set out from paragraph 4.64 and are summarised below.
25. ORR considers that the exceptional circumstances that followed the introduction of the 20 May timetable meant that providing perfect advance information for all services was, from the outset, an impossible task. Evidence demonstrates that GTR’s overriding focus throughout the period that followed 20 May was on providing as much capacity as it could to meet customer demand.
26. ORR’s guidance to support compliance with condition 4 recognises that timetabling services and providing information to passengers are difficult, complex tasks. There is a balance to be struck between service delivery and the ability to provide appropriate, accurate and timely information for passengers during sustained periods of disruption. The licence condition is not intended to undermine the primary objective of providing the best available services for passengers.
______________________________________________________________________
(^5) the *Office of Rail and Road Rail Investigation Report: Govia Thameslink Railway: Provision of passenger information – May 2018 timetable change*
(^6) ORR’s investigation into GTR’s delivery of passenger information prior to 20 May timetable is set out in full in our Investigation Report. 27. ORR consider the immediate response to the timetable change on 20 May required a period of reactivity as both the scale and severity of the disruption emerged. However, ORR consider that better passenger information should be a core element of the service recovery process and as time progressed an increasingly improving picture should have emerged. Against this context, ORR considers that GTR failed to appropriately balance service recovery with the need for passenger information to an unacceptable extent and duration throughout the implementation of their service recovery plan.
28. In particular ORR has identified failings in the following areas:
a. **Aligning service recovery with passenger information obligations.** ORR considers that too often there was a failure in operational decision-making to give adequate regard to the fact that running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive, where it is going and how long the journey will take. Further ORR considers that as information failures persisted over such a sustained period of time, without any timely or proportionate response to these issues, there was a fundamental problem at both a strategic and functional level in aligning operation recovery with passenger information obligations.
b. **Provision of ‘Alpha list’ and other journey information.** ORR considers that GTR’s failure to clearly communicate known cancellations in a timely manner undermined the ability of prospective passengers to plan ahead and make informed journey decisions. The Alpha list information could have been published sooner than 25 June, which would have provided greater certainty to passengers about services which were not planned to run.
c. **Day to day amendments.** ORR considers that operational decisions taken and implemented to support the recovery process were in many cases to the detriment of providing passengers with appropriate, accurate and timely information to an unacceptable extent and duration. Passengers were therefore left uncertain of what services would run each day as travelling on a particular train one day was no guarantee that it would run or be shown on station screens the next day. ORR considers that the cumulative effect of the factors described here manifested in the unacceptable passenger outcomes described in our Investigation Report and in the numerous examples of passenger information failures.
______________________________________________________________________
7 Details set out in paragraphs 4.68-4.69 of ORR’s Investigation Report 8 GTR’s Alpha list was a list of specified train services that it was unable to run and which were removed from the timetable. 9 Details set out in paragraphs 4.70–4.74 of ORR’s Investigation Report 10 Details set out in paragraphs 4.75-4.79 of ORR’s Investigation Report 29. ORR wrote a case to answer letter\\textsuperscript{11} to GTR on 29 January 2019 to state that we considered there was evidence that GTR did not do, and is not doing everything reasonably practicable to deliver its passenger information obligations following the 20 May timetable change.
30. GTR requested a meeting with ORR and provided a written response to our letter on 13 February 2019. GTR raised a number of inaccuracies with our Investigation Report and stated that it considered that it did do everything reasonably practicable to deliver its passenger information obligations in light of exceptional circumstances, which were a direct result of industry failings.
31. In response to the representations ORR made some revisions to its Investigation Report.
32. In accordance with ORR’s rules of procedure, the decision whether to find GTR in contravention of condition 4 and if so what regulatory action to take, was made by ORR’s Board. ORR’s Board took into account all relevant material including the Investigation Report and GTR’s representations and is satisfied that:
(i) GTR’s operational decision making was not supported by passenger information that was sufficiently aligned to the steps that it was taking to recover the service;
(ii) GTR’s failure to clearly communicate known cancellations in a timely manner undermined the ability of prospective passengers to plan ahead and make informed journey decisions; and
(iii) Operational decisions taken and implemented to support the recovery process did not take account of the need to provide passengers with appropriate, accurate and timely information to an acceptable extent and within an acceptable time period.
33. ORR is therefore satisfied that, taking account of all evidence, including our findings and GTR’s representations, there is evidence that GTR contravened Condition 4 of its SNRP in that it failed to deliver to the greatest extent reasonably practicable, having regard to all relevant circumstances, its obligation to provide appropriate, accurate and timely information to passengers to enable them to plan and make their journeys with a reasonable degree of assurance.
34. ORR is not satisfied that there is sufficient evidence that this contravention is a current breach because GTR has taken some steps to ensure that the same situation would not happen again, in particular:
a. The steps GTR took to provide appropriate, accurate and timely passenger information during the implementation of the interim timetable on 15 July 2018, the phasing of additional services through September 2018 and the further timetable change in December 2018;
b. The information from Transport Focus regarding a Customer Awareness Report based on research carried out through October and November
\\textsuperscript{11} ORR’s case to answer letter has been published along with this notice 2018 showing that 88% of passengers overall and 92% of commuters were aware of the planned February blockade on the Brighton Mainline; c. The utilisation of a dedicated project website by Network Rail and GTR to communicate to passengers about The Brighton Mainline Improvement Project; d. GTR advise it has service recovery frameworks (SRF) to respond to disruptive events across GTR’s routes, which are supported by customer plans; e. Since May 2018, GTR advise it has rolled out new smart phones to its entire front line staff pre-loaded with industry information applications to enable staff to have improved access to passenger information. Further, as it became apparent during the May Timetable disruption that GTR’s messaging system “Tyrell” was not able to keep up the level of changes being inputted into the system, GTR has since converted to a cloud based scaleable environment to allow the system to respond to user demand more effectively; and f. Improvement in performance and reduction in compensation claims following the introduction of the July 2018 timetable.
35. The penalty that ORR proposes to impose on GTR therefore relates to a past breach of condition 4 as specified above.
Factors that justify the imposition of a penalty
36. ORR’s penalties statement states that, in deciding whether to impose a penalty, we will take full account of the particular facts and circumstances of the contravention, including any representations and objections made to us. ORR will also act in accordance with our Section 4 duties under the Act, and take into account the six penalty principles set out in the Macrory report(^\\text{12}) and the related five principles of good regulation (proportionality, targeting, consistency, transparency and accountability).
37. ORR’s primary objective in setting a penalty is to change the future behaviour of a licence holder and to incentivise it and others to comply with their obligations both specifically and in general.
(^{12}) See the Macrory report - ‘Regulatory Justice: Making Sanctions Effective’ and the related five principles of good regulation- The six penalty principles are: (i) aim to change the behaviour of the offender; (ii) aim to eliminate any financial gain or benefit from non-compliance; (iii) be responsive and consider what is appropriate for the particular offender and regulatory issue, which can include punishment and the public stigma that should be associated with a criminal conviction; (iv) be proportionate to the nature of the offence and the harm caused; (v) aim to restore the harm caused by regulatory non-compliance, where appropriate; and (vi) aim to deter future non-compliance. 38. ORR considers that a penalty is appropriate in relation to GTR’s failure to provide appropriate, accurate and timely information to passengers because: a. a penalty would incentivise GTR to ensure that the provision of information to passengers is managed more effectively in the future; and b. a penalty could also act as a future deterrent to other licence holders.
39. In deciding whether or not a penalty is appropriate, ORR also considered the following factors to be relevant: a. The reputational damage GTR have already suffered and additional costs incurred due to their wider failings in relation to the 20 May timetable change; b. GTR have taken some steps to compensate passengers through delay compensation schemes and have paid a passenger benefits fund to the Department for Transport. However, these sums were paid in response to its wider failings in relation to the 20 May timetable change and do not address the harm caused by its additional failings to provide adequate information to passengers; c. GTR have learnt some lessons from the 20 May timetable change and made some changes prior to the December timetable change. However, there is a lack of evidence that GTR undertook a significant lessons learnt exercise relating to passenger information and have focused instead on the wider industry failings; d. GTR have not acknowledged responsibility for its failure to provide adequate information to passengers.
Factors that justify the amount of the penalty
40. In line with our penalties statement ORR has considered factors falling into two categories: a. Proportionality; and b. Mitigating and aggravating factors.
Proportionality
41. The penalty should be proportionate to the seriousness of the contravention, and this is our starting point in calculating the amount. In considering the seriousness, in line with paragraph 129 of ORR’s economic enforcement policy and penalties statement, ORR has looked at: a. the actual and potential harm caused to third parties including passengers and other railway users and to the public interest purpose of the obligation (including the effectiveness of the regulatory regime); b. the culpability of the licence holder, including whether it has acted negligently, recklessly, knowingly or intentionally; and c. the extent to which the licence holder has co-operated with ORR during the investigation.
42. ORR sets out in its penalties statement, five levels of seriousness ranging from a technical or de minimis contravention to a very serious contravention, with corresponding financial ranges. Our policy states that these levels of seriousness are based on previous actions taken by us and judgements of seriousness and recognises that when we consider the particular facts and circumstances of each individual case, we may consider it appropriate to deviate from the scales.
**Actual and potential harm:**
43. To assist in determining the starting point for the penalty, ORR have assessed the level of harm/potential harm, particularly the harm caused to passengers of GTR’s Thameslink and Great Northern services caused by the failure to provide appropriate, accurate and timely information.
44. In relation to passenger information, it is difficult to quantify the actual and potential harm caused, although we have some evidence relating to key industry data, GTR social media engagement and passenger research carried out at the time of the issues.
45. In this particular case, issues with the provision of information, while serious, do not appear to be ‘systemic’ nature and affected passengers relying on GTR services primarily during an 8-week disruption period.
46. ORR further recognises that ineffective passenger information was not the only cause of harm as passengers were already suffering disruption to services because of the timetabling problems. In effect, even if passenger information had been ‘perfect’ passengers would still have suffered harm due to the wider disruption to services. ORR considers that GTR’s passenger information failings exacerbated the level of harm felt by passengers during this period as inaccurate or late changes to timetables further undermined their ability to plan and make journeys.
47. The impact of the passenger information issues predominantly affected GTR’s Thameslink and Great Northern service routes and GTR stated in its letter of 13 February 2019 to ORR that:
a) at the time of the May 2018 timetable implementation, it carried on average 1.06m passengers per weekday including in excess of 474,000 passengers per weekday on its Thameslink and Great Northern services and there were 982 front line staff on the Thameslink and Great Northern services;
b) Southern and Gatwick Express services did not suffer to the same extent from the late validation of the timetable issues and the operational and passenger information systems were therefore fully uploaded and correct for the implementation of the May 2018 timetable. As a result, passengers travelling on those services, which at the time made up over 63% of the GTR operation, were not as significantly affected as the passenger information was held and displayed correctly within the industry information systems.
48. ORR also considered the following impacts felt by passengers from the overall disruption: financial; stress and inconvenience; employment; social; personal safety; trust in the railway (and changing travel behaviour); and the impact of the disruption on disabled passengers(^\\text{13}). It is not possible to assess the extent to which these impacts can be directly attributed to the failure to provide adequate information, however it is clear that inadequate information will have exacerbated the impacts of the service issues.
**Culpability:**
49. ORR’s policy is to consider culpability including whether GTR acted negligently, recklessly, knowingly or intentionally.
50. ORR consider that GTR has some culpability in relation to the provision of passenger information post 20 May timetable until its interim timetable was introduced on 15 July.
51. We do not think that GTR benefited financially from the breach and we have no evidence that it cut corners to save money. In fact, ORR are aware GTR increased its staffing to manage the problems and the cost to GTR could be significant both reputationally, as well as financially.
52. Overall, ORR considers that GTR’s behaviour was not knowing or intentional but was instead towards the negligent end of the spectrum. Its focus on capacity of services during disruption was, we consider, made with the best intentions, but we take the view that much of its positive work to stabilise service levels and manage these issues post 20 May 2018 did not flow effectively through to adequate passenger information outcomes.
53. However, as time progressed and the extent of the information failures impacting passengers was repeatedly communicated to senior management, we have no evidence to demonstrate a timely or proportionate level of reaction or enhanced response to recognise and then improve the situation. In this respect, we consider that there was initially negligence but then latterly a level of knowing acceptance of the problem until the interim timetable was introduced on 15 July (Phase 3 of the Service Recovery Plan).
**Co-operation with ORR during the investigation:**
54. ORR considers that GTR’s co-operation with the investigation is what we would expect and therefore it does not alter our perception of the level of seriousness.
**Level of seriousness:**
55. ORR considered that the relevant levels of seriousness drawn from ORR’s penalties statement were:
(^{13}) These impacts are set out in more detail in chapter 2 of ORR’s Investigation Report. a. Less serious – this level would be appropriate in circumstances where a relatively small amount of harm was caused or was caused only to a small geographical area. b. Moderately serious – this level is more appropriate in circumstances where there were more serious implications and more serious actual or potential harm to third parties. c. Serious – this level is appropriate where there is evidence of systemic failings that results in serious harm or potential harm to third parties.
56. ORR does not consider that the contravention should be regarded as less serious because of the wide areas covered by the Thameslink and Great Northern routes, the large number of passengers affected over an 8 week period and the fact that, whilst the provision of information was not the only cause of harm, it exacerbated it to a significant degree. ORR also does not consider the contravention should be regarded as serious since ORR does not consider the failings to be systemic in nature.
57. Having considered the factors above, ORR has decided that this contravention therefore falls into the moderately serious level in our penalties statement, which suggests a starting point in the range up to £10m.
58. Taking all potentially relevant factors into account, we have decided that the significant actual (and potential) harm caused to passengers from the failure to provide adequate information, taken together with GTR’s culpability, puts the starting point in the middle of this range. ORR has therefore decided that the starting point should be £5m.
**Mitigating and aggravating factors**
59. ORR’s penalties statement also states that we will adjust the starting penalty up or down to take account of relevant mitigating and aggravating factors, according to the particular facts and circumstances of each case.
60. ORR’s penalties statement sets out a number of mitigating and aggravating factors which it may consider. From this list, ORR has identified the following mitigating factors that apply to GTR: a. *Steps taken to minimise the risk of the breach recurring:* GTR has taken some steps to improve communications and passenger information for future timetable introductions and more generally (see paragraph 34); b. *Repeated or continuing infringement of this or other obligations:* no formal licence action has previously been taken against GTR to date; and c. *Co-operation with ORR’s investigation:* we consider that GTR has co-operated with our investigation and have been generally open and forthcoming with their responses.
61. ORR has also identified the following aggravating factors that apply to GTR: a. Steps taken to rectify the breach, including whether these were initiated proactively by the licence holder or in response to ORR’s actions & the extent of involvement of directors of senior management in the action or inaction which caused the breach or their lack of appropriate involvement in action to remedy the breach:— during the 8 weeks of disruption, the scale of information failures became more apparent to senior management. However, despite this awareness we have not seen sufficient evidence that GTR took subsequent steps to address the level of inadequate information to passengers;
62. ORR has noted that to date we have also not received any separate offers of reparations for consideration under our economic enforcement policy.
63. ORR considers that the mitigating and aggravating factors balance each other out and therefore proposes that the penalty should be set at £5m.
Conclusion
64. Having had regard to ORR’s duties in Section 4 of the Act, the factors listed in ORR’s penalties statement and for the reasons set out above, ORR has decided that it should propose a penalty of £5m in respect of GTR’s contravention of condition 4 as described in this notice.
John Larkinson Chief Executive Office of Rail and Road Annex A
Condition 4: Information for Passengers
Purpose
1. The purpose is to secure the provision of appropriate, accurate and timely information to enable railway passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption.
General duty
2. The SNRP holder shall achieve the purpose to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
Specific obligations
3. The following obligations in this condition are without prejudice to the generality of the general duty in paragraph 2 and compliance with these obligations shall not be regarded as exhausting that general duty. In fulfilling these obligations the SNRP holder shall at all times comply with the general duty in paragraph 2.
Planning services
4. The SNRP holder shall cooperate, as necessary, with Network Rail and other train operators to enable Network Rail to undertake appropriate planning of train services and to establish or change appropriate timetables, including when there is disruption.
5. In particular, the SNRP holder shall:
(a) provide Network Rail with such information about the SNRP holder’s licensed activities as may be reasonably necessary for Network Rail to fulfil its obligations relating to timetabling in its network licence;
(b) participate constructively in any timetabling consultation carried out by Network Rail;
(c) use reasonable endeavours to resolve promptly any timetabling disputes; and
(d) respond expeditiously to any timetabling matter which Network Rail reasonably considers to be urgent. **Code(s) of practice and improvement plan(s)**
6. The SNRP holder shall, unless ORR otherwise consents, publish one or more code(s) of practice or other documents setting out the principles and processes by which it will comply with the general duty in paragraph 2.
7. Where the SNRP holder considers, or is directed by ORR, that improvements to its arrangements for the provision of information to railway passengers and prospective passengers are necessary or desirable to enable it better to fulfil the general duty in paragraph 2, it shall develop, publish and deliver a plan, which sets out the improvements it intends to make and the dates by which such improvements will be made.
8. The SNRP holder shall, from time to time and when so directed by ORR, review and, if necessary, revise, following consultation, anything published under paragraph 6 and any plan under paragraph 7 so that they may better fulfil the general duty in paragraph 2.
9. ORR shall not make any direction under paragraphs 7 or 8 without first consulting the SNRP holder.
**Provision of information to intermediaries**
10. The SNRP holder shall as soon as reasonably practicable:
(a) provide to the holders of passenger and station licences; and
(b) provide to all timetable information providers on request reasonable access to appropriate, accurate and timely information to enable each on request to provide passengers with all relevant information to plan their journeys including, so far as reasonably practicable, the fare or fares and any restrictions applicable.
11. In this condition:
"Network Rail" means Network Rail Infrastructure Limited (a company registered in England and Wales under number 02904587), and its successors and assigns.
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fee9eff17f93f758bf9e307ffde1b473b67521d4 | EXECUTIVE SUMMARY
Purpose of the Prior Role Review As outlined in the terms of reference, the purpose of the review was to develop a full understanding of ORR’s involvement in, and formal regulatory oversight of, the development and implementation of projects and timetable processes leading to the May timetable changes. The review was asked, if necessary, to make recommendations to the ORR board on how ORR can continuously improve its regulatory activities on the basis of the analysis of the evidence.
The scope of the review considered how ORR exercised (or did not exercise) its economic regulatory powers in relation to activities that could have directly or indirectly influenced the events that led up to the May 2018 timetable events.
In terms of process, we considered a number of ORR activities including regular monitoring and enforcement activities going back to 2010. These included ORR’s 2013 Periodic Review of Network Rail (PR13) and the ongoing monitoring of NR’s timetable planning and System Operation activities including project delivery capability. The resources to complete the review were myself and an expert independent investigator with administrative support.
Our approach was to read hundreds of documents including minutes and papers of various standing meetings (ORR Board meetings, Industry Delivery Review Group (IDRG) meetings, etc), as well as the main parts of ORR’s final determination for PR13. We interviewed six key ORR staff members and prepared questions for others to answer. We then prepared findings for five key areas which have been summarised in tabular form. Drafts were then circulated to ORR staff and the advisory panel for factual comment, allowing me to finalise the attached findings.
Overview of Findings The review found that ORR had a role in the following areas linked to the May timetable failure.
- PR13: ORR’s Control Period 5 (CP5) determination contained efficiency assumptions for areas of Network Rail’s (NR) activities, that included resources allocated to timetable planning. These were greater than NR had proposed itself, and NR disagreed with the assumptions. ORR did not undertake any impact assessments of its proposals. Although ORR did not explicitly demand a reduction of resource in this area, NR did reduce these resources during the first part of the control period as it had planned to do. Timetable planning has now been subject to a significant increase in resource. Also, ORR and its consultants did not accurately judge in PR13 NR’s capability in some key areas on which the May timetable were dependent, such as project and programme management and its ability to deliver the projects in the North of England.
- Network Rail’s Timetable Planning and System Operation: ORR’s role is to monitor and enforce Network Rail’s licence obligations in relation to timetable planning and system operation functions. ORR was aware of performance issues in this area of Network Rail’s work for some time, even before 2010. ORR found NR in breach of its licence obligations in relation to timetable generation in July 2018 during the time of this review. The ORR investigation which preceded this finding, carried out between February and July 2018, did not identify the impending operational timetable problems in advance of 20 May.
This table provides an overview of the findings of the Prior Role Review in five sections:
1. PR13
2. Network Rail’s Timetable Planning and System Operation
3. ORR’s ongoing monitoring of Network Rail
4. Project Authorisations
5. ORR general monitoring of Enhancement Improvement Programme Ongoing monitoring of Network Rail: ORR’s regulatory role meant it had oversight of Network Rail including the progress of enhancements (not costs) which were dependencies for the timetable implementation. There are concerns about the effectiveness with which ORR followed up actions it identified through this work. ORR clearly identified risks to the delivery of the May timetable, although there is a lack of clarity over whether these risks were communicated effectively and to whom.
Industry Process Role: ORR had an important role in the governance of access to the railway and project authorisations, both of which were part of the process to deliver the May timetable change. ORR carried out these roles well within the published and agreed timescales and they did not result in any impact on the implementation of the May 20 timetable.
The ORR board never held a substantive discussion on Thameslink and the largest timetable change in many years. This may have been because of the DfT/Network Rail protocol for Thameslink which set out a specific client role for DfT. However, that protocol made it clear that NR remained accountable to ORR regarding its licence obligations, including in relation to network performance.
Conclusion
In conclusion, I did not identify any single point of failure on the part of ORR that would have been a root cause of the failure to introduce the 20 May timetable in an effective way. However, ORR’s performance, in terms of both setting the overall framework in PR13 and the effectiveness of its ongoing monitoring and enforcement of NR’s licence obligations, could have been more effective and so could be seen as a contributory factor to the events that unfolded on 20 May.
ORR was aware at an early stage of risks to projects on which the May timetable changes were dependent, as well as problems with System Operator capability and risks to the Thameslink timetable. There are several instances in the records where it is clear that the ORR’s attention is primarily on Network Rail rather than the wider industry, despite being aware of some of the issues. ORR did not identify the system wide risks to the implementation of the May 2018 timetable that these individual problems created, by taking a step back and systematically identifying the interdependencies.
In addition, the ORR Board never held a substantive discussion on the new timetable’s potential risk to network performance. Such a discussion could have provided the opportunity to step back and identify the system-wide risks posed by the problems which had been recognised by ORR.
Ian Prosser CBE HM Chief Inspector of Railways
## 1. PR13
| What was ORR’s role? | How did ORR carry out its role? | What role did this play in the May 2018 timetable failure? | |----------------------|---------------------------------|----------------------------------------------------------| | **Funding: Efficiency assumptions on non-signaller expenditure for operations** | In the Final Determination, ORR assumed that Network Rail could make efficiencies of 17% across its expenditure on operating the network. ORR broke down operational costs into signaller costs (approximately two thirds of this cost) and non-signaller costs (the remaining third). | In making efficiency assumptions for non-signaller operating costs, which included timetabling resource, ORR used a top-down econometric analysis based on different regulated sectors (such as the water industry). | | ORR’s role in PR13 was to determine the outputs that Network Rail (NR) should deliver for the funding available in the Statement of Funds Available (SoFA). | In its strategic business plan, Network Rail proposed that it could make 17% efficiencies in its signaller costs, but only 3% efficiency within its non-signaller costs. In the Final Determination, ORR identified savings in non-signaller operations related expenditure of £55m more than NR was proposing over five years. ORR reduced NR’s Strategic Business Plan expenditure figure for non-signaller costs from £661m to £606m in the Final Determination. | NR, throughout CP4, had been reducing timetabling resource to meet its efficiency challenge and in its own SBP proposals for CP5 proposed to continue to do so. In fact, NR’s Strategic Business Plan submission for Control Period 6 (CP6) shows that in the early part of CP5 they continued to do so, something they have now started to reverse. Network Rail made it clear that it disagreed with both the methodology and the eventual efficiency assumptions made by ORR, but ORR did not change anything in this area of expenditure in the Final Determination. | | The Department for Transport set (in the SoFA) the funding available to achieve the objectives for Network Rail in the control period set out in the High Level Output Specification (HLOS). As part of PR13, ORR made assumptions on efficiency savings affecting the timetable planning function. | Timetable and planning resources formed a small part (approximately 18%) of the overall category of non-signaller costs. ORR did not make any explicit directions as to where these savings should be made with the decision being left to NR. However, ORR was aware that NR had been reducing its resource levels in this area in CP4 and had already indicated in its PR13 submission that it was proposing to make further efficiencies, of about 13%, in timetabling costs specifically. | A different approach to generating efficiency assumptions by ORR may have identified the likely increase in demand or lack of resources in this area. | | In relation to non-signaller operations related expenditure, it was for NR to identify where efficiency savings should be made within the business, ORR having set an efficiency challenge for this area of NR’s activities. | ORR did not carry out an impact assessment that specifically looked at what operating teams could realistically achieve in terms of efficiencies when demands on them were set to increase, as a result of the large-scale enhancements that were to be delivered during the control period and significant increases to services. | | | Outputs: ORR assessment of NR programme management capability | |-------------------------------------------------------------| | ORR's role in PR13 was to determine the outputs that NR should deliver for the funding available in the SoFA. | | ORR included improvements in project management capability as an enabler of delivery of outputs for Network Rail's Programme Management capability. | | The Department for Transport set (in the SoFA) the funding available to deliver the outputs set out in their High Level Output Statement. | | Network Rail was responsible for the delivery of the outputs. | | ORR's Final Determination made clear statements about Network Rail's Programme Management Capability. ORR commissioned an independent reporter to provide constructive challenge to Network Rail in the assessment of how best to drive continuous improvement in its programme and project management. | | The consultant's report summarised in the Final Determination found that Network Rail's project management capability was advanced, but it could improve its programme and portfolio management and identified priority areas within its business where this would add most value. | | The reporter recommended that Network Rail use the Cabinet Office's Portfolio Programme and Project Management Maturity model (P3M3) to baseline and monitor its programme management capability. Network Rail adopted this model and scored well using it. However, P3M3 is not an outcome-focused tool and issues with project outcomes, which were one of the causes of the timetable failure, were not addressed. | | Issues arose during the early period of CP5 in relation to the effectiveness of Network Rail's Project Management capability (see Enhancement Improvement Programme (EIP) section later) which question the accuracy of the ORR's analysis and assessment of Network Rail's capability made at this time. If ORR had identified weaknesses in Network Rail's capability at this time, it may have been able to cause NR to delay issues which contributed to the delay of projects associated with the timetable failure. |
### Deliverability assessment: ORR oversight of deliverability of engineering work
| ORR's role in PR13 was to determine the outputs that NR should deliver for the funding available in the SoFA. | ORR considered deliverability of engineering work in CP5 and commissioned work to review areas of particular complexity and uncertainty. This included: | |---|---| | ORR assessed deliverability of engineering work as part of the review. | ■ Work by the consultant to review Network Rail's readiness to implement the ECTS schemes in CP5. | | The Department for Transport set (in the SoFA) the funding available to deliver the outputs set out in their High Level Output Specification. | ■ Work by the consultant to review programme management arrangements of the emerging portfolio of projects in the North of England. | | Network Rail was responsible for the delivery of the outputs. | ■ ORR's own review of Network Rail's resourcing strategy and specific projects. | | | ■ These reviews were generally supportive of the ability of Network Rail to deliver the work, although particular areas of challenge, actions and areas for monitoring were identified, in some cases with an explicit reference in the Final Determination to ORR following up these actions. ORR did not monitor Network Rail's progress in all these areas. | | | The ORR undertook a range of work as part of PR13 to review the deliverability of engineering works, which would have a significant impact on the deliverability of the May 2018 timetable. This resulted in a number of recommendations and areas for further monitoring. Not all these actions were followed up by ORR during CP5 as part of regular monitoring, probably because it was not very long before the enhancements programme ran into problems. | | | ORR did not fully understand Network Rail's actual capability to successfully deliver work such as its portfolio of projects in the North of England. The lack of Network Rail capability to deliver its portfolio is evidenced by the need for the Hendy review to re-baseline projects early in CP5 and the fact that the EIP was put in place by NR. | | | ORR did not fully understand NR's real capability to deliver required outputs and did not follow up all the actions it had identified during CP5 in this area. This was a missed opportunity to put Network Rail in a better position to address later problems. |
### Funding: enhancements
| The Department for Transport set (in the SoFA) the funding available to deliver the enhancements set out in the HLOS. It was for Network Rail to deliver the enhancements. As set out in the next column, the respective roles of the DfT and ORR in relation to oversight of the delivery of enhancements changed during the control period. | ORR had to determine what funding should be allowed for, and outputs required by, enhancement programmes. However, some projects e.g. Thameslink, Crossrail, some EGIP elements and Borders were treated differently in the periodic review (see below). In addition, many projects were at an early stage of development which made it difficult to determine costs and outputs reliably. In recognition of this difficulty, the Enhancements Costs Adjustment Mechanism (ECAM) was created to enable more precise cost and output requirements to be fixed as projects were developed through CP5. This allowed efficient cost increases to be made as the project became more developed. The total cost of enhancements in CP5 was estimated at £12.4bn, which included the Thameslink and Northern Hub projects. Projects such as Thameslink and Crossrail were dealt with separately outside the periodic review, with costs and outputs set by individual project protocols with the DfT. The remainder of the portfolio of £7.8bn of spend was reduced by ORR to £7bn in the Draft Determination, both through seeking further efficiencies and reducing risk allowances. In its response to the Draft Determination, Network Rail disagreed with ORR's funding assessment and also updated the latest cost forecasts for three of the larger projects to a figure £700m higher that assumed in the Draft Determination. ORR concluded that its original assessment was reasonable, given that ECAM, applied when a project was sufficiently well defined, would include any efficient cost increase. The ECAM process was discontinued in England and Wales during the control period as DfT took on direct oversight of enhancements. This followed the recommendations of the Bowe and Hendy reviews. The respective roles of the ORR and DfT in the regulation of projects and programmes for the remainder of the control period were set out in an exchange of letters between the DfT and ORR of December 2016. ORR continued to monitor and report on milestones of projects in Network Rail’s delivery programme. | The determination made by ORR on funding of enhancements did not include all projects which were at the heart of problems with the implementation of the May 2018 timetable (Thameslink was excluded). However, the review on funding did include projects within the North West Electrification Programme. ORR's funding assessments were out of step with Network Rail's assessment for the portfolio which increased the funding pressure on Network Rail, albeit the ECAM mechanism could have addressed this. Although the role of ORR changed significantly in relation to oversight of projects following the Bowe and Hendy reviews, ORR continued to have a role ensuring Network Rail met its licence obligations in relation to performance. ORR also had a role of monitoring and reporting on delivery of projects. Therefore it was within the role and understanding of ORR to identify the consequences for performance of any problems with the delivery of projects. This included the Thameslink Project where a specific protocol was put in place to set out the roles of DfT, ORR and Network Rail. How ORR carried out its role in terms of ongoing monitoring is set out below. |
## 2. Network Rail’s Timetable Planning and System Operation
| What was ORR’s role? Who else had a role? | How did ORR carry out its role? | What role did this play in the May 2018 timetable failure? | |------------------------------------------|---------------------------------|----------------------------------------------------------| | ORR’s role is to monitor and enforce Network Rail’s licence obligations in relation to timetable planning and system operation functions. Conditions 1.23 and 2.7 of the network licence specifically require Network Rail to: | ORR undertook a number of formal licence investigations during the period covered by this Review, including:
- Into the implementation of the ITPS computer system in 2010.
- NR’s delivery to Southern and in Scotland in 2014-15 which highlighted timetabling weaknesses.
- NR’s failure to comply with its T-12 timetabling obligations.\
ORR also carried out work with the System Operator over the time period with the purpose of monitoring capability and performance of the System Operator, including its timetable function. | Over the 10-year period this Review is considering, ORR identified a number of weaknesses in the performance and capability of the NR System Operator timetabling function, both formally through licence investigations, and informally through other work with the System Operator, for example on open access applications. ORR described NR’s failings in this regard as “systemic” and in breach of its licence in its 2018 conclusions to the T-12 licence investigation. However, ORR should consider whether it could have acted faster or earlier to ensure Network Rail addressed the issues ORR had identified a number of years earlier. Further action may have helped improve capability and reduced the likelihood of the May timetable failure. The decision ORR took at the beginning of its T-12 licence investigation in February 2018 to focus on the process of engagement between NR and TOCs rather than considering the different timetable options may have been a missed opportunity to have identified the problems that were unfolding in relation to the May 2018 timetable changes. | | - Run an efficient and effective process reflecting best practice for establishing a timetable and any changes to it, so as to enable persons providing railway services and other relevant persons to plan their businesses with a reasonable degree of assurance and to meet their obligations to railway users.
- Establish and maintain efficient and effective processes reflecting best practice and apply those processes so as to provide appropriate, accurate and timely information to train operators to the greatest extent reasonably possible. ORR’s oversight includes Network Rail’s obligation, focused on the informed traveller, to produce finalised timetables 12 weeks in advance (known as T-12)¹. | | |
¹. ORR has separate obligations to oversee TOC compliance with passenger facing licence conditions. ORR’s work in this area in relation to T-12 problems is set out below. ORR oversees Train Operating Companies’ compliance with their licence conditions regarding obligations to passengers and in general consumer law. In particular these require TOCs:
- to have complaints handling procedures
- to have policies in place to assist passengers with disabilities
- to manage and provide timetable and service information, particularly during disruption.
These are separate to obligations to oversee NR’s licence obligations, but is set out here because of the link to ORR’s T-12 investigation.
Alongside ORR’s licence breach investigation into NR’s failure to comply with T-12 obligations (see above), ORR considered as a separate workstream TOC compliance with their licence obligations in relation to the issues. This included provision of information from train companies and ticket retailers so that passengers could plan journeys, buy tickets, be updated and receive information on options when things change.
ORR wrote to all TOCs asking how they were ensuring passengers understood the implications of the delay in the publication of timetables and followed up a number of issues on TOC websites and other sources of provision of information.
This area of work was not directly linked to the timetable failure as it focused on how TOCs were dealing with the complications caused by the failure to publish timetables within the usual deadlines. This area of work focused on how passengers could plan and buy tickets for journeys, rather than received information during the disruption caused by the May timetable problems.
### System operator capability enabler
ORR’s role in PR13 was to determine the outputs that Network Rail should deliver for the funding available in the SoFA.
ORR proposed an enabler to measure the performance of system operations functions including timetable planning functions in its Draft Determination. This was to include a dashboard agreed with NR.
Responses to the Draft Determination were supportive of the proposed enabler approach. However, the enabler (or dashboard) was never agreed. ORR said in its Final Determination that it would “work with Network Rail and the wider industry to develop the measures for the dashboard. The dashboard must be agreed and put in place before the start of the CP5”.
A system operator dashboard was discussed in the run-up to, and during, CP5. A draft of the dashboard was consulted on in August 2015, with a revised dashboard published in August 2016. However, by 2017, NR said that it intended to instead develop a System Operator Scorecard.
The enabler proposed in the Draft Determination received support in responses to the consultation and ORR identified it as an important action to be implemented before CP5. However, this proposal was then not taken forward for some time by Network Rail.
A dashboard was proposed in the final determination so it could provide a snapshot of the work of the System Operator and its capability in an easily understood format, which may have helped identify issues with System Operator capability. ORR did not take action to require NR to put in place this dashboard contrary to the intention set out in the Final Determination, which placed importance on it being agreed ahead of CP5. ORR approval of access agreements
| ORR makes sure the passenger and freight train operating companies have fair access to the rail network and that best use is made of capacity. | The expanded Thameslink services which were intended to be introduced as part of the May 2018 timetable change required an increased capacity allocation for the operator, GTR. GTR sent draft Rights Tables to ORR on 10 January 2018, rather than the first week of January as expected. They contained numerous minor errors. Two Supplemental Agreements between NR and GTR were then sent to ORR for approval:
- 14th Supplemental – for the May 2018 timetable
- 18th Supplemental – for temporary advance use of the Canal Tunnels\
The ORR determined these applications either on the same day they were received or the next day:
- The 14th Supplemental Agreement was sent to ORR on 20 April. The final submission was received on 15 May and approved on 16 May.
- The 18th Supplemental Agreement was signed and submitted on 22 February and approved the same day. | Applications for changes to access rights within the GTR contracts were not submitted within ORR’s anticipated timescale. Despite this, applications were processed quickly and efficiently. This shows that the ORR was ahead in its processing of the timetable applications through early engagement with, and cooperation with, NR and GTR. |
| ORR approves or determines the access agreements required for a train operator to make use of Network Rail’s track. The agreement sets out the access rights granted to the train operator in order for it to use a particular part of the track (for example, six trains per day to operate between point A and point B). | In determining a contract, ORR will seek the view of Network Rail as to the achievability of the access requested and consequent impacts on performance. If the access requirement for a train operator to the network changes, a change to the contract must be submitted and agreed by the ORR. | |
| | | | Train operators can appeal Network Rail’s timetabling decisions to the Access Disputes Committee. Under Part M of the Network Code, a train operator can appeal to ORR against determinations made by the Access Disputes Committee which it considers to be wrong or unjust because of a serious procedural or other irregularity.
ORR also has an appeal role under the Railways (Access, Management and Licensing) Regulations 2016, in respect of train operators who believe they have been discriminated against in respect of a number of matters, including capacity allocation by the infrastructure manager.
| ORR determination of access appeals | |------------------------------------| | Train operators can appeal Network Rail’s timetabling decisions to the Access Disputes Committee. Under Part M of the Network Code, a train operator can appeal to ORR against determinations made by the Access Disputes Committee which it considers to be wrong or unjust because of a serious procedural or other irregularity. | | ORR did not have an appeal role in the case of Thameslink or any other TOC affected by the May 2018 timetable change. Although at one point GTR was going to appeal, it decided not to do so, so ORR did not have the more extensive involvement that dealing with an appeal would have required. | | As there was no appeal, ORR did not play a role in this process. |
### 3. ORR’s ongoing monitoring of Network Rail
| What was ORR’s role? Who else had a role? | How did ORR carry out its role? | What role did this play in the May 2018 timetable failure? | |------------------------------------------|---------------------------------|----------------------------------------------------------| | ORR monitors and publicly reports on Network Rail’s delivery of enhancement projects to its customers and funders. NR is responsible for managing and completing projects on time. Supervising the delivery of enhancement projects has, since the Hendy Report and the Bowe Review of 2015, been the direct responsibility of the DfT. ORR has retained a role monitoring and reporting on delivery of milestones, so it is able to raise awareness of project risk. ORR enforces NR’s licence in relation to project delivery and impact on performance. ORR flags concerns with NR delivery of projects through its regulatory escalator process and the published monitor. | A key factor in the May 2018 timetable problems were the delays to the NWEP phase 4 electrification project. ORR had escalated earlier phases of the NWEP project to its highest level of concern on the regulatory escalator from January 2014 to June 2015. The project was removed from the escalator in May 2016 when NR confirmed that it would produce Quantified Schedule Risk Assessments (QSRAs). ORR attended (although not all meetings) the NWEP Project Delivery Group (PDG). The PDG flagged delivery of NWEP Phase 4 as a red risk. There are some limited examples of the late delivery of the project being flagged as a risk to delivery of the timetable at these groups. On 26 October 2011, ORR served an improvement notice on Phase 1 of the NWEP, as NR had not recorded significant findings to show that it had carried out a suitable and sufficient risk assessment in relation to the planned introduction of overhead electrical traction equipment onto the existing infrastructure. NR complied with the notice on the due date of 13 December 2011. On 21 January 2015 ORR served an improvement notice on NR Infrastructure for failure to comply with a condition of authorisation dated 6 December 2013. “All bridges over the new electrical sub system for NWEP Phase 1, as authorised by ORR on 6 December 2015, will have remedial work for safe integration of the sub system into the existing infrastructure completed by 5 December 2014.” Subsequently, NR did comply with the notice for NWEP Phase. | In respect of enhancements, ORR’s role changed in late 2016, when the DfT took over the role regarding the determination of efficient project costs, leaving ORR to continue monitoring and reporting on milestones in NR’s delivery. ORR also continued to ensure NR met its licence obligations. However, ORR’s regulatory processes did not consistently identify or flag the delay to the NWEP project as a risk to the delivery of the May 2018 timetable. There are question marks over the effectiveness of this process - many items remain on the watch list for a considerable time while others are removed and reinstated sometimes without a clear rationale for the decision. Therefore, in some cases, there is no record of how long-standing issues in Network Rail are addressed. |
2. The ORR and DfT set out respective roles on monitoring enhancements in CP5 through an exchange of letters between ORR CEO Joanna Whittington and DfT DG Rail Bernadette Kelly. ORR's ongoing monitoring of Thameslink timetable delivery
| ORR monitors and publicly reports on Network Rail's delivery to its customers and funders. This includes the delivery of major timetable changes including the Thameslink timetable. ORR enforces NR's licence in relation to timetable delivery. | ORR first flagged the Thameslink timetable delivery as a risk in February 2016 at the lowest level on the regulatory escalator. The item was discussed regularly within ORR and with NR in July 2016. A detailed paper was taken at an ORR executive regulation committee in February 2017, which outlined actions to address the risks. An action was agreed at this meeting to follow up these concerns at a future date with a detailed discussion, but no further paper was taken by this committee. The ORR continued to monitor the Thameslink timetable through the IDRG and the Escalator. The records show the ORR remained well aware of the nature of the risks. In Sept 17 it was agreed at IDRG that there was a major risk to the industry from the May 2018 timetable, but there were differing opinions about ORR's role. After the meeting, a decision was taken to remove it from the escalator, and the IDRG had no further role in monitoring risks. The decision was taken on the basis that the Industry Readiness Board (set up by the Secretary of State) was the appropriate body to handle the issue. | As Thameslink delivery was removed from the regulatory escalator on the basis that the IRB was the appropriate body to handle the issue, there is a question of whether the ORR should have done more to ensure the IRB was carrying out this role effectively (see below). It is clear that ORR was aware of the timetable delivery risk at an early stage and it was discussed at ORR's executive level regulatory meetings and raised with the DfT, which was the client for this project. However, ORR did not discuss the risk to timetable delivery in detail and ORR's executive regulation committee never followed up its action to do so. There are several instances in the records where it is clear that the ORR's attention is primarily on Network Rail (understandable, given ORR's regulatory role) rather than the wider industry, despite being aware of some of the issues. ORR were aware of risks to the December timetable, but at no stage was a detailed discussion held and the system-wide implications considered. In addition, the ORR Board never held a substantive discussion on Thameslink and the new timetable's potential risk to network performance. Such a discussion could have provided the opportunity to step back and identify the system-wide risks posed by the problems which had been recognised by ORR. | In Jan 2017, the Industry Readiness Board (IRB) was set up under Chris Gibb. The focus of the IRB was Thameslink-specific programme risk; this was covered at a fairly detailed level, issue by issue, a great deal of it technical and operational in nature.
The ORR was represented on the IRB (but not on the Industry Assurance Panel which reported to the IRB) and were present for between 10 and 14 of the 17 meetings (records are not complete).
ORR's role, it has been stated, was to ensure Network Rail was playing its full part meeting its licence obligations and to respond on any regulatory issues that arose.
From the records, input from the ORR at the IRB was limited, although the ORR did make contributions to clarify the ORR role on certain issues.
ORR discussed risks associated with the Thameslink timetable delivery in November and December 2016 at its internal IDRG meeting. The IRB was set up in January 2017 in response to recommendations in the Gibb Report, in order to provide DfT with assurance, provide an integrated system approach to the introduction of the Thameslink Programme and highlight risks regarding operational readiness.
The effectiveness of the Industry Readiness Board itself is not a matter for this Review.
Concerns were discussed at the ORR and raised with the DfT before they were raised by the Gibb Report and before the IRB was set up.
Without a clear statement of the ORR's role on the IRB it is difficult to assess how effectively ORR carried this out.
ORR's role on the IRB did facilitate the very timely authorisation of the canal tunnels.
ORR should also clearly define its ongoing role in key industry meetings, such as those associated with timetable change. In particular, it should clarify whether or not these meetings form part of ORR's monitoring function/intelligence gathering operations.
## 4. Project Authorisations
| What was ORR’s role? Who else had a role? | How did ORR carry out its role? | What role did this play in the May 2018 timetable failure? | |------------------------------------------|---------------------------------|----------------------------------------------------------| | ORR is required to authorise new infrastructure or rolling stock before it enters into service. The dutyholder, in this case Network Rail, must submit to ORR a completed technical file, which will demonstrate that any issues raised by the third party assessment body, for example, have been mitigated or closed out. The legislation allows ORR two months from receipt of the technical file to determine an application for authorisation to place into service (an additional one month for further checks or tests can be sought if there is a safety concern). | A timetable for receipt and approval of authorisations related to the May 2018 timetable has been compiled. This shows that ORR processed and delivered the authorisations of the projects linked to the May timetable change - Thameslink and NWEP phase 3 and 5 - in good time and faster than the deadline allowed in law. Turnaround times varied from just one day to less than 4 weeks. This was in part due to the early involvement of ORR staff to help Network Rail through the authorisation process, as they were aware that Network Rail’s project delivery was running behind schedule. | Timescales for all the authorisations were met well within ORR’s published requirements so, in practice, would have aided the situation. There was no impact from these processes on the May 2018 timetable. | 5. ORR general monitoring of the Enhancement Improvement Programme (EIP)
| What was ORR’s role? Who else had a role? | How did ORR carry out its role? | What role did this play in the May 2018 timetable failure? | |------------------------------------------|---------------------------------|----------------------------------------------------------| | ORR monitored Network Rail’s Enhancement Programme. | ORR initiated an investigation in March 2015 into Network Rail’s capability to plan and deliver enhancements after escalation of concerns about missed milestones. This focused on four areas of concern: enhancements project development; project delivery; Network Rail’s approach to complex programmes; and its ability to manage the investment portfolio. Network Rail proposed the Enhancements Improvement Programme (EIP) in response. The evidence report published in October 2015 stated the following: “Our concerns are not new and the formal investigation has been triggered by Network Rail’s failure to address them earlier. We first raised concerns about slipping or missed milestones with Network Rail in July 2014 using routine channels, but following an unsatisfactory response we escalated issues through formal letters, the first in November 2014”. The investigation found Network Rail in breach of Condition 1 of its network licence with regard to its failure to adequately plan and deliver its enhancements programme to the greatest extent reasonably practicable having regard to all the relevant circumstances, including the ability of NR to finance its licensed activities. While the investigation found that Network Rail’s improvement plan had made significant progress it was not sufficiently finalised. However the report noted that the EIP required significant changes to Network Rail’s processes, systems, culture, capability and behaviours that would take time to deliver across a large company. | The fact that Network Rail cannot demonstrate benefits from the EIP and the serious failures of projects such as the North West Electrification Project, phase 4 (announcing significant delays late in the process) give rise to questions around how effective the regulatory action and its impact were. If ORR had required these improvements to be implemented, it is possible that their benefits would have been felt and the problems with projects associated with the May 2018 timetable failure avoided. The question remains as to whether ORR will open a further investigation into Network Rail’s potential breach of its licence following non-compliance with the full requirements of the Notice. | The report concluded that: “On the basis of our findings, we cannot be satisfied that Network Rail is doing everything reasonably practicable until:
- The EIP is sufficiently finalised, and
- There is evidence of improvement following effective implementation of the finalised EIP.”
ORR issued a notice in October 2015 setting out its decision not to make a final order, on the basis that there was sufficient evidence that NR had agreed to take, and was taking, all such steps as appeared appropriate to ORR for the purpose of securing or facilitating compliance with its licence. In particular, NR committed to finalising, publishing and delivering its EIP.
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a54c37aff9d08481d480d2ecdd8f6684b19a35d0 | Office of Rail and Road – Qualifying Regulatory Provisions
Reporting period 8 May 2015 – 8 June 2017
Section 24A of the Small Business, Enterprise and Employment Act 2015, as amended by the Enterprise Act 2016, requires statutory regulators to publish a list of all ‘qualifying regulatory provisions’ with a figure showing the economic impact on Business of each QRP made in accordance with the BIT Methodology (“BIT Score”), such figure having been verified by the Regulatory Policy Committee (“RPC”). The following list meets this obligation. Further information can be found at ORR website: http://www.orr.gov.uk/about-orr/how-we-work/better-regulation
| Qualifying Regulatory Provisions | Description of measure | BIT score (£ millions) | RPC reference number | |----------------------------------|----------------------------------------------------------------------------------------|------------------------|----------------------| | CHP Guidance | Guidance to train and station operators on how to meet their licence obligations in respect of complaint handling | £0 | RPC-3501(1)-DFT-ORR | | Model Freight Contract | Revision by ORR of an industry agreed ‘model contract’ available for businesses to use to reduce the need for bespoke track access agreements | £0 | RPC-3502(1)-DFT-ORR | | RSP 1 staff competence guidance | Advice on how safety ‘duty holders’ may best to develop and maintain staff competence to control safety risk | £0 | RPC17-3609(1)-DfT-ORR | | Guidance - CA98 & Market studies | Guidance on the application of competition law and market studies to the rail industry | £0 | RPC17-DfT-ORR-3768(1) | | Guidance on RSR 2017 | Guidance to safety duty holders on implementation of the rail safety regulations 2017 | £0 | RPC-3821(1)-DFT-ORR. | | Systematic approach to safety guidance | ORR’s review and revision of existing safety guidance to reduce the volume of this guidance | £0 | RPC-DFT-ORR-3946(1) | | Core data compliance monitoring | Requirements on train and station operators to provide regular data to monitor compliance with their licence conditions | £0 | RPC-3842(1)-DFT-ORR | | TVM remedies | Proposals to train operators to improve consumer confidence when making purchases from ticket vending machines | £0 | RPC-DFT-ORR-3990(1) | | Freight general approvals | Widen of our ‘general approvals’ approach for freight track access contracts | £0 | RPC-4005(1)-DFT-ORR | | Train driver licensing portal | Introduction of a voluntary electronic application process to licence train drivers | £0 | RPC17-3861(1)-DfT-ORR | | Update of ORR’s General Approvals for Station and Depot Access Agreements | Adjustments and simplifications to ORR’s General Approval process for businesses applying for depot or station access agreements. | £0 | RPC-4065(1) |
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ad81f98046ceaf7313f309c024b357946ad530f4 | MEMORANDUM OF UNDERSTANDING BETWEEN THE RAIL ACCIDENT INVESTIGATION BRANCH, THE BRITISH TRANSPORT POLICE AND THE OFFICE OF RAIL AND ROAD RELATING TO THE INVESTIGATION OF RAIL ACCIDENTS AND INCIDENTS IN ENGLAND AND WALES
1. FRAMEWORK OF UNDERSTANDING
1.1 INTRODUCTION
1.1.1 This Memorandum of Understanding (MOU) has been agreed between the Rail Accident Investigation Branch (RAIB), the British Transport Police (BTP) and the Office of Rail and Road (ORR) and covers England and Wales; Scotland is the subject of a separate MOU. In cases where BTP may not immediately be involved (for example accidents and incidents on heritage railway networks or tramways) Home Office police will apply principles similar to those contained in this MoU.
1.1.2 The fundamental purpose of this MOU is to ensure effective investigation of railway accidents and incidents, while allowing each party to pursue the separate aim of its investigation. It is not legally binding and each party has its own separate investigatory functions and responsibilities. The specific legal framework of each party must still be considered to ensure that the working arrangements promoted in this MOU do not impinge on any party’s ability to fulfil its own legal requirements, including the RAIB’s requirement of independence.
1.1.3 Cooperation and coordination are the fundamental principles underlying this MOU, necessary for the effective and efficient management of the scene and the subsequent criminal and safety investigations. Effective and regular communications are key to this. These principles should be applied at all stages of the investigation.
2. PARTICIPANTS IN THE MOU
2.1 THE RAIL ACCIDENT INVESTIGATION BRANCH (RAIB)
2.1.1 RAIB is the independent railway accident investigation body for the United Kingdom. Its statutory functions are set out in Part 1 of the Railways and Transport Safety Act 2003, together with the Railways (Accident Investigation and Reporting) Regulations 2005, as amended (“the 2005 Regulations”).
2.1.2 RAIB is required to investigate serious railway accidents and has discretion to investigate other accidents and incidents. It conducts investigations into railway accidents and incidents to identify their causes and make recommendations to improve railway safety, prevent railway accidents and incidents, and inform the industry and public. RAIB investigations do not consider or determine blame or liability for an accident or incident.
2.1.3 Further information about the role and scope of RAIB’s work can be found on its website at www.gov.uk/government/organisations/rail-accident-investigation-branch. 2.2 BRITISH TRANSPORT POLICE (BTP)
2.2.1 BTP is the national police force for the mainline railways in England, Scotland and Wales and will work closely with the local Home Office police force on whose geographic area an incident occurs. In addition, it is responsible for policing the London Underground, Docklands Light Railway, Midland Metro Tram, Tyne & Wear Metro, Glasgow Subway, Emirates Airline cable car and Croydon Tramlink.
2.2.2 The police’s responsibility is to protect life, property, prevent and investigate criminal offences, and prosecute offenders.
2.2.3 Further information about the role and scope of BTP’s work can be found at their website at www.btp.police.
2.3 OFFICE OF RAIL AND ROAD
2.3.1 ORR is the independent safety and economic regulator for Britain’s railways. It works to maintain and improve railway safety by operating a system of safety certification and authorisation, actively monitoring and ensuring compliance with relevant legislation, and by developing the regulatory framework.
2.3.2 One of its statutory functions is to investigate potential breaches of health and safety legislation related to railway operations, including those arising from railway accidents and incidents. Where appropriate this can result in enforcement action ranging from advice up to prosecution.
2.3.3 Further information about the role and scope of the ORR’s work can be found at their website at orr.gov.uk
3. AREAS OF MUTUAL INTEREST AND GENERAL PRINCIPLES
3.1 RAIB, BTP and ORR should establish and maintain liaison and cooperation throughout their investigations into an accident or incident, so that each can proceed in parallel without obstruction. The following are areas of mutual interest requiring liaison and cooperation:
- Notification of accidents and incidents;
- Preservation, recording, collection, storage and disposal of evidence;
- Insofar as permissible, sharing of evidence and interpretation/analysis of evidence (Note: RAIB’s powers to share such information are restricted by law);
- Testing of evidence including forensic examinations and facilitating attendance of specialists to assist;
- Sharing of costs related to physical evidence, including its collection, management (for example, storage) and testing where these are of mutual interest;
- The welfare and management of witnesses and victims;
- Interviewing of witnesses; • Dialogue with the bereaved and injured and the use of Family Liaison Officers throughout and beyond the investigation/s; • Release to the media of information obtained in the course of the investigations; • Timing of RAIB investigation report publication in the event of possible prosecutions; • Role of RAIB inspectors in court proceedings.
3.2 The general underlying principles that will be applied by the three parties to ensure that the above areas of mutual interest are managed effectively are:
• early contact will be established between RAIB, BTP and ORR lead investigators as soon as is practicable after an accident or incident has been reported; • each party will cooperate to ensure the others have immediate and unrestricted access to the site of an accident, working through third parties such as the infrastructure owner and Home Office police forces where necessary; and • effective arrangements for co-operation will be maintained throughout the conduct of their respective investigations by regular dialogue between RAIB, BTP and ORR.
3.3 These general principles shall apply for all types of accident and incident where all three participants have an interest, but the respective investigation leads will determine the actions necessary to implement and respect the principles on a case-by-case basis.
4. SPECIFIC PRINCIPLES
4.1 NOTIFICATION
4.1.1 Each participant in this MOU will notify the others when it deploys to an accident or incident that it considers is likely to be of interest to one or both of them.
4.2 SCENE
4.2.1 The police will usually be the first at the scene of an accident and will secure the site.
4.2.2 Before the arrival of RAIB on site, where practicable, BTP and ORR should notify the RAIB of their intention to enter the site and agree with RAIB any steps they intend to take to secure evidence on the accident site.
4.2.3 A major incident scene will be managed in accordance with the Joint Emergency Services Interoperability Principles (JESIP) https://jesip.org.uk/five-principles, one of which is that all commanders of emergency services at the scene should co-locate to assist in communication and shared understanding of hazards and risk. Access to the initial scene is dictated by the Fire Service who are responsible for making the site safe and any rescue effort. Access to the scene will be through the co-located command posts. 4.3 COMMENCING AND CARRYING OUT PARALLEL INVESTIGATIONS
4.3.1 At the outset of an accident or incident the cause may not be clear so RAIB, BTP and ORR will initially commence parallel investigations to fulfil their respective statutory investigative duties. These will continue until the likely cause of the accident or incident is known and future involvement can be more clearly determined.
4.3.2 RAIB will normally lead on conducting scene investigations, evidence recovery and any testing and analysis to establish the cause. However, if it is evident that serious criminality was the cause of the event, it is likely to be agreed that the police will lead on conducting their investigation on site, in which case the police will deploy resources to conduct the investigation and to recover evidence. RAIB will have access to the accident or incident site and evidence, plus early access to witnesses, as necessary for it to identify whether a safety investigation may benefit railway safety, and gather additional evidence as necessary for its own investigation.
4.3.3 RAIB has trained and appointed ‘accredited agents’ from the railway industry to record and preserve evidence on site before RAIB inspectors arrive. The accredited agents’ access to the scene will be facilitated by BTP and ORR. They can be accompanied on site by BTP or ORR and their activities witnessed. They are not allowed to conduct interviews, or alter evidence, and can only move evidence in the interests of its preservation with the agreement of BTP and ORR.
4.3.4 ORR, as the relevant enforcing authority, will conduct its own investigation into any potential breaches of health and safety law and will advise on any site safety issues when on site.
4.3.5 Where applicable, BTP and ORR will work jointly in accordance with the Work Related Deaths Protocol [http://www.hse.gov.uk/pubns/wrdp1.pdf](http://www.hse.gov.uk/pubns/wrdp1.pdf) throughout an investigation (which is a matter dealt with outside of this MOU).
4.4 COORDINATION AND COOPERATION
4.4.1 To enable each party to fulfil its statutory role and to carry out their respective investigations to best effect while investigations run in parallel, the participants will agree early initial arrangements to cover:
- the liaison, communication and mutual co-operation required to enable the investigative needs of all parties to this MOU to be met;
- how site access is to be achieved by those who need it;
- how the lead role in any investigation will be decided and implemented - such that it will not inhibit each party’s role - and how any changes in this will be managed as the investigation/s go forward; and
- co-ordination of the taking of statements, collection of evidence, analysis and examination of evidence.
4.4.2 Throughout, each party should remain cognisant of the needs of the others and ensure that they are: • kept informed of matters that might be relevant to their investigation where permissible; • offered the opportunity to examine evidence and to witness tests on physical evidence, and to carry out their own forensic examinations that may be relevant to their investigation as far as possible; and • in agreement as to when the site can be handed back to the duty holder.
4.5 EVIDENCE
Preservation, recording, collection, storage, sharing and disposal of evidence
4.5.1 Evidence from accident and incident sites will be of interest to each investigating body. Evidence will be collected in a manner that ensures continuity and its admissibility as evidence in court. The respective lead investigators from RAIB, BTP and ORR will agree between themselves an evidence handling plan which will assign responsibilities for preservation, recording, collection and storage of evidence, using plans and photographs of the site as necessary to ensure clarity over the areas to be examined and the sequence of activities. If applicable, the evidence handling plan will consider whether the RAIB needs to examine the site before any body recovery takes place.
4.5.2 Factual information will generally be exchanged between the three parties, but RAIB has some legislative limitations on what information it can exchange:
• it cannot make available witness statements, witness details and medical records; and • it cannot be required to make available opinions unsubstantiated by evidence, commercially sensitive information, inspectors’ working notes or working documents of the Branch, should RAIB consider that it is necessary to withhold them.
Such material can only be disclosed by order of a relevant court.
RAIB’s Regulations permit witness statements and witness details to be shared if the witness consents to such disclosure. Where an individual gives consent to disclosure of information to BTP/ORR where it would otherwise be prohibited by regulation 10(2), the necessary arrangements will be made for that information to be provided to the interested party.
4.5.3 Each party will obtain the agreement of the other participant(s) involved before returning any evidence to its owner.
Sharing of interpretation/analysis of evidence
4.5.4 Investigation teams will conduct the interpretation and analysis of evidence they consider necessary for their own investigations. The principles applying to RAIB’s sharing of its interpretation/analysis mean the following may be shared:
• inspectors’ simple statements of fact on matters relating to evidence continuity and on basic interpretation of evidence (e.g. the OTDR shows that the driver applied the tram’s brakes x seconds before the data recorder stopped working); • comparisons between hard facts such as measurements and defined requirements (such as prevailing standards) • conclusions that can be directly linked to evidence, without the possibility of any other conclusion being feasible.
4.5.5 RAIB cannot offer a separate analysis of the evidence, provide opinion or act as expert witnesses. Where permissible, it will, however, facilitate BTP and ORR with access to evidence it holds.
Testing of evidence including forensic examinations and the employment of specialists to assist
4.5.6 The respective lead investigators from RAIB, BTP and ORR will notify each other of any intention to carry out investigative actions that may alter evidence. Testing that alters the condition of evidence will only take place after consultation with all parties. Where deemed necessary, the three parties will collaborate on the preparation of a testing plan.
4.5.7 Each party will invite the other to attend investigative activities such as operational trials, metallurgical tests and forensic examinations.
4.5.8 Each party may appoint its own specialists to advise on or conduct testing or examination, analysis and interpretation of evidence and each party will cooperate with appointed specialists to ensure their needs are taken into account.
4.6 WITNESSES AND VICTIMS
4.6.1 Witnesses are likely to be asked to give an account to RAIB, BTP and ORR. The taking of witness statements will be co-ordinated between each party, where possible. In the case of vulnerable witnesses such as children, ORR will use the expertise of BTP to help conduct interviews.
4.6.2 RAIB will normally interview persons before BTP and ORR. Early access for RAIB inspectors should be facilitated. RAIB will carry out their own separate interviews of witnesses without others being present, and cannot play a part in the interviews conducted by BTP or ORR.
4.6.3 BTP and ORR will cooperate to agree who will interview witnesses and what questions need to be asked to avoid carrying out separate interviews of the same witnesses where possible. The necessity of using section 20 powers under the Health & Safety at Work etc. Act 1974 by ORR Inspectors in a joint investigation with BTP should be discussed between the respective lead investigators for any implications for the sharing of evidence and witness statements.
4.6.4 RAIB is unable to share its witness statements with BTP and ORR (unless the person who made the statement consents, in which case the arrangements described in paragraph 4.5.2 apply), but there is no such restriction on BTP and ORR sharing their witness statements with RAIB.
4.6.5 BTP’s Family Liaison Officer (FLO) will normally be the single point of contact between bereaved families, relatives and investigators as an investigation proceeds. The FLO’s purpose is to gather evidence and information from families to contribute to the investigation and also to provide support and information at a sensitive time for families of victims. It may be that the BTP investigation concludes with no further action on the part of BTP in which case ongoing family liaison arrangements should be agreed. Where investigations of RAIB and ORR are continuing then maintaining such established arrangements for liaison with families may be appropriate to continue via BTP.
4.7 SUSPECTS
4.7.1 On occasion, where there is evidence of criminality, the police may be required to exercise their power to detain a person who is a suspect; a suspect who is held in custody and their treatment is governed by the Police and Criminal Evidence Act 1984 (PACE).
4.7.2 Such action may be required prior to any interview of the suspect by another party. However, the police will normally co-ordinate this detention with RAIB such that RAIB’s ability to conduct its early independent interview is not jeopardised. If it is not practicable to do this, the police will inform RAIB of the action as soon as possible after it has taken place.
4.8 RELEASE TO THE MEDIA OF INFORMATION OBTAINED DURING INVESTIGATIONS
4.8.1 The respective lead investigators or their representatives from RAIB, BTP and ORR will consult each other on aspects of mutual concern or interest in respect of contact with the media while on site, and inform or consult them as appropriate in subsequent phases of the investigation. If necessary, the advice of individuals acting in the capacity of ‘Strategic commander’ for each of the organisations will be sought.
4.9 INQUEST PROCEEDINGS
4.9.1 Following a fatal accident each party is required to assist the relevant coroner, which may require the disclosure to the coroner of certain information and provision of investigation reports. On completion of its investigation RAIB may share its report with the coroner.
4.9.2 RAIB inspectors will attend a coroner’s inquest only for the purposes of substantiating the factual findings of its investigation. To facilitate understanding, they may provide technical explanation of the material included in the RAIB report. They will also answer questions on factual matters contained in the report. If RAIB attends the scene of a fatal accident, but does not proceed to a full investigation or produce an investigation report, it will instead prepare a note for the coroner setting out the basic facts of the accident as established at the point when the decision to terminate the investigation was made. In these circumstances, BTP will advise RAIB when the inquest is to be held.
4.9.3 The police and the ORR’s assistance to the coroner will differ on a case by case basis. Some investigations may only involve the provision of a pre-inquest factual report, disclosure of relevant material and summary of statements taken. Others may require more assistance, for example attendance at pre-inquest hearings, provision of a final report and attendance at the inquest to give evidence. 5. RESOLUTION OF ISSUES
5.1 Any disagreement about the practical application of this MOU that cannot be resolved locally will be referred to the Chief Inspector of RAIB, the HM Chief Inspector of Railways of the ORR and the Chief Constable of the BTP for resolution. In the event of their absence, a designated deputy may assume this responsibility.
5.2 Should it still not be possible for agreement to be reached, the Chief Inspector of RAIB (or a senior inspector acting on behalf of the Chief Inspector) will determine the course of action which best serves the public interest in accordance with sections 8.5 and 8.6 of the Railways and Transport Safety Act 2003. The Chief Inspector will only exercise this power where there is conflict with a RAIB investigation.
6. MONITORING OF THIS MOU
6.1 The working and text of this MOU will be reviewed at least every five years, or as circumstances dictate, by the Chief Inspectors of RAIB and ORR and the Chief Constable of BTP. Other persons or organisations may be invited to contribute as appropriate. Any proposed amendments will be agreed by the three organisations. | Contact details | |----------------| | **The Rail Accident Investigation Branch** | | Cullen House | | Berkshire Copse Road | | Aldershot | | Hampshire | | GU11 2HP | | **British Transport Police** | | Force Headquarters | | 25 Camden Road | | London | | NW19LN | | **Contact Numbers** | | Accident Reporting Line (24hr): 01332 253333 | | General Use: 01932 440000 | | **Website and E-mail** | | Website: [www.gov.uk/raib](http://www.gov.uk/raib) | | E-mail: [email protected] | | **Office of Rail and Road** | | 25 Cabot Square | | London | | E14 4QZ | | **Contact Numbers** | | Accident Reporting Line: 020 7282 3910 (Mon to Fri 09:00 to 17:30), 020 7944 5445 (at all other times) | | General Use: 020 7282 2000 | | **Website and E-mail** | | Website: [www.orr.gov.uk](http://www.orr.gov.uk) | E-mail: [email protected]
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94bc92dd76065e3e27327f0a09c176a25d2ed025 | MEMORANDUM OF UNDERSTANDING AGREED BETWEEN THE RAIL ACCIDENT INVESTIGATION BRANCH, THE CROWN OFFICE AND PROCURATOR FISCAL SERVICE, THE BRITISH TRANSPORT POLICE, THE ASSOCIATION OF CHIEF POLICE OFFICERS (SCOTLAND) AND THE OFFICE OF RAIL REGULATION FOR THE INVESTIGATION OF RAIL ACCIDENTS AND INCIDENTS IN SCOTLAND
INTRODUCTION
1. This Memorandum of Understanding (MoU) has been agreed between the following parties: the Rail Accident Investigation Branch (RAIB), the Crown Office and Procurator Fiscal Service (COPFS), the British Transport Police (BTP), the Association of Chief Police Officers in Scotland (ACPOS), and the Office of Rail Regulation (ORR). It sets out the principles for effective liaison, communication and co-operation between these parties so that rail accidents, and related criminal incidents and deaths, can be independently investigated, as necessary, by each party, in a thorough and professional manner, taking into account their respective roles and responsibilities, while also ensuring that legitimate public expectations are met. The parties agree to keep the MoU under review as appropriate.
2. The MoU recognises that all parties have duties to perform in relation to investigating rail accidents and incidents and that each party in fulfilling these, should appropriately take into account the respective roles and responsibilities of the other parties.
3. The MoU sets out when the RAIB investigation will take precedence and when a criminal investigation will take precedence. In effect, this means that whilst no party can prevent other parties discharging their duties and functions, the exact timing and manner in which each party does so, may be affected by another party’s investigation, where this best serves the public interest.
4. The MoU establishes that, ordinarily, the public interest will require that the RAIB investigation takes precedence, in recognition of the great importance of safety considerations and the role of the RAIB to conduct ‘no blame’ investigations into cause and make recommendations to improve safety. It also recognises an exception to this, namely that, where there is a clear indication of serious criminal offending(^1), in the public interest the criminal investigation will normally take precedence. The MoU sets out commitments for co-operation to minimise any adverse effect on other parties’ investigations. Any such adverse effect should only occur where it is in the public interest.
______________________________________________________________________
(^1) Serious criminal offending is defined at paragraph 31 5. The MoU provides a framework within which each party can carry out their respective roles and responsibilities, and, where necessary, carry out parallel independent investigations in cooperation with one another, in a way which achieves the best outcome for all concerned. It recognises the need for each party involved in the investigation of rail accidents and incidents, to approach their task in co-operation with one another and in accordance with the public interest.
**ROLES & RESPONSIBILITIES**
**The Rail Accident Investigation Branch**
06. The RAIB was established by the Railways and Transport Safety Act 2003 (RTSA). It is the independent railway accident investigation body for the United Kingdom, as required by the European Railway Safety Directive, 2004/49/EC.
07. The Railways (Accident Investigation and Reporting) Regulations 2005 (S.I. 2005/1992) (RAIR) implement that part of the European Directive dealing with rail accident investigation which was not implemented already by the Railways and Transport Safety Act 2003. It sets out the procedures for dealing with specified accidents and incidents, including notification requirements, dealing with evidence and publishing reports and recommendations. Further information is contained in RAIB’s guidance to the Regulations.
08. The RAIB conduct ‘no blame’ investigations into railway accidents and incidents to identify the causes and make recommendations to improve safety. The purpose behind their investigation is to ensure that safety lessons are learned quickly and that the site of the accident is restored to service as soon as possible.
09. In respect of accident or incident investigation, the RAIB is independent of the railway industry, and regulatory and prosecution bodies. Like the air and marine accident investigation branches (AAIB and MAIB), the RAIB is administratively part of the Department for Transport, but is functionally independent in its conduct of investigations, and submits its accident and incident investigation reports directly to the Secretary of State.
10. RAIB is required by the Directive to investigate serious accidents, as defined by the Directive, and has discretion to investigate other accidents and incidents. Its remit covers all railways, except for those in some industrial premises, museums and funfairs. Its remit also includes tramways in England and Wales.
**The Lord Advocate, COPFS & the police in Scotland**
11. The Lord Advocate has primary responsibility under the Fatal Accidents and Sudden Deaths Inquiry (Scotland) Act 1976 for the investigation of sudden deaths in Scotland, and at common law for the investigation and prosecution of criminal
______________________________________________________________________
2 Guidance to RAIR Regulations can be found at [http://www.raib.gov.uk/guidance_and_procedures/guidance_notes.cfm](http://www.raib.gov.uk/guidance_and_procedures/guidance_notes.cfm) offences. The Lord Advocate’s position in relation to these matters is specifically recognised and preserved by section 48 of the Scotland Act 1998.
12. The Lord Advocate and procurators fiscal, who hold commissions from the Lord Advocate, have a statutory power to instruct the police in their investigation and reporting of crime and all suspicious, sudden and unexplained deaths.
13. Where criminal and deaths investigations, carried out by the police and procurators fiscal under the authority of the Lord Advocate, arise out of rail accidents and incidents, these will proceed in parallel with any RAIB investigation. An investigation into a criminal offence or death arising out of the circumstances which led to the rail accident fulfils the function of a judicial inquiry referred to in the Directive.
The Office of Rail Regulation
14. ORR is the safety authority as required by the Directive and is therefore safety regulator for the railway industry. This function was transferred to ORR from the Health and Safety Executive on [1April 2006] when the Health and Safety (Enforcing Authority for Railways and Other Guided Transport Systems) Regulations 2006 (EARR2006) came into force. The safety authority works to maintain and improve railway safety by operating a system of safety certification and authorisation, by actively monitoring and ensuring compliance, and by developing the regulatory framework. Its jurisdiction covers all Great Britain’s railways and associated infrastructure, including light railways, underground systems and tramways.
15. As part of its statutory functions ORR investigates potential breaches of health and safety legislation in relation to the operation of railways including those arising from rail accidents and incidents. Following an investigation, ORR will submit a report to the procurator fiscal in most cases of work-related death and may also in appropriate circumstances submit a Prosecution Report. Although the RAIR Regulations make significant changes to the way railway accidents and incidents are investigated, they do not alter the duties and functions of the railway safety regulator as they have been transferred to ORR under EARR2006 statutory. Interface between investigations carried out by the RAIB, COPFS, the police and ORR in Scotland
16. The purpose behind the respective investigations carried out by the RAIB, the police and procurators fiscal, and ORR is very different.
17. The police, under the instruction of procurators fiscal, investigate potential criminal activity and deaths arising out of a rail accident or incident. The police investigation is concerned with the cause of the accident to the extent that it is important evidence in any criminal and/or deaths investigation. The focus of their investigation is to gather evidence about the commission of a crime(s) or which points to or helps to explain the circumstances which contributed to, or caused a death(s), with a view to assessing whether there should be a criminal prosecution and/or a fatal accident inquiry. In the case of a death(s), ORR will work closely with the police and procurators fiscal, in accordance with the terms of the COPFS, ACPOS, BTP and ORR “Work-Related Deaths” Protocol, as well as in relation to other ‘non death(s)’ investigations.
18. The RAIB has a statutory responsibility independently to investigate railway accidents and incidents, including those which may involve the commission of a criminal offence or where deaths may have occurred, and to establish the surrounding circumstances, and the cause of a railway accident or incident. Their main concern is to ensure that safety lessons are learned quickly and that the site of the accident is restored to service as soon as possible. The RAIB conduct ‘no blame’ investigations to identify the cause of an accident and make recommendations to improve safety.
19. Sometimes criminal and deaths investigations will depend, in part, on the technical expertise of RAIB and/or ORR inspectors. In this event, the RAIB may still want to investigate to establish the cause of the accident or the reasons for the severity of its consequences, independently of any criminal and/or deaths investigation carried out by the police or procurators fiscal. In addition, where the RAIB do not carry out an investigation, ORR may seek to establish the cause of a rail accident.
20. The police, procurators fiscal, RAIB and ORR inspectors, in carrying out their respective investigations, will take account of the roles and responsibilities of the other parties, and cooperate with one another to ensure the legal requirements of all parties are met. This is particularly important in respect of the collection and preservation of evidence from the accident site, the subsequent examination and analysis of items of evidence, and the interviewing of witnesses.
21. In this regard, it is essential for the police, procurators fiscal and ORR, that the manner in which evidence is gathered in the course of any investigation into a rail accident or incident, takes account of the evidential requirements of Scots law, in particular those relating to the admissibility of evidence and the need for corroboration of each essential fact in a criminal case.
22. It is essential for the RAIB, ORR, the police and procurators fiscal that the highest standard of expertise is employed in an investigation. Generally the police will not be trained to carry out such a technical investigation, but the police, in working with the RAIB in carrying out a criminal and/or deaths investigation, may contribute specialist forensic skills, including the examination and analysis of prints and samples. In establishing the cause, or reasons for severity of consequences of a rail accident or incident, the necessary technical expertise will normally be provided by the RAIB, or by ORR.
23. For these reasons, the RAIB will, in most instances, assume lead responsibility for the investigation into a rail accident or incident and for the recovery of evidence from a rail accident site, as relevant to the RAIB investigation. Arrangements are set out below for securing and managing an accident site, in order that the RAIB can carry out a thorough and detailed investigation into the cause of a rail accident.
24. The police will, in most instances, be first in attendance at the scene of a rail accident and will take steps to make contact with, and establish early and good communication with the RAIB and ORR about the accident, any subsequent rescue operation, and about any collection of evidence which takes place prior to the arrival of the RAIB and ORR. MANAGEMENT OF THE INVESTIGATION
25. Regardless of the roles of the parties in carrying out their investigative functions and responsibilities, all parties will make every effort to establish and maintain good liaison, communication and cooperation with one another throughout their respective investigations, and to work together as appropriate to achieve the best outcome for all. Even where it is not clear initially whether another party has an interest in carrying out an investigation, the potential involvement of the other parties should be borne in mind in the conduct of any investigation.
Precedence of Investigations
26. Except in the circumstances described in paragraphs 31 & 32, it will normally be appropriate for the RAIB investigation to take precedence which means that the RAIB will assume lead responsibility for the investigation.
27. In many instances, initially it will not be clear what has caused a rail accident or incident, or whether a crime has been committed. In these circumstances the RAIB, the police acting under the instruction of procurators fiscal, and ORR all have an interest in commencing an investigation.
28. The RAIB will lead the independent investigation into cause. Even where persons sustain injuries, possibly fatal, in the absence of the circumstances described in paragraph 31, the need to identify the cause and reasons for the severity of the incident is paramount and the RAIB will assume the role of lead investigator into the cause.
29. Where death(s) occur, even where no criminal activity is immediately evident, the police will fulfil their duties to investigate any fatalities. ORR may also have an interest in investigating the death(s) and will follow its normal Health and Safety Enforcement Policy.
30. Similarly, where there is an indication of gross negligence or recklessness, while the RAIB will lead the independent investigation into cause, it is likely that the police will also commence an investigation into the circumstances, as these early indications may give rise to evidence of criminal action.
Serious Criminal Offending
31. Where there is a clear indication that the railway accident or incident has been caused by serious criminal offending, it will normally be appropriate for the criminal investigation to take precedence. Where it is agreed by procurators fiscal and RAIB inspectors that the criminal investigation takes precedence, the procurator fiscal will instruct the police to assume lead responsibility for the investigation.
32. Where the criminal investigation takes precedence, the RAIB may decide to investigate safety matters and the seriousness of the consequences of the accident or
______________________________________________________________________
3 “Serious criminal offending” includes the crimes of murder and culpable homicide, and any criminal act which result in a terrorist incident, deaths, multiple casualties, serious injury and/or other serious consequences, e.g. derailment of a train, or a train collision. This does not include criminal offences which properly fall to be investigated by the Office of Rail Regulation. incident, to determine whether there are any safety issues which need to be addressed. ORR may also investigate for breaches of health and safety law.
**ORR enforcement action and investigation**
33. An investigation by the RAIB will not prevent ORR taking enforcement action in accordance with its statutory duties and in the public interest, or carrying out an investigation into a breach of health and safety law using technical evidence from the RAIB or in parallel with the RAIB. ORR will aim to inform RAIB before issuing an improvement notice, and will take note of RAIB’s views unless urgency prevents this, in which case they will inform RAIB, without undue delay, after the event.
34. The RAIB will make available evidence required by ORR as necessary for enforcement action but subject to the restrictions outlined in paragraph 65 of the MoU (Sharing of Evidence). ORR will inform the RAIB if they are commencing an investigation which did not begin in the immediate aftermath of the rail accident or incident.
**Change of lead responsibility for the investigation**
35. If at any point, one or more parties consider that the circumstances of the rail accident or incident require another agency to assume lead responsibility for the investigation, the Chief Inspector or, in the absence of the Chief Inspector, the Deputy Chief Inspector of the RAIB, and the procurator fiscal will discuss and agree as to whether or not any change is necessary. ORR will be advised accordingly. Parties will discuss the handling of all aspects of an investigation, particularly the handling of witnesses, in the event that a change is agreed.
**Accident site**
36. Parties must have a clear understanding of their respective responsibilities on the accident site to minimise delays, including the release of the accident site back to rail operations, and to ensure preservation of the best evidence.
**Prior to the arrival of the RAIB**
37. Where any party is made aware of an accident or incident likely to require the attendance of the police, the RAIB, or ORR, that party will contact the other parties as soon as possible to inform them about the accident.
38. The RAIB has a duty co-ordinator available 24 hours a day with specific responsibility for deciding on the appropriate level of response to an accident or incident. The RAIB duty co-ordinator will decide whether the RAIB is to undertake an immediate investigation and the form that any such investigation should take. Where appropriate, the RAIB duty co-ordinator will mobilise a RAIB investigation team to go to the accident site.
39. The RAIB duty co-ordinator will inform the police of the intended RAIB response and estimated time of arrival. BTP has its own communication centre available 24 hours a day and this would normally be the initial contact point for the RAIB. Where BTP is the first point of contact they will provide the initial liaison and co-ordination role for the RAIB with other police forces. Where the railway is not within the jurisdiction of BTP, RAIB will contact the relevant force communication centre. directly. Where it is not clear which force has jurisdiction, BTP will assist RAIB in establishing the relevant contact with the other police force.
40. When ORR or the RAIB is informed of an accident or incident which is likely to require attendance on site, the RAIB duty co-ordinator and ORR accident officer will contact each other as soon as possible to confirm that the other is aware of the incident and to advise whether or not staff are being sent to site, and the approximate arrival time.
41. The priority should be to arrange appropriate medical attention for, and the removal of any casualties, and to identify and secure the accident site for the benefit of all the investigative bodies. The police should thereafter maintain the security of the site until the arrival of the RAIB. The site should be subject to the minimum level of disruption in the process of securing it and attending to and removing any casualties. At any stage during the investigation of an accident or incident where the site has been cordoned, the RAIB duty co-ordinator or the RAIB inspectors, may request the extent of the cordon to be extended, or other areas to be cordoned off, and will make appropriate arrangements with the police.
42. The site should be preserved as closely as possible in its state immediately after the accident. After the initial emergency response the accident site should not be disturbed until the arrival of the RAIB unless this results in the prevention, as opposed to delay, of one of the parties carrying out their responsibilities. Vital evidence can easily be destroyed by well intentioned people climbing over wreckage, or by moving items of equipment etc. The number of people in and around the wreckage in the aftermath of an accident needs to be kept to an absolute minimum.
43. Should the RAIB or its accredited agent be delayed in attending the accident site, ORR and the police should take steps to ensure, as far practicable, that evidence is not disturbed prior to the arrival of the RAIB. However it is in the interests of all parties that appropriate steps are taken by the police or ORR to secure any evidence which either party has reason to believe may be lost, damaged or destroyed.
44. To ensure evidence is preserved most effectively, and to minimise the potential loss of evidence and technical information, the police and ORR should, where practicable, notify the RAIB and agree any steps they intend to take to secure evidence on the accident site (recognising that this may include remote locations such as signal boxes, and track some distance in rear of the main site).
45. In this context practicability relates to whether it is absolutely essential for the action to be taken at that particular time to secure best evidence, as opposed to incurring a delay for discussion. If it is not possible to discuss such action with the RAIB before taking it, the police and ORR should inform the RAIB as soon as practicable of any action taken while on the site.
46. This process is not intended to impose any undue burden on the police or ORR as the level of actions informed or reported only needs to be sufficient to enable RAIB to have the opportunity to come to appropriate arrangements with the other parties prior to them taking action, or to fully understand what has taken place after the event.
47. At this stage, the police will assist their own and/or the RAIB investigation by compiling an initial list of witnesses and their contact details. The ORR may also do this if appropriate.
After the arrival of the RAIB
48. At the scene of a railway accident or incident, which has been cordoned, the site will generally comprise an inner cordoned area, (which will include any relevant rail vehicles), further cordoned areas (which may be remote sites relevant to the investigation), and the main outer cordon (which defines the extent of the police controlled access area). In general terms it will be the area within the inner cordon, and any further evidential cordoned areas that will be of interest to RAIB investigators.
49. On arrival, the RAIB inspectors, the RAIB accredited agents, technical experts working on behalf of the RAIB and the ORR inspectors should be allowed access to the site without delay, even where it is considered a crime scene, in order for the RAIB or ORR to commence their investigations into the cause of the accident. In the event of a terrorist incident, the police may need to restrict access to the accident site.
50. When the RAIB arrive at the scene of an accident the police and/or ORR inspectors should brief the RAIB inspectors as to what has happened prior to their attendance. The police will provide appropriate assistance to the RAIB inspectors while they are carrying out their initial investigation.
51. On arrival at the accident site, RAIB staff, accredited agents or technical experts working on behalf of the RAIB, and ORR inspectors will identify themselves, first to the police at the site cordon (where a cordon exists), and then to the railway industry’s Rail Incident Officer (RIO), or equivalent representative of the infrastructure controller. The RAIB and ORR staff will endeavour to make contact with each other as soon as practicable after arrival.
52. In order to preserve perishable evidence, the RAIB will maintain a register of ‘accredited agents’ able to identify and record this evidence. Accredited agents will normally be staff employed by railway industry bodies who will be part of the initial response to the accident. Accredited agents are specially trained and have powers necessary for this specific role. Accredited agents should be given access to the site without delay for the specific purposes of recording perishable evidence on behalf of the RAIB. The accredited agent will normally carry out their duties under the escort of a police officer, who will witness their actions for evidential purposes.
53. The RAIB duty co-ordinator will have available the register of RAIB accredited agents to which the COPFS, the police or ORR will also have access. Should there appear to the police, COPFS or ORR to be any conflict of interest arising from an accredited agent carrying out activities on behalf of the RAIB, the RAIB duty co-ordinator will provide advice as to how the RAIB investigation will proceed.
54. It is important that the RAIB, ORR and police maintain liaison about site security until the wreckage has been removed and the site has been handed back to the rail operator. If any party intends withdrawing from the site they will inform the other interested parties. This is particularly important where the police wish to withdraw, so that the RAIB or ORR can make alternative security arrangements before their departure.
55. Parties will consult with other interested parties before they hand the accident site, or part of it, back to the site operator, to enable any of those parties to continue with or to commence an investigation.
56. The RAIB may be able to release parts of the site from its investigation in a phased manner, as evidence is gathered and the investigation becomes focused in fewer geographical locations. In such cases this will be managed carefully and only after consultation with ORR, COPFS and the police to ensure that any hand-over/hand-back is done in a controlled manner, taking account of the interests of all parties.
**Accident Site Safety**
57. Parties will retain primary responsibility for the safety of both their own staff and those working under their direction, but it is important for the RAIB inspectors, ORR and the police to co-operate, and to co-ordinate their activities in order to maintain the safety of the accident site. When present on site ORR will provide the RAIB and the police with advice on site safety issues. When ORR are not on site, they will not normally turn out on request but will provide general advice in accordance with their statutory functions.
**Collection and Use of Evidence**
58. References to evidence in this section relate to evidence in which the RAIB, ORR, police and COPFS have an interest. Each party should liaise and agree, taking into account investigation precedence, the overall plan for gathering evidence to ensure all parties are informed. Where there is any doubt as to another party’s interest in a piece of evidence steps should be taken by all parties to clarify their respective interests.
59. In this regard, the police and RAIB and ORR inspectors, agree to keep a record of any evidence collected and significant steps taken in the course of their investigation which can be shared at any time with the other party, subject to legal restrictions on disclosure.
60. It is essential that the RAIB and ORR inspectors, the police and procurators fiscal take account of their respective interests in the gathering and preservation of evidence from the accident site, and in any subsequent examination or analysis of items of evidence.
61. Any evidence gathered by the police, ORR or by the RAIB inspectors should be properly preserved so that the other parties can access it if required, and if it is within their power to do so.
62. Scottish criminal law requires that all essential facts in the commission of a crime are corroborated, i.e. the prosecution must present corroborated evidence to the court.
______________________________________________________________________
4 “Significant steps” include actions taken which may impact on the evidence gathering process, e.g. moving a piece of wreckage as part of the rescue operation. It is not intended that parties will note down every minor action taken on the accident site or otherwise in connection with their investigation, but the record of evidence gathered should contain necessary information about actions taken as part of the evidence collection process, which have been essential for the securing of best evidence. to establish that a crime was committed and who is responsible. This means that there must be evidence of each essential fact from two independent sources.
63. This evidential standard must be taken account of when evidence is being gathered, passed on to any third party, examined or analysed. Therefore, for example, when pieces of evidence are gathered from the accident site this must be done by one person in the presence of another. Both of these people should be able to speak to the evidence gathering process and the record of the collection of evidence must be maintained by two people. For this purpose an RAIB inspector or its accredited agent, or an ORR inspector may provide mutual assistance, or require police assistance. All efforts should be made to ensure that provision of this resource does not unnecessarily delay the investigation.
64. These evidential standards are equally important with regard to the examination or analysis of a piece of evidence. This is particularly important where the examination or analysis could result in the destruction of the item; in this event other parties will not have an opportunity to instruct an independent analysis. If this is contemplated then all parties must be consulted on, and given the opportunity to be represented during the examination or analysis.
Sharing of Evidence
65. The RAIB will make available to ORR, and COPFS or the police, evidence and confirmed findings, with the exception of, witness statements, witness details, medical records, opinions unsubstantiated by evidence, inspector’s working notes or working documents, subject to any legal restrictions on disclosure.
66. The COPFS or the police, and ORR will make available relevant evidence and findings to the RAIB. This applies even where the RAIB has not initially attended at the accident site but subsequently decides to commence an investigation.
Witnesses
67. The police will assist their own and/or the RAIB investigation by compiling a list of persons who have witnessed the accident or incident and their contact details. The ORR may also do this if appropriate.
68. The RAIB must carry out its own separate interviews of those persons as appropriate. ORR and the police should carry out their own separate interviews of witnesses. The RAIB will normally wish to interview persons before the police or ORR do so, in order to obtain the fullest and most frank account of events. Where practicable, parties should liaise, as appropriate, to co-ordinate witness interviews.
69. On occasion, the police may require to exercise their power under section 14 of the Criminal Procedure (Scotland) Act 1995 to detain a person who is a suspect in the criminal investigation. Such action may be required prior to any interview of the suspect by another party. In order to achieve the best co-ordination of witness interviews, the police, where practicable, will notify the RAIB of their intention to detain a person who is a suspect, and agree this course of action, but where it is not practicable to do this, the police will inform the RAIB of this action as soon as possible after taking the action. Practicability in this context has the same meaning as in paragraph 45.
70. The RAIB will keep confidential the details of any RAIB witness statement taken by them. The RAIB will also protect the identity of a RAIB witness from whom they take, or intend to take, a statement. Except in exceptional circumstances, this provision would not normally apply to any person engaged by the RAIB as an expert in the investigation.
**Contact with the injured and bereaved and next of kin**
71. When accidents result in serious injuries and fatalities, it is important that all the investigating bodies liaise and agree arrangements for keeping the injured and bereaved informed regarding the progress of the investigations. In the first instance the police Family Liaison Officer (FLO) will be the main channel for this process and as far as possible all contact with the bereaved and injured will be co-ordinated through the FLO. It will be important for the FLO to explain to the bereaved the respective roles of the police, RAIB and ORR, and the fact that the RAIB investigation is independent of any criminal investigation.
**Employing third parties**
72. As far as is practical parties should consult with one another on the employment and remit of third parties to be contracted in relation to their investigation to ensure their remit meets the needs of all parties.
**Urgent safety advice**
73. Both ORR and the RAIB have a responsibility to take such immediate action as they consider necessary if either becomes aware of information that may have an immediate impact on safety. As outlined in paragraph 34 above, the RAIB will make available evidence required by ORR for its enforcement action but subject to the restrictions outlined in paragraph 65 of the MoU regarding the sharing of evidence.
74. The RAIB may issue urgent safety advice to the railway industry. It will aim to inform ORR before doing so and will take into account ORR views unless urgency prevents this, in which case they will inform ORR after the event.
**Other information**
75. Periodically, the RAIB may request (RAIR Reg 15(2) (a) ORR to provide, at times and in such a manner as the Chief Inspector of the RAIB may reasonably determine, information about, and statistical summaries of incidents which are reported to ORR under the requirements of RIDDOR(^5), but which are not required to be reported by the railway industry to the RAIB.
**Evidential Costs**
76. In the first instance, where railway industry duty holders need to preserve, move, analyse and store evidence in order to carry out their own investigation in the absence of RAIB involvement, the industry body or bodies will bear these costs (RAIR Reg. 6(4)).
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(^5) Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995. 77. Beyond this, costs associated with the handling, analysis and storage of evidence will be shared between the parties where they have an interest in the activity or service concerned.
Public Statements / Media Coverage
78. In the event of a need to make a public statement, the RAIB, ORR, the police and COPFS will consult one another to ensure the factual accuracy of any media release and as far as possible to co-ordinate activities.
RAIB reports and recommendations / Potential criminal prosecution/FAI
79. The RAIB is required to publish reports on the accidents and incidents it investigates as early as possible so safety lessons can be learned and recommendations made known as soon as possible. Subject to the normal provisions of contempt of court, reports may be published whether or not civil or criminal proceedings are in progress or may be instituted. The RAIB may issue an interim report or immediate safety advice if appropriate.
80. The RAIB recommendations must be addressed to the safety authority, and may be addressed to other appropriate public authorities. Before finalising its draft report on an accident, the RAIB will discuss the formulation of recommendations arising from the investigation with ORR and will take into account any comments made, but will not be bound by them. ORR will provide input to the formulation of recommendations as appropriate.
81. Where a prosecution and/or a fatal accident inquiry is under consideration, the COPFS shall notify the RAIB of its interest in their investigation. If the RAIB has been so notified, or is otherwise aware of an ongoing criminal and/or deaths investigation by the police and the COPFS, it will make available to the COPFS a pre-publication copy of the finalised report at the earliest opportunity. The pre-publication copy of the finalised report shown to the COPFS will be treated as confidential and not disclosed before the date of publication.
82. The COPFS will keep the RAIB and ORR informed as to the possible timing of any prosecution or fatal accident inquiry related to a rail accident which the COPFS is aware the RAIB is investigating.
83. The COPFS may comment on the finalised report and any comments made will be considered by the RAIB before the report is published, but the RAIB it is not obliged to take any action as a result. Information given to the RAIB by the COPFS will be treated as confidential.
84. ORR will ensure that the RAIB’s recommendations are duly taken into consideration by the end implementers and where appropriate acted upon. ORR will then, without delay, inform the RAIB of the result of the end implementer’s consideration and subsequently, without undue delay or within such other period not exceeding 12 months, as may be agreed with the RAIB’s Chief Inspector, provide details of the measures taken to implement the recommendation. If ORR are considering sanctioning an end implementer’s non-implementation of a recommendation then they will consult the RAIB prior to final agreement. Resolution of issues arising from investigations
85. Where a question arises as to the appropriateness of any action taken or proposed to be taken by any party, parties on the ground will seek to continue working in cooperation with one another and negotiate a way forward taking account of their respective interests, and responsibilities, as well as the nature of the incident.
86. In doing so parties should consider whether the action in question is essential and whether it is critical that the action be taken immediately or in the proposed manner. All parties should consider the relative importance of the action for their purposes and identify whether an alternative solution or modified approach can be agreed which most effectively addresses all parties’ concerns. Where possible, parties should agree a solution, or alternative approach, which provides the optimum solution for all parties.
87. Where a resolution cannot be reached between the RAIB and the police or the COPFS, the matter will be referred for resolution to the Chief Inspector of the RAIB, and the Crown Agent in the COPFS, or in their absence their deputies. In discussions, either party will take into account, and decide on a course of action which best serves the public interest, without treating either party’s needs as automatically outweighing the other.
88. Where a resolution cannot be reached between the RAIB and ORR, the matter will be referred to the Chief Inspector of the RAIB and the relevant General Manager in ORR. If a solution cannot be reached, Sections 8(5) and (6) of the RTSA give the Chief Inspector the power to determine the course of action which best serves the public interest. The Chief Inspector may only exercise this power where there is a conflict with an RAIB investigation.
On behalf of RAIB ..................................................
On behalf of COPFS ..................................................
On behalf of BTP ..................................................
On behalf of ACPOS ............................................. On behalf of ORR
Dated: 2006
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ba9f1fee03f3769dfb71dded38327d5bc635775b | Les Waters\
Senior Manager, Licensing\
Email: [email protected]
20 May 2020
Andrew Wozencraft\
Infrastructure Management Director / Cyfarwyddwr Rheoli Seilwaith\
Amey Keolis Infrastructure / Seilwaith Amey Keolis Limited\
Transport for Wales CVL Infrastructure Depot Ty Trafnidiaeth\
Treforest Industrial Estate\
Gwent Road\
Pontypridd\
CF37 5UT
Dear Andrew,
Core Valley Lines: Network Statement 2021
I am writing to conclude ORR’s review of the 2021 network statement for the Core Valley Lines (“CVL”), published by Amey Keolis Infrastructure / Seilwaith Amey Keolis Limited (“AKIL”). Our reviews of annual network statements are required by The Railways (Access, Management and Licensing of Railway Undertakings) Regulations 2016 (“the 2016 Regulations”).
We are aware that AKIL needed to focus its resources on preparing to take operational control of the CVL at the end of March 2020, so we have reviewed your initial publication with that context in mind and are taking a pragmatic approach to your first publication. Improvements need to be made, but we understand that this will come over time as you become more familiar with the requirements. Our main comments relate to the following sections:
- **Performance regime**: Any train operator that crosses between the Network Rail and AKIL networks may need to make or receive payments related to delay under the performance regime in Schedule 8 of its track access contracts. Although the section on performance says that the regime incentivises AKIL to manage the impact of knock-on delays, a description of the Star Model would be a worthwhile inclusion.
- **Charging**: For the avoidance of doubt, this section should say that ORR will not be carrying out periodic reviews of access charges for the CVL, instead that AKIL intends to do so every five years, in line with ORR’s periodic reviews of Network Rail.
- **Service facilities**: This section needs more information about service facilities so that it can be fully compliant with the requirements of the 2016 Regulations and the Commission Implementing Regulation (EU) 2017/2177 of 22 November 2017, on access to service facilities and rail-related services. The RNE website provides a template you may follow¹. We note that you are aware of this and will seek to add more information in your provisional 2022 edition.
We understand that you will start to prepare your provisional 2022 edition in a few weeks. We are providing some detailed comments and suggestions in an annotated Word copy of your network statement for you to consider as you start this. If you have any queries on these, please get in touch.
Finally, noting that the RailNet Europe common template changed at the end of 2019², we anticipate your provisional 2022 version will follow that format.
¹ See [http://rne.eu/wp-content/uploads/Common_template_for_service_facility_information_clean.pdf](http://rne.eu/wp-content/uploads/Common_template_for_service_facility_information_clean.pdf) ² See [http://rne.eu/wp-content/uploads/RNE_NS_Common_Structure_TT_2022.pdf](http://rne.eu/wp-content/uploads/RNE_NS_Common_Structure_TT_2022.pdf) I am copying this letter to Alan Brookes at Amey and Antonio di Caprio at Transport for Wales. In line with our commitment to transparency, we will place a copy of this letter on our website.
Yours sincerely,
Les Waters
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80d8731fcc605f725ea0592696a0696d54f81a5f | **Blade Trail**
**Grade**........ red/difficult\
**Distance** ....... 23km\
**Time** .......... 2½ - 3½ hours\
**Climb** .......... 570m
**Bike Trail Grade**\
Red/ Difficult
**Suitable for**\
Proficient mountain bikers with good off-road riding skills. Suitable for better quality off-road mountain bikes.
**Trail & surface types**\
Steeper and tougher, mostly singletrack with technical sections. Expect very variable surface types.
**Gradients & technical trail features (TTFs)**\
A wide range of climbs and descents of a challenging nature will be present. Expect boardwalks, berms, large rocks, medium steps, drop-offs, cambers and water crossings.
**Suggested fitness level**\
Higher level of fitness and stamina.
______________________________________________________________________
**Llwybr Blade**
**Gradd**........ coch/anodd\
**Pellter** ........ 23km\
**Amser** ........ 2½ - 3½ awr\
**Dringo** ........ 570m
**Dosbarth y Llwybr**\
Coch/ Anodd
**Yn addas i Beicwyr mynydd medrus gyda sgiliau oddi ar y ffordd da. Addas i feiciau mynydd oddi ar y ffordd o ansawdd da.**
**Mathau o Iwybrau ac arwyneb**\
Yn fwy serth a chaled, trac sengl gan fwyaf gydag adrannau technegol. Disgwyliwch lawer o arwynebedd amrywiol.
**Nodweddion graddiant a thechnegol y llwybr**\
Fe fydd yna amrywiaeth eang o ddringfeydd a disgyniadau eithaf heriol. Disgwyliwch ddod ar draws llwybrau bordiau, ysgafellau, creigiau mawr, camau cymedrol, disgyniadau, cambrau, a chroesi dŵr.
**Lefel ffitrwydd awgrymiedig**\
Lefel uwch o ffitrwydd a stamina.
______________________________________________________________________
**Afan Forest Park’s Blade trail is a fantastic addition to the network. With lots of great singletrack, offering a great trail for more experienced riders.**
This trail takes you to higher and more remote sections of the forest with amazing views over the Brecon Beacons. It twists and winds through the distant forest with some tough technical climbs and descents before dropping back to Glyncorrwg.
Looking for more distance? You can also add-in a loop of the old Skyline trail. Make sure you are properly equipped as this extra loop takes you to a very remote area with changeable weather conditions. Llwybr Skyline Loop Trail
Gradd...... coch/anodd Amser ..... 2 - 3 awr
Grade...... red/difficult Time....... 2 - 3 hours
Pellter...... 19.4km Dringo ..... 316m
Distance... 19.4km Climb....... 316m
Ilwybr Blade Blade trail Ilwybr Skyline Skyline trail ffordd goedwig forest road postyn lleoliad waymarker parcio parking caffi café safle picnic picnic area trac sengl Blade Blade singletrack trac sengl Skyline Skyline singletrack ffordd gyhoeddus public road gwybodaeth information toiledau toilets man cwrdd ambiwlans ambulance pick-up point ffordd allan mewn argyfwng emergency exit
Canolfan Beiciau Mynydd Glyncorwg
Glyncorwg Mountain Bike Centre
Resolven Breath Taker Ghost Train Heartburn Turbine Valley Hokey Kokey Beacon View Deadwood Helter Skelter Groovy Gully The Twister Two Tombstones Peregrine Ridge The Rock Happy Life Jetlag Dastardly & Mutley Y Trwyn
© Crown copyright and database right 2016. Ordnance Survey Licence number 100019741 Reproduced by Permission of Ordnance Survey on behalf of HMSO.
© Hawlfraint a hawliau cronfa ddata'r Goron 2016. Cedwir pob hawl. Rhif Trwydded yr Arolwg Ordnans 100019741 Atgynhyrchwyd â chaniatâd yr Arolwg Ordains ar ran Llyfrta ei Mawrhydi.
SN 921025 SS 873984 SN 833026
© Crown copyright and database right 2016. Ordnance Survey Licence number 100019741 Reproduced by Permission of Ordnance Survey on behalf of HMSO.
© Hawlfraint a hawliau cronfa ddata'r Goron 2016. Cedwir pob hawl. Rhif Trwydded yr Arolwg Ordnans 100019741 Atgynhyrchwyd â chaniatâd yr Arolwg Ordains ar ran Llyfrta ei Mawrhydi.
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3ba6e20b63f4bfb970c9845c69df67c44debf4e1 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|-----------------------|--------------------------|---------| | Camilla Bustani | SMS | Aug-15 | Aug 10, 2015 | Off-site Hospitality | Colleague meetings | 7.40 | | Camilla Bustani | SMS | Aug-15 | Aug 10, 2015 | Overseas Travel - Air | Stakeholder meeting | 135.88 | | Camilla Bustani | SMS | Aug-15 | Aug 14, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 219.89 | | Janet Campbell | SMS | Aug-15 | Jul 28, 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 16.60 | | Tony Close | SMS | Aug-15 | Jul 16, 2015 | Overseas Travel - Air | Stakeholder meeting | 10.99 | | Tony Close | SMS | Aug-15 | Jul 17, 2015 | Overseas - Accommodation | Stakeholder meeting | 170.14 | | Fionnuala Cosgrove| SMS | Aug-15 | Jul 29, 2015 | Off-site Hospitality | Stakeholder meeting | 25.77 | | Katie Curry | SMS | Aug-15 | Jun 9, 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 14.00 | | Peter Davies | SMS | Aug-15 | Jun 16, 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 7.00 | | Peter Davies | SMS | Aug-15 | Jun 16, 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 10.00 | | Peter Davies | SMS | Aug-15 | Jun 25, 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 11.00 | | Peter Davies | SMS | Aug-15 | Jun 25, 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 15.00 | | Peter Davies | SMS | Aug-15 | Jul 7, 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 15.00 | | Peter Davies | SMS | Aug-15 | Jul 7, 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 18.00 | | Peter Davies | SMS | Aug-15 | Jul 14, 2015 | Overseas Travel - Taxis | Stakeholder event | 17.00 | | Peter Davies | SMS | Aug-15 | Jul 14, 2015 | Overseas Travel - Taxis | Stakeholder event | 17.00 | | Peter Davies | SMS | Aug-15 | Jul 14, 2015 | Overseas Travel - Taxis | Stakeholder event | 35.00 | | Peter Davies | SMS | Aug-15 | Jul 15, 2015 | Overseas subsistence | Stakeholder event | 9.29 | | Peter Davies | SMS | Aug-15 | Jul 15, 2015 | Overseas Travel - Taxis | Stakeholder event | 7.80 | | Peter Davies | SMS | Aug-15 | Jul 16, 2015 | Overseas - Accommodation | Stakeholder event | 118.02 | | Peter Davies | SMS | Aug-15 | Jul 16, 2015 | Overseas Travel - Taxis | Stakeholder event | 17.58 | | Peter Davies | SMS | Aug-15 | Jul 16, 2015 | Overseas Travel - Taxis | Stakeholder event | 33.25 | | Peter Davies | SMS | Aug-15 | Jul 17, 2015 | Overseas - Accommodation | Stakeholder event | 169.48 | | Peter Davies | SMS | Aug-15 | Jul 21, 2015 | Off-site Hospitality | Colleague meetings | 35.15 | | Gwen Morgan | SMS | Aug-15 | Jun 16, 2015 | UK Accommodation | Colleague meetings | 89.00 | | Gwen Morgan | SMS | Aug-15 | Jun 16, 2015 | UK Subsistence | Colleague meetings | 23.65 | | Gwen Morgan | SMS | Aug-15 | Jun 17, 2015 | UK Travel - Taxis and cabs | Colleague meetings | 30.00 | | Victoria Nash | SMS | Aug-15 | Jul 20, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 9.60 | | Victoria Nash | SMS | Aug-15 | Jul 30, 2015 | UK Travel - Air | Stakeholder meeting | 195.88 | | Victoria Nash | SMS | Aug-15 | Jul 31, 2015 | External Conferences & Seminars | Stakeholder meeting | 601.82 | | Victoria Nash | SMS | Aug-15 | Aug 7, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 9.40 | | Claudio Pollack | SMS | Aug-15 | Jul 17, 2015 | Overseas - Accommodation | Stakeholder event | 169.48 | | Claudio Pollack | SMS | Aug-15 | Jul 29, 2015 | Off-site Hospitality | Stakeholder meeting | 15.47 | | Claudio Pollack | SMS | Aug-15 | Aug 5, 2015 | Staff meals - Off site | Colleague meetings | 54.84 | | Claudio Pollack | SMS | Aug-15 | Aug 11, 2015 | UK Accommodation | Stakeholder event | 70.00 | | Jonathan Rose | SMS | Aug-15 | Jul 20, 2015 | UK Travel - Parking costs | Colleague meetings | 26.78 | | Jonathan Rose | SMS | Aug-15 | Jul 20, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 19.40 | | Jonathan Rose | SMS | Aug-15 | Jul 22, 2015 | UK Travel - Parking costs | Colleague meetings | 15.50 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|-------------------------------|------------------|---------| | Jonathan Rose | SMS | Aug-15 | Jul 31, 2015 | UK Travel - Parking costs | Colleague meetings | 11.80 | | Jonathan Rose | SMS | Aug-15 | Aug 11, 2015 | UK Travel - Air | Colleague meetings | 91.98 | | Mark Walls | SMS | Aug-15 | Jul 31, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meetings | 63.90 | | Rhodri Williams | SMS | Aug-15 | Jun 16, 2015 | UK Subsistence | Colleague meetings | 30.00 | | Rhodri Williams | SMS | Aug-15 | Jun 16, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 109.00 | | Rhodri Williams | SMS | Aug-15 | Jun 17, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 46.10 | | Rhodri Williams | SMS | Aug-15 | Jun 18, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content Board | 96.50 | | Rhodri Williams | SMS | Aug-15 | Jun 22, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 249.00 | | Rhodri Williams | SMS | Aug-15 | Jun 22, 2015 | UK Travel – Oyster card | Colleague meetings | 6.40 | | Rhodri Williams | SMS | Aug-15 | Jun 23, 2015 | Staff meals - Off site | Colleague meetings | 30.00 | | Rhodri Williams | SMS | Aug-15 | Jun 29, 2015 | UK Subsistence | Colleague meetings | 30.00 | | Rhodri Williams | SMS | Aug-15 | Jun 29, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 12.00 | | Rhodri Williams | SMS | Aug-15 | Jun 29, 2015 | UK Travel – Toll Fee | Colleague meetings | 10.00 | | Rhodri Williams | SMS | Aug-15 | Jun 30, 2015 | UK Subsistence | Colleague meetings | 30.00 | | Rhodri Williams | SMS | Aug-15 | Jul 1, 2015 | UK Travel – Oyster card | Colleague meetings | 11.00 | | Rhodri Williams | SMS | Aug-15 | Jul 1, 2015 | UK Travel – Toll Fee | Colleague meetings | 11.50 | | Rhodri Williams | SMS | Aug-15 | Jul 6, 2015 | UK Accommodation | Content Board | 64.50 | | Rhodri Williams | SMS | Aug-15 | Jul 6, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 127.50 | | Rhodri Williams | SMS | Aug-15 | Jul 11, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 104.00 | | Rhodri Williams | SMS | Aug-15 | Jul 13, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meetings | 146.70 | | Rhodri Williams | SMS | Aug-15 | Jul 13, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 124.50 | | Rhodri Williams | SMS | Aug-15 | Jul 14, 2015 | UK Subsistence | Stakeholder meeting | 30.00 | | Rhodri Williams | SMS | Aug-15 | Jul 14, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 12.00 | | Rhodri Williams | SMS | Aug-15 | Jul 14, 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 12.50 | | Rhodri Williams | SMS | Aug-15 | Jul 14, 2015 | UK Travel – Oyster card | Stakeholder meeting | 11.00 | | Rhodri Williams | SMS | Aug-15 | Jul 15, 2015 | UK Subsistence | Stakeholder meeting | 30.00 | | Rhodri Williams | SMS | Aug-15 | Jul 20, 2015 | UK Travel - Parking costs | Colleague meetings | 3.00 | | Rhodri Williams | SMS | Aug-15 | Jul 20, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 249.00 | | Rhodri Williams | SMS | Aug-15 | Jul 20, 2015 | UK Travel – Oyster card | Colleague meetings | 4.60 | | Rhodri Williams | SMS | Aug-15 | Jul 21, 2015 | UK Travel - Car,Motorbike,Cycle | Stakeholder event | 65.70 | | Rhodri Williams | SMS | Aug-15 | Jul 29, 2015 | UK Subsistence | Colleague meetings | 30.00 | | Rhodri Williams | SMS | Aug-15 | Aug 5, 2015 | UK Accommodation | Stakeholder event | 195.00 | | Christopher Woolford | SMS | Aug-15 | Jul 28, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 4.60 | | Christopher Woolford | SMS | Aug-15 | Aug 5, 2015 | Overseas Travel - Air | Stakeholder meeting | 215.48 | | Christopher Woolford | SMS | Aug-15 | Aug 5, 2015 | Overseas Travel - Air | Stakeholder meeting | 136.44 |
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9eebbd1f0002433157680a0f38cec7c5a21aeca4 | ## Board, Content Board and Senior Management Specialists (SMS) expenses
### Recorded in December 2015
| Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|----------------|--------------|---------------|-------------------------------|--------------------------------|--------| | Lynne Bradley | Ofcom Board | Dec-15 | Dec 6, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 36.30 | | Lynne Bradley | Ofcom Board | Dec-15 | Dec 14, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom Board | 19.00 | | Tim Gardam | Ofcom Board | Dec-15 | Oct 6, 2015 | UK Accommodation | Ofcom Board | 137.00 | | Tim Gardam | Ofcom Board | Dec-15 | Oct 6, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 24.70 | | Tim Gardam | Ofcom Board | Dec-15 | Oct 21, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom Board | 66.60 | | Tim Gardam | Ofcom Board | Dec-15 | Nov 5, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 66.60 | | Tim Gardam | Ofcom Board | Dec-15 | Nov 10, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 66.60 | | Tim Gardam | Ofcom Board | Dec-15 | Dec 14, 2015 | UK Accommodation | Ofcom Board | 137.00 | | Tim Gardam | Ofcom Board | Dec-15 | Dec 14, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom Board | 30.30 | | Tim Gardam | Ofcom Board | Dec-15 | Dec 15, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom Board | 24.70 | | David Levy | Content Board | Dec-15 | Dec 15, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meeting | 2.25 | | David Levy | Content Board | Dec-15 | Dec 15, 2015 | UK Travel - Parking costs | Colleague meeting | 5.00 | | David Levy | Content Board | Dec-15 | Dec 15, 2015 | UK Travel - Parking costs | Colleague meeting | 64.00 | | Mike McFige | Ofcom Board | Dec-15 | Nov 16, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom Board | 19.15 | | Mike McFige | Ofcom Board | Dec-15 | Nov 17, 2015 | UK Travel - Taxis and cars | Ofcom Board | 20.00 | | Mike McFige | Ofcom Board | Dec-15 | Dec 9, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom Board | 33.00 | | Mike McFige | Ofcom Board | Dec-15 | Dec 15, 2015 | UK Travel - Taxis and cars | Ofcom Board | 20.00 | | Martin Ballantyne | SMS | Dec-15 | Dec 18, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 24.00 | | Camilla Busciani | SMS | Dec-15 | Nov 18, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 10.00 | | Camilla Busciani | SMS | Dec-15 | Nov 30, 2015 | UK Travel - Taxis and cars | Colleague meeting | 32.00 | | Camilla Busciani | SMS | Dec-15 | Dec 7, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 38.00 | | Camilla Busciani | SMS | Dec-15 | Dec 12, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 20.00 | | Joseph Butler | SMS | Dec-15 | Nov 11, 2015 | Off-site Hospitality | Stakeholder meeting | 41.87 | | Joseph Butler | SMS | Dec-15 | Nov 11, 2015 | Overseas subsistence | Stakeholder meeting | 7.23 | | Joseph Butler | SMS | Dec-15 | Nov 11, 2015 | Overseas subsistence | Stakeholder meeting | 3.55 | | Joseph Butler | SMS | Dec-15 | Nov 12, 2015 | Off-site Hospitality | Stakeholder meeting | 47.79 | | Joseph Butler | SMS | Dec-15 | Nov 12, 2015 | Overseas subsistence | Stakeholder meeting | 5.40 | | Joseph Butler | SMS | Dec-15 | Dec 3, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 4.60 | | Mark Caines | SMS | Dec-15 | Sep 28, 2015 | Overseas Travel - Air | Stakeholder meeting | 138.50 | | Mark Caines | SMS | Dec-15 | Sep 28, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 2.47 | | Mark Caines | SMS | Dec-15 | Oct 2, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 120.50 | | Mark Caines | SMS | Dec-15 | Nov 16, 2015 | Overseas Travel - Taxis | Stakeholder meeting | 18.42 | | Mark Caines | SMS | Dec-15 | Nov 16, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 40.00 | | Mark Caines | SMS | Dec-15 | Nov 17, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 22.37 | | Janet Campbell | SMS | Dec-15 | Dec 3, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meeting | 27.00 | | Tony Close | SMS | Dec-15 | Dec 2, 2015 | Overseas Travel - Air | Stakeholder meeting | 93.75 | | Tony Close | SMS | Dec-15 | Dec 2, 2015 | Overseas Travel - Air | Stakeholder meeting | 235.58 | | Tony Close | SMS | Dec-15 | Dec 2, 2015 | Overseas Travel - Air | Stakeholder meeting | 28.00 | | Tony Close | SMS | Dec-15 | Dec 7, 2015 | UK Subsistence | Stakeholder meeting | 19.90 | | Tony Close | SMS | Dec-15 | Dec 7, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 17.70 | | Tony Close | SMS | Dec-15 | Dec 15, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 60.00 | | Tony Close | SMS | Dec-15 | Dec 15, 2015 | UK Travel - Taxis and cars | Colleague meeting | 22.00 | | Peter Davies | SMS | Dec-15 | Oct 6, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 26.00 | | Peter Davies | SMS | Dec-15 | Nov 3, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 11.00 | | Peter Davies | SMS | Dec-15 | Nov 10, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 12.00 | | Peter Davies | SMS | Dec-15 | Dec 10, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 63.65 | | Abigail Smith | SMS | Dec-15 | Nov 27, 2015 | UK Subsistence | Stakeholder meeting | 3.65 | | Abigail Smith | SMS | Dec-15 | Nov 27, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meeting | 19.80 | | Abigail Smith | SMS | Dec-15 | Nov 27, 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 9.00 | | Abigail Smith | SMS | Dec-15 | Nov 27, 2015 | UK Travel - Oyster card | Stakeholder meeting | 6.60 | | Abigail Smith | SMS | Dec-15 | Nov 27, 2015 | UK Travel - Oyster card | Stakeholder meeting | 5.60 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|-------------------------------|--------------------------|--------| | Geoffrey Myers | SMS | Dec-15 | Nov 27, 2015 | Overseas Travel - Taxis | Stakeholder Event | 14.42 | | Geoffrey Myers | SMS | Dec-15 | Nov 28, 2015 | Overseas - Accommodation | Stakeholder Event | 4.00 | | Geoffrey Myers | SMS | Dec-15 | Nov 28, 2015 | Overseas Travel - Taxis | Stakeholder Event | 15.07 | | Victoria Nash | SMS | Dec-15 | Nov 16, 2015 | UK Travel - Air | Colleague meeting | 169.27 | | Victoria Nash | SMS | Dec-15 | Nov 16, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 50.00 | | Victoria Nash | SMS | Dec-15 | Nov 16, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 9.40 | | Victoria Nash | SMS | Dec-15 | Dec 2, 2015 | UK Accommodation | Stakeholder meeting | 46.00 | | Victoria Nash | SMS | Dec-15 | Dec 2, 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 16.45 | | Victoria Nash | SMS | Dec-15 | Dec 2, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.40 | | Victoria Nash | SMS | Dec-15 | Dec 3, 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 10.80 | | Victoria Nash | SMS | Dec-15 | Dec 7, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 18.10 | | Victoria Nash | SMS | Dec-15 | Dec 8, 2015 | Off-site Hospitality | Colleague meeting | 17.50 | | Victoria Nash | SMS | Dec-15 | Dec 8, 2015 | UK Accommodation | Colleague meeting | 189.00 | | Victoria Nash | SMS | Dec-15 | Dec 8, 2015 | UK Subsistence | Colleague meeting | 30.00 | | Victoria Nash | SMS | Dec-15 | Dec 8, 2015 | UK Travel - Air | Colleague meeting | 286.84 | | Victoria Nash | SMS | Dec-15 | Dec 8, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 4.80 | | Victoria Nash | SMS | Dec-15 | Dec 9, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 6.80 | | Victoria Nash | SMS | Dec-15 | Dec 10, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.60 | | Victoria Nash | SMS | Dec-15 | Dec 14, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 8.50 | | Lynn Parker | SMS | Dec-15 | Oct 1, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 12.00 | | Lynn Parker | SMS | Dec-15 | Oct 22, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.00 | | Lynn Parker | SMS | Dec-15 | Oct 23, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.00 | | Phillips, Paul J | SMS | Dec-15 | Dec 3, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 15.25 | | Phillips, Paul J | SMS | Dec-15 | Dec 3, 2015 | UK Travel - Oyster card | Colleague meeting | 2.30 | | Phillips, Paul J | SMS | Dec-15 | Dec 10, 2015 | UK Travel - Taxis and cab | Stakeholder Meeting | 12.00 | | Phillips, Paul J | SMS | Dec-15 | Dec 14, 2015 | UK Travel - Oyster card | Colleague meeting | 2.30 | | Phillips, Paul J | SMS | Dec-15 | Dec 16, 2015 | UK Travel - Taxis and cab | Stakeholder Meeting | 20.00 | | Christopher Rowell| SMS | Dec-15 | Dec 3, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder Event | 5.52 | | Christopher Rowell| SMS | Dec-15 | Dec 3, 2015 | UK Travel - Taxis and cab | Stakeholder Event | 12.00 | | Christopher Rowell| SMS | Dec-15 | Dec 3, 2015 | UK Travel - Oyster card | Stakeholder Event | 1.90 | | Christopher Rowell| SMS | Dec-15 | Dec 3, 2015 | UK Travel - Oyster card | Stakeholder Event | 2.90 | | Yih-Choung Teh | SMS | Dec-15 | Nov 27, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 23.37 | | Yih-Choung Teh | SMS | Dec-15 | Dec 8, 2015 | Overseas subsistence | Stakeholder Event | 123.13 | | Yih-Choung Teh | SMS | Dec-15 | Dec 9, 2015 | Overseas - Accommodation | Stakeholder Event | 7.00 | | Yih-Choung Teh | SMS | Dec-15 | Dec 15, 2015 | UK Travel - Taxis and cab | Colleague meeting | 6.00 | | Yih-Choung Teh | SMS | Dec-15 | Dec 15, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 60.00 | | James Thickett | SMS | Dec-15 | Nov 25, 2015 | UK Travel - Air | Colleague meeting | 49.00 | | James Thickett | SMS | Dec-15 | Nov 25, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 10.90 | | James Thickett | SMS | Dec-15 | Dec 8, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 19.90 | | James Thickett | SMS | Dec-15 | Dec 8, 2015 | UK Travel - Taxis and cab | Colleague meeting | 20.00 | | James Thickett | SMS | Dec-15 | Dec 9, 2015 | UK Accommodation | Colleague meeting | 99.00 | | James Thickett | SMS | Dec-15 | Dec 9, 2015 | UK Subsistence | Colleague meeting | 15.15 | | James Thickett | SMS | Dec-15 | Dec 9, 2015 | UK Subsistence | Colleague meeting | 19.15 | | James Thickett | SMS | Dec-15 | Dec 10, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 27.23 | | James Thickett | SMS | Dec-15 | Dec 10, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 31.13 | | James Thickett | SMS | Dec-15 | Dec 11, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 82.82 | | Mark Wells | SMS | Dec-15 | Dec 3, 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 63.90 | | Mark Wells | SMS | Dec-15 | Dec 11, 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 63.90 | | Mark Wells | SMS | Dec-15 | Dec 16, 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 72.45 | | Mark Wells | SMS | Dec-15 | Dec 17, 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 58.50 | | Mark Wells | SMS | Dec-15 | Dec 28, 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 68.30 |
## PMB, Executive Committee and Senior Management Specialists (SMS) expenses
**Recorded in December 2015**
| Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |----------------|-------|--------------|----------------|-------------------------------|-----------------------|--------| | Rhodri Williams| SMS | Dec-15 | Sep 18, 2015 | UK Travel - Parking costs | Colleague meeting | 3.00 | | Rhodri Williams| SMS | Dec-15 | Nov 16, 2015 | UK Accommodation | Colleague meeting | 119.00 | | Rhodri Williams| SMS | Dec-15 | Nov 16, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting | 112.00 | | Rhodri Williams| SMS | Dec-15 | Nov 16, 2015 | UK Travel - Oyster card | Colleague meeting | 13.90 | | Rhodri Williams| SMS | Dec-15 | Nov 17, 2015 | UK Subsistence | Colleague meeting | 7.03 | | Rhodri Williams| SMS | Dec-15 | Nov 17, 2015 | UK Subsistence | Colleague meeting | 30.00 | | Rhodri Williams| SMS | Dec-15 | Nov 16, 2015 | UK Subsistence | Colleague meeting | 23.69 | | Rhodri Williams| SMS | Dec-15 | Nov 19, 2015 | UK Travel - Parking costs | Colleague meeting | 5.00 | | Rhodri Williams| SMS | Dec-15 | Nov 24, 2015 | UK Subsistence | Stakeholder Meeting | 15.00 | | Rhodri Williams| SMS | Dec-15 | Dec 1, 2015 | UK Subsistence | Stakeholder Meeting | 9.15 | | Rhodri Williams| SMS | Dec-15 | Dec 8, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting | 60.00 | | Rhodri Williams| SMS | Dec-15 | Dec 8, 2015 | UK Travel - Oyster card | Colleague meeting | 43.50 | | Christopher Woolford| SMS | Dec-15 | Nov 1, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Stakeholder Event | 12.00 | | Christopher Woolford| SMS | Dec-15 | Nov 7, 2015 | Overseas subsistence | Stakeholder Event | 117.47 | | Christopher Woolford| SMS | Dec-15 | Nov 8, 2015 | Overseas subsistence | Stakeholder Event | 69.40 | | Christopher Woolford| SMS | Dec-15 | Nov 13, 2015 | Overseas subsistence | Stakeholder Event | 69.10 | | Christopher Woolford| SMS | Dec-15 | Nov 14, 2015 | Overseas subsistence | Stakeholder Event | 30.10 | | Christopher Woolford| SMS | Dec-15 | Nov 16, 2015 | Overseas subsistence | Stakeholder Event | 18.12 | | Christopher Woolford| SMS | Dec-15 | Nov 16, 2015 | Overseas subsistence | Stakeholder Event | 241.75 | | Christopher Woolford| SMS | Dec-15 | Nov 17, 2015 | Overseas subsistence | Stakeholder Event | 44.92 | | Christopher Woolford| SMS | Dec-15 | Nov 18, 2015 | Overseas subsistence | Stakeholder Event | 421.91 | | Christopher Woolford| SMS | Dec-15 | Nov 20, 2015 | Overseas subsistence | Stakeholder Event | 19.83 | | Christopher Woolford| SMS | Dec-15 | Nov 21, 2015 | Overseas subsistence | Stakeholder Event | 78.78 | | Christopher Woolford| SMS | Dec-15 | Nov 22, 2015 | Overseas subsistence | Stakeholder Event | 47.89 | | Christopher Woolford| SMS | Dec-15 | Nov 25, 2015 | Overseas subsistence | Stakeholder Event | 18.46 | | Christopher Woolford| SMS | Dec-15 | Nov 26, 2015 | Overseas subsistence | Stakeholder Event | 57.89 | | Christopher Woolford| SMS | Dec-15 | Nov 27, 2015 | Overseas - Accommodation | Stakeholder Event | 41.99 | | Christopher Woolford| SMS | Dec-15 | Nov 27, 2015 | Overseas subsistence | Stakeholder Event | 39.34 | | Christopher Woolford| SMS | Dec-15 | Nov 27, 2015 | Overseas Travel - Air | Stakeholder Event | 66.04 | | Christopher Woolford| SMS | Dec-15 | Nov 27, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Stakeholder Event | 24.50 | | Christopher Woolford| SMS | Dec-15 | Dec 4, 2015 | Overseas Travel - Rail/Bus/Coach| Stakeholder Meeting | 90.79 | | Christopher Woolford| SMS | Dec-15 | Nov 11, 2015 | Off-site Hospitality | Stakeholder meeting | 41.87 | | Christopher Woolford| SMS | Dec-15 | Nov 12, 2015 | Off-site Hospitality | Stakeholder meeting | 40.79 |
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7732738e612ac2487b026df4cda32333812f2648 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|----------------|--------------|---------------|-------------------------------|----------------------------------|--------| | Patricia Hodgson | Ofcom Board | February 15 | 10 February 2015 | UK Travel - Taxis and cabs | Annual Plan Event, Belfast | 90.55 | | Patricia Hodgson | Ofcom Board | February 15 | 10 February 2015 | UK Subsistence | Annual Plan Event, Belfast | 2.35 | | Philip Schlesinger| Content Board | February 15 | 28 January 2015 | UK Travel - Car,Motorbike,Cycle| Stakeholder meeting | 7.20 | | Philip Schlesinger| Content Board | February 15 | 28 January 2015 | UK Travel - Rail/Bus/Tube/Ferry| Stakeholder meeting | 0.00 | | Philip Schlesinger| Content Board | February 15 | 29 January 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting | 8.50 | | Tim Gardam | Ofcom Board | February 15 | 03 November 2014 | UK Travel - Rail/Bus/Tube/Ferry| Content board | 28.70 | | Tim Gardam | Ofcom Board | February 15 | 05 November 2014 | UK Travel - Rail/Bus/Tube/Ferry| Stakeholder meeting | 4.10 | | Tim Gardam | Ofcom Board | February 15 | 25 November 2014 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting | 29.60 | | Tim Gardam | Ofcom Board | February 15 | 25 November 2014 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting | 28.70 | | Tim Gardam | Ofcom Board | February 15 | 15 December 2014 | UK Accommodation | Ofcom board | 129.00 | | Tim Gardam | Ofcom Board | February 15 | 15 December 2014 | UK Travel - Rail/Bus/Tube/Ferry| Ofcom board | 15.10 | | Tim Gardam | Ofcom Board | February 15 | 16 December 2014 | UK Travel - Rail/Bus/Tube/Ferry| Ofcom board | 24.10 | | Tim Gardam | Ofcom Board | February 15 | 19 December 2014 | UK Travel - Rail/Bus/Tube/Ferry| Content board | 65.50 | | Tim Gardam | Ofcom Board | February 15 | 20 January 2015 | UK Travel - Rail/Bus/Tube/Ferry| Content board | 66.60 | | Tim Gardam | Ofcom Board | February 15 | 28 January 2015 | UK Accommodation | Colleague meeting | 88.00 | | Tim Gardam | Ofcom Board | February 15 | 28 January 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting | 24.00 | | Tim Gardam | Ofcom Board | February 15 | 28 January 2015 | UK Travel - Taxis and cabs | Colleague meeting | 26.00 | | Tim Gardam | Ofcom Board | February 15 | 29 January 2015 | UK Travel - Taxis and cabs | Colleague meeting | 25.00 | | Tim Gardam | Ofcom Board | February 15 | 03 February 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting | 66.60 | | Alastair Smith | SMG | February 15 | 28 January 2015 | UK Travel - Car,Motorbike,Cycle| Colleague meeting | 19.80 | | Alastair Smith | SMG | February 15 | 28 January 2015 | UK Travel - Oyster card | Colleague meeting | 5.60 | | Alastair Smith | SMG | February 15 | 28 January 2015 | UK Travel - Oyster card | Stakeholder meeting | 2.80 | | Charles Jenne | SMG | February 15 | 22 October 2014 | UK Travel - Rail/Bus/Tube/Ferry| Stakeholder meeting | 40.00 | | Charles Jenne | SMG | February 15 | 22 October 2014 | UK Travel - Taxis and cabs | Stakeholder meeting | 40.00 | | Mark Walls | SMG | February 15 | 27 January 2015 | UK Travel - Car,Motorbike,Cycle| Colleague meeting | 50.40 | | Mark Walls | SMG | February 15 | 13 February 2015 | UK Travel - Car,Motorbike,Cycle| Colleague meeting | 63.90 | | Mark Walls | SMG | February 15 | 16 February 2015 | UK Travel - Car,Motorbike,Cycle| Colleague meeting | 63.90 | | Mark Walls | SMG | February 15 | 19 February 2015 | UK Travel - Car,Motorbike,Cycle| Colleague meeting | 63.90 | | Mark Walls | SMG | February 15 | 24 February 2015 | UK Travel - Car,Motorbike,Cycle| Colleague meeting | 141.30 | | Peter Davies | SMG | February 15 | 22 January 2015 | External Conferences & Seminars| Stakeholder event | 330.00 | | Peter Davies | SMG | February 15 | 24 January 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting | 64.74 | | Peter Davies | SMG | February 15 | 27 January 2015 | UK Travel - Taxis and cabs | Colleague meeting | 54.50 | | Peter Davies | SMG | February 15 | 28 January 2015 | Off-site Hospitality | Colleague meeting | 1.78 | | Peter Davies | SMG | February 15 | 29 January 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting | 35.00 | | Peter Davies | SMG | February 15 | 29 January 2015 | UK Travel - Taxis and cabs | Colleague meeting | 22.00 | | Peter Davies | SMG | February 15 | 29 January 2015 | UK Travel - Taxis and cabs | Colleague meeting | 22.00 | | Peter Davies | SMG | February 15 | 29 January 2015 | UK Travel - Taxis and cabs | Colleague meeting | 16.00 | | Peter Davies | SMG | February 15 | 11 February 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 16.00 | | Peter Davies | SMG | February 15 | 11 February 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 27.30 | | Christopher Woolford| SMG | February 15 | 26 January 2015 | Overseas Travel - Rail/Bus/Coach| Stakeholder meeting | 215.78 | | Christopher Woolford| SMG | February 15 | 26 January 2015 | UK Travel - Oyster card | Stakeholder meeting | 4.60 | | Christopher Woolford| SMG | February 15 | 27 January 2015 | Overseas Travel - Rail/Bus/Coach| Stakeholder meeting | 243.00 | | Christopher Woolford| SMG | February 15 | 28 January 2015 | Overseas subsistence | Stakeholder meeting | 22.13 | | Christopher Woolford| SMG | February 15 | 28 January 2015 | Overseas Travel - Rail/Bus/Coach| Stakeholder meeting | 1.80 | | Christopher Woolford| SMG | February 15 | 29 January 2015 | Overseas - Accommodation | Stakeholder meeting | 120.99 | | Christopher Woolford| SMG | February 15 | 29 January 2015 | Overseas subsistence | Stakeholder meeting | 32.64 | | Christopher Woolford| SMG | February 15 | 29 January 2015 | Overseas subsistence | Stakeholder meeting | 28.94 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|---------------------------------------|--------------------------|--------| | Christopher Woolford | SMG | February 15 | 29 January 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 4.21 | | Christopher Woolford | SMG | February 15 | 30 January 2015 | Network charges | Stakeholder meeting | 7.72 | | Christopher Woolford | SMG | February 15 | 30 January 2015 | Overseas - Accommodation | Stakeholder meeting | 128.96 | | Christopher Woolford | SMG | February 15 | 30 January 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 10.81 | | Christopher Woolford | SMG | February 15 | 02 February 2015 | Overseas subsistence | Colleague meeting | 9.85 | | Christopher Woolford | SMG | February 15 | 02 February 2015 | UK Subsistence | Colleague meeting | 9.85 | | Christopher Woolford | SMG | February 15 | 02 February 2015 | UK Travel - Taxis and cabs | Colleague meeting | 42.00 | | Christopher Woolford | SMG | February 15 | 04 February 2015 | Overseas subsistence | Colleague meeting | 149.96 | | Christopher Woolford | SMG | February 15 | 05 February 2015 | Overseas subsistence | Colleague meeting | 65.91 | | Christopher Woolford | SMG | February 15 | 06 February 2015 | Overseas - Accommodation | Colleague meeting | 220.13 | | Christopher Woolford | SMG | February 15 | 06 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 33.59 | | Christopher Woolford | SMG | February 15 | 06 February 2015 | UK Travel - Rail/Bus/Coach | Colleague meeting | 332.91 | | Christopher Woolford | SMG | February 15 | 09 February 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 4,109.75 | | Claudio Pollack | SMG | February 15 | 04 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 95.04 | | Claudio Pollack | SMG | February 15 | 09 February 2015 | UK Travel - Taxis and cabs | Colleague meeting | 6.00 | | Claudio Pollack | SMG | February 15 | 10 February 2015 | Staff meals - Off site | Colleague meeting | 11.84 | | Claudio Pollack | SMG | February 15 | 11 February 2015 | UK Accommodation | Colleague meeting | 174.00 | | Clive Carter | SMG | February 15 | 04 December 2014 | UK Travel - Taxis and cabs | Stakeholder meeting | 8.00 | | Clive Carter | SMG | February 15 | 13 January 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 8.00 | | Clive Carter | SMG | February 15 | 13 January 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 8.00 | | Geoffrey Myers | SMG | February 15 | 04 February 2015 | Off-site Hospitality | Colleague meeting | 29.02 | | Graham Howell | SMG | February 15 | 22 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 22.09 | | Graham Howell | SMG | February 15 | 22 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 22.09 | | Graham Howell | SMG | February 15 | 02 February 2015 | UK Travel - Air | Colleague meeting | 50.00 | | Graham Howell | SMG | February 15 | 03 February 2015 | UK Travel - Air | Colleague meeting | 57.19 | | Graham Howell | SMG | February 15 | 03 February 2015 | UK Travel - Air | Colleague meeting | 49.57 | | Graham Howell | SMG | February 15 | 03 February 2015 | UK Travel - Air | Colleague meeting | 2.47 | | Graham Howell | SMG | February 15 | 03 February 2015 | UK Travel - Air | Colleague meeting | 50.00 | | Graham Howell | SMG | February 15 | 03 February 2015 | UK Travel - Air | Colleague meeting | 2.76 | | Graham Howell | SMG | February 15 | 04 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 97.61 | | Graham Howell | SMG | February 15 | 05 February 2015 | UK Travel - Air | Colleague meeting | 137.11 | | Graham Howell | SMG | February 15 | 05 February 2015 | UK Travel - Air | Colleague meeting | 9.99 | | Graham Howell | SMG | February 15 | 05 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 49.83 | | Graham Howell | SMG | February 15 | 05 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.64 | | Graham Howell | SMG | February 15 | 11 February 2015 | UK Accommodation | Colleague meeting | 111.00 | | Graham Howell | SMG | February 15 | 11 February 2015 | UK Subsistence | Colleague meeting | 60.00 | | Graham Howell | SMG | February 15 | 11 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Refund | (11.18) | | Graham Howell | SMG | February 15 | 12 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Refund | (11.18) | | Graham Howell | SMG | February 15 | 12 February 2015 | UK Travel - Taxis and cabs | Colleague meeting | 50.00 | | Graham Howell | SMG | February 15 | 12 February 2015 | UK Travel - Taxis and cabs | Colleague meeting | 25.00 | | Graham Howell | SMG | February 15 | 12 February 2015 | UK Travel - Taxis and cabs | Colleague meeting | 50.00 | | James Thickett | SMG | February 15 | 22 January 2015 | UK Accommodation | Colleague meeting | 99.00 | | James Thickett | SMG | February 15 | 26 January 2015 | UK Travel - Air | Colleague meeting | 49.99 | | James Thickett | SMG | February 15 | 26 January 2015 | UK Travel - Air | Colleague meeting | 35.25 | | James Thickett | SMG | February 15 | 26 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 133.58 | | James Thickett | SMG | February 15 | 27 January 2015 | UK Travel - Air | Colleague meeting | 72.99 | | James Thickett | SMG | February 15 | 28 January 2015 | UK Travel - Air | Colleague meeting | 94.99 | | James Thickett | SMG | February 15 | 28 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 77.06 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|---------------------------------------|--------------------------|--------| | James Thickett | SMG | February 15 | 29 January 2015 | UK Accommodation | Colleague meeting | 87.00 | | James Thickett | SMG | February 15 | 02 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 2.30 | | Jonathan Odey | SMG | February 15 | 06 January 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 7.00 | | Jonathan Odey | SMG | February 15 | 09 January 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 20.00 | | Jonathan Odey | SMG | February 15 | 09 January 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 25.80 | | Jonathan Odey | SMG | February 15 | 02 February 2015 | Staff meals - Off site | Colleague meeting | 16.30 | | Jonathan Odey | SMG | February 15 | 12 February 2015 | Off-site Hospitality | Colleague meeting | 52.11 | | Jonathan Odey | SMG | February 15 | 13 February 2015 | UK Travel - Car, Motorbike, Cycle | Stakeholder meeting | 11.25 | | Jonathan Odey | SMG | February 15 | 13 February 2015 | UK Travel - Car, Motorbike, Cycle | Stakeholder meeting | 56.70 | | Jonathan Odey | SMG | February 15 | 13 February 2015 | UK Travel - Parking costs | Stakeholder meeting | 2.20 | | Jonathan Odey | SMG | February 15 | 19 January 2015 | UK Travel - Parking costs | Colleague meeting | 25.75 | | Jonathan Odey | SMG | February 15 | 22 January 2015 | UK Travel - Air | Colleague meeting | 64.99 | | Jonathan Odey | SMG | February 15 | 22 January 2015 | UK Travel - Air | Colleague meeting | 59.99 | | Jonathan Odey | SMG | February 15 | 29 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 10.48 | | Jonathan Rose | SMG | February 15 | 05 February 2015 | UK Travel - Car, Motorbike, Cycle | Stakeholder meeting | 54.00 | | Jonathan Rose | SMG | February 15 | 13 February 2015 | UK Travel - Air | Colleague meeting | 80.26 | | Jonathan Rose | SMG | February 15 | 16 February 2015 | UK Travel - Air | Colleague meeting | 74.99 | | Jonathan Rose | SMG | February 15 | 16 February 2015 | UK Travel - Air | Colleague meeting | 59.99 | | Jonathan Rose | SMG | February 15 | 16 February 2015 | UK Travel - Air | Colleague meeting | 8.80 | | Jonathan Rose | SMG | February 15 | 16 February 2015 | UK Travel - Air | Colleague meeting | 54.99 | | Jonathan Rose | SMG | February 15 | 16 February 2015 | UK Travel - Parking costs | Colleague meeting | 25.75 | | Jonathan Rose | SMG | February 15 | 16 February 2015 | UK Travel - Car, Motorbike, Cycle | Stakeholder meeting | 54.00 | | Jonathan Rose | SMG | February 15 | 19 February 2015 | UK Travel - Car, Motorbike, Cycle | Stakeholder meeting | 37.35 | | Joseph Butler | SMG | February 15 | 03 February 2015 | Overseas Travel - Air | Stakeholder event | 386.93 | | Marine Golds | SMG | February 15 | 22 January 2015 | Overseas - Accommodation | Stakeholder meeting | 161.96 | | Mark Harrison | SMG | February 15 | 27 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 12.00 | | Mark Harrison | SMG | February 15 | 28 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 12.00 | | Mark Harrison | SMG | February 15 | 06 February 2015 | UK Travel - Rail/Bus/Tube/Ferry (to/from home to normal place of work) | Stakeholder meeting | 9.60 | | Mark Harrison | SMG | February 15 | 11 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 12.00 | | Martin Ballantine | SMG | February 15 | 29 January 2015 | UK Travel - Taxis and cabs | Colleague meeting | 10.00 | | Rhodri Williams | SMG | February 15 | 21 January 2015 | UK Travel - Oyster card | Colleague meeting | 17.70 | | Rhodri Williams | SMG | February 15 | 23 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Refund | 106.00 | | Rhodri Williams | SMG | February 15 | 12 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.00 | | Rhodri Williams | SMG | February 15 | 17 February 2015 | UK Subsistence | Colleague meeting | 25.41 | | Rhodri Williams | SMG | February 15 | 18 February 2015 | UK Subsistence | Colleague meeting | 30.00 | | Rhodri Williams | SMG | February 15 | 18 February 2015 | UK Subsistence | Colleague meeting | 55.00 | | Rhodri Williams | SMG | February 15 | 19 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 46.10 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|-------------------------------|-----------------------|--------| | Rhodri Williams | SMG | February 15 | 10 February 2015 | Staff meals - Off site | Colleague meeting | 11.83 | | Stephen Gettings | SMG | February 15 | 22 January 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 136.46 | | Stephen Gettings | SMG | February 15 | 22 January 2015 | Overseas Travel - Taxis | Stakeholder meeting | 25.30 | | Stephen Unger | SMG | February 15 | 11 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 22.09 | | Stephen Unger | SMG | February 15 | 11 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 18.60 | | Stephen Unger | SMG | February 15 | 11 February 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 16.00 | | Stephen Unger | SMG | February 15 | 12 February 2015 | UK Travel - Parking costs | Stakeholder meeting | 9.20 | | Stephen Unger | SMG | February 15 | 13 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.50 | | Victoria Nash | SMG | February 15 | 28 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 172.07 | | Victoria Nash | SMG | February 15 | 29 January 2015 | UK Accommodation | Colleague meeting | 97.85 | | Victoria Nash | SMG | February 15 | 12 February 2015 | UK Travel - 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Rail/Bus/Tube/Ferry | Colleague meeting | 2.47 | | Victoria Nash | SMG | February 15 | 19 February 2015 | UK Travel - Air | Colleague meeting | 200.07 | | Victoria Nash | SMG | February 15 | 19 February 2015 | UK Travel - Air | Colleague meeting | 2.47 | | Yih-Choung Teh | SMG | February 15 | 02 February 2015 | Staff meals - Off site | Colleague meeting | 16.30 |
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d79bc3afcbeb8f4ca685cfda0c40efa517b17a88 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |------------------------|----------------|--------------|---------------|-------------------------------|--------------------------|--------| | Lynne Brindley | Ofcom Board | January 2015 | 20 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content Board | 21.50 | | Lynne Brindley | Ofcom Board | January 2015 | 20 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content Board | 9.20 | | Lynne Brindley | Ofcom Board | January 2015 | 20 January 2015 | UK Travel - Taxis and cabs | Content Board | 24.00 | | Lynne Brindley | Ofcom Board | January 2015 | 21 January 2015 | UK Accommodation | Colleague Meeting | 34.00 | | Lynne Brindley | Ofcom Board | January 2015 | 21 January 2015 | UK Subsistence | Colleague Meeting | 5.84 | | Lynne Brindley | Ofcom Board | January 2015 | 21 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 18.00 | | Lynne Brindley | Ofcom Board | January 2015 | 26 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom Board | 16.30 | | David Levy | Content Board | January 2015 | 20 January 2015 | UK Travel - Car,Motorbike,Cycle | Content Board | 2.25 | | David Levy | Content Board | January 2015 | 20 January 2015 | UK Travel - Parking costs | Content Board | 6.70 | | David Levy | Content Board | January 2015 | 20 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content Board | 66.60 | | Lesley MacKenzie | Content Board | January 2015 | 19 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content Board | 35.00 | | Lesley MacKenzie | Content Board | January 2015 | 20 January 2015 | UK Accommodation | Content Board | 125.00 | | Glyn Mathias | Content Board | January 2015 | 03 December 2014 | UK Travel - Car,Motorbike,Cycle | Stakeholder Event | 36.00 | | Glyn Mathias | Content Board | January 2015 | 03 December 2014 | UK Travel - Parking costs | Colleague Meeting | 18.00 | | Glyn Mathias | Content Board | January 2015 | 04 December 2014 | UK Travel - Car,Motorbike,Cycle | Colleague Meeting | 36.00 | | Glyn Mathias | Content Board | January 2015 | 04 December 2014 | UK Travel - Parking costs | Colleague Meeting | 10.00 | | Glyn Mathias | Content Board | January 2015 | 08 December 2014 | UK Travel - Car,Motorbike,Cycle | Content Board | 34.20 | | Glyn Mathias | Content Board | January 2015 | 08 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 97.10 | | Glyn Mathias | Content Board | January 2015 | 09 December 2014 | UK Accommodation | Content Board | 120.00 | | Glyn Mathias | Content Board | January 2015 | 09 December 2014 | UK Travel - Parking costs | Content Board | 17.20 | | Glyn Mathias | Content Board | January 2015 | 09 December 2014 | UK Travel - Taxis and cabs | Colleague Meeting | 8.00 | | Glyn Mathias | Content Board | January 2015 | 19 January 2015 | UK Travel - Car,Motorbike,Cycle | Content Board | 34.20 | | Glyn Mathias | Content Board | January 2015 | 19 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content Board | 94.35 | | Glyn Mathias | Content Board | January 2015 | 20 January 2015 | UK Accommodation | Content Board | 120.00 | | Glyn Mathias | Content Board | January 2015 | 20 January 2015 | UK Travel - Parking costs | Content Board | 15.00 | | Glyn Mathias | Content Board | January 2015 | 20 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content Board | 4.70 | | Glyn Mathias | Content Board | January 2015 | 20 January 2015 | UK Travel - Taxis and cabs | Content Board | 10.00 | | Baroness Sheila Noakes | Ofcom Board | January 2015 | 14 October 2014 | UK Travel - Taxis and cabs | Stakeholder Meeting | 9.00 | | Baroness Sheila Noakes | Ofcom Board | January 2015 | 31 October 2014 | UK Travel - Car,Motorbike,Cycle | Colleague Meeting | 45.00 | | Baroness Sheila Noakes | Ofcom Board | January 2015 | 27 November 2014 | UK Travel - Parking costs | Stakeholder Meeting | 85.00 | | Baroness Sheila Noakes | Ofcom Board | January 2015 | 04 December 2014 | UK Travel - Taxis and cabs | Colleague Meeting | 15.00 | | Baroness Sheila Noakes | Ofcom Board | January 2015 | 16 December 2014 | UK Travel - Taxis and cabs | Stakeholder Meeting | 8.50 | | Philip Schlesinger | Content Board | January 2015 | 14 January 2015 | UK Subsistence | Stakeholder Meeting | 5.25 | | Philip Schlesinger | Content Board | January 2015 | 14 January 2015 | UK Travel - Car,Motorbike,Cycle | Stakeholder Meeting | 7.20 | | Philip Schlesinger | Content Board | January 2015 | 14 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 5.00 | | Philip Schlesinger | Content Board | January 2015 | 17 January 2015 | UK Travel - Taxis and cabs | Content Board | 15.00 | | Philip Schlesinger | Content Board | January 2015 | 19 January 2015 | UK Subsistence | Content Board | 23.30 | | Philip Schlesinger | Content Board | January 2015 | 20 January 2015 | UK Travel - Taxis and cabs | Colleague Meeting | 20.00 | | Philip Schlesinger | Content Board | January 2015 | 20 January 2015 | UK Travel - Taxis and cabs | Stakeholder Event | 22.00 | | Philip Schlesinger | Content Board | January 2015 | 16 December 2014 | Off-site Hospitality | Colleague Meeting | 25.00 | | Janey Walker | Content Board | January 2015 | 20 January 2015 | UK Travel - Parking costs | Content Board | 6.50 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|-----------------------------------|--------------------------|--------| | Joseph Butler | SMS | January 2015 | 27 November 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Event | 9.00 | | Peter Davies | SMS | January 2015 | 19 November 2014 | UK Travel - Taxis and cabs | Stakeholder Meeting | 11.20 | | Peter Davies | SMS | January 2015 | 19 November 2014 | UK Travel - Taxis and cabs | Stakeholder Meeting | 12.00 | | Peter Davies | SMS | January 2015 | 26 November 2014 | Overseas Travel - Taxis | Stakeholder Event | 11.89 | | Peter Davies | SMS | January 2015 | 26 November 2014 | Overseas Travel - Taxis | Stakeholder Event | 7.93 | | Peter Davies | SMS | January 2015 | 11 December 2014 | External Conferences & Seminars | Stakeholder Event | 358.80 | | Peter Davies | SMS | January 2015 | 15 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 134.37 | | Clayton Hirst | SMS | January 2015 | 06 January 2015 | Off-site Hospitality | Stakeholder Meeting | 5.40 | | Clayton Hirst | SMS | January 2015 | 07 January 2015 | Off-site Hospitality | Stakeholder Meeting | 15.64 | | Graham Howell | SMS | January 2015 | 12 January 2015 | UK Travel - Air | Colleague Meeting | 110.43 | | Graham Howell | SMS | January 2015 | 12 January 2015 | UK Travel - Air | Colleague Meeting | 37.18 | | Graham Howell | SMS | January 2015 | 12 January 2015 | UK Travel - Air | Colleague Meeting | 159.71 | | Graham Howell | SMS | January 2015 | 12 January 2015 | UK Travel - Air | Colleague Meeting | 2.47 | | Philip Marnick | SMS | January 2015 | 09 January 2015 | UK Travel - Car,Motorbike,Cycle | Colleague Meeting | 53.10 | | Philip Marnick | SMS | January 2015 | 13 January 2015 | UK Travel - Taxis and cabs | Stakeholder Meeting | 17.00 | | Philip Marnick | SMS | January 2015 | 14 January 2015 | UK Travel - Taxis and cabs | Stakeholder Event | 7.20 | | Victoria Nash | SMS | January 2015 | 16 December 2014 | Off-site Hospitality | Colleague Meeting | 25.00 | | Victoria Nash | SMS | January 2015 | 16 December 2014 | UK Accommodation | Colleague Meeting | 190.00 | | Victoria Nash | SMS | January 2015 | 16 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 4.70 | | Victoria Nash | SMS | January 2015 | 23 December 2014 | UK Travel - Air | Colleague Meeting | 2.47 | | Victoria Nash | SMS | January 2015 | 23 December 2014 | UK Travel - Air | Colleague Meeting | 264.31 | | Victoria Nash | SMS | January 2015 | 15 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 23.10 | | Victoria Nash | SMS | January 2015 | 18 January 2015 | UK Travel - Parking costs | Colleague Meeting | 31.50 | | Victoria Nash | SMS | January 2015 | 19 January 2015 | UK Accommodation | Colleague Meeting | 118.00 | | Victoria Nash | SMS | January 2015 | 19 January 2015 | UK Travel - Car,Motorbike,Cycle | Colleague Meeting | 7.20 | | Victoria Nash | SMS | January 2015 | 19 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 9.60 | | Victoria Nash | SMS | January 2015 | 21 January 2015 | UK Travel - Air | Colleague Meeting | 2.47 | | Victoria Nash | SMS | January 2015 | 21 January 2015 | UK Travel - Air | Colleague Meeting | 246.31 | | Lynn Parker | SMS | January 2015 | 12 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 4.60 | | Lynn Parker | SMS | January 2015 | 21 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 4.60 | | Jonathan Rose | SMS | January 2015 | 15 December 2014 | UK Accommodation | Stakeholder Meeting | 9.75 | | Jonathan Rose | SMS | January 2015 | 15 December 2014 | UK Travel - Parking costs | Colleague Meeting | 25.75 | | Jonathan Rose | SMS | January 2015 | 15 December 2014 | UK Travel - Parking costs | Colleague Meeting | 10.00 | | Jonathan Rose | SMS | January 2015 | 16 December 2014 | Staff meals - Off site | Colleague Meeting | 14.38 | | Jonathan Rose | SMS | January 2015 | 16 December 2014 | UK Accommodation | Colleague Meeting | 122.00 | | Jonathan Rose | SMS | January 2015 | 16 December 2014 | UK Travel - Parking costs | Colleague Meeting | 35.02 | | Jonathan Rose | SMS | January 2015 | 16 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 9.40 | | Jonathan Rose | SMS | January 2015 | 17 December 2014 | UK Accommodation | Colleague Meeting | 123.00 | | Jonathan Rose | SMS | January 2015 | 23 December 2014 | UK Travel - Air | Colleague Meeting | 54.99 | | Jonathan Rose | SMS | January 2015 | 23 December 2014 | UK Travel - Air | Colleague Meeting | 25.99 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|-------------------------------|--------------------------|---------| | Jonathan Rose | SMS | January 2015 | 06 January 2015 | UK Accommodation | Colleague Meeting | 129.47 | | Jonathan Rose | SMS | January 2015 | 13 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 11.20 | | Alastair Smith | SMS | January 2015 | 15 January 2015 | Off-site Hospitality | Stakeholder Meeting | 27.5 | | James Thickett | SMS | January 2015 | 06 November 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 3.20 | | James Thickett | SMS | January 2015 | 06 November 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 3.20 | | James Thickett | SMS | January 2015 | 07 November 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 2.30 | | James Thickett | SMS | January 2015 | 18 November 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 2.30 | | James Thickett | SMS | January 2015 | 18 November 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 2.30 | | James Thickett | SMS | January 2015 | 25 November 2014 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 3.20 | | James Thickett | SMS | January 2015 | 26 November 2014 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 2.30 | | James Thickett | SMS | January 2015 | 28 November 2014 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 2.30 | | James Thickett | SMS | January 2015 | 02 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 3.20 | | James Thickett | SMS | January 2015 | 02 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 2.20 | | James Thickett | SMS | January 2015 | 03 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 2.20 | | James Thickett | SMS | January 2015 | 04 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 3.20 | | James Thickett | SMS | January 2015 | 15 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 18.50 | | James Thickett | SMS | January 2015 | 15 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 10.28 | | James Thickett | SMS | January 2015 | 15 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Meeting | 2.20 | | James Thickett | SMS | January 2015 | 22 December 2014 | UK Travel - Air | Stakeholder Event | 43.00 | | James Thickett | SMS | January 2015 | 22 December 2014 | UK Travel - Air | Stakeholder Event | 59.99 | | James Thickett | SMS | January 2015 | 22 December 2014 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Event | 1.23 | | James Thickett | SMS | January 2015 | 07 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 204.73 | | James Thickett | SMS | January 2015 | 14 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 2.30 | | James Thickett | SMS | January 2015 | 14 January 2015 | UK Travel - Taxis and cabs | Colleague Meeting | 8.00 | | James Thickett | SMS | January 2015 | 15 January 2015 | UK Accommodation | Colleague Meeting | 106.00 | | James Thickett | SMS | January 2015 | 15 January 2015 | UK Subsistence | Colleague Meeting | 16.95 | | James Thickett | SMS | January 2015 | 15 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 21.50 | | James Thickett | SMS | January 2015 | 21 January 2015 | UK Subsistence | Colleague Meeting | 27.65 | | James Thickett | SMS | January 2015 | 21 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 2.30 | | James Thickett | SMS | January 2015 | 22 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 3.30 | | Stephen Unger | SMS | January 2015 | 16 January 2015 | Overseas Travel - Air | Stakeholder Event | 113.17 | | Stephen Unger | SMS | January 2015 | 21 January 2015 | Overseas Travel - Air | Stakeholder Event | 216.91 | | Stephen Unger | SMS | January 2015 | 21 January 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder Event | 78.35 | | Mark Walls | SMS | January 2015 | 09 January 2015 | UK Travel - Car,Motorbike,Cycle | Colleague Meeting | 63.90 | | Mark Walls | SMS | January 2015 | 15 January 2015 | UK Travel - Car,Motorbike,Cycle | Colleague Meeting | 66.60 | | Mark Walls | SMS | January 2015 | 22 January 2015 | UK Travel - Car,Motorbike,Cycle | Colleague Meeting | 50.40 | | Rhodri Williams | SMS | January 2015 | 15 December 2014 | UK Travel - Oyster card | Colleague Meeting | 4.40 | | Rhodri Williams | SMS | January 2015 | 16 December 2014 | UK Subsistence | Colleague Meeting | 30.00 | | Rhodri Williams | SMS | January 2015 | 16 December 2014 | UK Travel - Oyster card | Colleague Meeting | 8.40 | | Rhodri Williams | SMS | January 2015 | 17 December 2014 | UK Travel - Oyster card | Colleague Meeting | 5.00 | | Rhodri Williams | SMS | January 2015 | 23 December 2014 | UK Accommodation | Colleague Meeting | 99.59 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|----------------|-------------------------------|------------------|--------| | Rhodri Williams | SMS | January 2015 | 08 January 2015 | UK Subsistence | Colleague Meeting | 30.00 | | Rhodri Williams | SMS | January 2015 | 08 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Coaching session | 109.00 | | Rhodri Williams | SMS | January 2015 | 08 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Coaching session | 43.00 | | Rhodri Williams | SMS | January 2015 | 08 January 2015 | UK Travel - Oyster card | Colleague Meeting | 4.60 | | Rhodri Williams | SMS | January 2015 | 09 January 2015 | UK Subsistence | Colleague Meeting | 18.00 | | Rhodri Williams | SMS | January 2015 | 09 January 2015 | UK Travel – Oyster card | Colleague Meeting | 5.80 | | Rhodri Williams | SMS | January 2015 | 12 January 2015 | UK Subsistence | Colleague Meeting | 30.00 | | Rhodri Williams | SMS | January 2015 | 13 January 2015 | UK Accommodation | Colleague Meeting | 119.00 | | Rhodri Williams | SMS | January 2015 | 14 January 2015 | UK Subsistence | Colleague Meeting | 30.00 | | Rhodri Williams | SMS | January 2015 | 14 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Refund | (43.00) | | Rhodri Williams | SMS | January 2015 | 14 January 2015 | UK Travel - Oyster card | Colleague Meeting | 4.60 | | Rhodri Williams | SMS | January 2015 | 15 January 2015 | UK Travel – Oyster card | Colleague Meeting | 5.20 | | Christopher Woolford | SMS | January 2015 | 16 January 2015 | UK Accommodation | Colleague Meeting | 120.00 | | Christopher Woolford | SMS | January 2015 | 19 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague Meeting | 109.00 | | Christopher Woolford | SMS | January 2015 | 20 January 2015 | UK Subsistence | Colleague Meeting | 30.00 | | Christopher Woolford | SMS | January 2015 | 15 January 2015 | UK Travel - Air | Stakeholder Event | 76.37 | | Christopher Woolford | SMS | January 2015 | 15 January 2015 | UK Travel - Air | Stakeholder Event | 1.23 | | Christopher Woolford | SMS | January 2015 | 18 January 2015 | UK Subsistence | Stakeholder Event | 65.66 | | Christopher Woolford | SMS | January 2015 | 18 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Event | 19.35 | | Christopher Woolford | SMS | January 2015 | 18 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Event | 9.50 | | Christopher Woolford | SMS | January 2015 | 19 January 2015 | UK Subsistence | Stakeholder Event | 130.00 | | Christopher Woolford | SMS | January 2015 | 20 January 2015 | UK Accommodation | Stakeholder Event | 170.00 | | Christopher Woolford | SMS | January 2015 | 20 January 2015 | UK Travel - Air | Stakeholder Event | 6.50 | | Christopher Woolford | SMS | January 2015 | 20 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Event | 4.80 | | Christopher Woolford | SMS | January 2015 | 20 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder Event | 5.00 | | Christopher Woolford | SMS | January 2015 | 21 January 2015 | Overseas Travel - Air | Stakeholder Event | 79.44 | | Christopher Woolford | SMS | January 2015 | 21 January 2015 | Overseas Travel - Air | Stakeholder Event | 1.23 | | Christopher Woolford | SMS | January 2015 | 21 January 2015 | Overseas Travel - Air | Stakeholder Event | 102.30 |
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a2ae65197a9f0af460e5e8dfb4a97470d9f3d8ad | ## Board, Content Board and Senior Management Specialists (SMS) expenses
Recorded in July 2015
| Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|----------------|--------------|---------------|-------------------------------|--------------------------|----------| | Lynne Brindley | Ofcom Board | Jul-15 | Jul 13, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom Board | 18.00 | | Lynne Brindley | Ofcom Board | Jul-15 | Jul 13, 2015 | UK Travel - Taxis and cabs | Ofcom Board | 9.00 | | Tim Gardam | Ofcom Board | Jul-15 | Jun 30, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 66.60 | | Tim Gardam | Ofcom Board | Jul-15 | Jul 7, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 66.60 | | Tim Gardam | Ofcom Board | Jul-15 | Jul 13, 2015 | UK Accommodation | Ofcom Board | 137.00 | | Tim Gardam | Ofcom Board | Jul-15 | Jul 13, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom Board | 24.70 | | David Levy | Content Board | Jul-15 | Jul 7, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 19.40 | | Philip Schlesinger| Content Board | Jul-15 | Jun 15, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meetings | 7.20 | | Philip Schlesinger| Content Board | Jul-15 | Jun 15, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 5.00 | | Philip Schlesinger| Content Board | Jul-15 | Jun 25, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meetings | 7.20 | | Philip Schlesinger| Content Board | Jul-15 | Jun 25, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 5.00 | | Monica Arino | SMS | Jul-15 | Jun 17, 2015 | Overseas Travel - Taxis | Stakeholders meeting | 9.38 | | Monica Arino | SMS | Jul-15 | Jun 18, 2015 | Overseas - Accommodation | Stakeholders meeting | 126.91 | | Monica Arino | SMS | Jul-15 | Jun 22, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder event | 286.67 | | Monica Arino | SMS | Jul-15 | Jun 23, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholders meeting | 263.04 | | Monica Arino | SMS | Jul-15 | Jun 23, 2015 | UK Subsistence | Stakeholders meeting | 13.50 | | Monica Arino | SMS | Jul-15 | Jun 25, 2015 | UK Travel - Taxis and cabs | Stakeholders meeting | 15.00 | | Monica Arino | SMS | Jul-15 | Jun 30, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholders meeting | 105.83 | | Monica Arino | SMS | Jul-15 | Jun 30, 2015 | Overseas Travel - Taxis | Stakeholders meeting | 30.36 | | Monica Arino | SMS | Jul-15 | Jun 30, 2015 | UK Travel - Taxis (after 9pm late working) | Stakeholders meeting | 35.00 | | Monica Arino | SMS | Jul-15 | Jun 30, 2015 | UK Travel - Taxis and cabs | Stakeholders meeting | 22.00 | | Monica Arino | SMS | Jul-15 | Jul 2, 2015 | Overseas subsistence | Stakeholders meeting | 5.46 | | Monica Arino | SMS | Jul-15 | Jul 2, 2015 | Overseas subsistence | Stakeholders meeting | 7.45 | | Monica Arino | SMS | Jul-15 | Jul 2, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholders meeting | 9.93 | | Monica Arino | SMS | Jul-15 | Jul 2, 2015 | UK Travel - Taxis and cabs | Stakeholders meeting | 22.00 | | Janet Campbell | SMS | Jul-15 | Jul 1, 2015 | UK Travel - Taxis and cabs | Colleague meetings | 10.20 | | David Doherty | SMS | Jul-15 | Jun 26, 2015 | Overseas Travel - Air | Stakeholders meeting | 3,405.23 | | David Doherty | SMS | Jul-15 | Jun 27, 2015 | Other incidental costs | Stakeholders meeting | 12.99 | | Alastair Smith | SMS | Jul-15 | Jun 26, 2015 | UK Travel - Oyster card | Colleague meetings | 5.60 | | Alastair Smith | SMS | Jul-15 | Jun 29, 2015 | UK Travel - Oyster card | Colleague meetings | 2.80 | | Alastair Smith | SMS | Jul-15 | Jul 8, 2015 | UK Travel - Oyster card | Colleague meetings | 5.60 | | Alastair Smith | SMS | Jul-15 | Jul 13, 2015 | UK Travel - Oyster card | Colleague meetings | 5.60 | | Mark Harrison | SMS | Jul-15 | Jun 29, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 106.86 | | Mark Harrison | SMS | Jul-15 | Jun 30, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholders meeting | 9.60 | | Graham Howell | SMS | Jul-15 | May 27, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 154.12 | | Graham Howell | SMS | Jul-15 | Jun 11, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 99.15 | | Graham Howell | SMS | Jul-15 | Jun 16, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 28.86 | | Graham Howell | SMS | Jul-15 | Jun 17, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 183.41 | | Graham Howell | SMS | Jul-15 | Jun 22, 2015 | UK Accommodation | Colleague meetings | 112.00 | | Graham Howell | SMS | Jul-15 | Jun 22, 2015 | UK Subsistence | Colleague meetings | 30.00 | | Graham Howell | SMS | Jul-15 | Jun 22, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 6.00 | | Graham Howell | SMS | Jul-15 | Jun 22, 2015 | UK Travel - Rail/Bus/Coach/Ferry | Colleague meetings | 106.86 | | Graham Howell | SMS | Jul-15 | Jun 24, 2015 | UK Subsistence | Colleague meetings | 23.80 | | Graham Howell | SMS | Jul-15 | Jun 25, 2015 | UK Accommodation | Colleague meetings | 129.00 | | Graham Howell | SMS | Jul-15 | Jul 6, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 106.86 | | Graham Howell | SMS | Jul-15 | Jul 16, 2015 | UK Travel - Air | Ofcom Board | 52.66 | | Graham Howell | SMS | Jul-15 | Jul 16, 2015 | UK Travel - Air | Ofcom Board | 59.9 | | Graham Howell | SMS | Jul-15 | Jul 16, 2015 | UK Travel - Air | Colleague meetings | 1.23 | | David Mahoney | SMS | Jul-15 | Jun 30, 2015 | UK Travel - Taxis and cabs | Stakeholders meeting | 18.00 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |----------------|-------|--------------|---------------|-------------------------------|--------------------------|---------| | Philip Marnick | SMS | Jul-15 | May 15, 2015 | Overseas Travel - Air | Stakeholder event | 101.43 | | Philip Marnick | SMS | Jul-15 | May 15, 2015 | Overseas Travel - Air | Stakeholder event | 157.11 | | Philip Marnick | SMS | Jul-15 | May 18, 2015 | Overseas Travel - Air | Stakeholder event | 59.03 | | Philip Marnick | SMS | Jul-15 | May 21, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholders meeting | 135.63 | | Philip Marnick | SMS | Jul-15 | May 22, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholders meeting | 243.52 | | Philip Marnick | SMS | Jul-15 | May 22, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholders meeting | 123.30 | | Philip Marnick | SMS | Jul-15 | May 29, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meetings | 51.30 | | Philip Marnick | SMS | Jul-15 | Jun 10, 2015 | Overseas Travel - Taxis | Stakeholders meeting | 9.86 | | Philip Marnick | SMS | Jul-15 | Jun 10, 2015 | Staff meals - Off site | Colleague meetings | 23.17 | | Philip Marnick | SMS | Jul-15 | Jun 11, 2015 | Overseas - Accommodation | Stakeholders meeting | 128.71 | | Philip Marnick | SMS | Jul-15 | Jun 11, 2015 | Overseas Travel - Taxis | Stakeholders meeting | 13.09 | | Philip Marnick | SMS | Jul-15 | Jun 14, 2015 | Overseas Travel - Taxis | Stakeholder event | 8.33 | | Philip Marnick | SMS | Jul-15 | Jun 15, 2015 | Overseas - Accommodation | Stakeholder event | 96.03 | | Philip Marnick | SMS | Jul-15 | Jun 15, 2015 | Overseas Travel - Taxis | Stakeholder event | 6.30 | | Philip Marnick | SMS | Jul-15 | Jun 15, 2015 | Overseas Travel - Taxis | Stakeholder event | 7.97 | | Philip Marnick | SMS | Jul-15 | Jun 15, 2015 | Overseas Travel - Taxis | Stakeholder event | 11.74 | | Philip Marnick | SMS | Jul-15 | Jun 16, 2015 | Overseas - Accommodation | Stakeholder event | 94.46 | | Philip Marnick | SMS | Jul-15 | Jun 16, 2015 | Overseas Travel - Taxis | Stakeholder event | 36.14 | | Philip Marnick | SMS | Jul-15 | Jun 19, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meetings | 168.30 | | Philip Marnick | SMS | Jul-15 | Jun 21, 2015 | Overseas subsistence | Stakeholder event | 9.66 | | Philip Marnick | SMS | Jul-15 | Jun 21, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder event | 22.22 | | Philip Marnick | SMS | Jul-15 | Jun 21, 2015 | Overseas Travel - Taxis | Stakeholder event | 8.77 | | Philip Marnick | SMS | Jul-15 | Jun 21, 2015 | UK Travel - Taxis and cabs | Stakeholder event | 25.00 | | Philip Marnick | SMS | Jul-15 | Jun 22, 2015 | Overseas - Accommodation | Stakeholder event | 144.21 | | Philip Marnick | SMS | Jul-15 | Jun 22, 2015 | Overseas subsistence | Stakeholder event | 6.62 | | Philip Marnick | SMS | Jul-15 | Jun 22, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder event | 22.25 | | Philip Marnick | SMS | Jul-15 | Jun 22, 2015 | Overseas Travel - Taxis | Stakeholder event | 31.52 | | Philip Marnick | SMS | Jul-15 | Jun 22, 2015 | Overseas Travel - Taxis | Stakeholder event | 8.95 | | Philip Marnick | SMS | Jul-15 | Jun 22, 2015 | UK Travel - Taxis and cabs | Stakeholder event | 9.06 | | Philip Marnick | SMS | Jul-15 | Jun 22, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 4.40 | | Philip Marnick | SMS | Jul-15 | Jul 8, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 282.57 | | Philip Marnick | SMS | Jul-15 | Jul 15, 2015 | UK Accommodation | Stakeholder event | 80.00 | | Philip Marnick | SMS | Jul-15 | Jul 17, 2015 | UK Travel - Car,Motorbike,Cycle | Colleague meetings | 85.50 | | Dominic Morris | SMS | Jul-15 | Jul 20, 2015 | Off-site Hospitality | Stakeholders meeting | 44.15 | | Victoria Nash | SMS | Jul-15 | Jun 15, 2015 | UK Travel - Air | Colleague meetings | 110.34 | | Victoria Nash | SMS | Jul-15 | Jun 15, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 4.80 | | Victoria Nash | SMS | Jul-15 | Jun 16, 2015 | UK Accommodation | Ofcom Board | 207.00 | | Victoria Nash | SMS | Jul-15 | Jun 16, 2015 | UK Subsistence | Ofcom Board | 12.00 | | Victoria Nash | SMS | Jul-15 | Jun 16, 2015 | UK Travel - Parking costs | Colleague meetings | 31.50 | | Victoria Nash | SMS | Jul-15 | Jun 16, 2015 | UK Travel - Parking costs | Colleague meetings | 47.00 | | Victoria Nash | SMS | Jul-15 | Jun 16, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 4.80 | | Victoria Nash | SMS | Jul-15 | Jun 17, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 35.30 | | Victoria Nash | SMS | Jul-15 | Jun 22, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meetings | 9.60 | | Victoria Nash | SMS | Jul-15 | Jun 23, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholders meeting | 9.40 | | Victoria Nash | SMS | Jul-15 | Jun 25, 2015 | UK Travel - Air | Colleague meetings | 35.44 | | Victoria Nash | SMS | Jul-15 | Jun 25, 2015 | UK Travel - Air | Colleague meetings | 353.50 | | Victoria Nash | SMS | Jul-15 | Jun 26, 2015 | UK Travel - Air | Colleague meetings | 28.00 | | Victoria Nash | SMS | Jul-15 | Jun 26, 2015 | UK Travel - Air | Colleague meetings | 1.23 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |----------------|-------|--------------|---------------|-------------------------------|--------------------------|--------| | Victoria Nash | SMS | Jul-15 | Jun 26, 2015 | UK Travel - Air | Colleague meetings | 60.00 | | Victoria Nash | SMS | Jul-15 | Jun 29, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meetings | 9.60 | | Victoria Nash | SMS | Jul-15 | Jun 29, 2015 | UK Travel - Taxis and cabs | Colleague meetings | 12.00 | | Victoria Nash | SMS | Jul-15 | Jun 30, 2015 | UK Accommodation | Colleague meetings | 206.00 | | Victoria Nash | SMS | Jul-15 | Jun 30, 2015 | UK Subsistence | Colleague meetings | 22.00 | | Victoria Nash | SMS | Jul-15 | Jun 30, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meetings | 21.50 | | Victoria Nash | SMS | Jul-15 | Jun 30, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meetings | 4.80 | | Victoria Nash | SMS | Jul-15 | Jun 30, 2015 | UK Travel - Taxis and cabs | Colleague meetings | 20.00 | | Victoria Nash | SMS | Jul-15 | Jul 1, 2015 | UK Subsistence | Colleague meetings | 26.55 | | Victoria Nash | SMS | Jul-15 | Jul 4, 2015 | UK Travel - Parking costs | Colleague meetings | 49.99 | | Victoria Nash | SMS | Jul-15 | Jul 4, 2015 | UK Travel - Parking costs | Colleague meetings | 49.99 | | Victoria Nash | SMS | Jul-15 | Jul 6, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meetings | 4.80 | | Victoria Nash | SMS | Jul-15 | Jul 7, 2015 | UK Accommodation | Colleague meetings | 226.00 | | Victoria Nash | SMS | Jul-15 | Jul 7, 2015 | UK Travel - Air | Colleague meetings | 371.50 | | Victoria Nash | SMS | Jul-15 | Jul 7, 2015 | UK Travel - Air | Colleague meetings | 2.47 | | Victoria Nash | SMS | Jul-15 | Jul 7, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meetings | 4.80 | | Victoria Nash | SMS | Jul-15 | Jul 9, 2015 | UK Subsistence | Colleague meetings | 30.00 | | Victoria Nash | SMS | Jul-15 | Jul 9, 2015 | UK Travel - Air | Colleague meetings | 79.37 | | Victoria Nash | SMS | Jul-15 | Jul 9, 2015 | UK Travel - Taxis and cabs | Colleague meetings | 30.00 | | Victoria Nash | SMS | Jul-15 | Jul 10, 2015 | UK Accommodation | Colleague meetings | 221.00 | | Victoria Nash | SMS | Jul-15 | Jul 10, 2015 | UK Travel - Air | Colleague meetings | 2.23 | | Victoria Nash | SMS | Jul-15 | Jul 10, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meetings | 4.80 | | Victoria Nash | SMS | Jul-15 | Jul 17, 2015 | Off-site Hospitality | Stakeholders meeting | 46.00 | | Victoria Nash | SMS | Jul-15 | Jul 17, 2015 | Off-site Hospitality | Stakeholders meeting | 46.00 | | Victoria Nash | SMS | Jul-15 | Jul 18, 2015 | UK Travel - Parking costs | Colleague meetings | 31.99 | | Jonathan Oxley | SMS | Jul-15 | Jun 30, 2015 | Overseas Travel - Taxis | Stakeholders meeting | 21.39 | | Jonathan Oxley | SMS | Jul-15 | Jul 2, 2015 | UK Travel - Taxis (after 9pm late working) | Stakeholders meeting | 35.00 | | Jonathan Oxley | SMS | Jul-15 | Jul 3, 2015 | Overseas - Accommodation | Stakeholders meeting | 20.17 | | Jonathan Oxley | SMS | Jul-15 | Jul 17, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Stakeholders meeting | 8.20 | | Lynn Parker | SMS | Jul-15 | Jun 29, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meetings | 12.00 | | Lynn Parker | SMS | Jul-15 | Jun 30, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meetings | 12.00 | | Lynn Parker | SMS | Jul-15 | Jul 2, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meetings | 12.00 | | Claudio Pollack| SMS | Jul-15 | Jun 22, 2015 | UK Travel - Rail/Bus/Tube/Ferry| Stakeholder event | 126.38 | | Claudio Pollack| SMS | Jul-15 | Jun 23, 2015 | UK Subsistence | Colleague meetings | 19.45 | | Claudio Pollack| SMS | Jul-15 | Jun 23, 2015 | UK Travel - Taxis and cabs | Colleague meetings | 37.00 | | Claudio Pollack| SMS | Jul-15 | Jun 24, 2015 | UK Accommodation | Colleague meetings | 90.00 | | Claudio Pollack| SMS | Jul-15 | Jun 24, 2015 | UK Travel - Taxis and cabs | Colleague meetings | 38.00 | | Claudio Pollack| SMS | Jul-15 | Jun 26, 2015 | Overseas Travel - Air | Colleague meetings | 190.30 | | Claudio Pollack| SMS | Jul-15 | Jun 30, 2015 | UK Travel - Taxis and cabs | Colleague meetings | 25.00 | | Claudio Pollack| SMS | Jul-15 | Jul 1, 2015 | UK Subsistence | Stakeholder event | 65.00 | | Claudio Pollack| SMS | Jul-15 | Jul 1, 2015 | UK Travel - Taxis and cabs | Stakeholders meeting | 8.71 | | Claudio Pollack| SMS | Jul-15 | Jul 6, 2015 | Overseas Travel - Air | Stakeholders meeting | 31.43 | | Claudio Pollack| SMS | Jul-15 | Jul 17, 2015 | Overseas Travel - Taxis | Stakeholders meeting | 69.87 | | Claudio Pollack| SMS | Jul-15 | Jul 17, 2015 | UK Travel - Taxis and cabs | Stakeholders meeting | 40.00 | | Jonathan Rose | SMS | Jul-15 | Jun 16, 2015 | UK Accommodation | Colleague meetings | 137.00 | | Jonathan Rose | SMS | Jul-15 | Jun 16, 2015 | UK Travel - Parking costs | Colleague meetings | 2.50 | | Jonathan Rose | SMS | Jul-15 | Jun 16, 2015 | UK Travel - Parking costs | Colleague meetings | 36.05 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|-------------------------------|------------------|--------| | Jonathan Rose | SMS | Jul-15 | Jun 29, 2015 | UK Travel - Parking costs | Colleague meetings | 26.78 | | Jonathan Rose | SMS | Jul-15 | Jul 29, 2015 | UK Travel - Taxis and cabs | Colleague meetings | 10.00 | | Christopher Rowsell | SMS | Jul-15 | Jun 18, 2015 | UK Subsistence | Stakeholder event | 7.50 | | Christopher Rowsell | SMS | Jul-15 | Jun 18, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 24.50 | | Christopher Rowsell | SMS | Jul-15 | Jun 30, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 29.00 | | Christopher Rowsell | SMS | Jul-15 | Jul 1, 2015 | UK Travel - Oyster card | Stakeholder event | 1.50 | | Christopher Rowsell | SMS | Jul-15 | Jul 1, 2015 | UK Travel - Oyster card | Stakeholder event | 2.30 | | Christopher Rowsell | SMS | Jul-15 | Jul 2, 2015 | Overseas - Accommodation | Stakeholder event | 234.17 | | Christopher Rowsell | SMS | Jul-15 | Jul 2, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 15.50 | | Christopher Rowsell | SMS | Jul-15 | Jul 2, 2015 | UK Travel - Oyster card | Stakeholder event | 1.50 | | Huw Saunders | SMS | Jul-15 | May 21, 2015 | UK Travel - Parking costs | Stakeholders meeting | 25.00 | | Huw Saunders | SMS | Jul-15 | Jun 8, 2015 | UK Travel - Parking costs | Stakeholders meeting | 40.95 | | Huw Saunders | SMS | Jul-15 | Jun 8, 2015 | UK Travel - Parking costs | Stakeholders meeting | 24.00 | | Huw Saunders | SMS | Jul-15 | Jun 10, 2015 | UK Travel - Car, Motorbike, Cycle | Stakeholders meeting | 60.75 | | Huw Saunders | SMS | Jul-15 | Jun 11, 2015 | Overseas Travel - Taxis | Stakeholders meeting | 26.15 | | Huw Saunders | SMS | Jul-15 | Jun 12, 2015 | Overseas Travel - Taxis | Stakeholders meeting | 18.05 | | James Thickett | SMS | Jul-15 | Jun 22, 2015 | UK Subsistence | Colleague meetings | 26.83 | | James Thickett | SMS | Jul-15 | Jun 22, 2015 | UK Travel - Oyster card | Colleague meetings | 2.30 | | James Thickett | SMS | Jul-15 | Jun 23, 2015 | UK Travel - Oyster card | Colleague meetings | 3.30 | | James Thickett | SMS | Jul-15 | Jun 24, 2015 | UK Subsistence | Colleague meetings | 28.50 | | James Thickett | SMS | Jul-15 | Jun 24, 2015 | UK Travel - Oyster card | Colleague meetings | 2.30 | | James Thickett | SMS | Jul-15 | Jun 25, 2015 | UK Accommodation | Colleague meetings | 82.00 | | James Thickett | SMS | Jul-15 | Jun 25, 2015 | UK Travel - Oyster card | Colleague meetings | 2.80 | | Mark walls | SMS | Jul-15 | Jul 3, 2015 | UK Travel - Car, Motorbike, Cycle | Colleague meetings | 63.90 | | Mark walls | SMS | Jul-15 | Jul 17, 2015 | UK Travel - Car, Motorbike, Cycle | Colleague meetings | 72.00 | | Mark walls | SMS | Jul-15 | Jul 22, 2015 | UK Travel - Car, Motorbike, Cycle | Colleague meetings | 144.90 | | Mark walls | SMS | Jul-15 | Jul 24, 2015 | UK Travel - Car, Motorbike, Cycle | Colleague meetings | 82.00 | | Sharon White | SMS | Jul-15 | Jun 22, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholders meeting | 338.05 | | Sharon White | SMS | Jul-15 | Jun 22, 2015 | UK Travel - Air | Stakeholder event | 75.11 | | Sharon White | SMS | Jul-15 | Jun 25, 2015 | UK Travel - Rail/Bus/Coach | Stakeholders meeting | 16.03 | | Sharon White | SMS | Jul-15 | Jun 26, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholders meeting | 30.83 | | Sharon White | SMS | Jul-15 | Jul 3, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholders meeting | 8.84 | | Sharon White | SMS | Jul-15 | Jul 6, 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholders meeting | 76.04 | | Christopher Woolford | SMS | Jul-15 | Jun 24, 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholders meeting | 343.73 | | Christopher Woolford | SMS | Jul-15 | Jun 29, 2015 | Overseas - Accommodation | Stakeholders meeting | 5.56 | | Christopher Woolford | SMS | Jul-15 | Jun 29, 2015 | Overseas Travel - Taxis | Stakeholders meeting | 63.90 | | Christopher Woolford | SMS | Jul-15 | Jul 14, 2015 | Overseas Travel - Air | Stakeholder event | 660.03 | | Christopher Woolford | SMS | Jul-15 | Jun 10, 2015 | Staff meals - Off site | Colleague meetings | 23.17 |
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8bf266404aa603a649286016c5b98b653b340502 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|----------------|--------------|---------------|-------------------------------|------------------|--------| | Lesley MacKenzie | Content Board | March 15 | 23 March 2015 | UK Accommodation | Colleague meeting| 121.50 | | Lesley MacKenzie | Content Board | March 15 | 23 March 2015 | UK Travel - Rail/Bus/Tube/Ferry| Colleague meeting| 6.00 | | Lynne Brindley | Ofcom Board | March 15 | 02 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 13.00 | | Lynne Brindley | Ofcom Board | March 15 | 17 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom board | 39.60 | | Lynne Brindley | Ofcom Board | March 15 | 27 January 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom board | 26.00 | | Lynne Brindley | Ofcom Board | March 15 | 02 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom board | 18.00 | | Lynne Brindley | Ofcom Board | March 15 | 16 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom board | 15.30 | | Mike McTighe | Ofcom Board | March 15 | 15 December 2014 | UK Travel - Taxis and cabs | Ofcom board | 14.00 | | Mike McTighe | Ofcom Board | March 15 | 15 December 2014 | UK Travel - Taxis and cabs | Ofcom board | 15.00 | | Mike McTighe | Ofcom Board | March 15 | 15 December 2014 | UK Travel - Taxis and cabs | Ofcom board | 15.00 | | Mike McTighe | Ofcom Board | March 15 | 30 March 2015 | UK Travel - Taxis and cabs | Ofcom board | 18.00 | | Mike McTighe | Ofcom Board | March 15 | 17 March 2015 | UK Travel - Taxis and cabs | Ofcom board | 14.00 | | Lynne Brindley | Ofcom Board | March 15 | 02 February 2015 | UK Subsistence | Colleague meeting | 6.15 | | Philip Schlesinger| Content Board | March 15 | 01 February 2015 | UK Travel - Oyster card | Colleague meeting | 2.30 | | Philip Schlesinger| Content Board | March 15 | 01 March 2015 | UK Subsistence | Content board | 6.15 | | Philip Schlesinger| Content Board | March 15 | 03 March 2015 | UK Accommodation | Content board | 270.00 | | Philip Schlesinger| Content Board | March 15 | 03 March 2015 | UK Subsistence | Colleague meeting | 12.85 | | Philip Schlesinger| Content Board | March 15 | 03 March 2015 | UK Travel - Taxis and cabs | Content board | 15.00 | | Philip Schlesinger| Content Board | March 15 | 03 March 2015 | UK Travel - Oyster card | Content board | 2.30 | | Tim Gardam | Ofcom Board | March 15 | 17 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom board | 66.60 | | Tim Gardam | Ofcom Board | March 15 | 24 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 66.60 | | Tim Gardam | Ofcom Board | March 15 | 03 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 60.00 | | Tim Gardam | Ofcom Board | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom board | 66.60 | | Tim Gardam | Ofcom Board | March 15 | 17 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Ofcom board | 66.60 | | David Key | Content Board | March 15 | 03 March 2015 | UK Travel - Car/Motorbike/Cycle | Content board | 2.25 | | David Key | Content Board | March 15 | 03 March 2015 | UK Travel - Parking costs | Content board | 6.70 | | David Key | Content Board | March 15 | 03 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content board | 66.60 | | David Key | Content Board | March 15 | 23 January 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 36.00 | | Glyn Mathias | Content Board | March 15 | 23 January 2015 | UK Travel - Parking costs | Colleague meeting | 8.00 | | Glyn Mathias | Content Board | March 15 | 11 February 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 36.00 | | Glyn Mathias | Content Board | March 15 | 11 February 2015 | UK Travel - Parking costs | Colleague meeting | 10.00 | | Glyn Mathias | Content Board | March 15 | 25 February 2015 | UK Travel - Car/Motorbike/Cycle | Stakeholder meeting | 34.20 | | Glyn Mathias | Content Board | March 15 | 25 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 4.80 | | Glyn Mathias | Content Board | March 15 | 06 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 48.35 | | Glyn Mathias | Content Board | March 15 | 06 February 2015 | UK Accommodation | Stakeholder meeting | 120.00 | | Glyn Mathias | Content Board | March 15 | 06 February 2015 | UK Travel - Parking costs | Stakeholder meeting | 22.00 | | Glyn Mathias | Content Board | March 15 | 02 March 2015 | UK Travel - Car/Motorbike/Cycle | Content board | 34.20 | | Glyn Mathias | Content Board | March 15 | 02 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content board | 94.60 | | Glyn Mathias | Content Board | March 15 | 02 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Content board | 4.80 | | Glyn Mathias | Content Board | March 15 | 03 March 2015 | UK Travel - Parking costs | Content board | 27.00 | | Glyn Mathias | Content Board | March 15 | 03 March 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 9.50 | | Glyn Mathias | Content Board | March 15 | 09 March 2015 | UK Travel - Car/Motorbike/Cycle | Colleague meeting | 34.20 | | Glyn Mathias | Content Board | March 15 | 09 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 4.80 | | Glyn Mathias | Content Board | March 15 | 10 March 2015 | UK Accommodation | Colleague meeting | 100.00 | | Glyn Mathias | Content Board | March 15 | 10 March 2015 | UK Travel - Parking costs | Colleague meeting | 24.80 | | Glyn Mathias | Content Board | March 15 | 10 March 2015 | UK Travel - Taxis and cabs | Colleague meeting | 4.80 | | Glyn Mathias | Content Board | March 15 | 10 March 2015 | UK Travel - Taxis and cabs | Colleague meeting | 10.00 | | Patricia Hodgson | Ofcom Board | March 15 | 13 March 2015 | Telephone - mobile | Ofcom board | 5.64 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|--------------|--------------------------|--------| | Alastair Smith | SMG | March 15 | 04 March 2015 | UK Travel - Oyster card | Colleague meeting | 5.60 | | Alastair Smith | SMG | March 15 | 10 March 2015 | UK Travel - Oyster card | Stakeholder meeting | 5.60 | | Alastair Smith | SMG | March 15 | 17 March 2015 | UK Travel - Oyster card | Stakeholder meeting | 5.60 | | Alastair Smith | SMG | March 15 | 19 March 2015 | UK Travel - Oyster card | Stakeholder meeting | 5.60 | | Alastair Smith | SMG | March 15 | 20 March 2015 | UK Travel - Oyster card | Colleague meeting | 5.60 | | James Threlfall | SMG | March 15 | 24 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 5.60 | | Alison Marsden | SMG | March 15 | 18 March 2015 | Overseas subsistence | Stakeholder meeting | 15.50 | | Alison Marsden | SMG | March 15 | 18 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 21.50 | | Christopher Rowell| SMG | March 15 | 05 January 2015 | UK Subsistence | Colleague meeting | 5.54 | | Christopher Rowell| SMG | March 15 | 22 January 2015 | Overseas subsistence | Stakeholder meeting | 26.64 | | Christopher Rowell| SMG | March 15 | 22 January 2015 | UK Subsistence | Stakeholder meeting | 4.25 | | Christopher Rowell| SMG | March 15 | 23 January 2015 | Overseas subsistence | Stakeholder meeting | 181.38 | | Christopher Rowell| SMG | March 15 | 23 January 2015 | Overseas subsistence | Stakeholder meeting | 6.69 | | Christopher Woolford | SMG | March 15 | 16 February 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 30.83 | | Christopher Woolford | SMG | March 15 | 19 February 2015 | Overseas subsistence | Stakeholder meeting | 18.50 | | Christopher Woolford | SMG | March 15 | 20 February 2015 | Overseas - Accommodation | Stakeholder meeting | 301.30 | | Christopher Woolford | SMG | March 15 | 30 February 2015 | Overseas subsistence | Stakeholder meeting | 13.25 | | Christopher Woolford | SMG | March 15 | 12 March 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 370.93 | | Christopher Woolford | SMG | March 15 | 13 March 2015 | Overseas - Accommodation | Stakeholder meeting | 123.41 | | Christopher Woolford | SMG | March 15 | 16 March 2015 | Overseas subsistence | Stakeholder meeting | 18.39 | | Christopher Woolford | SMG | March 15 | 17 March 2015 | Overseas subsistence | Stakeholder meeting | 13.98 | | Clayton Hirst | SMG | March 15 | 17 March 2015 | Off-site Hospitality | External meeting | 2.70 | | Clayton Hirst | SMG | March 15 | 26 February 2015 | Off-site Hospitality | Stakeholder meeting | 35.00 | | David Mahoney | SMG | March 15 | 27 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 61.65 | | David Mahoney | SMG | March 15 | 36 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 24.80 | | Peter Davies | SMG | March 15 | 06 February 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 12.50 | | Peter Davies | SMG | March 15 | 06 February 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 14.00 | | Peter Davies | SMG | March 15 | 03 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 60.00 | | Peter Davies | SMG | March 15 | 05 March 2015 | UK Travel - Taxis and cabs | Stakeholder event | 17.50 | | Geoffrey Meers | SMG | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 58.00 | | Graham Howell | SMG | March 15 | 04 March 2015 | Off-site Hospitality | Colleague meeting | 21.30 | | Graham Howell | SMG | March 15 | 30 March 2015 | Off-site Hospitality | Colleague meeting | 25.66 | | Janet Campbell | SMG | March 15 | 27 February 2015 | UK Travel - Taxis and cabs | Colleague meeting | 8.00 | | Joseph Butler | SMG | March 15 | 26 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 12.00 | | Joseph Butler | SMG | March 15 | 09 March 2015 | Overseas subsistence | Stakeholder meeting | 8.80 | | Joseph Butler | SMG | March 15 | 10 March 2015 | Overseas subsistence | Stakeholder meeting | 5.76 | | Joseph Butler | SMG | March 15 | 11 March 2015 | Overseas - Accommodation | Stakeholder meeting | 24.70 | | Joseph Butler | SMG | March 15 | 11 March 2015 | Overseas subsistence | Stakeholder meeting | 5.72 | | Joseph Butler | SMG | March 15 | 16 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 3.20 | | Joseph Butler | SMG | March 15 | 16 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 23.10 | | Joseph Butler | SMG | March 15 | 17 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.00 | | Joseph Butler | SMG | March 15 | 17 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.00 | | Joseph Butler | SMG | March 15 | 20 March 2015 | Overseas Travel - Air | Stakeholder meeting | 177.00 | | Joseph Butler | SMG | March 15 | 20 March 2015 | Overseas - Accommodation | Stakeholder meeting | 145.76 | | Marina Gibbs | SMG | March 15 | 13 March 2015 | Overseas Travel - Taxis | Stakeholder event | 16.87 | | Mark Caines | SMG | March 15 | 24 November 2014 | UK Travel - Taxis and cabs | Stakeholder event | 22.00 | | Mark Caines | SMG | March 15 | 03 January 2015 | External Conferences & Seminars | Stakeholder meeting | 59.00 | | Mark Caines | SMG | March 15 | 05 February 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 20.00 | | Mark Caines | SMG | March 15 | 05 February 2015 | UK Travel - Taxis and cabs | Stakeholder meeting | 15.56 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|-------------------------------|--------------------------|--------| | Mark Caines | SMG | March 15 | 27 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder event | 61.66 | | Martin Balaynye | SMG | March 15 | 26 February 2015 | UK Travel - Taxis and cars | Colleague meeting | 12.50 | | Martin Balaynye | SMG | March 15 | 26 February 2015 | UK Travel - Taxis and cars | Colleague meeting | 12.50 | | Philip Marnick | SMG | March 15 | 28 February 2015 | Overseas Travel - Taxis | Stakeholder event | 36.97 | | Philip Marnick | SMG | March 15 | 03 March 2015 | Overseas subsistence | Stakeholder event | 36.26 | | Philip Marnick | SMG | March 15 | 03 March 2015 | Overseas Travel - Taxis | Stakeholder event | 11.07 | | Philip Marnick | SMG | March 15 | 02 March 2015 | Overseas Travel - Taxis | Stakeholder event | 16.66 | | Philip Marnick | SMG | March 15 | 02 March 2015 | Overseas Travel - Taxis | Stakeholder event | 8.49 | | Philip Marnick | SMG | March 15 | 03 March 2015 | Overseas subsistence | Stakeholder event | 13.99 | | Philip Marnick | SMG | March 15 | 04 March 2015 | Overseas - Accommodation | Stakeholder event | 218.00 | | Philip Marnick | SMG | March 15 | 04 March 2015 | UK Travel - Taxis (after 9pm late working) | Stakeholder event | 20.45 | | Philip Marnick | SMG | March 15 | 13 March 2015 | UK Travel - Car, Motorbike, Cycle | Colleague meeting | 59.20 | | Rhodri Williams | SMG | March 15 | 19 February 2015 | UK Travel - Oyster card | Colleague meeting | 17.20 | | Rhodri Williams | SMG | March 15 | 23 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 81.50 | | Rhodri Williams | SMG | March 15 | 25 February 2015 | UK Accommodation | Colleague meeting | 240.00 | | Rhodri Williams | SMG | March 15 | 26 February 2015 | UK Subsistence | Colleague meeting | 30.00 | | Rhodri Williams | SMG | March 15 | 27 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 109.00 | | Rhodri Williams | SMG | March 15 | 27 February 2015 | UK Travel - Oyster card | Colleague meeting | 15.60 | | Rhodri Williams | SMG | March 15 | 09 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 98.00 | | Rhodri Williams | SMG | March 15 | 10 March 2015 | UK Subsistence | Colleague meeting | 120.00 | | Rhodri Williams | SMG | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 60.00 | | Rhodri Williams | SMG | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 109.00 | | Rhodri Williams | SMG | March 15 | 14 March 2015 | UK Accommodation | Colleague meeting | 90.00 | | Rhodri Williams | SMG | March 15 | 14 March 2015 | UK Subsistence | Colleague meeting | 30.00 | | Rhodri Williams | SMG | March 15 | 16 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 209.00 | | Rhodri Williams | SMG | March 15 | 17 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 4.80 | | Rhodri Williams | SMG | March 15 | 17 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 43.00 | | Jonathan Rose | SMG | March 15 | 25 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 31.20 | | Jonathan Rose | SMG | March 15 | 26 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 4.80 | | Jonathan Rose | SMG | March 15 | 27 February 2015 | UK Accommodation | Colleague meeting | 109.00 | | Jonathan Rose | SMG | March 15 | 27 February 2015 | UK Travel - Parking costs | Colleague meeting | 35.02 | | Jonathan Rose | SMG | March 15 | 27 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 20.90 | | Jonathan Rose | SMG | March 15 | 04 March 2015 | UK Travel - Air | Colleague meeting | 66.80 | | Jonathan Rose | SMG | March 15 | 10 March 2015 | Staff meals - Off site | Colleague meeting | 21.55 | | Jonathan Rose | SMG | March 15 | 10 March 2015 | UK Travel - Parking costs | Colleague meeting | 25.75 | | Jonathan Rose | SMG | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 4.80 | | Jonathan Rose | SMG | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 4.80 | | Jonathan Rose | SMG | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 4.80 | | Jonathan Rose | SMG | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 10.20 | | Jonathan Rose | SMG | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 10.20 | | Jonathan Rose | SMG | March 15 | 12 March 2015 | UK Travel - Air | Colleague meeting | 96.00 | | Jonathan Rose | SMG | March 15 | 12 March 2015 | UK Travel - Air | Colleague meeting | 25.99 | | Jonathan Rose | SMG | March 15 | 16 March 2015 | Staff meals - Off site | Colleague meeting | 17.50 | | Jonathan Rose | SMG | March 15 | 16 March 2015 | UK Travel - Parking costs | Colleague meeting | 25.75 | | Jonathan Rose | SMG | March 15 | 16 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 10.20 | | Sharon White | SMG | March 15 | 20 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 23.74 | | Sharon White | SMG | March 15 | 22 March 2015 | UK Travel - Taxis and cars | Colleague meeting | 25.00 | | Sharon White | SMG | March 15 | 26 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 4.80 | | Stephen Warish | SMG | March 15 | 26 February 2015 | UK Travel - Taxis and cars | Stakeholder meeting | 7.00 | | Stephen Gettings | SMG | March 15 | 27 February 2015 | Overseas Travel - Air | Stakeholder meeting | 1.23 | | Employee | Level | Posting Date | Date Incurred | Expense Type | Purpose | Amount | |-------------------|-------|--------------|---------------|-----------------------|--------------------------|---------| | Stephen Gettings | SMG | March 15 | 27 February 2015 | Overseas Travel - Air | Stakeholder meeting | 493.50 | | Stephen Gettings | SMG | March 15 | 27 February 2015 | Overseas Travel - Air | Stakeholder meeting | 221.11 | | Stephen Gettings | SMG | March 15 | 03 March 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 243.52 | | Stephen Gettings | SMG | March 15 | 05 March 2015 | Overseas - Accommodation | Stakeholder meeting | 138.48 | | Stephen Gettings | SMG | March 15 | 05 March 2015 | Overseas subsistence | Stakeholder meeting | 64.56 | | Stephen Gettings | SMG | March 15 | 06 March 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder meeting | 204.42 | | Stephen Gettings | SMG | March 15 | 08 March 2015 | Overseas subsistence | Stakeholder event | 6.13 | | Stephen Gettings | SMG | March 15 | 10 March 2015 | Overseas Travel - Taxis | Stakeholder event | 10.66 | | Stephen Gettings | SMG | March 15 | 10 March 2015 | Off-site Hospitality | Stakeholder event | 3.42 | | Stephen Gettings | SMG | March 15 | 13 March 2015 | Overseas Travel - Air | Stakeholder event | 370.93 | | Stephen Gettings | SMG | March 15 | 16 March 2015 | Overseas Travel - Taxis | Stakeholder event | 12.47 | | Stephen Gettings | SMG | March 15 | 17 March 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder event | 29.44 | | Stephen Gettings | SMG | March 15 | 17 March 2015 | Overseas Travel - Rail/Bus/Coach | Stakeholder event | 30.18 | | Stephen Gettings | SMG | March 15 | 17 March 2015 | Overseas Travel - Taxis | Stakeholder event | 14.26 | | Stephen Unger | SMG | March 15 | 24 February 2015 | Overseas subsistence | Stakeholder meeting | 3.10 | | Stephen Unger | SMG | March 15 | 24 February 2015 | Overseas subsistence | Stakeholder meeting | 3.10 | | Stephen Unger | SMG | March 15 | 25 February 2015 | Overseas subsistence | Stakeholder meeting | 29.37 | | Stephen Unger | SMG | March 15 | 27 February 2015 | Overseas - Accommodation | Stakeholder meeting | 462.77 | | Stephen Unger | SMG | March 15 | 27 February 2015 | Overseas subsistence | Stakeholder meeting | 41.81 | | Stephen Unger | SMG | March 15 | 27 February 2015 | Overseas subsistence | Stakeholder meeting | 13.94 | | Stephen Unger | SMG | March 15 | 27 February 2015 | Overseas subsistence | Stakeholder meeting | 32.70 | | Stephen Unger | SMG | March 15 | 27 February 2015 | Overseas Travel - Taxis | Stakeholder meeting | 11.21 | | Stephen Unger | SMG | March 15 | 06 March 2015 | Off-site Hospitality | Stakeholder meeting | 2.29 | | Stephen Unger | SMG | March 15 | 12 March 2015 | UK Travel - Taxis and cabs | Colleague meeting | 15.00 | | Tony Close | SMG | March 15 | 27 February 2015 | UK Travel - Air | Colleague meeting | 2.47 | | Tony Close | SMG | March 15 | 27 February 2015 | UK Travel - Air | Colleague meeting | 38.00 | | Tony Close | SMG | March 15 | 27 February 2015 | UK Travel - Air | Colleague meeting | 67.05 | | Tony Close | SMG | March 15 | 27 February 2015 | UK Travel - Air | Colleague meeting | 2.47 | | Tony Close | SMG | March 15 | 10 March 2015 | Overseas Travel - Air | Stakeholder meeting | 132.30 | | Victoria Nash | SMG | March 15 | 24 February 2015 | UK Travel - Car,Motorbike,Cycle | Stakeholder event | 44.10 | | Victoria Nash | SMG | March 15 | 27 February 2015 | UK Accommodation | Colleague meeting | 150.45 | | Victoria Nash | SMG | March 15 | 27 February 2015 | UK Accommodation | Colleague meeting | 50.45 | | Victoria Nash | SMG | March 15 | 27 February 2015 | UK Travel - Parking costs | Colleague meeting | 41.00 | | Victoria Nash | SMG | March 15 | 27 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 4.80 | | Victoria Nash | SMG | March 15 | 03 March 2015 | UK Travel - Parking costs | Colleague meeting | 25.00 | | Victoria Nash | SMG | March 15 | 03 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 9.60 | | Victoria Nash | SMG | March 15 | 04 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 12.40 | | Victoria Nash | SMG | March 15 | 09 March 2015 | UK Travel - Parking costs | Colleague meeting | 31.99 | | Victoria Nash | SMG | March 15 | 10 March 2015 | UK Travel - Rail/Bus/Tube/Ferry | Colleague meeting | 9.66 | | Victoria Nash | SMG | March 15 | 10 March 2015 | Staff meals - Off site | Colleague meeting | 21.54 | | Yih-Choung Teh | SMG | March 15 | 13 February 2015 | UK Travel - Rail/Bus/Tube/Ferry | Stakeholder meeting | 13.30 |
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d2096a759dd41764e5aa5d9028b35c216b26fec9 | CODE OF CONDUCT FOR MEMBERS OF THE BOARD OF THE FOOD STANDARDS AGENCY
Contents
1. Introduction
2. Responsibilities of Board Members
3. Attendance at Board meetings
4. Interests
5. Gifts and Hospitality
6. Discussions outside meetings
7. Collective responsibility
8. Attendance at conferences and industry/stakeholder events
9. Failure to observe the code of conduct
Annex A: The Seven Principles of Public Life
Revised and agreed at FSA Board Open Meeting, Tuesday 22 May 2012
1. INTRODUCTION
1.1 This Code of Conduct sets out standards of conduct and probity that members of the FSA Board are expected to meet at all times.
2. RESPONSIBILITIES OF BOARD MEMBERS
2.1 Board Members are responsible for upholding the values and principles of the FSA and for contributing their personal skills, knowledge and experience to the work of the Board. Board Members must comply with this Code of Conduct at all times.
2.2 Board Members must:
- act in good faith and in the best interests of the FSA;
- ensure that the Board operates within the limits of its statutory authority and in accordance with the rules set out by the Treasury relating to the use of public funds;
- ensure that high standards of corporate governance are observed at all times;
- conduct the business of the FSA in accordance with its Code of Practice on Openness;
- ensure that they understand the functions and role of the FSA and their own responsibilities;
- be accountable to the ‘appropriate authorities’ (in practice, Health Ministers) for the effective discharge of their duties and responsibilities;
- be aware of and abide by FSA policy on personal data and confidentiality - Board Members must undertake to store and dispose of papers in the securest possible way;
- be bound by the provisions of the Official Secrets Acts 1911 to 1989;
- ensure that the Board operates sound environmental policies and practices, within the framework of the Government’s Sustainable Development Strategy;
- register and declare any interests in accordance with Section 4 of this Code;
- comply with the restrictions on acceptance of gifts and hospitality as set out at Section 5 of this Code;
- comply with the requirements on confidentiality and disclosure of information as set out in Section 6 of this Code; • exercise proper discretion when engaging in any political activities – Board Members are expected not to occupy paid party political posts or to hold particularly sensitive or high-profile unpaid roles in a political party, although they are free to engage in political activities other than making political speeches or engaging in similar activities on matters directly affecting the work of the FSA (in case of doubt, Board Members should seek advice from the Chief Executive);
• follow the Seven Principles of Public Life set out by the Committee on Standards in Public Life (Annex A);
• comply with the provisions of equality legislation and value diversity; and
• treat others with respect.
2.3 Board Members must not
• act in a way that brings the FSA into disrepute;
• speak on a public platform or in the media and present themselves as an FSA Board Member unless that has been agreed by the Chair or Chief Executive. Where Board Members speak on a public platform in other capacities, they must ensure that there is no reasonable possibility that their comments could be seen to be attributed to, or represent the view of, the FSA;
• use their position improperly for their own advantage or disadvantage or that of any connected person, firm, business or other organisation;
• bully any person including other Board Members, officials or stakeholders;
• be members of any of the FSA scientific advisory committees which advise the Board
3. ATTENDANCE AT BOARD MEETINGS
3.1 A Board Member is expected to attend all Board meetings. A Board Member may be removed from office if he/ she is absent from more than two consecutive meetings [or more than three meetings in any twelve month period] unless the absence is due to illness or some other reason approved by the Chair.
4. INTERESTS
4.1 Where a Board Member has a private financial or non-financial interest which might influence, or be perceived to influence, their judgement, a conflict of interest may arise. It is important for potential conflicts of interest to be properly managed.
Register of Interests
4.2 The Food Standards Act 1999 requires the Agency to maintain a register of Board Members’ private interests. Board Members must register with the Board Secretariat on appointment the following interests that may affect or be affected by the work of the Agency:
- Paid employment, office or profession
- Directorships, whether paid or not
- Any business, professional or public activities or interests that provides a regular source of income, recognition or some other benefit
- Membership of public bodies, trusteeship of a charity or other public or private trust, or membership, role or affiliation to clubs or organisations
- Any shareholdings other than those held by a unit trust or similar arrangements where the member has no influence on the management of the shares
Board Members must inform the Board Secretariat within 28 days of any changes to their registered interests.
4.3 The known interests of a Board Member’s close family members must also be registered. Close family members include a partner (i.e. spouse, civil partner or someone else with whom the Board Member lives in a similar capacity), parents and parents-in-law, children and step children, brothers and sisters of the Board Member and their partner, uncle and aunt, nephew and niece and the partners of any of these people.
4.4 The Board Secretariat is responsible for making the Register of Interests available for public scrutiny and for its publication on the Agency’s website.
Declaration of Interests at Board Meetings
4.5 Board Members with an interest in a matter on the agenda for a Board Meeting should notify the Chair (or the Deputy Chair in the case of the Chair having an interest) in advance of the Meeting and declare the nature of the interest at the Meeting before the matter is discussed. The interests to be notified to the Chair and declared at the Meeting include
- any which must be registered
- any other interest which affects the well being or financial position of the Board Member (or a close family member)
- any other interest which the Board Member considers may affect or be affected by the matter to be discussed
4.6 After a Board Member has declared the nature of their interest at the Meeting, the Chair (or Deputy Chair in the case of a declaration by the Chair) will decide whether the Board Member should participate in the discussion and decision on an issue. If a Board Member has a direct financial interest in a matter under discussion, the Chair will require that the Board Member leave the meeting. If the Chair considers that an observer who knows the facts might reasonably think that any other declared interest is so significant as to prejudice the Board Member’s judgement, the Board Member will be required to leave the meeting. In any other case, the Chair may agree that the Board Member may remain and participate in the meeting.
4.7 All interests declared at a Board Meeting, including the nature of the interest and the reasons why the Chair decides a Board Member may remain present at the Meeting, shall be recorded in the Minutes of the Meeting.
4.8 In the event of the Chair having an interest that requires them to leave the Meeting, the Deputy Chair will chair the discussion of the relevant item. 5. GIFTS AND HOSPITALITY
5.1 Board Members should not accept or offer a gift, hospitality or any other benefit as a reward, either for doing or not doing something in their official capacity, or for showing advantage to someone or to an organisation.
5.2 Hospitality is defined as meals or functions such as cocktail parties, receptions, presentations, and invitations to social, cultural and sporting events. It includes overnight accommodation and travel to and from a venue at which the event is held. Hospitality does not include light refreshments, working lunches or meals provided at conferences particularly if the FSA has paid for attending such events.
5.3 Gifts of cash should always be refused. Gifts of a trivial nature or minor seasonal items such as calendars or diaries may be accepted.
5.4 Board Members must inform the Board Secretary of all gifts and hospitality that they receive in the course of their official FSA duties where the nominal value exceeds £25 so that the details may be recorded in the Gifts and Hospitality Register. Notification should be made within 28 days of receipt of the gift or hospitality.
6. DISCUSSIONS OUTSIDE THE MEETING
6.1 A Board Member may consult external colleagues or advisers on any issue to be discussed by the Board in advance of meetings, but should make clear in any discussion that policy decisions can only be made by the Board as a whole in open session. Board Members should not give those advising them the impression that views expressed will carry any more weight than views expressed by others, and members must reach their own view of matters at the Board meeting having heard all the arguments. Should Board Members wish to discuss specific papers with others prior to wider publication of those papers, they should ensure that those whom they consult are made aware of the status of papers and the information they contain (for example, where research results are preliminary rather than final). Board Members are responsible for the acts of any person whom they consult and should therefore ensure that they are made aware of the draft, sensitive or confidential nature of any information and behave accordingly.
6.2 Board Members should treat papers for Business Meetings and other confidential information that may be circulated as confidential to them and not for discussion outside the FSA. Board Members must take responsibility for the safe keeping of such information.
7. COLLECTIVE RESPONSIBILITY
7.1 The Board will take collective responsibility for its decisions. Board Members are therefore expected, if questioned on a matter on which the Board has taken a view, to represent the views of the Board. If Board Members are questioned on a matter that falls within the remit of the FSA but on which the Board has not taken a view, they are free to give their own personal view but should stress that this does not necessarily represent the view of the Board. 8. ATTENDANCE AT CONFERENCES AND INDUSTRY/ STAKEHOLDER EVENTS
8.1 All invitations to attend or speak at conferences and industry or stakeholder events as an FSA Board Member should be referred to the Chair, who will consult with the FSA’s Engagement Planning Team before advising on whether the invitation should be accepted.
9. FAILURE TO OBSERVE THE CODE OF CONDUCT
9.1 The following paragraphs of this Code of Conduct apply where any Board Member is the subject of allegations that they have failed to comply with this Code. The nature of such allegations can vary widely, and the procedure for handling them needs to be flexible, to reflect the circumstances. In all cases of allegations concerning the conduct of Board Members the following principles should be followed:
a. Board Members of the FSA are not employees and the relationships between a Board Member and the Board and between any Board Member and the FSA are not the same as the relationships between an employee and their employer. Allegations against a Board Member will be dealt with in accordance with this Section of the Code and not through the procedures adopted by the FSA for dealing with matters concerning its employees.
b. Allegations must be dealt with fairly, thoroughly and as quickly as practicable, and in a manner which upholds the reputation of the FSA, and of its Board Members and employees.
c. The Chair (or, if the allegations concern the Chair, the Deputy Chair) is responsible on behalf of the Board for determining in any case the detailed process for handling an allegation, including the timescales within which any actions are to be taken and the appointment of any person to conduct any investigation (In the remainder of this Section 9 references to the Chair are references to the Chair or, if the allegations concern the Chair, the Deputy Chair as appropriate).
d. In determining how to handle allegations the Chair will normally consult the Chief Executive and will consult with such other Board Members and seek such legal and other advice as seems to the Chair appropriate in the circumstances.
9.2 On becoming aware of any allegations concerning the conduct of a Board Member, the Chair will first consider their seriousness and decide whether they can be dealt with informally by the Chair with the Board Member(s) concerned, or whether further action is required. If allegations are dealt with informally the Chair will advise the person who has made the allegations as to how the matter has been dealt with.
9.3 In the case of serious allegations, where the Chair decides that formal action may be required, the Chair will arrange for the allegations to be investigated by someone independent of the FSA. In such cases the Chair will write to those involved – including the Board Member against whom the allegation has been made and any person who has made the allegation – and explain the nature of the allegations and how they will be dealt with (including the timescales for dealing with them). The Chair may request that the Board Member concerned play no part in the proceedings of the FSA until the allegations have been finally disposed of. 9.4 The result of any investigation into allegations that a Board Member has breached this Code of Conduct will be considered and decided by a panel of three Board Members appointed by the Chair for that purpose. The Board Member against whom the allegations have been made will have an opportunity at a meeting with the panel to put to the panel any matters which that Board Member wishes to be taken into account before deciding what, if any, action is appropriate. The Board Member concerned may be accompanied at that meeting by another person of their choice. Any such meeting also will be attended by an advisor to the panel and a note-taker.
9.5 The panel will determine, taking into account the nature of the allegations, the outcome of any investigation carried out and any representations made by the Board Member, the appropriate action to take. That action may include a recommendation to the Chair on behalf of the Board that the Chair seek the Board Member’s removal from the Board of the FSA on the basis that the conduct of the Board Member has been such that the Board Member is unfit to carry out their duties. Where the panel makes such a recommendation the Chair shall first offer the Board Member an opportunity to have the matter referred to a special meeting of the Board members.
9.6 If a Board Member elects to have the question of their suitability to remain a member of the Board of the FSA reviewed by the Board Members a special meeting for this purpose shall be convened as quickly as practicable. The Board Member concerned shall be entitled to address the meeting and to be accompanied when doing so but shall not otherwise attend or play any part in the meeting. The Board’s decision on behalf of the FSA in relation to the allegations shall be final. Where the Board decides that the Board Member is unfit to carry out their duties the Chair shall forthwith write to the relevant ministers requesting that the Board Member be removed from the Board of the FSA. Where the Board reaches any other decision in relation to the allegations that decision shall be communicated in writing to the relevant Board Member by the Chair.
9.7 The Chair will ensure that all involved in the matter, including the Board and the person or persons who made the allegations, are kept informed and notified of the Chair, or Board’s decision in relation to the allegations.
Revised and agreed at FSA Board Open Meeting, Tuesday 22 May 2012 ANNEX A
THE SEVEN PRINCIPLES OF PUBLIC LIFE
Selflessness Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.
Integrity Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.
Objectivity In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
Accountability Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.
Openness Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
Honesty Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interests.
Leadership Holders of public office should promote and support these principles by leadership and example
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8c81d0a8d4e33b05f568cf3fd299773c1af507ac | ROLE DESCRIPTIONS - LGA BOARD MEMBERS
2016/17 Meeting Year
Context
The Local Government Association (LGA) is a politically led cross-party organisation, representing local authorities across England and Wales. Its membership includes English councils, fire and rescue authorities, the 22 Welsh councils in corporate membership through the Welsh LGA and national parks authorities via the English National Parks Authority Association. The LGA seeks where possible to work on the basis of consensus across all political groups.
The LGA Boards are central to achieving the LGA’s strategic objectives. They are responsible for:
- developing a thorough understanding of council priorities in their programme area;
- helping to shape the LGA business plan; and
- overseeing a programme of work to deliver, through engagement with councils, the strategic priorities set by the LGA Executive.
Each Board has full responsibility for its designated policy area(s). Boards may hold up to 5 formal meetings a year. However, more importantly, Boards are encouraged to find their own most effective way of working that ensures active engagement with councils and groups of councils, and not be restricted by a set timetable of formal meetings in London.
Each Board has a Chair, who also sits on the LGA Executive, and three vice/deputy Chairs drawn from the other three groups. There are currently nine Boards:-
- Children & Young People
- City Regions
- Culture, Tourism & Sport
- Environment, Economy, Housing & Transport
- Improvement & Innovation
- People & Places
- Safer & Stronger Communities
- Community Wellbeing
- Resources
NB - Improvement and Innovation Board members are precluded from undertaking the role of a National or Regional Member Peer role. Chair of the Board / Portfolio Holder
Accountabilities
- To lead the members of the Board to set the priorities and forward plan in line with the LGA Business Plan, and to oversee its delivery.
- To secure the views and active involvement of the wider membership to inform the Board's priorities and policy lines.
- To direct the work of the Board in line with the priorities of the LGA taking into account the best use of resources.
- In relation to the policy area(s) covered by the Board, to be the principal representative of the LGA, and of local government as a whole, at meetings with ministers, parliamentarians, partner bodies and other key decision-makers.
- To be the principal political spokesperson for the LGA, and for local government as a whole, in relation to those policy areas, including media interviews, writing articles and making speeches at appropriate events.
- To communicate to the wider LGA membership the work and successes of the Board.
- To Chair Board meetings, one-day conferences and other events initiated by the Board.
- To manage relationships with vice/deputy Chairs, and Board members to secure consensus on the priorities and programme.
- To actively manage the roles and responsibilities across the Board to make best use of the talent and experience of Board members.
- To sit on the LGA Executive and report on the work of the Board.
- To attend Councillors’ Forum and present the Chair’s activities report on behalf of the Board.
- To work as appropriate with other LGA Boards, contributing to the wider development of LGA priorities.
- To make appointments to outside bodies relevant to the service area.
Knowledge and Experience
The Chair may hold the relevant Portfolio in his/her home authority, or have significant experience/knowledge of, and commitment to, the policy area(s) covered by the Board.
Travel and expenses
This role will require attendances at meetings in London and in other parts of the country. Reasonable travel and subsistence costs incurred by the Chairs of Boards in the discharge of their duties will be paid by the LGA. Remuneration
Board Chair £16,219 Expected time commitment: 1.5 - 2 days per week
The Chair is required to complete a Register of Interest form and to update it annually, or when an individual’s circumstances change.
Vice/Deputy Board Chairs
Accountabilities
- To work with the Chair and other Board members to develop the programme plan for the Board taking into account the availability and need to make best use of resources.
- Where appropriate, to deputise for the Chair of the Board in his/her role as principal representative of the LGA on the policy area(s) covered by the Board, including undertaking speaking engagements and media work.
- To lead/participate in task and finish groups set up to look in more detail at specific areas of policy.
- To attend residential conferences and other events initiated by the Board, leading and Chairing sessions as required.
- To Chair meetings in the absence of the Chair.
- To fulfil all other responsibilities of a Board member, set out below.
- To make appointments to outside bodies of relevance to the service area.
Knowledge and experience
Vice-Chairs/deputy Chairs may be Portfolio Holders for that policy area in their home authorities or have significant experience/knowledge of, and commitment to, the policy area(s) covered by the Board.
Travel and expenses
This role will require attendances at meetings in London and in other parts of the country. Travel and subsistence costs incurred in attending Board meetings should be met by the member’s home authority.
Remuneration
Board vice/deputy Chair’s allowance: £8,109 Expected time commitment: 0.5 – 1 day per week
Vice/Deputy chairs are required to complete a Register of Interest form and to update it annually, or when an individual’s circumstances change. Board Member
Accountabilities
- To actively engage with councils and groupings of councils to secure the views and involvement of the wider membership to inform the Board priorities and policy lines and act as an advocate for the LGA and its work.
- To work with the Chair and Vice/Deputy Chairs to develop the programme plan for the Board taking into account the availability of and need to make best use of resources.
- To attend and actively participate in Board meetings.
- To attend conferences and other events initiated by the Board.
- To read and understand all Board papers in advance of the meeting, and to keep abreast of all developments locally and nationally in relation to the policy areas covered by the Board.
- Where required, to take responsibility for a specified policy issue or area of work and act as spokesperson.
- To take on appointments to outside bodies relevant to the policy area covered by the Board.
Knowledge and Experience
Board members may be Portfolio Holders for that policy area in their home authorities or have experience/knowledge of, and commitment to, the policy area(s) covered by the Board.
Travel and expenses
This role will require attendances at meetings in London and in other parts of the country. Travel and subsistence costs incurred in attending Boards meetings should be met by the member’s home authority.
Remuneration
Board members’ allowance: £2,704 Expected time commitment: up to 0.5 days per week
Members are required to complete a Register of Interest form and to update it annually, or when an individual’s circumstances change.
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02ae7dd6546c1defa762c1acce59d913cb88a789 | Summary of board members’ engagements
This paper provides a summary of Board Members’ engagements from: **21 January 2020 – 10 March 2020**
| Date of visit | Organisation visited/ events | Board member attended/ attending | |---------------|------------------------------|----------------------------------| | 16.01.20 | Welsh Food Advisory Committee meeting | Ruth Hussey | | 28.01.20 | Meeting with Jo Churchill MP, DHSC | Heather Hancock | | 28.01.20 | Meeting with Jonathan Hellawell, 10 Downing Street | Heather Hancock | | 29.01.20 | Filming with BBC on E-commerce | Heather Hancock | | 29.01.20 | Food Law Enforcement Committee Wales | Ruth Hussey | | 24.02.20 | Meeting with Geraint Davies MP | Heather Hancock | | 25.02.20 | Allergy Symposium event, FSA | Heather Hancock | | 26.02.20 | FSA conference Wales (speaker) | Ruth Hussey | | 03.03.20 | Audit and Risk Assurance Committee meeting | Colm McKenna, Ruth Hussey, Mary Quicke, Timothy Riley | | 10.03.20 | Meeting with Rt Hon George Eustice MP, SoS for Defra | Heather Hancock |
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ab15b4793ab575176d550c29853214b9ef358b12 | Office of Rail Regulation
Minutes of the 90th Board meeting on 15 January 2013 (08:45 – 16:00) in Room 1, ORR offices, One Kemble Street, London
Board present:
Non-executive directors: Anna Walker (Chair), Tracey Barlow, Peter Bucks, Mark Fairbairn, Mike Lloyd, Stephen Nelson, Ray O'Toole, and Steve Walker.
Executive directors: Richard Price (Chief Executive), Michael Beswick (Director, Rail Policy), Ian Prosser (Director, Railway Safety), Alan Price (Director, Railway Planning and Performance) and Cathryn Ross (Director, Railway Markets and Economics).
In attendance, all items: Dan Brown (Director, Strategy), Richard Emmott (Interim Director, External Affairs), Juliet Lazarus (Director, Legal Services) Tess Sanford (Board Secretary), Gary Taylor (Asst. Board Secretary).
In attendance, specific items: Richard Parry-Jones (Chairman, Network Rail), David Higgins (Chief Executive, Network Rail), Paul Plummer (Group Strategy Director, Network Rail), Robin Gisby (Managing Director – Network Operations, Network Rail), Simon Kirby (Managing Director, Infrastructure projects) and Patrick Butcher (Group Finance Director, Network Rail) (all Item 3)
John Larkinson (PR13 programme Director) item 3, Carl Hetherington (Deputy Director, Railway Markets and Economics) item 3, Brian Kogan (Deputy Director, Railway Markets and Economics), Agnes Bonnet (Head of European Policy), Alan Bell (Head of Railway Safety Policy), Paul Hooper (Head of Interoperability) - all item 8, Alastair Gilchrist (Director, Corporate Operations) – item 9, Sandra Jenner,(Change Advisor) - items 9-11) Elaine Horton (Associate Director, Finance) Item 9.
Item 1: Welcome and apologies for absence
1. Anna Walker welcomed Richard Emmott, the new Interim Director of External Affairs.
Item 2: Declarations of interest
2. There were no interests declared.
Item 3: Network Rail (NR) - presentation and discussion on the Strategic Business Plan (SBP)
03. The Chair welcomed the NR team and set out areas that the ORR Board had already identified as being of interest. NR would appreciate that it was too soon for any substantive response by ORR to the SBP and this meeting was about receiving information to set the context for later detailed discussion. A great deal of analysis needed to be done by staff before a rounded view of the SBP could be taken.
04. The questions which the Board had already identified around the SBP included:
- How the efficiency figure had been reached;
- What was meant when NR talked about ‘trade-offs’
- Whether ‘whole life’ asset management was included
- How sustainable the business was
- What was meant by expecting something ‘different’ from the regulator
- What the sector would need to do differently if NR were to deliver the SBP
05. NR presented the key areas of the Strategic Business Pan. Richard Parry Jones introduced the presentation and noted that the state of structures and earthworks across the network was a matter for concern which was being addressed.
06. David Higgins explained how the SBP had been developed in a ‘bottom up’/top down process. RDG (the Rail Delivery Group) had reviewed the plan and were generally supportive.
07. NR reported progress in a number of key areas during CP4 including:
- Significant improvements at dealing with Level Crossing risks with the use of better data and a comprehensive action plan through positive collaboration between Network Rail and ORR. By the end of CP4 there should be a 25% reduction in level crossing risks.
- Inspection process for structures now in place, though it needs to be developed further to reduce risks and enable a significant impact in CP5.
- A national operating strategy in place including projects such as ORBIS to deliver technological improvements. One result of this would be to reduce staffing from 5,000 signallers to 1,000 track managers. NR did not anticipate significant industrial unrest as job losses would be balanced by other benefits.
08. However, David Higgins made clear that he and his team had very serious concerns about the state of some of the assets and civils on the network and that these were the issues that ‘kept him awake at night’. Network Rail were doing everything they could to improve matters through targeted maintenance and close management.
09. A strategic vision for Network Rail had been developed which aligned to a set of strategic outcomes and key enablers. Network Rail’s activity and expenditure plans for CP5 supported these. In summary the plans were:
- The plan requires £37.5b of expenditure;
- Network Rail plan to deliver efficiency savings of 18% during CP5;
- Operating costs to continue to fall whilst investment in the network takes place;
- Network Rail’s asset policies have matured and align with route plans
- Network Rail will need to raise debt of £23b, whilst industry subsidy falls in CP5.
10. Stretch targets had been placed on Network Rail’s teams to find efficiencies throughout CP5. Work had already begun in a number of areas to find these, though not all the required savings had been identified. Effective engagement with contractors would support further efficiencies. There were no efficiencies included in the plan related to new alliances.
11. There was a significant sum planned to be spent on Enhancements in CP5. NR said this was a substantial investment to improve mid-long term performance and to meet passenger demand. A number of projects had not yet been scoped so figures were provisional.
12. NR said there were no long-term planning assumptions for enhancements in CP7. We said we would find it useful to see NR’s longer term high level projections to understand the profile of planned investment into CP7 or beyond.
13. We said that the additional spend on safety should be supported by statements of benefits expected. NR said the additional resources would be focused on enhancements to two areas – substantial improvements to the use of road rail vehicles on adjacent line openings and automatic isolation. Further information would be provided to ORR through full business cases as these were developed.
14. The meeting discussed:
- whether localism could drive efficiencies;
- the role of the central system operator in setting central asset policies so that route managers could deliver best practice at regional level;
- assumptions in the plan for improving access;
- the need to reconcile the savings proposed against McNulty’s proposals and the assumptions of savings arising from the work in hand by RDG sub groups;
- the sustainability of NR’s asset management and the quality of the data it uses to inform asset policies. (Independent research would report on data quality in April 2013);
- outputs and incentive settings in the context of unobtrusive regulation and the motivational approach which Network Rail are keen for ORR to adopt. (Meetings between ORR and Network Rail will discuss outputs and the motivational model in more detail.)
15. We thanked Network Rail for an informative presentation. A comprehensive series of challenge discussions had been scheduled to discuss the SBP in more detail. A further informal Board to Board meeting would take place in April.
Post presentation discussion
16. Board members and executives shared comments which would feed into the challenge process. These included:
- no detail on sustainability in asset management where internal opinion was very different to Network Rail’s;
- need a clear articulation of the trade-off question
- how can efficiency be incentivised through a motivational model;
- financial information showing RAB growth and depreciation numbers would be essential
- more detail to underpin the figures that sit behind activities.
Item 4: European policy – key priorities and IRG rail
17. Brian Kogan and Agnès Bonnet were seeking Board comment on ORR’s objectives for European activity for 2013-14 and beyond, and ORR’s approach to the upcoming chairmanship of IRG rail.
18. We asked for a set of outputs and outcomes for 2013-14 to be developed and highlighted in our business plan.
19. The Fourth Package in Europe was likely to introduce a number of ambitious proposals, it would be important to ensure that the GB regulatory regime is not compromised. IRG’s paper on the Fourth Package and how it relates to each country would be circulated to Board members.
20. Anna Walker would be chair of IRG rail during 2013 and we agreed the objectives set out to take advantage of this opportunity. It was important to build IRG’s credibility if we were to avoid changes in the European regulation framework.
21. We agreed the objectives set out for our European work and added: • spread of technology and working practice innovation to ensure GB benefits from best practice. • state funded operators not to have unfair advantage in competing in the UK market.
*Paragraph 22 has been redacted as it relates to policy development*
23. We discussed investing more resources in our European work in 2013-14. The current plan included increased complement to support the chair in IRG work. We suggested staff explore taking a more active approach in areas such as interoperability. We noted that the information provided under paragraph L (breakdown of resources for 2013-14) of the paper did not align with the Business planning information elsewhere in the papers and asked that this be corrected.
**Board 15.01.2013 Action A:** Agnès would circulate the recent IRG rail paper on initial views on the fourth package to Board members.
**Board 15.01.2013 Action B:** DfT involvement on Europe should be raised by Richard and Anna when they meet with Phillip Rutman and Claire Moriarty on 21 January.
**Board 15.01.2013 Action C:** European team to align Business plan against table L to reflect planned resources for 2013-14
**Board 15.01.2013 Action D:** ORR’s 2013-14 Business plan to include clear reference to our planned European work
**Board 15.01.2013 Action E:** Set out the outcomes for our work in Europe to cover the next 12 months and longer term.
24. **Item 5: Monthly Safety report / issues to advise the Board**
25. Ian Prosser’s update was included in the CE’s report. Ian highlighted the following points: • Higher risk SPAD incidents have increased in the last quarter. Staff will continue to monitor closely the industry’s Operational Focus Group plan which is facilitated by the Rail Safety and Standards Board. • ORR’s technical safety specialists will hold a series of meetings with NR to assess NR’s capability to deliver its health and safety responsibilities as set out in the SBP.
26. We discussed the relationship between ORR and RAIB, and the process for closing out RAIB recommendations, some of which were now very old. Significant progress had been made in closing out a high proportion of RAIB recommendations; but more was needed. It was important to maintain a positive dialogue between ourselves and Carolyn Griffiths and to respond constructively to any concerns. We agreed that Ian and Richard Price should meet with Carolyn and that Steve Walker might be invited to attend the next meeting (or in his absence, another NED).
27. We asked that in future the presentation of this agenda item highlighted the key systemic or strategic points for Board consideration by setting the important individual cases in a more strategic context.
**Board 15.01.2013 Action F:** We agreed that Steve Walker would be invited to the next scheduled meeting between Richard, Ian and Carolyn Griffiths of RAIB.
**Item 6: 6 Monthly industry Health & Safety report**
28. We considered the 6 monthly health and safety report and noted the five key points set out by Ian Prosser:
- The Passenger Indicator Model performance has been consistently good for the last three years; the balance of risks associated with the different indicator groups has changed;
- A significant increase in landslips and structural failures due to heavy rainfall and flooding has shown that some asset assessments need to be revisited because they did not identify precursors;
- Failure of Network Rail to deliver planned maintenance (as opposed to reactive maintenance) at some depots;
- The notable decrease in SPAD risk, although there has been an increase in the last quarter; and
- The indicator for public behaviour at level crossings is at an all-time low (positive outcome).
29. In the context of NR’s delivery of planned maintenance, we noted that language around ‘on track’ and ‘off track’ issues can be inconsistent between NR and ORR and asked for a short note to clarify ORR’s use of the terms and explain how performance against the plan was measured as well as whether the plan itself was adequate.
30. We asked about the recent increase in landslips following severe weather conditions and whether better flood prevention would help. We did not know whether NR were taking a broad view of innovative long term solutions to some environmental issues. We queried whether it was possible to incentivise improved environmental sustainability.
31. We noted the focus on workforce safety in plans for RSD’s work in 2013-14. **Board 15.01.2013 Action G:** Ian to produce a short note clarifying the language around track and off track areas. **Board 15.01.2013 Action H:** options around eco-systems for flood prevention to be picked up as part of CP5 work and discussed at a PRC meeting.
**Item 7: Report back from December SRC meeting**
32. Steve Walker reported on the Safety Regulation Committee on 12 December 2012.
- The committee had discussed driverless trains in deep tube lines and would receive a further update in the summer. Following agreement between ORR and ATOC for further dialogue on safety issues, Charles Horton (ATOC) and Gary Cooper (ATOC) attended the meeting to discuss health and safety challenges, particularly around rolling stock and the rapid obsolescence of electrical equipment.
33. The next SRC meeting will take place on 18 March 2013.
**Item 8: Strategic environment**
34. Dan Brown presented a paper summarising recent external reports and the implications for ORR’s work:
- Laidlaw enquiry – published on 6 December 2012;
- Brown Review into rail franchising process – published 10 January 2013; and
- The Transport Select Committee’s “Rail 2020” report – published January 2013.
35. We discussed the three reports. The reports included differing levels of detail around the future role of regulation. Neither the Laidlaw nor Brown reviews explicitly address the role of regulation; although both had consequences for ORR’s working relationship with DfT. DfT’s immediate focus is to develop a new franchise process but we should be careful that our relationship is maintained.
36. The “Rail 2020” report was broadly consistent with our direction of travel but it will be important to respond to the challenges for us in the report, particularly around transparency and demonstrating our capability.
37. It was important that our stakeholder engagement on these issues went beyond NR, DfT and ATOC.
38. We discussed our dialogue with both Network Rail and ATOC which should include discussion about the development of a motivational model. Work to develop a motivational approach was at an initial stage and it will be important for NEDs to be kept informed of this work as part of developing our thinking around outputs and implementing the incentives framework.
39. The relationship with ATOC had improved, with dialogue continuing after the joint Board session in September 2012. A further joint Board session was due to take place in the spring.
40. We believed that ATOC’s concern had been around regulatory creep in our functions and the implications of moving towards a regulatory model, when they had a contractual relationship with DfT. Dan would review the areas around where there has been a shift to a regulatory model and highlight the key points of the transition that might generate tension. In the long term we believed there was significant alignment of our aims with ATOC’s interests.
**Board 15.01.2013 Action I:** As part of continued dialogue with ATOC Dan should highlight the areas of transition where there have been moves towards a regulatory model so that we understand the wider story.
**Item 9: Business planning 2013-14** 41. Alastair Gilchrist presented an update on the development of the 2013-14 Business plan including the current draft slides for the consultation event, taking place on 7 February 2013.
42. Significant work had taken place since the last Board discussion in December. The new business management system contained a defined list of activities and milestones but not all underpinning detail was complete and the business plan could not yet be drafted.
43. We recognised that significant work had taken place and were encouraged that there was a line of sight from the work on the strategy through to the business plan.
44. We would receive a further update in February with greater detail on resources. It was important for the plan to highlight the areas where our inputs will deliver real difference. Board members would provide detailed comments on the document to Alastair.
45. We noted the draft slides for the consultation event. The document was thorough and provided sufficient detail to generate significant comments from our stakeholders. One key message was that we planned to deliver more impact for less funding and this should be clear from the beginning of the presentation.
**Board 15.01.2013 Action J:** Further update to be provided to the Board in February to include feedback from the consultation event on 7 February and the resource figures in more detail.
**Board 15.01.2013 Action K:** NEDs to provide Alastair with any specific comments following the meeting.
**Board 15.01.2013 Action L:** Business Plan needs to ensure clearer objective setting / performance management and success measures.
**Board 15.01.2013 Action M:** Business Plan needs to take account of and be clear what we are going to do in the following areas:
- passengers;
- transparency; and
- Europe.
**Item 10: ORR’s Capability plan**
46. Sandra Jenner presented an update on the work already completed and that planned in the next few months to develop ORR’s capability. *Paragraphs 47-51 have been redacted as they contain sensitive information.*
47. We discussed the need to ensure effective internal communication around the positive changes which have happened to date, which would be taken forward by Richard Emmott and the executive team.
48. The executive would look at the balance between ‘business as usual’ and ‘stretch’ or new activity planned for next year. Dan Brown would lead on a piece of work to review our capability over the longer term against our strategy to ensure that we are capable to deliver.
49. A paper on our response to the Capability Review would be discussed by the Board in February.
Board 15.01.2013 Action N: Internal communications plan should allow us to recognise what changes have been achieved over the past twelve months and set out the agenda for the next period.
Board 15.01.2013 Action O: has been redacted as it relates to sensitive information
Board 15.01.2013 Action P: Dan to look at the longer term capability requirements in accordance with our strategy.
Board 15.01.2013 Action Q: Follow up to the Capability Review to be discussed by the Board in February.
Item 11: CE’s Assurance & accountability report – quarter 3
55. The Chief Executive’s assurance report covered quarter three:
- The RAG rating for the PR13 programme was now rated as red. This was due to a number of slippages to key milestones in the work plan. We noted that the milestone dates for the remainder of the project were extremely tight and there was no further room for slippage so that any one significant issue could cause problems to the delivery of the project on schedule. We recognised that significant pressures had been placed on staff colleagues in recent weeks and agreed that this was not acceptable and should be avoided. We talked about the need for clear alerts from directors of staff who were unable to meet Board demands.
- A detailed PR13 project run-in plan had been developed and agreed by the Chair and CE. This set out in meticulous detail the key dates for the project, including NED meeting dates. This would be circulated to Board members and we each agreed to check it against our own diaries and raise any significant comments direct with staff.
- The Transparency conference held on 10 December had been extremely successful and the media coverage suggests that we have made real progress in this area. Richard Emmott was taking over the role as SRO for our transparency programme of work. Further work will take place to assess the resources currently available to take this forward.
- Alan Price confirmed that we have written to Network Rail on issues on operational performance over Christmas and the New Year. He explained that he had encouraged them to use reports that would be produced for internal audiences as a way of reducing the reporting burden. A written report would be provided to the Board in February. Board 15.01.2013 Action R: PR13 ‘run in’ plan to be circulated to NEDs for information and to raise any significant comments.
Item 12: Timescales for the ORR Annual report 2012-13
56. We agreed the process for producing the 2012-13 Annual Report and resource accounts and noted the list of significant areas of work which had been completed during 2012-13. Richard Emmott confirmed that the draft report would highlight the organisation’s key achievements at the appropriate level of detail.
57. We asked for enough time to review the detail of the draft report and Richard agreed to provide Board members with the draft at least a week in advance of any discussion which is scheduled to take place at the March Board meeting.
Board 15.01.2013 Action S: Richard Emmott to circulate first draft of the annual report and resource accounts to Board members a week in advance of the March Board meeting.
Item 13: Audit Committee report
58. The report summarised key items discussed at the last Audit Committee meeting on 12 December 2012.
59. The committee had discussed assurance around our financial models in light of the franchising issues at DfT. The committee were encouraged by the current QA process and felt that this provided positive assurance.
60. We discussed the way in which our safety team and the industry use the Railway Management Maturity Model (RM3). We asked for a note on the technical assurance status of RM3, and how it was being used.
61. The committee also discussed the process for completing our annual resource accounts. No issues were raised, or anticipated, by the National Audit Office.
Board 15.01.2013 Action T: Ian to provide the Board with a report around the assurance that the RM3 model provides and how we use the model.
Item 14: Chair’s report
62. The Chair’s report gave details of the Chair’s recent meetings with Government, industry and stakeholders over the past month.
63. We discussed issues which had become apparent around the recent Network Rail rebate payment to Transport Scotland. We agreed that there were a number of lessons to be drawn from this process and feedback will be provided to the Board in due course.
64. We confirmed that we would want to review question of rebates as part of a discussion of the overall approach to efficiency savings in CP5/PR13.
Item 15: Chief executive’s overview and monthly data pack
Competition powers The Chief Executive drew to our attention a current issue around regulatory competition powers. We noted that the government had introduced an amendment to the Enterprise and Regulatory reform bill which provides power to the Secretary of State to take competition powers from regulators in certain circumstances but without consultation. Following discussion we agreed that as part of our business planning process we should look at how we use our competition powers and make sure that we are active in using them.
Team success
We noted and congratulated colleagues for the considerable effort it had taken to successfully handle the late flurry of licence submissions for the introduction of the GSMR.
Open Access
Paragraphs 67 and 68 have been redacted as potentially commercially sensitive
Finance
We noted an increase in consultancy spend this month which meant that end year projections for the budget were improving. We asked for assurance that the executive was comfortable with the process around these procurements. The contracts had been awarded in line with government guidelines.
Board 15.01.2013 Action U: Cathryn to bring open access back to the board before further decisions were made.
Board 15.01.2013 Action V: Discussion to be held at board before decision is made on competition powers.
Board 15.01.2013 Action W: Update to be provided in advance of a decision on the Alliance open access application.
Item 16: Board forward programme
The Board forward programme had been amended and now included the forward programmes for Board committees, and information about which executive committee was responsible for quality assuring papers and rehearsing any issues. No comments were raised.
Item 17: Approval of minutes of Board meetings of 27th and 28th November 2012
The draft minutes of the meetings held on 27th and 28th November were noted.
Item 18: Matters arising not taken elsewhere on the agenda
The updates on the outstanding Board actions were noted.
Item 19: Any other business
No items were raised. For publication
Anna Walker Chair Draft minutes approved by the Board on 26 February 2013
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551abb1bfc7aff4126123760b533762eba0ef265 | Office of Rail Regulation Minutes of the 87th Board meeting on 18 September 2012 (11:00 – 16:55) in Room 1, ORR offices, One Kemble Street, London
Board present:
Non-executive directors: Anna Walker (chair), Tracey Barlow, Peter Bucks, Mark Fairbairn, Mike Lloyd, Stephen Nelson, Ray O’Toole and Steve Walker.
Executive directors: Richard Price (chief executive), Michael Beswick, Ian Prosser, and Cathryn Ross.
In attendance, all items: John Larkinson (acting director, RPP), Jen Dinmore (legal adviser), Ken Young (director, external affairs – from item 7), Alastair Gilchrist (director of corporate operations), Sam McClelland Hodgson (Board secretary), Gary Taylor (asst. board secretary)
In attendance, specific items: Dan Brown (items 3 and 4), Richard Gusanie (item 5) Paul McMahon (Items 6, 11), Jonathan Hulme (item 6); Ken Young (from item 8), Claire Dickinson (Item 8); John Gillespie (item 8); Nigel Fisher (item 9); David Robertson (item 10); Paul Stone (item 11), Sandra Jenner (Items: 3,4,5 and 12)
Item 1: Welcome and apologies for absence
1. Anna Walker welcomed everyone to the meeting, in particular, Alastair Gilchrist, the new interim director of corporate operations observing the meeting. We noted apologies for absence had been received from Juliet Lazarus; Jen Dinmore was attending on her behalf as legal adviser. We also noted apologies for lateness from Ken Young.
Item 2: Declarations of interest
2. There were no interests declared relevant to the agenda.
Item 3: Strategy vision and next steps
3. Following our recent staff workshops and our strategy discussions on 11 September we discussed our upcoming October awayday where we will establish greater clarity around our short, medium and long term objectives. We recognised the importance of this work as we considered the development of our strategic objectives as key to establishing the building blocks for CP5 and CP6.
4. Dan Brown provided a brief recap of what had already taken place in the process of developing our strategy. Going forward, we noted that we need to look at the following:
- Our current activities and statutory duties;
- Establish a clear set of longer term objectives;
- How the strategy is taken forward by the Business plan in 13-14.
- How best to engage our stakeholders around our business priorities.
5. Following discussion we agreed that it would be important for the Board to have a greater understanding of the building blocks involved and how these link together to build our overall story.
6. We recognised that we have historically looked at our strategy from the bottom-up. We agreed that going forward we also needed a top down approach to developing our strategy.
7. In terms of next steps, it was confirmed that a Board strategy group meeting was currently being arranged to ensure a further discussion takes place around preparations for the awayday session. We agreed that all non-executive directors be invited to join this meeting by phone if available.
8. We agreed that it would be important for the executive team to provide a clear steer around what the outcomes of the awayday should be. The executive team were tasked with developing a clear set of outcomes and to work up the agenda for awayday from the basis of this discussion.
**Board 18.09.2012 Action A:** Board strategy group session to take place in early October to discuss preparations for the October awayday event. NEDs to join by conference call (subject to availability).
**Board 18.09.2012 Action B:** Dan Brown to take Board discussion as a basis to draw up an agenda for the strategy workshop in October.
**Board 18.09.2012 Action C:** We agreed that the Executive should provide a clear steer on what they want the outcomes of the awayday discussion to be.
**Item 4: Outcome of high level meetings with RDG and ATOC and the recent ministerial changes**
9. We noted the feedback from the recent high level meetings held with the industry, including a workshop with ATOC, and meetings with RDG.
*(Paragraphs 10-12 have been redacted because they contain sensitive information.)*
13. Steve Walker confirmed to us that following the discussion around ensuring better safety dialogue between ORR and ATOC, a slot on the December SRC agenda was being developed to invite relevant ATOC members to discuss safety areas in more detail.
14. An introductory meeting with Simon Burns (Minister of State for Transport) took place on 10 September. The main points to note were:
- Very clear that the new team would take their own decisions, not be bound by their predecessors.
- Ministers were already apprised of our interest in doing more on passenger experience and performance monitoring
- Ministers are very keen on progress on the transparency agenda.
15. The Board noted that meetings with the Secretary of State and Simon Burns would take place in the coming month.
**Board 18.09.2012 Action D:** In relation to the monitoring of TOC performance, we were keen that we take a pragmatic approach to ensure that we build credibility and confidence within the industry. The executive agreed to keep the Board updated with developments.
**Item 5: PR13 governance and overview of issues and timeline**
16. We considered a paper and presentation for PR13 which set out the key issues, timelines and proposals for governance arrangements going forward.
17. We noted and agreed the suggested changes to the PR13 governance arrangements.
18. These included:
- NEDs would cease attending regular programme boards, however bespoke meetings would be arranged as required to get NED input on specific issues/topics
- PRC membership would now include Steve Walker (ensuring all our Board would now be members of the committee)
- The Board will be convened at the end of regular PRC meetings, as necessary, to expedite necessary decisions from PRC discussions – governance arrangements in accordance with our rules of procedure will be put in place to accommodate this
- Agreement that the test for delegation for Executive to progress PR13 be on the basis of
- operating within the strategic objectives and policy framework
- There being no new / significant issues raised by the delegation.
19. We agreed there needed to be further work on our success measures – we expressed concerns over linking ORR’s success with industry, more towards reflecting what ORR has done to drive success and how we have added value through PR13. Wider success measures of what the industry should achieve as a result of PR13 were also needed.
20. We noted the current position on the direction of travel. We suggested that we need to have a clearer understanding of direction of travel and our vision for the PR13 determinations. We agreed that it would be useful to produce a slide which sets out a top down picture of the projects and key dates.
21. We discussed the timeline in more detail. We suggested that it would be useful to flesh this out and highlight the key dependencies and timings. The executive agreed that this was important for the Board to have sight of these dependencies. We also agreed that it would be useful to schedule in a further Board or PRC discussion on safety issues.
22. We agreed that it would be useful to establish potential dates for an additional Board meeting in August 2013 for any potential PR13 discussions following the draft determinations. On balance we agreed not to re-issue our PR13 objectives, but use our narrative around the PR13 determination for messaging. We agreed to revisit our PR13 narrative at start of our awayday ‘What we want to achieve through PR13’ and update this following the outcomes of the October awayday discussions on strategy objectives.
23. We discussed the development of success measures for PR13. We agreed that we would need to consider the impact of having a set of success measures for PR13 which take into account the lessons learned from CP4. Cathryn agreed to reflect on this and assess the benefits. We suggested that it may be useful for Cathryn to discuss this with the NAO.
**Board 18.09.2012 Action E:** Agreed governance proposals to be implemented- governance arrangements in accordance with our rules of procedure will be put in place to accommodate this.
**Board 18.09.2012 Action F:** Further work on fleshing out the timeline, including the dependencies of each project to ensure the Board have clear sight of these – to be circulated in correspondence to Board.
**Board 18.09.2012 Action G:** Need for clearer understanding of direction of travel and ‘end game’ for PR13 determinations – 1 slide to be produced on top down version of what projects being done and when
**Board 18.09.2012 Action H:** We agreed that it would be useful to have a discussion included on the PRC/Board agenda which focused on drawing together the PR13 safety issues – Cathryn to also reflect this in the timeline.
**Board 18.09.2012 Action I:** We noted that as there is no Board meeting in August 2013, it may be wise to have in the diary a meeting which may/may not be necessary to discuss PR13 issues.
**Board 18.09.2012 Action J:** Anna agreed to provide Cathryn with further specific comments following this meeting, including a short note in reference to understanding where government is going and growth forecasts.
**Board 18.09.2012 Action K:** Cathryn to look at work on providing better clarity on success measures for PR13. We agreed that it may be useful to discuss this with National Audit Office. Paper to be brought back to the Board at a date to be agreed
**Board 18.09.2012 Action L:** We agreed that we should consider the lessons learned from CP4 to inform our success measures for CP5. Outcomes of this should be incorporated in Board action above
**Item 6: Conclusions on aligning incentives to improve efficiency**
24. In considering this paper and the complex issues relating to the proposals we agreed we needed further information and clarity of views on the pros and cons of the propositions to be able to make a decision on Regional Efficiency Benefit Sharing mechanisms (REBS), its interaction with alliances and whether to mandate it or not and our approach to increasing train operators exposure to changes in NR’s track access charges at periodic reviews.
25. We therefore agreed that the executive would provide a further paper and we would endeavour to circulate it for a Board decision in correspondence as soon as possible in October.
26. The additional information we requested in the paper needed to include:
- Reasons for proposals and recommendations
- answer questions relating to pay outs
- Address questions relating to McNulty figures
- Clarity of the two sets of decisions required
- An executive summary to capture views
- How REBs will work as a scheme
**Board 18.09.2012 Action M:** Following discussion we agreed that the Board would require a further paper which clearly sets out the pros and cons of the proposition and clearly states the associated legal issues and DfT position. Paper to be cleared by the executive as an agreed view(s) and circulated to NEDs for agreement through correspondence as soon as possible.
**Item 7: Monthly Industry Health and Safety report**
27. Ian Prosser provided an update on the latest industry health and safety issues.
28. We noted that in period four there were significant increases in weather and water-caused structural and landslip failures resulting in our focused enforcement and investigation of how Network Rail mitigates the consequences of and from such risks. We noted we were investigating a number of these failures, as well as pursuing the wider asset management implications. The key question was how resistant Network Rail’s assets were to extreme weather.
29. Ian confirmed that he continued to meet with Carolyn Griffiths, Chief Inspector to discuss RAIB recommendations issues. Richard Price also confirmed that a meeting had been arranged to take forward his liaison with Carolyn in October. RAIB were concerned at what appeared to be repetitions of the same problem. The question was whether the duty holder had done enough to prevent such repetitions.
30. We discussed the recent Olympics and Paralympics and recognised the success of the railways, underground services and DLR to manage during this period this time. We noted the industry was looking at lessons learnt from this experience and how these could be taken forward in their day to day processes.
31. We also discussed the latest trends relating to SPADs and worker fatigue.
**Item 8: Occupational Health**
32. We considered a paper which set out the progress made to date in relation to our Occupational Health programme.
*Paragraphs 33 - 35 have been redacted because they contain sensitive information.*
36. Steve Walker confirmed that SRC would continue to have oversight of the programme and any issues that may arise. He reported ATOC’s concern at over-intrusiveness in this area and that this would need looking at. We also recognised the need to be mindful of our own Occupational Health processes and assess whether there are areas for improvement.
37. We thanked the team for a thorough and timely update on the progress made in our programme of work. We agreed that it was crucial to explore the use of our economic levers to see where better management of health within the industry can drive greater efficiencies. Board 18.09.2012 Action (a): Work should take place to join up our occupational health work to ensure that in CP5 Network Rail was not rewarded for inefficient occupational health management and to close the gaps in their management of health issues.
Board 18.09.2012 Action (b): Timetable a review of our occupational health processes and assess whether there are areas for improvement.
Item 9: Performance update
38. Michael Beswick provided an update around the issues of performance in relation to long distance performance, LSE, freight performance and concerns around Network Rail’s planning process.
(Paragraphs 39-44 have been redacted because they contain sensitive information.)
45. We thanked Michael and Nigel for a useful update to the variety of issues around performance.
Board 18.09.2012 Action N: In relation to long distance performance, we agreed that we would need to establish whether David Higgins should meet with Anna and Richard to explain the issues. We agreed that we would need to consider the handling of this along with messaging.
Board 18.09.2012 Action O: Further update to be provided at the next Board meeting on LSE performance.
Board 18.09.2012 Action P: Michael agreed to consider the key messaging around this discussion.
Item 10: Open Access
46. We received an update report on the issues raised around open access. We noted that work was on going to look at our access functions, with Brian Kogan leading a strategic review of our track access functions with a report expected to be discussed at the Board around Christmas.
47. We considered that there may be an issue to consider around perceptions that our policies were inconsistent. We agreed that as part of the review of track access we should consider our approach and evaluate whether we have a robust policy in place which allows open access operators opportunities and promotes competition.
48. We agreed that consideration needed to be given to our long term approach and work for CP5, including the establishment of a proper system operator function, and a definition of capacity with incentives on Network Rail to promote and sell such capacity. It was confirmed that these issues will be picked up as part of the review with all options being considered.
49. We thanked the team for the extremely useful paper and summary of the history of on-rail competition.
Board 18.09.2012 Action Q: Cathryn confirmed that the results of the strategic review of our track access function will be presented to the Board around Christmas time. Exact date to be confirmed. Item 11: PR14 – HS1
50. We noted the report which set out the issues associated with our review of PR14. We noted that we had had good engagement with HS1 through a number of workshops.
51. We discussed the resources in place to undertake the review. It was confirmed that at present we have resources in place but suggested that the level of resources required will be kept under review. We recognised there was also the question of whether we had the appropriate expertise as the asset base was ‘young’ and a key issue would be the rate of degradation.
52. Following discussion we agreed with the proposed scope of PR14 for our initial consultation which will begin in December 2012.
53. We also thought we should consider whether there is anything to learn from benchmarking expenditure to help us with this work.
Board 18.09.2012 Action R: Further paper to be scheduled to the Board in April 2013 on PR14-HS1.
Item 12: Change and internal capability plan
54. We noted the paper which set out progress made against a number of areas which are being reviewed as part of the overall change and internal capability plan.
[Paragraphs 55-59 have been redacted as they contain sensitive material]
60. We thanked Sandra for her paper and supporting annexes and agreed that positive progress had been made to date.
Board 18.09.2012 Action S: We agreed that a further Board discussion was needed to follow up the Capability Review recommendations.
Board 18.09.2012 Action T: We suggested that the change plan should include a review of our core processes.
Board 18.09.2012 Action U: We suggested that it would be useful for Sandra and Alastair (as relatively new to ORR) to provide their initial observations of ORR to the board.
Item 13: Chair’s report
61. We noted the feedback provided in the Chairs report this month on Anna’s meetings and engagements with the industry and Government over the past month.
62. We noted feedback of recent meetings including with Richard Parry-Jones. We agreed that it was crucial that there was clear coordination around Anna’s briefing for these meetings. Ken agreed to take this forward.
63. We agreed that Cathryn Ross would take forward meetings for HS2 and Infrastructure UK as proposed in the Chair’s report.
Board 18.09.2012 Action V: Ken Young to take forward co-ordination of briefing of key messages for organisation as part of the programme of Anna & Richard Parry-Jones meetings. Item 14: Chief executive’s overview and monthly data
64. We discussed the Chief Executives overview and monthly data which set out the key issues for ORR in relation to internal and external activities.
65. We agreed that the issues raised in the report had been covered earlier in the agenda. We noted that a paper would be brought to Board this autumn which will highlight our approach to information and TOC relations (and will cover the developing TOC monitoring story).
Item 15: Board forward programme and draft dates 2013
66. We noted the latest Board forward programme would be circulated following updates to the PR13 timeline work.
Item 16: Committee meetings: feedback
67. Steve Walker provided feedback from the last Safety Regulation Committee meeting which took place on 25 July. The topics discussed at the meeting included; maintenance management, change management at Network Rail and the overall role and purpose of SRC and RIAC going forward.
68. We noted the progress of the Board committee review project. We noted the group’s last meeting considered comparisons with other regulators committee structures, our committee governance arrangements and our statutory functions and the variety of ways these are undertaken. Anna confirmed that the final report will now be prepared and shared with the Board in the next few months.
Board 18.09.2012 Action X: We agreed that the feedback from SRC should be included under the health and safety update going forward.
Item 17: Approval of minutes of Board meetings of 24 July 2012 2012 for publication
69. The minutes of our formal Board meeting on 24 July 2012 were confirmed subject to revision to paragraph 9. We also noted that the minutes were subject to the Chairs final review, following which they would be signed.
Board 18.09.2012 Action Y: We noted the change to paragraph 9 in the minutes.
Item 18: Matters arising (not taken elsewhere on the agenda)
70. We noted the progress against actions from our previous meetings; we noted we needed to close out Board actions and ensure a more manageable list going forward.
Board 18.09.2012 Action Z: We noted the large number of actions. We agreed that we should review how we use this agenda item for future meetings to ensure that actions are being properly monitored and progressed.
Item 19: Any other business
71. No issues were raised under this item. Item 20: Meeting review
72. We agreed that the quality and timeliness of the Board papers was positive. The NED preparation sessions were also useful. Richard confirmed that this enabled the executive team to pick up points in advance of the Board meeting.
73. We agreed that having strategic discussion at the start of the agenda helped the flow of meeting.
74. We suggested that further thought should be given around how to highlight CE’s and Chairs information better to inform strategic issues elsewhere on the agenda.
Draft minutes approved by the Board on 22 October 2012
Anna Walker Chair
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f96f5bb56800ed5e9a69d558d176a3f363eaad99 | ## CONTENTS
1. Executive Summary........................................................................................................... i 1.1 Introduction ............................................................................................................... .........i 1.2 Summary Results................................................................................................................i
2. INTRODUCTION.............................................................................................................1 2.1 Objectives ................................................................................................................. .........1
3. METHODOLOGY............................................................................................................3 3.1 Introduction ............................................................................................................... ........3 3.2 Sample ...............................................................................................................................3 3.3 Sample Design.............................................................................................................. .....3 3.4 Questionnaire Design ....................................................................................................... .4 3.5 Fieldwork.................................................................................................................. .........5 3.6 Weighting .................................................................................................................. ........5 3.7 Analysis ................................................................................................................... ..........6 3.8 Statistical Significance ................................................................................................... ...6
4. COMPANY PROFILE......................................................................................................7 4.1 Age of Business.................................................................................................................7 4.2 Number of Employees.......................................................................................................8 4.3 Company Turnover..........................................................................................................10 4.4 Industry Sector............................................................................................................ .....12 4.5 Company Ownership.......................................................................................................15 4.6 Benefits of Selling into Overseas Markets ......................................................................17 4.7 Experience of Doing Business Overseas: Self-assessment .............................................19 4.8 Overseas Experience: Number of Years Doing Business Overseas................................21 4.9 Experience: Born Globals..............................................................................................23 4.10 Experience: Proportion of Turnover Accounted for by Overseas Sales.........................24 4.11 Experience: Number of Markets .....................................................................................26 4.12 Number of Regions ......................................................................................................... 29 4.13 Benefits of Expanding the Number of Overseas Markets in which a firm operates .......33 4.14 Innovative Companies.....................................................................................................36 4.15 IP Active Companies....................................................................................................... 39 4.16 Young Technology Intensive Firms ................................................................................40 4.17 Past Growth (Turnover)...................................................................................................41 4.18 Past Growth (Number of Markets)..................................................................................42 4.19 Past Growth: Employment ..............................................................................................44 4.20 Future Growth ............................................................................................................. ....48 4.21 Growth – ASBS Definition .............................................................................................51 4.22 Growth OECD Definition ...............................................................................................53 4.23 Business Planning......................................................................................................... ...55
5. MODES OF INTERNATIONALISATION ...................................................................60 5.1 Number of Modes............................................................................................................ 64
6. DRIVERS OF GEOGRAPHICAL FOCUS.................................................................66 6.1 Market Perceptions......................................................................................................... 70 6.2 Market Perceptions: Summary .......................................................................................75
7. BARRIERS .................................................................................................................... .79
8. EXECUTIVE SUMMARY
1.1 Introduction
This research gathers evidence about trends in UK businesses’ international business strategies; barriers hindering such business, and associated needs for external help as well as awareness of, and propensity to use, UKTI; and related issues.
In terms of the specific research aims, the study was required to provide robust evidence to:
- identify UK business use of different modes of internationalisation and overseas market entry, including among young innovation and technology intensive firms
- identify drivers of geographical focus, including awareness of, and potential interest in, the emerging and high growth markets which were identified in UKTI’s five year strategy, published in 2006
- understand the barriers encountered by UK businesses in seeking to develop overseas business, both for new exporters and for companies seeking to enter new markets
- identify business needs for external help to overcome barriers and to address knowledge and skill needs associated with developing overseas business
- identify awareness and use of UKTI support
- understand the role of international market diversification in business development strategies, including its effects on: revenue growth and resilience, profitability, and return on investment in new product development
- identify and assess the extent to which credit conditions may be impacting on firms’ international business development, including related issues such as access to trade credit insurance and letters of credit.
This report outlines the key findings from this study.
1.2 Summary Results
Industry Sector
All companies were asked to identify the main activity of their business. The main activity for just over six in ten of the surveyed companies was manufacturing.
These self-reported main activities were simplified into four sectors namely services, construction, production and primary. In the 2008 survey, roughly similar proportions of the companies were either classified as production or services. In the 2009 survey, these proportions had changed considerably with approximately two thirds of the sample in the production, and a third in the services sector. This should be taken into consideration when interpreting the data. In this 2009 survey whilst the primary and construction industry sectors are still a minority there were more of these companies than in the 2008 survey.
Table 1: Simplified company sector
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | | Services | 32% | 36% | 41% | 22% | 22% | | | | | 27% | 12% | 24% | | Construction | 3% | 3% | 2% | 0% | 0% | | | | | 2% | 0% | 0% | | Production | 62% | 56% | 54% | 78% | 76% | | | | | 67% | 84% | 66% | | Primary | 4% | 5% | 3% | 0% | 3% | | | | | 4% | 3% | 5% |
Modes of Internationalisation
All respondents were asked to indicate which overseas business activities their firm had been involved in over the last 5 years. These modes included selling directly to businesses or individuals abroad, selling to businesses or individuals abroad through agents or distributors, licensing or franchising overseas, or other contractual arrangements (including joint ventures) and operating their own overseas site or office. Those companies not currently involved in any of these listed overseas activities were asked to indicate whether or not they were seriously considering starting to conduct overseas business via any of these routes in the next year. In order to be included in this survey, respondents had to respond positively to this question. This group (the ‘considerers’) were then also asked to indicate which types of overseas business activities they were planning to become involved in.
The majority of companies were selling directly abroad or via agents and distributors. The level of selling directly abroad was identical to the 2008 survey, whilst the level of selling through agents and distributors (67%) was much higher than in the 2008 survey (29%). Furthermore, the level of importing was much higher in the 2009 survey (76%) than identified in the 2008 survey (48%). Selling direct was more typically utilised by older companies.
Table 2: Simplified mode of internationalisation
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | | Direct sales | 90% | 87% | 88% | 93% | 89% | | | | | 92% | 91% | 94% | | Via agents/distributors | 67% | 58% | 57% | 78% | 81% | | | | | 74% | 74% | 81% | | Contractual arrangements (licensing, franchising and joint ventures) | 15% | 11% | 13% | 7% | 32% | | | | | 12% | 22% | 30% | | Overseas sites | 27% | 23% | 17% | 30% | 46% | | | | | 20% | 43% | 57% | | Importing | 76% | 69% | 76% | 81% | 78% | | | | | 77% | 90% | 81% | Drivers of Geographical Focus The table below shows the proportions of companies scoring against each of eight summary categories of drivers of geographical focus. Nearly three quarters of companies indicated that the measure of ‘network and serendipity’ played a vital role when companies conduct business overseas which strongly indicates the prominent role played by existing contacts and the element of chance. Furthermore, ‘language and culture’, ‘practicalities’, ‘contacts’ and ‘independent analysis’ are clearly important factors when considering a new market. Overall, these results are consistent with the 2008 survey. Table 3: Summary drivers of geographical focus Total Total
Base
Networks and serendipity Independent analysis
Up to 5 years
6-10 years 0 - 49
50 - 99
10+ years 100 +
0 - 49
50 – 99
100 +
911
236
249
27
37
196
58
108
100%
100%
100%
100%
100%
100%
100%
100%
74%
77%
77%
81%
76%
74%
66%
65%
55%
51%
55%
67%
59%
50%
60%
62%
Solely reactive Not significantly driven by any of these factors
13%
14%
13%
15%
5%
18%
10%
5%
13%
14%
11%
4%
8%
14%
14%
16%
Contacts
13%
12%
14%
11%
11%
15%
7%
18%
Practicalities
14%
13%
17%
7%
14%
13%
14%
14%
Language and culture
71%
75%
75%
85%
73%
66%
71%
63%
Risk and IP
36%
40%
39%
44%
38%
30%
36%
29%
Resources Not significantly driven by any of these factors
66%
91%
67%
0%
33%
75%
40%
56%
16%
14%
14%
7%
11%
19%
16%
25%
Barriers Following difficulties encountered in previous studies in measuring barriers through direct questioning techniques, a projective questioning technique was employed for both this and the 2008 survey. This technique attempted to circumvent issues relating to the reluctance of firms to acknowledge barriers by asking them to talk about issues that similar firms would face rather than necessarily their own company. The table below shows the proportions of firms scoring against each of six summary categories of barriers as well as the proportion scoring against at least one of these categories. Here the proportion indicating at least one barrier (91%) is much higher than in the 2008 survey where nearly eight in ten companies (79%) specified at least one barrier. As has been the case in previous studies, fixed cost barriers, contacts barriers and legal and regulatory barriers were highlighted as being amongst the most important barriers to conducting international business.
Accent
UKTI Evaluation Final Report November 2010.doc•TM•30.04.10
Page iii of vi
Table 4: Barriers to conducting overseas business
| % scoring 4 or 5 on a scale from 1 to 5 where 1 is ‘very easy’ and 5 is ‘very difficult’ | Total | Up to 5 years | 6-10 years | 10+ years | |---|---|---|---|---| | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Legal and regulatory | 58% | 55% | 48% | 59% | 73% | 63% | 62% | 70% | | Contacts | 61% | 56% | 60% | 67% | 62% | 64% | 66% | 66% | | Information | 21% | 18% | 22% | 22% | 22% | 27% | 9% | 21% | | Fixed costs | 78% | 72% | 76% | 89% | 86% | 79% | 86% | 83% | | Language and cultural | 37% | 35% | 34% | 30% | 43% | 38% | 36% | 44% | | Bias | 28% | 25% | 29% | 41% | 22% | 23% | 40% | 32% | | At least one barrier | 91% | 86% | 90% | 96% | 95% | 94% | 97% | 94% | | No significant barriers | 8% | 13% | 11% | 4% | 3% | 5% | 3% | 6% |
Number of Markets
Six in ten (60%) of the surveyed companies were in 11 or more markets. This is twice the proportion in the 2008 survey for which the equivalent figure was 30%. This indicates that the 2009 sample contains firms with more export experience than that of 2008. The number of markets in which a firm operates tends to increase with age.
Table 5: Number of Markets
| | Total | Up to 5 years | 6-10 years | 10+ years | |---|---|---|---|---| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Considerers | 1% | 3% | 0% | 0% | 0% | 0% | 0% | 1% | | None | 0% | 0% | 0% | 0% | 0% | 1% | 0% | 0% | | One country | 3% | 6% | 4% | 0% | 0% | 0% | 0% | 0% | | 2-5 countries | 15% | 24% | 21% | 11% | 11% | 10% | 5% | 1% | | 6-10 countries | 21% | 25% | 27% | 19% | 22% | 19% | 16% | 8% | | 11-20 countries | 22% | 17% | 25% | 30% | 11% | 28% | 28% | 14% | | 21-50 countries | 26% | 17% | 19% | 19% | 43% | 34% | 31% | 42% | | More than 50 countries | 12% | 8% | 4% | 22% | 14% | 9% | 21% | 34% | | Don’t know | 0% | 1% | 0% | 0% | 0% | 0% | 0% | 0% |
Number of regions
The following table summarises the number of regions of the world that these businesses were operating in. This table illustrates that nearly three quarters of companies (73%) were conducting business in four or more regions. This is indicative of the sample firms being experienced exporters and having geographically diversified export markets.
______________________________________________________________________
1 Two respondents stated they had not done business in any market over the last five years despite previously stating that they had sold directly to businesses or individuals abroad and had imported goods or services over the last five years. Table 6: Number of regions
| | Total | Up to 5 years | 6-10 years | 10+ years | |-------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | | | | | | | | | | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | None | | 0% | 0% | 0% | 3% | 1% | 0% | 1% | | 1 | | 8% | 14% | 14% | 0% | 0% | 3% | 0% | 1% | | 2 | | 7% | 11% | 8% | 7% | 3% | 6% | 5% | 0% | | 3 | | 11% | 12% | 18% | 0% | 8% | 10% | 5% | 3% | | 4 or more | 73% | 62% | 60% | 93% | 86% | 81% | 90% | 95% |
Opportunities in Emerging and Fast Growing Markets
All companies were asked to indicate the regions of the world in which their business was active. They were then given a list of emerging markets and for each market in turn they were asked whether they saw it as being a ‘good opportunity’ for their company over the next 2 years, a ‘possible opportunity’, ‘unlikely to be an opportunity’ or ‘already doing business there’.
A comparison of the 2008 and 2009 survey reveals that seven in ten companies (70%) in the 2009 survey are ‘already in’ these emerging markets, compared to almost half (45%) in 2008. The level of ‘unlikely’ market opportunities in the 2009 survey (6%) was also half the level that it was in the 2008 survey (12%).
These results are unlikely to represent such a large increase in the number of firms entering emerging markets. The apparent increase is likely to be driven by the higher proportion of UKTI users in the 2009 sample (65% vs 35% in the 2008 sample) and a much higher proportion of firms in the 2009 sample which are already in over 25 markets, as well as a higher proportion in the manufacturing sector. Analysis of the 2008 survey indicated that a higher proportion of firms were already in emerging markets if they were users of UKTI, or if they were in the manufacturing sector.
Table 7: Summary of the opportunities in the emerging and fast growing markets
| | Total | Up to 5 years | 6-10 years | 10+ years | |-------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | | | | | | | | | | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Already in | 70% | 65% | 59% | 74% | 73% | 79% | 76% | 82% | | Good opportunity | 12% | 10% | 14% | 15% | 14% | 10% | 17% | 11% | | Possible opportunity | 12% | 15% | 16% | 0% | 14% | 8% | 7% | 5% | | Unlikely | 6% | 9% | 11% | 7% | 0% | 3% | 0% | 2% | | Don’t know | 0% | 0% | 0% | 4% | 0% | 0% | 0% | 0% |
The following table summarises for each country the perceived strength of opportunity available, with Saudi Arabia/UAE considered the best opportunity.
______________________________________________________________________
2 Four respondents stated they had not done business in any regions despite previously stating that they had sold directly to businesses or individuals abroad and had imported goods or services over the last five years. They were not classified as ‘considerers’. Table 8: Summary of the opportunities in the emerging and fast growing markets by country
| Country | Total | Russia | Turkey | South Africa | Saudi Arabia/United Arab Emirates | Brazil | Mexico | China | India | |--------------------------------|-------|--------|--------|--------------|-----------------------------------|--------|--------|-------|-------| | **Base** | 911 | 911 | 911 | 911 | 911 | 911 | 911 | 911 | 911 | | **Already in** | | | | | | | | | | | Russia | 70% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Turkey | 26% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | South Africa | 28% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Saudi Arabia/United Arab Emirates | 32% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Brazil | 42% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Mexico | 18% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | China | 15% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | India | 33% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Economic Situation
All companies who were currently trading were asked to indicate whether their business had been negatively affected by the downturn in the USA, UK and European markets over the last year.
Overall companies were more likely to feel negatively affected by the economic downturn in the UK and USA markets than in the European markets, with companies over ten years of age most likely to feel the effects of the economic downturn in these markets.
The proportion of firms reporting being negatively impacted by the economic downturn in the UK and USA is somewhat higher (69%) than that reported in the 2008 survey (42%). While this suggests that more firms have been affected by the downturn in the intervening period between surveys (July-August 2008 to January-March 2009), this difference may partly be driven by the higher proportion of manufacturing firms in the 2009 sample.
Table 9: Impact of economic downturn in the UK, USA and Europe
| Country | Total | Up to 5 years | 6-10 years | 10+ years | |--------------------------------|-------|---------------|------------|-----------| | | | 0 – 49 | 50 – 99 | 100 + | 0 – 49 | 50 – 99 | 100 + | 0 – 49 | 50 – 99 | 100 + | | **Base** | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | | **UK and USA** | | | | | | | | | | | | | Yes | 69% | 67% | 67% | 74% | 73% | 68% | 74% | 76% | | | | | No | 29% | 30% | 32% | 26% | 24% | 30% | 26% | 22% | | | | | Don’t know | 2% | 3% | 1% | 0% | 3% | 3% | 0% | 2% | | | | | **Europe** | | | | | | | | | | | | | Yes | 60% | 57% | 55% | 70% | 70% | 60% | 66% | 69% | | | | | No | 38% | 41% | 43% | 30% | 27% | 39% | 33% | 30% | | | | | Don’t know | 2% | 3% | 1% | 0% | 3% | 1% | 2% | 2% | | | | UKTI Awareness and Usage
All companies were asked a series of questions to ascertain their level of awareness of UKTI and a selection of UKTI services. Those aware of UKTI or of any of its services were then asked to indicate whether they had actually used any of these services. Both awareness and usage of UKTI services are based on a positive response to any of the UKTI services and not necessarily solely UKTI.
Awareness of UKTI services does appear to vary with both company age and size with older and larger companies more likely to be aware of UKTI services. Most respondents were aware of UKTI itself (79%) with the commercial services provided by embassies overseas known by nearly three quarters (71%) of companies. This level of awareness is much higher than in the previous survey when the comparable figures for awareness of UKTI and the commercial services provided by embassies overseas were known by 51% and 55% respectively. Rather than indicating a significant increase in awareness, this result is likely to be driven by the much higher proportion of users of UKTI services in the 2009 sample (68%) compared to that of 2008 (35%).
Table 10: Awareness of UKTI services
| Service | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------------------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | | | | | | | | | | UKTI | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Commercial services provided by embassies overseas | 79% | 73% | 75% | 74% | 81% | 86% | 86% | 90% | | The international Trade Advisors based in Business Links | 71% | 61% | 63% | 81% | 65% | 85% | 76% | 88% | | Passport to Export | 60% | 53% | 56% | 67% | 59% | 66% | 66% | 72% | | The Export Marketing Research Scheme (EMRS) | 41% | 34% | 39% | 48% | 35% | 49% | 38% | 45% | | Export Communication Reviews (ECR) | 31% | 25% | 26% | 44% | 38% | 33% | 31% | 44% | | The Tradeshows Access Programme (TAP) | 14% | 12% | 16% | 11% | 8% | 18% | 4% | 14% | | The Overseas marketing Information Service (OMIS) | 37% | 31% | 35% | 56% | 35% | 39% | 38% | 46% | | Awareness of UKTI or at least one UKTI service | 41% | 37% | 34% | 48% | 30% | 45% | 47% | 56% |
UKTI services had been used by the majority of the survey respondents (68%) with about 70% of these recognising that UKTI provided the service. Of the individual services used, the commercial services provided by embassies overseas (45%) were the most commonly used among the sample firms. Table 11: Usage of UKTI services
| Service | Total | Up to 5 years | 6-10 years | 10+ years | |------------------------------------------------------------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | UKTI | 48% | 39% | 41% | 44% | 46% | 56% | 60% | 67% | | Commercial services provided by embassies overseas | 45% | 34% | 36% | 41% | 41% | 54% | 59% | 67% | | The international Trade Advisors based in Business Links | 36% | 28% | 31% | 41% | 32% | 42% | 38% | 48% | | Passport to Export | 15% | 13% | 19% | 11% | 5% | 20% | 3% | 14% | | The Export Marketing Research Scheme (EMRS) | 12% | 9% | 7% | 19% | 19% | 14% | 16% | 17% | | Export Communication Reviews (ECR) | 5% | 2% | 4% | 7% | 3% | 7% | 2% | 9% | | The Tradeshow Access Programme (TAP) | 16% | 11% | 12% | 22% | 14% | 19% | 22% | 23% | | The Overseas Marketing Information Service (OMIS) | 19% | 14% | 13% | 19% | 16% | 22% | 29% | 33% | | Usage of UKTI or at least one UKTI service | 68% | 57% | 59% | 67% | 65% | 79% | 79% | 89% | 2. INTRODUCTION
UK Trade & Investment (UKTI) commissioned this research as the second wave of an annual survey to gather evidence about trends in UK businesses’ international business strategies; barriers hindering such businesses to internationalise, and associated needs for external help; awareness of, and propensity to use UKTI; and related issues. The first wave of the survey was carried out during late 2008, replacing a former annual UKTI awareness survey.
Evidence from the current 2009 survey will be used to help inform UKTI policy development and other aspects of UK Government policy relating to international trade and investment and the ability of British business to fully optimise UK opportunities in global markets.
The 2009 survey has replicated the majority of the 2008 survey material, in order to provide consistent data on topics which require annual monitoring; however, some changes were also made in order to include more comprehensive questioning on the impact of the current economic downturn in the UK, USA and Europe.
Future waves of the survey are expected to follow a similar pattern, combining continuity with some variation, in order to capture data on a wider range of issues at less frequent intervals.
This survey is intended to complement evidence already available from other surveys of UK business most notably:
- UKTI’s Performance and Impact Monitoring Survey (PIMS) of businesses which have used UKTI trade services. This captures some evidence about overseas business experience and export strategy;
- UKTI’s annual survey of exporters who have not used UKTI trade services, in addition to gathering information about overseas business experience and strategy, it captures evidence about barriers to overseas business activity and associated needs for external assistance;
- The Community Innovation Survey (CIS) which is representative at national level of firms with at least 10 employees. It captures some evidence about international aspects of innovation activity including international partnerships, as well as export activity.
2.1 Objectives
The research aims of the 2009 wave of this survey, as stated in the brief, were to:
- identify UK business use of different modes of internationalisation and overseas market entry, including among young innovation and technology intensive firms • identify drivers of geographical focus, including awareness of, and potential interest in, the emerging and high growth markets which were identified in UKTI’s five year strategy, published in 2006
• understand the barriers encountered by UK businesses in seeking to develop overseas business, both for new exporters and for firms seeking to enter new markets
• identify business needs for external help to overcome barriers and to address knowledge and skill needs associated with developing overseas business
• identify awareness and use of UKTI support
• to understand the role of international market diversification in business development strategies, including its effects on: revenue growth and resilience, profitability, and return on investment in new product development
• to identify and assess the extent to which credit conditions may be impacting on firms’ international business development, including related issues such as access to trade credit insurance and letters of credit.
The initial five aims were replicated from the previous 2008 survey whilst the latter two, namely market diversification and access to credit, relate to issues which have arisen from the context of the present difficult economic conditions. These latter two areas used some questions from PIMS in addition to new questions which were developed for the survey. 3. METHODOLOGY
3.1 Introduction
The research was conducted via quantitative research namely CATI(^3) interviews, administered by Accent’s specialist interviewers with extensive experience of conducting interviews with senior level respondents.
3.2 Sample
A base of 911 interviews was conducted with companies either currently engaged in, or over the next 12 months seriously considering conducting, some form of overseas business activity. This included the full range of internationalisation modes, including selling to overseas customers both directly and via agents or distributors, operating via contractual agreements and firms operating their own overseas sites.
Whilst the majority of the companies interviewed in this survey (ie 903 of the 911) were involved in at least one of these forms of internationalisation at the time of the interview, a small number (ie 8 companies) were only planning to become involved in this type of activity over the next 12 months. As previously, this latter group have been labelled ‘considerers’ in the analysis. This sample group was somewhat smaller than the 55 considerers identified in the 2008 survey.
3.3 Sample Design
The sample frame was built from a random sample of all businesses which was purchased from a reputable sample provider namely Sample Answers. Sample Answers sourced the data from Corpdata who have a comprehensive business database comprising over 1.3 million UK business contacts covering every major industry in the UK. It is based upon a combination of the Experian National Business Database and the LBM Business File, supplemented by Kompass and other sources - these are, in turn, based upon information from Companies House, Thomson Directories and the Credit Risk File.
Whilst it may take time for younger businesses to be present on any business database Sample Answers quota strategy ensures that both younger and older businesses are represented. The sample was screened to ascertain involvement in overseas business activity either currently or over the next 12 months. This methodology permitted the inclusion of ‘considerers’ in the research.
The sample was stratified by both age of company and number of employees. It was decided that a disproportionate sample design would be used, so that a roughly equal number of firms were interviewed that were aged up to 5 years, aged 6-10 years and aged more than 10 years (to allow for robust analysis by age group). The final breakdown of companies included in this research is summarised in the table below.
(^3) Computer Assisted Telephone Interviewing. Table 12: Sample breakdown
| | Actual number of employees | Target number of employees | |------------------|-----------------------------|----------------------------| | | 1-49 employees | 50-99 | 100 plus employees | Total | 1-49 employees | 50-99 | 100 plus employees | Total | | Up to 5 years | 166 | 20 | 50 | 236 | As it falls out | As it falls out | As it falls out | 300 | | 6-10 years | 249 | 27 | 37 | 313 | 240 | 30 | 30 | 300 | | 10 plus years | 196 | 58 | 108 | 362 | 180 | 60 | 60 | 300 | | Base | 611 | 105 | 195 | 911 | 520 | 190 | 190 | 900 |
In order to maximise the incidence of firms eligible for interview (ie those who were engaging in international business activity) it was decided to exclude from the outset a number of industry sectors which one might expect would have a very low proportion of companies involved in overseas business activity. These exclusions were based on the exclusions reported from the previous survey in 2008 and also from additional common-sense exclusions based on interviewer feedback from the initial pilot interviews. The analysis only permitted exclusions at the level of 2-digit SIC codes. These initial exclusions are summarised in Appendix A.
3.4 Questionnaire Design
The majority of the questionnaire was a replica of the questionnaire used in the 2008 survey with the further inclusion of questions relating to the two new objectives namely:
- to understand the role of international market diversification in business development strategies, including its effects on: revenue growth and resilience, profitability, and return on investment in new product development
- to identify and assess the extent to which credit conditions may be impacting on firms’ international business development, including related issues such as access to trade credit insurance and letters of credit.
Thus given that this research covered areas that have not been covered in previous studies, an initial qualitative phase comprising ten cognitive interviews was conducted to help inform the quantitative questionnaire design. These face-to-face interviews conducted by the Accent project executives, were conducted using a Topic Guide agreed following meetings with both the Accent and the UKTI project manager. From these cognitive interviews further questions were drafted primarily on the topic of the impact on business of the economic downturn in the UK, US and European markets.
Following this initial qualitative phase the quantitative questionnaire was drafted, with a pilot of 20 CATI interviews conducted prior to the main fieldwork to test the questionnaire design, including the new questions, and to ensure that the questionnaire flowed smoothly.
At the start of this questionnaire to ensure that we were speaking to the individual who was most qualified to talk about their firm’s international business activities, Accent interviewers carefully probed with initial screening questions and also asked for the respondent’s job title to ensure that the right calibre of respondent was answering the questionnaire. Typically the respondent was a Director of the company with roles including Business Development Director, Sales Director and Marketing Director. A copy of the final questionnaire is appended to this report as Appendix B.
### 3.5 Fieldwork
The main fieldwork was conducted between 3 March and 24 April 2009 at Accent’s two Telephone Units based in Bristol and Edinburgh. The interview duration was an average of 25 minutes, which was longer than the duration of the 2008 interview which was reported to be an average of 19 minutes.
The following table summarises the number of sample records selected for CATI, the approximate number of records lost due to screening-out or incorrect contact details, and the number of interviews completed along with the associated response and refusal rates.
**Table 13: Accent sample breakdown**
| CATI SCREENING | | |-----------------------------------------------------|----------| | Selection for CATI | 23,363 | | Unusable – no overseas business activity | 12,286 | | Unusable – contact details incorrect | 1,575 |
| ACHIEVED INTERVIEWS / RESPONSE RATES | | |-----------------------------------------------------|----------| | Total usable sample | 9,502 | | Interviews achieved | 911 | | Response rate (%) | 10% | | Refusal rate (%) | 24% |
### 3.6 Weighting
The data presented in this report has not been weighted due to the disproportionate nature of the sample design (ie the disproportionate sampling by age of firm and the number of employees). Hence all of the data tables reported in the subsequent chapters are of the unweighted data. The research team did consider weighting the data in line with the weighting undertaken for the 2008 survey but this would have given low weights to the larger firms. In order for the analysis to reflect the responses from these larger firms, the data were left unweighted but presented in a format which reflects the sample design.
The report provides some comparisons with the results of the 2008 survey. The table below provides a comparison of the data by age group.
**Table 14: Comparison of data by age group**
| | 2008 weighted survey data | 2009 unweighted survey data | |----------------------|---------------------------|-----------------------------| | Up to 5 years | 19% | 26% | | 6-10 years | 19% | 34% | | More than 10 years | 62% | 40% | 3.7 Analysis
Throughout the report, each variable is analysed first for the whole sample and then by two sets of sub-groups which reflect Intellectual Property (IP) activity and usage of UKTI services.
Respondent firms were classified as IP active if they reported that they held patents or trademarks either in the UK or overseas. All other respondents were classified as non-IP active.
Users of UKTI services were identified as firms which reported having used a UKTI service at some point in the past ie usage was not restricted to a determined period. The profile of UKTI users in this survey differs from that of the profile of UKTI clients identified through the UKTI Performance and Impact Monitoring Survey (PIMS). PIMS is a quarterly survey of UKTI clients which have used its trade services 6 months prior to taking part in the survey (with the exception of clients of the Passport service, for which the service was received 1 year prior to the interview). Clients are randomly sampled to take part in the survey and PIMS results show a consistent profile of UKTI clients.
When interpreting the results of this survey, the differences between UKTI users as identified in this survey and the PIMS survey should be borne in mind. Where relevant, differences between the profiles of UKTI clients identified in this survey, compared to PIMS are highlighted in the text. For the purposes of comparison, tables are provided which show analysis by the sub-groups of users and non-users from this survey with data from 2008 and 2009 PIMS surveys of non-users of UKTI services (PIMS Non-users) and the results of two sets of pooled PIMS results for four quarters (PIMS 12-15 and PIMS 7-10).
3.8 Statistical Significance
Throughout the report, where a difference between two groups (eg UKTI users and non-users) has been found to be statistically significant at the 5% level (using a Mann Whitney test), for individual questions this is indicated in the text as being statistically significant. This level of significance indicates that one can be 95% certain that the differences between the two sample groups with the specific characteristic being tested are not the same. The Mann Whitney test was used because the sample was not ‘normally’ distributed. 4. COMPANY PROFILE
This chapter provides descriptive analysis of the characteristics of the survey respondents. The survey results are presented in such a way as to reflect the sampling strategy used in the survey. Each variable is analysed first for the whole sample and then by two sets of sub-groups which reflect Intellectual Property (IP) activity and usage of UKTI services.
4.1 Age of Business
All companies were asked to state how long ago their business was established. For further clarification, interviewers were also asked to read out that this meant when the business in ‘its current form’ started trading. Furthermore, if the business were a subsidiary then the respondent was asked to respond to this question in terms of the subsidiary in which they worked.
The following table depicts the unweighted figures for when the business was established by the size of the company as defined by the number of employees. There is a good representation of companies within each of the size classifications.
| Table 15: Company age by size of company | |-----------------------------------------| | Total | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | Up to 5 years | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | 6-10 years | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | 0-9 employees | 33% | 42% | 49% | 0% | 0% | 38% | 0% | 0% | | 10-49 employees | 34% | 28% | 51% | 0% | 0% | 62% | 0% | 0% | | 50-99 employees | 12% | 8% | 0% | 100% | 0% | 0% | 100% | 0% | | 100+ employees | 21% | 21% | 0% | 0% | 100% | 0% | 0% | 100% |
Typically, the IP active companies are older than their non-IP active counterparts. When IP active companies are broken down by age, there appears to be a trend towards the proportion of IP active firms increasing with age. However, the same trend is not apparent among non-IP active firms, with a peak in the 6 to 10 age group and fewer companies aged more than 10 years, which suggest the relationship here may be more complex.
| Table 16: Company age by IP activity | |-------------------------------------| | Total | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | Up to 5 years | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | 6-10 years | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | Up to 5 years | 23% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | | | 6-10 years | 29% | 0% | 100% | 100% | 100% | 0% | 0% | 0% | | | 10+ years | 47% | 0% | 0% | 0% | 0% | 100% | 100% | 100% | | Non-IP active | Up to 5 years | 28% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | | | 6-10 years | 40% | 0% | 100% | 100% | 100% | 0% | 0% | 0% | | | 10+ years | 32% | 0% | 0% | 0% | 0% | 100% | 100% | 100% | According to the current survey data, UKTI usage appears to increase with the age of the company, with the longer established companies more likely to have been a user of UKTI services. As with IP activity however, the relationship is non-linear for the non-UKTI users with the proportions increasing for companies aged up to ten years and then decreasing for the older companies.
Table 17: Company age by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Up to 5 years | | 22% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | | 6-10 years | | 31% | 0% | 100% | 100% | 100% | 0% | 0% | 0% | | 10+ years | | 48% | 0% | 0% | 0% | 0% | 100% | 100% | 100% | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Up to 5 years | | 35% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | | 6-10 years | | 42% | 0% | 100% | 100% | 100% | 0% | 0% | 0% | | 10+ years | | 23% | 0% | 0% | 0% | 0% | 100% | 100% | 100% |
The following table summarises the current survey results with results from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009. Whilst the current survey data shows UKTI usage increasing with the age of the company; this is in contrast to PIMS data for over 7,000 firms. The PIMS data indicate that although over half of users are firms which are at least 10 years old, one quarter are up to 5 years old. The proportion dips for firms that are 6-10 years old. Data from PIMS non-user surveys for 2008 and 2009 show no consistent pattern as regards the age profile of non-users.
Table 18: Comparison of survey results for company age by UKTI usage with results from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009
| | Total | This survey UKTI Non-users | This survey UKTI users | PIMS Non-users 2009 | Users PIMS 12-15 | PIMS Non-users 2008 | Users PIMS 7-10 | |------------------|-------|---------------------------|-----------------------|---------------------|------------------|---------------------|------------------| | UKTI users | Base | 290 | 621 | 300 | 3985 | 302 | 3143 | | | | 100% | 100% | 100% | 100% | 100% | 100% | | Up to 5 years | | 35% | 22% | 17% | 26% | 32% | 26% | | 6-10 years | | 42% | 31% | 23% | 17% | 31% | 17% | | 10+ years | | 23% | 48% | 60% | 55% | 36% | 56% |
4.2 Number of Employees
All companies were asked to indicate the number of people currently employed by their business in the UK. Respondents unable to offer a precise number here were presented with banded numbers and were asked to state which of these bands was most appropriate for their company.
Younger and older companies were more likely to have more than 100 employees. However, this result should be interpreted with caution since it may be driven by anomalies in the survey sample: there were a considerably higher proportion of firms under 5 years old with at least 100 employees in this survey than was found in either the 2008 wave of this survey or found in the Annual Small Business Survey (ASBS) 2007.
Table 19: Company size by company age
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 196 | 58 | 108 | | 0-9 employees | 33% | 42% | 49% | 0% | 0% | | 10-49 employees| 34% | 28% | 51% | 0% | 0% | | 50-99 employees| 12% | 8% | 0% | 100% | 0% | | 100+ employees | 21% | 21% | 0% | 0% | 100% |
IP active companies were more likely than non-IP active companies to have both fewer than nine employees and also more than one hundred employees. Again this may be driven by anomalies in the survey sample. There were statistically significant differences in the number of employees between IP active and non-IP active companies.
Table 20: Company size by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | | | | 100% | 100% | 100% | | 0-9 employees | 20% | 29% | 38% | 0% | 0% | | 10-49 employees| 33% | 25% | 62% | 0% | 0% | | 50-99 employees| 14% | 10% | 0% | 100% | 0% | | 100+ employees | 32% | 36% | 0% | 0% | 100% |
In this survey, UKTI users had a higher proportion of companies with more than one hundred employees than equivalent sized firms which were non-UKTI users. There were statistically significant differences in the number of employees by UKTI usage. Table 21: Company size by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | 0-9 employees | | 30% | 40% | 51% | 0% | 0% | 38% | 0% | 0% | | 10-49 employees | | 32% | 24% | 49% | 0% | 0% | 62% | 0% | 0% | | 50-99 employees | | 12% | 8% | 0% | 100% | 0% | 0% | 100% | 0% | | 100+ employees | | 25% | 27% | 0% | 0% | 100% | 0% | 0% | 100% | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | 0-9 employees | | 38% | 45% | 48% | 0% | 0% | 38% | 0% | 0% | | 10-49 employees | | 39% | 34% | 52% | 0% | 0% | 62% | 0% | 0% | | 50-99 employees | | 10% | 9% | 0% | 100% | 0% | 0% | 100% | 0% | | 100+ employees | | 13% | 13% | 0% | 0% | 100% | 0% | 0% | 100% |
However, a higher proportion of firms with over 100 employees were observed in the survey sample than in either the PIMS user or non-user surveys. For example, this current survey found that 1 in 4 UKTI users have over 100 employees, while evidence from over 7,000 users participating in PIMS surveys suggests that the proportion is closer to 1 in 5 as shown in the table below.
Table 22: Comparison of company size by UKTI usage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009
| | Total | UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 12-15 | PIMS Non-users 2008 | Users PIMS 7-10 | |------------------|-------|----------------|------------|---------------------|------------------|---------------------|------------------| | | | | | | | | | | UKTI users | Base | 290 | 621 | 300 | 3985 | 302 | 3143 | | | | 100% | 100% | 100% | 100% | 100% | 100% | | 0-9 employees | | 38% | 30% | 59% | 41% | 56% | 42% | | 10-49 employees | | 39% | 32% | 33% | 28% | 37% | 29% | | 50-99 employees | | 10% | 12% | 4% | 8% | 4% | 10% | | 100+ employees | | 13% | 25% | 4% | 20% | 1% | 18% |
4.3 Company Turnover
All companies were asked to indicate what the annual turnover of their business was. Companies established in the last year were asked to predict the turnover of their business in the first year of trading. Respondents unable to offer a precise figure here were presented with banded amounts and were asked to state which of these bands they felt was most appropriate for their company.
Firms in the 2009 survey sample, compared to the 2008 survey sample, tended to have higher turnover. In the 2008 survey, half (53%) of the internationalising companies had fairly modest turnovers of up to £2 million while only one third (32%) of the sample firms in the 2009 survey had this level of turnover. In contrast, 27% of the 2009 sample had turnover exceeding £10 million, compared to 6% of firms in the 2008 survey sample. Table 23: Annual company turnover
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 196 | 58 | 108 | | Up to £500,000 | 11% | 17% | 16% | 0% | 0% | | £500,000 - £2M | 21% | 25% | 29% | 4% | 0% | | £2M-£10M | 27% | 23% | 32% | 44% | 5% | | £10M-£50M | 16% | 14% | 6% | 41% | 30% | | More than £50M | 11% | 11% | 4% | 7% | 43% | | Don’t know/refused | 14% | 11% | 13% | 4% | 22% |
There were statistically significant differences in the annual turnover between IP active and non-IP active companies. IP active companies were more than twice as likely as non-IP active companies (39% vs 16%) to have annual turnovers of more than £10 million.
Table 24: Annual company turnover by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | Up to £500,000 | 6% | 9% | 11% | 0% | 0% | | £500,000 - £2M | 16% | 22% | 28% | 0% | 0% | | £2M-£10M | 25% | 21% | 38% | 29% | 0% | | £10M-£50M | 23% | 19% | 6% | 59% | 35% | | More than £50M | 16% | 14% | 4% | 6% | 50% | | Don’t know/refused | 14% | 15% | 13% | 6% | 15% |
There were statistically significant differences in the annual turnover between UKTI users and non-UKTI users. Fewer than six in ten (57%) UKTI users had annual turnovers of up to £10 million, compared to two thirds (65%) of non-UKTI users. Hence, UKTI users were slightly more likely than non-UKTI users to have annual turnovers in excess of £10 million. Table 25: Annual company turnover by UKTI usage
| UKTI users | Base | Up to 5 years | 6-10 years | 10+ years | |------------|------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Up to £500,000 | 10% | 13% | 16% | 0% | 0% | 12% | 0% | 2% | | £500,000 - £2M | 19% | 22% | 31% | 0% | 0% | 28% | 2% | 0% | | £2M-£10M | 28% | 24% | 31% | 50% | 4% | 35% | 43% | 8% | | £10M-£50M | 18% | 15% | 5% | 44% | 29% | 7% | 30% | 44% | | More than £50M | 12% | 12% | 2% | 0% | 42% | 3% | 9% | 35% | | Don’t know/refused | 14% | 13% | 15% | 6% | 25% | 15% | 15% | 10% |
| Non-UKTI users | Base | Up to 5 years | 6-10 years | 10+ years | |----------------|------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Up to £500,000 | 14% | 21% | 17% | 0% | 0% | 7% | 0% | 0% | | £500,000 - £2M | 24% | 29% | 27% | 11% | 0% | 29% | 0% | 0% | | £2M-£10M | 27% | 21% | 34% | 33% | 8% | 33% | 25% | 8% | | £10M-£50M | 13% | 12% | 6% | 33% | 31% | 7% | 50% | 42% | | More than £50M | 9% | 9% | 6% | 22% | 46% | 0% | 8% | 17% | | Don’t know/refused | 13% | 9% | 11% | 0% | 15% | 24% | 17% | 33% |
The turnover of companies in the current 2009 survey was typically higher for both UKTI users and non-UKTI users than in the PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009 (Table 26).
Table 26: Comparison of annual company turnover by UKTI usage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009
| UKTI users | Base | UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 12-15 | PIMS Non-users 2008 | Users PIMS 7-10 | |------------|------|----------------|------------|---------------------|------------------|---------------------|------------------| | | | 290 | 621 | 300 | 3985 | 302 | 3143 | | Up to £500,000 | 14% | 10% | 35% | 28% | 29% | 29% | | £500,000-£2 million | 24% | 19% | 31% | 19% | 36% | 19% | | £2-£10 million | 27% | 28% | 17% | 18% | 17% | 17% | | £10-£50 million | 13% | 18% | 5% | 11% | 3% | 9% | | More than £50 million | 9% | 12% | 2% | 6% | 1% | 4% | | Don’t know/refused/not yet trading | 13% | 14% | 10% | 17% | 14% | 21% |
4.4 Industry Sector
All companies were asked to identify the main activity of their business.
The main activity for just over six in ten (62%) of the surveyed companies was manufacturing, followed by retail for just under one in seven companies (15%), as summarised in the table below. The following table shows the profile of firms in terms of their industry sector. The data on sector is collected at the level of 1-digit SIC code, but for the purpose of this analysis has been summarised into four main classifications which are:
- Primary industries
- Production
- Construction
- Services.
### Table 27: Industry sector
| Sector | Total | Up to 5 years | 6-10 years | 10+ years | |-------------------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Agriculture, hunting & forestry | 1% | 2% | 2% | 0% | 0% | 1% | 0% | 2% | | Fishing | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | Mining & quarrying | 2% | 0% | 0% | 0% | 0% | 3% | 2% | 2% | | Manufacturing | 62% | 56% | 54% | 78% | 76% | 67% | 84% | 66% | | Electricity, gas and water supply | 1% | 1% | 1% | 0% | 3% | 1% | 2% | 1% | | Construction | 3% | 3% | 2% | 0% | 0% | 2% | 0% | 6% | | Retail, wholesale & repair of motor vehicles | 15% | 16% | 19% | 7% | 3% | 18% | 9% | 10% | | Hotels and catering | 0% | 0% | 0% | 7% | 0% | 0% | 0% | 0% | | Transport, storage and communication | 5% | 9% | 8% | 0% | 5% | 1% | 0% | 2% | | Financial intermediation (Finance) | 1% | 1% | 1% | 0% | 0% | 1% | 0% | 1% | | Real estate, renting & business activities | 4% | 4% | 5% | 4% | 5% | 2% | 0% | 3% | | Public administration and defence | 1% | 0% | 1% | 0% | 0% | 1% | 0% | 4% | | Education | 1% | 0% | 2% | 0% | 3% | 1% | 0% | 2% | | Health and social work | 1% | 0% | 0% | 0% | 3% | 2% | 0% | 1% | | Other community, social & personal service activities | 3% | 4% | 4% | 4% | 3% | 1% | 2% | 2% | | Other | 1% | 1% | 2% | 0% | 0% | 1% | 2% | 0% |
In the 2008 survey, roughly similar proportions of the companies were either classified as being in the production (46%) or services (52%) sectors. In the 2009 survey, these proportions had changed considerably with approximately two thirds of the sample (62%) in the production, and a third (32%) in the services sector. This should be taken into consideration when interpreting the data. In this 2009 survey, whilst the primary and construction industry sectors are still a minority, more of these companies were surveyed than in the 2008 survey. Table 29: Simplified industry sector
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | | Services | 32% | 36% | 41% | 22% | 27% | | | | | 27% | 12% | 24% | | Construction | 3% | 3% | 2% | 0% | 0% | | | | | 2% | 0% | 6% | | Production | 62% | 56% | 54% | 78% | 76% | | | | | 67% | 84% | 66% | | Primary | 4% | 5% | 3% | 0% | 3% | | | | | 4% | 3% | 5% |
There were statistically significant differences in the industry sector by IP active and non-IP active companies. A higher proportion of non-IP active firms were in the services sector than was the case for IP active firms. This does not necessarily mean that service firms are less likely to be IP active than manufacturing but rather may be a reflection of the relatively low proportions of the sample coming from service sectors such as finance which have relatively high levels of IP activity (around 30% of firms in the finance sector held trademarks in 2000(^4)). Similarly, a higher proportion of IP active firms were in the production sector than was the case for non-IP active firms.
Table 30: Simplified industry sector by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | IP active| 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | | Services | 23% | 30% | 32% | 24% | 27% | | | | | 14% | 11% | 19% | | Construction | 2% | 2% | 1% | 0% | 0% | | | | | 3% | 0% | 2% | | Production | 72% | 66% | 61% | 76% | 73% | | | | | 80% | 89% | 75% | | Primary | 3% | 2% | 6% | 0% | 0% | | | | | 2% | 0% | 4% |
| | Base | | 0 - 49 | 50 - 99 | 100 + | |----------|-------|---------------|------------|-----------| | Non-IP active | 454 | 129 | 159 | 10 | 11 | | | | | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | | Services | 40% | 42% | 45% | 20% | 9% | | | | | 39% | 14% | 40% | | Construction | 3% | 4% | 3% | 0% | 0% | | | | | 1% | 0% | 16% | | Production | 52% | 47% | 50% | 80% | 82% | | | | | 55% | 76% | 36% | | Primary | 5% | 7% | 2% | 0% | 9% | | | | | 5% | 10% | 8% |
In this survey, UKTI users were more likely to be dominant in the production sector whilst non-UKTI users were more equally split between both the services and the production sectors (Table 31). Thus there were statistically significant differences in the industry sector between UKTI users and non-UKTI users.
However, this is very different to the client profile consistently achieved from PIMS which shows that 60% of UKTI clients are in the services sector, and 38% in production, as shown below (Table 32).
(^4) Greenhalgh and Rogers 2005 Table 31: Simplified industry sector by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 621 | 135 | 148 | 18 | 24 | | | | | 154 | 46 | 96 | | Services | 26% | 24% | 39% | 6% | 29% | | | | | 25% | 11% | 21% | | Construction | 3% | 4% | 2% | 0% | 0% | | | | | 3% | 0% | 6% | | Production | 68% | 67% | 57% | 94% | 67% | | | | | 71% | 85% | 69% | | Primary | 3% | 6% | 3% | 0% | 4% | | | | | 1% | 4% | 4% |
| Non-UKTI users | Base | 6-10 years | 10+ years | |----------------|------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100 + | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 290 | 101 | 101 | 9 | | | | 13 | 13 | 42 | | | | 12 | 12 | 12 | | Services | 44% | 53% | 44% | 56% | | | | 8% | 8% | 36% | | | | 17% | 17% | 50% | | Construction | 2% | 2% | 3% | 0% | | | | 0% | 0% | 0% | | | | 0% | 0% | 0% | | Production | 50% | 42% | 50% | 44% | | | | 92% | 92% | 52% | | | | 83% | 83% | 42% | | Primary | 4% | 3% | 4% | 0% | | | | 0% | 0% | 12% | | | | 0% | 0% | 12% | | | | 8% | 8% | 8% |
The following table comprises the comparable data from the PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009.
Table 32: Comparison of sectors by UKTI usage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009
| Total | UKTI non-users | UKTI users | PIMS non-users 2009 | Users PIMS 12-15 | PIMS non-users 2008 | Users PIMS 7-10 | |-------|----------------|------------|---------------------|------------------|---------------------|-----------------| | Base | 290 | 621 | 300 | 3985 | 302 | 3143 | | | 100% | 100% | 100% | 100% | 100% | 100% | | Services | 44% | 26% | 47% | 60% | 45% | 59% | | | 100% | 100% | 100% | 100% | 100% | 100% | | Construction | 2% | 3% | 1% | 1% | 1% | 1% | | | 100% | 100% | 100% | 100% | 100% | 100% | | Production | 50% | 68% | 50% | 38% | 53% | 38% | | | 100% | 100% | 100% | 100% | 100% | 100% | | Primary | 4% | 3% | 2% | 1% | 1% | 2% | | | 100% | 100% | 100% | 100% | 100% | 100% |
4.5 Company Ownership
All respondents were asked to indicate whether their business was UK owned, foreign-owned or jointly UK and foreign-owned.
As in the 2008 survey, the majority of companies were UK owned. However, the 2009 survey sample contained a higher proportion of foreign-owned companies, with one in seven foreign-owned (15%), compared to one in ten (9%) in the 2008 survey. This suggests that the 2009 sample has a bias towards foreign-owned firms. In both surveys, only a small minority of firms were jointly UK and foreign-owned.
Table 33: Company ownership by company age
| Total | Total | Up to 5 years | 6-10 years | 10+ years | |-------|-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100 + | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 911 | 236 | 249 | 27 | | | | 37 | 196 | 58 | | | | 108 | 100% | 100% | | UK-owned | 81% | 81% | 89% | 74% | | | | 51% | 85% | 74% | | | | 69% | 69% | 69% | | Foreign-owned | 15% | 14% | 9% | 26% | | | | 46% | 11% | 17% | | | | 28% | 28% | 28% | | Joint UK and foreign-owned | 3% | 4% | 2% | 0% | | | | 3% | 3% | 3% | | | | 3% | 3% | 3% | | Don’t know | 0% | 0% | 0% | 0% | | | | 2% | 0% | 1% | IP active companies were more likely to be foreign-owned than non-IP active companies.
Table 34: Company ownership by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | IP active | | | 0 - 49 | 50 - 99 | 100 + | | | 457 | 107 | 90 | 17 | 26 | | | 100% | 100% | 100% | 100% | 100% | | UK-owned | | | 0 - 49 | 50 - 99 | 100 + | | | 73% | 72% | 82% | 65% | 46% | | Foreign-owned | | 23% | 21% | 16% | 35% | | Joint UK and foreign-owned | | 4% | 7% | 2% | 0% | | Don’t know | | | 0% | 0% | 0% | | | 100% | 100% | 100% | 100% | 100% | | Non-IP active | Base | 454 | 129 | 159 | 10 | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | UK-owned | | | 100% | 100% | 100% | | Foreign-owned | | 88% | 89% | 93% | 90% | | Joint UK and foreign-owned | | 3% | 2% | 2% | 0% | | Don’t know | | | 0% | 0% | 0% | | | 100% | 100% | 100% | 100% | 100% |
Similar proportions of users and non-users of UKTI services were UK owned, foreign-owned and jointly UK and foreign-owned.
Table 35: Company ownership by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | | 621 | 135 | 148 | 18 | 24 | | | 100% | 100% | 100% | 100% | 100% | | UK-owned | | | 100% | 100% | 100% | | Foreign-owned | | 81% | 79% | 93% | 72% | | Joint UK and foreign-owned | | 3% | 4% | 2% | 0% | | Don’t know | | | 0% | 0% | 0% | | | 100% | 100% | 100% | 100% | 100% | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | | 290 | 101 | 101 | 9 | 13 | | | 100% | 100% | 100% | 100% | 100% | | UK-owned | | | 100% | 100% | 100% | | Foreign-owned | | 80% | 84% | 84% | 78% | | Joint UK and foreign-owned | | 3% | 4% | 2% | 0% | | Don’t know | | | 0% | 0% | 0% | | | 100% | 100% | 100% | 100% | 100% |
Among users of UKTI services, 15% of firms from the current survey were foreign-owned compared to 10% and 7% in PIMS 12-15 and 7-10 respectively. This is indicative of the 2009 survey having a bias towards foreign-owned firms. Compared to the PIMS 7-10 sample of 3,143 firms, twice as many foreign-owned firms participated in this survey.
The difference was also large for non-users with 17% of the survey sample of non-users being foreign-owned (ie close to 1 in 6 firms) which was almost double the 9% and 8% found in the 2009 and 2008 PIMS non-user surveys. Table 36: Comparison of company ownership by UKTI usage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009
| | Total | UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 12-15 | PIMS Non-users 2008 | Users PIMS 7-10 | |----------------------|-------|----------------|------------|---------------------|------------------|---------------------|-----------------| | **UKTI users** | Base | 290 | 621 | 300 | 3985 | 302 | 3143 | | | | 100% | 100% | 100% | 100% | 100% | 100% | | **UK-owned** | | 80% | 81% | 90% | 83% | 90% | 86% | | **Foreign-owned** | | 17% | 15% | 9% | 10% | 8% | 7% | | **Joint UK and foreign-owned** | | 3% | 3% | 0% | 2% | 2% | 2% | | **Don’t know/refused/not for profit/other business type** | | 0% | 0% | 0% | 5% | 0% | 5% |
4.6 Benefits of Selling into Overseas Markets
All respondents were asked to indicate whether for their own company the following were possible benefits of selling into overseas markets. Respondents were asked to rate a list of benefits on a 5 point scale, where 1 meant it was a benefit ‘to no extent’ and 5 meant it was a benefit ‘to a critical extent’.
The main benefits of selling into overseas markets were to achieve a level of growth otherwise not possible and to fully utilise exiting capacity. However, for firms over 5 years and with 50-99 employees, exposure to new ideas was more frequently cited than fully using existing capacity.
Table 37: Benefits of selling into overseas markets
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 911 | 236 | 249 | | | | 100% | 100% | 100% | | Achieve a level of growth otherwise not possible | 79% | 72% | 76% | 89% | 86% | 84% | 84% | 89% | | Fully utilise your existing capacity | 76% | 75% | 69% | 74% | 86% | 77% | 81% | 87% | | Reduce dependence on a single or small number of markets | 63% | 60% | 58% | 67% | 70% | 65% | 66% | 71% | | Exposure to new ideas | 72% | 71% | 67% | 85% | 68% | 67% | 84% | 84% | | Increase the commercial life span of products and services | 54% | 50% | 47% | 67% | 65% | 52% | 60% | 70% |
IP active companies were more likely to state that each of these statements were a benefit of international trading than non-IP active companies. Achieving a level of growth otherwise not possible remained the most frequently cited benefit for IP active and non-IP active firms. However, IP active firms were as likely to indicate that exposure to new ideas was a benefit as they were to indicate the benefit of fully utilising existing capacity. For non-IP active firms, exposure to new ideas was a less important benefit. Table 38: Benefits of selling into overseas markets by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |-----------|-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Achieve a level of growth otherwise not possible | 88% | 81% | 88% | 88% | 85% | 90% | 92% | 94% | | | | Fully utilise your existing capacity | 81% | 81% | 74% | 76% | 88% | 80% | 81% | 86% | | | | Reduce dependence on a single or small number of markets | 70% | 68% | 63% | 76% | 73% | 73% | 73% | 71% | | | | Exposure to new ideas | 81% | 80% | 76% | 100% | 69% | 76% | 95% | 88% | | | | Increase the commercial life span of products and services | 63% | 64% | 57% | 76% | 58% | 61% | 62% | 73% | | | | Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Achieve a level of growth otherwise not possible | 71% | 64% | 69% | 90% | 91% | 79% | 71% | 72% | | | | Fully utilise your existing capacity | 71% | 70% | 67% | 70% | 82% | 73% | 81% | 92% | | | | Reduce dependence on a single or small number of markets | 56% | 53% | 55% | 50% | 64% | 57% | 52% | 72% | | | | Exposure to new ideas | 63% | 64% | 62% | 60% | 64% | 59% | 67% | 72% | | | | Increase the commercial life span of products and services | 44% | 38% | 42% | 50% | 82% | 42% | 57% | 60% | | |
UKTI users were more likely to state that each of these statements were a benefit of international trading than non-UKTI users. The most frequently cited benefit by firms that were over 5 years old and had 50-99 employees was exposure to new ideas.
Table 39: Benefits of selling into overseas markets by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |------------|-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | Base | 621 | 135 | 148 | 18 | UKTI users | Base | 621 | 135 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Achieve a level of growth otherwise not possible | 85% | 81% | 82% | 89% | 88% | 88% | 85% | 90% | | | | Fully utilise your existing capacity | 78% | 81% | 70% | 72% | 88% | 77% | 80% | 85% | | | | Reduce dependence on a single or small number of markets | 68% | 70% | 62% | 72% | 63% | 70% | 67% | 72% | | | | Exposure to new ideas | 76% | 79% | 70% | 94% | 67% | 71% | 85% | 85% | | | | Increase the commercial life span of products and services | 57% | 58% | 49% | 72% | 67% | 51% | 65% | 69% | | | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Achieve a level of growth otherwise not possible | 68% | 59% | 66% | 89% | 85% | 71% | 83% | 83% | | | | Fully utilise your existing capacity | 72% | 66% | 68% | 78% | 85% | 76% | 83% | 100% | | | | Reduce dependence on a single or small number of markets | 51% | 46% | 51% | 56% | 85% | 45% | 58% | 67% | | | | Exposure to new ideas | 62% | 60% | 62% | 67% | 69% | 55% | 83% | 75% | | | | Increase the commercial life span of products and services | 46% | 39% | 45% | 56% | 62% | 52% | 42% | 83% | | | 4.7 Experience of Doing Business Overseas: Self-assessment
All companies currently doing business overseas were asked to summarise their level of experience on a scale of 1 to 4, where 1 meant ‘very experienced in overseas markets’ and 4 meant ‘not at all experienced in overseas markets’.
The vast majority of companies conceded that they were either ‘quite experienced’ (42%) or ‘very experienced’ (44%) in operating in overseas markets, with a sixth (16%) stating they felt ‘not very experienced’. As might be expected, and in parallel with last year’s survey, there is a link between company age, size of company and company’s overall assessment of their experience, with companies older than 5 years of age and those with more employees more likely to feel that they have higher levels of experience of conducting business overseas.
Despite this, the results differ somewhat from those of the 2008 survey. This is most marked for firms which indicated that they were very experienced in overseas markets; in 2008 only 26% of the sample indicated this level of experience, compared to 40% this year. A higher proportion of firms indicated that they were not very experienced in overseas markets in the 2008 survey (23% compared to 16% in this survey). A bias in the 2009 sample toward experienced exporters is corroborated by comparisons with PIMS survey data (Table 43). This is probably a reflection of the 2009 sample containing more experienced exporters as measured by the proportion of turnover from overseas markets and the number of markets in which firms are active.
Table 40: Self-assessment of experience in overseas markets
| | Total | Up to 5 years | 6-10 years | 10+ years | |--------------------------|-------|---------------|------------|-----------| | | Base | | | | | | 911 | 236 | 249 | 37 | | | | 100% | 100% | 100% | | Very experienced in overseas markets | 40% | 36% | 28% | 44% | | | | | 65% | 39% | | | | | | 43% | | | | | | 63% | | Quite experienced | 42% | 39% | 48% | 48% | | | | | 27% | 45% | | | | | | 47% | | | | | | 32% | | Not very experienced | 16% | 19% | 22% | 7% | | | | | 8% | 15% | | | | | | 10% | | | | | | 4% | | Not at all experienced in overseas markets | 1% | 3% | 2% | 0% | | | | | 0% | 0% | | | | | | 0% | | Don’t know | 0% | 1% | 0% | 0% | | | | | 0% | 0% | | | | | | 0% | | Refused | 0% | 0% | 0% | 0% | | | | | 0% | 1% | | | | | | 0% | | Considerers | 1% | 3% | 0% | 0% | | | | | 0% | 0% | | | | | | 1% |
There was a statistically significant difference in the experience rating of IP active companies compared to non-IP active companies. IP active companies were more likely than non-IP active companies to state that they were ‘very experienced’ in operating in overseas markets. Table 41: Self-assessment of experience in overseas markets by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | IP active | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Very experienced in overseas markets | 45% | 42% | 32% | 65% | 65% | 34% | 46% | 66% | | Quite experienced | 43% | 45% | 49% | 35% | 23% | 52% | 51% | 29% | | Not very experienced | 10% | 8% | 19% | 0% | 12% | 13% | 3% | 4% | | Not at all experienced in overseas markets | 1% | 3% | 0% | 0% | 0% | 0% | 0% | 0% | | Refused | 0% | 0% | 0% | 0% | 0% | 1% | 0% | 0% | | Considerers | 1% | 2% | 0% | 0% | 0% | 0% | 0% | 0% |
| Non-IP active | Total | Up to 5 years | 6-10 years | 10+ years | |---------------|-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Non-IP active | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Very experienced in overseas markets | 34% | 32% | 26% | 10% | 64% | 44% | 38% | 52% | | Quite experienced | 42% | 34% | 48% | 70% | 36% | 39% | 38% | 44% | | Not very experienced | 21% | 27% | 23% | 20% | 0% | 16% | 24% | 4% | | Not at all experienced in overseas markets | 2% | 2% | 3% | 0% | 0% | 0% | 0% | 0% | | Don’t know | 0% | 2% | 0% | 0% | 0% | 0% | 0% | 0% | | Considerers | 1% | 3% | 1% | 0% | 0% | 0% | 0% | 0% |
Similarly, there was a statistically significant difference in the experience rating of UKTI users and non-UKTI users. UKTI users were more likely than non-UKTI users to state that they were both ‘very experienced’ and ‘quite experienced’ in operating in overseas markets.
Table 42: Self-assessment of experience in overseas markets by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | UKTI users | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Very experienced in overseas markets | 42% | 39% | 32% | 44% | 54% | 38% | 50% | 63% | | Quite experienced | 44% | 43% | 48% | 56% | 38% | 49% | 39% | 32% | | Not very experienced | 13% | 16% | 18% | 0% | 8% | 12% | 11% | 4% | | Not at all experienced in overseas markets | 0% | 1% | 1% | 0% | 0% | 0% | 0% | 0% | | Refused | 0% | 0% | 0% | 0% | 0% | 1% | 0% | 0% | | Considerers | 0% | 1% | 1% | 0% | 0% | 0% | 0% | 1% |
| Non-UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Non-UKTI users | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Very experienced in overseas markets | 34% | 34% | 22% | 44% | 85% | 43% | 17% | 67% | | Quite experienced | 39% | 34% | 49% | 33% | 8% | 33% | 75% | 33% | | Not very experienced | 22% | 22% | 27% | 22% | 8% | 24% | 8% | 0% | | Not at all experienced in overseas markets | 2% | 4% | 3% | 0% | 0% | 0% | 0% | 0% | | Don’t know | 1% | 2% | 0% | 0% | 0% | 0% | 0% | 0% | | Considerers | 2% | 5% | 0% | 0% | 0% | 0% | 0% | 0% |
In summary, UKTI users were more likely than non-UKTI users to state that they were either ‘quite experienced’ or ‘very experienced’ in operating in overseas markets which is consistent with evidence from the PIMS surveys. However, this survey found a somewhat higher proportion of UKTI users to be very experienced in overseas markets (42%) compared to 34% and 27% in PIMS 12-15 and 7-10 respectively.
Table 43: Comparison of self-assessment of experience in overseas markets by UKTI usage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009
| Total | UKTI non-users | UKTI users | PIMS non-users 2009 | Users PIMS 12-15 | PIMS non-users 2008 | Users PIMS 7-10 | |-------|----------------|------------|---------------------|-----------------|---------------------|-----------------| | Base | 290 | 621 | 300 | 3985 | 302 | 3143 | | | 100% | 100% | 100% | 100% | 100% | 100% | | Very experienced in overseas markets | 34% | 42% | 23% | 34% | 22% | 27% | | Quite experienced | 39% | 44% | 39% | 44% | 45% | 42% | | Not very experienced | 22% | 13% | 34% | 14% | 27% | 20% | | Not at all experienced in overseas markets | 2% | 0% | 4% | 2% | 4% | 4% | | Not currently exporting | - | - | 0% | 6% | 0% | 7% | | Don’t know | 1% | 0% | - | - | - | - | | Considerers | 2% | 0% | - | - | - | - |
4.8 Overseas Experience: Number of Years Doing Business Overseas
All companies were asked to indicate how long ago their company had started to conduct business overseas.
There is clearly a strong correlation between the age of the company and the number of years conducting overseas business.
Compared to the 2008 survey, a higher proportion of firms have been active in overseas markets for at least 20 years (25% vs 18% in the 2008 survey).
Table 44: Company age by number of years doing business overseas
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Within last two years | 10% | 34% | 3% | 0% | 0% | 1% | 0% | 1% | | 2-5 years | 21% | 63% | 12% | 11% | 11% | 3% | 0% | 0% | | 6-10 years | 32% | 0% | 84% | 89% | 89% | 9% | 9% | 6% | | 11-20 years | 11% | 0% | 0% | 0% | 0% | 31% | 36% | 13% | | More than 20 years | 25% | 0% | 0% | 0% | 0% | 56% | 55% | 80% | | Don’t know/refused/Considerers | 1% | 3% | 0% | 0% | 0% | 1% | 0% | 1% |
There was a statistically significant difference in the longevity of conducting business overseas of IP active companies compared to non-IP active companies. IP active companies were more likely to have been conducting business overseas for a longer period of time than non-IP active companies. This is consistent with the proportion of IP active firms in the sample increasing with the age of company (Table 16). Thus, this result does not necessarily indicate that IP activity increases with the number of years of overseas experience; it may be driven by the age profile of IP active firms in the sample. Table 45: Number of years doing business overseas by IP activity
| IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|------|-------|---------------|------------|-----------| | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | | 0 - 49 | 50 - 99 | 100 + | | Years doing business overseas | 457 | 107 | 90 | 17 | 26 | 97 | | Within last two years | 100% | 100% | 100% | 100% | 100% | 100% | | 2-5 years ago | 17% | 60% | 7% | 6% | 15% | 4% | | 6-10 years ago | 29% | 0% | 90% | 94% | 85% | 7% | | 11-20 years ago | 12% | 0% | 0% | 0% | 0% | 33% | | More than 20 years ago | 31% | 0% | 0% | 0% | 0% | 54% | | Don’t know/refused/Considerers | 1% | 2% | 0% | 0% | 0% | 1% |
| Non-IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | |---------------|------|-------|---------------|------------|-----------| | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | | 0 - 49 | 50 - 99 | 100 + | | Years doing business overseas | 454 | 129 | 159 | 10 | 11 | 99 | | Within last two years | 100% | 100% | 100% | 100% | 100% | 100% | | 2-5 years ago | 24% | 65% | 15% | 20% | 0% | 1% | | 6-10 years ago | 36% | 0% | 81% | 80% | 100% | 11% | | 11-20 years ago | 9% | 0% | 0% | 0% | 0% | 29% | | More than 20 years ago | 19% | 0% | 0% | 0% | 0% | 58% | | Don’t know/refused/Considerers | 2% | 5% | 1% | 0% | 0% | 0% |
There was a statistically significant difference in the longevity of conducting business overseas of UKTI users compared to non-UKTI users. UKTI users were more likely to have been conducting business overseas for a longer period of time than non-UKTI users. Almost a third (31%) of UKTI users had been conducting business overseas for more than twenty years compared to just over one in ten (11%) non-UKTI users. This is consistent with the proportion of UKTI users in the sample increasing with the age of company (Table 17).
Table 46: Number of years doing business overseas by UKTI usage
| UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |------------|------|-------|---------------|------------|-----------| | Years doing business overseas | 621 | 135 | 148 | 18 | 24 | 154 | | Within last two years | 9% | 34% | 3% | 0% | 0% | 1% | | 2-5 years ago | 18% | 65% | 10% | 6% | 13% | 3% | | 6-10 years ago | 30% | 0% | 86% | 94% | 88% | 8% | | 11-20 years ago | 11% | 0% | 0% | 0% | 0% | 28% | | More than 20 years ago | 31% | 0% | 0% | 0% | 0% | 59% | | Don’t know/refused/Considerers | 1% | 1% | 1% | 0% | 0% | 1% |
| Non-UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|------|-------|---------------|------------|-----------| | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | | 0 - 49 | 50 - 99 | 100 + | | Years doing business overseas | 290 | 101 | 101 | 9 | 13 | 42 | | Within last two years | 13% | 34% | 4% | 0% | 0% | 0% | | 2-5 years ago | 27% | 59% | 15% | 22% | 8% | 2% | | 6-10 years ago | 38% | 0% | 81% | 78% | 92% | 12% | | 11-20 years ago | 9% | 0% | 0% | 0% | 0% | 43% | | More than 20 years ago | 11% | 0% | 0% | 0% | 0% | 43% | | Don’t know/refused/Considerers | 2% | 7% | 0% | 0% | 0% | 0% |
However, PIMS data shows that less than one-quarter of UKTI clients have been conducting business overseas for more than 20 years. PIMS also shows that only 16% of UKTI clients have been conducting business overseas for 6-10 years, compared to 30% in this survey. These differences may partly be due to some of the sampling anomalies highlighted earlier in the chapter such as over sampling of: older and larger firms; firms in the production sector; and firms with more experience of overseas markets as measured by self-assessment and number of markets.
Table 47: Comparison of number of years experience in overseas markets by UKTI usage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009
| Years doing business overseas | Base | UKTI non-users | UKTI users | PIMS non-users 2009 | PIMS users PIMS 12-15 | PIMS non-users 2008 | Users PIMS 7-10 | |------------------------------|------|----------------|------------|---------------------|----------------------|---------------------|----------------| | Total | 290 | 621 | 300 | 3985 | 302 | 3143 | | Within last two years | 100% | 100% | 100% | 100% | 100% | 100% | | 2-5 years ago | 13% | 9% | 5% | 15% | 5% | 17% | | 6-10 years ago | 27% | 18% | 19% | 16% | 36% | 21% | | 11-20 years ago | 38% | 30% | 26% | 16% | 30% | 15% | | More than 20 years ago | 9% | 11% | 26% | 15% | 13% | 16% | | Not currently exporting | - | - | 2% | 13% | 2% | 7% | | Not applicable | 2% | 1% | - | - | - | - |
4.9 Experience: Born Globals
The following table shows the proportion of companies that are defined as ‘born global’. In this context ‘born globals’ were defined as firms which have been established for up to 5 years and have been doing business since they were established. Nearly a quarter (23%) of these internationalising companies were ‘born global’, which is higher than the proportions from the 2008 survey of one in ten companies (10%) which were ‘born global’. Whereas in the 2008 survey ‘born globals’ accounted for about half the sample firms which had been established in the last five years; in the 2009 survey, they accounted for 88% of these younger firms. This may reflect bias in the survey sample towards firms with more export experience.
Table 48: Born Globals
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | Total | 0 - 49 | 50 - 99 | 100+ | | | Base | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Born global | 23% | 88% | 0% | 0% | 0% | 0% | 0% | 0% | | Up to 5 years | 26% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | | More than 5 years | 74% | 0% | 100% | 100% | 100% | 100% | 100% | 100% |
When the total sub samples of IP active and non-IP active firms are considered, almost equal proportions of the subgroups are ‘born globals’ (22% and 24% respectively). However, this reflects differences in the age profiles of the sub-samples. When only firms established for up to five years are considered, a higher proportion of IP active firms are born globals (93%) than non-IP active firms (84%). This is consistent with the concept that firms internationalise early due to their products and services being innovative and in niche markets. Consequently, internationalisation is needed in order to reach a sufficiently large market. Table 49: Born Globals by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Born global | 22% | 93% | 0% | 0% | 0% | 0% | 0% | 0% | | Up to 5 years | 23% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | | More than 5 years | 77% | 0% | 100% | 100% | 100% | 100% | 100% | 100% |
When the sub-sample of firms established for up to five years is considered, similar proportions of UKTI users (90%) and non-UKTI users (86%) are ‘born global’.
Table 50: Born Globals by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Born global | 19% | 90% | 0% | 0% | 0% | 0% | 0% | 0% | | Up to 5 years | 22% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | | More than 5 years | 78% | 0% | 100% | 100% | 100% | 100% | 100% | 100% |
| Non-UKTI users | Base | Up to 5 years | 6-10 years | 10+ years | |----------------|------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Born global | 30% | 86% | 0% | 0% | 0% | 0% | 0% | 0% | | Up to 5 years | 35% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | | More than 5 years | 65% | 0% | 100% | 100% | 100% | 100% | 100% | 100% |
4.10 Experience: Proportion of Turnover Accounted for by Overseas Sales
All companies currently doing business overseas were asked about their current/planned overseas business activity (ie selling goods or services to either businesses or individuals based abroad specifically in the last financial year) and approximately what percentage of their turnover was accounted for by overseas sales. Those unable to offer a percentage were presented with banded amounts and asked to indicate which one was the most relevant.
The following tables show overseas experience as measured by the proportion of turnover accounted for by overseas sales. For around four in ten companies up to 25% of their turnover is accounted for by overseas business, whilst for just over a third of companies (30%) over half of their turnover is accounted for by overseas business, as shown in the table below. Therefore, a higher proportion of the turnover from companies from this current research is accounted for by overseas business than was found in the 2008 survey. This is most marked for firms generating up to 10% of their turnover from overseas sales which accounted for half the 2008 sample but only one quarter of the current (2009) survey sample. This again indicates that this year’s survey contains firms with a greater level of experience in overseas markets than has been found in previous UKTI surveys.
Table 51: Proportion of turnover accounted for by overseas sales
| Total | 2008 survey | Total | Up to 5 years | 6-10 years | 10+ years | |-------|-------------|-------|---------------|------------|-----------| | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 900 | 911 | 236 | 249 | 27 | 37 | | | 100% | 100% | 100% | 100% | 100% | 100% | | Zero | 5% | 1% | 2% | 1% | - | - | | | 1% | - | - | - | - | - | | Up to 10% | 51% | 24% | 30% | 28% | 22% | 19% | | | 15% | 11% | 19% | 12% | 17% | 21% | | 11-25% | 12% | 16% | 20% | 15% | 11% | 19% | | | 12% | 17% | 20% | 15% | 19% | 20% | | 26-50% | 14% | 22% | 19% | 20% | 37% | 24% | | | 25% | 26% | 20% | 20% | 26% | 20% | | 51-75% | 5% | 14% | 9% | 15% | 7% | 14% | | | 19% | 19% | 13% | 19% | 19% | 13% | | More than 75% | 11% | 20% | 16% | 18% | 22% | 24% | | | 26% | 21% | 19% | 26% | 21% | 19% | | Don’t know/ refused | 7% | 3% | 5% | 2% | - | - | | | 3% | - | - | 3% | - | - |
There was a statistically significant difference in the percentage of turnover accounted for by overseas sales between IP active and non-IP active companies. IP active companies are more likely to have a higher percentage of their turnover accounted for by overseas sales (ie more than 50%) than non-IP active companies.
Table 52: Proportion of turnover accounted for by overseas sales by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 457 | 107 | 90 | 17 | 26 | | | 100% | 100% | 100% | 100% | 100% | | Zero | 0% | 1% | - | - | - | | | 1% | - | - | - | - | | Up to 10% | 19% | 26% | 23% | 12% | 23% | | | 11% | 14% | 15% | 16% | 22% | | 11-25% | 18% | 23% | 14% | 6% | 23% | | | 15% | 16% | 15% | 16% | 22% | | 26-50% | 21% | 19% | 16% | 41% | 15% | | | 28% | 30% | 17% | 17% | 17% | | 51-75% | 16% | 10% | 21% | 12% | 12% | | | 20% | 16% | 16% | 16% | 16% | | More than 75% | 23% | 17% | 24% | 29% | 27% | | | 24% | 24% | 23% | 23% | 23% | | Don’t know/ refused | 2% | 4% | 1% | - | - | | | 1% | - | - | - | - |
There was a statistically significant difference in the percentage of turnover accounted for by overseas sales between UKTI users and non-UKTI users. According to this survey, UKTI users were more likely to have in excess of 50% of their turnover accounted for by overseas sales than non-UKTI users (Table 53). However, evidence from PIMS demonstrates no difference in the proportion of users and non-users of UKTI services generating at least half their turnover from overseas sales, as shown below (Table 54). Table 53: Proportion of turnover accounted for by overseas sales by UKTI usage
| UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Zero | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Up to 10% | 1% | 1% | 1% | - | - | 1% | - | - | | 11-25% | 20% | 27% | 22% | 11% | 25% | 13% | 15% | 22% | | 26-50% | 16% | 19% | 13% | 11% | 25% | 12% | 20% | 21% | | 51-75% | 23% | 21% | 21% | 50% | 29% | 24% | 24% | 20% | | More than 75% | 17% | 12% | 19% | 11% | 13% | 21% | 20% | 14% | | Don’t know/ refused | 3% | 3% | 3% | - | - | 3% | - | 5% |
| Non-UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Zero | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Up to 10% | 31% | 34% | 37% | 44% | 8% | 21% | 25% | 17% | | 11-25% | 17% | 21% | 18% | 11% | 8% | 14% | 8% | 17% | | 26-50% | 20% | 15% | 20% | 11% | 15% | 29% | 33% | 25% | | 51-75% | 9% | 6% | 9% | 0% | 15% | 12% | 17% | 8% | | More than 75% | 19% | 16% | 14% | 33% | 54% | 24% | 17% | 25% | | Don’t know/ refused | 3% | 7% | 2% | - | - | 3% | - | 8% |
The following is a summary of the proportion of turnover accounted for by overseas sales by UKTI usage from this survey compared with the PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009.
Table 54: Comparison of proportion of turnover accounted for by overseas sales by UKTI usage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009
| Total | UKTI non-users | UKTI users | PIMS non-users 2009 | Users PIMS 12-15 | PIMS non-users 2008 | Users PIMS 7-10 | |-------|----------------|------------|----------------------|------------------|---------------------|------------------| | | Base | 290 | 621 | 300 | 3985 | 302 | 3143 | | | 100% | 100% | 100% | 100% | 100% | 100% | | Up to 10% | 31% | 20% | 46% | 25% | 39% | 30% | | 11-25% | 17% | 16% | 15% | 12% | 12% | 17% | | 26-50% | 20% | 23% | 13% | 13% | 17% | 16% | | 51-75% | 9% | 17% | 8% | 10% | 8% | 10% | | More than 75% | 19% | 20% | 14% | 20% | 14% | 12% | | Not currently exporting | - | - | 2% | 13% | 2% | 7% | | Not applicable | 4% | 4% | - | - | - | - | | Don’t know/refused | - | - | 2% | 7% | 8% | 7% |
4.11 Experience: Number of Markets
All companies currently conducting business overseas were asked to indicate the number of overseas countries they had done business in (in any form) over the last 5 years, excluding countries from which they had only imported. They were presented with numbers in bands and were asked to identify the most relevant. Later in the questionnaire, after indicating in which world regions they were active, they were also asked to state whether the number of countries in which they did business had increased, decreased or remained the same in the last three years. After this they were asked to specify whether over the next three years they expect the number of countries to do business with to increase, decrease or remain the same.
As can be seen from the following table six in ten (60%) of these companies were in 11 or more markets. This is twice the proportion in the 2008 survey for which the equivalent figure was 30%. This indicates that the 2009 sample contains firms with more export experience than that of 2008. The number of markets in which a firm operates tends to increase with age.
Table 55: Number of markets
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | 100% | 100% | 100% | 100% | 100% | | Considerers | 1% | 3% | 0% | 0% | 0% | | | 0% | 0% | 0% | 0% | 0% | | None | 0% | 0% | 0% | 0% | 0% | | One country | 3% | 6% | 4% | 0% | 0% | | | 0% | 0% | 0% | 0% | 0% | | 2-5 countries | 15% | 24% | 21% | 11% | 11% | | | 11% | 11% | 10% | 5% | 1% | | 6-10 countries | 21% | 25% | 27% | 19% | 22% | | | 19% | 16% | 19% | 16% | 8% | | 11-20 countries | 22% | 17% | 25% | 30% | 11% | | | 28% | 28% | 28% | 14% | 14% | | 21-50 countries | 26% | 17% | 19% | 19% | 43% | | | 34% | 31% | 34% | 31% | 42% | | More than 50 countries | 12% | 8% | 4% | 22% | 14% | | | 9% | 21% | 9% | 21% | 34% | | Don't know | 0% | 1% | 0% | 0% | 0% |
There was a statistically significant difference between IP active and non-IP active companies regarding the number of countries in which they had done business in any form in the last 5 years. IP active companies were much more likely to be in more countries than non-IP active companies, with this propensity increasing by age. As with other experience measures, this may reflect the age profile of IP active firms in the sample (Table 16).
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5 Two respondents stated they had not done business in any market over the last five years despite previously stating that they had sold directly to businesses or individuals abroad and had imported goods or services over the last five years. Table 56: Number of markets by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Considerers | 1% | 2% | 0% | 0% | 0% | 0% | 0% | 1% | | None | 0% | 0% | 0% | 0% | 0% | 1% | 0% | 0% | | One country | 1% | 2% | 3% | 0% | 0% | 0% | 0% | 0% | | 2-5 countries | 10% | 20% | 12% | 0% | 12% | 11% | 3% | 0% | | 6-10 countries | 15% | 21% | 23% | 12% | 15% | 13% | 11% | 5% | | 11-20 countries | 22% | 16% | 31% | 29% | 8% | 31% | 30% | 10% | | 21-50 countries | 33% | 26% | 26% | 29% | 46% | 32% | 35% | 46% | | More than 50 countries | 18% | 14% | 4% | 29% | 19% | 11% | 22% | 39% | | Non-IP active | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Considerers | 1% | 3% | 1% | 0% | 0% | 0% | 0% | 0% | | None | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% | | One country | 4% | 9% | 4% | 0% | 0% | 0% | 0% | 0% | | 2-5 countries | 20% | 28% | 26% | 30% | 9% | 8% | 10% | 4% | | 6-10 countries | 27% | 29% | 28% | 30% | 36% | 24% | 24% | 20% | | 11-20 countries | 22% | 18% | 22% | 30% | 18% | 25% | 24% | 28% | | 21-50 countries | 19% | 9% | 15% | 0% | 36% | 36% | 24% | 28% | | More than 50 countries | 6% | 3% | 3% | 10% | 0% | 6% | 19% | 20% | | Don’t know | 0% | 2% | 0% | 0% | 0% | 0% | 0% | 0% |
There was a statistically significant difference between UKTI users and non-UKTI users regarding the number of countries in which they had done business in any form in the last 5 years. UKTI users were more likely than non-UKTI users (14% vs 6%) to have conducted business in more than 50 countries in the last five years (Table 57). As for IP active firms, this may be related to the age profile of UKTI users in the survey sample (Table 17).
The equivalent data is not available from PIMS. Table 57: Number of markets by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | UKTI users | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Considerers | 0% | 1% | 1% | 0% | 0% | 0% | 0% | 1% | | None | 0% | 0% | 1% | 0% | 0% | 1% | 0% | 0% | | One country | 1% | 4% | 2% | 0% | 0% | 0% | 0% | 0% | | 2-5 countries | 13% | 22% | 18% | 11% | 13% | 9% | 4% | 1% | | 6-10 countries | 19% | 23% | 25% | 22% | 25% | 18% | 15% | 7% | | 11-20 countries | 23% | 17% | 28% | 33% | 17% | 27% | 28% | 14% | | 21-50 countries | 28% | 19% | 20% | 17% | 38% | 34% | 33% | 42% | | More than 50 countries | 14% | 12% | 6% | 17% | 8% | 10% | 20% | 35% | | Don't know | 0% | 1% | 0% | 0% | 0% | 0% | 0% | 0% | | Non-UKTI users | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Considerers | 2% | 5% | 0% | 0% | 0% | 0% | 0% | 0% | | One country | 5% | 8% | 6% | 0% | 0% | 0% | 0% | 0% | | 2-5 countries | 21% | 27% | 27% | 11% | 8% | 12% | 8% | 0% | | 6-10 countries | 25% | 28% | 29% | 11% | 15% | 21% | 17% | 17% | | 11-20 countries | 20% | 17% | 22% | 22% | 0% | 31% | 25% | 17% | | 21-50 countries | 21% | 13% | 17% | 22% | 54% | 33% | 25% | 42% | | More than 50 countries | 6% | 3% | 0% | 33% | 23% | 2% | 25% | 25% |
4.12 Number of Regions
All companies were given a list of world regions and were asked to indicate in which their business was active. A definition of the EEA was provided for those who required it.
Most typically businesses were active in the EEA and Asia, with older and larger companies more likely to be active in Asia. Table 58 Overseas experience: region
| Total | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | EEA | 93% | 92% | 95% | 100% | 97% | 89% | 98% | 94% | | Russia and Eastern Europe, outside of the EEA | 54% | 47% | 42% | 70% | 73% | 56% | 66% | 75% | | USA/Canada | 63% | 53% | 58% | 78% | 81% | 63% | 79% | 80% | | Latin America and Caribbean | 45% | 38% | 28% | 52% | 73% | 49% | 52% | 75% | | Africa | 56% | 47% | 45% | 56% | 68% | 62% | 74% | 79% | | Middle East | 69% | 61% | 55% | 81% | 81% | 79% | 78% | 92% | | Asia | 73% | 63% | 61% | 81% | 89% | 82% | 83% | 92% | | Australia/New Zealand | 57% | 46% | 48% | 56% | 65% | 64% | 72% | 78% | | None6 | 0% | 0% | 0% | 0% | 3% | 1% | 0% | 1% |
There was a statistically significant difference between IP active and non-IP active companies regarding the number of regions they reported they were active in for their international business. A higher proportion of IP active respondents reported being in any of these regions than non-IP active respondents. Outside the EEA both groups were most likely to be in Asia, the Middle East and the USA/Canada and least likely to be in Latin America and the Caribbean. However, a higher proportion of IP active firms were in Russia and Eastern Europe outside the EEA than in Africa. For non-IP active firms, this order was reversed.
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6 Four respondents stated they had not done business in any region despite previously stating that they had sold directly to businesses or individuals abroad and had imported goods or services over the last five years. They were not classified as ‘considerers’. Table 59: Overseas experience: region by IP activity
| IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | |-----------|------|-------|---------------|------------|-----------|-------|--------|------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | EEA | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | | Russia and E Europe | 96% | 95% | 99% | 100% | 100% | 93% | 100% | 95% | | USA/Canada | 65% | 57% | 54% | 76% | 73% | 63% | 78% | 81% | | Latin America/Caribbean | 70% | 58% | 62% | 88% | 85% | 68% | 81% | 84% | | Africa | 53% | 45% | 38% | 53% | 77% | 48% | 54% | 80% | | Middle East | 63% | 55% | 50% | 65% | 73% | 61% | 81% | 81% | | Asia | 79% | 76% | 63% | 88% | 85% | 78% | 84% | 93% | | Australia/New Zealand | 81% | 77% | 69% | 94% | 92% | 80% | 86% | 93% | | None | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| Non-IP active | Base | 454 | 129 | 150 | 10 | 11 | 99 | 21 | 25 | |---------------|------|-----|-----|-----|----|----|----|----|----| | | | | | | | | | | | | EEA | 90% | 88% | 92% | 100% | 91% | 85% | 95% | 92% | | Russia and E Europe | 43% | 40% | 35% | 60% | 73% | 49% | 43% | 56% | | USA/Canada | 56% | 50% | 55% | 60% | 73% | 59% | 76% | 64% | | Latin America/Caribbean | 36% | 33% | 23% | 50% | 64% | 51% | 48% | 60% | | Africa | 49% | 40% | 43% | 40% | 55% | 63% | 62% | 72% | | Middle East | 60% | 50% | 51% | 70% | 73% | 79% | 67% | 88% | | Asia | 64% | 52% | 57% | 60% | 82% | 83% | 76% | 88% | | Australia/New Zealand | 45% | 36% | 42% | 30% | 36% | 57% | 62% | 68% | | None | 1% | 1% | 0% | 0% | 9% | 1% | 0% | 4% |
There was a statistically significant difference between UKTI users and non-UKTI users regarding the number of regions they reported they were active in for their international business. Although roughly the same proportion of UKTI users as non-users are active in the EEA, outside the EEA a higher proportion of UKTI users are in any one region than non-UKTI users. There are also differences in the apparent popularity of different regions for the two groups. Whereas UKTI users are almost equally likely to be in Asia and the Middle East (77% and 76% respectively), a higher proportion of non-UKTI users are in Asia than the Middle East (66% and 54% respectively). While for non-UKTI users, the USA/Canada is the third most popular region, for UKTI users, it falls behind EEA, Asia and the Middle East. The following table summarises the number of world regions that these businesses were operating in. This table illustrates that nearly three quarters of companies (73%) were conducting business in four or more regions. Again, this indicates that the survey sample is biased towards firms which are experienced in international activity.
### Table 61: Number of regions
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
IP active companies were more likely to be in four or more regions than non-IP active companies (84% vs 62%). This is consistent with the findings for the number of markets.
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7 Four respondents stated they had not done business in any region despite previously stating that they had sold directly to businesses or individuals abroad and had imported goods or services over the last five years. They were not classified as ‘considerers’. in which respondents were active. As with other experience measures this may reflect the age profile of IP active firms in the sample (Table 16).
Table 62: Number of regions by IP activity
| IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | IP active | | | | | | | | | | None | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | 1 region | 3% | 6% | 6% | 0% | 0% | 3% | 0% | 1% | | 2 regions | 5% | 10% | 7% | 0% | 4% | 4% | 0% | 0% | | 3 regions | 8% | 9% | 16% | 0% | 8% | 8% | 3% | 2% | | 4 or more regions | 84% | 75% | 72% | 100% | 88% | 85% | 97% | 96% |
| Non-IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | |---------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | None | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | 1 region | 13% | 22% | 18% | 0% | 0% | 2% | 0% | 0% | | 2 regions | 9% | 12% | 9% | 20% | 0% | 8% | 14% | 0% | | 3 regions | 14% | 15% | 19% | 0% | 9% | 11% | 10% | 4% | | 4 or more regions | 62% | 51% | 53% | 80% | 82% | 78% | 76% | 92% |
UKTI users were more likely than non-UKTI users to be conducting business in four or more regions (78% vs 62%). This is consistent with the survey results showing the number of markets in which respondents were active. As with these results, the difference found between users and non-users of UKTI services may be related to the age profile of UKTI users in the survey sample (Table 17).
Table 63: Number of regions by UKTI usage
| UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | UKTI users | | | | | | | | | | None | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | 1 region | 5% | 10% | 9% | 0% | 0% | 3% | 0% | 1% | | 2 regions | 6% | 10% | 8% | 6% | 0% | 6% | 4% | 0% | | 3 regions | 10% | 13% | 17% | 0% | 13% | 9% | 2% | 2% | | 4 or more regions | 78% | 67% | 66% | 94% | 83% | 82% | 93% | 96% |
| Non-UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Non-UKTI users | | | | | | | | | | None | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | 1 region | 14% | 21% | 20% | 0% | 0% | 2% | 0% | 0% | | 2 region | 9% | 12% | 9% | 11% | 8% | 7% | 8% | 0% | | 3 region | 14% | 12% | 20% | 0% | 0% | 12% | 17% | 8% | | 4 or more regions | 62% | 55% | 51% | 89% | 92% | 79% | 75% | 92% |
4.13 Benefits of Expanding the Number of Overseas Markets in which a firm operates
All respondents were read a list of reasons which have been given for expanding the number of countries in which a business operates. Respondents were then asked to indicate the extent to which each applied to their business using a score between 1 and 5, where 1 meant that it was ‘not at all beneficial’ and 5 meant that this was ‘very beneficial’.
The main reasons for expanding the number of countries in which they operated were to enable them to meet growth objectives and to reduce dependence on a small number of markets. Among older firms with at least 50 employees, allowing full use of existing capacity was as important as, or slightly more important than, reducing dependence on a small number of markets.
Table 64: Reasons for expanding the number of countries in which a business operates
| Reason | Total | Up to 5 years | 6-10 years | 10+ years | |------------------------------------------------------------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Enabling you to meet growth objectives | 911 | 67% | 62% | 68% | 74% | 76% | 63% | 69% | 76% | | Allowing you to fully utilise your existing capacity | 236 | 56% | 56% | 54% | 59% | 65% | 56% | 57% | 61% | | Reducing your dependence on a single or small number of markets | 249 | 60% | 60% | 59% | 59% | 62% | 61% | 53% | 61% | | Enabling you to offset declining revenues in other markets | 27 | 51% | 48% | 49% | 59% | 43% | 52% | 53% | 56% | | Enabling you to increase the commercial life span of any of your products or services | 37 | 39% | 38% | 37% | 48% | 32% | 38% | 43% | 44% | | Not selected beneficial rating to any of the 5 questions | 37 | 18% | 21% | 16% | 15% | 19% | 22% | 17% | 13% |
IP active companies were more likely to state each of these benefits were reasons for expanding the number of countries in which their company operates than non-IP active companies. Table 65: Reasons for expanding the number of countries in which a business operates by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Enabling you to meet growth objectives | 72% | 67% | 79% | 65% | 77% | 65% | 73% | 78% | | Allowing you to fully utilise your existing capacity | 61% | 56% | 62% | 59% | 65% | 62% | 65% | 64% | | Reducing your dependence on a single or small number of markets | 63% | 59% | 69% | 65% | 58% | 68% | 57% | 63% | | Enabling you to offset declining revenues in other markets | 54% | 51% | 52% | 65% | 42% | 55% | 59% | 57% | | Enabling you to increase the commercial life span of any of your products or services | 44% | 43% | 41% | 59% | 31% | 42% | 51% | 46% | | Not selected beneficial rating to any of the 5 questions | 14% | 20% | 9% | 18% | 15% | 16% | 14% | 10% |
| Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Enabling you to meet growth objectives | 62% | 57% | 62% | 90% | 73% | 62% | 62% | 68% | | Allowing you to fully utilise your existing capacity | 52% | 56% | 49% | 60% | 64% | 49% | 43% | 52% | | Reducing your dependence on a single or small number of markets | 56% | 61% | 54% | 50% | 73% | 54% | 48% | 56% | | Enabling you to offset declining revenues in other markets | 47% | 45% | 48% | 50% | 45% | 48% | 43% | 56% | | Enabling you to increase the commercial life span of any of your products or services | 34% | 34% | 35% | 30% | 36% | 33% | 29% | 40% | | Not selected beneficial rating to any of the 5 questions | 23% | 22% | 20% | 10% | 27% | 28% | 24% | 24% |
UKTI users were more likely to state each of these benefits were reasons for expanding the number of countries in which their company operates than non-UKTI users. Table 66: Reasons for expanding the number of countries in which a business operates by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Enabling you to meet growth objectives | 70% | 70% | 74% | 78% | 71% | 64% | 67% | 73% | | Allowing you to fully utilise your existing capacity | 60% | 64% | 57% | 61% | 63% | 59% | 57% | 58% | | Reducing your dependence on a single or small number of markets | 63% | 65% | 64% | 78% | 63% | 64% | 54% | 58% | | Enabling you to offset declining revenues in other markets | 54% | 53% | 53% | 72% | 42% | 53% | 57% | 55% | | Enabling you to increase the commercial life span of any of your products or services | 41% | 44% | 38% | 56% | 38% | 39% | 46% | 43% | | Not selected beneficial rating to any of the 5 questions | 17% | 19% | 13% | 11% | 21% | 20% | 17% | 15% |
| Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | |----------------|------|-----|-----|-----|---|----|----|----|----| | | | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Enabling you to meet growth objectives | 60% | 50% | 59% | 67% | 85% | 60% | 75% | 100% | | Allowing you to fully utilise your existing capacity | 50% | 46% | 49% | 56% | 69% | 43% | 58% | 83% | | Reducing your dependence on a single or small number of markets | 53% | 53% | 53% | 22% | 62% | 50% | 50% | 83% | | Enabling you to offset declining revenues in other markets | 44% | 42% | 44% | 33% | 46% | 45% | 42% | 67% | | Enabling you to increase the commercial life span of any of your products or services | 34% | 30% | 37% | 33% | 23% | 33% | 33% | 58% | | Not selected beneficial rating to any of the 5 questions | 22% | 24% | 21% | 22% | 15% | 31% | 17% | 0% |
4.14 Innovative Companies
Information on the engagement of employees in R&D and new product (or service) development activity, externally commissioned product (or service) development and sales of new products and services has been used to classify firms as either ‘innovative’ or ‘non-innovative’. The details of this classification are provided below, which is similar to the definition used in both the equivalent 2008 survey and the PIMS survey.
Table 67: Loose definition of ‘Innovative’ companies
Companies have been classified as ‘innovative’ if they...
- Have more than one employee engaged either wholly or partly in R&D activity (Q77) and have more than one employee engaged either wholly or partly in new product or service development (Q79)
- Or, have employed someone external to the business to conduct new product or service development activity in the last year (Q80).
The key difference is that it omits the following criterion:
- Or, derive some of their turnover from products & services introduced in the last 3 years except firms established in the last 2 years Another ‘tighter’ definition of innovation was constructed that also considers whether employees have been engaged in R&D activity in ‘the development of scientific or technical knowledge that is not commonly available’ and whether any new products they have developed can be described as ‘novel’ (ie new to the sector or new to the world as opposed to just new to their business).
Table 68: Tight definition of ‘Innovative’ companies
| Firms have been classified as ‘innovative’ under the alternative (tight) definition if they… | |---------------------------------------------------------------| | • Have more than one employee engaged either wholly or partly in R&D activity (Q77) and have more than one employee engaged either wholly or partly in new product or service development (Q79) | | • Or, have employed someone external to the business to conduct new product or service development activity in the last year (Q80). | | • Or, their products & services are completely new and have not been introduced by anyone else previously (Q76). |
This was similar to the tighter definition of innovative firms used in PIMS and the 2008 survey, but with the omission of the following criteria:
• Or, derive at least some of their turnover from products & services introduced in the last 3 years except firms established in the last 2 years and these products & services are completely new and have not been introduced by anyone else previously.
The following table summarises the proportion of companies that can be defined as innovative using both definitions. Using this ‘loose’ definition just under two thirds (60%) of companies were defined as being innovative, compared to nearly three quarters (72%) in the 2008 survey. In comparison, the proportion of companies defined as innovative using the tight definition (48%) is almost identical to the findings in the 2008 survey (47%). Firms identified as innovative using the tight definition, form a subset of innovative firms defined using the loose definition.
Table 69: Innovative firms
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | | | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Loose definition | 60% | 54% | 50% | 81% | 86% | 53% | 78% | 81% | | Tight definition | 48% | 45% | 41% | 70% | 59% | 45% | 62% | 58% | | IP active | 50% | 45% | 36% | 63% | 70% | 49% | 64% | 77% | | Neither Innovative nor IP active | 28% | 33% | 35% | 15% | 11% | 31% | 14% | 9% |
There was a statistically significant difference between IP active and non-IP active companies regarding whether or not they were innovative. As might be expected, a higher proportion of IP active, than non-IP active firms are innovative. Using the ‘loose’ definition, over three quarters (77%) of IP active companies were defined as innovative using the ‘loose’ definition, compared to just over four in ten (42%) of non-IP active companies. When the tight definition is applied, almost two thirds (62%) of IP active firms, but only one third (34%) of non-IP active firms are innovative. Similarly, there was a statistically significant difference between UKTI users and non-UKTI users regarding whether or not they were innovative. Nearly two thirds (64%) of UKTI users were defined as innovative using the ‘loose’ definition, reducing to just over half (52%) of companies using the ‘tight’ definition of innovative. In comparison, half (50%) of the non-UKTI users are defined as innovative using the ‘loose’ definition, reducing to just under four in ten (38%) of companies using the ‘tight’ definition. Therefore, a higher proportion of UKTI users than non-UKTI users are defined as innovative, using both the ‘loose’ and the ‘tight’ definitions. Over half (56%) of UKTI users are IP active compared to less than four in ten (38%) of non-users. Again, this indicates that UKTI users are more innovative than non-users.
Table 71: Innovative firms by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |------------|-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Loose definition | 64% | 64% | 52% | 83% | 88% | 56% | 76% | 80% | | Tight definition | 52% | 53% | 43% | 83% | 71% | 49% | 63% | 57% | | IP active | 56% | 58% | 40% | 67% | 67% | 52% | 65% | 76% | | Non Innovative or IP active | 23% | 25% | 32% | 11% | 13% | 27% | 13% | 10% |
| Non-UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |----------------|-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Loose definition | 50% | 42% | 47% | 78% | 85% | 43% | 83% | 92% | | Tight definition | 38% | 34% | 39% | 44% | 38% | 33% | 59% | 67% | | IP active | 38% | 29% | 31% | 56% | 77% | 40% | 58% | 83% | | Non Innovative or IP active | 37% | 43% | 40% | 22% | 8% | 43% | 17% | 0% |
However, the proportions in this current survey for the ‘loose’ definition of innovative companies are somewhat lower than the 80% indicated consistently by PIMS. Table 72: Comparison of innovative firms (loose definition) by UKTI usage with client profiles from PIMS 12-15 and 7-10 and PIMS non-user surveys of 2008 and 2009
| UKTI users | Base | Total | UKTI non-users | UKTI users | PIMS non-users 2009 | Users PIMS 12-15 | PIMS non-users 2008 | Users PIMS 7-10 | |------------|------|-------|----------------|------------|---------------------|-----------------|---------------------|-----------------| | | | | 290 | 621 | 300 | 3985 | 302 | 3143 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | | Innovative | | | 50% | 64% | 71% | 82% | 80% | 80% |
4.15 IP Active Companies
The following is the definition used to define whether companies were considered IP active or not.
Table 73: Definition of IP active
Companies have been classified as ‘IP active’ if they currently hold any patents or trademarks, either in the UK or overseas (Q81).
The following Table 74 summarises the proportion of companies that have been defined as IP active. The incidence of IP activity increases with both company age and size, as was also evident for the 2008 survey. In this survey half of the companies were defined as being IP active in comparison to just under a third in the 2008 survey.
Table 74: IP activity
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100 + | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 50% | 45% | 36% | 63% | 70% | 49% | 64% | 77% | | No/Don’t Know | 50% | 55% | 64% | 37% | 30% | 51% | 36% | 23% |
There was a statistically significant difference between UKTI users and non-UKTI users regarding whether or not they were IP active. A higher proportion of UKTI users were IP active than was evident among non-UKTI users.
Table 75: IP activity by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 56% | 58% | 40% | 67% | 67% | 52% | 65% | 76% | | No/Don’t Know | 44% | 42% | 60% | 33% | 33% | 48% | 35% | 24% |
| Non-UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 38% | 29% | 31% | 56% | 77% | 40% | 58% | 83% | | No/Don’t Know | 62% | 71% | 69% | 44% | 23% | 60% | 42% | 17% |
The higher proportion of UKTI users who were IP active is consistent with evidence from the PIMS survey. Table 76: Comparison of IP active firms by UKTI usage with client profiles from PIMS 12-15 and PIMS 4-7 user follow-up interviews and PIMS non-user surveys of 2008 and 2009
| | Total | UKTI non-users | UKTI users | PIMS non-users 2009 | Users PIMS 12-15 | PIMS non-users 2008 | Users PIMS 4-7 | |------------------|-------|----------------|------------|---------------------|------------------|---------------------|----------------| | UKTI users | Base | 290 | 621 | 300 | 3985 | 302 | 459 | | | | 100% | 100% | 100% | 100% | 100% | 100% | | IP active | | 56% | 38% | 18% | 46% | 26% | 52% |
4.16 Young Technology Intensive Firms
Companies that are aged up to 5 years old which were classified as either ‘innovative’ or IP active under the previous definitions have also been classified as ‘young, technology intensive firms’.
Although the proportion of these firms in the total sample was slightly higher than in 2008 (17% vs 14%), the proportion in the sub-sample of firms established up to five years ago was lower (66% vs 74%).
Table 77: Young, technology intensive firms
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | Base | 911 | 236 | 249 | | | | 100% | 100% | 100% | | Young technology intensive | 17% | 66% | 0% | 0% | 0% | 0% | | Up to 5 years | 26% | 100% | 0% | 0% | | More than 5 years| 74% | 0% | 100% | 100% |
There was a statistically significant difference between IP active and non-IP active companies regarding whether or not they were young, technology intensive. Given the definition of young technology intensive firms used in this study, it is not surprising that all (100%) IP active companies established for up to five years were ‘young technology intensive’ firms compared to only 37% of non-IP active firms in this age group. Young technology firms in the non-IP active sub-sample represent firms established for up to 5 years which are not IP active but can be classified as innovative.
Table 78: Young, technology intensive firms by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | IP active | Base | 457 | 107 | 90 | | | | 100% | 100% | 100% | | Young technology intensive | 23% | 100% | 0% | 0% | 0% | 0% | | Up to 5 years | 23% | 100% | 0% | 0% | | More than 5 years| 77% | 0% | 100% | 100% |
| Non-IP active | Base | 454 | 129 | 159 | | | | 100% | 100% | 100% | | Young technology intensive | 11% | 37% | 0% | 0% | 0% | 0% | | Up to 5 years | 28% | 100% | 0% | 0% | | More than 5 years| 72% | 0% | 100% | 100% | UKTI users and non-UKTI users were equally likely to be defined as ‘young, technology intensive’ when the separate groups were considered. However, among firms of the relevant age category, ie up to 5 years, the incidence of young, technology intensive firms is higher amongst UKTI users than non-UKTI users (74% vs 54%). This is consistent with the observation that UKTI users are more likely to be classified as innovative or IP active than non-UKTI users.
Table 79: Young, technology intensive firms by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Young technology intensive | 16% | 74% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | Up to 5 years | 22% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | More than 5 years| 78% | 0% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Young technology intensive | 19% | 54% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | Up to 5 years | 35% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | More than 5 years| 65% | 0% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
4.17 Past Growth (Turnover)
All companies were asked to indicate whether, compared to this time three years ago, their turnover was much higher, a bit higher, lower, or had stayed the same.
For just over six in ten companies (61%) their turnover was higher than it was three years ago. However, 37% of firms indicated that their turnover was lower or was about the same as it was three years ago. This compares with 30% in the 2008 survey.
Table 80: Past growth (turnover)
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | Base | 789 | 114 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Much higher | 27% | 33% | 30% | 22% | 49% | 18% | 21% | 28% | | A bit higher | 34% | 31% | 33% | 30% | 16% | 35% | 45% | 42% | | About the same size | 18% | 18% | 16% | 33% | 8% | 21% | 21% | 13% | | Lower | 19% | 18% | 21% | 15% | 24% | 22% | 9% | 16% | | Don’t know | 2% | 0% | 1% | 0% | 3% | 3% | 5% | 2% |
IP active and non-IP active companies reported similar levels of increases and decreases in company turnover over the last three years. Table 81: Past growth (turnover) by IP activity 6-10 years
10+ years
Total
Up to 5 years
0 - 49
50 - 99
100 +
0 - 49
50 - 99
396
46
90
17
26
97
37
83
100%
100%
100%
100%
100%
100%
100%
100%
Much higher
28%
33%
33%
24%
42%
20%
14%
30%
A bit higher
35%
28%
28%
29%
19%
37%
51%
43%
About the same size
18%
17%
20%
35%
12%
21%
24%
8%
Lower
17%
22%
18%
12%
27%
20%
5%
16%
Don’t know
2%
0%
1%
0%
0%
3%
5%
2%
IP active
Base
393
68
159
10
11
99
21
25
100%
100%
100%
100%
100%
100%
100%
100%
Much higher
26%
34%
28%
20%
64%
16%
33%
20%
A bit higher
33%
32%
35%
30%
9%
33%
33%
36%
About the same size
17%
18%
13%
30%
0%
22%
14%
28%
Lower
21%
16%
23%
20%
18%
25%
14%
16%
Don’t know
2%
0%
1%
0%
9%
3%
5%
0%
Non-IP active
Base
100 +
Similarly UKTI users and non-UKTI users reported similar levels of increases and decreases in company turnover over the last three years. Table 82: Past growth (turnover) by UKTI usage 6-10 years
Up to 5 years
0 - 49
547
61
148
100%
100%
100%
Much higher
28%
39%
32%
A bit higher
33%
20%
About the same size
17%
20%
Lower
20%
Don’t know
2%
Total UKTI users
Base
10+ years 100 +
0 - 49
50 - 99
100 +
18
24
154
46
96
100%
100%
100%
100%
100%
11%
42%
21%
24%
27%
31%
33%
13%
36%
46%
41%
15%
39%
13%
19%
20%
14%
21%
21%
17%
29%
22%
7%
18%
0%
1%
0%
4%
2%
4%
1%
242
53
101
9
13
42
12
12
100%
100%
100%
100%
100%
100%
100%
100%
Much higher
25%
26%
27%
44%
62%
7%
8%
33%
A bit higher
36%
43%
35%
22%
23%
31%
42%
50%
About the same size
18%
15%
17%
22%
0%
31%
25%
8%
Lower
18%
15%
21%
11%
15%
24%
17%
0%
Don’t know
2%
0%
1%
0%
0%
7%
8%
8%
Non-UKTI users
Base
50 - 99
4.18 Past Growth (Number of Markets) All companies were asked to indicate whether the number of countries in which they were doing business overseas has increased or decreased in the last three years. Just over six in ten companies (61%) indicated an increase in the number of countries in which they were conducting business in the last three years, which was especially true for older companies.
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Table 83: Past growth (number of markets)
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | | Increased | 61% | 56% | 59% | 67% | 68% | | | | | 62% | 74% | 59% | | Decreased | 10% | 11% | 8% | 7% | 11% | | | | | 10% | 3% | 13% | | Stayed the same| 28% | 29% | 31% | 26% | 22% | | | | | 28% | 21% | 26% | | Don’t know | 1% | 1% | 0% | 0% | 0% | | | | | 0% | 2% | 1% | | Not Applicable | 1% | 3% | 1% | 0% | 0% |
There was a statistically significant difference between IP active and non-IP active companies regarding the number of countries in which they had done business in any form in the last 3 years. IP active companies were more likely than non-IP active companies to indicate an increase in the number of countries in which they were doing business over the last three years.
Table 84: Past growth (number of markets) by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | | | 100% | 100% | 100% | 100% | | Increased | 66% | 61% | 67% | 76% | 69% | | | | | 65% | 78% | 65% | | Decreased | 10% | 10% | 10% | 12% | 15% | | | | | 7% | 5% | 12% | | Stayed the same| 23% | 25% | 23% | 12% | 15% | | | | | 27% | 16% | 22% | | Don’t know | 0% | 2% | 0% | 0% | 0% | | | | | 0% | 0% | 0% | | Not Applicable | 1% | 2% | 0% | 0% | 0% |
There was a statistically significant difference between UKTI users and non-UKTI users regarding the number of countries in which they had done business in any form in the last 3 years. UKTI users were more likely than non-UKTI users to indicate an increase in the number of countries in which they were doing business over the last three years, which was especially true for medium sized companies.
______________________________________________________________________
8 In this table ‘Not Applicable’ refers to those companies that are not currently exporting or who have been active in overseas markets for less than 3 years.
9 In this table ‘Not Applicable’ refers to those companies that are not currently exporting or who have been active in overseas markets for less than 3 years.
10 In this table ‘Not Applicable’ refers to those companies that are not currently exporting or who have been active in overseas markets for less than 3 years. Table 85: Past growth (number of markets) by UKTI usage
| UKTI users | Base | 6-10 years | 10+ years | |------------|------|------------|-----------| | | Total| Up to 5 years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Increased | 100% | 64% | 61% | 63% | 72% | 63% | 66% | 76% | 58% | | Decreased | 10% | 10% | 12% | 9% | 11% | 13% | 11% | 4% | 13% | | Stayed the same | 24% | 24% | 27% | 17% | 25% | 23% | 17% | 27% | | Don’t know | 0% | 1% | 0% | 0% | 0% | 0% | 2% | 1% | | Not Applicable | 1% | 2% | 1% | 0% | 0% | 1% | 0% | 1% |
| Non-UKTI users | Base | 6-10 years | 10+ years | |----------------|------|------------|-----------| | | Total| Up to 5 years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Increased | 100% | 54% | 50% | 54% | 56% | 77% | 50% | 67% | 67% | | Decreased | 8% | 9% | 8% | 0% | 8% | 5% | 0% | 17% | | Stayed the same | 36% | 35% | 37% | 44% | 15% | 45% | 33% | 17% | | Don’t know | 1% | 2% | 1% | 0% | 0% | 0% | 0% | 0% | | Not Applicable | 2% | 5% | 0% | 0% | 0% | 0% | 0% | 0% |
4.19 Past Growth: Employment
Companies that had been established for at least three years were asked to compare the number of people they employed currently with the number employed three years ago. Those who indicated that their employee numbers had grown were also asked to indicate the number of people that were employed by their company three years ago. This data has been combined into a single indicator of past growth as shown below.
Table 86: Past growth (employment)
Companies have been classified as having ‘decreased’ if…
- Their employee numbers have decreased over the last 3 years (Q69)
Companies have been classified as having ‘stayed the same’ if…
- Their employee numbers are the same as they were 3 years ago (Q69)
Companies have been classified as having ‘grown slightly’ if…
- Their employee numbers have grown by less than 30% over the last 3 years (Q71)
Companies have been classified as having ‘grown moderately’ if…
11 In this table ‘Not Applicable’ refers to those companies that are not currently exporting or who have been active in overseas markets for less than 3 years.
12 In this table ‘Not Applicable’ refers to those companies that are not currently exporting or who have been active in overseas markets for less than 3 years. • Their employee numbers have grown by between 30-75% over the last 3 years (Q71)
Companies have been classified as having ‘grown substantially’ if…
• Their employee numbers have grown by more than 75% over the last 3 years (Q71).
Overall 27% of respondents in the 2009 survey indicated that their company had grown, compared to 30% in the 2008 survey. The proportion of firms indicating that they had grown moderately was similar in the 2008 (12%) and 2009 (13%) surveys. However, the proportion that had grown substantially was somewhat lower in the 2009 survey (6%) than in 2008 (13%). Firms which reported having grown moderately or substantially over the past three years tended to have been established 6-10 years.
In the 2008 survey about a sixth (16%) of companies had become smaller and just over four in ten (43%) had stayed the same size when growth was measured in terms of changes in employee numbers. However, the proportion of companies in this 2009 survey reporting that they had become smaller was higher, at around one quarter (25%), whilst the proportion which had stayed the same size was lower (33%) than recorded in the 2008 survey. Firms which were both older and larger were more likely to experience a decrease in employee numbers in the past three years.
Table 87: Past growth (employment)
| Total | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-------|------|-------|---------------|------------|-----------| | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Became smaller | 25% | 14% | 24% | 33% | 24% | 26% | 40% | 39% | | Stayed the same size | 33% | 16% | 44% | 33% | 30% | 48% | 21% | 27% | | Grown slightly | 8% | 5% | 5% | 4% | 14% | 11% | 14% | 13% | | Grown moderately | 13% | 6% | 20% | 15% | 16% | 10% | 14% | 10% | | Grown substantially | 6% | 6% | 7% | 11% | 8% | 3% | 7% | 6% | | Not Applicable | 16% | 53% | 0% | 4% | 8% | 2% | 5% | 6% |
Non-IP active companies were slightly more likely to have stayed the same size. This was most notable amongst firms which had been established for up to 5 years: of those that were not IP active, 20% had remained the same size compared to 10% of those which were IP active. IP active companies were slightly more likely than non-IP active firms to have become smaller in terms of employee numbers. IP active and non-IP active companies were as likely to have grown in the last three years.
13 In this table ‘Not applicable’ refers to those companies that are less than 3 years old or did not know their change in growth in terms of employees over the last 3 years. Table 88: Past growth (employment) by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | |-----------------|-------|---------------|------------|-----------|--------|---------|-------|--------|---------|-------| | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Become smaller | 28% | 18% | 21% | 41% | 31% | 27% | 41% | 40% | | | | Stayed the same | 29% | 10% | 41% | 29% | 31% | 43% | 22% | 27% | | | | Grown slightly | 9% | 5% | 6% | 0% | 15% | 11% | 16% | 12% | | | | Grown moderately| 13% | 7% | 24% | 12% | 15% | 13% | 11% | 10% | | | | Grown substantially | 6% | 4% | 8% | 18% | 4% | 4% | 5% | 6% | | | | Not Applicable | 15% | 57% | 0% | 0% | 4% | 1% | 5% | 6% | | |
| Non-IP active | Base | 129 | 159 | 10 | 11 | 99 | 21 | 25 | |-----------------|------|-----|-----|----|----|----|----|----| | | 100% | 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Become smaller | 22% | 12% | 25% | 20% | 9% | 25% | 38% | 36% | | Stayed the same | 37% | 20% | 46% | 40% | 27% | 54% | 19% | 28% | | Grown slightly | 7% | 5% | 4% | 10% | 9% | 10% | 10% | 16% | | Grown moderately| 12% | 6% | 18% | 20% | 18% | 7% | 19% | 12% | | Grown substantially | 6% | 7% | 7% | 0% | 18% | 2% | 10% | 4% | | Not Applicable | 16% | 50% | 0% | 10% | 18% | 2% | 5% | 4% |
The profile of UKTI users and non-users in terms of past growth is similar, with around a third of companies remaining the same size and around a quarter of companies becoming smaller. However, this is not consistent with evidence from PIMS.
______________________________________________________________________
14 In this table ‘Not applicable’ refers to those companies that are less than 3 years old or did not know their change in growth in terms of employees over the last 3 years.
15 In this table ‘Not applicable’ refers to those companies that are less than 3 years old or did not know their change in growth in terms of employees over the last 3 years. Table 89: Past growth (employment) by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Became smaller | | 26% | 13% | 27% | 39% | 21% | 27% | 35% | 39% | | Stayed the same | | 33% | 16% | 41% | 28% | 33% | 48% | 22% | 27% | | Grown slightly | | 9% | 4% | 5% | 6% | 8% | 10% | 15% | 15% | | Grown moderately | | 13% | 6% | 20% | 22% | 17% | 11% | 13% | 10% | | Grown substantially | | 5% | 4% | 7% | 0% | 8% | 3% | 9% | 5% | | Not Applicable | | 14% | 56% | 0% | 6% | 13% | 1% | 7% | 4% |
| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Became smaller | | 22% | 16% | 19% | 22% | 31% | 24% | 58% | 42% | | Stayed the same | | 34% | 16% | 49% | 44% | 23% | 50% | 17% | 25% | | Grown slightly | | 7% | 5% | 5% | 0% | 23% | 12% | 8% | 0% | | Grown moderately | | 12% | 7% | 21% | 0% | 15% | 7% | 17% | 8% | | Grown substantially | | 7% | 7% | 7% | 33% | 8% | 2% | 0% | 8% | | Not Applicable | | 19% | 50% | 0% | 0% | 0% | 5% | 0% | 17% |
Evidence from the PIMS user and non-user surveys demonstrates that UKTI users are more likely to report having grown substantially and less likely to have reported having become smaller than firms which have not used UKTI services.
Table 90: Comparison of firm growth (employment) by UKTI usage with client profiles from PIMS 12-15 and PIMS 7-10 and PIMS Non-user surveys of 2008 and 2009
| | Total | UKTI non-users | UKTI users | PIMS non-users 2009 | Users PIMS 12-15 | PIMS non-users 2008 | Users PIMS 7-10 | |------------------|-------|----------------|------------|---------------------|------------------|---------------------|------------------| | UKTI users | Base | 290 | 621 | 300 | 3985 | 302 | 3143 | | | | 100% | 100% | 100% | 100% | 100% | 100% | | Became smaller | | 22% | 26% | 13% | 4% | 9% | 5% | | Stayed the same | | 34% | 33% | 22% | 15% | 15% | 16% | | Grown slightly | | 7% | 9% | 0% | 0% | 0% | 0% | | Grown moderately | | 12% | 13% | 50% | 47% | 57% | 46% | | Grown substantially | | 7% | 5% | 13% | 28% | 19% | 30% | | Not Applicable | | 19% | 14% | 1% | 4% | 2% | 0% |
16 In this table ‘Not applicable’ refers to those companies that are less than 3 years old or did not know their change in growth in terms of employees over the last 3 years.
17 In this table ‘Not applicable’ refers to those companies that are less than 3 years old or did not know their change in growth in terms of employees over the last 3 years.
18 PIMS user and non-user surveys asked about growth over the previous 5 years, whereas the current survey asked over the previous 3 years. Also note that the PIMS surveys do not identify firms which grew slightly. 4.20 Future Growth
Future Growth (Number of Markets)
Those companies who had conducted business in at least one overseas country in the last five years were asked to indicate whether the number of countries in which they would do business overseas over the next three years was likely to increase, decrease or stay the same.
Just over six in ten companies (61%) projected an increase in the number of countries in which they expected to do business over the next three years. Firms with 50-99 employees were more likely to expect to increase the number of markets in which they do business.
Table 91: Future growth (number of markets)
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | 899 | 228 | 247 | 27 | 37 | 195 | 58 | 107 | | Increase | 61% | 65% | 62% | 70% | 57% | 56% | 72% | 55% | | Decrease | 3% | 3% | 2% | 4% | 5% | 4% | 3% | 2% | | Stay the same | 34% | 30% | 36% | 26% | 35% | 38% | 24% | 40% | | Don’t know | 1% | 2% | 1% | 0% | 3% | 2% | 0% | 3% |
There was a statistically significant difference between IP active and non-IP active companies regarding the number of countries they are likely to do business in over the next three years. IP active companies are more likely to predict an increase in the number of countries they do business in over the next three years than non-IP active companies. This was especially true of younger IP active companies.
Table 92: Whether number of countries doing business in will increase or decrease in the next three years by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | IP active | 453 | 105 | 90 | 17 | 26 | 96 | 37 | 82 | | Increase | 68% | 73% | 74% | 71% | 50% | 63% | 78% | 60% | | Decrease | 2% | 3% | 1% | 6% | 8% | 2% | 5% | 0% | | Stay the same | 29% | 22% | 24% | 24% | 38% | 34% | 16% | 39% | | Don’t know | 1% | 2% | 0% | 0% | 4% | 1% | 0% | 1% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Non-IP active | 446 | 123 | 157 | 10 | 11 | 99 | 21 | 25 | | Increase | 55% | 59% | 54% | 70% | 73% | 49% | 62% | 40% | | Decrease | 3% | 2% | 2% | 0% | 0% | 6% | 0% | 8% | | Stay the same | 40% | 37% | 43% | 30% | 27% | 42% | 38% | 44% | | Don’t know | 2% | 2% | 1% | 0% | 0% | 2% | 0% | 8% |
There was a statistically significant difference between UKTI users and non-UKTI users regarding the number of countries they are likely to do business in over the next three years. UKTI users were more likely to indicate an increase in the number of countries in which they are doing business over the next three years than non-UKTI users. This is especially true of younger companies and those with 50-99 employees. Table 93: Whether number of countries doing business in will increase or decrease in the next three years by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 614 | 132 | 146 | 18 | 24 | 153 | 46 | 95 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Increase | | 65% | 71% | 68% | 72% | 58% | 62% | 74% | 53% | | Decrease | | 2% | 2% | 2% | 6% | 4% | 3% | 4% | 2% | | Stay the same | | 31% | 26% | 29% | 22% | 33% | 33% | 22% | 42% | | Don’t know | | 2% | 2% | 1% | 0% | 4% | 2% | 0% | 3% | | Non-UKTI users | Base | 285 | 96 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Increase | | 53% | 57% | 52% | 67% | 54% | 33% | 67% | 75% | | Decrease | | 4% | 4% | 1% | 0% | 8% | 10% | 0% | 0% | | Stay the same | | 42% | 36% | 47% | 33% | 36% | 57% | 33% | 25% | | Don’t know | | 1% | 2% | 0% | 0% | 0% | 0% | 0% | 0% |
Future Growth (objectives)
All companies, with the exception of those not yet trading, were asked to consider their business as a whole, and to state what growth objectives their company had for the business over the next five years in terms of whether they would remain the same size, become smaller, grow moderately or grow substantially in this time period. The business objectives for all companies is summarised in the following table.
Nearly six in ten (57%) of these companies stated that their growth objective for the next five years was to grow moderately, compared to half (50%) of the companies in 2008. Whilst just under a third (31%) of companies in the 2008 survey stated that their growth objective was to ‘grow substantially’ this was reduced slightly to 28% in the 2009 survey. Companies which had been established for up to 10 years were more likely to indicate an expectation that they would grow substantially in the next five years.
Table 94: Future growth
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Become smaller | | 1% | 0% | 1% | 4% | 0% | 3% | 3% | 1% | | Remain the same size | | 11% | 9% | 10% | 15% | 3% | 20% | 7% | 7% | | Grow moderately | | 57% | 57% | 60% | 41% | 57% | 54% | 64% | 56% | | Grow substantially | | 28% | 30% | 29% | 37% | 41% | 20% | 26% | 31% | | Don’t know | | 2% | 4% | 0% | 4% | 0% | 3% | 0% | 4% | | Refused | | 1% | 1% | 0% | 0% | 0% | 1% | 0% | 1% |
There was a statistically significant difference between IP active and non-IP active companies regarding their future growth predictions over the next five years. IP active companies were more likely than non-IP active firms to state that their business objective was to ‘grow substantially’ in the next 5 years. Table 95: Future growth by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Become smaller | 1% | 0% | 1% | 6% | 0% | 0% | 3% | 0% | 0% | | Remain the same size | 8% | 6% | 4% | 12% | 4% | 16% | 3% | 10% | | Grow moderately | 55% | 51% | 60% | 41% | 50% | 56% | 73% | 51% | | Grow substantially | 34% | 39% | 33% | 41% | 46% | 26% | 22% | 36% | | Don’t know | 2% | 3% | 0% | 0% | 0% | 2% | 0% | 2% | | Refused | 1% | 1% | 1% | 0% | 0% | 0% | 0% | 0% |
| Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | |---------------|------|-----|-----|-----|----|----|----|----|----| | | | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Become smaller | 2% | 0% | 1% | 0% | 0% | 6% | 5% | 4% | | Remain the same size | 14% | 12% | 14% | 20% | 0% | 23% | 14% | 0% | | Grow moderately | 59% | 61% | 60% | 40% | 73% | 52% | 48% | 76% | | Grow substantially | 22% | 22% | 26% | 30% | 27% | 15% | 33% | 12% | | Don’t know | 3% | 5% | 0% | 10% | 0% | 3% | 0% | 8% | | Refused | 0% | 1% | 0% | 0% | 0% | 1% | 0% | 0% |
Both UKTI users and non-UKTI users had similar expectations for growth for the next five years, with similar proportions predicting growth or reductions.
Table 96: Future growth by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Become smaller | 1% | 0% | 0% | 6% | 0% | 3% | 4% | 1% | | Remain the same size | 10% | 6% | 7% | 11% | 0% | 21% | 9% | 8% | | Grow moderately | 57% | 60% | 61% | 50% | 58% | 51% | 63% | 55% | | Grow substantially | 29% | 29% | 31% | 33% | 42% | 23% | 24% | 31% | | Don’t know | 2% | 4% | 0% | 0% | 0% | 2% | 0% | 4% | | Refused | 0% | 1% | 0% | 0% | 0% | 0% | 0% | 0% |
| Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | |----------------|------|-----|-----|----|---|----|----|----|----| | | | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Become smaller | 1% | 0% | 2% | 0% | 0% | 5% | 0% | 0% | | Remain the same size | 13% | 13% | 15% | 22% | 8% | 17% | 0% | 0% | | Grow moderately | 56% | 52% | 57% | 22% | 54% | 62% | 67% | 67% | | Grow substantially | 26% | 31% | 25% | 44% | 38% | 10% | 33% | 25% | | Don’t know | 2% | 3% | 0% | 11% | 0% | 5% | 0% | 0% | | Refused | 1% | 1% | 1% | 0% | 0% | 2% | 0% | 8% |
However, PIMS data shows UKTI users to be less likely than non-UKTI users to be considering staying the same size and more likely than non-users to aim to grow substantially. Table 97: Comparison of plans for future firm growth by UKTI usage with client profiles from PIMS 12-15 and PIMS 7-10 and PIMS Non-user surveys of 2008 and 2009
| UKTI users | Base | UKTI users | PIMS non-users 2009 | Users PIMS 12-15 | PIMS Non-users 2008 | Users PIMS 7-10 | |------------|------|------------|---------------------|-----------------|---------------------|-----------------| | | 290 | 621 | 300 | 3985 | 302 | 3143 | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Become smaller | 1% | 1% | 1% | 1% | 5% | 1% | | Remain the same size | 13% | 10% | 24% | 8% | 10% | 5% | | Grown moderately | 56% | 57% | 52% | 48% | 57% | 50% | | Grown substantially | 26% | 29% | 18% | 38% | 27% | 41% | | Don’t know | 2% | 3% | 5% | 5% | 2% | 4% | | Refused | 1% | 0% | | | | | | Not Applicable | 0% | 1% | | | | |
4.21 Growth – ASBS Definition
Companies were divided into four ‘growth categories’, as described in the box below; a categorisation that takes account of both past and future growth. This analysis has sought to replicate, as far as is possible with the data available, an analysis of growth conducted for BERR’s Annual Small Business Survey (ASBS).
Table 98: Definition of Growth – ASBS definition
| Companies have been classified as displaying ‘sustained growth’ if… | |---------------------------------------------------------------| | • Their employee numbers have grown over the last 3 years (Q69) | | • And, they are anticipating substantial growth over the next 5 years (Q85) |
| Companies have been classified as displaying ‘contained growth’ if… | |---------------------------------------------------------------| | • Their employee numbers have grown over the last 3 years (Q69) | | • But, they are not anticipating substantial growth over the next 5 years (Q85) |
| Companies have been classified as displaying ‘new growth’ if… | |---------------------------------------------------------------| | • Their employee numbers have not grown over the last 3 years including firms established in the last 3 years (Q69) | | • But, they are anticipating substantial growth over the next 5 years (Q85) |
| Companies have been classified as displaying ‘no growth’ if… | |---------------------------------------------------------------| | • Their employee numbers have not grown over the last 3 years including firms established in the last 3 years (Q69) | | • And, they are not anticipating substantial growth over the next 5 years (Q85). |
According to the ASBS definition of growth, 39% of the sample firms displayed growth, which was below the 47% of growth observed in the 2008 survey. When the types of growth are analysed, a similar pattern is observed to the 2008 survey with a fairly even split between ‘sustained growth’, ‘contained growth’ and ‘new growth’. The following table also illustrates that according to the ASBS definition of growth, older companies and also smaller companies were more likely to predict ‘no growth’.
Table 99: ASBS definition of growth
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 0 - 49 | 50 - 99 | 100 + | | Sustained | 12% | 6% | 12% | 19% | 24% | | | | | 11% | 17% | 17% | | Contained | 15% | 11% | 21% | 19% | 19% | | | | | 11% | 21% | 14% | | New growth | 12% | 7% | 16% | 19% | 16% | | | | | 9% | 9% | 13% | | No growth | 43% | 18% | 49% | 41% | 38% | | | | | 62% | 52% | 49% | | Established less than 3 years/not yet trading | 18% | 58% | 2% | 4% | 3% | | | | | 7% | 2% | 7% |
There was a statistically significant difference between IP active and non-IP active companies regarding their future growth predictions. IP active companies were more likely to predict ‘new growth’ and ‘sustained growth’ than non-IP active companies. New growth is predicted more by IP active companies aged six to ten years of age.
Table 100: ASBS definition of growth by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | | | | 100% | 100% | 100% | | Sustained | 14% | 6% | 14% | 24% | 23% | | | | | 15% | 11% | 19% | | Contained | 15% | 8% | 26% | 12% | 15% | | | | | 10% | 27% | 11% | | New growth | 14% | 10% | 19% | 18% | 23% | | | | | 10% | 11% | 16% | | No growth | 40% | 14% | 39% | 47% | 38% | | | | | 58% | 51% | 48% | | Established less than 3 years/not yet trading | 17% | 62% | 2% | 0% | 0% | | | | | 6% | 0% | 6% | | Non-IP active | 454 | 129 | 159 | 10 | 11 | | | | | 99 | 21 | 25 | | | | | 100% | 100% | 100% | | Sustained | 10% | 7% | 11% | 10% | 27% | | | | | 7% | 29% | 8% | | Contained | 16% | 12% | 18% | 30% | 27% | | | | | 12% | 10% | 24% | | New growth | 9% | 5% | 15% | 20% | 0% | | | | | 8% | 5% | 4% | | No growth | 46% | 22% | 54% | 30% | 36% | | | | | 66% | 52% | 52% | | Established less than 3 years/not yet trading | 19% | 54% | 2% | 10% | 9% | | | | | 7% | 5% | 12% |
Both UKTI users and non-UKTI users predicted similar levels of growth over the next five years. Table 101: ASBS definition of growth by UKTI usage
| UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Sustained | 13% | 5% | 11% | 17% | 25% | 12% | 20% | 19% | | Contained | 15% | 11% | 20% | 22% | 17% | 11% | 22% | 13% | | New growth | 12% | 6% | 20% | 17% | 17% | 11% | 4% | 13% | | No growth | 44% | 17% | 48% | 44% | 38% | 60% | 52% | 50% | | Established less than 3 years/not yet trading | 16% | 61% | 1% | 0% | 4% | 5% | 2% | 6% |
| Non-UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Sustained | 10% | 8% | 13% | 22% | 23% | 7% | 8% | 0% | | Contained | 16% | 10% | 23% | 11% | 23% | 12% | 17% | 25% | | New growth | 11% | 9% | 12% | 22% | 15% | 2% | 25% | 17% | | No growth | 40% | 20% | 50% | 33% | 38% | 67% | 50% | 42% | | Established less than 3 years/not yet trading | 22% | 53% | 3% | 11% | 0% | 12% | 0% | 17% |
4.22 Growth OECD Definition
Additional analysis was conducted seeking to replicate the OECD categories of growth. Again, this analysis has replicated the approach as far as possible given the data available, with the details of the analysis provided in the panel below.
Table 102: Definition of Growth – OECD Definition
Companies have been defined as ‘high-growth’ if...
- Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years (Q71)
Companies have been defined as ‘gazelles’ if...
- Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years (Q71)
- And, they are less than 5 years old (Q12).
Only a minority of companies displayed ‘high growth’ under this definition.
The proportion of firms in the sample classified as ‘high growth’ or ‘gazelles’ was somewhat lower than found in the 2008 survey. In 2008, 13% of firms were classified as ‘high growth’ compared to just 6% in this survey.
As ‘gazelles’ are a subset of high growth firms, the proportion of companies defined as ‘gazelles’ was lower than high growth firms with 3% of firms being identified as gazelles in 2008 and only 1% in the current survey. This could be driven in part by the lower proportion of firms established for up to 5 years in the 2009 survey compared to the 2008 survey. A further key difference between the 2008 survey and the current survey is that 16% of firms up to 5 years of age were identified as high growth in the 2008 survey, but only 6% in the current survey. This is surprising given the higher proportion of young firms with over 100 employees in the 2009 survey sample which are suggestive of recent growth than found in the 2008 survey.
In both surveys, ‘gazelles’ were restricted to firms under 5 years of age so are not observed among older and larger firms.
Table 103: OECD definition of growth
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | Total | 911 | 236 | 249 | 37 | | | 100% | 100% | 100% | 100% | | High growth | 6% | 6% | 7% | 8% | | Gazelles | 1% | 6% | 0% | 0% |
Similarly small proportions of IP active and non-IP active companies displayed ‘high growth’ with levels rising for those IP active companies of between 6 and 10 years of age with 50 to 99 employee and non-IP active companies of between 6 and 10 years of age with more than 100 employees, although the bases for both are small and should be treated with caution.
Table 104: OECD definition of growth by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | IP active | 457 | 107 | 90 | 26 | | | 100% | 100% | 100% | 100% | | High growth | 6% | 4% | 8% | 4% | | Gazelles | 1% | 4% | 0% | 0% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | Non-IP active | 454 | 129 | 159 | 11 | | | 100% | 100% | 100% | 100% | | High growth | 6% | 7% | 7% | 0% | | Gazelles | 2% | 7% | 0% | 0% |
Again for UKTI users and non-UKTI users there were similar small proportions of companies displaying ‘high growth’. Although PIMS data does not provide the same measure, PIMS 12-15 and 7-10 contained a higher proportion of firms which reported having grown substantially over the past five years, which was somewhat higher than reported by UKTI users in the survey sample. Table 105: OECD definition of growth by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | High growth | | 5% | 4% | 7% | 0% | 8% | 3% | 9% | 5% | | Gazelles | | 1% | 4% | 0% | 0% | 0% | 0% | 0% | 0% | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | High growth | | 7% | 7% | 7% | 33% | 8% | 2% | 0% | 8% | | Gazelles | | 2% | 7% | 0% | 0% | 0% | 0% | 0% | 0% |
4.23 Business Planning
All companies were asked to indicate whether they had a current, written business plan. Those that had a current, written business plan were then asked to indicate whether this current business plan contained any targets relating to business in overseas markets.
Table 106 depicts whether companies have a current, written business plan by age of company. This table illustrates that older and larger companies are more likely to have a current, written business plan. Furthermore, the proportion of companies with a written business plan was lower in the 2008 survey, with just over six in ten (61%) with a written business plan, increasing to seven in ten companies with a written business plan in 2009 (70%). This may be due to the higher proportion of UKTI users in the 2009 survey sample.
Table 106: Existence of current, written business plans
| | Total | Up to 5 years | 5-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | Total | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | | 70% | 69% | 64% | 81% | 89% | 57% | 81% | 93% | | No | | 27% | 30% | 34% | 15% | 11% | 38% | 14% | 4% | | Don’t know | | 2% | 1% | 1% | 4% | 0% | 3% | 5% | 4% | | Refused | | 1% | 0% | 1% | 0% | 0% | 2% | 0% | 0% |
There was a statistically significant difference between IP active and non-IP active companies. IP active companies were more likely than non-IP active companies to have a current, written business plan. That said, whether companies were IP active or not, it was the case that the vast majority of larger companies have a current, written business plan. Table 107: Existence of current, written business plans by IP activity
| IP active | Base | Total | Up to 5 years | 5-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |-----------|------|-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | | | | | | | | | | | | | | IP active | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | | 78% | 74% | 73% | 82% | 88% | 70% | 84% | 93% | | | | No | | 19% | 26% | 22% | 12% | 12% | 28% | 11% | 4% | | | | Don’t know| | 2% | 0% | 3% | 6% | 0% | 2% | 5% | 4% | | | | Refused | | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% | | | | Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | | 61% | 65% | 58% | 80% | 91% | 44% | 76% | 92% | | | | No | | 36% | 33% | 41% | 20% | 9% | 48% | 19% | 4% | | | | Don’t know| | 2% | 2% | 0% | 0% | 0% | 4% | 5% | 4% | | | | Refused | | 1% | 1% | 1% | 0% | 0% | 3% | 0% | 0% | | |
There was a statistically significant difference between UKTI users and non-UKTI users in terms of whether they had a current, written business plan. UKTI users were more likely than non-UKTI users to have a current, written business plan. However again it should be noted that the vast majority of larger companies have a current, written business plan.
Table 108: Existence of current, written business plans by UKTI usage
| UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |------------|------|-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | | | | | | | | | | | | | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | | 75% | 75% | 69% | 83% | 88% | 64% | 85% | 92% | | | | No | | 23% | 24% | 28% | 17% | 13% | 35% | 13% | 4% | | | | Don’t know | | 1% | 0% | 1% | 0% | 0% | 1% | 2% | 4% | | | | Refused | | 0% | 1% | 1% | 0% | 0% | 0% | 0% | 0% | | | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | | 59% | 61% | 56% | 78% | 92% | 33% | 67% | 100% | | | | No | | 36% | 37% | 43% | 11% | 8% | 50% | 17% | 0% | | | | Don’t know | | 3% | 2% | 1% | 11% | 0% | 10% | 17% | 0% | | | | Refused | | 1% | 0% | 0% | 0% | 0% | 7% | 0% | 0% | | |
The level of UKTI users with a written business plan in this current survey is consistent with the PIMS 12-15 and PIMS 7-10 user follow-up interviews of 2008 and 2009. Table 109: Comparison of existence of current, written business plans by UKTI usage with client profiles from PIMS 12-15 and PIMS 7-10 and PIMS Non-user surveys of 2008 and 2009
| UKTI users | Base | UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 12-15 | PIMS Non-users 2008 | Users PIMS 7-10 | |------------|------|----------------|------------|---------------------|-----------------|---------------------|-----------------| | Yes | 290 | 621 | 300 | 3995 | 302 | 3143 | | No | | | | | | | | Don’t know | | | | | | | | Refused | | | | | | |
For just over half of these companies (54%) their current written business plans contained targets relating to business in overseas markets, which was more prevalent among larger companies.
Table 110: Existence of current, written business plans with targets relating to business overseas
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Yes | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | No | 14% | 19% | 14% | 15% | 8% | 15% | 5% | 8% | | Don’t know | 2% | 2% | 1% | 0% | 3% | 1% | 2% | 5% | | Refused | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 1% | | No/ don’t know/refused/ No current written business plan | 30% | 31% | 36% | 19% | 11% | 43% | 19% | 7% |
There was a statistically significant difference between IP active and non-IP active companies regarding their likelihood of having a current, written business plan that contains targets relating to business in overseas markets. IP active companies were more likely than non-IP active companies to have a current, written business plan that contained targets relating to business in overseas markets. Table 111: Existence of current, written business plans with targets relating to business overseas by IP activity
| IP active | Total | Up to 5 years | 5-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 457 | 107 | 90 | 17 | 26 | | | | | 0 - 49 | 50 - 99 | 100 + | | | 100% | 100% | 100% | 100% | 100% | | Yes | 67% | 61% | 60% | 76% | 77% | | No | 9% | 10% | 13% | 6% | 8% | | Don’t know| 2% | 3% | 0% | 0% | 4% | | No/ don’t know/refused/ No current written business plan | 22% | 26% | 27% | 18% | 12% |
| Non-IP active | Base | 6-10 years | 10+ years | |---------------|------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100 + | | | 100% | 100% | 100% | 100% | | Yes | 40% | 36% | 42% | 50% | | No | 19% | 27% | 15% | 30% | | Don’t know | 2% | 2% | 1% | 0% | | Refused | 0% | 0% | 0% | 0% | | No/ don’t know/refused/ No current written business plan | 39% | 35% | 42% | 20% | 9% |
There was a statistically significant difference between UKTI users and non-UKTI users regarding their likelihood of having a current, written business plan that contains targets relating to business in overseas markets. UKTI users were more likely than non-UKTI users to have a current, written business plan that contained targets relating to business in overseas markets.
Table 112: Existence of current, written business plans containing targets relating to business overseas by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | Base | 621 | 135 | 148 | 18 | | | 100% | 100% | 100% | 100% | | Yes | 61% | 59% | 55% | 72% | | No | 12% | 13% | 13% | 11% | | Don’t know | 2% | 2% | 1% | 0% | | Refused | 0% | 0% | 0% | 0% | | No/ don’t know/refused/ No current written business plan | 25% | 25% | 31% | 17% | 13% |
| Non-UKTI users | Base | 6-10 years | 10+ years | |----------------|------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100 + | | | 100% | 100% | 100% | 100% | | Yes | 39% | 32% | 39% | 56% | | No | 19% | 28% | 17% | 22% | | Don’t know | 1% | 2% | 1% | 0% | | No/ don’t know/refused/ No current written business plan | 41% | 39% | 44% | 22% | 8% |
For UKTI users, the level of those with a current, written business plan that contained targets relating to business in overseas markets is consistent with the PIMS 12-15 and PIMS 7-10 and PIMS non-user interviews of 2008 and 2009. There is no data available which indicates the percentage of firms in the PIMS non-user survey 2008 and PIMS users 7-10 surveys which do not have overseas targets. Table 113: Comparison of business plans with targets by UKTI usage with client profiles from PIMS 12-15 and PIMS 4-7 user follow-up interviews and PIMS non-user surveys of 2008 and 2009
| UKTI users | Base | UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 12-15 | PIMS Non-users 2008 | Users PIMS 7-10 | |------------|------|----------------|------------|---------------------|------------------|---------------------|------------------| | | | | | | | | | | UKTI users | | | | | | | | | | | | | | | | | | Yes, contains overseas targets | 39% | 61% | 17% | 59% | 26% | 53% | | No overseas targets | 19% | 12% | 19% | 18% | 0% | 0% | | Don't know | 1% | 2% | 2% | 2% | 49% | 27% | | Not applicable | 41% | 25% | 62% | 21% | 49% | 27% |
Total
| UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 12-15 | PIMS Non-users 2008 | Users PIMS 7-10 | |----------------|------------|---------------------|------------------|---------------------|------------------| | 290 | 621 | 300 | 3985 | 302 | 3143 | 5. MODES OF INTERNATIONALISATION
All respondents were asked to indicate which of the following overseas business activities their firm had been involved in over the last 5 years. These included selling directly to businesses or individuals abroad, selling to businesses or individuals abroad through agents or distributors, licensing or franchising overseas, or other contractual arrangements (including joint ventures) and operating their own overseas site or office.
Companies not currently involved in any of these listed overseas activities were asked if they were seriously considering starting to conduct overseas business via any of these routes in the next year. In order to be included in this survey, respondents had to respond positively to this question. This group (the ‘considerers’) were asked which types of overseas business activities they were planning to become involved in.
This was a multi-code question and so respondents could offer more than one response.
Firms who indicated that they were involved in contractual arrangements were asked to specify the form used eg licensing, franchising etc.
Those companies who were involved in ‘other partnership or joint venture arrangements’ were asked to state what the main purpose of this partnership or joint venture was or will be.
Those firms who are currently conducting business overseas were asked to indicate whether they had imported any goods or services over the last 5 years (excluding through partnerships, joint ventures and production sites). Where required, a definition of importing was read out which was:
“By importing I mean the buying in of goods or services from overseas suppliers.”
All those who did import were asked to indicate whether they imported directly from an overseas supplier, or through a UK-based intermediary or both.
Those with overseas offices and sites were asked to indicate how many of these they had and their purpose.
As shown in the table below, the majority of companies were selling directly abroad (90%) or via agents and distributors (67%). The proportion of companies selling (ie selling direct and/or through agents or distributors) was 98% which was identical to the proportion in 2008.
Although the proportion of firms selling direct (90%) was similar to the 2008 survey (86%), there was a higher prevalence of the use of other modes of internationalisation in the 2009 survey. This may be driven in part by the higher proportion of manufacturing firms in the 2009 survey sample; results of the 2008 survey indicated that more firms in the production sector sold through agents and distributors than in the services sector (39% vs 26%). In the 2008 survey, firms in production were also more likely to import than firms in the services sector (64% vs 43%). In this 2009 survey, 67% of respondents indicated that they sold through agents and distributors compared to 30% in the 2008 survey.
Only 7% of firms reported using contractual arrangements in the 2008 survey but 15% reported doing so in this 2009 survey.
Overseas sites were also more prevalent: 27% of respondents operated these in 2009 but only 11% in the 2008 survey.
The level of importing was much higher in the 2009 survey than was identified in the 2008 survey (76% vs 48%).
Use of modes other than selling direct was most prevalent among firms with at least 100 employees which had been established for at least 5 years. However, firms with at least 50 employees (and had been established for at least 5 years) were more likely to have an overseas sales site than smaller firms while firms which had been established for at least 5 years were more likely to sell via agents or distributors than younger firms.
Franchising was the least commonly practiced form of contractual arrangement amongst the surveyed firms. Equal proportions of firms in the sample used licensing and other contractual arrangements.
Table 114: Mode of internationalisation
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Selling directly to businesses or individuals abroad | 90% | 87% | 88% | 93% | 89% | 92% | 91% | 94% | | Selling to businesses or individuals abroad through agents or distributors | 67% | 58% | 57% | 78% | 81% | 74% | 74% | 81% | | Licensing overseas | 8% | 5% | 7% | 4% | 16% | 5% | 16% | 17% | | Franchising overseas | 3% | 3% | 2% | 0% | 8% | 2% | 0% | 6% | | Other contractual arrangements (including joint ventures) | 8% | 6% | 7% | 4% | 19% | 7% | 9% | 18% | | Own overseas site or office : production | 6% | 6% | 5% | 4% | 14% | 3% | 3% | 13% | | Own overseas site or office : call centre | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | Own overseas site or office : sales | 20% | 17% | 10% | 26% | 30% | 16% | 38% | 41% | | Own overseas site or office : R&D | 1% | 0% | 1% | 0% | 0% | 0% | 2% | 1% | | Importing | 76% | 69% | 76% | 81% | 78% | 77% | 90% | 81% |
For the purposes of further analysis, modes have been simplified into the groupings shown in the following table. Table 115: Simplified mode of internationalisation
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Direct sales | 90% | 87% | 88% | 93% | 89% | 92% | 91% | 94% | | Via agents/distributors | 67% | 58% | 57% | 78% | 81% | 74% | 74% | 81% | | Contractual arrangements (licensing, franchising and joint ventures) | 15% | 11% | 13% | 7% | 32% | 12% | 22% | 30% | | Overseas sites | 27% | 23% | 17% | 30% | 46% | 20% | 43% | 57% | | Importing | 76% | 69% | 76% | 81% | 78% | 77% | 90% | 81% |
IP active companies are more likely than non-IP active companies to use non-traditional modes of internationalisation ie modes other than selling direct. IP active firms were almost twice as likely as non-IP active firms to be engaged in contractual arrangements (21% vs 9%) and to have overseas sites (36% vs 18%). A slightly higher percentage of IP active firms import (80%) than non-IP active firms (72%). These results show a broadly similar pattern to those found in the 2008 survey.
Table 116: Simplified mode of internationalisation by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Direct sales | 89% | 86% | 89% | 94% | 85% | 92% | 89% | 93% | | Via agents/distributors | 81% | 78% | 74% | 88% | 85% | 82% | 81% | 88% | | Contractual arrangements (licensing, franchising and joint ventures) | 21% | 19% | 20% | 6% | 31% | 14% | 27% | 33% | | Overseas sites | 36% | 27% | 26% | 41% | 54% | 26% | 46% | 61% | | Importing | 80% | 76% | 77% | 82% | 77% | 76% | 95% | 86% |
Non-IP active
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Direct sales | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Via agents/distributors | 52% | 42% | 48% | 60% | 73% | 66% | 62% | 56% | | Contractual arrangements (licensing, franchising and joint ventures) | 9% | 4% | 9% | 10% | 36% | 9% | 14% | 20% | | Overseas sites | 18% | 19% | 13% | 10% | 27% | 14% | 38% | 44% | | Importing | 72% | 64% | 76% | 80% | 82% | 77% | 81% | 64% |
UKTI users and non-UKTI users were equally likely to use different modes of internationalisation, with the exception of selling via agents and distributors which was more likely to be used by UKTI users. Table 117: Simplified mode of internationalisation by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | UKTI users | | | | | | | | | | Direct sales | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Via agents/distributors | 91% | 93% | 90% | 89% | 92% | 91% | 89% | 95% | | | 72% | 67% | 62% | 78% | 79% | 75% | 74% | 82% | | Contractual arrangements (licensing, franchising and joint ventures) | 16% | 13% | 12% | 6% | 25% | 12% | 22% | 29% | | Overseas sites | 28% | 24% | 15% | 33% | 38% | 19% | 43% | 57% | | Importing | 78% | 72% | 77% | 83% | 92% | 77% | 89% | 79% | | Non-UKTI users | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Direct sales | 87% | 80% | 86% | 100% | 85% | 98% | 100% | 92% | | Via agents/distributors | 56% | 46% | 50% | 78% | 85% | 69% | 75% | 67% | | Contractual arrangements (licensing, franchising and joint ventures) | 14% | 8% | 15% | 11% | 46% | 10% | 25% | 33% | | Overseas sites | 26% | 22% | 21% | 22% | 62% | 21% | 42% | 58% | | Importing | 72% | 65% | 75% | 78% | 54% | 76% | 92% | 92% |
Only companies either with overseas sites or who where planning to have overseas sites within the next 12 months were asked to indicate how many overseas sites they either had or would have.
The number of overseas offices or sites is summarised in the following table which illustrates that, as in the 2008 survey, the majority of firms with overseas sites have up to 5 sites. However, the 2009 survey sample contained a higher proportion of firms with 21-50 sites (8% of firms with overseas sites compared with 2% in the 2008 survey) but fewer with 6-10 sites (6% vs 11% in 2008). This may be related to firms in the 2009 sample being active in more markets than firms in the 2008 sample.
Table 118: Number of overseas offices or sites
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 248 | 54 | 43 | 8 | 17 | 39 | 25 | 62 | | One | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | 2-5 | 36% | 31% | 51% | 38% | 6% | 54% | 28% | 29% | | 6-10 | 40% | 35% | 44% | 25% | 35% | 41% | 64% | 34% | | 11-20 | 6% | 11% | 2% | 0% | 12% | 0% | 8% | 8% | | 21-50 | 5% | 6% | 0% | 0% | 18% | 3% | 0% | 10% | | More than 50 | 8% | 7% | 2% | 38% | 24% | 3% | 0% | 13% | | Don’t know | 3% | 6% | 0% | 0% | 6% | 0% | 0% | 6% |
The following table summarises the main purpose of these overseas offices or sites with nearly six in ten (56%) classified as distribution/sales offices and one in five (20%) classified as manufacturing. Whilst the proportion of offices/sites for manufacturing is similar to that of the 2008 survey (22%), the proportion of distribution/sales offices is higher in the 2009 survey sample (56%) than in the 2008 sample (38%). In the 2008 sample, there were 2 call centres; the 2009 survey sample contained none. Table 119: Main purpose of the overseas office and sites for all overseas business activities
| Purpose | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------------------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | 248 | 54 | 43 | 8 | 17 | | | 100% | 100% | 100% | 100% | 100% | | Manufacturing | 20% | 22% | 26% | 13% | 29% | | | | | 13% | 8% | 21% | | Assembly | 2% | 2% | 5% | 0% | 0% | | | | | 0% | 0% | 2% | | Distribution/sales office | 56% | 59% | 47% | 50% | 41% | | | | | 67% | 72% | 50% | | After-sales office | 4% | 2% | 2% | 25% | 0% | | | | | 8% | 0% | 6% | | Service delivery | 13% | 11% | 12% | 13% | 24% | | | | | 5% | 16% | 15% | | Research, product or process development | 2% | 2% | 7% | 0% | 0% | | | | | 0% | 4% | 2% | | Don’t know | 4% | 2% | 2% | 0% | 6% | | | | | 8% | 0% | 5% |
5.1 Number of Modes
In terms of the number of modes that companies utilised, most typically this was one (33%) or two (41%). Larger and older companies were more likely to adopt more modes for conducting international business.
Table 120: Number of modes
| Modes | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | Base | 911 | 236 | 249 | 27 | | | | | 37 | 196 | 58 | | | | | 108 | | | | | | | 100% | 100% | 100% | | | | | 100% | 100% | 100% | | | | | 100% | 100% | 100% | | One | 33% | 44% | 43% | 22% | 16% | | | | | 28% | 17% | 13% | | Two | 41% | 37% | 42% | 52% | 38% | | | | | 50% | 43% | 28% | | Three | 19% | 14% | 12% | 22% | 27% | | | | | 17% | 31% | 41% | | Four or more | 7% | 5% | 4% | 4% | 19% | | | | | 5% | 9% | 19% |
There was a statistically significant difference between IP active and non-IP active companies regarding the number of modes they utilise for conducting international business. Non-IP active companies were more likely than IP active companies to adopt a single mode for selling internationally with around half (47%) of non-IP active firms using only one mode compared to around one fifth (19%) of IP active firms. Over a third (37%) of IP active firms used at least three modes of internationalisation, but only about one in seven (15%) non-IP active firms used as many modes. Table 121: Number of modes by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | IP active | Base | | | | | | | 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | | One mode | 19% | 28% | 23% | 6% | 15% | | | | | 20% | 11% | 10% | | Two modes | 44% | 44% | 50% | 65% | 35% | | | | | 54% | 43% | 24% | | Three modes | 26% | 19% | 21% | 24% | 31% | | | | | 19% | 38% | 45% | | Four or more modes | 11% | 9% | 6% | 6% | 19% | | | | | 8% | 8% | 22% | | Non-IP active | Base | | | | | | | 454 | 129 | 159 | 10 | 11 | | | | | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | | One mode | 47% | 58% | 53% | 50% | 18% | | | | | 36% | 29% | 24% | | Two modes | 38% | 31% | 37% | 30% | 45% | | | | | 46% | 43% | 40% | | Three modes | 12% | 10% | 7% | 20% | 18% | | | | | 15% | 19% | 28% | | Four or more modes | 3% | 1% | 3% | 0% | 18% | | | | | 2% | 10% | 8% |
There was a statistically significant difference between UKTI users and non-UKTI users regarding the number of modes they utilise for conducting international business. Non-UKTI users were more likely than UKTI users to adopt a single mode for international trade (45% vs 28%).
Table 122: Number of modes by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | | | | | | | 621 | 135 | 148 | 18 | 24 | | | | | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | | One mode | 28% | 33% | 37% | 28% | 21% | | | | | 27% | 15% | 13% | | Two modes | 44% | 44% | 49% | 44% | 42% | | | | | 51% | 48% | 28% | | Three modes | 21% | 17% | 11% | 22% | 21% | | | | | 18% | 30% | 41% | | Four or more modes | 7% | 6% | 3% | 6% | 17% | | | | | 5% | 7% | 19% | | Non-UKTI users | Base | | | | | | | 290 | 101 | 101 | 9 | 13 | | | | | 42 | 12 | 12 | | | 100% | 100% | 100% | 100% | 100% | | One mode | 45% | 59% | 50% | 11% | 8% | | | | | 31% | 25% | 17% | | Two modes | 33% | 28% | 32% | 67% | 31% | | | | | 48% | 25% | 25% | | Three modes | 16% | 10% | 13% | 22% | 38% | | | | | 14% | 33% | 42% | | Four or more modes | 6% | 3% | 5% | 0% | 23% | | | | | 7% | 17% | 17% | 6. DRIVERS OF GEOGRAPHICAL FOCUS
All companies were asked to nominate ‘the most challenging country’ in which they had done business and to focus their attention on one mode in that market for the sections of the interview relating to drivers of market and barriers. In those instances where the respondent was not able to identify a single, ‘challenging’ market the interviewer proceeded to ask them to focus on the one they had started doing business in most recently.
With specific reference to the respondent’s selected challenging market, interviewers read out the following statement:
“I’m going to read out some of the individual circumstances that other firms have found themselves in when looking at doing business in specific overseas locations and I’d like you to tell me the extent to which each one applied to you when you were FIRST CONSIDERING doing business <in country>.”
All companies were read out a list of five statements, which were randomised to prevent order bias, and asked to rate each one on a 5-point scale where 1 meant ‘not at all applicable’ and 5 meant ‘completely applicable’. The following table is a summary of those who said either ‘applicable’ or ‘completely applicable’ to these statements (i.e. gave a score of 4 or 5).
Responses were similar to those of the 2008 survey sample with the highest proportion of companies indicating that they had received an approach from someone in the market, or had identified internally that the country offered a potential opportunity.
Firms which had been established for at least 6 years and had over 50 employees were more likely to indicate that they had identified internally that a market offered an opportunity than to have received an approach. This suggests that as firms become more experienced (older firms were more likely to have had more export experience in terms of the number of years exporting) they become more pro-active and less reactive when selecting a market.
In this table and the two subsequent tables on ‘drivers of market’ the ‘none applicable’ refers to those companies that did not give either an ‘applicable’ or a ‘completely applicable’ rating to any of these five statements on drivers of market.
| Table 123: Drivers of market | |-----------------------------| | % scoring 4 or 5 | Total | Up to 5 years | 6-10 years | 10+ years | | | Base | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Received an approach | 55% | 57% | 56% | 56% | 54% | 59% | 52% | 42% | | Suggested by someone external to the company | 23% | 23% | 26% | 26% | 24% | 21% | 19% | 21% | | Someone within the company who already had experience | 26% | 32% | 25% | 33% | 24% | 20% | 14% | 31% | | Considering a number of countries | 19% | 17% | 19% | 37% | 14% | 18% | 22% | 20% | | Identified internally as potential opportunity | 52% | 48% | 52% | 59% | 57% | 48% | 57% | 58% | | Not significantly driven by any of these factors | 13% | 14% | 11% | 4% | 8% | 14% | 14% | 16% | IP active companies were more likely than non-IP active companies to have identified internally that the selected country had offered a potential opportunity. They were also more likely to have considered a number of markets at the time and to have decided to focus on the market in question. This suggests that IP active firms are more strategic when selecting a market than non-IP active firms.
Table 124: Drivers of market by IP activity
| % scoring 4 or 5 | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | IP active | | | | | | | | | | | Base | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Received an approach | 50% | 55% | 53% | 41% | 46% | 56% | 49% | 39% | | Suggested by someone external to the company | 25% | 26% | 26% | 35% | 27% | 24% | 22% | 23% | | Someone within the company who already had experience | 26% | 34% | 20% | 35% | 27% | 20% | 16% | 31% | | Considering a number of countries | 23% | 24% | 26% | 35% | 12% | 19% | 30% | 24% | | Identified internally as potential opportunity | 58% | 57% | 61% | 82% | 58% | 48% | 59% | 61% | | Not significantly driven by any of these factors | 12% | 10% | 11% | 6% | 8% | 14% | 14% | 13% | | Non-IP active | | | | | | | | | | | Base | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Received an approach | 59% | 59% | 58% | 80% | 73% | 62% | 57% | 52% | | Suggested by someone external to the company | 21% | 21% | 26% | 10% | 18% | 18% | 14% | 16% | | Someone within the company who already had experience | 26% | 30% | 28% | 30% | 18% | 20% | 10% | 28% | | Considering a number of countries | 14% | 11% | 15% | 40% | 18% | 17% | 10% | 8% | | Identified internally as potential opportunity | 45% | 40% | 47% | 20% | 55% | 47% | 52% | 48% | | Not significantly driven by any of these factors | 14% | 16% | 11% | 0% | 9% | 14% | 14% | 24% |
UKTI users were more likely than non-UKTI users to have identified internally that the selected country had offered a potential opportunity (55% vs 44%). They were also more likely to have considered a number of markets at the time and to have decided to focus on the market in question (23% vs 10%). This suggests that like IP-active firms, users of UKTI services are more likely to have been strategic when selecting a market. Table 125: Drivers of market by UKTI usage
| % scoring 4 or 5 | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | UKTI users | | | | | | | | | | | Received an approach | 56% | 59% | 55% | 61% | 54% | 59% | 59% | 45% | | | Suggested by someone external to the company | 23% | 24% | 26% | 22% | 29% | 21% | 20% | 22% | | | Someone within the company who already had experience | 27% | 34% | 27% | 33% | 29% | 21% | 17% | 32% | | | Considering a number of countries | 23% | 23% | 25% | 44% | 13% | 19% | 26% | 23% | | | Identified internally as potential opportunity | 55% | 54% | 53% | 67% | 67% | 51% | 59% | 57% | | | Not significantly driven by any of these factors | 10% | 9% | 9% | 0% | 4% | 13% | 9% | 16% | | | Non-UKTI users | | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Received an approach | 53% | 55% | 58% | 44% | 54% | 57% | 25% | 17% | | | Suggested by someone external to the company | 23% | 23% | 25% | 33% | 15% | 21% | 17% | 17% | | | Someone within the company who already had experience | 23% | 29% | 23% | 33% | 15% | 17% | 0% | 17% | | | Considering a number of countries | 10% | 9% | 10% | 22% | 15% | 12% | 8% | 0% | | | Identified internally as potential opportunity | 44% | 40% | 50% | 44% | 38% | 36% | 50% | 67% | | | Not significantly driven by any of these factors | 18% | 20% | 14% | 11% | 15% | 19% | 33% | 17% | |
These drivers were summarised into three categories: serendipity and networks; independent analysis and solely reactive. The definitions of these are set out in the table below.
Table 126: Definition of networks and serendipity, independent analysis and solely reactive
Companies have been defined as being motivated to a significant extent by ‘networks & serendipity’ if they scored 4 or 5 on a 5-point scale for...
- Received an approach from someone in the market
- Or, it had been suggested to them by an external source that the market might offer them an opportunity
- Or, Someone in the company already had connections in that market
Firms have been defined as being motivated to a significant extent by ‘independent analysis’ if they scored 4 or 5 on a 5-point scale for...
- Had been considering a number of markets and decided to focus on this one
- Or, Identified internally that the market offered a potential opportunity for them
Firms have been defined as ‘solely reactive’ if...
- They score 4 or 5 for ‘received an approach from someone in the market’
- But did not score 3, 4 or 5 for having connections, considering a number of markets or internal identification of an opportunity. Nearly three quarters (74%) of companies indicated that ‘networks and serendipity’ played a vital role which strongly indicates the prominent role played by existing contacts and the element of chance when companies conduct business overseas. Overall these results are very comparable to the 2008 survey, although the proportion of sample firms agreeing that ‘networks and serendipity’ was a driver of geographical focus is slightly lower than the 81% in the 2008 survey sample.
Table 127: Summary of drivers of market
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Networks and serendipity | 74% | 77% | 77% | 81% | 76% | 74% | 66% | 65% | | Independent analysis | 55% | 51% | 55% | 67% | 59% | 50% | 60% | 62% | | Solely reactive | 13% | 14% | 13% | 15% | 5% | 18% | 10% | 5% | | Not significantly driven by any of these factors | 13% | 14% | 11% | 4% | 8% | 14% | 14% | 16% |
There were statistically significant differences between IP active and non-IP active companies with regards to each of these drivers of market. Independent analysis is more prevalent among IP active companies than non-IP active companies (61% vs 49%). IP active firms were also less likely to be solely reactive than non-IP active firms (9% and 17% respectively). This suggests that IP active companies are more considered than non-IP active firms when selecting an overseas market.
Table 128: Summary of drivers of market by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Networks and serendipity | 72% | 77% | 72% | 71% | 73% | 74% | 68% | 65% | | Independent analysis | 61% | 59% | 64% | 82% | 58% | 52% | 62% | 65% | | Solely reactive | 9% | 13% | 8% | 0% | 4% | 14% | 11% | 4% | | Not significantly driven by any of these factors | 12% | 10% | 11% | 6% | 8% | 14% | 14% | 13% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Networks and serendipity | 76% | 77% | 80% | 100% | 82% | 74% | 62% | 64% | | Independent analysis | 49% | 44% | 50% | 40% | 64% | 48% | 57% | 52% | | Solely reactive | 17% | 15% | 16% | 40% | 9% | 22% | 10% | 8% | | Not significantly driven by any of these factors | 14% | 16% | 11% | 0% | 9% | 14% | 14% | 24% |
There were statistically significant differences between UKTI users and non-UKTI users with regards to ‘networks and serendipity’ and independent analysis. Independent analysis is much more prevalent among UKTI users than non-UKTI users (59% vs 46%). UKTI users are only slightly less likely to be solely reactive than non-UKTI users (11% and 17% respectively). These findings are broadly consistent with results from PIMS users and non-user survey although these surveys also find that PIMS users are less likely than non-users to report ‘networks and serendipity’ as drivers of market choice. The difference between the two groups is less marked in this 2009 survey. Table 129: Summary of drivers of market by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Networks and serendipity | 76% | 81% | 77% | 83% | 79% | 75% | 72% | 69% | | Independent analysis | 59% | 57% | 59% | 78% | 67% | 53% | 63% | 61% | | Solely reactive | 11% | 13% | 9% | 11% | 4% | 16% | 11% | 5% | | Not significantly driven by any of these factors | 10% | 9% | 9% | 0% | 4% | 13% | 9% | 16% |
| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Networks and serendipity | 70% | 70% | 77% | 78% | 69% | 71% | 42% | 33% | | Independent analysis | 46% | 43% | 50% | 44% | 46% | 38% | 50% | 67% | | Solely reactive | 17% | 15% | 19% | 22% | 8% | 26% | 8% | 0% | | Not significantly driven by any of these factors | 18% | 20% | 14% | 11% | 15% | 19% | 33% | 17% |
The following table depicts the comparable data from the 2008 PIMS non-user survey and PIMS 7-10.
Table 130: Comparison of drivers of market choice by UKTI usage with client profiles from PIMS 7-10 and the 2008 and 2009 PIMS Non-user surveys
| | Total | UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 12-15 | PIMS Non-users 2008 | Users PIMS 7-10 | |----------------------|-------|----------------|------------|---------------------|------------------|---------------------|------------------| | UKTI users | Base | 290 | 621 | 300 | 3985 | 302 | 3143 | | | | 100% | 100% | 100% | 100% | 100% | 100% | | Networks and serendipity | 76% | 70% | 0% | 0% | 50% | 63% | | Independent analysis | 59% | 46% | 0% | 0% | 32% | 63% | | Solely reactive | 11% | 17% | 0% | 0% | 0% | 0% | | Not significantly driven by any of these factors | 10% | 18% | 0% | 0% | 0% | 0% |
6.1 Market Perceptions
Firms were also asked a series of questions about their perceptions of their chosen market in respect to a number of characteristics (covering the ease of doing business there, perceptions on levels of demand/costs and levels of risk). Respondents were asked to rate on a scale of 1 to 5, where 1 meant ‘very easy’ and 5 meant ‘very difficult’, how easy or difficult it has been or that they expected it to be to do business in the nominated country. Some of the statements were relevant only to certain modes of internationalisation and were only read to firms which had reported using the relevant mode eg ease of finding a suitable partner was only relevant to those where the mode involved some form of partnership. Thus, the bases here reflect those for whom the mode was relevant. Again all statements were randomised to prevent order bias.
The scale used differs slightly from that used in the 2008 survey in that a semantic, rather than numeric scale was used in 2008. In 2008, respondents were asked to indicate whether the issue in question had been very easy, fairly easy, average, fairly hard or very hard. As indicated above, the current survey used a numeric scale. The majority of companies found each of these aspects of conducting business overseas to be either ‘fairly easy’ or ‘very easy’. For the majority of companies, understanding the financial risk (75%) in the selected country posed a low risk.
Table 131: Summary of drivers of market
| % Not scoring 4 or 5 | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Ease of finding customers | 64% | 67% | 64% | 63% | 76% | 64% | 50% | 63% | | Base | 332 | 77 | 79 | 13 | 12 | 79 | 24 | 48 | | Ease of finding suitable partner | 54% | 56% | 57% | 46% | 42% | 51% | 42% | 60% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Ease of negotiating the legal and regulatory framework or standards | 54% | 57% | 61% | 48% | 46% | 50% | 52% | 47% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Ease of negotiating the culture and language | 71% | 75% | 75% | 85% | 73% | 66% | 71% | 63% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Ease of IP protection | 57% | 61% | 55% | 70% | 65% | 53% | 52% | 56% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Ease of logistics of doing business | 65% | 71% | 69% | 52% | 59% | 61% | 62% | 54% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Risk: getting paid and enforcing contracts | 69% | 70% | 72% | 67% | 68% | 68% | 76% | 60% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Risk: ability to make a profit | 75% | 78% | 76% | 78% | 76% | 74% | 71% | 67% | | Base | 384 | 89 | 104 | 11 | 12 | 77 | 29 | 62 | | Making any modifications to your products or services so that they are suitable for customers | 78% | 80% | 74% | 91% | 92% | 79% | 66% | 79% | | Base | 38 | 11 | 6 | 0 | 3 | 4 | 5 | 9 | | Ease of recruiting and retaining suitable staff | 66% | 91% | 67% | 0% | 33% | 75% | 40% | 56% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Not significantly driven by any of these factors | 2% | 2% | 1% | 0% | 0% | 4% | 5% | 3% |
IP active companies and non-IP active companies were most likely to state that understanding the financial risk was regarded as a low risk.
______________________________________________________________________
19 This base is 384 respondents as it relates to those who had indicated that they expected to need to modify their products or service for customers.
20 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results. Table 132: Summary of drivers of market by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Ease of finding customers | 65% | 68% | 64% | 65% | 73% | 63% | 57% | 65% | | Base | 214 | 49 | 35 | 11 | 10 | 50 | 17 | 42 | | Ease of finding a suitable partner | 49% | 45% | 46% | 45% | 50% | 46% | 47% | 60% | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Ease of negotiating the legal and regulatory framework or standards | 54% | 53% | 64% | 47% | 38% | 56% | 54% | 47% | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Ease of negotiating the culture and language | 69% | 69% | 74% | 88% | 69% | 64% | 76% | 61% | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Ease of IP protection | 60% | 64% | 58% | 71% | 58% | 62% | 59% | 55% | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Ease of logistics of doing business | 61% | 66% | 69% | 47% | 62% | 61% | 54% | 53% | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Risk: getting paid and enforcing contracts | 68% | 72% | 66% | 59% | 69% | 70% | 78% | 58% | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Risk: Ability to make a profit | 75% | 77% | 74% | 88% | 73% | 80% | 68% | 66% | | Base | 220 | 45 | 44 | 8 | 10 | 45 | 22 | 46 | | Making any modifications to your products or services so that they are suitable for customers | 76% | 78% | 68% | 88% | 90% | 78% | 64% | 80% | | Base | 17 | 3 | 0 | 0 | 3 | 1 | 3 | 7 | | Ease of recruiting and retaining suitable staff | 47% | 67% | 0% | 0% | 33% | 0% | 33% | 57% | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Not significantly driven by any of these factors | 2% | 2% | 1% | 0% | 0% | 3% | 3% | 2% | | Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 25 | 25 | |--------------|------|-----|-----|-----|----|----|----|----|----| | | | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Base | 454 | 129 | 159 | 10 | 11 | 99 | 25 | 25 | | Ease of finding customers | 63% | 65% | 64% | 60% | 82% | 66% | 38% | 56% | | Base | 118 | 28 | 44 | 2 | 2 | 29 | 7 | 6 | | Ease of finding a suitable partner | 63% | 75% | 66% | 50% | 0% | 59% | 29% | 67% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Ease of negotiating the legal and regulatory framework or standards | 55% | 60% | 59% | 50% | 64% | 44% | 48% | 48% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Ease of negotiating the culture and language | 74% | 79% | 75% | 80% | 82% | 69% | 62% | 68% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Ease of IP protection | 53% | 58% | 53% | 70% | 82% | 44% | 38% | 56% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Ease of logistics of doing business | 68% | 75% | 69% | 60% | 55% | 62% | 76% | 56% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Risk: getting paid and enforcing contracts | 71% | 69% | 75% | 80% | 64% | 67% | 71% | 68% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Risk: Ability to make a profit | 75% | 80% | 77% | 60% | 82% | 69% | 76% | 68% | | Base | 164 | 44 | 60 | 3 | 2 | 32 | 7 | 16 | | Making any modifications to your products or services so that they are suitable for customers | 80% | 82% | 78% | 100%| 100%| 81% | 71% | 75% | | Base | 21 | 8 | 6 | 0 | 0 | 3 | 2 | 2 | | Ease of recruiting and retaining suitable staff | 81% | 100%| 67% | 0% | 0% | 100%| 50% | 50% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Not significantly driven by any of these factors | 3% | 2% | 1% | 0% | 0% | 5% | 10%| 4% |
Again UKTI users and non-UKTI users were most likely to state that understanding the financial risk was a low risk associated with conducting business abroad. Table 133: Summary of drivers of market by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Ease of finding customers | 64% | 69% | 64% | 61% | 75% | 66% | 48% | 61% | | Base | 242 | 46 | 51 | 11 | 8 | 65 | 19 | 42 | | Ease of finding a suitable partner | 49% | 46% | 49% | 45% | 38% | 49% | 42% | 57% | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Ease of negotiating the legal and regulatory framework or standards | 52% | 54% | 55% | 56% | 50% | 48% | 52% | 49% | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Ease of negotiating the culture and language | 70% | 73% | 71% | 89% | 79% | 63% | 72% | 66% | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Ease of IP protection | 57% | 61% | 52% | 61% | 75% | 55% | 59% | 58% | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Ease of logistics of doing business | 62% | 69% | 66% | 50% | 58% | 60% | 61% | 52% | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Risk: Getting paid and enforcing contracts | 69% | 73% | 74% | 61% | 67% | 67% | 78% | 58% | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Risk: Ability to make a profit | 75% | 76% | 80% | 78% | 75% | 73% | 74% | 66% | | Base | 274 | 58 | 63 | 7 | 6 | 61 | 23 | 56 | | Making any modifications to your products or services so that they are suitable for customers | 80% | 84% | 78% | 86% | 100% | 80% | 61% | 80% | | Base | 23 | 4 | 3 | 0 | 1 | 4 | 4 | 7 | | Recruiting and retaining suitable staff | 61% | 100% | 67% | 0% | 0% | 75% | 50% | 43% | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Not significantly driven by any of these factors | 2% | 1% | 1% | 0% | 0% | 5% | 4% | 2% | 6.2 Market Perceptions: Summary
The eight elements of conducting overseas business have been summarised into the following five market perceptions.
Table 134: Market perceptions summary
| Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | |----------------|------|-----|-----|-----|---|----|----|----|----| | | | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Ease of finding customers | 64% | 63% | 64% | 67% | 77% | 57% | 58% | 75% | | Base | 90 | 31 | 28 | 2 | 4 | 14 | 5 | 6 | | Ease of finding a suitable partner | 67% | 71% | 71% | 50% | 50% | 57% | 40% | 5% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Ease of negotiating the legal and regulatory framework or standards | 60% | 60% | 69% | 33% | 38% | 57% | 50% | 33% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Ease of negotiating the culture and language | 76% | 76% | 80% | 78% | 62% | 79% | 67% | 42% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Ease of IP protection | 56% | 59% | 59% | 89% | 46% | 48% | 25% | 33% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Ease of logistics of doing business | 71% | 74% | 73% | 56% | 62% | 64% | 67% | 67% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Risk: Getting paid and enforcing contracts | 69% | 66% | 69% | 78% | 69% | 74% | 67% | 75% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Risk: Ability to make a profit | 75% | 81% | 69% | 78% | 77% | 79% | 58% | 75% | | Base | 110 | 31 | 41 | 4 | 6 | 16 | 6 | 6 | | Making any modifications to your products or services so that they are suitable for customers | 73% | 71% | 68% | 100% | 83% | 75% | 83% | 67% | | Base | 15 | 7 | 3 | 0 | 2 | 0 | 1 | 2 | | Recruiting and retaining suitable staff | 73% | 86% | 67% | 0% | 50% | 0% | 0% | 100% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Not significantly driven by any of these factors | 2% | 3% | 1% | 0% | 0% | 2% | 8% | 8% |
Companies have been defined as perceiving the market favourably with respect to ‘contacts’ if they do not score 4 (fairly hard) or 5 (very hard) on a 5-point scale for...
- Ease of finding customers
- And, the ease of finding a suitable partner
Firms have been defined as perceiving the market favourably with respect to ‘practicalities’ if they do not score 4 (fairly hard) or 5 (very hard) on a 5-point scale for...
- Ease of negotiating the legal & regulatory framework or standards
- And, the ease of dealing with the logistics of doing business
- And, the ease of making product/service modifications (including those making no product/service modifications) Firms have been defined as perceiving the market favourably with respect to ‘language & culture’ if they do not score 4 (fairly hard) or 5 (very hard) on a 5-point scale for…
- Ease of negotiating the culture and language
Firms have been defined as perceiving the market favourably with respect to ‘risk & IP’ if they do not score 4 or 5 on a 5-point scale for …
- Ease of protecting your Intellectual Property (not 4 (fairly hard) or 5 (very hard))
- And, risk of ensuring you get paid and enforcing contracts (not 4 (fairly high risk) or 5 (very high risk))
- And, the financial risk in terms of ensuring a return on investment (not 4 (fairly high risk) or 5 (very high risk))
Firms have been defined as perceiving the market favourably with respect to ‘resources’ if they scored as follows…
- Ease of recruiting and retaining suitable staff (not 4 (fairly hard) or 5 (very hard)).
It is apparent from the following table that, as in 2008, ‘language and culture’ plays a key role in international business and that it can be an especially pertinent consideration for younger companies. In the following three tables the ‘Not Applicable’ category refers to those who have not selected a score of 1-3 (ie very easy – average) to any of the questions relating to conducting business overseas. Furthermore, for each of these tables the bases refer to the number of respondents who were asked the question, that is based on routing, rather than the overall sample.
**Table 135: Market perceptions summary**
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Base | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Contacts | 911 | 13% | 12% | 14% | 11% | 11% | 15% | 7% | 18% | | Base | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Practicalities | 911 | 14% | 13% | 17% | 7% | 14% | 13% | 14% | 14% | | Base | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Language and culture | 911 | 71% | 75% | 75% | 85% | 73% | 66% | 71% | 63% | | Base | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Risk and IP | 911 | 36% | 40% | 39% | 44% | 38% | 30% | 36% | 29% | | Base21 | 38 | 11% | 6% | 0% | 3% | 4% | 5% | 9% | | Resources | 911 | 66% | 91% | 67% | 0% | 33% | 75% | 40% | 56% | | Base | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Not significantly driven by any of these factors | 911 | 16% | 14% | 14% | 7% | 11% | 19% | 16% | 25% |
21 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results. Whilst issues of ‘language and culture’ were important for both IP active and non-IP active companies, it was more an issue for non-IP active companies.
Table 136: Market perceptions summary by IP activity
| % scoring 4 or 5 | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | IP active | | | | | | | | | | | Base | 100% | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Contacts | 16% | 14% | 17% | 18% | 15% | 18% | 5% | 18% | 18% | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | Practicalities | 14% | 13% | 19% | 6% | 12% | 16% | 11% | 13% | | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | Language and culture | 69% | 69% | 74% | 88% | 69% | 64% | 76% | 61% | | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | Risk and IP | 35% | 36% | 37% | 41% | 38% | 37% | 38% | 29% | | | Base22 | 17 | 3 | 0% | 0% | 3 | 1 | 3 | 7 | | | Resources | 47% | 67% | 0% | 0% | 33% | - | 33% | 57% | | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | Not significantly driven by any of these factors | 18% | 17% | 14% | 6% | 15% | 21% | 14% | 24% | |
| | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Non-IP active | | | | | | | | | | | Base | 100% | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Contacts | 11% | 10% | 12% | 0% | 0% | 12% | 10% | 16% | | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | Practicalities | 14% | 13% | 16% | 10% | 18% | 9% | 19% | 16% | | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | Language and culture | 74% | 79% | 75% | 80% | 82% | 69% | 62% | 68% | | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | Risk and IP | 37% | 44% | 40% | 50% | 36% | 23% | 33% | 28% | | | Base23 | 21 | 8 | 6 | 0% | 0% | 3 | 2 | 2 | | | Resources | 81% | 100%| 67% | 0% | 0% | 100%| 100%| 100%| | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | Not significantly driven by any of these factors | 15% | 12% | 14% | 10% | 0% | 18% | 19% | 28% | |
Similarly, whilst issues of ‘language and culture’ were important for both UKTI users and non-UKTI users, it was more an issue for non-UKTI users.
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22 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results.
23 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results. Table 137: Market perceptions summary by UKTI usage
| % scoring 4 or 5 | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | |------------------|-------|---------------|------------|-----------|--------|---------|-------|--------|---------|-------| | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Contacts | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Practicalities | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Language and culture | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Risk and IP | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Resources | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Not significantly driven by any of these factors | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |
| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Contacts | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Practicalities | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Language and culture | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Risk and IP | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Resources | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | | Not significantly driven by any of these factors | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |
Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results.
Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results. 7. BARRIERS
All respondents were asked to think not about their own company but about the difficulties or problems that a firm in a similar position to themselves in terms of size, sector and structure might face doing business in the nominated country. They were then read out a list of possible issues and asked to indicate the extent to which a firm similar to themselves would encounter each one when trying to do business in the nominated country. This type of projective questioning was employed following difficulties encountered in previous studies in measuring barriers through direct questioning techniques. Employing a projective technique attempts to circumvent the reluctance of firms to acknowledge barriers by asking them to talk about issues that other firms ‘in a similar position’ to them might face.
All companies were asked to provide a score in the range of 1 to 5 for the extent to which they felt that specific issues were likely to be a difficulty, where 1 meant that it would 'not be a problem at all' and 5 meant it would be 'extremely difficult'. The statements were rotated to avoid bias with some, however, still placed in the same order.
A series of 11 potential barriers were tested with this questioning approach. The following table summarises proportions scoring either a 4 or a 5 on the 5-point scale for each of these elements, that is, those who said ‘difficult’ or ‘extremely difficult’. The responses to these questions are referred to in the analysis as projected barriers, due to the projective questioning technique used.
Again these questions were only put to companies for whom they were relevant. For example, the question about ‘problems obtaining work permits or visas for staff to allow them to relocate to <market>’ was only asked of those with an overseas site or office. Hence, the base for this element of the question is only the subgroup that has a site or office overseas.
The analysis illustrates that the greatest barrier to conducting business overseas is ‘identifying who to make contact with in the first instance [or finding a suitable partner]’, with nearly half of all companies (45%) identifying this as being problematic. These findings are in line with the 2008 survey. Indeed the largest discrepancy between the two surveys was for ‘identifying who to make contact with in the first instance [or finding a suitable partner]’ which in 2008 had fewer companies stating that this was ‘difficult’ or ‘very difficult’ (34%) compared to the 2009 survey. Table 138: Barriers to conducting overseas business
| % scoring 4 or 5 | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Obtaining basic information | 21% | 18% | 22% | 22% | 27% | 9% | 21% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Identifying who to make contact with | 45% | 39% | 45% | 56% | 38% | 49% | 52% | 49% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Establishing an initial dialogue | 33% | 29% | 34% | 37% | 36% | 34% | 38% | 33% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Building relationships | 37% | 36% | 36% | 44% | 49% | 34% | 36% | 42% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Cultural differences outside of any language barriers | 23% | 25% | 22% | 22% | 27% | 22% | 17% | 28% | | Base | 863 | 222 | 240 | 27 | 34 | 191 | 52 | 97 | | Not having an office or site | 33% | 31% | 32% | 41% | 44% | 34% | 31% | 37% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Home bias | 28% | 25% | 29% | 41% | 22% | 23% | 40% | 32% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | The costs associated with doing business | 32% | 28% | 32% | 41% | 35% | 31% | 36% | 39% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Finding the necessary management time | 36% | 35% | 35% | 41% | 35% | 36% | 36% | 41% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Exchange rates and currency | 33% | 28% | 34% | 41% | 35% | 32% | 36% | 42% | | Base | 38 | 11 | 6 | 0 | 3 | 4 | 5 | 9 | | Problems obtaining work permits or visas | 16% | 18% | 0% | 0% | 0% | 25% | 20% | 22% | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | None of these barriers significant | 14% | 19% | 14% | 11% | 8% | 13% | 10% | 10% |
26 The percentage of summary of drivers of market identified in Table 131 to Table 133 and the barriers to conducting overseas business identified in Table 138 to Table 140 do not total to 100% due to a respondents stating ‘don’t know’ and ‘not applicable’ in response to these questions.
27 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results. Perceptions of the market (defined as being fairly difficult and very difficult)
| Perceptions of the market | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | |---------------------------|------|-----|-----|-----|----|----|-----|----|-----| | Ease of negotiating framework | 36% | 34% | 28% | 41% | 54% | 39% | 38% | 44% | | Ease of negotiating language and culture | 26% | 23% | 22% | 15% | 27% | 30% | 29% | 32% | | Ease of protecting Intellectual Property | 22% | 19% | 16% | 15% | 24% | 24% | 28% | 31% | | Ease of logistics of doing business | 33% | 27% | 30% | 48% | 41% | 36% | 36% | 43% | | Ease of recruiting and retaining suitable staff | 29% | 9% | 33% | 0% | 67% | 25% | 60% | 22% | | Ease of making modifications to your products or services | 19% | 18% | 19% | 9% | 8% | 19% | 34% | 16% | | Ease of ensuring you get paid and enforcing contracts | 27% | 26% | 24% | 26% | 33% | 29% | 20% | 35% | | Ease of making a profit | 22% | 18% | 22% | 19% | 24% | 24% | 26% | 30% | | None of these barriers significant | 24% | 31% | 30% | 15% | 8% | 20% | 9% | 17% |
There were statistically significant differences between IP active and non-IP active companies with regards to obtaining basic information, identifying who to make contact with, establishing an initial dialogue, not having an office or site, having a home bias and exchange rates and currency. IP active companies were more likely to indicate that each of these difficulties or problems were apparent.
Furthermore, IP active companies were more likely than non-IP active companies to indicate that at least one of these was a barrier to conducting business overseas.
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28 The wording here has been amended to be comparable with the 2008 report. 29 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results. 30 This base is 384 respondents as it relates to those who had indicated that they expected to need to modify their products or service for customers. Table 139: Barriers to conducting overseas business (defined as being difficult or extremely difficult) by IP activity
| % scoring 4 or 5 | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | IP active | | | | | | | | | | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Obtaining basic information | 25% | 24% | 29% | 18% | 27% | 29% | 14% | 20% | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Identifying who to make contact with | 49% | 46% | 51% | 65% | 38% | 51% | 49% | 51% | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Establishing an initial dialogue | 36% | 34% | 36% | 41% | 46% | 37% | 35% | 35% | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Building relationships | 39% | 41% | 42% | 41% | 50% | 31% | 35% | 42% | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Cultural differences outside of any language barriers | 25% | 28% | 28% | 18% | 23% | 19% | 11% | 31% | | Base | | 437 | 104 | 89 | 17 | 23 | 95 | 34 | 75 | | Not having an office or site | 40% | 38% | 43% | 47% | 48% | 41% | 32% | 39% | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Home bias | 32% | 30% | 32% | 47% | 23% | 30% | 32% | 35% | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | The costs associated with doing business | 34% | 31% | 32% | 47% | 35% | 33% | 38% | 39% | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Finding the necessary management time | 39% | 45% | 38% | 47% | 31% | 34% | 32% | 42% | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Exchange rates and currency | 37% | 31% | 34% | 41% | 38% | 38% | 43% | 41% | | Base | | 17 | 3 | 0 | 0 | 3 | 1 | 3 | 7 | | Problems obtaining work permits or visas | 12% | 0% | 0% | 0% | 0% | 0% | 0% | 29% | | Base | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | None of these barriers significant | 9% | 9% | 11% | 6% | 8% | 8% | 8% | 11% |
31 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results. | Perceptions of the market (% scoring 4 or 5) | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | |--------------------------------------------|------|-----|-----|----|----|----|----|----|----| | Ease of negotiating framework | 40% | 40% | 33% | 41%| 62%| 37%| 43%| 45%| | Ease of negotiating language and culture | 30% | 31% | 26% | 12%| 31%| 33%| 24%| 35%| | Ease of protecting Intellectual Property | 26% | 21% | 24% | 18%| 31%| 26%| 27%| 35%| | Ease of logistics of doing business | 37% | 33% | 30% | 53%| 38%| 37%| 43%| 43%| | Ease of recruiting and retaining suitable staff | 17% | 3% | 0% | 0% | 67%| 100%| 67%| 29%| | Ease of making modifications to your products or services | 20% | 18% | 23% | 13%| 10%| 22%| 36%| 13%| | Ease of ensuring you get paid and enforcing contracts | 29% | 26% | 32% | 35%| 31%| 25%| 19%| 38%| | Ease of making a profit | 23% | 19% | 25% | 12%| 27%| 18%| 29%| 30%| | None of these barriers significant | 14% | 16% | 20% | 6% | 4% | 14%| 3% | 16%|
32 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results.
33 This base is 220 respondents as it relates to those who had indicated that they expected to need to modify their products or service for customers. | Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | |--------------|------|-----|-----|-----|----|----|----|----|----| | | | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Obtaining basic information | 18% | 13% | 19% | 30% | 9% | 24% | 0% | 24% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Identifying who to make contact with | 41% | 34% | 42% | 40% | 36% | 47% | 57% | 44% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Establishing an initial dialogue | 30% | 25% | 33% | 30% | 18% | 30% | 43% | 28% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Building relationships | 34% | 31% | 33% | 50% | 45% | 36% | 38% | 40% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Cultural differences outside of any language barriers | 22% | 22% | 19% | 30% | 36% | 25% | 29% | 16% | | Base | 426 | 118 | 151 | 10 | 11 | 96 | 18 | 22 | | Not having an office or site | 27% | 25% | 26% | 30% | 36% | 27% | 28% | 32% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Home bias | 24% | 21% | 26% | 30% | 18% | 17% | 52% | 24% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | The costs associated with doing business | 30% | 26% | 31% | 30% | 36% | 29% | 33% | 40% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Finding the necessary management time | 33% | 26% | 33% | 30% | 45% | 37% | 43% | 36% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Exchange rates and currency | 30% | 25% | 34% | 40% | 27% | 26% | 24% | 44% | | Base | 21 | 8 | 6 | 0 | 0 | 3 | 2 | 2 | | Problems obtaining work permits or visas | 19% | 25% | 0% | 0% | 0% | 33% | 50% | 0% | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | None of these barriers significant | 19% | 27% | 16% | 20% | 9% | 17% | 14% | 8% |
Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results.
### Perceptions of the market (defined as being fairly difficult and very difficult)
| | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | |--------------------------------|------|-----|-----|-----|----|----|----|----|----| | Ease of negotiating framework | | 31% | 29% | 25% | 40%| 36%| 40%| 29%| 44%| | Ease of negotiating language and culture | | 22% | 16% | 21% | 20%| 18%| 26%| 38%| 24%| | Ease of protecting Intellectual Property | | 17% | 18% | 12% | 10%| 9% | 23%| 29%| 20%| | Ease of logistics of doing business | | 30% | 22% | 30% | 40%| 45%| 35%| 24%| 40%| | Ease of recruiting and retaining suitable staff | | 14% | 0% | 33% | 0% | 0% | 0% | 50%| 0% | | Ease of making modifications to your products or services | | 18% | 18% | 17% | 0% | 0% | 16%| 29%| 25%| | Ease of ensuring you get paid and enforcing contracts | | 26% | 27% | 20% | 10%| 36%| 33%| 24%| 28%| | Ease of making a profit | | 22% | 17% | 20% | 30%| 18%| 29%| 19%| 32%| | None of these barriers significant | | 33% | 43% | 35% | 30%| 18%| 26%| 19%| 20%|
There were statistically significant differences between UKTI users and non-UKTI users with regards to identifying who to make contact with, building relationships, cultural differences outside of any language barriers and having a home bias. UKTI users were more likely than non-UKTI users to indicate that at least one of these was a barrier to conducting business overseas.
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35 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results.
36 This base is 164 respondents as it relates to those who had indicated that they expected to need to modify their products or service for customers. Table 140: Barriers to conducting overseas business by UKTI usage
| % scoring 4 or 5 | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | |------------------|-------|---------------|------------|-----------|--------|---------|-------|--------|---------|-------| | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Obtaining basic information | 21% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Identifying who to make contact with | 49% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Establishing an initial dialogue | 35% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Building relationships | 39% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Cultural differences outside of any language barriers | 26% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Not having an office or site | 33% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Home bias | 30% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | The costs associated with doing business | 33% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Finding the necessary management time | 38% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Exchange rates and currency | 33% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Problems obtaining work permits or visas | 22% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | None of these barriers significant | 11% | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 |
Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results.
### Perceptions of the market (defined as being fairly difficult and very difficult)
| Perceived Barriers | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | |---------------------------------------------------------|------|-----|-----|-----|----|----|-----|----|----| | Ease of negotiating framework | 38% | 38% | 34% | 33% | 50%| 40%| 37% | 43%| | Ease of negotiating language and culture | 28% | 26% | 27% | 11% | 21%| 32%| 28% | 29%| | Ease of protecting Intellectual Property | 22% | 19% | 19% | 22% | 17%| 23%| 24% | 30%| | Ease of logistics of doing business | 36% | 31% | 32% | 50% | 42%| 36%| 37% | 44%| | Ease of recruiting and retaining suitable staff | 30% | 0% | 33% | 0% | 100%| 25%| 50% | 29%| | Ease of making modifications to your products or services| 18% | 14% | 17% | 14% | 0% | 20%| 39% | 14%| | Ease of ensuring you get paid and enforcing contracts | 28% | 26% | 24% | 34% | 33%| 30%| 17% | 36%| | Ease of making a profit | 23% | 20% | 17% | 23% | 25%| 25%| 22% | 31%| | None of these barriers significant | 20% | 27% | 22% | 17% | 8% | 20%| 9% | 18%|
______________________________________________________________________
38 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results.
39 This base is 274 respondents as it relates to those who had indicated that they expected to need to modify their products or service for customers. | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | |----------------|------|-----|-----|-----|---|----|----|----|----| | | | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Obtaining basic information | 21% | 16% | 21% | 22% | 38% | 24% | 8% | 42% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Identifying who to make contact with | 38% | 34% | 39% | 22% | 23% | 48% | 58% | 33% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Establishing an initial dialogue | 30% | 27% | 28% | 22% | 31% | 38% | 33% | 42% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Building relationships | 31% | 33% | 25% | 44% | 62% | 33% | 17% | 42% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Cultural differences outside of any language barriers | 18% | 17% | 16% | 11% | 31% | 17% | 25% | 33% | | Base | 270 | 93 | 96 | 9 | 11 | 41 | 10 | 10 | | Not having an office or site | 34% | 33% | 32% | 56% | 36% | 37% | 30% | 20% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Home bias | 23% | 23% | 25% | 33% | 15% | 19% | 17% | 33% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | The costs associated with doing business | 31% | 29% | 31% | 22% | 46% | 29% | 42% | 42% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Finding the necessary management time | 32% | 28% | 34% | 22% | 31% | 38% | 17% | 50% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Exchange rates and currency | 34% | 36% | 34% | 22% | 23% | 33% | 25% | 50% | | Base40 | 15 | 7 | 3 | 0 | 2 | 0 | 1 | 2 | | Problems obtaining work permits or visas | 7% | 14% | 0% | 0% | 0% | 0% | 0% | 0% | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | None of these barriers significant | 20% | 20% | 24% | 33% | 0% | 14% | 17% | 17% |
40 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results. Perceptions of the market (defined as being fairly difficult and very difficult)
| Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | |------|-----|-----|-----|---|----|----|----|----| | Ease of negotiating framework | 31% | 30% | 20% | 56% | 62% | 36% | 42% | 58% | | Ease of negotiating language and culture | 21% | 19% | 16% | 22% | 38% | 21% | 33% | 58% | | Ease of protecting Intellectual Property | 21% | 21% | 13% | 0% | 38% | 29% | 42% | 42% | | Ease of logistics of doing business | 28% | 22% | 27% | 44% | 38% | 36% | 33% | 33% | | Ease of recruiting and retaining suitable staff | 15 | 7 | 3 | 0 | 2 | 0 | 1 | 2 | | Ease of making modifications to your products or services | 22% | 26% | 22% | 0% | 17% | 19% | 17% | 33% | | Ease of ensuring you get paid and enforcing contracts | 26% | 27% | 25% | 11% | 30% | 24% | 33% | 25% | | Ease of making a profit | 22% | 14% | 28% | 11% | 23% | 21% | 42% | 25% | | None of these barriers significant | 31% | 36% | 42% | 11% | 8% | 21% | 8% | 8% |
These projected barriers were summarised along with barriers captured in the drivers of market section of the questionnaire, which provided data on ‘own experience’ barriers where respondents indicated that something had been difficult or very difficult.
Table 141: Barriers summary
Firms have been defined as perceiving significant ‘legal & regulatory’ barriers if they scored 4 or 5 on a 5-point scale for…
- Problems obtaining work permits or visas for staff to allow them to relocate to <market> (projected)
- Or, Difficulty negotiating the legal and regulatory framework or standards in <market> (own experience)
- Or, Difficulty protecting Intellectual Property (own experience)
- Or, Difficulty ensuring you get paid and enforcing contracts (own experience)
Firms have been defined as perceiving significant ‘contacts’ barriers if they scored 4 or 5 on a 5-point scale for…
- Identifying who to make contact with in the first instance or finding a suitable partner (projected)
- Or, Establishing an initial dialogue with prospective customers or business partners (projected)
- Or, Building relationships with key influencers or decision makers (projected)
41 Note that these are very small base sizes since only respondents answering about overseas sites were asked this question. Take great care when interpreting these results. 42 This base is 110 respondents as it relates to those who had indicated that they expected to need to modify their products or service for customers. Firms have been defined as perceiving significant ‘information’ barriers if they scored 4 or 5 on a 5-point scale for…
- Obtaining basic information about doing business in <market> (projected)
Firms have been defined as perceiving significant ‘fixed costs’ barriers if they scored 4 or 5 on a 5-point scale for…
- The costs associated with doing business in <market> (projected)
- Or, Finding the necessary management time to devote to doing business in <market> (projected)
- Or, Exchange rates and currency (projected)
- Or, Not having an office or site in <market> (projected)
- Or, Difficulty dealing with the logistics of doing business in <market> (own experience)
- Or, Difficulty with staff recruitment and retention (own experience)
Firms have been defined as perceiving significant ‘language & cultural’ barriers if they scored 4 or 5 on a 5-point scale for…
- Cultural differences outside of any language barriers (projected)
- Or, Difficulty negotiating the culture and language in <market> (own experience)
Firms have been defined as perceiving significant ‘bias’ barriers if they scored 4 or 5 on a 5-point scale for…
- A bias or preference on the part of overseas customers for dealing with domestic firms (projected)
- Or, A bias or preference on the part of UK customers for UK goods/call centres/R&D (projected).
The table below shows the proportions of companies scoring against each of these summary categories as well as an analysis of the number of barriers mentioned (with this latter analysis not taking account of the market perceptions data, in order to provide comparability with previous research).
The results follow the same pattern as the 2008 survey with fixed costs barriers and contacts barriers being the most important barriers, followed by legal and regulatory barriers.
The ‘legal and regulatory’ category is mainly based on market perceptions data (rather than data specifically on barriers), covering perceptions in relation to negotiating the legal and regulatory framework or standards, intellectual property protection and contract enforcement (as well as opinions on the extent to which the obtaining of work permits or visas is a barrier in the case of firms with overseas sites).
In the 2009 survey, with the exception of ‘information’, the survey sample was more likely to report barriers than that of 2008. In 2009, nearly eight in ten (78%) companies stated that ‘fixed costs’ were problematic in comparison to nearly two thirds (63%) in the 2008 survey. Similarly, in the 2009 survey around six in ten companies stated that legal and regulatory (58%) or contacts (61%) were barriers in comparison to under half in the 2008 survey (42% and 46% respectively). Almost all companies (91%) mentioned at least one barrier to international trade whereas in 2008 this was just under eight in ten (72%).
These differences are again likely to be driven by the differences in sample structure. Firstly, the 2009 sample contains firms which are more experienced exporters than that of 2008. One consequence of this, given that firms tend to enter the easiest markets first, moving to more difficult countries as they increase their international activities, is that a sample of firms which have entered more markets is more likely to include firms which have entered more difficult markets. Focusing questions on the most challenging market is therefore likely to give rise to the reporting of more barriers.
A second reason may be the higher proportion of users of UKTI services (65%) than in the 2008 sample (35%). Previous surveys of users and non-users of UKTI services indicate that users are more likely to report barriers. A higher proportion of users in the sample are therefore likely to increase the reporting of barriers.
Table 142: Barriers to conducting overseas business
| Total | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Legal and regulatory | 58% | 55% | 48% | 59% | 73% | 63% | 62% | 70% | | Contacts | 61% | 56% | 60% | 67% | 62% | 64% | 66% | 66% | | Information | 21% | 18% | 22% | 22% | 22% | 27% | 9% | 21% | | Fixed costs | 78% | 72% | 76% | 89% | 86% | 79% | 86% | 83% | | Language and cultural | 37% | 35% | 34% | 30% | 43% | 38% | 36% | 44% | | Bias | 28% | 25% | 29% | 41% | 22% | 23% | 40% | 32% | | At least one barrier | 91% | 86% | 90% | 96% | 95% | 94% | 97% | 94% | | No significant barriers | 8% | 13% | 11% | 4% | 3% | 5% | 3% | 6% |
There were statistically significant differences between IP active and non-IP active companies with regard to all barriers to conducting overseas business. Furthermore, IP active companies were more likely to identify at least one barrier to international trade than non-IP active companies. As with the 2008 sample, IP active firms were more likely to report barriers of all types.
Across both groups, fixed cost barriers, contacts barriers and legal and regulatory barriers were the most prevalent. Table 143: Barriers to conducting overseas business by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |----------------------|-------|---------------|------------|-----------|--------|---------|------|--------|---------|------| | **IP active** | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Legal and regulatory | | 64% | 60% | 61% | 65% | 77% | 60% | 68% | 71% | | | Contacts | | 66% | 63% | 68% | 71% | 62% | 66% | 65% | 69% | | | Information | | 25% | 24% | 29% | 18% | 27% | 29% | 14% | 20% | | | Fixed costs | | 82% | 79% | 76% | 94% | 85% | 86% | 95% | 82% | | | Language and cultural| | 40% | 41% | 37% | 24% | 42% | 40% | 30% | 48% | | | Bias | | 32% | 30% | 32% | 47% | 23% | 30% | 32% | 35% | | | At least one barrier | | 95% | 94% | 93% | 100% | 96% | 97% | 100% | 94% | | | No significant barriers | | 5% | 6% | 9% | 0% | 4% | 4% | 0% | 7% | | | **Non-IP active** | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Legal and regulatory | | 52% | 51% | 40% | 50% | 64% | 66% | 52% | 68% | | | Contacts | | 56% | 50% | 55% | 60% | 64% | 62% | 67% | 56% | | | Information | | 18% | 13% | 19% | 30% | 9% | 24% | 0% | 24% | | | Fixed costs | | 73% | 67% | 75% | 80% | 91% | 72% | 71% | 88% | | | Language and cultural| | 34% | 29% | 33% | 40% | 45% | 36% | 48% | 32% | | | Bias | | 24% | 21% | 26% | 30% | 18% | 17% | 52% | 24% | | | At least one barrier | | 87% | 80% | 88% | 90% | 91% | 91% | 90% | 96% | | | No significant barriers | | 11% | 19% | 12% | 10% | 0% | 6% | 10% | 0% | |
There were statistically significant differences between UKTI users and non-UKTI users with regards to contacts, language and culture, and bias. UKTI users were more likely to identify at least one barrier to international trade than non-UKTI users. As with the 2008 sample, UKTI users were more likely to report barriers of all types. Across both groups, fixed cost barriers, contacts barriers and legal and regulatory barriers were the most prevalent. Table 144: Barriers to conducting overseas business by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Legal and regulatory | | 60% | 57% | 53% | 61% | 71% | 61% | 57% | 70% | | Contacts | | 65% | 59% | 68% | 78% | 63% | 64% | 67% | 68% | | Information | | 21% | 20% | 24% | 22% | 13% | 27% | 9% | 19% | | Fixed costs | | 79% | 72% | 78% | 89% | 88% | 80% | 89% | 83% | | Language and cultural| | 41% | 40% | 42% | 33% | 42% | 40% | 37% | 43% | | Bias | | 30% | 27% | 31% | 44% | 25% | 25% | 46% | 32% | | At least one barrier | | 93% | 87% | 95% | 100% | 92% | 94% | 98% | 95% | | No significant barriers | | 6% | 12% | 5% | 0% | 4% | 5% | 2% | 5% |
| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Legal and regulatory | | 54% | 52% | 40% | 56% | 77% | 69% | 83% | 75% | | Contacts | | 53% | 51% | 49% | 44% | 62% | 64% | 58% | 50% | | Information | | 21% | 16% | 21% | 22% | 38% | 24% | 8% | 42% | | Fixed costs | | 74% | 73% | 72% | 89% | 85% | 74% | 75% | 83% | | Language and cultural| | 29% | 28% | 23% | 22% | 46% | 31% | 33% | 58% | | Bias | | 23% | 23% | 25% | 33% | 15% | 19% | 17% | 33% | | At least one barrier | | 87% | 86% | 82% | 89% | 100% | 93% | 92% | 92% | | No significant barriers | | 13% | 14% | 19% | 11% | 0% | 7% | 8% | 8% |
In terms of the number of barriers mentioned by companies these are similar to last year. However in the 2008 survey just two in ten (21%) indicated that they had experienced no significant barriers to conducting international business whilst in 2009 this has reduced to one in seven (14%).
Table 145: The number of barriers to conducting overseas business
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | One | | 12% | 11% | 13% | 11% | 11% | 14% | 7% | 10% | | Two | | 14% | 16% | 15% | 15% | 22% | 12% | 16% | 12% | | Three | | 17% | 16% | 14% | 19% | 11% | 19% | 24% | 19% | | Four or more | | 43% | 39% | 44% | 44% | 49% | 42% | 43% | 49% | | At least one barrier | | 86% | 81% | 86% | 89% | 92% | 87% | 90% | 90% | | No significant barriers | | 14% | 19% | 14% | 11% | 8% | 13% | 10% | 10% |
IP active companies were more likely to indicate significant barriers to conducting international business than non-IP active companies. Table 146: The number of barriers to conducting overseas business by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | One | 9% | 9% | 9% | 6% | 8% | 11% | 5% | 7% | | Two | 15% | 18% | 11% | 18% | 19% | 12% | 24% | 12% | | Three | 18% | 16% | 18% | 24% | 12% | 22% | 16% | 18% | | Four or more | 49% | 48% | 51% | 47% | 54% | 46% | 46% | 52% | | At least one barrier | 91% | 91% | 89% | 94% | 92% | 92% | 92% | 89% | | No significant barriers | 9% | 9% | 11% | 6% | 8% | 8% | 8% | 11% |
| Non-IP active | Total | Up to 5 years | 6-10 years | 10+ years | |---------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | One | 15% | 12% | 16% | 20% | 18% | 17% | 10% | 20% | | Two | 14% | 14% | 17% | 10% | 27% | 11% | 0% | 12% | | Three | 15% | 16% | 12% | 10% | 9% | 16% | 38% | 20% | | Four or more | 37% | 32% | 40% | 40% | 36% | 38% | 38% | 40% | | At least one barrier | 81% | 73% | 84% | 80% | 91% | 83% | 86% | 92% | | No significant barriers | 19% | 27% | 16% | 20% | 9% | 17% | 14% | 8% |
UKTI users were more likely to indicate significant barriers to conducting international business than non-UKTI users.
Table 147: The number of barriers to conducting overseas business by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | One | 12% | 7% | 14% | 11% | 8% | 16% | 9% | 10% | | Two | 13% | 13% | 16% | 17% | 17% | 12% | 11% | 13% | | Three | 18% | 20% | 14% | 28% | 8% | 18% | 24% | 20% | | Four or more | 46% | 41% | 49% | 44% | 54% | 43% | 48% | 48% | | At least one barrier | 89% | 81% | 93% | 100% | 87% | 88% | 91% | 91% | | No significant barriers | 11% | 19% | 7% | 0% | 13% | 12% | 9% | 9% |
| Non-UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | One | 12% | 15% | 13% | 11% | 15% | 10% | 0% | 8% | | Two | 17% | 20% | 13% | 11% | 31% | 12% | 33% | 8% | | Three | 14% | 10% | 15% | 0% | 15% | 24% | 25% | 8% | | Four or more | 37% | 36% | 36% | 44% | 38% | 40% | 25% | 58% | | At least one barrier | 80% | 80% | 76% | 67% | 100% | 86% | 83% | 83% | | No significant barriers | 20% | 20% | 24% | 33% | 0% | 14% | 17% | 17% | 8. OPPORTUNITIES IN EMERGING AND FAST GROWING
8.1 Opportunities in Emerging and Fast Growing Markets
All companies were asked to indicate if they considered that a range of emerging markets offered a ‘good opportunity’ for their company over the next 2 years, a ‘possible opportunity’, or if it was ‘unlikely to be an opportunity’ or if they were ‘already doing business there’.
In the 2009 survey sample, the highest proportion of firms were in Saudi Arabia (42%), followed by China (33%), India (32%) and South Africa (32%). These were somewhat higher proportions in each market than found in the 2008 sample, and there was also a greater difference between the proportions in the most, and second most popular markets. In 2008 the sample firms were most likely to report being in India (19%), Saudi Arabia (18%) or China (17%).
Table 148: Opinions on the opportunities in emerging and fast growing markets
| Country | Total | Up to 5 years | 6-10 years | 10+ years | |---------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | | | | | 0 - 49 | 50 - 99 | 100+ | | Russia | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Already doing business | 26% | 24% | 17% | 52% | 30% | 28% | 22% | 43% | | Good opportunity | 9% | 10% | 8% | 4% | 11% | 11% | 19% | 6% | | Possible opportunity | 26% | 30% | 29% | 22% | 19% | 22% | 33% | 22% | | Unlikely | 37% | 35% | 46% | 19% | 41% | 38% | 26% | 28% | | Don’t know | 1% | 1% | 0% | 4% | 0% | 1% | 0% | 2% | | Turkey | | | | | | | | | | Already doing business | 28% | 21% | 19% | 33% | 38% | 32% | 34% | 50% | | Good opportunity | 9% | 8% | 9% | 4% | 11% | 11% | 12% | 5% | | Possible opportunity | 25% | 29% | 26% | 22% | 19% | 22% | 26% | 22% | | Unlikely | 37% | 41% | 45% | 37% | 30% | 34% | 28% | 23% | | Don’t know | 1% | 1% | 1% | 4% | 3% | 1% | 0% | 0% | | South Africa | | | | | | | | | | Already doing business | 32% | 26% | 20% | 48% | 32% | 32% | 57% | 53% | | Good opportunity | 9% | 10% | 9% | 7% | 8% | 8% | 10% | 6% | | Possible opportunity | 24% | 24% | 29% | 15% | 24% | 28% | 17% | 15% | | Unlikely | 34% | 39% | 41% | 26% | 32% | 32% | 16% | 26% | | Don’t know | 1% | 2% | 2% | 4% | 3% | 0% | 0% | 0% | | Saudi Arabia | | | | | | | | | | Already doing business | 42% | 37% | 30% | 52% | 51% | 47% | 52% | 64% | | Good opportunity | 14% | 16% | 12% | 22% | 11% | 15% | 16% | 11% | | Possible opportunity | 19% | 23% | 24% | 11% | 22% | 17% | 12% | 10% | | Unlikely | 24% | 23% | 33% | 11% | 16% | 21% | 21% | 15% | | Don’t know | 1% | 1% | 2% | 4% | 0% | 0% | 0% | 0% | | Brazil | | | | | | | | | | Already doing business | 18% | 14% | 10% | 19% | 32% | 20% | 22% | 37% | | Good opportunity | 8% | 6% | 11% | 7% | 11% | 7% | 12% | 6% | | Possible opportunity | 25% | 22% | 23% | 30% | 30% | 28% | 29% | 25% | | Unlikely | 47% | 56% | 53% | 37% | 24% | 45% | 36% | 32% | | Don’t know | 2% | 3% | 2% | 7% | 3% | 1% | 0% | 0% | The results from the 2009 survey have also been summarised as follows:
**Table 149: Summary of opportunities in emerging and fast growing markets**
| Firms have been defined as ‘already in’ if… | |--------------------------------------------| | • They are already in at least one emerging/fast growing market |
| Firms have been defined as perceiving a ‘good opportunity’ if… | |---------------------------------------------------------------| | • Not already in any of the emerging/fast growing markets | | • But feel that at least one is a ‘good’ opportunity |
| Firms have been defined as perceiving a ‘possible opportunity’ if… | |------------------------------------------------------------------| | • Not already in any of the emerging/fast growing markets | | • Feel that none of the markets are a ‘good’ opportunity | | • But feel that at least one is a ‘possible’ opportunity |
| Firms have been defined as ‘unlikely’ if… | |------------------------------------------| | • Not already in any of the emerging/fast growing markets | | • And feel that none of the markets are either a ‘good’ or ‘possible’ opportunity. |
The table below depicts the results of this analysis. A comparison of the 2008 and 2009 survey reveals that seven in ten companies (70%) in the 2009 survey sample are ‘already in’ these emerging markets, compared to almost half (45%) in 2008 sample. The proportion of firms in the 2009 survey sample which indicated that they considered that all of the emerging markets listed were ‘unlikely’ to offer market opportunities (6%) was also half that of the 2008 survey sample (12%). These differences are likely to be due to a higher proportion of experienced firms in the 2009 sample and the higher proportion of UKTI users in the sample than that of 2008.
Table 150: Summary of the opportunities in emerging and fast growing markets
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | | Already in | 70% | 65% | 59% | 74% | 73% | | | | | 79% | 76% | 82% | | Good opportunity| 12% | 10% | 14% | 15% | 14% | | | | | 10% | 17% | 11% | | Possible opportunity| 12% | 15% | 16% | 0% | 14% | | | | | 8% | 7% | 5% | | Unlikely | 6% | 9% | 11% | 7% | 0% | | | | | 3% | 0% | 2% | | Don’t know | 0% | 0% | 0% | 4% | 0% | | | | | 0% | 0% | 0% |
Just over three quarters (76%) of IP active companies reported already being in these markets compared to just under two thirds (63%) of non-IP active companies. Furthermore, the propensity to be ‘already in’ these markets is greater for larger and older companies. A lower proportion of IP active (2%) than non-IP active (10%) firms indicated that they considered emerging markets to be unlikely to offer market opportunities.
Table 151: Summary of the opportunities in emerging and fast growing markets by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | | Already in | 76% | 76% | 67% | 82% | 77% | | | | | 76% | 84% | 83% | | Good opportunity| 12% | 7% | 16% | 12% | 12% | | | | | 12% | 14% | 13% | | Possible opportunity| 9% | 14% | 14% | 0% | 12% | | | | | 9% | 3% | 2% | | Unlikely | 2% | 4% | 3% | 6% | 0% | | | | | 2% | 0% | 1% | | Don’t know | 0% | 0% | 0% | 0% | 0% | | | | | 0% | 0% | 0% | | Non-IP active | 454 | 129 | 159 | 10 | 11 | | | | | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | | Already in | 63% | 57% | 54% | 60% | 64% | | | | | 82% | 62% | 80% | | Good opportunity| 12% | 13% | 13% | 20% | 18% | | | | | 8% | 24% | 4% | | Possible opportunity| 14% | 16% | 18% | 0% | 18% | | | | | 7% | 14% | 12% | | Unlikely | 10% | 14% | 15% | 10% | 0% | | | | | 3% | 0% | 4% | | Don’t know | 0% | 0% | 1% | 10% | 0% | | | | | 0% | 0% | 0% |
Users of UKTI services were more likely to be ‘already in’ the emerging markets than non-users and conversely were less likely to say that these regions were ‘unlikely’ to offer market opportunities. Table 152: Summary of the opportunities in emerging and fast growing markets by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Already in | | 74% | 73% | 65% | 78% | 75% | 78% | 74% | 84% | | Good opportunity | | 12% | 10% | 14% | 17% | 13% | 12% | 20% | 10% | | Possible opportunity | | 10% | 13% | 14% | 0% | 13% | 8% | 7% | 3% | | Unlikely | | 4% | 4% | 6% | 6% | 0% | 3% | 0% | 2% | | Don’t know | | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% |
| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Already in | | 60% | 54% | 50% | 67% | 69% | 83% | 83% | 67% | | Good opportunity | | 11% | 11% | 13% | 11% | 15% | 5% | 8% | 17% | | Possible opportunity | | 17% | 19% | 20% | 0% | 15% | 10% | 8% | 17% | | Unlikely | | 12% | 16% | 18% | 11% | 0% | 2% | 0% | 0% | | Don’t know | | 0% | 0% | 0% | 11% | 0% | 0% | 0% | 0% | 9. ECONOMIC CLIMATE
9.1 Downturn in UK, US and European Markets
All companies who were currently trading were asked to indicate whether their business has been negatively affected by the downturn in either the UK and US or European markets over the last year. Those who said ‘Yes’ to either of these were then asked whether this had prompted their company to devote more attention to any of the emerging or fast growing economies (namely Russia, Turkey, South Africa, Saudi Arabia or the United Arab Emirates, Brazil, Mexico, China and India).
Overall companies were more likely to feel negatively affected by the economic downturn in the UK and USA markets than in Europe, with companies over six years of age most likely to feel the effects of economic downturn in the UK and USA but least likely to feel the impact of economic downturn in Europe.
The proportion of companies negatively affected by the economic downturn in the UK and USA (69%) is much higher than the comparable level reported in 2008 when just over four in ten (42%) reported being negatively impacted by the economic downturn in the UK and USA.
Table 153: Impact of economic downturn in UK and USA
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | | | | 0 - 49 | 50 - 99 | 100+ | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 69% | 67% | 67% | 74% | 73% | 68% | 74% | 76% | | No | 29% | 30% | 32% | 26% | 24% | 30% | 26% | 22% | | Don’t know | 2% | 3% | 1% | 0% | 3% | 3% | 0% | 2% |
IP active companies were more likely to state that they were negatively impacted by the downturn in the UK and USA markets than non-IP active companies, most especially larger, older companies. This is in contrast to the 2008 survey sample in which almost equal proportions of IP active and non-IP active firms indicated that they had been affected by the downturn.
Table 154: Impact of economic downturn in UK and USA by IP activity
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | | | | 0 - 49 | 50 - 99 | 100+ | | IP active | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 74% | 73% | 72% | 76% | 69% | 74% | 70% | 77% | | No | 25% | 24% | 27% | 24% | 27% | 23% | 30% | 22% | | Don’t know | 2% | 3% | 1% | 0% | 4% | 3% | 0% | 1% | | Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 65% | 62% | 64% | 70% | 82% | 62% | 81% | 72% | | No | 33% | 34% | 35% | 30% | 18% | 36% | 19% | 24% | | Don’t know | 2% | 4% | 1% | 0% | 0% | 2% | 0% | 4% | UKTI users and non-UKTI users were equally likely to indicate that their business was negatively affected by the downturn in the UK and USA markets.
In a UKTI PIMS survey of 834 users of UKTI services which took place in October/November 2008 44% indicated that they had been affected by the downturn in the US or UK; this is similar to the 42% in the 2008 survey sample who were surveyed in July/August 2008. In a UKTI PIMS survey of 979 users of UKTI services which took place in January/February 2009, 60% indicated that they had been affected by the downturn. This rose to 65% in the survey of 985 users in March/April 2009. This is somewhat lower than the 70% of UKTI users in this survey.
Table 155: Impact of economic downturn in UK and USA by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Yes | 70% | 70% | 70% | 78% | 67% | 65% | 70% | 79% | | | No | 28% | 27% | 30% | 22% | 29% | 32% | 30% | 20% | | | Don’t know | 2% | 3% | 1% | 0% | 4% | 3% | 0% | 1% | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Yes | 67% | 62% | 63% | 67% | 85% | 79% | 92% | 50% | | | No | 31% | 34% | 36% | 33% | 15% | 19% | 8% | 42% | | | Don’t know | 2% | 4% | 1% | 0% | 0% | 2% | 0% | 8% |
The impact of the economic downturn in Europe appears to have had less impact than in the UK and USA, with the impact greatest for older and larger companies.
Table 156: Impact of the economic downturn in Europe
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | Total | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Yes | 60% | 57% | 55% | 70% | 70% | 60% | 66% | 69% | | | No | 38% | 41% | 43% | 30% | 27% | 39% | 33% | 30% | | | Don’t know | 2% | 3% | 1% | 0% | 3% | 1% | 2% | 2% |
IP active companies were more likely to state they were impacted by the economic downturn in Europe than non-IP active companies. Table 157: Impact of the economic downturn in Europe by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 63% | 57% | 58% | 76% | 65% | 67% | 65% | 70% | | No | 35% | 41% | 41% | 24% | 31% | 33% | 35% | 29% | | Don’t know| 1% | 2% | 1% | 0% | 4% | 0% | 0% | 1% |
| Non-IP active | Total | Up to 5 years | 6-10 years | 10+ years | |---------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 57% | 57% | 54% | 60% | 82% | 54% | 67% | 64% | | No | 41% | 40% | 45% | 40% | 18% | 45% | 29% | 32% | | Don’t know | 2% | 3% | 1% | 0% | 0% | 1% | 5% | 4% |
UKTI users were slightly more likely to agree that their business had been negatively affected by the downturn in the European markets than non-UKTI users.
Table 158: Impact of the economic downturn in Europe by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 62% | 59% | 57% | 72% | 67% | 62% | 61% | 71% | | No | 37% | 39% | 42% | 28% | 29% | 38% | 37% | 28% | | Don’t know | 1% | 2% | 1% | 0% | 4% | 1% | 2% | 1% |
| Non-UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 57% | 54% | 53% | 67% | 77% | 55% | 83% | 50% | | No | 42% | 43% | 46% | 33% | 23% | 45% | 17% | 42% | | Don’t know | 2% | 3% | 1% | 0% | 0% | 0% | 0% | 8% |
All companies were asked to indicate whether the decline in the UK, USA or European markets has prompted them to devote more attention to any of the emerging or fast growing economies. There was some ambivalence here with nearly a third saying ‘yes’ and just over four in ten saying ‘no’. Older and larger companies were more likely to indicate that they had devoted more attention to the emerging or fast growing markets as a result of the decline in the UK, USA or European markets.
Table 159: Whether devoted more attention to any of the emerging or fast growing markets
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 32% | 31% | 25% | 41% | 32% | 34% | 36% | 41% | | No | 41% | 39% | 47% | 41% | 38% | 39% | 45% | 37% | | Don’t know | 27% | 30% | 28% | 19% | 30% | 28% | 19% | 22% |
IP active companies were more likely than non-IP active companies to indicate that they had devoted more attention to the emerging or fast growing markets as a result of the downturn in the UK, USA or European markets. Table 160: Whether devoted more attention to any of the emerging or fast growing markets by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | Base | 100% | 100% | 100% | 100% | 100% | | Yes | 39% | 42% | 34% | 41% | 27% | | | | | 37% | 38% | 45% | | No | 38% | 31% | 41% | 41% | 38% | | | | | 39% | 43% | 37% | | Don’t know | 24% | 27% | 24% | 35% | 24% | | | | | 24% | 19% | 18% | | Non-IP active | 454 | 129 | 159 | 10 | 11 | | | | | 99 | 21 | 25 | | Base | 100% | 100% | 100% | 100% | 100% | | Yes | 25% | 22% | 20% | 40% | 45% | | | | | 30% | 33% | 28% | | No | 45% | 46% | 50% | 40% | 36% | | | | | 38% | 48% | 36% | | Don’t know | 30% | 32% | 30% | 20% | 18% | | | | | 31% | 19% | 36% |
UKTI users were more likely than non-UKTI users to indicate that they had devoted more attention to the emerging or fast growing markets as a result of the economic downturn in the UK, USA or European markets.
Table 161: Whether devoted more attention to any of the emerging or fast growing markets by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | 621 | 135 | 148 | 18 | 24 | | | | | 154 | 46 | 96 | | Base | 100% | 100% | 100% | 100% | 100% | | Yes | 35% | 39% | 28% | 50% | 38% | | | | | 33% | 37% | 43% | | No | 39% | 36% | 45% | 39% | 29% | | | | | 38% | 41% | 38% | | Don’t know | 26% | 26% | 27% | 11% | 33% | | | | | 29% | 22% | 20% | | Non-UKTI users | 290 | 101 | 101 | 9 | 13 | | | | | 42 | 12 | 12 | | Base | 100% | 100% | 100% | 100% | 100% | | Yes | 24% | 22% | 22% | 22% | 23% | | | | | 36% | 33% | 25% | | No | 46% | 44% | 50% | 44% | 54% | | | | | 43% | 58% | 33% | | Don’t know | 29% | 35% | 29% | 33% | 23% | | | | | 21% | 8% | 42% |
9.2 Economic Growth
All companies that were currently exporting were asked whether, in the last year, their business has benefited from sustained economic growth or increasing demand in any overseas countries. They were then asked to consider their overseas business and whether they saw the economic downturn as offering their company increased, reduced, or about the same opportunities.
Firms established for more than 5 years and with over 50 employees were more likely to feel that their business had benefited from sustained growth or increased demand in overseas countries. Table 162: Benefit from sustained growth or increased demand in any overseas country
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | 903 | 230 | 248 | 27 | 37 | | | | | 196 | 58 | 107 | | Base | 100% | 100% | 100% | 100% | 100% | | Yes | 53% | 47% | 46% | 59% | 65% | | | | | 55% | 67% | 68% | | No | 44% | 51% | 52% | 37% | 24% | | | | | 41% | 31% | 27% | | Don’t know | 3% | 2% | 2% | 4% | 4% | | | | | 2% | 2% | 5% |
There were statistically significant differences between IP active and non-IP active companies regarding whether or not they had benefited from sustained growth or increased demand in overseas countries. Those companies described as IP active were more likely than non-IP active firms to indicate that in the last year they had benefited from sustained growth or increased demand in overseas countries.
Table 163: Benefit from sustained growth or increased demand in any overseas country by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | IP active | 454 | 105 | 90 | 17 | 26 | | | | | 97 | 37 | 82 | | Base | 100% | 100% | 100% | 100% | 100% | | Yes | 63% | 56% | 61% | 71% | 62% | | | | | 60% | 68% | 76% | | No | 34% | 42% | 38% | 24% | 23% | | | | | 38% | 30% | 22% | | Don’t know | 3% | 2% | 1% | 6% | 15% | | | | | 2% | 3% | 2% | | Non-IP active | 449 | 125 | 158 | 10 | 11 | | | | | 99 | 21 | 25 | | Base | 100% | 100% | 100% | 100% | 100% | | Yes | 43% | 39% | 37% | 40% | 73% | | | | | 49% | 67% | 44% | | No | 53% | 59% | 60% | 60% | 27% | | | | | 44% | 33% | 44% | | Don’t know | 4% | 2% | 3% | 0% | 0% | | | | | 6% | 0% | 12% |
There were statistically significant differences between UKTI users and non-UKTI users regarding whether or not they had benefited from sustained growth or increased demand in overseas countries. UKTI users were more likely than non-UKTI users to report that in the last year they had benefited from sustained growth or increased demand in overseas countries.
In this survey 58% of respondents who were UKTI users indicated that they had benefited from sustained growth or increased demand in any overseas country. This is the same proportion as that in a UKTI PIMS survey of UKTI users in January/February 2009. Table 164: Benefit from sustained growth or increased demand in any overseas country by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 618 | 134 | 147 | 18 | 24 | 154 | 46 | 95 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Yes | 58% | 57% | 48% | 61% | 71% | 56% | 72% | 69% | | | No | 39% | 41% | 48% | 39% | 21% | 41% | 26% | 27% | | | Don’t know | 3% | 1% | 3% | 0% | 8% | 3% | 2% | 3% | | Non-UKTI users | Base | 285 | 96 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Yes | 42% | 32% | 42% | 56% | 54% | 50% | 50% | 58% | | | No | 54% | 66% | 57% | 33% | 31% | 43% | 50% | 25% | | | Don’t know | 4% | 2% | 1% | 11% | 15% | 7% | 0% | 17% |
Almost equal proportions of the survey sample indicated that the economic downturn had offered increased opportunities or about the same opportunities or reduced opportunities (32%, 33% and 32% respectively). Younger companies were slightly more likely to indicate that the downturn had offered them increased opportunities.
Table 165: Whether economic downturn has offered increased or reduced opportunities
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Increased opportunities | 32% | 36% | 32% | 33% | 24% | 31% | 26% | 31% | | About the same/no impact | 33% | 29% | 34% | 37% | 32% | 37% | 36% | 30% | | Reduced opportunities | 32% | 32% | 32% | 26% | 41% | 30% | 29% | 40% | | Don’t know | 3% | 3% | 2% | 4% | 3% | 3% | 9% | 0% |
Equal proportions of IP and non-IP active firms indicated that the downturn offered increased opportunities (32%). A lower proportion of IP active firms indicated that opportunities were about the same (29% vs 37% of non-IP active firms). Companies who were IP active were more likely to state that the economic downturn had offered their company reduced opportunities (36% vs 29%). Table 166: Whether economic downturn has offered increased or reduced opportunities by IP activity
| IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | IP active | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Increased opportunities | 32% | 30% | 39% | 24% | 31% | 35% | 19% | 33% | | About the same/no impact | 29% | 29% | 23% | 29% | 35% | 32% | 38% | 27% | | Reduced opportunities | 36% | 37% | 36% | 41% | 31% | 31% | 32% | 41% | | Don’t know | 3% | 4% | 2% | 6% | 4% | 2% | 11% | 0% |
| Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Increased opportunities | 32% | 41% | 28% | 50% | 9% | 26% | 38% | 24% | | About the same/no impact | 37% | 29% | 40% | 50% | 27% | 41% | 33% | 40% | | Reduced opportunities | 29% | 27% | 30% | 0% | 64% | 29% | 24% | 36% | | Don’t know | 2% | 3% | 2% | 0% | 0% | 3% | 5% | 0% |
UKTI users and non-UKTI users were equally likely to report increased opportunities, reduced opportunities and no impact on their company from the economic downturn.
Table 167: Whether economic downturn has offered increased or reduced opportunities by UKTI usage
| UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Increased opportunities | 32% | 40% | 31% | 33% | 21% | 32% | 24% | 30% | | About the same/no impact | 33% | 27% | 32% | 33% | 38% | 37% | 39% | 30% | | Reduced opportunities | 32% | 29% | 35% | 33% | 38% | 27% | 26% | 40% | | Don’t know | 3% | 4% | 2% | 0% | 4% | 3% | 11% | 0% |
| Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Increased opportunities | 31% | 31% | 34% | 33% | 31% | 24% | 33% | 33% | | About the same/no impact | 34% | 32% | 38% | 44% | 23% | 36% | 25% | 25% | | Reduced opportunities | 33% | 36% | 27% | 11% | 46% | 40% | 42% | 42% | | Don’t know | 2% | 2% | 2% | 11% | 0% | 0% | 0% | 0% |
9.3 Impact of the Decline in the Value of Sterling
All respondents were asked a series of questions about pricing and currency and the impact on their business of currency fluctuations.
Firstly companies were asked about the effect of the recent decline in the value of sterling and whether their company would be able to take advantage of the decline in the value of sterling. All respondents were asked to indicate whether they expected to increase their sales in any market as a result of the decline in the value of sterling. Following on from this, respondents who said yes were asked whether it has been necessary or would be necessary to discount products or services to achieve an increase in sales in any market. Almost two thirds (64%) of companies felt they would be able to take advantage of the decline in the value of sterling. Companies aged over 5 years were more likely to feel that they would be able to take advantage of the decline in the value of sterling than younger companies.
Table 168: Ability to take advantage of the decline in the value of sterling
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | 100% | 100% | 100% | 100% | | Yes | 64% | 58% | 62% | 70% | 69% | | No | 32% | 38% | 35% | 24% | 27% | | Don’t know | 5% | 3% | 3% | 7% | 5% |
There were statistically significant differences between IP active and non-IP active companies regarding whether or not they would be able to take advantage of the decline in the value of sterling. Companies defined as IP active were more likely to indicate that they would be able to take advantage of the decline in the value of sterling than non-IP active companies (69% and 59% respectively).
Table 169: Ability to take advantage of the decline in the value of sterling by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | | | | 100% | 100% | 100% | 100% | | Yes | 69% | 67% | 64% | 69% | 75% | | No | 25% | 29% | 36% | 23% | 21% | | Don’t know | 6% | 4% | 0% | 12% | 8% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | Non-IP active | 454 | 129 | 159 | 10 | 11 | | | | 100% | 100% | 100% | 100% | | Yes | 59% | 51% | 61% | 50% | 63% | | No | 38% | 46% | 35% | 50% | 33% | | Don’t know | 3% | 3% | 4% | 0% | 4% |
There were statistically significant differences between UKTI users and non-UKTI users regarding whether or not they would be able to take advantage of the decline in the value of sterling. UKTI users were more likely to feel that they could take advantage of the decline in the value of sterling compared to non-UKTI users. Table 170: Ability to take advantage of the decline in the value of sterling by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |------------|-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | Yes | 68% | 66% | 67% | 72% | 63% | 74% | 70% | 65% | | | | No | 26% | 32% | 30% | 17% | 29% | 21% | 22% | 24% | | | | Don’t know | 5% | 2% | 3% | 11% | 8% | 5% | 9% | 11% | | | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | Yes | 54% | 49% | 55% | 56% | 85% | 50% | 50% | 67% | | | | No | 43% | 47% | 42% | 44% | 15% | 48% | 42% | 33% | | | | Don’t know | 3% | 5% | 3% | 0% | 0% | 2% | 8% | 0% | | |
All those currently exporting were asked to indicate whether they have increased or expected to increase their sales in any market as a result of the decline in the value of sterling.
Most companies (64%) had not increased, and did not expect to increase, their sales in any market as a result of the decline in the value of sterling.
Table 171: Effect of the decline in the value of sterling on sales
| Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | Yes | 31% | 30% | 29% | 41% | 32% | 35% | 29% | 30% | | | No | 64% | 66% | 68% | 56% | 62% | 61% | 67% | 60% | | | Don’t know | 5% | 4% | 4% | 4% | 5% | 4% | 3% | 10% | |
There were statistically significant differences between IP active and non-IP active companies regarding whether or not they would be able to increase their sales in overseas markets as a result of the decline in the value of sterling. Around a third (34%) of IP active companies felt that they would increase their sales in overseas markets as a result of the decline in the value of sterling in comparison to just under three in ten (28%) non-IP active companies.
Table 172: Effect of the decline in the value of sterling on sales by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |-----------|-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | Yes | 34% | 34% | 31% | 41% | 38% | 37% | 30% | 35% | | | | No | 60% | 60% | 67% | 53% | 54% | 58% | 68% | 53% | | | | Don’t know | 6% | 7% | 2% | 6% | 8% | 5% | 3% | 12% | | | | Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | | Yes | 28% | 27% | 27% | 40% | 18% | 33% | 29% | 12% | | | | No | 69% | 71% | 69% | 60% | 82% | 65% | 67% | 84% | | | | Don’t know | 3% | 2% | 4% | 0% | 0% | 2% | 5% | 4% | | | There were statistically significant differences between UKTI users and non-UKTI users regarding whether or not they would be able to increase their sales in overseas markets as a result of the decline in the value of sterling. A third (33%) of UKTI users felt that they would increase their sales in overseas markets as a result of the decline in the value of sterling, in comparison to just under three in ten (26%) non-UKTI users.
Table 173: Effect of the decline in the value of sterling on sales by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | UKTI users | Yes | 33% | 35% | 30% | 44% | 33% | 37% | 28% | 30% | | | No | 61% | 59% | 65% | 50% | 63% | 60% | 67% | 58% | | | Don’t know | 6% | 6% | 5% | 6% | 4% | 3% | 4% | 11% | | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Yes | 26% | 24% | 26% | 33% | 31% | 29% | 33% | 25% | | | No | 72% | 75% | 72% | 67% | 62% | 67% | 67% | 75% | | | Don’t know | 2% | 1% | 2% | 0% | 8% | 5% | 0% | 0% |
All respondents who expected to increase their sales as a result of the decline in the value of sterling were asked whether it was necessary to discount their products and services in order to increase their sales. For most this was not a consideration.
Table 174: Discounting products or services to increase sales in any market
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | Base | 283 | 71 | 71 | 11 | 12 | 69 | 17 | 32 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | | Yes | 25% | 27% | 24% | 27% | 17% | 29% | 18% | 22% | | | No | 75% | 73% | 76% | 73% | 83% | 70% | 82% | 78% | | | Don’t know | 0% | 0% | 0% | 0% | 0% | 1% | 0% | 0% |
For both IP active and non-IP active companies, only a minority (25%) would have to discount their products or services to increase sales. Table 175: Discounting products or services to increase sales in any market by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 157 | 36 | 28 | 7 | 10 | 36 | 11 | 29 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 25% | 31% | 18% | 29% | 20% | 31% | 18% | 24% | | No | 74% | 69% | 82% | 71% | 80% | 67% | 82% | 76% | | Don’t know| 1% | 0% | 0% | 0% | 0% | 3% | 0% | 0% |
| Non-IP active | Base | 126 | 35 | 43 | 4 | 33 | 6 | 3 | |---------------|------|-----|----|----|---|----|---|---| | | 100% | 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Yes | 25% | 23% | 28% | 25% | 0% | 27% | 17% | 0% | | No | 75% | 77% | 72% | 75% | 100%| 73% | 83% | 100%| | Don’t know | 0% | 0% | 0% | 0% | 0% | 2% | 0% | 0% |
For both UKTI users and non-UKTI users, only a minority (24% vs 28%) had had to discount their products or services to increase sales.
Table 176: Discounting products or services to increase sales in any market by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 207 | 47 | 45 | 8 | 8 | 57 | 13 | 29 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 24% | 23% | 20% | 25% | 25% | 32% | 15% | 21% | | No | 75% | 77% | 80% | 75% | 75% | 67% | 85% | 79% | | Don’t know | 0% | 0% | 0% | 0% | 0% | 2% | 0% | 0% |
| Non-UKTI users | Base | 76 | 24 | 26 | 3 | 4 | 12 | 4 | 3 | |----------------|------|----|----|----|---|---|----|---|---| | | 100% | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Yes | 28% | 33% | 31% | 33% | 0% | 17% | 25% | 33% | | No | 72% | 67% | 69% | 67% | 100%| 83% | 75% | 67% |
9.4 Usage of Currencies
All respondents were asked to indicate when they were operating in overseas markets whether they priced their products or services in sterling, overseas currencies or both.
A higher proportion of younger companies and smaller companies priced their products or services exclusively in sterling when trading overseas. However, the majority of firms (55%) reported pricing in both sterling and overseas currencies. Usage of this mixture of currencies was most popular among firms which had been established for at least 10 years. Table 177: Currency usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 37 | 196 | 58 | 108 | | Sterling | | 100% | 100% | 100% | 100% | 100% | 100% | | Overseas | | 29% | 36% | 36% | 22% | 8% | 28% | | Both | | 55% | 45% | 44% | 73% | 63% | 71% | | Don’t know | | 0% | 0% | 0% | 4% | 0% | 2% | | Not applicable | | 0% | 1% | 0% | 0% | 0% | 0% |
IP active companies were more likely to price their products and services in both sterling and overseas currencies, with the propensity to do this increasing for older companies.
Table 178: Currency usage by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Sterling | | 100% | 100% | 100% | 100% | 100% | 100% | | Overseas | | 22% | 34% | 27% | 18% | 8% | 22% | 8% | 14% | | Both | | 63% | 46% | 51% | 41% | 81% | 70% | 76% | 82% | | Don’t know | | 0% | 0% | 0% | 6% | 0% | 0% | 0% | 0% | | Not applicable | | 0% | 2% | 0% | 0% | 0% | 0% | 0% | 0% |
Non-IP active
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Sterling | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Overseas | | 100% | 100% | 100% | 100% | 100% | 100% | | Both | | 35% | 37% | 41% | 30% | 9% | 33% | 19% | 20% | | Don’t know | | 17% | 18% | 19% | 10% | 36% | 11% | 14% | 16% | | Not applicable | | 48% | 44% | 40% | 60% | 55% | 56% | 62% | 64% |
UKTI users were more likely to price in both sterling and overseas currencies than non-UKTI users. This is consistent with UKTI users in the survey sample operating in more overseas markets and more world regions than non-users. Table 179: Currency usage by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Sterling | | 27% | 34% | 32% | 28% | 0% | 29% | 15% | 17% | | Overseas Currencies | | 13% | 14% | 21% | 17% | 13% | 9% | 15% | 5% | | Both | | 60% | 51% | 47% | 50% | 88% | 62% | 67% | 78% | | Don’t know | | 0% | 0% | 0% | 6% | 0% | 0% | 2% | 0% | | Not applicable as no overseas sales in the last year | | 0% | 1% | 0% | 0% | 0% | 0% | 0% | 0% |
| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Sterling | | 32% | 38% | 41% | 11% | 23% | 24% | 0% | 8% | | Overseas Currencies | | 21% | 24% | 19% | 44% | 31% | 12% | 17% | 17% | | Both | | 46% | 37% | 41% | 44% | 46% | 64% | 83% | 75% | | Not applicable as no overseas sales in the last year | | 1% | 2% | 0% | 0% | 0% | 0% | 0% | 0% |
9.5 Effect of the decline in Sterling on costs
All companies were asked whether, taking account of imports, the recent decline in the value of sterling has raised the costs of conducting business overseas for their firm.
For almost six in ten companies (56%) the recent decline in the value of sterling has raised the cost of conducting business overseas either ‘moderately’ or ‘a lot’.
Table 180: Effect on costs of the recent decline in the value of sterling
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | No | | 21% | 24% | 24% | 15% | 3% | 19% | 19% | 18% | | Not significantly | | 7% | 7% | 7% | 11% | 3% | 6% | 9% | 10% | | A little | | 13% | 11% | 13% | 11% | 8% | 16% | 10% | 12% | | Moderately | | 27% | 31% | 23% | 30% | 38% | 24% | 34% | 25% | | A lot | | 29% | 25% | 30% | 26% | 43% | 31% | 26% | 26% | | Don’t know | | 3% | 1% | 3% | 7% | 5% | 3% | 2% | 9% |
IP and non-IP active companies were equally likely to feel that the recent decline in the value of sterling had raised the cost of conducting business overseas either moderately or a lot. Table 181: Effect on costs of the recent decline in the value of sterling
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | No | | 18% | 21% | 22% | 18% | 4% | 19% | 11% | 13% | | Not significantly | | 8% | 9% | 6% | 18% | 4% | 6% | 8% | 12% | | A little | | 14% | 13% | 16% | 6% | 12% | 18% | 14% | 11% | | Moderately | | 29% | 29% | 27% | 29% | 35% | 32% | 32% | 24% | | A lot | | 27% | 25% | 28% | 18% | 42% | 23% | 32% | 30% | | Don’t know | | 4% | 2% | 2% | 12% | 4% | 3% | 3% | 10% | | Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | No | | 24% | 26% | 26% | 10% | 0% | 20% | 33% | 32% | | Not significantly | | 6% | 5% | 8% | 0% | 0% | 5% | 10% | 4% | | A little | | 11% | 9% | 11% | 20% | 0% | 15% | 5% | 16% | | Moderately | | 26% | 33% | 21% | 30% | 45% | 17% | 38% | 28% | | A lot | | 30% | 26% | 31% | 40% | 45% | 39% | 14% | 12% | | Don’t know | | 3% | 1% | 3% | 0% | 9% | 3% | 0% | 8% |
UKTI users were only slightly more likely than non-UKTI users to feel that the recent decline in the value of sterling has raised the cost of conducting business overseas either moderately or a lot (58% vs 53%).
Table 182: Effect on costs of the recent decline in the value of sterling by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | No | | 20% | 24% | 22% | 17% | 0% | 19% | 20% | 18% | | Not significantly | | 8% | 8% | 7% | 11% | 4% | 6% | 9% | 10% | | A little | | 11% | 10% | 13% | 11% | 0% | 16% | 7% | 10% | | Moderately | | 29% | 33% | 26% | 28% | 46% | 26% | 37% | 25% | | A lot | | 29% | 24% | 30% | 28% | 46% | 30% | 26% | 27% | | Don’t Know | | 4% | 1% | 3% | 6% | 4% | 3% | 2% | 9% | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | No | | 23% | 24% | 28% | 11% | 8% | 19% | 17% | 17% | | Not significantly | | 6% | 6% | 7% | 11% | 0% | 5% | 8% | 8% | | A little | | 15% | 13% | 13% | 11% | 23% | 19% | 25% | 25% | | Moderately | | 24% | 29% | 20% | 33% | 23% | 19% | 25% | 25% | | A lot | | 29% | 27% | 30% | 22% | 38% | 36% | 25% | 17% | | Don’t Know | | 3% | 2% | 3% | 11% | 8% | 2% | 0% | 8% |
9.6 Overall effect of the decline in the value of sterling
All companies were asked what the effect had been of the decline in the value of sterling on their business. Just over four in ten companies (41%) felt that the decline in the value of sterling had had a negative effect on their business. Firms established for less than 5 years were most likely to indicate that the effect had been negative. Just under one third of respondents (30%) indicated that the decline in sterling had been beneficial to their business.
Table 183: Overall effect of the recent decline in the value of sterling
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Been beneficial to your business | 30% | 26% | 32% | 37% | 24% | 33% | 28% | 29% | | Had no effect | 26% | 25% | 24% | 26% | 38% | 27% | 29% | 26% | | Had a negative effect on your business | 41% | 47% | 43% | 37% | 32% | 36% | 36% | 41% | | Had positive effects on some aspects of business, negative on others | 1% | 1% | 1% | 0% | 3% | 1% | 2% | 3% | | Too early to tell | 0% | 0% | 0% | 0% | 3% | 1% | 0% | 2% | | Other | 1% | 1% | 0% | 0% | 0% | 2% | 5% | 0% |
There were statistically significant differences between IP active and non-IP active companies regarding whether the decline in the value of sterling has had a negative effect on their business. IP active companies were less likely than non-IP active companies to state that the decline in the value of sterling has had a negative effect on their business. Conversely, they were also more likely to indicate that the decline in the value of sterling had been beneficial to their business.
Table 184: Overall effect of the recent decline in the value of sterling on businesses by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Been beneficial to your business | 33% | 32% | 36% | 35% | 23% | 35% | 30% | 33% | | Had no effect | 27% | 29% | 23% | 24% | 38% | 30% | 22% | 24% | | Had a negative effect on your business | 37% | 38% | 39% | 41% | 31% | 30% | 43% | 39% | | Had positive effects on some aspects of business, negative on others | 2% | 1% | 2% | 0% | 4% | 1% | 3% | 2% | | Too early to tell | 1% | 0% | 0% | 0% | 4% | 1% | 0% | 2% | | Other | 1% | 0% | 0% | 0% | 0% | 3% | 3% | 0% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Non-IP active | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Been beneficial to your business | 27% | 22% | 30% | 40% | 27% | 31% | 24% | 16% | | Had a negative effect on your business | 46% | 53% | 46% | 30% | 36% | 42% | 24% | 48% | | Had no effect | 25% | 22% | 24% | 30% | 36% | 24% | 43% | 32% | | Had positive effects on some aspects of business, negative on others | 1% | 2% | 1% | 0% | 0% | 1% | 0% | 4% | | Too early to tell | 1% | 2% | 0% | 0% | 0% | 1% | 10% | 0% | | Other | 1% | 2% | 0% | 0% | 0% | 1% | 10% | 0% |
There were statistically significant differences between UKTI users and non-UKTI users regarding whether the decline in the value of sterling has had a negative effect on their business. UKTI users were less likely than non-UKTI users to state that the effect of the decline in the value of sterling had been negative for their business. They were also more likely to indicate that the effect had been positive (32% vs 24%)
Table 185: Overall effect of the recent decline in the value of sterling on businesses by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Been beneficial to your business | 32% | 30% | 39% | 33% | 21% | 35% | 28% | 26% | | Had no effect | 26% | 21% | 25% | 33% | 42% | 27% | 33% | 27% | | Had a negative effect on your business | 38% | 47% | 35% | 33% | 38% | 33% | 30% | 43% | | Had positive effects on some aspects of business, negative on others | 1% | 1% | 1% | 0% | 0% | 1% | 2% | 2% | | Too early to tell | 0% | 0% | 0% | 0% | 0% | 1% | 0% | 2% | | Other | 1% | 1% | 0% | 0% | 0% | 3% | 7% | 0% |
| Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | |----------------|------|-----|-----|-----|---|----|----|----|----| | | | 100%| 100%| 100%|100%|100%|100%|100%|100%| | Been beneficial to your business | 24% | 21% | 22% | 44% | 31% | 26% | 25% | 50% | | Had no effect | 25% | 31% | 22% | 11% | 31% | 26% | 17% | 17% | | Had a negative effect on your business | 48% | 47% | 55% | 44% | 23% | 48% | 58% | 25% | | Had positive effects on some aspects of business, negative on others | 1% | 1% | 1% | 0% | 8% | 0% | 0% | 8% | | Too early to tell | 0% | 0% | 0% | 0% | 8% | 0% | 0% | 0% | | Other | 0% | 1% | 0% | 0% | 0% | 0% | 0% | 0% |
9.7 Export Credit Insurance
All companies were asked whether they either currently used or would use export credit insurance. Those who did use export credit insurance were asked whether they had experienced any difficulties in accessing export credit insurance in the last six months.
Export credit insurance was used by one in five companies (21%). It was most likely to be used by older companies and larger companies. These results are consistent with those from PIMS. Over 3 waves of the quarterly survey of UKTI PIMS trade clients, (Jan/Feb - Jul/Aug 2009) 73% of respondents indicated that they did not use export credit insurance.
Table 186: Use of export credit insurance
| Total | Up to 5 years | 6-10 years | 10+ years | |-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Base | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 21% | 20% | 12% | 19% | 41% | 17% | 29% | 42% | | No | 73% | 74% | 84% | 78% | 51% | 80% | 62% | 47% | | Don’t know | 6% | 6% | 5% | 4% | 8% | 4% | 9% | 11% | There were statistically significant differences between IP active and non-IP active companies regarding their use of export credit insurance. IP active companies were more likely than non-IP active companies to use export credit insurance.
Table 187: Use of export credit insurance by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | Base | | | | | | 457 | 107 | 90 | 17 | | | | 100% | 100% | 100% | | Yes | 28% | 26% | 17% | 24% | | No | 64% | 65% | 77% | 71% | | Don’t know| 8% | 8% | 7% | 6% |
| Non-IP active | Base | | | | | | 454 | | | | | | 100% | 100% | 100% | 100% | | Yes | 14% | 16% | 9% | 10% | | No | 82% | 81% | 87% | 90% | | Don’t know | 4% | 4% | 4% | 0% |
There were statistically significant differences between UKTI users and non-UKTI users regarding their use of export credit insurance. Users of UKTI were more likely to use export credit insurance than non-UKTI users (24% vs 15%).
Table 188: Use of export credit insurance by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | Base | | | | | | 621 | 135 | 148 | 18 | | | 100% | 100% | 100% | 100% | | Yes | 24% | 24% | 12% | 22% | | No | 71% | 71% | 86% | 72% | | Don’t know | 5% | 5% | 1% | 6% |
| Non-UKTI users | Base | | | | | | 290 | | | | | | 100% | 100% | 100% | 100% | | Yes | 15% | 16% | 11% | 11% | | No | 77% | 77% | 79% | 89% | | Don’t know | 8% | 7% | 10% | 0% |
As a comparison the following table reports data from the UKTI PIMS non-user surveys of 2008 and 2009 which illustrates that the findings are consistent between surveys.
Table 189: Comparison of Use of export credit insurance by UKTI usage with client profiles from PIMS 14-16 and the PIMS non-user survey of 2009
| Total | UKTI non-users | UKTI users | PIMS non-users 2009 | Users PIMS 14-16 | |-------|----------------|------------|---------------------|------------------| | UKTI users | Base | 290 | 621 | 291 | 2548 | | | 100% | 100% | 100% | 100% | | Yes | 15% | 24% | 11% | 16% | | No | 77% | 71% | 85% | 73% | | Don’t know | 8% | 5% | 4% | 11% | Fewer than one in ten companies (9%) reported difficulties in accessing export credit insurance over the last 6 months, most typically this was reported by larger companies. This is somewhat higher than indicated by UKTI PIMS 14-16 in which 4% of UKTI users indicated that they had had difficulties and with the UKTI 2009 non-user survey which found that 3% of respondents had experienced difficulties.
Table 190: Difficulties in accessing export credit insurance
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Yes | 9% | 7% | 5% | 7% | 19% | 4% | 16% | 25% | | No | 11% | 11% | 6% | 11% | 19% | 13% | 12% | 16% | | Do not use export credit insurance | 79% | 81% | 88% | 81% | 59% | 83% | 71% | 58% | | Don’t know | 1% | 1% | 0% | 0% | 3% | 0% | 2% | 1% |
There were statistically significant differences between IP active and non-IP active companies regarding their reported difficulties in accessing export credit insurance. IP active companies were more likely than non-IP active companies to use export credit insurance and to have more difficulties accessing it.
Table 191: Difficulties in accessing export credit insurance by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Yes | 14% | 9% | 10% | 12% | 15% | 6% | 22% | 30% | | No | 13% | 14% | 7% | 12% | 19% | 15% | 14% | 16% | | Do not use export credit insurance | 72% | 76% | 83% | 76% | 62% | 78% | 65% | 53% | | Don’t know | 1% | 1% | 0% | 0% | 4% | 0% | 0% | 1% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Non-IP active | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Yes | 4% | 5% | 3% | 0% | 27% | 2% | 5% | 8% | | No | 9% | 9% | 6% | 10% | 18% | 10% | 10% | 16% | | Do not use export credit insurance | 87% | 85% | 91% | 90% | 55% | 88% | 81% | 76% | | Don’t know | 0% | 1% | 0% | 0% | 0% | 0% | 5% | 0% |
There were statistically significant differences between UKTI users and non-UKTI users regarding their reported difficulties in accessing export credit insurance. UKTI users were more likely than non-UKTI users to use export credit insurance and to have difficulties accessing it, especially larger companies. Table 192: Difficulties in accessing export credit insurance by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 621 | 135 | 148 | 18 | 24 | | | 100% | 100% | 100% | 100% | 100% | | Yes | 12% | 10% | 7% | 11% | 17% | | No | 12% | 12% | 5% | 11% | 17% | | Do not use export credit insurance | 76% | 77% | 88% | 78% | 67% | | Don’t know | 0% | 1% | 0% | 0% | 0% |
| Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | |----------------|------|-----|-----|-----|---|----|----|----|----| | | | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Yes | 3% | 3% | 3% | 0% | 23%| 0% | 0% | 8% | 8% | | No | 10% | 10% | 8% | 11% | 23%| 7% | 8% | 17% | 17% | | Do not use export credit insurance | 86% | 86% | 89% | 89% | 46%| 93% | 83% | 67% | 67% | | Don’t know | 1% | 1% | 0% | 0% | 8% | 0% | 8% | 8% | 8% |
However, the proportion of UKTI users experiencing difficulties is considerably higher than that reported through the UKTI PIMS surveys of 2,548 users of UKTI services (4%). This difference may have arisen due to the higher levels of export experience in this 2009 survey sample. Analysis of the PIMS survey data by years export experience showed firms which had exported for longer were more likely to have experienced difficulties.
Table 193: Comparison of Difficulties in accessing export credit insurance by UKTI usage with client profiles from PIMS 14-16 and the PIMS non-user survey of 2009
| UKTI users | Total | UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 14-16 | |------------|-------|----------------|------------|---------------------|------------------| | Base | 290 | 621 | 291 | 2548 | | | 100% | 100% | 100% | 100% | | Yes | 3% | 12% | 3% | 4% | | No | 10% | 12% | 8% | 11% | | Do not use export credit insurance | 86% | 76% | 85% | 73% | | Don’t know/refused | 1% | 0% | 4% | 12% |
9.8 Letters of Credit
All companies were asked whether they either currently used or would use letters of credit when doing business overseas. For those who said that they did use letters of credit and were currently exporting, they were asked whether they had experienced any difficulties in accessing letters of credit or with the terms and conditions relating to the letters of credit in the last six months.
Just under half of the companies had used letters of credit, with firms with more than 50 employees more likely to use letters of credit when conducting business overseas.
A high proportion of firms in the survey sample (48%) reported using letters of credit compared to the 291 respondents to the UKTI PIMS non-user survey of 2009 and 1,698 users of UKTI services surveyed in 2009 of whom 24% and 28% reported using letters of credit respectively. This disparity may be related to the bias in this survey sample towards firms in many markets and world regions.
Table 194: Use of letters of credit
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | 911 | 236 | 249 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 48% | 39% | 34% | 63% | 50% | 60% | 73% | | No | 50% | 59% | 65% | 37% | 47% | 36% | 24% | | Don’t know | 3% | 2% | 2% | 0% | 3% | 3% | 3% |
There was a statistically significant difference between IP active and non-IP active companies in terms of whether they used letters of credit. IP active companies were more likely to use letters of credit when conducting business overseas, especially those with over 50 employees.
Table 195: Use of letters of credit by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 57% | 50% | 38% | 71% | 49% | 70% | 80% | | No | 41% | 48% | 60% | 29% | 47% | 30% | 18% | | Don’t know | 2% | 2% | 2% | 0% | 3% | 0% | 2% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Non-IP active | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 38% | 29% | 31% | 50% | 51% | 43% | 52% | | No | 59% | 68% | 67% | 50% | 46% | 48% | 44% | | Don’t know | 3% | 2% | 1% | 0% | 3% | 10% | 4% |
There was a statistically significant difference between UKTI users and non-UKTI users in terms of whether they used letters of credit. UKTI users were more likely than non-UKTI users to use letters of credit when conducting business overseas, especially those with over 50 employees.
Table 196: Use of letters of credit by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | UKTI users | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 53% | 47% | 35% | 72% | 52% | 65% | 76% | | No | 45% | 53% | 64% | 28% | 45% | 33% | 22% | | Don’t know | 2% | 1% | 1% | 0% | 3% | 2% | 2% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Non-UKTI users | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 36% | 29% | 32% | 44% | 43% | 42% | 50% | | No | 61% | 67% | 65% | 56% | 55% | 50% | 42% | | Don’t know | 3% | 4% | 3% | 0% | 2% | 8% | 8% | Most typically, companies who accessed letters of credit did not have any problems either accessing them or with the terms and conditions relating to these letters of credit.
Table 197: Difficulties with letters of credit
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes - difficulty accessing the letters of credit | 3% | 3% | 3% | 7% | 3% | 3% | 5% | 2% | | Yes - difficulty with the terms and conditions relating to these letters of credit | 4% | 3% | 3% | 4% | 5% | 5% | 5% | 6% | | Yes - both | 2% | 1% | 2% | 4% | 5% | 3% | 2% | 2% | | No | 37% | 31% | 25% | 48% | 65% | 38% | 48% | 58% | | Do not use letters of credit | 53% | 62% | 66% | 37% | 22% | 50% | 40% | 28% | | Don’t know | 1% | 0% | 1% | 0% | 0% | 1% | 0% | 4% |
IP active companies were more likely to access letters of credit. Most typically companies did not have any problems either accessing letters of credit or with the terms and conditions relating to these letters of credit whether IP active or not.
Table 198: Difficulties with letters of credit by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes - difficulty accessing the letters of credit | 4% | 6% | 3% | 0% | 0% | 4% | 8% | 2% | | Yes - difficulty with the terms and conditions relating to these letters of credit | 5% | 2% | 4% | 6% | 4% | 7% | 8% | 7% | | Yes - both | 3% | 1% | 3% | 6% | 4% | 4% | 3% | 2% | | No | 44% | 41% | 24% | 59% | 77% | 33% | 51% | 63% | | Do not use letters of credit | 43% | 50% | 62% | 29% | 15% | 51% | 30% | 22% | | Don’t know | 1% | 0% | 2% | 0% | 0% | 1% | 0% | 4% | | Non-IP active | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes - difficulty accessing the letters of credit | 2% | 2% | 3% | 20% | 9% | 1% | 0% | 0% | | Yes - difficulty with the terms and conditions relating to these letters of credit | 3% | 4% | 3% | 0% | 9% | 3% | 0% | 4% | | Yes - both | 1% | 1% | 1% | 0% | 9% | 2% | 0% | 0% | | No | 31% | 22% | 26% | 30% | 36% | 43% | 43% | 44% | | Do not use letters of credit | 62% | 71% | 69% | 50% | 36% | 49% | 57% | 48% | | Don’t know | 0% | 0% | 0% | 0% | 0% | 1% | 0% | 4% |
Most typically, companies did not have any problems either accessing letters of credit or with the terms and conditions relating to these letters of credit whether UKTI users or not. Table 199: Difficulties with letters of credit by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | |------------|-------|---------------|------------|-----------|--------|--------|------|--------|--------|------| | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes - difficulty accessing the letters of credit | 4% | 4% | 3% | 11% | 4% | 3% | 4% | 2% | | | | Yes - difficulty with the terms and conditions relating to these letters of credit | 5% | 4% | 3% | 6% | 8% | 4% | 7% | 6% | | | | Yes - both | 2% | 1% | 1% | 6% | 0% | 3% | 2% | 1% | | | | No | 42% | 36% | 28% | 50% | 67% | 41% | 52% | 61% | | | | Do not use letters of credit | 47% | 53% | 65% | 28% | 21% | 48% | 35% | 25% | | | | Don’t know | 1% | 0% | 0% | 0% | 0% | 1% | 0% | 4% | | |
| Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | |----------------|------|-----|-----|-----|---|----|----|----|----| | | 100% | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | Yes - difficulty accessing the letters of credit | 2% | 2% | 2% | 0% | 0% | 0% | 8% | 0% | 0% | | Yes - difficulty with the terms and conditions relating to these letters of credit | 3% | 1% | 4% | 0% | 0% | 10% | 0% | 8% | 0% | | Yes - both | 2% | 0% | 2% | 0% | 15%| 2% | 0% | 8% | 0% | | No | 27% | 24% | 22% | 44% | 62%| 29% | 33% | 33% | 33% | | Do not use letters of credit | 65% | 73% | 68% | 56% | 23%| 57% | 58% | 50% | 50% | | Don’t know | 1% | 0% | 2% | 0% | 0% | 2% | 0% | 0% | 0% |
However, a higher proportion of firms indicated that they had experienced difficulties than PIMS evidence suggests.
Table 200: Comparison of difficulties with letters of credit by UKTI usage with client profiles from PIMS 14-16 and the PIMS non-user survey of 2009
| Total | UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 14-16 | |-------|----------------|------------|----------------------|------------------| | UKTI users | Base | 290 | 621 | 291 | 2548 | | | 100% | 100% | 100% | 100% | | Yes - difficulty accessing the letters of credit | 2% | 4% | 1% | 0% | | Yes - difficulty with the terms and conditions relating to these letters of credit | 3% | 5% | 1% | 1% | | Yes - both | 2% | 2% | 1% | 2% | | No | 27% | 42% | 21% | 24% | | Do not use letters of credit | 65% | 47% | 76% | 64% | | Don’t know | 1% | 1% | 0% | 8% |
9.9 Accessing Finance
All companies were asked whether over the past 6 months their company had attempted to access finance either from within the company or from external sources. Those who had, were asked whether their business had any difficulties in accessing finance, either from within the company or from external sources. If they responded ‘Yes’ to this they were then asked whether these difficulties related to accessing internal finance from within the business or, raising finance from external sources such as a bank. For those who had experienced difficulties relating to accessing finance they were asked whether any of these difficulties specifically related to financing their overseas business activity. If these difficulties related to overseas sales they were further asked whether these difficulties accessing finance had had any negative impact on the value of their overseas sales over the last 6 months. However, if they responded ‘no’ or ‘don’t know’ ie the difficulties did not specifically relate to financing their overseas business activity they were instead asked, ‘Although they did not specifically relate to financing your overseas business, would you say that these difficulties accessing finance had any negative impact on the value of your overseas sales over the last 6 months”.
The majority of companies (64%) had not attempted to access either internal or external finance over the last six months. Those most likely to have accessed internal or external finance were younger companies and companies with 100 or more employees.
Table 201: Attempts to access finance
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 30% | 36% | 31% | 33% | 35% | 23% | 22% | 31% | | No | 64% | 61% | 67% | 63% | 54% | 73% | 62% | 53% | | Don’t know | 6% | 3% | 2% | 4% | 11% | 4% | 16% | 17% |
There were statistically significant differences between IP active and non-IP active companies regarding their attempts to access finance. IP active companies were more likely to have attempted to access finance than non-IP active companies (34% vs 26%).
Table 202: Attempts to access finance by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 34% | 36% | 41% | 35% | 35% | 28% | 30% | 34% | | No | 58% | 58% | 57% | 59% | 65% | 68% | 51% | 49% | | Don’t know | 8% | 7% | 2% | 6% | 0% | 4% | 19% | 17% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Non-IP active | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 26% | 36% | 25% | 30% | 36% | 19% | 10% | 20% | | No | 70% | 64% | 73% | 70% | 27% | 78% | 81% | 64% | | Don’t know | 4% | 0% | 3% | 0% | 36% | 3% | 10% | 16% |
Similar proportions of UKTI users (31%) and non-UKTI users (28%) had accessed finance. Firms established up to 5 years ago were most likely to have attempted to access finance. Table 203: Attempts to access finance by UKTI usage
| UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Yes | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | No | | | 100% | 100% | 100% | 100% | 100% | 100% | | Don’t know | | | 31% | 39% | 29% | 27% | 24% | 30% | | | | | 62% | 56% | 54% | 70% | 61% | 52% | | | | | 7% | 5% | 17% | 3% | 15% | 18% |
| Non-UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Yes | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | No | | | 100% | 100% | 100% | 100% | 100% | 100% | | Don’t know | | | 28% | 32% | 46% | 12% | 17% | 33% | | | | | 68% | 65% | 54% | 83% | 67% | 58% | | | | | 3% | 0% | 0% | 5% | 17% | 8% |
Difficulty in accessing finance was more likely to be reported by the youngest companies, with one in five (20%) reporting such difficulties. This result is likely to be driven by this group being more likely to have attempted to access finance.
Table 204: Difficulties in accessing finance
| Total | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Yes | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | No | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Did not attempt to access finance | 70% | 64% | 69% | 67% | 65% | 77% | 78% | 69% | | Don’t know | 1% | 0% | 2% | 0% | 3% | 1% | 0% | 1% | | Refused | 0% | 0% | 0% | 0% | 3% | 0% | 0% | 0% |
Whilst IP active firms were more likely to have attempted to access finance than non-IP active firms, similar proportions indicated that they had experienced difficulties.
Table 205: Difficulties in accessing finance by IP activity
| Total | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Yes | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | No | | 16% | 22% | 22% | 0% | 12% | 12% | 19% | | Did not attempt to access finance | 66% | 64% | 59% | 65% | 65% | 72% | 70% | 66% | | Don’t know | 1% | 0% | 1% | 0% | 4% | 1% | 0% | 1% | | Refused | 0% | 0% | 0% | 0% | 4% | 0% | 0% | 0% |
| Non-IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | |---------------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Yes | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | No | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Did not attempt to access finance | 13% | 18% | 13% | 10% | 9% | 6% | 5% | 16% | | Don’t know | 1% | 0% | 2% | 0% | 0% | 1% | 0% | 0% | Similar proportions of both UKTI users and non-UKTI users (15% and 12% respectively) had experienced difficulties accessing finance.
Table 206: Difficulties in accessing finance by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | UKTI users | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Base | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 15% | 20% | 19% | 6% | 13% | 11% | 15% | 13% | | No | 15% | 19% | 10% | 28% | 13% | 15% | 9% | 17% | | Did not attempt to access finance | 69% | 61% | 69% | 67% | 71% | 73% | 76% | 70% | | Don’t know | 1% | 0% | 1% | 0% | 0% | 1% | 0% | 1% | | Refused | 0% | 0% | 1% | 0% | 4% | 0% | 0% | 0% |
| | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Non-UKTI users | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 12% | 20% | 13% | 0% | 8% | 2% | 8% | 0% | | No | 14% | 12% | 15% | 33% | 31% | 7% | 8% | 33% | | Did not attempt to access finance | 72% | 68% | 70% | 67% | 54% | 88% | 83% | 67% | | Don’t know | 1% | 0% | 2% | 0% | 8% | 2% | 0% | 0% |
The proportion of UKTI users reporting difficulties was lower than that in PIMS 14 and 15 surveys of UKTI trade clients, in which 22% reported difficulties compared to just 12% in this survey.
Table 207: Comparison of difficulties in accessing finance by UKTI usage with client profiles from PIMS 14-15 and PIMS non-user survey of 2009
| | Total | UKTI non-users | UKTI users | PIMS non-users 2009 | Users PIMS 14-15 | |------------------|-------|----------------|------------|---------------------|------------------| | | Base | 290 | 621 | 300 | 1961 | | | | 100% | 100% | 100% | 100% | | UKTI users | | | | | | | Yes | 12% | 15% | 17% | 17% | 22% | | No | 14% | 15% | 80% | 80% | 72% | | Did not attempt to access finance | 72% | 69% | 0% | 0% | | Don’t know | 1% | 1% | 2% | 2% | 6% |
For the minority of companies who indicated that they had experienced problems accessing finance this more typically related to external finance rather than internal finance, especially for younger companies. Table 208: Difficulties in accessing internal or external finance either from within the company or from external sources
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Internal finance | | 1% | 2% | 1% | 0% | 3% | 0% | 0% | | External finance | | 11% | 16% | 13% | 4% | 3% | 8% | 14% | | Both | | 2% | 1% | 2% | 0% | 3% | 1% | 0% | | Did not experience difficulties | 86% | 80% | 84% | 96% | 89% | 91% | 86% | 89% | | Don’t know | | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | Refused | | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
Both IP active and non-IP active companies were equally likely (12% and 10% respectively) to have experienced problems accessing external finance rather than internal finance.
Table 209: Difficulties in accessing internal or external finance either from within the company or from external sources by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | Base | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Internal finance | | 1% | 4% | 1% | 0% | 4% | 0% | 0% | | External finance | | 12% | 15% | 18% | 0% | 0% | 11% | 19% | | Both | | 2% | 3% | 3% | 0% | 4% | 0% | 0% | | Did not experience difficulties | 84% | 78% | 78% | 100% | 88% | 88% | 81% | 90% | | Don’t know | | 1% | 1% | 0% | 0% | 4% | 1% | 0% | | Refused | | 0% | 0% | 1% | 0% | 0% | 0% | 0% |
Both UKTI users and non-users were equally likely (12% and 10% respectively) to have experienced problems accessing external finance, with around one in ten indicating this. Table 210: Difficulties in accessing internal or external finance either from within the company or from external sources by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | UKTI users | Base | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Internal finance | | 1% | 2% | 1% | 0% | 4% | 0% | 0% | 1% | | External finance | | 12% | 16% | 16% | 6% | 0% | 10% | 15% | 7% | | Both | | 2% | 1% | 2% | 0% | 4% | 0% | 0% | 4% | | Did not experience difficulties | | 85% | 80% | 81% | 94% | 88% | 89% | 85% | 88% | | Don’t know | | 0% | 1% | 0% | 0% | 4% | 1% | 0% | 0% | | Non-UKTI users | Base | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Internal finance | | 1% | 2% | 1% | 0% | 0% | 0% | 0% | 0% | | External finance | | 10% | 17% | 9% | 0% | 8% | 0% | 8% | 0% | | Both | | 1% | 1% | 2% | 0% | 0% | 2% | 0% | 0% | | Did not experience difficulties | | 88% | 80% | 87% | 100% | 92% | 98% | 92% | 100% | | Refused | | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% |
However, the above proportions are lower than reported in PIMS 14 and 15 surveys of users of UKTI services (17%) and a 2009 survey of non-users (13%).
Table 211: Comparison of difficulties in accessing finance by UKTI usage with client profiles from PIMS 14-15 and PIMS non-user survey of 2009
| | Total | UKTI Non-users | UKTI users | PIMS Non-users 2009 | Users PIMS 14-15 | |----------------------|-------|----------------|------------|---------------------|------------------| | | Base | 290 | 621 | 300 | 1961 | | | | 100% | 100% | 100% | 100% | | Internal finance | | 1% | 1% | 1% | 2% | | External finance | | 10% | 12% | 13% | 17% | | Both | | 1% | 2% | 3% | 3% | | Did not experience difficulties | | 88% | 85% | 80% | 72% | | Don’t know | | 0% | 0% | 2% | 6% |
Companies were asked to indicate whether any of these difficulties specifically related to financing their overseas business activity.
Although only a minority of companies experienced difficulties accessing finance for overseas business activity, this was more prevalent among younger companies. Please note that a proportion of respondents were not asked this question who should have been. They are classified in this table as ‘Not asked the question’. Table 212: Difficulties in accessing finance related to overseas business activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | | Yes, related to overseas sales | 5% | 9% | 5% | 0% | 0% | | | | | 3% | 3% | 2% | | No | 4% | 5% | 8% | 0% | 0% | | | | | 1% | 3% | 2% | | Did not experience difficulties | 86% | 81% | 84% | 96% | 92% | | | | | 91% | 86% | 89% | | Not asked the question | 5% | 5% | 3% | 4% | 8% | | | | | 5% | 7% | 7% |
There were statistically significant differences between IP active and non-IP active companies regarding their reported difficulties in accessing finance for overseas business. IP active companies were more likely to have experienced difficulties accessing finance for overseas business activity than non-IP active companies. This was driven in part by the higher proportion of firms which had experienced difficulties in accessing finance.
Table 213: Difficulties in accessing finance related to overseas business activity by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | | Yes, related to overseas sales | 7% | 9% | 12% | 0% | 0% | | | | | 6% | 5% | 2% | | No | 4% | 6% | 8% | 0% | 0% | | | | | 1% | 5% | 1% | | Did not experience difficulties | 84% | 79% | 78% | 100% | 92% | | | | | 89% | 81% | 90% | | Not asked the question | 5% | 7% | 2% | 0% | 8% | | | | | 4% | 8% | 6% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Non-IP active | 454 | 129 | 159 | 10 | 11 | | | | | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | | Yes, related to overseas sales | 3% | 9% | 1% | 0% | 0% | | | | | 0% | 0% | 0% | | No | 5% | 5% | 8% | 0% | 0% | | | | | 1% | 0% | 4% | | Did not experience difficulties | 88% | 82% | 87% | 90% | 91% | | | | | 94% | 95% | 84% | | Not asked the question | 5% | 4% | 4% | 10% | 9% | | | | | 5% | 5% | 12% |
UKTI users and non-UKTI users were as likely to have experienced difficulties accessing finance for overseas business activity. Table 214: Whether difficulties in accessing finance related to financing companies overseas business activity by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | | | | | | | | | | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes, related to overseas sales | | | | | | | | | | | 4% | 9% | 3% | 0% | 0% | 4% | 4% | 2% | | No | 5% | 5% | 10% | 0% | 0% | 1% | 4% | 2% | | Did not experience difficulties | | | | | | | | | | | 85% | 81% | 81% | 94% | 92% | 90% | 85% | 88% | | Not asked the question | | | | | | | | | | | 6% | 5% | 5% | 6% | 8% | 5% | 7% | 8% | | Non-UKTI users | Base | | | | | | | | | | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes, related to overseas sales | | | | | | | | | | | 6% | 10% | 7% | 0% | 0% | 0% | 0% | 0% | | No | 3% | 5% | 5% | 0% | 0% | 0% | 0% | 0% | | Did not experience difficulties | | | | | | | | | | | 88% | 80% | 88% | 100% | 92% | 98% | 92% | 100% | | Not asked the question | | | | | | | | | | | 3% | 5% | 0% | 0% | 8% | 2% | 8% | 0% |
Companies were equally likely to report that these difficulties in accessing finance had a negative impact on the value of their overseas sales.
Table 215: Whether difficulties in accessing finance had any negative impact on the value of overseas sales
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | Base | | | | | | | | | | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 7% | 9% | 9% | 0% | 5% | 5% | 10% | 6% | | No | 6% | 10% | 6% | 4% | 5% | 4% | 3% | 5% | | Don’t know | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% | | Did not experience difficulties | | | | | | | | | | | 86% | 81% | 84% | 96% | 89% | 91% | 86% | 89% |
There were statistically significant differences between IP active and non-IP active companies regarding whether their reported difficulties in accessing finance had a negative impact on the value of their overseas sales. IP active companies were more likely to indicate that difficulties in accessing finance had a negative impact on the value of their overseas sales. Table 216: Whether difficulties in accessing finance had any negative impact on the value of overseas sales by IP activity
| IP active | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|-------|---------------|------------|-----------| | | Base | | | | | | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 10% | 11% | 17% | 0% | 8% | 8% | 14% | 6% | | No | 5% | 10% | 4% | 0% | 4% | 3% | 5% | 4% | | Don’t know| 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% | | Did not experience difficulties | 84% | 79% | 78% | 100% | 88% | 89% | 81% | 90% |
| Non-IP active | Base | | | | | | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 5% | 7% | 4% | 0% | 0% | 2% | 5% | 8% | | No | 7% | 9% | 8% | 10% | 9% | 4% | 0% | 8% | | Don’t know | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% | | Did not experience difficulties | 88% | 84% | 87% | 90% | 91% | 94% | 95% | 84% |
UKTI users and non-UKTI users were equally likely to report that difficulties in accessing finance had a negative impact on the value of their overseas sales.
Table 217: Whether difficulties in accessing finance had any negative impact on the value of overseas sales by UKTI usage
| UKTI users | Total | Up to 5 years | 6-10 years | 10+ years | |------------|-------|---------------|------------|-----------| | | Base | | | | | | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 9% | 11% | 11% | 0% | 8% | 6% | 11% | 7% | | No | 6% | 8% | 7% | 6% | 4% | 5% | 4% | 5% | | Don’t know | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% | | Did not experience difficulties | 85% | 81% | 81% | 94% | 88% | 90% | 85% | 88% |
| Non-UKTI users | Base | | | | | | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 5% | 6% | 6% | 0% | 0% | 2% | 8% | 0% | | No | 7% | 12% | 6% | 0% | 8% | 0% | 0% | 0% | | Did not experience difficulties | 89% | 82% | 88% | 100% | 92% | 98% | 92% | 100% | 10. AWARENESS AND USAGE OF UKTI
10.1 Awareness of UKTI Trade Support Services
All companies were asked a series of questions to ascertain their level of awareness of both UKTI and UKTI’s services offerings. Those aware of UKTI or of any of its services were then asked to indicate whether they had actually used any of these services.
Awareness of UKTI service appears to vary with company age and size with older and larger companies more likely to be aware of the UKTI services. Nearly eight in ten companies (79%) were aware of UKTI, with nearly three-quarters of respondents (71%) aware of the commercial services provided by embassies overseas. These figures are much higher than in the 2008 survey where just over half (51%) were aware of UKTI and the commercial services provided by embassies overseas (55%). However, this does not necessarily reflect an increase in awareness, rather, that this survey sample contained a much higher proportion of users of UKTI services (48%) than the 2008 survey sample (35%).
Table 218: Awareness of UKTI services
| Service | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------------------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 911 | 236 | 249 | 27 | 37 | | | 100% | 100% | 100% | 100% | 100% | | UKTI | 79% | 73% | 75% | 74% | 81% | | | | | 86% | 86% | 90% | | Commercial services provided by embassies | 71% | 61% | 63% | 81% | 65% | | overseas | | | 85% | 76% | 88% | | The international Trade Advisors based in | 60% | 53% | 56% | 67% | 59% | | Business Links | | | 66% | 66% | 72% | | Passport to Export | 41% | 34% | 39% | 48% | 35% | | | | | 49% | 38% | 45% | | The Export Marketing Research Scheme (EMRS) | 31% | 25% | 26% | 44% | 38% | | | | | 33% | 31% | 44% | | Export Communication Reviews (ECR) | 11% | 8% | 10% | 11% | 8% | | | | | 15% | 5% | 13% | | The Tradeshow Access Programme (TAP) | 37% | 31% | 35% | 56% | 35% | | | | | 39% | 38% | 46% | | The Overseas marketing Information Service | 41% | 37% | 34% | 48% | 30% | | (OMIS) | | | 45% | 47% | 56% | | Awareness of UKTI or at least one UKTI | 92% | 88% | 89% | 96% | 92% | | service | | | 97% | 97% | 100% |
There were statistically significant differences between IP active and non-IP active companies regarding their awareness of many of the UKTI services. However the notable exceptions to this were Passport to Export, ECR and Business Link where IP active and non-IP active firms had similar levels of awareness. Table 219: Awareness of UKTI by IP activity
| IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | UKTI | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Commercial services provided by embassies overseas | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | The international Trade Advisors based in Business Links | 65% | 57% | 59% | 71% | 62% | 69% | 68% | 76% | | Passport to Export | 44% | 35% | 42% | 41% | 35% | 58% | 38% | 47% | | The Export Marketing Research Scheme (EMRS) | 38% | 32% | 33% | 41% | 38% | 41% | 27% | 53% | | Export Communication Reviews (ECR) | 12% | 10% | 12% | 0% | 8% | 18% | 8% | 14% | | The Tradeshow Access Programme (TAP) | 45% | 37% | 49% | 53% | 31% | 51% | 43% | 47% | | The Overseas marketing Information Service (OMIS) | 47% | 44% | 44% | 47% | 31% | 48% | 49% | 59% | | Awareness of UKTI or at least one UKTI service | 95% | 90% | 93% | 94% | 92% | 98% | 97% | 100% |
| Non- IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | |---------------|------|-------|---------------|------------|-----------| | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | UKTI | | | 74% | 68% | 69% | 60% | 82% | 86% | 81% | 84% | | Commercial services provided by embassies overseas | 67% | 57% | 58% | 90% | 64% | 86% | 90% | 80% | | The international Trade Advisors based in Business Links | 56% | 50% | 54% | 60% | 55% | 64% | 62% | 60% | | Passport to Export | 38% | 34% | 37% | 60% | 36% | 40% | 38% | 40% | | The Export Marketing Research Scheme (EMRS) | 23% | 20% | 21% | 50% | 36% | 24% | 38% | 16% | | Export Communication Reviews (ECR) | 9% | 6% | 9% | 30% | 9% | 12% | 0% | 8% | | The Tradeshow Access Programme (TAP) | 29% | 26% | 27% | 60% | 45% | 27% | 29% | 44% | | The Overseas marketing Information Service (OMIS) | 34% | 32% | 28% | 50% | 27% | 42% | 43% | 44% | | Awareness of UKTI or at least one UKTI service | 90% | 86% | 86% | 100% | 91% | 96% | 95% | 100% |
There were statistically significant differences between UKTI users and non-UKTI users for all services. Not surprisingly UKTI users were more likely to be aware of each of the UKTI services than non-UKTI users especially the international Trade Advisors in Business Link and the commercial services provided by embassies overseas. Table 220: Awareness of UKTI services by UKTI usage
| UKTI users | Base | Total | Up to 5 years | 6-10 years | 10+ years | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | |------------|------|-------|---------------|------------|-----------|--------|--------|-------|--------|--------|-------| | | | | | | | | | | | | | | UKTI | | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Commercial services provided by embassies overseas | | 91% | 92% | 90% | 89% | 88% | 92% | 93% | 91% | | | | The international Trade Advisors based in Business Links | | 85% | 77% | 82% | 94% | 83% | 92% | 83% | 90% | | | | Passport to Export | | 75% | 75% | 76% | 89% | 71% | 75% | 70% | 73% | | | | The Export Marketing Research Scheme (EMRS) | | 52% | 48% | 55% | 61% | 46% | 56% | 41% | 48% | | | | Export Communication Reviews (ECR) | | 40% | 37% | 36% | 61% | 50% | 39% | 35% | 45% | | | | The Tradeshow Access Programme (TAP) | | 14% | 12% | 16% | 11% | 8% | 18% | 4% | 14% | | | | The Overseas marketing Information Service (OMIS) | | 46% | 44% | 50% | 72% | 42% | 43% | 41% | 45% | | | | Awareness of UKTI or at least one UKTI service | | 52% | 49% | 47% | 67% | 38% | 55% | 54% | 57% | | | | Non-UKTI users | | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | UKTI | | 54% | 48% | 52% | 44% | 69% | 62% | 58% | 83% | | | | Commercial services provided by embassies overseas | | 42% | 40% | 34% | 56% | 31% | 60% | 50% | 75% | | | | The international Trade Advisors based in Business Links | | 30% | 24% | 27% | 22% | 38% | 36% | 50% | 67% | | | | Passport to Export | | 18% | 16% | 15% | 22% | 15% | 24% | 25% | 25% | | | | The Export Marketing Research Scheme (EMRS) | | 12% | 10% | 10% | 11% | 15% | 10% | 17% | 42% | | | | Export Communication Reviews (ECR) | | 3% | 3% | 2% | 11% | 8% | 2% | 8% | 8% | | | | The Tradeshow Access Programme (TAP) | | 18% | 13% | 13% | 22% | 23% | 24% | 25% | 58% | | | | The Overseas marketing Information Service (OMIS) | | 18% | 22% | 14% | 11% | 15% | 12% | 17% | 42% | | | | Awareness of UKTI or at least one UKTI service | | 76% | 71% | 72% | 89% | 77% | 86% | 83% | 100% | | |
Usage of UKTI services does appear to vary with both company age and size with older and larger companies more likely to have availed of UKTI services most especially the commercial services provided by embassies overseas. Table 221: Usage of UKTI services
| Service | Total | Up to 5 years | 6-10 years | 10+ years | |----------------------------------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | Base | 911 | 236 | 249 | 27 | 37 | | | 100% | 100% | 100% | 100% | 100% | | UKTI | 48% | 39% | 41% | 44% | 46% | | Commercial services provided by embassies overseas | 45% | 34% | 36% | 41% | 41% | | The international Trade Advisors based in Business Links | 36% | 28% | 31% | 41% | 32% | | Passport to Export | 15% | 13% | 19% | 11% | 5% | | The Export Marketing Research Scheme (EMRS) | 12% | 9% | 7% | 19% | 19% | | Export Communication Reviews (ECR) | 5% | 2% | 4% | 7% | 3% | | The Tradeshows Access Programme (TAP) | 16% | 11% | 12% | 22% | 14% | | The Overseas marketing Information Service (OMIS) | 19% | 14% | 13% | 19% | 16% | | Usage of UKTI or at least one UKTI service | 68% | 57% | 59% | 67% | 65% |
There were statistically significant differences between IP active and non-IP active companies regarding their use of UKTI services. IP active companies were more likely to be aware of UKTI and each of the listed UKTI services than non-IP active companies, most specifically, the commercial services provided by embassies overseas, the international Trade Advisors based in Business Links and OMIS. Table 222: Usage of UKTI services by IP activity
| IP active | Base | Total | Up to 5 years | 6-10 years | 10+ years | |-----------|------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100+ | 0 - 49 | 50 - 99 | 100+ | | IP active | | | | | | | | | | Base | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | | UKTI | 56% | 47% | 46% | 47% | 38% | 66% | 65% | 71% | | Commercial services provided by embassies overseas | 53% | 45% | 46% | 47% | 38% | 55% | 54% | 72% | | The international Trade Advisors based in Business Links | 41% | 36% | 33% | 53% | 35% | 47% | 41% | 49% | | Passport to Export | 18% | 15% | 22% | 6% | 4% | 29% | 5% | 17% | | The Export Marketing Research Scheme (EMRS) | 16% | 11% | 10% | 24% | 19% | 19% | 16% | 22% | | Export Communication Reviews (ECR) | 6% | 1% | 7% | 0% | 4% | 8% | 3% | 11% | | The Tradeshows Access Programme (TAP) | 23% | 20% | 20% | 33% | 21% | 24% | 28% | 26% | | The Overseas marketing Information Service (OMIS) | 24% | 19% | 17% | 29% | 15% | 27% | 27% | 37% | | Usage of UKTI or at least one UKTI service | 76% | 73% | 66% | 71% | 62% | 82% | 81% | 88% |
| Non-IP active | Base | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | |---------------|------|-----|-----|-----|----|----|----|----|----| | | | | | | | | | | | | 100% | 100% | 100%| 100%| 100%| 100%| 100%| 100%| 100%| 100%| | UKTI | 41% | 33% | 38% | 40% | 64%| 46% | 52% | 52% | 52%| | Commercial services provided by embassies overseas | 37% | 25% | 30% | 30% | 45%| 53% | 67% | 48% | 48%| | The international Trade Advisors based in Business Links | 30% | 22% | 30% | 20% | 27%| 37% | 33% | 44% | 44%| | Passport to Export | 13% | 12% | 17% | 20% | 9% | 11% | 0% | 4% | 4% | | The Export Marketing Research Scheme (EMRS) | 7% | 7% | 6% | 10% | 18%| 9% | 14% | 0% | 0% | | Export Communication Reviews (ECR) | 3% | 2% | 2% | 20% | 0% | 6% | 0% | 4% | 4% | | The Tradeshows Access Programme (TAP) | 17% | 13% | 12% | 11% | 23%| 24% | 25% | 58% | 58%| | The Overseas marketing Information Service (OMIS) | 14% | 9% | 11% | 0% | 18%| 18% | 33% | 20% | 20%| | Usage of UKTI or at least one UKTI service | 60% | 44% | 56% | 60% | 73%| 75% | 76% | 92% | 92%|
10.2 Business Link
All companies were asked whether prior to the interview they had heard of Business Link. For those who required it there was also an explanation of Business Link as follows:
“Business Link is a free business advice and support service, available online and through local advisers”
Those who had heard of Business Link were asked whether they had used Business Link. All respondents were then asked how likely they would be to use Business Link in the future.
Awareness of Business Link was very high, and indeed higher than that of UKTI, especially among older companies, as shown in the table below. Table 223: Awareness of Business Link
| | Total | Up to 5 years | 6-10 years | 10+ years | 6-10 years | 10+ years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------|------------|-----------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 90% | 85% | 91% | 85% | 81% | 95% | 95% | 94% | | No | 9% | 14% | 9% | 15% | 19% | 4% | 5% | 6% | | Don’t know | 0% | 1% | 0% | 0% | 0% | 1% | 0% | 0% |
Awareness of Business Link is comparable amongst IP active and non-IP active companies, as shown in the table below.
Table 224: Awareness of Business Link by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | 6-10 years | 10+ years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------|------------|-----------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 92% | 88% | 91% | 82% | 81% | 95% | 100% | 95% | | No | 8% | 12% | 9% | 18% | 19% | 5% | 0% | 5% | | Non-IP active | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 89% | 82% | 91% | 90% | 82% | 96% | 86% | 88% | | No | 11% | 16% | 9% | 10% | 18% | 3% | 14% | 12% | | Don’t know | 1% | 2% | 0% | 0% | 0% | 1% | 0% | 0% |
There were statistically significant differences between UKTI users and non-UKTI users regarding whether they had heard of Business Link prior to the interview. UKTI users were more likely than non-UKTI users to have heard of Business Link.
Table 225: Awareness of Business Link by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | 6-10 years | 10+ years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------|------------|-----------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | UKTI users | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 95% | 92% | 97% | 94% | 83% | 98% | 98% | 93% | | No | 5% | 8% | 3% | 6% | 17% | 2% | 2% | 7% | | Non-UKTI users | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | Yes | 80% | 75% | 81% | 67% | 77% | 86% | 83% | 100% | | No | 19% | 23% | 19% | 33% | 23% | 12% | 17% | 0% | | Don’t know | 1% | 2% | 0% | 0% | 0% | 2% | 0% | 0% |
Six in ten companies (60%) had used Business Link with usage being more likely amongst older companies. Table 226: Usage of Business Link
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | 196 | 58 | 108 | | Yes | 60% | 52% | 62% | 56% | 57% | 66% | 66% | 65% | | No | 28% | 31% | 28% | 26% | 24% | 27% | 28% | 26% | | Don’t know | 2% | 2% | 0% | 4% | 0% | 3% | 2% | 3% | | Not aware of Business Link | 10% | 15% | 9% | 15% | 19% | 5% | 5% | 6% |
There was a statistically significant difference between IP active and non-IP active companies regarding their likelihood of use of Business Link. IP active companies were more likely to have used Business Link than non-IP active companies.
Table 227: Usage of Business Link by IP Activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | 97 | 37 | 83 | | Yes | 65% | 62% | 62% | 65% | 58% | 73% | 62% | 65% | | No | 25% | 23% | 28% | 18% | 23% | 19% | 35% | 28% | | Don’t know | 2% | 3% | 1% | 0% | 0% | 3% | 3% | 2% | | Not aware of Business Link | 8% | 12% | 9% | 18% | 19% | 5% | 0% | 5% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Non-IP active | 454 | 129 | 159 | 10 | 11 | 99 | 21 | 25 | | Yes | 56% | 44% | 62% | 40% | 55% | 59% | 71% | 64% | | No | 31% | 37% | 28% | 40% | 27% | 35% | 14% | 20% | | Don’t know | 1% | 1% | 0% | 10% | 0% | 2% | 0% | 4% | | Not aware of Business Link | 11% | 18% | 9% | 10% | 18% | 4% | 14% | 12% |
There was a statistically significant difference between UKTI users and non-UKTI users regarding their likelihood of use of Business Link. UKTI users were more likely to have used Business Link than non-UKTI users (72% vs 35%).
Table 228: Usage of Business Link by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | UKTI users | 621 | 135 | 148 | 18 | 24 | 154 | 46 | 96 | | Yes | 72% | 71% | 78% | 72% | 67% | 73% | 70% | 69% | | No | 20% | 19% | 19% | 17% | 17% | 23% | 26% | 21% | | Don’t know | 2% | 2% | 1% | 6% | 0% | 3% | 2% | 3% | | Not aware of Business Link | 5% | 8% | 3% | 6% | 17% | 2% | 2% | 7% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | | | | | | 0 - 49 | 50 - 99 | 100 + | 0 - 49 | 50 - 99 | 100 + | | Non-UKTI users | 290 | 101 | 101 | 9 | 13 | 42 | 12 | 12 | | Yes | 35% | 27% | 40% | 22% | 38% | 40% | 50% | 33% | | No | 44% | 48% | 42% | 44% | 38% | 43% | 33% | 67% | | Don’t know | 1% | 1% | 0% | 0% | 0% | 2% | 0% | 0% | | Not aware of Business Link | 20% | 25% | 19% | 33% | 23% | 14% | 17% | 0% | Nearly six in ten companies (56%) felt that it was ‘very likely’ or ‘quite likely’ that they would use Business Link at some stage in the future.
Table 229: Likelihood of using Business Link in the future
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Total | 911 | 236 | 249 | 27 | 37 | | | | | 196 | 58 | 108 | | Very likely | 22% | 21% | 27% | 33% | 14% | | | | | 20% | 21% | 20% | | Quite likely | 34% | 34% | 28% | 15% | 38% | | | | | 38% | 40% | 38% | | Quite unlikely | 20% | 17% | 20% | 30% | 22% | | | | | 21% | 22% | 19% | | Very unlikely | 14% | 14% | 16% | 11% | 22% | | | | | 12% | 7% | 17% | | Don’t know | 10% | 14% | 9% | 11% | 5% | | | | | 8% | 10% | 6% |
There was a statistically significant difference between IP active and non-IP active companies regarding their likelihood of use of Business Link in the future. A higher proportion of IP active companies (60%) than non-IP active companies (51%) indicate that they are likely to use Business Link in the future.
Table 230: Likelihood of using Business Link in the future by IP activity
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | IP active | 457 | 107 | 90 | 17 | 26 | | | | | 97 | 37 | 83 | | Very likely | 23% | 16% | 33% | 47% | 8% | | | | | 25% | 19% | 23% | | Quite likely | 37% | 42% | 24% | 12% | 46% | | | | | 43% | 46% | 36% | | Quite unlikely | 17% | 13% | 16% | 24% | 23% | | | | | 16% | 22% | 20% | | Very unlikely | 12% | 13% | 16% | 6% | 19% | | | | | 6% | 8% | 14% | | Don’t know | 10% | 16% | 11% | 12% | 4% | | | | | 9% | 5% | 6% |
| | Total | Up to 5 years | 6-10 years | 10+ years | |----------------|-------|---------------|------------|-----------| | | Base | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | Non-IP active | 454 | 129 | 159 | 10 | 11 | | | | | 99 | 21 | 25 | | Very likely | 21% | 26% | 23% | 10% | 27% | | | | | 16% | 24% | 12% | | Quite likely | 30% | 28% | 30% | 20% | 18% | | | | | 32% | 29% | 44% | | Quite unlikely | 23% | 21% | 23% | 40% | 18% | | | | | 26% | 24% | 16% | | Very unlikely | 17% | 14% | 17% | 20% | 27% | | | | | 18% | 5% | 24% | | Don’t know | 9% | 12% | 8% | 10% | 9% | | | | | 7% | 19% | 4% |
There was a statistically significant difference between UKTI users and non-UKTI users regarding their likelihood of use of Business Link in the future. UKTI users (65%) are more likely to indicate that they will use Business Link in the future compared to non-UKTI users (38%). Table 231: Likelihood of using Business Link in the future by UKTI usage
| | Total | Up to 5 years | 6-10 years | 10+ years | |------------------|-------|---------------|------------|-----------| | | | | 0 - 49 | 50 - 99 | 100 + | | | | | 0 - 49 | 50 - 99 | 100 + | | UKTI users | Base | | | | | | Base | 621 | 135 | 148 | 18 | 24 | | | 100% | 100% | 100% | 100% | 100% | | Very likely | 29% | 30% | 37% | 44% | 21% | | | | | | | | | Quite likely | 36% | 40% | 26% | 11% | 42% | | | | | | | | | Quite unlikely | 18% | 13% | 18% | 28% | 21% | | | | | | | | | Very unlikely | 10% | 7% | 13% | 11% | 13% | | | | | | | | | Don’t know | 7% | 10% | 5% | 6% | 4% | | | | | | | | | Non-UKTI users | Base | | | | | | Base | 290 | 101 | 101 | 9 | 13 | | | 100% | 100% | 100% | 100% | 100% | | Very likely | 9% | 10% | 11% | 11% | 0% | | | | | | | | | Quite likely | 29% | 27% | 31% | 22% | 31% | | | | | | | | | Quite unlikely | 24% | 23% | 23% | 33% | 23% | | | | | | | | | Very unlikely | 23% | 23% | 22% | 11% | 38% | | | | | | | | | Don’t know | 15% | 18% | 14% | 22% | 8% |
Accent UKTI Evaluation Final Report November 2010.doc•TM•12.07.10 Page 137 of 137 APPENDIX A
SIC Code Exclusions | SIC Code Exclusions | |---------------------| | Grow cereals & other crops | 01 | | Grow vegetables & nursery products | 01 | | Grow fruit, nuts, beverage & spice crops | 01 | | Farming of cattle, dairy farming | 01 | | Farming of poultry | 01 | | Other farming of animals | 01 | | Other farming of animals | 01 | | Crops combined with animals, mixed farms | 01 | | Agricultural service activities | 01 | | Animal husbandry services, not vets | 01 | | Forestry & logging related services | 02 | | Fishing | 05 | | Operation of fish hatcheries & farms | 05 | | Extraction of petroleum & natural gas | 11 | | Services to oil and gas extraction | 11 | | Mining of non-ferrous metal ores | 13 | | Quarrying of stone for construction | 14 | | Quarrying of slate | 14 | | Production of salt | 14 | | Other mining and quarrying | 14 | | Manufacture of luggage & the like, saddlery | 19 | | Sawmill, plane, impregnation wood | 20 | | Manufacture of pulp | 21 | | Manufacture of paper & paperboard | 21 | | Manufacture corrugated paper & containers | 21 | | Manufacture corrugated paper & containers | 21 | | Manufacture of household & toilet goods | 21 | | Manufacture of paper stationery | 21 | | Manufacture of paper stationery | 21 | | Manufacture of wallpaper | 21 | | Manufacture of paper & paperboard goods | 21 | | Other activities to printing | 22 | | Manufacture of basic iron & steel (ecsc) | 27 | | Manufacture of steel tubes | 27 | | Other 1st process iron & steel | 27 | | Precious metals production | 27 | | Aluminium production | 27 | | Copper production | 27 | | Other non-ferrous metal production | 27 | | Casting of iron | 27 | | Forge press stamp & roll form metal | 28 | | Treatment and coat metals | 28 | | Recycling non-metal waste & scrap | 37 | | Manufacture of gas; mains distribution | 40 | | Collection, purify etc. of water | 41 | | Demolition buildings; earth moving | 45 | | Test drilling and boring | 45 | | General construction & civil engineering | 45 | | General construction & civil engineering | 45 | | Erection of roof covering & frames | 45 | | Construction roads, airfields etc. | 45 | | Construction of water projects | 45 | | Other special trades construction | 45 | | Installation electrical wiring etc. | 45 | | Plumbing | 45 | | Service Description | Code | |----------------------------------------------------------|------| | Other building installation | 45 | | Plastering | 45 | | Joinery installation | 45 | | Floor and wall covering | 45 | | Painting and glazing | 45 | | Other building completion | 45 | | Sale of motor vehicles | 50 | | Maintenance & repair of motors | 50 | | Sale of motor vehicle parts etc. | 50 | | Sale, repair etc. m'cycles & parts | 50 | | Retail sale of automotive fuel | 50 | | Retail non-special stores food, etc. | 52 | | Other retail non-specialised stores | 52 | | Retail of fruit and vegetables | 52 | | Retail of meat and meat products | 52 | | Retail of fish, crustaceans etc. | 52 | | Retail bread, cakes, confectionery | 52 | | Retail alcoholic & other beverages | 52 | | Retail sale of tobacco products | 52 | | Other retail food etc. specialised | 52 | | Dispensing chemists | 52 | | Retail sale of textiles | 52 | | Retail sale of clothing | 52 | | Retail of footwear & leather goods | 52 | | Retail furniture household etc. | 52 | | Retail furniture household etc. | 52 | | Retail electric household, etc. goods | 52 | | Retail hardware, paints & glass | 52 | | Retail books, newspapers etc. | 52 | | Other retail specialised stores | 52 | | Retail second-hand goods in stores | 52 | | Retail sale via mail order houses | 52 | | Other non-store retail sale | 52 | | Repair boots, shoes, leather goods | 52 | | Repair electrical household goods | 52 | | Repair of clocks & jewellery | 52 | | Repair not elsewhere classified | 52 | | Hotels & motels, with restaurant | 55 | | Youth hostels and mountain refuges | 55 | | Camp sites, including caravan sites | 55 | | Other provision of lodgings | 55 | | Restaurants | 55 | | Bars | 55 | | Catering | 55 | | Transport via railways | 60 | | Other scheduled passenger land transport | 60 | | Taxi operation | 60 | | Other passenger land transport | 60 | | Freight transport by road | 60 | | Transport via pipelines | 60 | | Sea and coastal water transport | 61 | | Inland water transport | 61 | | Scheduled air transport | 62 | | Non-scheduled air transport | 62 | | Storage and warehousing | 63 | | Other supporting water transport | 63 | | Travel agencies etc; tourist | 63 | | Activity | Code | |-------------------------------------------------------------------------|------| | National post activities | 64 | | Non-life insurance | 66 | | Development & sell real estate | 70 | | Letting of own property | 70 | | Real estate agencies | 70 | | Manage real estate, fee or contract | 70 | | Renting of automobiles | 71 | | Rent other land transport equipment | 71 | | Rent water transport equipment | 71 | | Rent civil engineering machinery | 71 | | Rent office machinery inc. computers | 71 | | Rent personal & household goods | 71 | | Industrial cleaning | 74 | | Legal activities | 74 | | Justice and judicial activities | 75 | | Public security, law & order | 75 | | Fire service activities | 75 | | Compulsory social security | 75 | | Primary education | 80 | | General secondary education | 80 | | Technical & vocational secondary | 80 | | Higher education | 80 | | Driving school activities | 80 | | Adult and other education | 80 | | Hospital activities | 85 | | Medical practice activities | 85 | | Dental practice activities | 85 | | Other human health activities | 85 | | Veterinary activities | 85 | | Social work with accommodation | 85 | | Social work without accommodation | 85 | | Business & employers organisations | 91 | | Professional organisations | 91 | | Religious organisations | 91 | | Political organisations | 91 | | Other membership organisations | 91 | | Motion picture projection | 92 | | Artistic & literary creation | 92 | | Operation of arts facilities | 92 | | Operation of arts facilities | 92 | | Fair and amusement park activities | 92 | | Other entertainment activities | 92 | | Library and archives activities | 92 | | Museum & preservation of history | 92 | | Botanical, zoos & nature reserves | 92 | | Operate sports arenas & stadiums | 92 | | Other sporting activities | 92 | | Gambling and betting activities | 92 | | Other recreational activities | 92 | | Wash & dry clean textile & fur | 93 | | Hairdressing & other beauty treatment | 93 | | Funeral and related activities | 93 | | Physical well-being activities | 93 | | Other service activities | 93 | | Private households with employees | 95 | | Extra-territorial organisations | 99 | Appendix B
Questionnaire Recruitment
Could I please speak to either the owner or someone responsible for your firm’s strategy in relation to your company’s non-UK business activity? Good morning/afternoon/evening. My name is ....... from Accent, an independent market research agency and I am carrying out research for the UK Trade & Investment and the Department for Business, Enterprise & Regulatory Reform (BERR) on the topic of UK based businesses conducting business outside of the UK.
We are interested in talking to a range of UK based firms either currently involved in any form of business activity outside of the UK or who are currently considering any form of business activity outside of the UK in the next 12 months. This overseas business activity might comprise, for example, selling directly to businesses or individuals abroad, selling to businesses or individuals abroad through agents or distributors, licensing or franchising overseas, or other contractual arrangements (including joint ventures) or operating your own overseas site or office. We are interested in talking to any UK based companies who are either currently, or who are intending in the next 12 months, to conduct any international business activity in any form. Please note, this call is being recorded for quality control purposes.
INTERVIEWER NOTE - YOU MAY TAKE REFERRALS TO ANOTHER SITE WITHIN THE UK.
INTERVIEWER NOTE – IF FIRM IS NOT CURRENTLY DOING BUSINESS OVERSEAS, BUT PLANNING ON DOING SO WITHIN THE NEXT YEAR CONTINUE WITH THE INTERVIEW ON THIS BASIS
This research will cover areas such as your current or potential overseas business activities, covering the way you go about doing business overseas and any issues you may have faced. It will take around 20 minutes to complete, depending upon your answers.
AS NECESSARY: We are able to offer all businesses taking part in this research an electronic link to a summary report of the research findings
AS NECESSARY: IT DOESN’T MATTER HOW MUCH OR HOW LITTLE OVERSEAS BUSINESS YOU DO – WE’RE INTERESTED IN SPEAKING TO A RANGE OF FIRMS ABOUT THEIR EXPERIENCES.
AS NECESSARY UKTI is responsible for helping UK firms do business overseas. They want to find out more about how firms are going about overseas business and any difficulties they have. This will help UKTI develop the type of help they offer to UK firms The research is being conducted under the Code of Practice of the Market Research Society, which means that all of the answers you give are strictly confidential and anonymous. Participation in this survey is voluntary. You do not have to answer any questions you do not wish to and you can terminate the interview at any point.
The responses of all organisations taking part will be combined into a statistical report.
Your organisation was selected at random from a list of UK businesses held by a commercial list broker.
If you wish to check that Accent is a bona fide market research agency, you can contact the Market Research Society on 0500 396999, or call Teresa McGarry at Accent on 0208 742 2211 or Heather Booth di Giovanni at UK Trade & Investment on 020 7215 4989.
Q1. Is it convenient to speak to you now or would you prefer to make an appointment for another time?
1. Speak now
2. Call back
Q2. Can I confirm that you are one of the people best qualified to talk about your company’s overseas business activity?
INTERVIEWER NOTE: IF KNOW ALREADY THAT YOU ARE SPEAKING TO THE CORRECT PERSON THEN CODE YES AUTOMATICALLY
REFERRALS CAN BE TAKEN TO ANY SITE WHEN THE CONTACT FEELS THAT THERE IS SOMEONE WITHIN THE COMPANY BETTER PLACED TO ANSWER QUESTIONS ON THE TOPIC AREAS OUTLINED
1. Yes
2. No – take referral and being transferred
3. No – take referral and arrange call back
4. No – refused referral THANK AND CLOSE
Q2b: May I ask your name and job title?
INTERVIEWER: PERSON NEEDS TO BE A SENIOR LEVEL BUSINESS PERSON SUCH AS THE MANAGING DIRECTOR, GENERAL MANAGER, COMMERCIAL DIRECTOR, HEAD OF MARKET DEVELOPMENT, SALES DIRECTOR ETC. IF NOT ASK TO SPEAK TO SOMEONE ELSE.
SCREENER
Q3. ASK ALL Which of the following overseas business activities has your firm been involved in, over the last 5 years? READ OUT – CODE ALL THAT APPLY
INTERVIEWER: ‘ABROAD’ MEANS OUTSIDE OF THE UK
1. Selling directly to businesses or individuals abroad
2. Selling to businesses or individuals abroad through agents or distributors
3. Licensing or franchising overseas, or other contractual arrangements (including joint ventures)
4. Operating your own overseas site or office
5. (None of these) ASK Q4
6. Don’t know THANK AND CLOSE Q4. **IF NONE AT Q3 (CODE 5) ASK:** Are you seriously considering starting to conduct overseas business via any of these routes in the **NEXT YEAR**?
7. Yes
8. No **THANK AND CLOSE**
9. Don’t know **THANK AND CLOSE**
Q5. **(IF Q4=1) ASK:** Which of the following overseas business activities are you planning to become involved in, in the next year? **CODE ALL THAT APPLY**
**INTERVIEWER: ‘ABROAD’ MEANS OUTSIDE OF THE UK**
1. Selling to businesses or individuals abroad
2. Selling to businesses or individuals abroad through agents or distributors
3. Licensing or franchising overseas, or other contractual arrangements (including joint ventures)
4. Operating your own overseas site or office
5. None of these **THANK AND CLOSE**
6. Don’t know **THANK AND CLOSE**
Q6. **IF CODE 3 AT Q3 OR CODE 3 AT Q5** You mentioned licensing or franchising overseas, or other contractual arrangements, but is this/ will this be licensing, franchising or some other partnership or joint venture arrangement? **CODE ALL THAT APPLY**
**INTERVIEWER NOTE:** IF RESPONDENT HAS ALREADY PROVIDED THIS INFORMATION DO NOT ASK QUESTION AND CODE AS APPROPRIATE
**INTERVIEWER NOTE:** IF IN DOUBT, RESPONDENT SHOULD SELECT THE MOST APPROPRIATE OPTION
1. Licensing
2. Franchising
3. Other partnership or joint venture arrangement
4. Don’t know
Q7. **IF CODE 3 AT Q6:** Would you say that the **MAIN** purpose of this partnership or joint venture is/will be? **READ OUT. CODE ALL THAT APPLY**
1. Manufacturing
2. Assembly
3. Call centre
4. Distribution/sales office
5. After-sales office
6. Service delivery
7. Research, product or process development
8. Something else (SPECIFY)
9. Don’t know
Q8. **IF CODE 4 AT Q3 OR CODE 4 AT Q5** You mentioned operating your own overseas office or site. How many overseas sites do you have/ will you have? **READ OUT. CODE ONE ONLY**
1. One
2. 2-5
3. 6-10
4. 11-20
5. 21-50
6. More than 50
7. Don’t know
8. Refused
Q9. **(IF CODE 1 AT Q8) OR (CODE 4 AT Q5) ONLY ONE SITE:** Would you say that the **MAIN** purpose of this office or site is/will be…
**OR (IF CODE 2-6 AT Q8) OR CODE 4 AT Q5:** Would you say that the **MAIN** purpose of these offices or sites are/will be: **READ OUT**
**READ OUT SINGLE CODE**
1. Manufacturing
2. Assembly
3. Call centre
4. Distribution/sales office
5. After-sales office
6. Service delivery
7. Research, product or process development
8. Don’t know
Q10. **(IF CODES 1-4 AT Q3):** Have you **IMPORTED** any goods or services over the last 5 years **(excluding through partnerships, joint ventures and production sites)?**
**PROMPT:** By importing I mean the buying in of goods or services from overseas suppliers
1. Yes
2. No **GO TO Q12**
3. Don’t know **GO TO Q12**
Q11. **IF CODE 1 (YES) AT Q10:** Do you import…? **READ OUT**
1. Direct from an overseas supplier
2. Or, through a UK-based intermediary
3. Or, both
4. Don’t know
**INTERVIEWER:** **READ OUT:** FROM NOW ON, WHEN I’M ASKING QUESTIONS ABOUT YOUR OVERSEAS BUSINESS ACTIVITY PLEASE DO NOT INCLUDE IMPORTING
Q12. **ASK ALL** And can I just ask, how long ago was your business established?
**READ OUT –INTERVIEWER:** THIS MEANS WHEN THE BUSINESS IN ITS CURRENT FORM STARTED TRADING
**INTERVIEWER:** IF THE BUSINESS IS A SUBSIDIARY THIS REFERS TO THE SUBSIDIARY IN WHICH THEY WORK
01. Within the last year
02. Over 1, up to 2 years ago
03. Over 2, up to 3 years ago
04. Over 3, up to 4 years ago
05. Over 4, up to 5 years ago
06. Over 5, up to 10 years ago
07. Over 10, up to 20 years ago
08. Over 20 years ago
09. Not yet trading
10. Don’t know
11. Refused
Q13. **(ASK IF CODES 1-2 AT Q12) IF ESTABLISHED 1-2 YEARS.** Can I just check, has your business actually started trading yet?
1. Yes
2. No
3. Don’t know
Q14. **ASK ALL** And what is the main activity of the business? **PROBE FULLY FOR INDUSTRY TYPE - IF MANUFACTURING WHAT TYPE OF MANUFACTURING, IF FINANCIAL SERVICES WHAT KIND AND SO FORTH**
01. Agriculture, hunting & forestry
02. Fishing
03. Mining & quarrying
04. Manufacturing
05. Electricity, gas and water supply
06. Construction
07. Retail, wholesale & repair of motor vehicles
08. Hotels and catering
09. Transport, storage and communication
10. Financial intermediation (Finance)
11. Real estate, renting & business activities
12. Public administration and defence
13. Education
14. Health and social work
15. Other community, social & personal service activities
16. Other (specify)
17. Don’t know
18. Refused
**SECTION A: OVERSEAS BUSINESS ACTIVITY**
Q15. **(ASK IF CODES 1-4 AT Q3)** As a company would you say you are…? **READ OUT – SINGLE CODE**
1. Very experienced in overseas markets
2. Quite experienced
3. Not very experienced
4. Or not at all experienced in overseas markets
5. Don’t know
6. Refused
Q16. **(ASK IF CODES 1-4 AT Q3)** And how long ago did your company start conducting business overseas? **READ OUT AS NECESSARY – ANSWER MUST NOT BE GREATER THAN Q12**
01. Within the last year
02. Over 1, up to 2 years ago
03. Over 2, up to 3 years ago
04. Over 3, up to 4 years ago
05. Over 4, up to 5 years ago
06. Over 5, up to 10 years ago
07. Over 10, up to 20 years ago
08. Over 20 years ago
09. Have not yet started doing business overseas
10. Don’t know
11. Refused
Q17. **(ASK IF CODES 1-4 AT Q3)** How many overseas countries have you done business in over the last 5 years, in any form? **IF IMPORTER (IE CODE 1 AT Q10) READ OUT: although please DO NOT include countries that you have only imported from.** **READ OUT CODES**
1. None Q18. **(IF CODE 2 AT 0)** Which country was this? **WRITE IN**
Q19. **(ASK IF CODE 4 AT Q3 OR CODE 4 AT Q5 OR Q7 NE 4)**: Can I just check, have you made any sales at all to customers in overseas markets in the last year?
1. Yes
2. No **GO TO Q22**
3. Don’t know **GO TO Q22**
Q20. **(ASK IF CODES 1-4 AT Q3)**: I would now like to move on to talking a bit more about your current/planned overseas business activity. **ADD AS NECESSARY**: And by that I mean selling goods or services to either businesses or individuals based abroad.
In the last financial year, approximately what percentage of your turnover was accounted for by overseas sales? **RECORD PERCENTAGE**
**IF CODE 3 AT Q3 SAY:** Please include any fees received from overseas companies or overseas licensing deals.
1. Write in (%) **GO TO Q22**
2. Don’t know
3. Refused **GO TO Q22**
**CATI TO CHECK NUMBER IS BETWEEN 0 AND 100**
Q21. **(IF CODE 2 AT Q20)** If you had to estimate this percentage, into which of the following bands would you put your business? **READ OUT**
1. Up to 5%
2. 6 - 10%
3. 11 - 15%
4. 16 – 25%
5. 26 – 50%
6. 51 – 75%
7. More than 75%
8. Don’t know
9. Refused
Q22. **(ASK IF CODES 1-4 AT Q3)**: And in a year’s time, approximately what percentage of your turnover do you anticipate will be accounted for by overseas sales? **AS NECESSARY**: Please just answer for the UK part of your business?
**IF CODE 3 AT Q3 SAY:** Please include any fees received from overseas companies or overseas licensing deals
1. Write in (%) **GO TO Q24**
2. Don’t know
3. Refused **GO TO Q24** Q23. **(IF CODE 2 DON’T KNOW AT Q22):** In a year’s time do you think the percentage of your turnover that is accounted for by overseas sales will be higher than it is now, lower, or about the same? **READ OUT**
4. Higher
5. Lower
6. About the same
7. Don’t know
8. Refused
Q24. **(IF Q3 =1-4 OR Q4 =1):** I’m going to read out some possible benefits of selling into overseas markets, and I’d like you to tell me whether each one applies to your business. So firstly…
Has selling into overseas markets... **READ OUT. ORDER OF STATEMENTS TO BE RANDOMISED**
| Yes | No | |-----|----| | 1. Enabled you to achieve a level of growth otherwise not possible? | 1 | 2 | 3 | | 2. Allowed you to fully utilise your existing capacity? | 1 | 2 | 3 | | 3. Reduced your dependence on a single or small number of markets? | 1 | 2 | 3 | | 4. Exposed you to new ideas? | 1 | 2 | 3 | | 5. Increased the commercial life span of any of your products or services? | 1 | 2 | 3 |
Q25. **ASK FOR EACH OF Q24 CODES 1-5 THAT HAS BEEN A BENEFIT (IE CODE 1). ASK Q25 DIRECTLY AFTER EACH Q24 STATEMENT:** And on a scale 1 to 5, where 1 means ‘to no extent’ and 5 means ‘to a critical extent’ to what extent (If Q3=1-4) do you feel that this has been a benefit/ (Q4 = 1) do you feel that this would be a benefit of selling into overseas markets? **READ OUT AS NECESSARY**
| No | Neither | Critical DK | |----|---------|-------------| | 1. Enabled you to achieve a level of growth otherwise not possible? | 1 | 2 | 3 | 4 | 5 | 6 | | 2. Allowed you to fully utilise your existing capacity? | 1 | 2 | 3 | 4 | 5 | 6 | | 3. Reduced your dependence on a single or small number of markets? | 1 | 2 | 3 | 4 | 5 | 6 | | 4. Exposed you to new ideas? | 1 | 2 | 3 | 4 | 5 | 6 | | 5. Increased the commercial life span of any of your products or services? | 1 | 2 | 3 | 4 | 5 | 6 |
**SECTION B – DRIVERS OF MARKET**
Q26. **(IF Q17=3-7 (AND Q12 = 1-8 OR Q13=1)):** Thinking now about the overseas countries that you have done business in within the last 5 years, which was the most challenging to do business in? Was it? **OR (IF Q17=2 AND (Q12 = 1-8 OR Q13=1))** So the only overseas country you have done business in is <Q18> Is this correct? **OR (IF Q4=1):** Which overseas country is your firm planning to become involved in, in the next year? **PROMPT. SINGLE CODE**
**INTERVIEWER NOTE: IF RESPONDENT CAN’T NAME THE MOST CHALLENGING COUNTRY ASK THEM TO LIST THE MOST RECENT OVERSEAS COUNTRY FOR DOING BUSINESS/THINKING OF DOING BUSINESS** Q27. And which of the following overseas business activities did this/will this involve in <Q26>? READ OUT – SINGLE CODE
1. Selling directly to businesses or individuals abroad
2. Selling to businesses or individuals abroad through agents or distributors
3. Licensing
4. Franchising overseas
5. Other contractual arrangements (including joint ventures)
6. Operating your own overseas site or office
7. Don’t know
Q28. (IF CODE 4 AT Q27) What was/will be the MAIN purpose of this site? Was it … READ OUT SINGLE CODE
1. Manufacturing
2. Assembly
3. Call centre
4. Distribution/sales office
5. After-sales office
6. Service delivery
7. Research, product or process development
8. Don’t know
MODE: M1: SELLING DIRECT: IF Q27=1: M2: SELLING THROUGH AGENTS/DISTRIBUTORS IF Q27=2 M3-M5: SELLING THROUGH LICENSING IF Q27=3 M6: PRODUCTION SITE: IF Q28 = CODES 1-2 M7: CALL CENTRE: IF Q28 = CODE 3 M8: SALES/SERVICE CENTRE: IF Q28 = CODES 4-6 M9: R & D SITE: IF Q28 = CODE 7
Q29. (IF CODES 1-4 AT Q3): How long have you done business < IN Q26 >? READ OUT AS NECESSARY – ANSWER MUST NOT BE GREATER THAN Q16
01. Less than a year
02. Over 1, up to 2 years
03. Over 2, up to 3 years
04. Over 3, up to 4 years
05. Over 4, up to 5 years
06. Over 5, up to 10 years
07. Over 10, up to 20 years
08. Over 20 years
09. Have not yet started
10. Don’t know
11. Refused
Q30. IF M6, M7 OR M9: Can I just check, does your/ would this (IF M6: PRODUCTION SITE/ IF M7: CALLCENTRE/ IF M9 R&D SITE in < Q26 >) sell any products or services directly to any customers < IN Q26 >? READ OUT – SINGLE CODE
1. Yes
2. No
3. Don’t know
Q31. IF M1, M2, M3-M5 OR M8 OR CODE 1 AT Q30: Have you had to/Do you expect to need to modify any of your products or services for customers < IN Q26 >?
1. Yes
2. No GO TO Q33
3. Don’t know GO TO Q33
Q32. IF YES (CODE 1) AT Q31: Was this/ Are you expecting this to be …? READ OUT - MULTICODE
1. Something cosmetic such as packaging or translation
2. Or something more fundamental
3. None of these
4. Don’t know
Q33. M5 OR M6: Can I just check, do you / would you import into the UK at all IF M5 <through this partnership or joint venture>/ IF M6 <from this production site >? READ OUT – SINGLE CODE
1. Yes
2. No
3. Don’t know
Q34. ASK ALL: I’m going to read out some of the individual circumstances that other firms have found themselves in when looking at doing business in specific overseas locations and I’d like you to tell me the extent to which each one applied to you when you were FIRST CONSIDERING doing business < in Q26>.
Please give me a score of 1 to 5, where 1 means that it is ‘not at all applicable’ and 5 means that it is ‘completely applicable’ and so firstly…READ OUT - RANDOMISE
To what extent did the following (READ OUT CODES 1 -5) apply to you when you were FIRST CONSIDERING doing business <in Q26>?
| Not at all applicable | Not applicable | Neither | Applies | Completely applicable | |-----------------------|----------------|---------|---------|-----------------------| | 1 | 2 | 3 | 4 | 5 |
1. We had received an approach from someone in <Q26> .........................................................1 ................ 2.............. 3............... 4............... 5............
2. It had been suggested to us by someone external to the company that <Q26> might be an opportunity for us..............1 ................ 2.............. 3............... 4............... 5............
3. There was someone within the company who already had experience of <Q26> .........................................................1 ................ 2.............. 3............... 4............... 5............
4. We had been considering a number of countries at the time, and decided to focus on <Q26> .........................................................1 ................ 2.............. 3............... 4............... 5............
5. We had identified internally that <Q26> offered a potential opportunity for us .........................................................1 ................ 2.............. 3............... 4............... 5............
Q35. ASK ALL Thinking now about your (IF CODES 1-4 AT Q3) experiences so far of (IF CODE 1 AT Q4) your plans for doing business in <Q26> how easy or difficult (IF CODES 1-4 AT Q3) has it been / (IF CODE 1 AT Q4) do you expect it to be on a scale from 1 to 5 where 1 is ‘very easy’ and 5 is ‘very difficult’?
READ OUT – RANDOMISE
| Very Easy | Fairly easy | Average | Fairly difficult | Very difficult | NA | |-----------|-------------|---------|------------------|----------------|----|
1How easy or difficult (IF CODES 1-4 AT Q3) has it been (IF CODE 1 AT Q4) do you expect it to be > for you to find customers < in Q26 > 1 2 3 4 5 6 2. IF M3-M5: How easy or difficult (IF CODES 1-4 AT Q3) has it been (IF CODE 1 AT Q4) do you expect it to be > for you to find a suitable partner 1 2 3 4 5 6 3. How easy or difficult (IF CODES 1-4 AT Q3) has it been (IF CODE 1 AT Q4) do you expect it to be > for you to negotiate the legal and regulatory framework or standards < in Q26 > 1 2 3 4 5 6 4. How easy or difficult (IF CODES 1-4 AT Q3) has it been (IF CODE 1 AT Q4) do you expect it to be > for you to negotiate the culture and language < in Q26 > 1 2 3 4 5 6 5. How easy or difficult (IF CODES 1-4 AT Q3) has it been (IF CODE 1 AT Q4) do you expect it to be > for you to protect your Intellectual Property 1 2 3 4 5 6 6. How easy or difficult has it been for you to deal with the logistics of doing business < in Q26 > 1 2 3 4 5 6 7. IF M6-M9: How easy or difficult (IF CODES 1-3 AT Q3) has it been (IF CODE 1 AT Q4) do you expect it to be > for you to recruit and retain suitable staff 1 2 3 4 5 6 8. (IF YES AT Q31) How easy or difficult (IF CODES 1-4 AT Q3) has it been (IF CODE 1 AT Q4) do you expect it to be > for you to make any modifications to your products or services so that they are suitable for customers < in Q26 > 1 2 3 4 5 6
Q36. REMOVE: QUESTION
Q37. ASK ALL: And how do you view the RISK of doing business < in Q26 > IF M3-M7 OR M9 in terms of the following? READ OUT - RANDOMISE
Would you say that the risk < in Q26 > of \<codes 1-3) is…?
| Very low | Fairly low | Average | fairly high | very high | NA | |----------|------------|---------|-------------|-----------|----|
1. Ensuring you get paid and enforcing contracts? 1 2 3 4 5 6
2. The financial risk in terms of whether you will be able to make a profit in <Q26>? 1 2 3 4 5 6
SECTION D – BARRIERS
Q38. ASK ALL: I’d now like you to think about the difficulties or problems that a firm IN A SIMILAR POSITION TO YOURSELF in terms of size, sector and structure might face doing business <in Q26>.
I’m going to read out a list of possible issues and I’d like you tell me the extent to which a firm SIMILAR TO YOURSELF would encounter each one when trying to do business < in Q26 >. Please give me a score of 1 to 5 for the extent to which you feel that this is likely to be a difficulty, where 1 means that it would 'not be a problem at all' and 5 means it would be 'extremely difficult'
SO FIRSTLY, ... READ OUT - ROTATE LIST ALWAYS ASK STATEMENT H AFTER STATEMENT G ALWAYS ASK STATEMENTS B, C & D IN ORDER
ON EACH OF THE E1 SCREENS ADD AFTER EACH STATEMENT
| No problem | Extremely | Neither | Difficult | |------------|-----------|---------|-----------| | at all | NA | Don’t | difficult |
01. Obtaining basic information about (IF M1)/ DOING BUSINESS/(IF M2-M9< in Q26> 1……………2 ……………3……………4……………5……………6……………
02. Identifying who to make contact with in the first instance , (IF M2-5) or finding a suitable partner> 1……………2 ……………3……………4……………5……………6……………
03. Establishing an initial dialogue with prospective \<IF M1, M5 OR M8> customers or business partners < in Country > 1……………2 ……………3……………4……………5……………6……………
04. Building relationships with key influencers or decision-makers 1……………2 ……………3……………4……………5……………6……………
05. Cultural differences outside of any language barriers 1……………2 ……………3……………4……………5……………6……………
06. IF M1-5 Not having IF M1 an / IF M3-M5 their own office or site < in Q26 > 1……………2 ……………3……………4……………5……………6……………
07. IF M1-M6 OR M8 A bias or preference on the part of customers in <Q26> for doing business with firms from < Q26 > 1……………2 ……………3……………4……………5……………6……………
08. The costs associated with doing business < in Q26 > 1……………2 ……………3……………4……………5……………6……………
09. Finding the necessary management time to devote to doing business < in Q26 > 1……………2 ……………3……………4……………5……………6……………
10. Exchange rates and currency 1……………2 ……………3……………4……………5……………6……………
11. IF M6-M9: Problems obtaining work permits or visas for staff to allow them to relocate to < Q26 > 1……………2 ……………3……………4……………5……………6……………
SECTION F – DIVERSIFICATION AND EMERGING/FAST GROWING MARKETS
Q39. (ASK IF Q17 = 3-7): Focusing on the overall balance of your international activity, can I just check in which regions of the world your business is active.
Is your business active in READ OUT INTERVIEWER THE EEA COUNTRIES ARE: ICELAND, LIECHTENSTEIN, NORWAY, AUSTRIA, BELGIUM, BULGARIA, CYPRUS, CZECH REPUBLIC, DENMARK, ESTONIA, FINLAND, FRANCE, GERMANY, GREECE, HUNGARY, IRELAND, ITALY, LATVIA, LITHUANIA, LUXEMBOURG, MALTA, NETHERLANDS, POLAND, PORTUGAL, ROMANIA, SLOVAKIA, SLOVENIA, SPAIN, SWEDEN, UK.
Yes No DK Q40. (ASK IF Q17 = 2 - 7): Thinking now about the NUMBER of countries in which you are doing business overseas, has this number increased or decreased in the last 3 years? READ OUT
1. Increased
2. Decreased
3. Stayed the same
4. Don’t know
Q41. (ASK IF Q17 = 2 - 7): And over the next three years do you expect the number of countries you do business with overseas will increase, decrease or stay the same? READ OUT
1. Increased
2. Decreased
3. Stayed the same
4. Don’t know
Q42. I am going to read out a list of reasons which have been given for expanding the number of countries in which a business operates. I would like you to tell me the extent to which each applies to your business. Please give me a score between 1 and 5 for the extent to which you feel that this applies, where 1 means that it is ‘not at all beneficial and 5 means that this is ‘very beneficial’.
| Reason | Not at all beneficial | Neither | Very beneficial | NA | |------------------------------------------------------------------------|-----------------------|---------|-----------------|----| | Has enabled you to meet growth objectives? | 1 | 2 | 3 | 4 | | Allowed you to fully utilise your existing capacity? | 1 | 2 | 3 | 4 | | Reduced your dependence on a single or small number of markets? | 1 | 2 | 3 | 4 | | Enabling you to offset declining revenues in other markets | 1 | 2 | 3 | 4 | | Enabling you to increase the commercial life span of any of your products or services? | 1 | 2 | 3 | 4 |
INTERVIEWER: READ OUT: I am now going to ask you about the extent to which you see there being opportunities for YOUR FIRM in some of the world’s fastest growing and emerging economies.
Q43. ASK ALL: For each of these countries please could you tell me whether you see it as being a good opportunity for your firm over the next 2 years, a possible opportunity, unlikely to provide you with an opportunity over this timeframe or are you already doing business there.
So firstly, would you say that < INSERT COUNTRY CODES 1- 10> is a…?
ROTATE ORDER OF 1-7, ALWAYS ASKING 8-10 LAST Q44. **ASK ALL EXCEPT ‘NOT YET TRADING’ (CODE 9 AT Q12 OR CODE 2 AT Q13):** In your opinion, has your business been negatively affected by the downturn in the US or UK markets over the last year? **SINGLE CODE.**
1. Yes
2. No
3. Don’t know
Q45. Again in your opinion, has your business been negatively affected by the downturn in the European Markets over the last year? **SINGLE CODE.**
1. Yes
2. No
3. Don’t know
Q46. **ASK IF YES (CODE 1) AT Q44 OR Q45. IF NO/DK AT BOTH Q44 AND Q45 GO TO Q47:** And has this prompted you to devote more attention to any of the emerging or fast growing economies I’ve just mentioned?
**INTERVIEWER: AS NECESSARY FOR EXAMPLE CHINA, INDIA, BRAZIL OR RUSSIA**
1. Yes
2. No
3. Don’t know
Q47. **IF ALREADY EXPORTING (IF Q3 =1-4)** And, in the last year, has your business benefited from sustained economic growth or increasing demand in any overseas countries? **SINGLE CODE.**
1. Yes
2. No
3. Don’t know
Q47a: Overall thinking about your overseas business do you see the economic downturn as offering your firm ……READ OUT
1. increased opportunities
2. about the same/no impact
3. reduced opportunities
4. don’t know
Q48. **MOVE QUESTION TO AFTER Q50**
**ASK ALL** I would now like to ask you some questions about the effect on your business on the recent decline in the value of sterling
Q Will your firm be able to take advantage of the decline in the value of sterling?
1. Yes
2. No
3. Don't know
Q49. **ASK ALL IF ALREADY EXPORTING (IF Q3 =1-4):** So far have you increased/ (IF Q4=1) do you expect to increase your sales in any market as a result of the decline in the value of sterling?
1. Yes
2. No
3. DK
Q50. **(IF CODE 1 AT Q49): ASK ALL IF ALREADY EXPORTING (IF Q3 =1-4):** Has it been necessary/(IF Q4=1) Will it be necessary to discount your products or services in order to achieve this?
1. Yes
2. No
3. Don’t know
Q48: **ASK ALL:** When operating in overseas markets do you price your products or services in **READ OUT**
1. Sterling
2. Overseas Currencies
3. Both
4. Don’t know
5. NA
Q51. **ASK ALL:** Taking account of imports, has the recent decline in the value of sterling raised the costs of conducting business overseas for your firm?
1. No
2. Not significantly
3. A little
4. Moderately
5. A lot
6. DK
Q52. **ASK ALL:** Overall what has the effect been of the decline in the value of sterling on your business?. Has it **READ OUT**
1. Been beneficial to your business
2. Had a negative affect your business
3. Had no effect
4. Other (specify)
Q53. **ASK ALL:** Still thinking about the current economic downturn, I would now like to ask you some questions about your company’s use of export credit insurance, letters of credit and access to finance.
**INTERVIEWER:** TRADE CREDIT INSURANCE POLICIES COVER AGAINST THE RISK OF NON PAYMENT, DUE TO YOUR CUSTOMERS' INSOLVENCY, AND PROTRACTED DEFAULT (I.E., NON-PAYMENT SIX MONTHS AFTER ORIGINAL PAYMENT DUE DATE). FOR EXPORTING COMPANIES, THEY CAN ALSO EXTEND OVER LOSSES ARISING AS A CONSEQUENCE OF POLITICAL (COUNTRY) RISK.
Can I just check, **(IF Q3 =1-4)** does your firm ever/ **(IF Q4 = 1)** will your firm use export credit insurance? **SINGLE CODE** INTERVIEWER NOTE: IF RESPONDENT DOES NOT KNOW WHAT EXPORT CREDIT INSURANCE IS THEN CODE AS ‘NO’
1. Yes
2. No
3. Don’t know
Q54. **(IF CODE 1 AT Q53 AND (IF Q3 =1-3 OR Q3 = 4 AND Q19 = 1))** ASK: And over the last 6 months, have you had any difficulties in accessing export credit insurance? **SINGLE CODE**
1. Yes
2. No
3. Don’t know
4. Refused
Q55. **(IF Q3 =1-4):** Does your firm ever/ **(IF Q4 =1)** will your firm use letters of credit when doing business overseas? **SINGLE CODE**
INTERVIEWER: A LETTER OF CREDIT IS WHEN A CREDITOR/SELLER IS OFFERING AN OBLIGATION TO PAY THE AMOUNT STIPULATED IN THE CREDIT NOTWITHSTANDING ANY DEFENCE RELATING TO THE UNDERLYING CONTRACT OF SALE.
1. Yes
2. No
3. Don’t know
Q56. **(IF CODE 1 AT Q55) AND ALREADY EXPORTING (IF Q3 =1-4):** ASK: And over the last 6 months, have you had any difficulties in accessing letters of credit or with the terms and conditions relating to these letters of credit? **SINGLE CODE. IF YES PROBE WHETHER THIS RELATES TO ACCESSING LETTERS OF CREDIT, THE TERMS & CONDITIONS OR BOTH**
1. Yes – difficulty accessing the letters of credit
2. Yes – difficulty with the terms and conditions relating to these letters of credit
3. Yes – both
4. No
5. Don’t know
6. Refused
Q56aOver the past 6 months has your firm attempted to access finance either from within the company or from external sources?
1. Yes
2. No **GO TO Q61**
3. Don’t know **GO TO Q61**
Q57. **ASK ALL:** Over the last 6 months, has your business had any difficulties in accessing finance, either from within the company or from external sources? **SINGLE CODE**
1. Yes
2. No **GO TO Q61**
3. Don’t know **GO TO Q61**
4. Refused **GO TO Q61** Q58. **(IF CODE 1 AT Q57) ASK:** And did these difficulties relate to accessing internal finance from within the business or raising finance from external sources such as a bank? SINGLE CODE
5. Internal finance
6. External finance
7. Both
8. Don’t know **GO TO Q61**
9. Refused **GO TO Q61**
Q59. **(IF CURRENTLY EXPORTING IE CODE Q3 = 1-4) ASK:** Did any of these difficulties specifically relate to financing your overseas business activity?
1. Yes, related to overseas sales
2. No
3. Don’t know
Q60. **IF CURRENTLY EXPORTING IE CODE Q3 = 1-3 OR Q3 = 4 AND Q19 =1)**
If yes at Q59 say: Would you say that these difficulties accessing finance have had any negative impact on the value of your overseas sales over the last 6 months? SINGLE CODE
If No or Don’t know at Q59 say: “Although they did not specifically relate to financing your overseas business, would you say that these difficulties accessing finance have had any negative impact on the value of your overseas sales over the last 6 months? SINGLE CODE
1. Yes
2. No
3. Don’t know
**SECTION E – AWARENESS & NEEDS**
**ASK ALL:** I’d now like to ask you some questions about any sources of information or advice you are aware of that are available to help UK firms do business overseas.
Q61. Prior to this interview, had you heard of? **READ OUT – ROTATE STATEMENTS 4-8 (1-3 ALWAYS ASKED FIRST)**
Q62. **IF YES AT ANY OF Q61 1-8:** Have you used any of these?
| Q61 | Q61 | Q61 | Q62 | Q62 | |-----|-----|-----|-----|-----| | Yes | No | DK | Yes | No | | 1. UK Trade & Investment or UKTI | 1 | 2 | 3 | 1 | 2 | | 2. The commercial services provided by embassies overseas | 1 | 2 | 3 | 1 | 2 | | 3. The International Trade Advisors based in Business Links | 1 | 2 | 3 | 1 | 2 | | 4. Passport to Export | 1 | 2 | 3 | 1 | 2 | | 5. (IF YES AT CODES 1 OR 3) The Export Marketing Research Scheme or EMRS | 1 | 2 | 3 | 1 | 2 | | 6. (IF YES AT CODES 1 OR 3) Export Communication Reviews or ECR | 1 | 2 | 3 | 1 | 2 | | 7. The Tradeshows Access Programme or TAP | 1 | 2 | 3 | 1 | 2 | | 8. The Overseas Market Information Service or OMIS | 1 | 2 | 3 | 1 | 2 | Q63. **ASK ALL:** Prior to this interview, had you heard of Business Link?
**INTERVIEWER: READ OUT IF REQUIRED:** Business Link is a free business advice and support service, available online and through local advisers
1. Yes
2. No **GO TO Q65**
3. Don’t know **GO TO Q65**
Q64. Have you used Business Link?
1. Yes
2. No
3. Don’t know
Q65. How likely will you be to use Business Link in the future?
1. Very likely
2. Quite likely
3. Quite unlikely
4. Very unlikely
5. Don’t know
______________________________________________________________________
**SECTION G – PROFILE**
I’d now like to ask you some questions about your business just to classify your answers for analysis purposes. You may of course skip any question you do not wish to answer.
Q66. **ASK ALL:** Can I just check, is the business UK or foreign-owned?
1. UK-owned
2. Foreign-owned
3. (Joint UK and foreign-owned)
4. Don’t know
Q67. **ASK ALL:** How many people are currently employed by your business in the UK?
**INTERVIEWER NOTE AS NECESSARY PLEASE INCLUDE BOTH FULL AND PART-TIME STAFF.**
1. Write in number (0+): **GO TO Q69**
2. Don’t know
3. Refused **GO TO Q69**
*(IF DON’T KNOW AT Q67)*
Q68. If you had to estimate, approximately how many people are employed by your business in the UK? **READ OUT AS NECESSARY**
01. No employees
02. 1-4
03. 5-9
04. 10-19
05. 20-49
06. 50-99
07. 100-199
08. 200-249
09. 250-499
10. 500 or more
11. Don’t know
12. Refused
Q69. **ASK ALL EXCEPT CODES 1, 2, 3 & 9 AT Q12 OR CODE 2 AT Q13:** Compared to this time three years ago, would you say that the number of people employed by your company is now…? **READ OUT**
1. Higher
2. Lower
3. Or, about the same as it was three years ago
4. Don’t know
5.
Q70. **IF HIGHER (CODE 1 AT Q69):** How many people were employed by your business three years ago? **READ OUT**
**INTERVIEWER NOTE AS NECESSARY PLEASE INCLUDE BOTH FULL AND PART-TIME STAFF.**
1. Write in number (0+): **GO TO Q72**
2. Don’t know
3. Refused **GO TO Q72**
Q71. **ASK IF DON’T KNOW/REFUSED AT Q70 OR (HIGHER (CODE 1 AT Q69) & NO FIGURE GIVEN IE Q68 OR Q67 (DON’T KNOW/REFUSED):** Over the last three years would you say that the number of people employed by your company has… **READ OUT**
1. Increased by more than 75%
2. Increased by between 30-75%
3. Or, increased by less than 30% compared to 3 years ago
4. Don’t know
Q72. **IF NOT ESTABLISHED IN THE LAST YEAR (Q12 NOT CODE 1 & NOT CODE 9 AND Q13 NOT CODE 2):** Can I ask, what is the current annual turnover of your business?
**IF ESTABLISHED IN LAST YEAR (CODES 1 OR 9 AT Q12 OR CODE 2 AT Q13):** What do you anticipate will be the turnover of your business in the first year of trading?
**AS NECESSARY BY THIS I MEAN YOUR ANNUAL SALES, INCOME OR RECEIPTS. AS NECESSARY PLEASE GIVE ME THE TURNOVER FOR THE UK PART OF YOUR BUSINESS, BUT INCLUDE OVERSEAS SALES MADE BY THE UK**
1. Write in amount in £ (£0+): **GO TO Q74**
2. Don’t know
3. Refused **GO TO Q74**
Q73. **IF DON’T KNOW AT Q72:** If you had to estimate your total turnover, into which of the following bands would you put yourself? **READ OUT AS NECESSARY**
01. £0
02. £100,000 or less
03. £100,001 - £500,000
04. £500,001 - £2million
05. £2million - £10million
06. £10million - £50million
07. More than £50million
08. Don’t know
09. Refused Q74. **ASK ALL EXCEPT CODES 1, 2, 3 & 9 AT Q12 OR CODE 2 AT Q13:** Compared to this time three years ago, would you say that your turnover is now …? **READ OUT**
10. Much higher
11. A bit higher
12. Lower
13. Or, about the same as it was three years ago
14. Don’t know
Q75. **ASK ALL UNLESS ESTABLISHED IN LAST TWO YEARS (I.E. NOT 1-2 OR 9 AT Q12 & NOT CODE 2 AT Q13):** Have you introduced any new products or services over the last three years?
1. Yes **GO TO Q77**
2. No **GO TO Q77**
3. Don’t know **GO TO Q77**
Q76. **ASK IF YES AT Q75:** And are these new products or services… **READ OUT - SINGLE CODE**
ADD AS NECESSARY: BY COMPLETELY NEW I MEAN THAT, TO THE BEST OF YOUR KNOWLEDGE, THEY HAVE NOT BEEN INTRODUCED BY ANYONE BEFORE YOU READ OUT – SINGLE CODE
1. Just new to your business
2. New to your industry or sector
3. Or, are they completely new to the world
4. (Some are just new to the business and some are completely new)
5. Don’t know
Q77. **ASK ALL EXCEPT NO EMPLOYEES (0 AT Q67 OR CODE 1 AT Q68) OR CODES 2, 3 OR 4 AT Q76:** Approximately how many of your UK employees are engaged either wholly or partly in R&D activity? **READ OUT AS NECESSARY**
01. Zero
02. One
03. 2-4
04. 5-9
05. 10-19
06. 20-49
07. 50-99
08. 100-199
09. 200-249
10. 250-499
11. 500 or more
12. Don’t know
13. refused
Q78. **ASK IF Q77 IS CODES 2-11:** Can I just check, are any of these employees involved in activities that could be described as ‘the development of scientific or technical knowledge that is not commonly available’?
01. Yes
02. No
03. Don’t know Q79. **ASK ALL EXCEPT NO EMPLOYEES (0 AT Q67 OR CODE 1 AT Q68) OR CODES 2, 3 OR 4 AT Q76 OR CODE 1 AT Q77:** And approximately how many of your employees are engaged either wholly or partly in new product or service development? **READ OUT AS NECESSARY**
04. Zero
05. One
06. 2-4
07. 5-9
08. 10-19
09. 20-49
10. 50-99
11. 100-199
12. 200-249
13. 250-499
14. 500 or more
15. Don’t know
16. Refused
Q80. **ASK ALL EXCEPT CODES 2, 3 OR 4 AT Q76 OR (CODE 1 AT Q78):** In the last year have you employed or commissioned anyone external to your business to conduct scientific or technical research, or any new product or service development activity for you?
1. Yes
2. No
3. Don’t know
Q81. **ASK ALL:** Do you currently hold any patents or trademarks, either in the UK or overseas, for any of your products or services?
1. Yes
2. No
3. Don’t know
Q82. Can I just check, do you have a current, written business plan?
1. Yes
2. No **GO TO 0**
3. Don’t know **GO TO 0**
4. Refused **GO TO 0**
Q83. Does the plan contain any targets relating to business in overseas markets?
1. Yes
2. No
3. Don’t know
4. Refused
Q84. **REMOVE QUESTION**
Q85. **ASK ALL EXCEPT ‘NOT YET TRADING’ (CODE 9 AT Q12 OR CODE 2 AT Q13):** Thinking about your business as a whole, what growth objectives do you have for the business over the next FIVE years? Do you plan to…? **READ OUT**
1. Remain the same size
2. Become smaller
3. Grow moderately
4. Grow substantially
5. Don’t know
6. Refused
Q86. REMOVE QUESTION
Q87. ASK ALL: That’s almost the end of the interview, thank you very much for taking part. Would you be willing to take part in any future UK Trade & Investment research?
1. Yes
2. No
3. Don’t know
Q88. We will be producing a summary report of the results from this survey. Would you like us to send you an electronic link to this summary report? READ OUT ADD AS NECESSARY THE REPORT WILL BE AVAILABLE LATE 2009.
1. Yes
2. No
3. Don’t know
Q89. IF YES AT Q88: Can I take your e-mail address? REASSURE RESPONDENT THAT THIS WILL NOT BE PASSED ON & ONLY USED TO MAIL A LINK TO THE REPORT
Q90. IF YES AT Q88 BUT RESPONDENT DOESN’T HAVE AN EMAIL ADDRESS: Can I confirm your postal address then and we will send you a letter containing the internet address for the electronic report? REASSURE RESPONDENT THAT THIS WILL NOT BE PASSED ON & ONLY USED TO MAIL A LINK TO THE REPORT
Q91. ASK ALL: Finally as proof of this interview please could I just confirm your business postcode?
Q 91a And can I just confirm whether you are located in England, Scotland, Wales or Northern Ireland. INTERVIEWER: If England, which Government Office Region?
England • North East North West Yorkshire and The Humber East Midlands West Midlands East of England London South East South West
Scotland Wales Northern Ireland
Q92. And may I take a note of your name?
WRITE IN………………………………………………
Q93. UKTI would like Accent to recontact a cross section of businesses interviewed in this survey at a later date to undertake further research to investigate some specific issues in greater detail. Would you be willing for us to recontact you at a later date to conduct another interview?
1. Yes COLLECT DETAILS
2. No
Thank you for your help in this research
This research was conducted under the terms of the MRS code of conduct and is completely confidential. If you would like to confirm my credentials or those of Accent please call the MRS free on 0500 396999.
Please can I take a note of your name and where we can contact you for quality control purposes?
Respondent name: .............................................................................................................
Telephone: home:.............................................. work:...............................................
Thank you
I confirm that this interview was conducted under the terms of the MRS code of conduct and is completely confidential
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b6e6b5d852647194ccde9dc8262d08c28d5fb3bc | UK Trade & Investment
International Business Strategies, Barriers & Awareness Monitoring Survey 2010
Research Report
June 2010
JN: 4229 Contents
01. Executive Summary ........................................................................................................ 1 1.1 Introduction ........................................................................................................... 1 1.2 Summary Results .................................................................................................. 2
02. Introduction .................................................................................................................. 12
03. Research Objectives .................................................................................................... 13
04. Methodology ................................................................................................................ 14 4.1 Coverage .............................................................................................................. 14 4.2 Sample Design ..................................................................................................... 14 4.3 Questionnaire Design ........................................................................................ 15 4.4 Fieldwork ............................................................................................................ 15 4.5 Weighting ............................................................................................................ 16 4.6 Statistical Significance ....................................................................................... 16
05. Modes of Internationalisation ..................................................................................... 17 5.1 Modes Used ......................................................................................................... 17 5.2 Number of Modes Used ..................................................................................... 23
06. Profile .......................................................................................................................... 25 6.1 Age of Business .................................................................................................. 25 6.2 Size of Business (Employees) ........................................................................... 27 6.3 Size of Business (Turnover) .............................................................................. 29 6.4 Industry Sector ................................................................................................... 31 6.5 Ownership .......................................................................................................... 32 6.6 Experience of Doing Business Overseas ......................................................... 33 6.7 Innovation .......................................................................................................... 45 6.8 Growth ................................................................................................................ 50 6.9 Business Planning ............................................................................................. 58 6.10 Customer Types ............................................................................................... 59 6.11 Profile of UKTI Users: Internationalisation Survey vs. PIMS ....................... 61
07. Awareness & Usage ...................................................................................................... 62 7.1 Awareness & Use of UKTI .................................................................................. 62 7.2 Awareness & Use of Business Link .................................................................... 65
08. Drivers of Market ......................................................................................................... 66 8.1 Drivers of Market (Summary) ............................................................................ 66 8.2 Drivers of Market (Detailed) ............................................................................. 69
09. Barriers to Overseas Trade ......................................................................................... 71 9.1 Barriers (Summary) ............................................................................................ 71 9.2 Barriers (Detailed) ............................................................................................. 84
10. Benefits of Doing Business Overseas ....................................................................... 96 10.1 Benefits ............................................................................................................. 96 10.2 Impact on Product & Service Development .................................................... 101
11. Opportunities in Emerging & Fast Growing Markets ........................................ 110 11.1 Opportunities in Emerging & Fast Growing Markets .............................. 110 11.2 Influence of Economic Downturn .......................................................... 115
12. Impact of Economic Downturn .................................................................... 118 12.1 Product & Service Development ............................................................ 118 12.2 Sterling Exchange Rates ....................................................................... 122 12.3 Access to Finance ................................................................................ 128 12.4 Export Credit Insurance ....................................................................... 132
13. Marketing Channels ..................................................................................... 135 13.1 Channels Used ..................................................................................... 135 13.2 Usefulness ........................................................................................... 138 13.3 Marketing UKTI Services ..................................................................... 141 13.4 Social Networking Sites ....................................................................... 144
Annex A – Markets Selected (For Drivers & Barriers Questions)
Annex B – Questionnaire
1. Executive Summary
1.1 Introduction
This research gathers evidence about trends in UK businesses’ international business strategies, barriers hindering such business, awareness and usage of UKTI, and related issues.
In terms of the specific research aims, the study was required to provide robust evidence to:
- Help understand the role of international market diversification in business development strategies;
- Identify drivers of geographical focus;
- Identify links between innovation, R&D and overseas business development, and the impact of the economic downturn on this relationship;
- Understand the barriers encountered by UK businesses in seeking to develop overseas business;
- Measure awareness and use of UKTI support;
- Identify the extent to which credit conditions and related issues are impacting on firms’ overseas business development;
- Provide evidence on the characteristics of users and non-users of UKTI.
This summary outlines the key findings from this study. Please note that all of the data in this report has been weighted by age of firm to reflect a disproportionate stratified sampling approach. 1.2 Summary Results
1.2.1 Internationalisation Modes
Firms were asked which of a number of internationalisation modes they had been involved in over the last five years (or were planning to do in the next year in the case of those that were not yet doing any business overseas(^1)).
| Table 1.2.1 Modes Of Internationalisation | |------------------------------------------| | **Base** | **Total** | **UKTI Usage** | **UKTI User** | **Non-User** | | | | | | | | Selling direct | 91% | 91% | 91% | | Agents/distributors | 42% | 60% | 35% | | Contractual arrangements | 9% | 13% | 7% | | Overseas site | 13% | 17% | 12% | | - Manufacturing/assembly | 3% | 3% | 3% | | - Call centre | 1% | 1% | 1% | | - Sales/service delivery | 11% | 15% | 10% | | - R&D | 4% | 4% | 4% | | Importing | 58% | 62% | 57% |
Almost all internationalising firms sell direct to businesses or individuals overseas, and two-fifths use agents or distributors. However, only around 1 in 10 are involved in other ‘contractual arrangements’ (such as licensing or franchising) or operate their own overseas sites.
Whilst the proportion selling direct is identical for users and non-users of UKTI services, the former are significantly more likely to also adopt alternative internationalisation modes, such as selling through agents or distributors. The same is true of larger firms, those with greater overseas experience and those defined as being innovative.
______________________________________________________________________
(^1) Please note that 44 of the 902 firms interviewed (5%) were not yet doing business overseas but qualified for the research on the basis that they were planning to do so in the next year. 1.2.2 Profile
The table below provides key profile information for internationalising firms, including comparisons between users and non-users of UKTI.
| Table 1.2.2 Profile | |---------------------| | **UKTI Usage** | | **Total** | | **UKTI User** | | **Non-User** | | **Base** | | 902 | | 235 | | 667 | | **Age** | | 0-5 years | | 17% | | 12% | | 19% | | 6-10 years | | 23% | | 24% | | 23% | | Over 10 years | | 60% | | 65% | | 58% | | **Size (employees)**| | 0-9 employees | | 56% | | 52% | | 57% | | 10-249 employees | | 38% | | 40% | | 37% | | 250+ employees | | 5% | | 7% | | 4% | | **Sector** | | Primary | | 1% | | 0% | | 1% | | Production | | 35% | | 39% | | 34% | | Construction | | 1% | | 2% | | 1% | | Services | | 63% | | 58% | | 64% | | **Innovation** | | Innovative | | 76% | | 85% | | 72% | | Innovative (alternative) | | 44% | | 53% | | 41% | | IP active | | 25% | | 37% | | 21% | | **Overseas experience** | | Less than 2 years | | 15% | | 11% | | 17% | | 2-10 years | | 45% | | 46% | | 45% | | Over 10 years | | 38% | | 42% | | 36% | | **Number of markets** | | Up to 5 markets | | 43% | | 31% | | 47% | | 6-10 markets | | 24% | | 24% | | 24% | | Over 10 markets | | 32% | | 44% | | 27% | | **Growth objectives (next 5 years)** | | Grow substantially | | 25% | | 31% | | 23% | | Grow moderately | | 58% | | 55% | | 59% | | Same/smaller | | 15% | | 11% | | 16% | | **Business plan** | | Yes | | 57% | | 68% | | 53% | | No | | 38% | | 27% | | 42% |
UKTI users and non-users have broadly similar characteristics in terms of age and size, although the former have a slightly older and larger profile. UKTI users are also somewhat more likely to be operating in the production sector than non-users.
Perhaps the most notable differences between users and non-users of UKTI services are in the area of innovation. The former are significantly more likely to be classed as ‘innovative’ (by both definitions) and as being ‘IP active’ (i.e. holding some form of legal protection for any of their products or services).
UKTI users also tend to have been doing business overseas for longer and, more notably, operate in a significantly greater number of markets. They also appear to be more ambitious in terms of their growth objectives and are more likely to have a current business plan which suggests they take a more strategic approach to the development of their business. 1.2.3 Awareness & Usage of UKTI
Firms were asked whether they had heard of either UK Trade & Investment or the commercial services provided by British embassies and consulates overseas, and whether they had used either of these.
Table 1.2.3 Awareness & Use of UKTI
| | Total | UKTI Usage | Total 2008 survey | |--------------------------------|-------|------------|-------------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Aware (at least one) | | 100% | 55% | | - UK Trade & Investment or UKTI| 51% | 84% | 39% | | - Commercial services provided by embassies and consulates overseas | 53% | 85% | 40% | | Used (at least one) | 27% | 100% | 0% |
Around two-thirds (68%) of internationalising firms have heard of either UKTI or the services provided by overseas posts, and just over a quarter (27%) have used UKTI services. There has been no change in awareness levels over the last 2 years, with identical results recorded in the 2008 survey.
However, awareness of the UK Trade & Investment name itself stands at only 51%, meaning that only 84% of UKTI users have actually heard of ‘UK Trade & Investment’ (i.e. 16% have used the services provided by overseas posts but not realised the link to UKTI).
Amongst non-users of UKTI overall awareness stands at 55%, clearly demonstrating that there are a significant number of internationalising firms that could benefit from UKTI’s services but have never heard of the organisation.
Awareness and usage levels increase amongst older and larger firms, and those with more experience of doing business overseas. It is also clear that innovative and IP active firms are more engaged with UKTI, with awareness and usage levels significantly higher amongst these groups. Encouragingly, awareness and usage of UKTI are particularly high amongst innovative firms that are planning for substantial growth over the next 5 years (at 76% and 37% respectively). 1.2.4 Barriers to Overseas Trade
Firms were asked to identify the ‘most challenging’ overseas market in which they had done business over the last 5 years, and were then read out a number of potential difficulties and asked to indicate the extent to which they had encountered each one in this market. These were then combined into 7 summary barriers, and the table below shows the proportion of firms experiencing ‘significant’ difficulties with each one.
Table 1.2.4 Summary Barriers
| Base: All exporters | Total | UKTI Usage | |---------------------|-------|------------| | | | UKTI User | Non-User | | At least one significant barrier | 858 | 227 | 631 | | - Legal & regulatory barriers | 66% | 77% | 62% | | - Customs barriers | 41% | 53% | 36% | | - Contacts barriers | 27% | 34% | 24% | | - Information barriers | 27% | 37% | 24% | | - Resource barriers | 16% | 21% | 14% | | - Language & cultural barriers | 20% | 25% | 18% | | - Bias barriers | 19% | 23% | 18% | | No significant barriers | 34% | 23% | 38% |
Overall, two-thirds of internationalising firms have experienced at least one significant barrier in their selected market, suggesting there is a clear need for external assistance to help firms overcome these barriers and successfully trade overseas.
Reflecting the results from previous UKTI studies, legal and regulatory barriers and contacts barriers are highlighted as being the most important (experienced by 41% and 27% of firms respectively). Customs barriers is a new area that has not been covered in previous UKTI surveys, but also appears to be a widespread concern for internationalising firms, with 27% claiming that it has been a significant difficulty.
UKTI users encounter more significant barriers than non-users, with 77% experiencing at least one, compared to just 62% of non-users. Given that firms were asked to focus on their ‘most challenging’ market, this difference between users and non-users could purely be a function of their different export profiles as UKTI users typically operate in more markets and are also more likely to be doing business in high growth or emerging markets (and hence have more potential to be exposed to ‘challenging’ markets). However, when further analysis is conducted based just on those firms answering about a high growth/emerging market, the difference between users and non-users is still evident, and the same is true when further analysis is conducted focussing just on those firms operating in more than 10 markets. This suggests that there is a ‘true’ distinction between users and non-users and the increased likelihood of users reporting barriers is not just a result of UKTI users operating in more challenging markets.
More experienced exporters, innovative firms and those using less traditional internationalisation modes (i.e. not just selling direct to customers) are all more likely to experience significant barriers to overseas trade. 1.2.5 Benefits of Doing Business Overseas
All firms were read out a number of possible benefits of doing business overseas and asked to indicate the extent to which each one applied to them. The table below shows the proportion benefiting significantly from each one.
Table 1.2.5.1 Summary Benefits
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | At least one sig. benefit | 54% | 69% | 49% | | - Level of growth otherwise not possible | 38% | 48% | 34% | | - More fully utilising capacity | 30% | 38% | 28% | | - Exposure to new ideas | 28% | 38% | 24% | | - Increased lifespan of products/services | 22% | 33% | 18% | | No sig. or mod. benefit | 23% | 13% | 27% |
The most widespread benefit of internationalising is that it enables firms to achieve a level of growth otherwise not possible, with 38% of firms indicating that they have benefited in this way to a significant extent. Over a quarter of firms also benefited from being able to better use their existing capacity and through being exposed to new ideas. Whilst it is the least widespread of the benefits tested, over a fifth of firms have also benefited significantly through exporting increasing the commercial lifespan of their products or services.
As well as encountering more barriers to their overseas development, it is clear that UKTI clients also experience consistently greater benefits from overseas trade, with 69% reporting at least one significant benefit compared to only 49% of non-users.
As might be expected, the longer a firm has been doing business overseas and the more markets they operate in, the more likely they are to report significant benefits. Perhaps linked to this, older and larger firms also tend to have experienced greater benefits from overseas trade.
Internationalisation also seems to have more positive outcomes for innovative and IP active firms. The same is true for those planning for ‘substantial’ growth over the next 5 years, and it may be that the level of benefit that these firms are experiencing through their overseas activity has influenced their ambitious growth predictions. Firms were also asked whether doing business overseas had prompted them to either develop new products/services or modify existing ones.
Table 1.2.5.2 Impact On Product/Service Development
| | Total | UKTI Usage | |------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Develop new products/services | 38% | 44% | 36% | | Change/modify existing ones | 46% | 56% | 42% | | Neither | 46% | 35% | 51% |
Just over half of all firms (53%) reported some degree of impact on their product or service development activity, with 38% indicating that doing business overseas had prompted them to develop new products or services and 46% that it had encouraged them to change or modify existing products or services. UKTI users are significantly more likely to report both of these impacts.
Where the impact on product/service development related to changing or modifying existing products, in most cases this was felt to be a fundamental change rather than just cosmetic changes (such as packaging or translation).
Firms were also asked about the extent to which internationalisation impacts on investment in product and service development activity.
Table 1.2.5.3 Impacts On Investment In Product/Service Development
| | Total | UKTI Usage | |------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Invest more time and money in NPD | 38% | 50% | 34% | | Increase money available for NPD | 37% | 46% | 34% | | Increase ROI in NPD | 46% | 60% | 41% |
There is clear evidence that internationalisation can increase the financial rewards of innovation activity, with approaching half of all firms reporting that doing business overseas had increased the return they received from their investment in product or service development. Over a third felt that doing business overseas had encouraged them to invest more resources in these activities, and a similar proportion indicated that it had enabled them to invest more money in product or service development activity, 1.2.6 Opportunities in Emerging & Fast Growing Markets
Firms were read out a list of various emerging or fast growing markets and asked whether they were already doing business there, were very likely to do so in the next 2 years, quite likely to do so or unlikely to do so. They were also asked whether the economic downturn had prompted them to focus more attention on emerging or fast growing markets.
Table 1.2.6 Opportunities In Emerging & Fast Growing Markets
| | Total | UKTI Usage | Non-User | |--------------------------------|-------|------------|----------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Likelihood of entering any emerging / fast growing markets in next 2 years | | | | | Already in | 48% | 61% | 44% | | Very likely | 10% | 11% | 9% | | Quite likely | 22% | 18% | 23% | | Unlikely | 19% | 10% | 22% | | Whether devoted more attention to emerging / fast growing markets as result of downturn | | | | | Yes | 26% | 33% | 23% | | No | 74% | 67% | 77% |
As seen above, almost half (48%) of internationalising firms are already doing business in at least one of the emerging/fast growing markets, and most of the remainder feel that they are very or quite likely to do so in the next 2 years. This increases amongst UKTI users, and only 10% of this group feel that they are unlikely to be doing business in any fast growing markets in 2 years time.
In terms of specific markets, Saudi Arabia and the UAE were felt to represent the best opportunities, followed by South Africa, China and India. However, firms were less positive about their likelihood of doing business in Brazil or Mexico.
The likelihood of a firm trading in these fast growing markets increases with both age and size, and there is also clear evidence that firms tend to enter fast growing markets later in their international life-cycle, with those that have been exporting longest significantly more likely to be operating in these markets. However, it is not the case that these markets are only targeted by more established firms, as over a third of firms in the youngest age band (established up to 5 years) and the smallest size band (0-9 employees) are already doing business in at least one of these areas.
It appears that the recent economic conditions have had a considerable effect on the extent to which firms are targeting emerging and fast growing economies, with a quarter of internationalising firms indicating that they have devoted more attention to these markets as a direct result of the downturn. This is more likely to be the case amongst UKTI users. 1.2.7 Impact of Economic Downturn
Those firms that carried out any product or service development activity were asked whether the economic downturn had affected either the amount spent on these activities or their geographical focus. Please note that the analysis below is based only on those firms that carry out or commission product or service development.
Table 12.7.1 Impact Of Downturn On Product/Service Development
| | Total | UKTI Usage | | | |--------------------------------|-------|------------|----------|----------| | | | UKTI User | Non-User | | Base: All doing NPD | 585 | 183 | 402 | | Impact on Amount Spent on Product/Service Development | | | | | Spending more | 21% | 17% | 23% | | Spending less | 25% | 28% | 23% | | No impact | 53% | 55% | 52% | | Don't know | 1% | 1% | 2% | | Impact on Geographical Focus of Product/Service Development | | | | | More for overseas | 29% | 32% | 27% | | Less for overseas | 12% | 11% | 13% | | No change | 58% | 58% | 58% | | Don't know | 1% | 0% | 1% |
There has been a fairly even split in terms of how firms have reacted to the economic downturn, with a quarter of those firms that undertake product or service development spending less on these activities but a fifth opting to spend more.
There has also been considerable impact in terms of the geographic focus of innovation activities, with almost a third indicating that more of their product/service development is aimed specifically at overseas customers than was the case previously.
UKTI users are slightly more likely to have reduced their investment in product/service development, but they are also more likely to have adjusted the balance of these activities in favour of overseas markets. It is also the case that innovative firms are significantly more likely to have increased the product/service development spend as a result of the economic conditions. All firms were asked to assess the overall impact of the recent decline in Sterling exchange rates on their business, and whether they would attempt to increase the share of their business accounted for by overseas sales if the situation continued.
Table 1.2.7.2 Impact Of Sterling Exchange Rates
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 |
**Impact of Recent Decline in Exchange Rates**
| Impact | Total | UKTI User | Non-User | |-------------------------------|-------|-----------|----------| | Positive impact | 27% | 33% | 25% | | Negative impact | 35% | 34% | 36% | | No impact | 36% | 31% | 38% | | Don't know | 2% | 2% | 2% |
**Whether Will Prompt to Increase Share of Business from Overseas Sales**
| Whether | Total | UKTI User | Non-User | |---------|-------|-----------|----------| | Yes | 40% | 47% | 37% | | No | 55% | 50% | 57% | | Don't know | 5% | 3% | 6% |
The decline in Sterling exchange rates has had a mixed impact on internationalising firms, with around a quarter reporting a net positive impact but a third reporting a negative impact. Two-fifths of firms believe that if the exchange rates stay at a similar level or fall further this will prompt them to try and increase the share of their business accounted for by overseas sales.
UKTI users are marginally more likely to feel that the recent changes in Sterling exchange rates have had a positive impact on their business, and are also more likely to try and increase their overseas sales if the situation continues.
There is a clear correlation between overseas experience and the impact of the recent fall in Sterling exchange rates, with those firms that have been exporting the longest, operate in the most markets and have the highest proportion of their turnover accounted for by overseas sales all more likely to report a positive impact. However, as expected, importers are more likely to report a negative impact on their business from the fall in Sterling exchange rates. 1.2.8 Marketing Channels
All respondents were read out a list of media/communication channels and asked to indicate which ones they personally used to obtain news or information relevant to their business. For each one used they were then asked to rate its usefulness, and they were also asked to indicate which channel they thought would be the best way for UKTI to let them know about a new service they were providing.
Table 12.8.1 Marketing Channels
| Base | % using | % rating as useful | % selecting as best UKTI channel | |-----------------------|---------|--------------------|----------------------------------| | Base | All respondents (902) | All using channel (91-742) | All respondents (902) | | Websites | 82% | 70% | 28% | | Trade press | 72% | 53% | 24% | | Seminars, etc | 68% | 63% | 4% | | Magazines | 49% | 39% | 3% | | National newspapers | 37% | 25% | 5% | | Social networking | 28% | 45% | 3% | | TV | 24% | 22% | 4% | | National radio | 18% | 23% | 1% | | Local newspapers | 16% | 20% | 1% | | Local radio | 10% | 17% | 1% |
Websites, the trade press and attendance at seminars, tradeshows and conferences are the most widely used channels for business news and information.
The perceived usefulness of the various channels generally reflects the usage patterns, with those channels that are most widely used also being rated as most useful. However, an interesting exception to this is social networking sites, which were used for business purposes by only 28% of respondents but were rated as being useful by 45% of users.
When it came to the most effective channel for UKTI to publicise a new service, websites and the trade press again emerged as the key mediums. 2. Introduction
UK Trade & Investment (UKTI) commissioned this piece of research in order to gather evidence about trends in UK businesses’ international business strategies, barriers hindering such business, awareness and usage of UKTI, and related issues.
The study was designed with a view to the results being used to help inform UKTI policy development and other aspects of UK Government policy relating to international trade and investment and the ability of British business to optimise opportunities in global markets.
The survey was intended to complement evidence already available from other surveys of UK business, in particular:
- The Community Innovation Survey, which is nationally representative of firms with at least 10 employees, and captures some evidence about international aspects of innovation activity, including international partnerships and other linkages, as well as export activity;
- UKTI’s Performance and Impact Monitoring Survey (PIMS) of businesses who have used UKTI trade services, which also captures some contextual evidence about overseas business experience and aspects of strategy;
- UKTI’s annual survey of exporters who have not used UKTI trade services, which gathers evidence about some aspects of overseas business strategy as well as evidence about barriers to overseas business and associated needs for external help.
The ‘International Business Strategies, Barriers & Awareness Monitoring Survey’ replaced the former annual UKTI awareness survey. It is undertaken on an annual basis, and this is the third wave conducted to date. Whilst the core content of the survey is kept consistent each year, there is variation in some of the topics covered. This ensures that annual monitoring with consistent data can be achieved where needed, as well as capturing data on a wider range of issues at less frequent intervals. 3. Research Objectives
In terms of the specific research aims, the study was required to provide robust evidence to:
- Understand the role of international market diversification in business development strategies, including its effects on revenue growth and resilience, profitability and return on investment in new product development;
- Identify drivers of geographical focus, including awareness of, and potential interest in, emerging and high growth markets (as identified in UKTI’s 5 year strategy, published in 2006);
- Understand links between innovation, R&D and overseas business development, and how the economic downturn is affecting this relationship (including the strategic aims of investment in R&D and innovation activities);
- Understand the barriers encountered by UK businesses in seeking to develop overseas business, both for new exporters and for firms seeking to enter new markets;
- Subject to the constraints of interview length and sample sizes, identify how these vary across markets.
- Identify awareness and use of UKTI support;
- Identify and assess the extent to which credit conditions and related issues (such as access to trade credit insurance and letters of credit) may be impacting on firms’ international business development, including their investment in R&D and innovation activities;
- Capture evidence about the characteristics of users and non-users of UKTI services, including innovation activity, scope of international business and modes of internationalisation employed.
This study built on the two previous survey waves, replicating the previous methodology so as to provide consistent year-on-year data (where practical), whilst developing the previous questionnaire to ensure that the 2010 objectives were fully addressed. 4. Methodology
The research was conducted via quantitative, CATI(^2) interviews, administered by a specialist team of business-to-business researchers with extensive experience of conducting similar studies with this type of audience.
4.1 Coverage
A total of 902 interviews were conducted with firms involved in overseas business activities covering the full range of internationalisation modes, including selling to overseas customers both directly and via agents or distributors, operating via contractual agreements and firms operating their own overseas sites. Whilst data was collected on import activity, only those firms also involved in other overseas business activities were selected for interview.
Whilst the majority of the firms interviewed (858 of the total 902) were involved in at least one of these forms of internationalisation at the time of the interview, a small number (44) were only planning to become involved in this type of activity (although to be eligible for the study they had to indicate that this was planned in the next year). This latter group have been labelled 'considerers' in the analysis.
4.2 Sample Design
Since one of the key objectives of this research was to ensure coverage of firms doing overseas business via the full range of modes, and not just simply exporting in the traditional sense, the sample frame was built from a random sample of UK businesses which was then screened to identify those engaged in overseas business. This approach had the further advantage of allowing the inclusion of 'considerers' in the research.
The initial sample frame was sourced from a Companies House-based list provided by Experian, with the sample stratified by age of firm. It was decided that a disproportionate sample design would be used, so that a robust number of interviews were conducted with 3 age groups of firms (those established up to 5 years, 6-10 years and over 10 years).
In order that the incidence within the sample frame of firms eligible for interview (i.e. engaging in international business activity) was kept to within sensible limits, an approach was taken to the construction of the initial sample frame whereby a small number of industry sectors with a very low proportion of firms expected to be involved in overseas business activity were excluded(^3). The exclusions were made on the basis of analysis of data from the Community Innovation Survey (CIS) on the incidence of exporting for individual industry sectors by age group(^4). The available data only enabled exclusions to be made at the level of 2-digit SIC codes, but a number of sub-sectors were also excluded based on both common sense and the research team's experiences of the previous surveys and pilot sessions (e.g. sub-post offices, taxi firms, dispensing chemists, etc).
(^2) Computer Assisted Telephone Interviewing. (^3) Sectors where the incidence of exporting firms was likely to be less than 1 in 5 were excluded from the sample frame. (^4) Based on analysis by Professor Richard Harris, University of Glasgow. Whilst both users and non-users of UKTI were included in the research, the sample lists were screened against lists of firms participating in the most recent main PIMS and PIMS Follow-Up surveys so as not to over-burden businesses with too frequent research.
4.3 Questionnaire Design
Strong emphasis was placed on questionnaire design in the early stages of this project, with the importance of ensuring that the questionnaire was easily understandable, clearly worded, flowed logically, acceptable in terms of length and capable of delivering high quality data across all the areas necessary to answer the research objectives recognised throughout the design phase of the study.
Given that some of the question areas had not been covered in previous studies, it was felt that an initial qualitative piloting phase was required to help test and inform the main questionnaire. This consisted of a total of 4 in-depth, less-structured interviews to ensure that the new question areas made sense to respondents and covered all of the pertinent issues.
Following this qualitative phase the quantitative questionnaire was revised where necessary, and then a full ‘live’ quantitative pilot was conducted on CATI. This took place over the course of 2 days and involved OMB executives and UKTI representatives listening to ‘live’ interviews conducted by the telephone research team. Based on this session, further changes were then made to the questionnaire script prior to the start of main fieldwork. A copy of the final questionnaire is appended to this report.
4.4 Fieldwork
Main fieldwork was conducted in February and March 2010, and interviews lasted an average of c.20 minutes.
The following table summarises the number of sample records selected for CATI, the approximate number of records lost due to screening-out or incorrect contact details, and the number of interviews completed along with the associated response rate.
| CATI SCREENING | | |-----------------------------------------------------|----------| | Selection for CATI | 22,006 | | Unusable – no overseas business activity | 15,168 | | Unusable – contact details incorrect | 2,990 |
| ACHIEVED INTERVIEWS / RESPONSE RATES | | |-----------------------------------------------------|----------| | Total useable sample | 3,848 | | Interviews achieved | 902 | | Response rate (%) | 23% | | Refusal rate (%) | 33% | 4.5 Weighting
All of the data presented in this report has been weighted to account for the disproportionate nature of the sample design (i.e. the disproportionate sampling by age of firm). The weighting regime uses data from the 2007/8 Annual Small Business Survey on the age profile of UK exporters (displayed below), with the data weighted to the profile shown.
Table 4.5.1 Weighting
| Age profile of UK exporters (2007/8 ASBS) | Age profile of interviewed firms | Weighting | |------------------------------------------|---------------------------------|-----------| | Up to 5 years | 16.8% | 28.3% | 0.594258824 | | 5-10 years | 23.4% | 24.3% | 0.963780822 | | More than 10 years | 59.8% | 47.5% | 1.260271028 |
4.6 Statistical Significance
Throughout this report, any differences between types of firm that are referred to as being ‘significant’ are statistically significant at the 95% level of confidence. In some cases apparent differences that are not statistically significant at this level have been highlighted, but made clear that they are not significant. 5. Modes of Internationalisation
5.1 Modes Used
Firms were asked which of a list of overseas business activities they had been involved in over the last five years. Those not involved in any of these overseas activities were asked whether they were seriously considering starting to conduct overseas business via any of these routes in the next year, and only those responding positively to this question were invited to take part in the research. This group (the ‘considerers’) were asked to indicate which types of activities they were planning to become involved in.
The chart below shows usage (and consideration for ‘considerers’) of these overseas business activities.
The vast majority of internationalising firms sell direct to businesses or individuals overseas, and two-fifths use agents or distributors. However, only around 1 in 10 are involved in other ‘contractual arrangements’ (such as licensing or franchising) or operate their own overseas sites.
Well over half of firms have also imported in the last 5 years (which was defined as buying any goods or services from overseas suppliers). However, please note that firms were not eligible to participate in the research purely on the basis of import activity, and they had to also be involved in one of the outward internationalisation modes to qualify for interview.
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5 Please note that 44 of the 902 firms interviewed (5%) were not yet doing business overseas but were planning to do so in the next year. The table below shows separate analysis of internationalisation modes for firms that are already engaged in overseas business and those that are just planning to start in the next year (i.e. ‘considerers’).
Table 5.1.1 Modes Of Internationalisation – By Active Exporters & Considerers
| Status | Total | Active | Considerer | |-------------------------------|-------|--------|------------| | Base | 902 | 858 | 44 | | Selling direct | 91% | 92% | 67% | | Agents/distributors | 42% | 42% | 43% | | Contractual arrangements | 9% | 9% | 18% | | Overseas site | 13% | 13% | 19% | | - Manufacturing/assembly | 3% | 3% | 0% | | - Call centre | 1% | 1% | 2% | | - Sales/service delivery | 11% | 11% | 15% | | - R&D | 4% | 3% | 9% | | Importing | 58% | 59% | 41% |
As seen above, firms that are just planning to start doing business overseas are comparatively less likely to be looking at selling direct to overseas customers, and more inclined to be considering contractual arrangements or setting up their own overseas site. However, the low base of ‘considerers’ should be taken into account when interpreting these results.
Those firms running their own overseas site(s) were asked to provide details of the main purpose of the site(s).
Table 5.1.2 Main Purpose of Site
| Overseas sites | |-----------------------------------------------------| | Base: All operating/considering overseas sites | 121 | | Manufacturing or assembly | 21% | | Call centre | 7% | | Distribution or sales office | 64% | | Service delivery | 57% | | Research, product or process development | 27% | | Don’t know/refused | 2% |
Most overseas sites are either distribution/sales offices or service delivery sites. However, around a quarter of firms have R&D facilities overseas and a fifth have production sites. Firms with overseas sites were also asked to indicate how many sites it was that they had, with the following results. Please note that ‘considerers’ were not asked this question and have been excluded from the analysis below.
Table 5.1.3 Number of Overseas Sites
| Overseas sites | | |----------------|---| | **Base: All operating overseas sites** | 115 | | One | 41% | | 2-5 | 37% | | 6-10 | 11% | | 11-20 | 3% | | 21-50 | 3% | | More than 50 | 4% | | Don’t know/refused | 2% |
Over half of those firms with overseas sites have 2 or more of them, although most have less than 5. However, a small minority of firms claimed to operate in excess of 50 sites, suggesting that they are extremely large multi-nationals.
The table below shows usage of the various different modes of internationalisation (including importing) by users and non-users of UKTI’s services. It is clear from this analysis that, whilst users and non-users are equally likely to sell direct to customers overseas, the former are more inclined to also adopt alternative internationalisation approaches (particularly using agents or distributors).
Table 5.1.4 Modes Of Internationalisation – By UKTI Usage
| UKTI Usage | Total | UKTI User | Non-User | |-------------|-------|-----------|----------| | **Base** | 902 | 235 | 667 | | Selling direct | 91% | 91% | 91% | | Agents/distributors | 42% | 60% | 35% | | Contractual arrangements | 9% | 13% | 7% | | Overseas site | 13% | 17% | 12% | | - Manufacturing/assembly | 3% | 3% | 3% | | - Call centre | 1% | 1% | 1% | | - Sales/service delivery | 11% | 15% | 10% | | - R&D | 4% | 4% | 4% | | Importing | 58% | 62% | 57% | As seen below, the larger a firm is (in terms of employee numbers) the more likely they are to use agents/distributors, do business overseas through contractual arrangements (such as licensing) and operate their own overseas sites. Whilst the difference is less pronounced, there is also some evidence that the same is true for older firms.
Table 5.1.5 Modes Of Internationalisation – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Selling direct | 88% | 91% | 91% | 92% | 90% | 90% | 92% | 84% | | Agents/distributors | 33% | 37% | 46% | 34% | 46% | 61% | 53% | 70% | | Contractual arrangements | 7% | 11% | 9% | 7% | 7% | 12% | 18% | 25% | | Overseas site | 7% | 12% | 15% | 7% | 13% | 33% | 34% | 39% | | - Manufacturing/assembly | 1% | 4% | 3% | 1% | 2% | 11% | 7% | 10% | | - Call centre | 1% | 1% | 1% | 0% | 1% | 2% | 3% | 7% | | - Sales/service delivery | 7% | 9% | 14% | 6% | 12% | 28% | 30% | 36% | | - R&D | 1% | 4% | 4% | 3% | 3% | 6% | 8% | 16% | | Importing | 50% | 57% | 61% | 50% | 69% | 79% | 69% | 53% |
The table below shows usage of the various different modes of internationalisation by overseas experience (measured via the number of years firms have been involved in overseas business activity and the number of markets they are doing business in). As might be expected, the more experienced firms are in overseas business, the more likely they are to use each mode. In particular, experienced firms are notably more inclined to use agents and distributors and to have their own overseas sites. More experienced firms are also more likely to import goods or services from overseas.
Table 5.1.6 Modes Of Internationalisation – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base | 185 | 433 | 270 | 411 | 214 | 268 | | Selling direct | 83% | 91% | 93% | 87% | 92% | 94% | | Agents/distributors | 30% | 40% | 48% | 27% | 46% | 58% | | Contractual arrangements | 9% | 8% | 11% | 6% | 8% | 13% | | Overseas site | 7% | 11% | 18% | 7% | 13% | 20% | | - Manufacturing/assembly | 0% | 3% | 4% | 1% | 2% | 5% | | - Call centre | 0% | 1% | 1% | 0% | 0% | 2% | | - Sales/service delivery | 6% | 9% | 16% | 7% | 11% | 17% | | - R&D | 2% | 3% | 5% | 1% | 3% | 7% | | Importing | 42% | 56% | 69% | 46% | 65% | 70% | The following table provides analysis by whether or not firms are innovative or IP active (for the definitions of ‘innovative’ firms and ‘IP active’ firms used in this analysis, see Chapter 6.7). There is little difference in the proportion of firms selling direct by these various innovation measures, but innovative and IP active firms are significantly more likely to use the other internationalisation modes (and are also more likely to import).
Table 5.1.7 Modes Of Internationalisation – By Innovation
| | Innovative | IP Active | |----------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | **Base** | 398 | 680 | 222 | 224 | 655 | | Selling direct | 90% | 90% | 92% | 89% | 91% | | Agents/distributors | 47% | 47% | 26% | 56% | 35% | | Contractual arrangements | 13% | 10% | 5% | 18% | 6% | | Overseas site | 16% | 14% | 11% | 18% | 11% | | - Manufacturing/assembly | 4% | 4% | 0% | 4% | 2% | | - Call centre | 1% | 1% | 1% | 2% | 1% | | - Sales/service delivery | 13% | 12% | 10% | 15% | 10% | | - R&D | 6% | 4% | 2% | 4% | 3% | | Importing | 62% | 61% | 49% | 68% | 55% |
The table below provides analysis by firms’ growth objectives over the next 5 years, and also shows results separately for innovative, high growth firms (a key group for UKTI). It is clear from this analysis that firms planning ‘substantial’ growth are much more likely to be using ‘non-traditional’ internationalisation modes (i.e. approaches other than just selling direct).
Table 5.1.8 Modes Of Internationalisation – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | |----------------------|-------------------|---------------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | Non innovative | | **Base** | 108 | 510 | 248 | 204 | 476 | 222 | | Selling direct | 93% | 90% | 90% | 90% | 90% | 92% | | Agents/distributors | 27% | 42% | 47% | 50% | 45% | 26% | | Contractual arrangements | 4% | 9% | 11% | 12% | 9% | 5% | | Overseas site | 8% | 14% | 15% | 17% | 13% | 11% | | - Manufacturing/assembly | 2% | 3% | 3% | 4% | 4% | 0% | | - Call centre | 0% | 1% | 1% | 1% | 1% | 1% | | - Sales/service delivery | 8% | 12% | 13% | 14% | 11% | 10% | | - R&D | 1% | 4% | 5% | 5% | 4% | 2% | | Importing | 49% | 59% | 59% | 63% | 61% | 49% | The table below shows usage of the various different modes of internationalisation by firms’ growth, using the ASBS and OECD definitions (for full details of these definitions please refer to Chapter 6.9).
Table 5.1.9 Modes Of Internationalisation – By Growth
| | ASBS Definition | OECD Definition | |----------------------|-----------------|-----------------| | | Sustained | Contained | New | No growth | High growth | Gazelles | | **Base** | 89 | 139 | 159 | 515 | 100 | 38 | | Selling direct | 90% | 89% | 91% | 91% | 90% | 95% | | Agents/distributors | 53% | 48% | 44% | 37% | 40% | 39% | | Contractual arrangements | 9% | 12% | 12% | 7% | 11% | 5% | | Overseas site | 16% | 17% | 15% | 11% | 13% | 8% | | - Manufacturing/assembly | 4% | 4% | 3% | 2% | 2% | 0% | | - Call centre | 0% | 2% | 2% | 1% | 1% | 0% | | - Sales/service delivery | 12% | 16% | 14% | 9% | 12% | 8% | | - R&D | 5% | 2% | 5% | 4% | 6% | 0% | | Importing | 68% | 66% | 54% | 56% | 65% | 66% |
There is some evidence that firms that are defined as growing under the ASBS definition (i.e. sustained, contained or new growth) are more likely to be involved in modes of internationalisation beyond direct sales. However, there is no indication that either ‘high growth’ firms or ‘gazelles’ (as per the OECD definition) are any more likely to be engaged in these activities.
Analysis has also been provided by whether or not younger firms are ‘born global’ (i.e. have been conducting business overseas since the outset) or are defined as being ‘young, technology intensive’. For the definitions of these categorisations, please refer to Chapters 6.6.2 and 6.7.3 respectively). As seen below, there is relatively little difference in the modes used by young firms that are defined as ‘born global’ or ‘young technology intensive’ and those that are not. That said, those firms that are classified as ‘born global’ under the alternative, tighter definition are significantly more likely to have their own overseas sites.
Table 5.1.9 Modes Of Internationalisation – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Over 5 years old | | **Base** | 255 | 136 | 44 | 126 | 647 | | Selling direct | 88% | 90% | 86% | 88% | 91% | | Agents/distributors | 33% | 30% | 36% | 38% | 43% | | Contractual arrangements | 7% | 7% | 11% | 11% | 9% | | Overseas site | 7% | 9% | 20% | 10% | 14% | | - Manufacturing/assembly | 1% | 2% | 5% | 2% | 3% | | - Call centre | 1% | 1% | 0% | 2% | 1% | | - Sales/service delivery | 7% | 7% | 16% | 10% | 12% | | - R&D | 1% | 1% | 0% | 2% | 4% | | Importing | 50% | 53% | 55% | 52% | 60% | 5.2 Number of Modes Used
The chart below provides an analysis of the number of modes firms have been involved in the last five years (or are planning to do in the next year in the case of ‘considerers’). Please note that this analysis is based just on the ‘outward’ internationalisation modes and does not include importing.
Chart 5.2.1 Number Of Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’)
Well over half of all internationalising firms (58%) are only using one mode when doing business overseas, with only around 1 in 10 involved in 3 or 4 different modes.
It is clear from the above analysis that UKTI users are more likely to employ multiple approaches when doing business overseas, with 63% using more than one mode compared to only 35% of non-users. However, this may well be a function of their greater experience overseas and the fact they tend to be operating in more markets (please refer to Section 6 for details of the profile of users and non-users). As seen below, this picture varies considerably across modes. In particular, those involved in some form of contractual arrangement or operating their own overseas site are much more likely to be involved in 3 or 4 different modes, suggesting that firms tend to adopt these approaches later in the international development. This is consistent with the earlier analysis that showed that more experienced exporters are more inclined to use these modes.
Table 5.2.1 Number of Modes – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 815 | 361 | 79 | 113 | | One | 55% | 15% | 6% | 12% | | Two | 34% | 62% | 34% | 32% | | Three | 9% | 19% | 39% | 41% | | Four | 2% | 5% | 21% | 3% | 6. Profile
6.1 Age of Business
The chart below shows the profile of internationalising firms in terms of their age. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.1.1 When Business Established – By UKTI Usage
As detailed earlier, the overall sample frame for this study was stratified by age to ensure robust coverage of firms aged up to 5 years, firms aged 5-10 and firms more than 10 years old. The data was then weighted to the known profile of internationalising firms (based on data taken from the 2007/8 Annual Small Business Survey), and the overall profile of firms reflects this.
Overall, the age profile of UKTI users and non-users is very similar, although the former are perhaps slightly older (with only 12% established in the last 5 years compared to 19% of non-users). The table below shows this age data by firm size (measured via number of employees).
Table 6.1.1 When Business Established – By Size Of Firm
| Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |----------------------------|-----|-------|-------|---------|------| | Base | 545 | 222 | 53 | 28 | 35 | | Within the last 2 years | 6% | 2% | 2% | 0% | 0% | | 2-5 years ago | 19% | 5% | 2% | 4% | 3% | | 5-10 years ago | 28% | 22% | 12% | 12% | 2% | | 10-20 years ago | 26% | 27% | 22% | 12% | 9% | | More than 20 years ago | 21% | 45% | 61% | 73% | 86% |
As expected, this analysis shows that larger firms tend to be older than their younger counterparts. However, it should be noted that a significant proportion of the smallest internationalising firms (with less than 10 employees) have been established for some time (26% for between 10 and 20 years and 21% for over 20 years). 6.2 Size of Business (Employees)
The chart below shows the size profile of firms, measured via their number of employees. Analysis has been provided at the total level, and by UKTI users and non-users.
The majority of internationalising firms are relatively small in terms of staff numbers, with over half having less than 10 employees and most of the remainder having less than 50 employees. This reinforces the importance of considering the needs of smaller firms when formulating policy in the area of trade support.
As with age, UKTI users and non-users have a broadly similar profile when it comes to size of firm, although users are slightly more likely to have over 50 employees. The table below shows firm size analysed by age.
Table 6.2.1 Number of Employees – By Age Of Firm
| Age (Years Trading) | Up to 5 | 6-10 | Over 10 | |---------------------|---------|------|---------| | Base | 255 | 219 | 428 | | Less than 10 | 84% | 66% | 44% | | 10-49 | 11% | 26% | 32% | | 50-99 | 2% | 4% | 10% | | 100-249 | 1% | 2% | 5% | | 250 or more | 1% | 0% | 7% | | Don’t know/refused | 2% | 3% | 2% |
Once again, the correlation between age and size of firm is highlighted. However, it should be noted that approaching half of the well-established internationalising firms (i.e. those trading for over 10 years) still have less than 10 employees. 6.3 Size of Business (Turnover)
The chart below shows the size profile of firms as measured by their annual turnover. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.3.1 Annual Turnover – By UKTI Usage
Approaching two-thirds of internationalising firms have fairly modest turnovers of up to £2 million, and only around 1 in 10 report sales in excess of £10 million.
Interestingly, whilst UKTI users and non-users were closely matched in terms of employee numbers, it appears that the former are somewhat more likely to generate higher turnovers. Overall, 35% of users report a turnover in excess of £2 million compared to only 24% of non-users. The table below shows firm turnover analysed by both age and number of employees.
Table 6.3.1 Annual Turnover - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|-----|-------|-------|---------|------| | Up to 5 | 255 | 545 | 222 | 53 | 28 | 35 | | 6-10 | 219 | 222 | 53 | 28 | 35 | | | Over 10 | 428 | 53 | 28 | 35 | | | | Base | | | | | | | | Up to £500,000 | 62% | 62% | 6% | 2% | 0% | 6% | | £500,000-£2million | 23% | 23% | 44% | 1% | 0% | 3% | | £2million-£10million| 5% | 4% | 33% | 56% | 11% | 4% | | £10million-£50million| 2% | 0% | 5% | 24% | 71% | 25% | | More than £50million| 1% | 0% | 6% | 0% | 2% | 6% | | Don't know/refused | 7% | 10% | 11% | 10% | 10% | 11% |
Unsurprisingly, there is a strong relationship between size measured by turnover and size measured by number of employees. The expected relationship between turnover and age is also evident, with older firms more likely to have the larger turnovers of over £2million.
However, it is certainly not the case that all older firms have larger turnovers, with over a quarter (27%) of those established more than 10 years reporting a turnover of £500,000 or less, and a similar proportion (26%) reporting a turnover of between £500,000 and £2million. 6.4 Industry Sector
The chart below shows the profile of firms in terms of their industry sector, both at the total level and by UKTI usage. During the survey the data on sector was collected at the level of 1-digit SIC code, but for the purposes of this analysis it has been summarised into primary industries, production, construction and services.
Overall, approaching two-thirds of internationalising firms are in the services sector, with almost all the remainder operating in the production sector. However, it appears that UKTI users are slightly more likely than non-users to be production sector firms.
As seen below, there is some evidence that internationalising firms established over 10 years or with 10 or more employees are more likely to be in the production sector than is the case for younger and smaller firms.
Table 6.4.1 Industry Sector - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | **Base** | | | | | | | | | | Primary | 0% | 1% | 1% | 1% | 1% | 0% | 4% | 0% | | Production | 22% | 28% | 42% | 27% | 43% | 65% | 51% | 43% | | Construction | 2% | 1% | 1% | 1% | 2% | 0% | 0% | 3% | | Services | 75% | 69% | 57% | 71% | 55% | 35% | 45% | 54% | 6.5 Ownership
The table below provides an analysis of the ownership of firms in terms of whether they are domestically or foreign owned. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.5.1 Company Ownership – By UKTI Usage
| | UKTI User | Non-User | Total | |----------------|-----------|----------|-------| | Joint UK & foreign owned | 2% | 3% | 2% | | Foreign owned | 8% | 9% | 9% | | UK owned | 91% | 90% | 90% |
Base: All respondents (Base) UKTI Users (235), Non-Users (667), Total (902)
Whilst the vast majority of the firms interviewed are UK-owned, around 1 in 10 are in foreign ownership (either wholly or partly). There is no difference between UKTI users and non-users in this respect.
As seen below, the larger the UK firm is, the more likely they are to be under foreign ownership.
Table 6.5.1 Company Ownership - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------|---------------------|----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | UK owned | 91% | 90% | 89% | 94% | 87% | 88% | 77% | 64% | | Foreign owned | 8% | 8% | 9% | 4% | 12% | 12% | 19% | 33% | | Joint UK & foreign owned | 1% | 2% | 1% | 2% | 1% | 0% | 4% | 3% |
OMB Research Ltd Report – D5 32 6.6 Experience of Doing Business Overseas
6.6.1 Number Of Years Doing Business Overseas
The chart below shows the experience profile of firms as measured by the length of time they have been involved in overseas business activity. Analysis has been provided at the total level, and by UKTI users and non-users.
UKTI users tend to be slightly more experienced in overseas markets than non-users, with 72% and 60% respectively having been doing business overseas for more than 5 years. The table below shows the length of time firms have been involved in overseas business activity analysed by both size (measured by number of employees) and age.
Table 6.6.1.1 Number Of Years Doing Business Overseas - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Not yet exporting | 11% | 4% | 2% | 6% | 2% | 4% | 0% | 0% | | Less than 2 years | 40% | 10% | 4% | 16% | 8% | 2% | 0% | 3% | | 2-5 years | 49% | 24% | 10% | 23% | 18% | 16% | 14% | 6% | | 6-10 years | 0% | 62% | 18% | 29% | 24% | 14% | 21% | 14% | | 11-20 years | 0% | 0% | 34% | 17% | 26% | 24% | 31% | 15% | | More than 20 years | 0% | 0% | 29% | 9% | 21% | 37% | 27% | 59% | | Don't know/refused | 1% | 1% | 2% | 1% | 2% | 2% | 7% | 3% |
As expected, there is a very strong link between the age of the firm and the length of time they have been doing business overseas, suggesting that when firms do internationalise they often do so reasonably early on.
Similarly, there is a link between size and the length of time firms have been involved in overseas business activity, with smaller firms tending to have been involved in overseas business activity for a shorter period than the larger firms. 6.6.2 ‘Born Global’ Firms
Some younger firms have been classified as ‘born global’, based on whether they started doing business overseas from the outset. The details of the ‘born global’ definition, and the alternative tighter definition, are shown below.
| ‘Born Global’ Firms | |---------------------| | Firms have been defined as being ‘born global’ if they… | | • Have been established for 5 years or less | | • And have been doing business overseas for as long as they have been established | | Firms have been defined as being ‘born global’ under the alternative (tighter) definition if they… | | • Have been established for 5 years or less | | • And have been doing business overseas for as long as they have been established | | • And the proportion of turnover accounted for by overseas sales is over 25% |
The table below shows the proportions of firms classified as ‘born global’ via each of these definitions. Analysis has been provided based on all respondents and based just on younger firms.
| Table 6.6.2.1 Born Global Firms – By UKTI Usage | |-----------------------------------------------| | | All firms | Firms aged up to 5 years | | | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | Base | 902 | 235 | 667 | 255 | 48 | 207 | | Born Global | 9% | 7% | 10% | 53% | 65% | 51% | | Born Global (alternative) | 3% | 2% | 3% | 17% | 19% | 17% | | Up to 5 years old but not Born Global | 8% | 4% | 9% | 45% | 35% | 48% | | Over 5 years old | 83% | 88% | 81% | - | - | - |
Overall, 9% of firms are classified as being ‘born global’ under the main definition and 3% under the tighter, alternative definition (equating to 53% and 17% respectively when based just on firms established in the last 5 years).
On the face of it, it looks as if UKTI users are less likely to be ‘born global’ than non-users (7% and 10% respectively). However, this is purely down to the slightly older profile of UKTI users, with this group containing a lower proportion of firms aged 5 years or less. When the analysis is based just on young firms, it is clear that UKTI users are in fact more likely to be ‘born global’. As seen below, amongst firms established in the last 5 years, it appears that those with 10 or more employees are slightly more likely to be ‘born global’.
Table 6.6.2.2 Born Global Firms – By Size (Up to 5 Years Old Only)
| | Firms aged up to 5 years | |--------------------------------|--------------------------| | | 0-9 emps | 10+ emps | | Base | 213 | 35 | | Born Global | 52% | 63% | | Born Global (alternative) | 17% | 17% | | Up to 5 years old but not Born Global | 46% | 37% | 6.6.3 Number Of Markets
The chart below shows the number of overseas markets firms are doing business in. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.6.3.1 Number of Markets Done Business in During Last 5 Years – By UKTI Usage
Over half of internationalising firms have done business in more than five markets over the last five years, with a third indicating that they are active in more than 10.
Users of UKTI clearly have more overseas experience in this respect, with 44% having done business in more than 10 markets compared to only 27% of non-users. As seen below, the number of markets firms do business in tends to increase with age and size.
Table 6.6.3.1 Number of Markets Done Business in During Last 5 Years - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|--------|------|---------|-----|-------|-------|---------|------| | Base | | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | None | | 11% | 4% | 2% | 6% | 2% | 4% | 0% | 0% | | One | | 11% | 11% | 7% | 11% | 7% | 0% | 3% | 0% | | 2-5 | | 37% | 35% | 27% | 35% | 30% | 20% | 14% | 3% | | 6-10 | | 20% | 28% | 24% | 23% | 28% | 28% | 31% | 8% | | More than 10 | | 20% | 21% | 40% | 25% | 33% | 48% | 52% | 83% | | Don’t know/refused | | 1% | 1% | 1% | 1% | 1% | 0% | 0% | 6% |
Firms were also asked whether they expected the number of markets they were doing business in to increase, decrease or stay the same over the next 3 years.
Chart 6.6.3.2 Whether Number of Markets Will Increase, Decrease or Stay the Same Over Next 3 Years – By UKTI Usage
Almost half of firms expect to expand into more markets over the next 3 years, with users of UKTI significantly more ambitious in this respect. Encouragingly, only 5% of firms anticipate reducing their overseas operations in the next 3 years. The table below shows the expected change in number of markets, analysed by both age and size.
Table 6.6.3.2 Whether Number of Markets Will Increase, Decrease or Stay the Same Over Next 3 Years - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|----------------------|----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Not yet exporting | 11% | 4% | 2% | 6% | 2% | 4% | 0% | 0% | | Increase | 55% | 52% | 41% | 43% | 46% | 54% | 50% | 58% | | Stay the same | 32% | 37% | 50% | 44% | 46% | 37% | 46% | 39% | | Decrease | 1% | 6% | 6% | 5% | 6% | 5% | 4% | 3% | | Don’t know/refused | 2% | 1% | 2% | 2% | 1% | 0% | 0% | 0% |
Whilst older firms tended to be operating in a greater number of markets, younger firms are more positive in terms of their plans to increase their overseas operations. However, it is a different picture by size of firm, with larger firms operating in more markets and more likely to plan to enter additional markets. 6.6.4 Regions
The chart below shows the experience profile of firms as measured by the regions in which they are currently doing business. Analysis has been provided at the total level, and by UKTI users and non-users.
Table 6.6.4.1 Regions Currently Doing Business In – By UKTI Usage
| Regions | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Europe | 87% | 87% | 87% | | North America | 44% | 52% | 41% | | South & Latin America | 21% | 27% | 18% | | Middle East & Africa | 45% | 59% | 40% | | Asia Pacific | 46% | 56% | 42% | | Not yet exporting | 4% | 3% | 4% | | Don't know | 1% | 1% | 1% |
The majority of internationalising firms are doing business in Europe, with approaching half operating in North America, the Middle East/Africa and the Asia Pacific region. However, only a fifth are active in South or Latin American markets.
Whilst there is no difference between UKTI users and non-users in terms of the proportion operating in Europe, the former are significantly more likely to be doing business in all of the other regions. UKTI users also tend to be active in more regions than non-users. As seen below, generally the older and larger a firm is the more geographic areas they tend to be operating in.
Table 6.6.4.1 Regions Currently Doing Business In - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | Europe | North America | South & Latin America | Middle East & Africa | Asia Pacific | Not yet exporting | Don't know | |---------------------|-----------------------------|------|--------|---------------|-----------------------|----------------------|--------------|------------------|------------| | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 |
Regions
| Regions | Europe | North America | South & Latin America | Middle East & Africa | Asia Pacific | Not yet exporting | Don't know | |--------------------------|--------|---------------|-----------------------|----------------------|--------------|------------------|------------| | | 81% | 38% | 15% | 29% | 32% | 11% | 1% | | | 85% | 42% | 13% | 38% | 42% | 4% | 1% | | | 89% | 47% | 26% | 52% | 52% | 2% | 0% | | | 83% | 40% | 15% | 38% | 40% | 6% | 0% | | | 92% | 44% | 23% | 48% | 49% | 2% | 0% | | | 96% | 58% | 31% | 59% | 71% | 4% | 0% | | | 93% | 57% | 35% | 63% | 71% | 0% | 0% | | | 92% | 54% | 47% | 87% | 70% | 0% | 0% |
Number of Regions
| Number of Regions | None/not exporting | One | Two | Three | Four | Five | Don't know | |-------------------|--------------------|-----|-----|-------|------|------|------------| | | 11% | 35% | 24% | 15% | 7% | 8% | 1% | | | 4% | 34% | 23% | 21% | 10% | 7% | 1% | | | 2% | 25% | 22% | 19% | 15% | 16% | 0% | | | 6% | 33% | 23% | 20% | 8% | 9% | 1% | | | 2% | 29% | 23% | 18% | 15% | 13% | 0% | | | 4% | 10% | 22% | 18% | 22% | 24% | 0% | | | 0% | 15% | 15% | 15% | 29% | 15% | 0% | | | 0% | 15% | 15% | 15% | 40% | 15% | 0% |
OMB Research Ltd Report – D5 41 6.6.5 Proportion Of Turnover Accounted For By Overseas Sales
The chart below shows firms’ experience as measured by the proportion of their turnover that is accounted for by overseas sales. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.6.5.1 Proportion Of Turnover Accounted For By Overseas Sales – By UKTI Usage
Reflecting the fact that they tend to have been doing business overseas for longer and operate in more markets, users of UKTI also report that a significantly greater proportion of their turnover is accounted for by overseas sales than is the case for non-users. As seen below, firms that have been established for more than 10 years tend to indicate that overseas sales account for a higher proportion of their turnover than is the case amongst younger firms. However, there is no clear relationship in this respect by size of firm. It is also worth noting that a significant minority of young and small firms are extremely reliant on exports, with 16% of firms established in the last 5 years and 19% of those with less than 10 employees indicating that overseas sales account for more than half of their revenues.
Table 6.6.5.1 Proportion Of Turnover Accounted For By Overseas Sales - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Zero | 11% | 4% | 2% | 6% | 2% | 4% | 0% | 0% | | Less than 10% | 45% | 47% | 38% | 44% | 39% | 29% | 48% | 29% | | 11%-25% | 14% | 14% | 15% | 14% | 16% | 18% | 9% | 14% | | 26%-50% | 10% | 13% | 15% | 13% | 15% | 18% | 15% | 18% | | 51%-75% | 5% | 6% | 11% | 8% | 11% | 12% | 8% | 12% | | More than 75% | 11% | 8% | 11% | 11% | 9% | 10% | 15% | 9% | | Don't know/refused | 4% | 7% | 7% | 5% | 9% | 8% | 4% | 18% |
Firms were also asked whether they expected the proportion of turnover accounted for by overseas sales to increase, decrease or stay the same over the next 3 years.
Chart 6.6.5.2 Whether Proportion of Turnover Accounted for by Overseas Sales will be Higher, Lower or Same in a Year’s Time – By UKTI Usage
Base: All respondents (Base, Don’t know/refused) UKTI Users (235, 2%), Non-Users (667, 4%), Total (902, 4%) Overall, 42% of firms expect overseas sales to become more important to their business over the next year, with only 7% anticipating that they will account for a lower proportion of turnover than they do currently. This mirrors the results on whether firms expect to increase the number of market they operate in, when 46% though that this would be the case (as seen in section 6.6.3).
Once again, UKTI users appear more ambitious in their plans for overseas growth and are significantly more likely than non-users to anticipate an increase in the proportion of turnover coming from overseas.
The table below shows the expected change in export turnover, analysed by both age and size.
Table 6.6.5.2 Whether Proportion of Turnover Accounted for by Overseas Sales will be Higher, Lower or Same in a Year’s Time - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|-----|-------|-------|---------|------| | Base | | 545 | 222 | 53 | 28 | 35 | | Not yet exporting | | 255 | 219 | 428 | | | | Higher | | 45% | 49% | 39% | 40% | 41% | 48% | 55% | 60% | | About the same | | 35% | 38% | 48% | 43% | 48% | 48% | 38% | 28% | | Lower | | 5% | 7% | 7% | 7% | 8% | 0% | 0% | 6% | | Don’t know/refused | | 3% | 2% | 4% | 4% | 2% | 0% | 8% | 5% |
Whilst there is no clear picture by age of firm, it does appear that younger firms established for less than 10 years are most likely to increase the proportion or turnover accounted for by overseas sales. However, when looking at size of firm, it is those with fewer employees that are most likely to be expecting overseas growth. 6.7 Innovation
6.7.1 ‘Innovative’ Firms
Information on the engagement of employees in R&D and new product or service development activity, externally commissioned product or service development and sales of new products and services has been used to classify firms as either ‘innovative’ or ‘non-innovative’. The details of the ‘innovative’ definition, and the alternative tighter definition, are shown below.
| ‘Innovative’ Firms | |-------------------| | Firms have been defined as ‘innovative’ if they… | | • Have more than one employee engaged in R&D activity and more than one employee engaged in new product/service development | | • Or, have commissioned external new product or service development activity in the last year | | • Or, have introduced new products or services in the last 3 years except firms established in the last 2 years |
Firms have been defined as ‘innovative’ under the alternative, tighter definition if they …
| • Have more than one employee engaged in R&D activity and more than one employee engaged in new product or service development and at least some employees are involved in the development of scientific or technical knowledge not commonly available | | • Or, have commissioned external new product or service development activity in the last year | | • Or, have introduced new products or services in the last 3 years and these are ‘new to the world’ or ‘new to the sector’ |
The table below shows the proportions of firms classified as ‘innovative’ via each of these definitions. Analysis has been provided at the total level, and by UKTI usage.
| Table 6.7.1.1 Innovative Firms – By UKTI Usage | |-----------------------------------------------| | | Total | UKTI Usage | | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Innovative | 76% | 85% | 72% | | Innovative (alternative) | 44% | 53% | 41% |
Around three-quarters of internationalising firms are classified as being innovative by the main definition, although this drops to 44% when the tighter, alternative definition is employed. UKTI users are significantly more likely to be innovative than non-users, irrespective of which definition is used. The table below shows the proportion of firms classified as being innovative, analysed by both age and size.
Table 6.7.1.2 Innovative Firms - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | Innovative | Innovative (alternative) | |---------------------|-----------------------------|------|------------|--------------------------| | | | 255 | 74% | 41% | | | | 219 | 77% | 48% | | | | 428 | 76% | 44% | | | | 545 | 72% | 41% | | | | 222 | 79% | 49% | | | | 53 | 79% | 51% | | | | 28 | 85% | 40% | | | | 35 | 91% | 56% |
It is clear that the larger a firm is (in terms of employee numbers), the more likely it is to be innovative. However, there appears to be no relationship between age and innovation. 6.7.2 IP Active Firms
Firms were asked to indicate whether or not they hold any patents or trademarks, either in the UK or overseas, for any of their products or services. This data has then been used to create a measure of ‘IP active’ firms, as detailed below.
| ‘IP Active’ Firms | |-------------------| | Firms have been defined as ‘IP Active’ if they… | | • Have applied for or obtained any patents, trademarks or other legal protection for their products or services, either in the UK or overseas |
If they held any IP protection, firms were also asked whether this related to the UK or overseas countries. The table below shows the proportions of firms classified as ‘IP active’, as well as details of the area to which the IP protection related to.
Table 6.7.2.1 Whether Applied For or Obtained Any Patents, Trademarks or Other Legal Protection for Products or Services – By UKTI Usage
| UKTI Usage | Total | UKTI User | Non-User | |------------|-------|-----------|----------| | Base | 902 | 235 | 667 | | Yes (IP active) | 25% | 37% | 21% | | - UK | 7% | 9% | 7% | | - Overseas | 1% | 2% | 1% | | - Both | 16% | 26% | 12% | | No | 72% | 60% | 76% | | Don’t know | 3% | 3% | 3% |
A quarter of internationalising firms have applied for or obtained some form of legal protection for any of their products or services, and are therefore defined as being IP active. In most cases these firms hold IP protection for both the UK and overseas markets. UKTI users are notably more likely to hold IP than non-users. As seen below, there appears to be a clear relationship between size of firm and likelihood of being IP active. However, there are no statistically significant differences by age of firm in this respect.
Table 6.7.2.2 Whether Applied For or Obtained Any Patents, Trademarks or Other Legal Protection for Products or Services - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|-----|-------|-------|---------|------| | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Yes (IP active) | 23% | 23% | 27% | 20% | 25% | 45% | 38% | 50% | | - UK | 9% | 8% | 7% | 6% | 7% | 9% | 4% | 18% | | - Overseas | 2% | 2% | 1% | 1% | 1% | 3% | 0% | 3% | | - Both | 11% | 13% | 18% | 13% | 15% | 33% | 30% | 27% | | No | 77% | 74% | 69% | 79% | 71% | 50% | 56% | 35% | | Don't know | 0% | 3% | 4% | 1% | 4% | 4% | 7% | 14% |
It is also the case that firms involved in contractual arrangements overseas (such as licensing, franchising or joint ventures) are most likely to hold IP protection.
Table 6.7.2.3 Whether Applied For or Obtained Any Patents, Trademarks or Other Legal Protection for Products or Services – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 815 | 361 | 79 | 113 | | Yes (IP active) | 25% | 34% | 51% | 36% | | - UK | 7% | 7% | 7% | 6% | | - Overseas | 1% | 1% | 4% | 1% | | - Both | 16% | 25% | 40% | 27% | | No | 72% | 61% | 49% | 59% | | Don't know | 3% | 4% | 0% | 6% | 6.7.3 Young, Technology Intensive Firms
Some firms have been classified as ‘young, technology intensive’, and the details of this definition are shown below.
| ‘Young, Technology Intensive’ Firms | |-------------------------------------| | Firms have been defined as being ‘young, technology intensive’ if they… | | • Have been established for 5 years or less | | • And are classified as being innovative using the alternative (tighter) definition or are classified as IP active |
The table below shows the proportions of firms classified as ‘young, technology intensive’. Analysis has been provided based on all respondents and based just on younger firms.
Table 6.7.3.1 Young, Technology Intensive Firms – By UKTI Usage
| | All firms | Firms aged up to 5 years | |----------------------|-----------|--------------------------| | | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | Base | 902 | 235 | 667 | 255 | 48 | 207 | | Young tech intensive | 8% | 8% | 8% | 49% | 69% | 45% | | Up to 5 years old but not young tech intensive | 9% | 4% | 11% | 51% | 31% | 55% | | Over 5 years old | 83% | 89% | 81% | - | - | - |
Overall, 8% of all internationalising firms are classified as being ‘young, technology intensive’, which equates to 49% of those established in the last 5 years.
Looking at the analysis based on all firms, it appears as if UKTI users and non-users are equally likely to be ‘young, technology intensive’. However, this is a function of the slightly older age profile of UKTI users, and when the analysis is based just on firms aged 5 years or less then it becomes apparent than UKTI users are significantly more likely to be ‘young, technology intensive’ firms.
As seen below, amongst firms established in the last 5 years, it is the larger ones with 10 or more employees that are most likely to be defined as being ‘young, technology intensive’.
Table 6.7.3.2 Young, Technology Intensive Firms – By Size (Up to 5 Years Old Only)
| | Firms aged up to 5 years | |----------------------|--------------------------| | | 0-9 emps | 10+ emps | | Base | 213 | 35 | | Young tech intensive | 48% | 66% | | Up to 5 years old but not young tech intensive | 52% | 34% | 6.8 Growth
6.8.1 Past Growth
Firms that have been in existence for at least three years were asked whether, compared to this time three years ago, the number of people they employed now was higher, lower or about the same. The chart below shows firms’ past growth profile, as determined by growth in employee numbers.
Chart 6.8.1.1 Whether Employee Numbers are Higher, Lower or Same as 3 Years Ago – By UKTI Usage
Only a quarter of internationalising firms indicate that their employee numbers are higher than they were 3 years ago, and this is off-set by a similar proportion that indicate staffing levels have reduced over this time. There is no real difference between UKTI users and non-users in this respect. To provide another perspective on past growth, firms were also asked whether, compared to this time three years ago, their turnover was higher, lower or about the same. The chart below shows firms' past growth profile, as determined by growth in turnover.
Chart 6.8.1.2 Whether Turnover is Higher, Lower or Same as 3 Years Ago – By UKTI Usage
The picture in terms of turnover growth over the last 3 years is more positive than that based on employee numbers, with 40% of internationalising firms indicating that turnover has increased compared to 29% reporting a decline.
UKTI users appear to have performed slightly better than non-users, with 43% of the former reporting an increase in turnover compared to 38% of the latter. However, it should be noted that this difference is not statistically significant. The table below provides further analysis of the levels of both employee and turnover growth in the last 3 years.
Table 6.8.1.1 Employee & Turnover Growth in Last 3 Years - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|------|------|---------|-----|-------|-------|---------|------| | Up to 5 | | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Higher | | 19% | 37% | 24% | 19% | 33% | 40% | 30% | 38% | | Same | | 21% | 43% | 46% | 47% | 36% | 27% | 25% | 25% | | Lower | | 10% | 21% | 31% | 22% | 27% | 28% | 38% | 33% | | Est. in last 3 years| | 50% | 0% | 0% | 12% | 3% | 2% | 4% | 1% | | Don't know | | 0% | 0% | 0% | 0% | 0% | 2% | 0% | 0% |
| Turnover Growth | | | | | | | | | | |---------------------|-----------------------------|------|------|---------|-----|-------|-------|---------|------| | Higher | | 32% | 49% | 39% | 36% | 46% | 42% | 48% | 48% | | Same | | 6% | 21% | 24% | 21% | 19% | 28% | 18% | 16% | | Lower | | 11% | 28% | 34% | 29% | 28% | 23% | 23% | 30% | | Est. in last 3 years| | 51% | 0% | 0% | 12% | 3% | 2% | 4% | 1% | | Don't know | | 0% | 2% | 4% | 2% | 4% | 4% | 7% | 6% |
Whilst there is no clear picture by age or size in terms of the proportion of firms that have grown over the last 3 years (in either employee or turnover terms), it does seem that older firms and larger firms are more likely to have reduced their employee numbers. Older firms are also more likely to report a decline in turnover over this period. 6.8.2 Future Growth
All firms were asked their opinions on their future growth, assessing their business as a whole. The chart below shows firms’ growth objectives for the next five years.
Chart 6.8.2.1 Growth Objectives For Business Over Next 5 Years – By UKTI Usage
Whilst the majority of firms indicated that they expect to grow, there were more likely to feel that this growth would be ‘moderate’ rather than ‘substantial’. However, UKTI users were significantly more likely to be planning ‘substantial’ growth than non-users. The table below shows firms’ expectations in respect of future growth analysed by both age and size.
Table 6.8.2.1 Growth Objectives For Business Over Next 5 Years - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | 6-10 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|------|------|-------|-------|---------|------| | Up to 5 | | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | 6-10 | | 27% | 21% | 22% | 31% | 22% | 35% | 35% | | Over 10 | | 59% | 54% | 62% | 58% | 53% | | | | 0-9 | | 7% | 10% | 16% | 15% | 8% | 8% | 9% | | 10-49 | | 1% | 4% | 1% | 2% | 2% | 1% | 0% | 0% | | 50-99 | | 2% | 1% | 3% | 2% | 2% | 6% | 0% | 3% | | 100-249 | | 2% | 1% | 3% | 2% | 2% | 6% | 0% | 3% | | 250+ | | 2% | 1% | 3% | 2% | 2% | 6% | 0% | 3% |
It is clear from the above analysis that younger firms that have been established no more than 5 years have the most ambitious growth objectives, with 40% planning 'substantial' growth. However, there is no clear picture in this respect by size of firm. 6.8.3 Innovative High Growth Firms
The survey data on innovation activity and growth objectives has been combined in the analysis to identify ‘innovative high growth firms’, as this is a key group for UKTI to target.
The table below provides analysis of the combined innovative and growth data, analysed at the total level and by UKTI usage.
Table 6.8.3.1 Innovation & Growth Objectives – By UKTI Usage
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Innovative & expect substantial growth | 21% | 29% | 18% | | Innovative & expect moderate growth | 43% | 46% | 41% | | Innovative & expect no growth or negative growth | 12% | 10% | 12% | | Non-innovative | 24% | 15% | 28% |
Overall 21% of internationalising firms are defined as being ‘innovative high growth’, and it is encouraging that 29% of UKTI users fall into this category. However, it should be noted that 18% of those firms that do not use UKTI are still in this critical category, confirming that there are many ‘innovative high growth’ internationalising firms that UKTI are not yet reaching. 6.8.4 Growth (ASBS & OECD Definitions)
Further analysis of growth has been carried out, seeking to replicate, as far as is possible with the data available, an analysis of growth conducted for the Annual Small Business Survey (ASBS). For this analysis firms have been divided into four ‘growth categories’, taking account of both past and future growth. Furthermore, additional analysis has also been conducted seeking to replicate the OECD categories of growth (‘high growth’ firms and ‘gazelles’). Details of both these approaches are set out below.
| Growth – ASBS Definition | |--------------------------| | Firms have been classified as displaying ‘sustained growth’ if… | | • Their employee numbers have grown over the last 3 years | | • And, they are anticipating substantial growth over the next 5 years | | Firms have been classified as displaying ‘contained growth’ if… | | • Their employee numbers have grown over the last 3 years | | • But, they are not anticipating substantial growth over the next 5 years | | Firms have been classified as displaying ‘new growth’ if… | | • Their employee numbers have not grown over the last 3 years including firms established in the last 3 years | | • But, they are anticipating substantial growth over the next 5 years | | Firms have been classified as displaying ‘no growth’ if… | | • Their employee numbers have not grown over the last 3 years including firms established in the last 3 years | | • And, they are not anticipating substantial growth over the next 5 years |
| Growth – OECD Definition | |--------------------------| | Firms have been defined as ‘high-growth’ if… | | • Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years | | • And, they are less than 5 years old | | Firms have been defined as ‘gazelles’ if… | | • Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years | | • And, they are less than 5 years old | The table below provides analysis of growth under both the ASBS and OECD definitions.
Table 6.8.4.1 Growth (ASBS & OECD Definitions) – By UKTI Usage
| | Total | UKTI Usage | | | | | | | |------------------|-------|------------|----------|----------|----------|----------|----------|----------| | | | UKTI User | Non-User | | | | | | | Base | 902 | 235 | 667 | | | | | | | ASBS Growth | | | | | | | | | | Sustained growth | 10% | 11% | 9% | | | | | | | Contained growth | 16% | 17% | 15% | | | | | | | New growth | 15% | 20% | 13% | | | | | | | No growth | 59% | 52% | 62% | | | | | | | OECD Growth | | | | | | | | | | High growth | 10% | 9% | 10% | | | | | | | Gazelles | 3% | 1% | 3% | | | | | |
By the ASBS definition, 41% of internationalising firms are displaying growth, with most of these displaying ‘contained’ or ‘new’ growth. UKTI users are more likely to be growing, and this difference is most pronounced when it comes to ‘new growth’ (20% vs. only 13% of non-users).
Based on the OECD categories, 10% of internationalising firms are classed as ‘high growth’ and just 3% as ‘gazelles’. There are no statistically significant differences between users and non-users in this respect.
The table below provides further analysis by age and size.
Table 6.8.4.2 Growth (ASBS & OECD Definitions) - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | | | | | | | |------------------|---------------------|---------------------------|----------|----------|----------|----------|----------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | ASBS Growth | | | | | | | | | | Sustained growth | 8% | 16% | 8% | 6% | 14% | 13% | 21% | 21% | | Contained growth | 11% | 20% | 15% | 13% | 20% | 27% | 12% | 21% | | New growth | 32% | 11% | 13% | 16% | 17% | 10% | 12% | 14% | | No growth | 50% | 74% | 64% | 65% | 49% | 48% | 55% | 45% | | OECD Growth | | | | | | | | | | High growth | 15% | 16% | 23% | 10% | 11% | 8% | 9% | 7% | | Gazelles | 15% | 0% | 0% | 3% | 2% | 0% | 0% | 0% |
Using the ASBS growth categories, there does not appear to be any consistent pattern by either age or size of firm, although it does seem that firms with less than 10 employees are more likely to be exhibiting ‘no growth’ than larger firms. There is also no clear pattern by the OECD categories (beyond that expected for ‘gazelles’ given the restriction of this category to firms less than 5 years old). 6.9 Business Planning
Firms were asked to indicate whether or not they have a current, written business plan, with the following results.
UKTI users appear to be more strategic in their approach than non-users, with 68% having a current written business plan compared to only 53% of non-users.
As seen below, younger firms are slightly more likely to have a business plan than those that have been established for more than 5 years. However, when looking at this by size of firm, it is very clear that the larger the firm the more likely they are to have a plan.
Table 6.9.1 Whether Have a Current, Written Business Plan - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | | |---------------------|-----------------------------|---| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Yes | 63% | 56% | 56% | 49% | 64% | 64% | 86% | 82% | | No | 35% | 42% | 37% | 48% | 26% | 26% | 8% | 9% | | Don't know | 2% | 2% | 8% | 2% | 10% | 10% | 7% | 9% | 6.10 Customer Types
Firms were asked to indicate whether their overseas customers were businesses or individuals (i.e. consumers), with the following results.
Table 6.10.1 Customer Types – By UKTI Usage
| | Total | UKTI Usage | |------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Businesses | 55% | 62% | 53% | | Individuals | 9% | 2% | 12% | | Both | 31% | 33% | 30% | | Other | 1% | 1% | 1% | | Not yet exporting| 4% | 3% | 4% |
The majority of internationalising firms (86%) sell to overseas businesses, either exclusively or as well as selling to individuals. Interestingly, it seems that UKTI users are more likely to sell to businesses (95% vs. 83% of non-users), whereas non-users are comparatively more likely to be selling to individuals (42% vs. 35% of users).
As seen below, it is also the case that the older and larger the firm is, the more likely they are to sell to overseas businesses.
Table 6.10.2 Customer Types – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Businesses | 41% | 53% | 60% | 51% | 65% | 59% | 64% | 53% | | Individuals | 18% | 11% | 6% | 13% | 5% | 1% | 0% | 0% | | Both | 29% | 31% | 32% | 29% | 27% | 36% | 36% | 47% | | Other | 2% | 1% | 1% | 1% | 1% | 0% | 0% | 0% | | Not yet exporting| 11% | 4% | 2% | 6% | 2% | 4% | 0% | 0% |
Overall, there is little difference in the customer profile by the mode of internationalisation used.
Table 6.10.3 Customer Types – By Modes Used
| | Modes Used | |------------------|------------| | | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | | Base | 815 | 361 | 79 | 113 | | Businesses | 55% | 58% | 53% | 56% | | Individuals | 9% | 3% | 6% | 4% | | Both | 32% | 34% | 30% | 33% | | Other | 1% | 0% | 3% | 1% | | Not yet exporting| 3% | 4% | 8% | 5% | Those firms that sold to overseas businesses were asked whether these business customers were the ‘end users’ of their products or services or whether they were part of the supply chain (i.e. they sold the products on to others, in either the same or modified form). This data has been combined with the other data on customer types to provide details of the proportion of internationalising firms selling direct to end users and selling into supply chains.
Table 6.10.4 Customer Types Summary – By UKTI Usage
| | Total | UKTI Usage | |----------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | End users | 65% | 65% | 65% | | Supply chain | 64% | 71% | 61% | | Don’t know | 0% | 1% | 0% | | Not yet exporting | 4% | 3% | 4% |
Overall, two-thirds of internationalising firms sell directly to end users and a similar proportion sell into overseas supply chains (as around a third of firms do both). UKTI users are slightly more likely to be selling into supply chains.
Smaller firms with less than 10 employees and those that have been established for 10 years or less are less likely to be selling into overseas supply chains.
Table 6.10.5 Customer Types – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | End users | 59% | 64% | 68% | 68% | 62% | 64% | 55% | 68% | | Supply chain | 56% | 58% | 68% | 55% | 74% | 71% | 82% | 82% | | Don’t know | 0% | 1% | 0% | 1% | 0% | 0% | 0% | 0% | | Not yet exporting | 11% | 4% | 2% | 6% | 2% | 4% | 0% | 0% |
There is some evidence that firms using agents/distributors and those operating their own overseas sites are more likely to be selling their products into supply chains.
Table 6.10.6 Customer Types – By Modes Used
| | Modes Used | |----------------------|------------| | | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | | Base | 815 | 361 | 79 | 113 | | End users | 68% | 60% | 57% | 60% | | Supply chain | 63% | 75% | 66% | 73% | | Don’t know | 0% | 0% | 0% | 0% | | Not yet exporting | 3% | 4% | 8% | 5% | 6.11 Profile of UKTI Users: Internationalisation Survey vs. PIMS
The Internationalisation Survey involves interviewing a random sample of UK firms that are involved in (or seriously considering) overseas business, and as such it includes both users and non-users of UKTI’s services. UKTI also have a wealth of information on users from the on-going Performance & Impact Monitoring Survey, which involves contacting c.1,000 supported firms every quarter. The table below provides a comparison of key profile variables between UKTI users from the two surveys.
Table 6.11.1 Profile of UKTI Users – Internationalisation Survey vs. PIMS
| UKTI Users | Internationalisation Survey 2010 | PIMS 16-19 | |------------|---------------------------------|------------| | Base | 235 | 4158 | | Age | | | | 0-5 years | 12% | 27% | | 6-10 years | 24% | 18% | | Over 10 years | 65% | 55% | | Size (employees) | | | | 0-9 employees | 52% | 40% | | 10-249 employees | 40% | 45% | | 250+ employees | 7% | 11% | | Sector | | | | Primary | 0% | 0% | | Production | 39% | 39% | | Construction | 2% | 2% | | Services | 58% | 59% | | Innovation | | | | Innovative | 85% | 83% | | Innovative (alternative) | 53% | 62% | | IP active | 37% | 39% | | Overseas experience | | | | Less than 2 years | 11% | 28% | | 2-10 years | 46% | 32% | | Over 10 years | 42% | 39% | | Growth objectives (next 5 years) | | | | Grow substantially | 31% | 38% | | Grow moderately | 55% | 49% | | Same/smaller | 11% | 7% | | Business plan | | | | Yes | 68% | 75% | | No | 27% | 21% |
In terms of their physical profile, firms interviewed in the PIMS research tend to be younger than those interviewed in the Internationalisation Survey, but are also slightly larger in terms of employee numbers. However, the sectoral profile is identical for both groups of UKTI users.
PIMS users are also more likely to be relatively new to exporting, have more ambitious growth objectives and have a current business plan. This may be due to the PIMS research covering firms that have very recently received support from UKTI, whereas the Internationalisation Survey includes firms that have ever used UKTI. As such, many PIMS users are actively seeking to grow at the time of the interview, whereas Internationalisation Survey users may have passed that stage some years ago and now be less dynamic in their approach. 7. Awareness & Usage
7.1 Awareness & Use of UKTI
All firms were asked whether, prior to the interview, they had heard of either UK Trade & Investment or the commercial services provided by British embassies and consulates overseas. If so, they were also asked whether they had used either of these. The table below provides details of awareness and usage levels, along with comparative results from the 2008 survey.
Table 7.1.1 Awareness & Use of UKTI – By UKTI Usage
| | Total | UKTI Usage | Total 2008 survey | |----------------------|-------|------------|-------------------| | | | UKTI User | Non-User | | | Base | 902 | 235 | 667 | 900 | | Aware (at least one)| 68% | 100% | 55% | 68% | | - UK Trade & Investment or UKTI | 51% | 84% | 39% | 51% | | - Commercial services provided by embassies and consulates overseas | 53% | 85% | 40% | 55% | | Used (at least one) | 27% | 100% | 0% | N/A |
Overall, around two-thirds (68%) of internationalising firms had heard of either UKTI or the services provided by overseas posts. Awareness of the UKTI name stands at only 51%, with a similar awareness level (53%) recorded for the services provided by overseas posts, indicating that a significant number of firms who knew of the posts’ services were still unaware of UKTI itself. Awareness levels appear to have remained constant over the last 2 years, with no significant differences from the levels recorded in 2008.
Just over a quarter of firms (27%) claim to have used UKTI. It should be noted that this figure may under-represent UKTI usage as the respondent interviewed may not be aware that this is the case (e.g. if the firm used UKTI before the respondent joined the firm, or if a different site/department has used UKTI). However, it is also possible that UKTI users are over-represented in the sample due to response bias (i.e. those who know UKTI are more likely to agree to participate in a UKTI survey).
It is interesting to note that only 84% of UKTI users have actually heard of ‘UK Trade & Investment’ (i.e. 16% have used the services provided by overseas posts but not realised the link to UKTI). Overall awareness amongst non-users stands at 55%, indicating that there are a significant number of internationalising firms that could benefit from UKTI’s services but have never heard of the organisation.
______________________________________________________________________
6 Please note that the questioning approach differed in the 2008 survey, but the awareness data has been recalculated to ensure that it is directly comparable. However, it is not possible to provide valid comparison data for use of UKTI. As seen below, awareness and use of UKTI is generally higher amongst older firms and those with more employees.
Table 7.1.2 Awareness & Use of UKTI – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | |---------------------|-----------------------------|------|-----|-----|-----|-----|-----|----|----|----| | Up to 5 | 6-10 | | | | | | | | | | | Over 10 | 0-9 | | | | | | | | | | | 10-49 | 50-99 | | | | | | | | | | | 100-249 | 250+ | | | | | | | | | | | Aware | 58% | 67% | 71% | 64% | 68% | 85% | 70% | 74%| | - UKTI | 44% | 53% | 53% | 48% | 55% | 68% | 40% | 60%| | - Posts | 41% | 48% | 58% | 47% | 55% | 73% | 55% | 66%| | Used | 19% | 28% | 29% | 26% | 27% | 39% | 23% | 42%|
As might be expected, the longer a firm has been doing business overseas and the more markets they operate in, the more likely they are to have heard of UKTI and to have used their services. That said, over a quarter of firms that have been doing business overseas for more than 10 years are still not aware of UKTI.
Table 7.1.3 Awareness & Use of UKTI – By Experience
| Years Exporting | Number of Markets | Base | 185 | 433 | 270 | 411 | 214 | 268 | |-----------------|-------------------|------|-----|-----|-----|-----|-----|-----| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Aware | 55% | 68% | 72% | 60% | 71% | 75% | | - UKTI | 44% | 52% | 54% | 47% | 51% | 57% | | - Posts | 37% | 52% | 61% | 44% | 57% | 62% | | Used | 19% | 28% | 30% | 20% | 27% | 38% |
It is also the case that awareness and usage of UKTI increases amongst firms that are active in two or more overseas regions (e.g. Europe and Asia Pacific).
Table 7.1.4 Awareness & Use of UKTI – By Number of Regions
| Number of Overseas Regions Active In | Base | Aware | - UKTI | - Posts | Used | |-------------------------------------|------|-------|--------|---------|------| | None | 44 | 63% | 48% | 46% | 20% | | One | 270 | 52% | 41% | 36% | 15% | | Two | 207 | 71% | 53% | 57% | 30% | | Three | 165 | 79% | 63% | 65% | 32% | | Four | 104 | 76% | 54% | 60% | 39% | | Five | 104 | 73% | 53% | 60% | 35% | There is also clear evidence that innovative and IP active firms are more engaged with UKTI, with both awareness and usage levels higher amongst these groups.
Table 7.1.5 Awareness & Use of UKTI – By Innovation
| | Innovative | IP Active | |----------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | **Base** | 398 | 680 | 222 | 224 | 655 | | **Aware** | 73% | 71% | 57% | 82% | 62% | | - **UKTI** | 60% | 55% | 39% | 64% | 47% | | - **Posts** | 59% | 56% | 43% | 70% | 46% | | **Used** | 32% | 31% | 17% | 40% | 23% |
As seen below, awareness and usage increases slightly amongst firms that plan to grow substantially over the next 5 years. It is particularly high amongst innovative high-growth firms (76% and 37% respectively), which is encouraging given that this is a key group for UKTI. However, a significant minority of this group (24%) are still not aware of UKTI.
Table 7.1.6 Awareness & Use of UKTI – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | Non innovative | |----------------|-------------------|---------------------|----------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | **Base** | 108 | 510 | 248 | 204 | 476 | 222 | | **Aware** | 68% | 65% | 73% | 76% | 69% | 57% | | - **UKTI** | 43% | 49% | 61% | 64% | 52% | 39% | | - **Posts** | 48% | 51% | 57% | 60% | 54% | 43% | | **Used** | 21% | 26% | 33% | 37% | 28% | 17% |
Awareness and usage of UKTI also increases amongst firms using less ‘traditional’ internationalisation modes (i.e. not just selling direct). In particular, around 40% of firms using agents/distributors or contractual arrangements such as licensing or franchising have used UKTI.
Table 7.1.7 Awareness & Use of UKTI – By Modes Used
| | Modes Used | |----------------|------------| | | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | | **Base** | 815 | 361 | 79 | 113 | | **Aware** | 68% | 78% | 86% | 81% | | - **UKTI** | 52% | 62% | 66% | 62% | | - **Posts** | 53% | 63% | 70% | 73% | | **Used** | 27% | 39% | 41% | 34% | 7.2 Awareness & Use of Business Link
All firms were also asked whether they had heard of Business Link and whether they had used them. Those that had not used Business Link were also asked whether they expected to do so in the future. The table below provides details of awareness and usage levels.
Table 7.2.1 Awareness & Use of Business Link – By UKTI Usage
| | Total | UKTI Usage | |------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Aware of Business Link | 81% | 87% | 79% | | Used Business Link | 54% | 67% | 49% | | Not used but expect to | 7% | 6% | 7% |
Awareness of Business Link amongst internationalising firms stands at 81%, with a little over half having used the service (54%). However, only 7% of firms indicate that they have not used Business Link but expect to do so in the future. Awareness and usage levels are significantly higher amongst UKTI users, suggesting that those firms who are open to external support are likely to access this from a number of different sources.
As seen below, there is no real difference in awareness and usage of Business Link by age of firms, but larger firms with 100 or more employees are significantly less likely to have heard of or used the service.
Table 7.2.2 Awareness & Use of Business Link – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |------------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Aware of Business Link | 78% | 81% | 82% | 82% | 86% | 83% | 60% | 63% | | Used Business Link | 56% | 54% | 53% | 56% | 58% | 50% | 18% | 39% | | Not used but expect to | 7% | 8% | 6% | 7% | 4% | 10% | 15% | 0% | 8. Drivers of Market
8.1 Drivers of Market (Summary)
For the sections of the interview relating to drivers of market and barriers, firms were asked to focus on just one market, as follows:
- Firms were asked to select the ‘most challenging’ country that they had done business in over the last 5 years
- If they were unable to pick one, they were asked to select the country they had started doing business in ‘most recently’
- Firms that were just considering overseas business were asked to select the country they were ‘likely to do business in first’
For full details of the markets selected by users and non-users of UKTI, please refer to Annex A.
Once the market had been selected, firms were read out 2 possible reasons for deciding to focus on that market, and asked to indicate the extent to which each one applied to them (using a 5 point scale, where 5 meant it was ‘completely applicable’ and 1 meant it was ‘not at all applicable’). The possible reasons tested were as follows:
- “You had received an approach from someone in <MARKET>”
- “There was someone within your company who already had experience of doing business in <MARKET>”
The table below shows the proportion of firms giving a score of 4 or 5 out of 5 for each of these reasons for doing business in the market in question. Details of the full distribution of scores are shown in Section 8.2.
| Table 8.1.1 Drivers of Market – By UKTI Usage | |-----------------------------------------------| | UKTI Usage | Total | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Received approach | 63% | 59% | 65% | | Staff with experience | 28% | 35% | 26% |
Almost two-thirds of firms indicated that a significant motive for targeting the selected market was that they were approached by someone in that market, and over a quarter were significantly motivated by the fact that they already had staff with experience of the market.
This analysis clearly demonstrates that in many cases firms’ market choice is driven by reactive or circumstantial reasons (i.e. ‘networks & serendipity’), rather than (or at least in conjunction with) more strategic reasons. This finding is consistent with the findings from other UKTI surveys such as PIMS. In terms of differences in drivers between UKTI users and non-users, it seems that the former are more likely to target a particular market because they already have some level of in-house expertise about it, but slightly less likely to be reacting to approaches from potential customers overseas.
As seen below, there is also some evidence that larger firms are more likely to choose to enter a market because they already have staff with experience of it.
Table 8.1.2 Drivers of Market – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | Received approach | Staff with experience | |---------------------|-----------------------------|------|-------------------|----------------------| | Up to 5 | 6-10 | 255 | 61% | 33% | | | Over 10 | 428 | 59% | 27% | | | 0-9 | 545 | 65% | 28% | | | 10-49 | 222 | 66% | 25% | | | 50-99 | 53 | 62% | 29% | | | 100-249 | 28 | 63% | 31% | | | 250+ | 35 | 60% | 39% |
There are no consistent differences in this respect by the number of years firms have been exporting or the number of markets they operate in, and it is clear that ‘networks and serendipity’ play an important role in the market choice of all firms, irrespective of their overseas experience.
Table 8.1.3 Drivers of Market – By Experience
| Years Exporting | Number of Markets | Base | Received approach | Staff with experience | |-----------------|-------------------|------|-------------------|----------------------| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | 185 | 433 | 270 | 411 | 214 | 268 | | 59% | 63% | 66% | 65% | 62% | 62% | | 31% | 27% | 29% | 28% | 24% | 33% |
Innovative and IP active firms appear slightly more likely to target a market on the basis of existing in-house expertise, although the difference is not particularly pronounced.
Table 8.1.4 Drivers of Market – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 398 | 680 | 222 | 224 | 655 | | Received approach | 66% | 63% | 62% | 61% | 64% | | Staff with experience | 32% | 29% | 26% | 31% | 27% | Firms that were ‘born global’ and ‘young, technology intensive’ firms are also slightly more likely to choose to enter a market because they already have staff with experience of it (particularly those defined as ‘born global’ under the alternative, tighter definition).
Table 8.1.5 Drivers of Market – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | | Base | 255 | 136 | 44 | 126 | 647 | | Received approach | 61% | 64% | 59% | 63% | 64% | | Staff with experience| 33% | 38% | 48% | 37% | 27% |
As seen below, firms targeting high growth markets were less likely to agree that each of these possible reasons had been a significant driver. This implies that when firms enter high growth markets this is less likely to be influenced by ‘networks & serendipity’ and instead is comparatively more likely to be a result of a strategic or planned approach to market choice.
Table 8.1.6 Drivers of Market – By Market Type
| | Market | |----------------------|-----------------| | | High Growth | EEA | Other | | Base | 193 | 305 | 404 | | Received approach | 58% | 61% | 67% | | Staff with experience| 26% | 29% | 29% | 8.2 Drivers of Market (Detailed)
8.2.1 Received An Approach
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms felt that they were motivated to enter the market because they received an approach by someone in the market.
Chart 8.2.1.1 You Had Received An Approach From Someone In <Market>
Over half of firms indicated that this was ‘completely applicable’ to them, scoring 5 on the 5-point scale, and 76% felt that it applied to at least some extent (i.e. 2-5 out of 5). 8.2.2 Staff With Experience
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms felt that they were motivated to enter the market because they already had staff with experience of the market.
Chart 8.2.2.1 There Was Someone Within Your Company Who Already Had Experience Of <Market>
Overall, 40% of firms felt that this reason applied to at least some extent (i.e. 2-5 out of 5), with 21% indicating that it was a ‘completely applicable’ reason for choosing to target the selected market (i.e. 5 out of 5). 9. Barriers to Overseas Trade
9.1 Barriers (Summary)
As mentioned previously, for the sections of the interview relating to drivers of market and barriers, firms were asked to focus on just one market, as follows:
- Firms were asked to select the ‘most challenging’ country that they had done business in over the last 5 years
- If they were unable to pick one, they were asked to select the country they had started doing business in ‘most recently’
- Firms that were just considering overseas business were asked to select the country they were ‘likely to do business in first’
For full details of the markets selected by users and non-users of UKTI, please refer to Annex A.
Firms were then read out 11 potential barriers that they might have faced when trying to develop their business in the selected market, and asked to indicate the extent to which each one had been a difficulty (using a 5 point scale, where 5 meant it had been ‘extremely difficult’ and 1 meant it had ‘not been at all difficult’). The barriers tested were as follows:
- Dealing with legal or tax regulations or standards in < MARKET >
- Protecting your intellectual property
- Ensuring you get paid and enforcing contracts
- Dealing with customs procedures or paperwork
- Identifying who to make contact with in the first instance or finding a suitable partner
- Establishing an initial dialogue with prospective customers or business partners in < MARKET >
- Building relationships with key influencers or decision-makers
- Obtaining basic information about doing business in < MARKET >
- Finding the necessary management time to devote to doing business in < MARKET >
- Negotiating the culture and language
- A preference on the part of customers in < MARKET > for doing business with firms from < MARKET >
Please note that all analysis in this section of the report is based just on firms that were already doing business overseas (i.e. ‘considerers’ have been excluded). The table below shows the proportion of firms experiencing each barrier to a significant extent (i.e. scoring 4 or 5 out of 5 for the extent to which it was a difficulty). Details of the full distribution of scores are shown in Section 9.2.
Table 9.1.1 Individual Barriers – By UKTI Usage
| Base: All exporters | Total | UKTI Usage | |---------------------|-------|------------| | | | UKTI User | Non-User | | Dealing with customs procedures and paperwork | 27% | 34% | 24% | | Dealing with legal or tax regulations and standards | 23% | 31% | 20% | | Ensuring you get paid and enforcing contracts | 23% | 28% | 21% | | Finding the necessary management time to devote to doing business in <market> | 20% | 25% | 18% | | Negotiating the language and culture | 19% | 23% | 18% | | Identifying who to make contact with in the first instance | 17% | 23% | 14% | | Preference on part of customers for doing business with firms from <market> | 17% | 20% | 17% | | Building relationships with key influencers or decision makers | 16% | 21% | 14% | | Obtaining basic information about doing business in <market> | 16% | 21% | 14% | | Protecting your intellectual property | 14% | 21% | 11% | | Establishing an initial dialogue with prospective customers or partners in <market> | 14% | 17% | 13% |
The most widely experienced barriers all relate to the formalities and bureaucracy of doing business overseas, with 27% having significant problems with customs procedures, 23% with legal or tax regulations and 23% with getting paid.
UKTI users are consistently more likely to report each of the barriers than non-users, and it may have been the experience of encountering these difficulties that prompted them to contact UKTI.
However, at this stage it should be remembered that respondents were asked to talk about the ‘most challenging’ market that they had done business in, and this is likely to be contributing towards this difference between users and non-users. UKTI users tend to have been doing business overseas longer, be operating in more markets and are more likely to be doing business in high growth markets. As such, UKTI users would appear to have a higher chance of having encountered a particularly ‘challenging’ market which involves significant barriers. The 11 individual barriers firms were prompted with have been summarised further as outlined below.
| Barriers - Summary | |--------------------| | Firms have been defined as perceiving significant ‘legal & regulatory’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Dealing with legal or tax regulations or standards in <MARKET> | | • Or, Protecting your intellectual property | | • Or, Ensuring you get paid and enforcing contracts | | Firms have been defined as perceiving significant ‘customs’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Dealing with customs procedures or paperwork | | Firms have been defined as perceiving significant ‘contacts’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Identifying who to make contact with in the first instance or finding a suitable partner | | • Or, Establishing an initial dialogue with prospective customers or business partners in <MARKET> | | • Or, Building relationships with key influencers or decision-makers | | Firms have been defined as perceiving significant ‘information’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Obtaining basic information about doing business in <market> | | Firms have been defined as perceiving significant ‘resource’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Finding the necessary management time to devote to doing business in <MARKET> | | Firms have been defined as perceiving significant ‘language & cultural’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Negotiating the language & culture | | Firms have been defined as perceiving significant ‘bias’ barriers if they scored 4 or 5 on a 5-point scale for… | | • A preference on the part of customers in <MARKET> for doing business with firms from <MARKET> | The table below shows the proportions of firms scoring against each of these summary categories as well as an analysis of the number of individual barriers experienced to a significant extent.
Table 9.1.2 Summary Barriers – By UKTI Usage
| Types of Barriers | Total | UKTI Usage | |-----------------------------------|-------|------------| | | | UKTI User | Non-User | | Base: All exporters | 858 | 227 | 631 | | Legal & regulatory barriers | 41% | 53% | 36% | | Customs barriers | 27% | 34% | 24% | | Contacts barriers | 27% | 37% | 24% | | Information barriers | 16% | 21% | 14% | | Resource barriers | 20% | 25% | 18% | | Language & cultural barriers | 19% | 23% | 18% | | Bias barriers | 17% | 20% | 17% |
| Number of Barriers | | | | |-----------------------------------|-------|-----------|-----------| | At least one significant individual barrier | 66% | 77% | 62% | | - One | 17% | 13% | 19% | | - Two | 15% | 17% | 15% | | - Three | 12% | 16% | 10% | | - Four or more | 22% | 32% | 18% | | No significant barriers | 34% | 23% | 38% |
As has been the case in past UKTI studies, legal and regulatory barriers and contacts barriers are highlighted as being the most important, experienced by 41% and 27% of firms respectively in the selected market. Customs barriers have also been encountered by 27% of firms, and it is worth noting that this is a new barrier that has not been covered in previous UKTI surveys.
Overall, two-thirds of firms report experiencing at least one significant barrier in their selected market (which, it should be noted, is the ‘most challenging market’ they have done business in). Almost a quarter of firms (22%) have encountered significant difficulties with four or more of the individual barriers, suggesting there is a clear need for some form of external assistance to help firms overcome these barriers and successfully trade in overseas markets.
UKTI users clearly come across more significant barriers than non-users, with 77% experiencing at least one, compared to just 62% of non-users. With the exception of language and cultural barriers and bias barriers, users are significantly more likely to encounter each of the barrier types. Perhaps linked to their more limited exposure to overseas markets, small firms with less than 10 employees are less likely to have experienced significant barriers.
Table 9.1.3 Summary Barriers – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base: All exporters | |---------------------|-----------------------------|---------------------| | Up to 5 | 6-10 | Over 10 | | 0-9 | 10-49 | 50-99 | | 100-249 | 250+ | | | Legal & regulatory | 43% | 36% | | Customs | 22% | 25% | | Contacts | 26% | 25% | | Information | 16% | 15% | | Resource | 20% | 20% | | Language & cultural | 18% | 20% | | Bias | 17% | 16% |
Types of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|----------|-----------------|-------------------------| | Legal & regulatory | 63% | 19% | 12% | 7% | 25% | 37% | | Customs | 64% | 19% | 14% | 9% | 21% | 36% | | Contacts | 68% | 16% | 16% | 14% | 22% | 32% | | Information | 61% | 17% | 12% | 10% | 22% | 39% | | Resource | 70% | 18% | 18% | 14% | 20% | 30% | | Language & cultural| 76% | 13% | 15% | 13% | 15% | 24% | | Bias | 76% | 19% | 15% | 15% | 15% | 18% |
There is no evidence that barriers decline as firms become more experienced overseas, and in fact it appears that they actually increase (although this is likely to be partly a function of the fact that firms focussed on their ‘most challenging’ market, and experienced firms have done business in more markets).
Table 9.1.4 Summary Barriers – By Experience
| Years Exporting | Number of Markets | Base: All exporters | |-----------------|-------------------|---------------------| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Legal & regulatory | 31% | 42% | 44% | 38% | 39% | 46% | | Customs | 18% | 25% | 31% | 19% | 29% | 33% | | Contacts | 27% | 26% | 30% | 23% | 26% | 34% | | Information | 16% | 16% | 16% | 14% | 16% | 20% | | Resource | 21% | 21% | 20% | 17% | 23% | 21% | | Language & cultural | 17% | 21% | 19% | 16% | 19% | 24% | | Bias | 13% | 17% | 19% | 18% | 14% | 20% |
Types of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|----------|-----------------|-------------------------| | Legal & regulatory | 60% | 22% | 11% | 6% | 20% | 40% | | Customs | 64% | 17% | 13% | 11% | 23% | 36% | | Contacts | 71% | 16% | 19% | 15% | 22% | 29% | | Information | 59% | 16% | 14% | 9% | 19% | 41% | | Resource | 67% | 18% | 16% | 12% | 21% | 33% | | Language & cultural| 75% | 17% | 17% | 14% | 27% | 25% | | Bias | 75% | 17% | 17% | 14% | 27% | 25% | As seen below, firms that are active in only one overseas region are significantly less likely to have experienced barriers.
Table 9.1.5 Summary Barriers – By Number of Regions
| Number of Overseas Regions Active In | One | Two | Three | Four | Five | |--------------------------------------|-----|-----|-------|------|------| | Base: All exporters | 270 | 207 | 165 | 104 | 104 |
Types of Barriers
| Types of Barriers | One | Two | Three | Four | Five | |-------------------|-----|-----|-------|------|------| | Legal & regulatory| 35% | 39% | 45% | 44% | 48% | | Customs | 19% | 28% | 31% | 32% | 31% | | Contacts | 23% | 28% | 22% | 34% | 35% | | Information | 13% | 16% | 17% | 16% | 22% | | Resource | 16% | 23% | 21% | 19% | 26% | | Language & cultural| 18% | 17% | 22% | 23% | 23% | | Bias | 17% | 19% | 13% | 21% | 15% |
Number of Barriers
| Number of Barriers | One | Two | Three | Four | Five | |--------------------|-----|-----|-------|------|------| | At least one barrier| 56% | 64% | 69% | 81% | 71% | | - One | 16% | 14% | 21% | 20% | 16% | | - Two | 13% | 14% | 16% | 27% | 12% | | - Three | 8% | 13% | 12% | 12% | 14% | | - Four or more | 19% | 23% | 21% | 22% | 29% | | No significant barriers | 44% | 36% | 31% | 19% | 29% |
Interestingly, non-innovative and non-IP active firms report fewer barriers to overseas trade. This difference is particularly apparent when it comes to legal and regulatory difficulties and contacts barriers.
Table 9.1.6 Summary Barriers – By Innovation
| Innovative | Yes (alternative) | Yes | No | IP Active | Yes | No | |------------|-------------------|-----|----|-----------|-----|----| | Base: All exporters | 378 | 648 | 210 | 210 | 625 |
Types of Barriers
| Types of Barriers | Yes | No | Yes | No | |-------------------|-----|----|-----|----| | Legal & regulatory| 45% | 34%| 50% | 38%| | Customs | 26% | 26%| 30% | 26%| | Contacts | 32% | 17%| 35% | 25%| | Information | 19% | 13%| 16% | 17%| | Resource | 24% | 15%| 22% | 20%| | Language & cultural| 20% | 18%| 21% | 20%| | Bias | 19% | 16%| 19% | 17%|
Number of Barriers
| Number of Barriers | Yes | No | Yes | No | |--------------------|-----|----|-----|----| | At least one barrier| 72% | 55%| 75% | 64%| | - One | 15% | 20%| 13% | 18%| | - Two | 18% | 11%| 17% | 15%| | - Three | 13% | 8% | 17% | 10%| | - Four or more | 26% | 16%| 27% | 21%| | No significant barriers | 28% | 45%| 25% | 36%| Interestingly, firms with substantial growth aspirations are more likely to encounter significant barriers, suggesting that they are most in need of external assistance.
Table 9.1.7 Summary Barriers – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | Non innovative | | Base: All exporters | 108 | 482 | 234 | 192 | 456 | 210 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|---------------------|---------|----------|-------------|----------|---------------------|------| | | 35% | 40% | 47% | 48% | 41% | 34% | | | 23% | 26% | 28% | 28% | 26% | 26% | | | 17% | 27% | 33% | 34% | 29% | 17% | | | 13% | 15% | 21% | 22% | 15% | 13% | | | 14% | 19% | 26% | 28% | 19% | 15% | | | 19% | 19% | 21% | 23% | 19% | 18% | | | 13% | 19% | 19% | 19% | 17% | 16% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | | 58% | 66% | 72% | 75% | 68% | 55% | | | 20% | 17% | 15% | 14% | 17% | 20% | | | 11% | 15% | 19% | 21% | 15% | 11% | | | 7% | 13% | 9% | 10% | 14% | 8% | | | 19% | 20% | 29% | 31% | 21% | 16% | | | 42% | 34% | 28% | 25% | 32% | 45% |
Young firms that are defined as being ‘born global’ under the alternative, tighter definition are more likely to experience barriers than other firms. ‘Young, technology intensive’ firms are also notably more likely to report resource barriers.
Table 9.1.8 Summary Barriers – By Born Global & Young, Tech Intensive
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|---------------------|---------|----------|-------------|----------|---------------------|------| | | 43% | 46% | 52% | 45% | 41% | | | 22% | 24% | 27% | 26% | 27% | | | 26% | 26% | 32% | 25% | 27% | | | 16% | 18% | 11% | 18% | 16% | | | 20% | 18% | 16% | 28% | 20% | | | 18% | 20% | 34% | 22% | 20% | | | 17% | 18% | 25% | 18% | 18% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | | 63% | 65% | 77% | 67% | 67% | | | 19% | 18% | 20% | 17% | 17% | | | 12% | 13% | 14% | 12% | 16% | | | 7% | 9% | 11% | 9% | 12% | | | 25% | 26% | 32% | 29% | 21% | | | 37% | 35% | 23% | 33% | 33% | It is also apparent that firms that sell directly to overseas customers are less likely to come across significant barriers than those adopting alternative modes. Generally, those operating overseas sites are most likely to report each of the types of barrier.
Table 9.1.9 Summary Barriers – By Modes Used In Selected Market
| Modes Used In Market | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |----------------------|----------------|---------------------|--------------------------|---------------| | Base: All exporters | 666 | 256 | 48 | 53 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|--------------------|------| | | 40% | 24% | 26% | 16% | 18% | 17% | 16% | | | 45% | 30% | 33% | 19% | 25% | 24% | 20% | | | 53% | 23% | 39% | 15% | 30% | 31% | 19% | | | 53% | | | | | | |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | | 64% | 18% | 15% | 11% | 21% | 36% | | | 75% | 16% | 18% | 15% | 26% | 25% | | | 73% | 9% | 12% | 15% | 38% | 27% | | | 76% | | | | | |
There is clear evidence that high growth markets involve more significant barriers than those in the European Economic Area or other established markets. This is true for all types of barrier, but particularly for legal and regulatory and customs barriers.
Table 9.1.10 Summary Barriers – By Market Type
| Market | High Growth | EEA | Other | |--------|-------------|-----|-------| | Base: All exporters | 184 | 290 | 384 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|--------------------|------| | | 57% | 43% | 36% | 24% | 28% | 30% | 20% | | | 31% | 14% | 25% | 11% | 13% | 15% | 20% | | | 40% | 27% | 24% | 16% | 21% | 18% | 14% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | | 83% | 16% | 20% | 12% | 34% | 17% | | | 56% | 19% | 12% | 11% | 15% | 44% | | | 64% | | | | | | The table below provides analysis of the barriers experienced by individual market. Please note that it has only been possible to provide this analysis for markets selected by at least 30 respondents.
Table 9.1.11 Summary Barriers – By Individual Market
| Market | China | France | Germany | India | Ireland | Italy | Russia | USA | |-----------------|-------|--------|---------|-------|---------|-------|--------|-----| | Base: All exporters | 54 | 62 | 51 | 42 | 36 | 31 | 33 | 98 |
Types of Barriers
| Types of Barriers | China | France | Germany | India | Ireland | Italy | Russia | USA | |-------------------|-------|--------|---------|-------|---------|-------|--------|-----| | Legal & regulatory| 57% | 34% | 33% | 70% | 44% | 34% | 47% | 37% | | Customs | 42% | 20% | 12% | 41% | 3% | 13% | 63% | 26% | | Contacts | 44% | 32% | 40% | 24% | 16% | 22% | 38% | 27% | | Information | 32% | 16% | 16% | 21% | 7% | 17% | 27% | 13% | | Resource | 31% | 16% | 16% | 30% | 6% | 14% | 27% | 20% | | Language & cultural| 40% | 25% | 21% | 24% | 0% | 23% | 28% | 3% | | Bias | 20% | 32% | 31% | 15% | 10% | 26% | 10% | 16% |
Number of Barriers
| Number of Barriers | China | France | Germany | India | Ireland | Italy | Russia | USA | |--------------------|-------|--------|---------|-------|---------|-------|--------|-----| | At least one barrier | 82% | 70% | 67% | 91% | 54% | 58% | 89% | 66% | | - One | 10% | 21% | 21% | 25% | 25% | 15% | 15% | 18% | | - Two | 13% | 9% | 12% | 26% | 19% | 13% | 24% | 19% | | - Three | 15% | 19% | 11% | 7% | 3% | 10% | 25% | 15% | | - Four or more | 45% | 21% | 23% | 33% | 7% | 20% | 26% | 15% | | No significant barriers | 18% | 30% | 33% | 9% | 46% | 42% | 11% | 34% |
Based on the above analysis, there are significant variations in the type and extent of barriers experienced in different markets. India, Russia and China appear to be the most challenging markets, with over 80% of firms selecting these markets reporting at least one significant barrier.
With the exception of bias barriers, the proportion of firms experiencing each barrier was significantly higher than the norm in China. Customs barriers appear to be a particularly difficult issue in Russia (63% reporting these), and legal and regulatory issues are a significant issue in India (70%).
Interestingly, bias barriers (i.e. where firms in an overseas market demonstrate a preference for doing business with other firms from their own market) seem to be a particularly large problem in France and Germany. As seen below, with the exception of EEA markets, UKTI users are still more likely to report significant barriers than non-users even when this data is analysed by the type of market these barriers relate to. This suggests that there is a ‘true’ distinction between users and non-users and the increased likelihood of users reporting barriers (as seen earlier in this section) is not just a result of UKTI users being more likely to be in challenging high growth markets.
Table 9.1.12 Summary Barriers – By Market Type & UKTI Usage
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | Base: All exporters | 74 | 110 | 53 | 237 | 100 | 284 | | Legal & regulatory | 66% | 51% | 36% | 30% | 51% | 36% | | Customs | 55% | 35% | 13% | 15% | 30% | 26% | | Contacts | 44% | 31% | 25% | 25% | 37% | 20% | | Information | 30% | 21% | 9% | 12% | 21% | 14% | | Resource | 28% | 28% | 19% | 11% | 27% | 19% | | Language & cultural | 33% | 28% | 11% | 16% | 22% | 16% | | Bias | 27% | 15% | 19% | 21% | 15% | 14% |
Number of Barriers
| At least one barrier | High Growth | EEA | Other | |----------------------|-------------|-----|-------| | - One | 91% | 77% | 57% | 56% | 77% | 60% | | - Two | 12% | 19% | 16% | 19% | 12% | 18% | | - Three | 18% | 21% | 13% | 11% | 18% | 15% | | - Four or more | 44% | 28% | 19% | 15% | 30% | 17% | | No significant barriers | 9% | 23% | 43% | 44% | 23% | 40% | Similarly, when the analysis compares users and non-users that are active in similar numbers of markets, there is still clear evidence that UKTI users are more likely to report significant barriers.
Table 9.1.13 Summary Barriers – By Number of Markets & UKTI Usage
| Types of Barriers | Up to 5 markets | 6-10 markets | More than 10 markets | |----------------------------|-----------------|--------------|----------------------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | Base: All exporters | 70 | 297 | 55 | 159 | 100 | 168 | | Legal & regulatory | 50% | 35% | 49% | 35% | 58% | 40% | | Customs | 31% | 16% | 29% | 29% | 40% | 29% | | Contacts | 35% | 19% | 35% | 23% | 39% | 31% | | Information | 13% | 14% | 23% | 13% | 25% | 16% | | Resource | 24% | 16% | 27% | 22% | 26% | 18% | | Language & cultural | 23% | 14% | 18% | 20% | 27% | 22% | | Bias | 14% | 19% | 17% | 13% | 25% | 16% |
Number of Barriers
| At least one barrier | 70% | 56% | 73% | 65% | 85% | 68% | | - One | 13% | 18% | 16% | 19% | 12% | 20% | | - Two | 14% | 14% | 15% | 16% | 20% | 15% | | - Three | 14% | 8% | 13% | 12% | 19% | 11% | | - Four or more | 30% | 16% | 29% | 19% | 35% | 22% | | No significant barriers | 30% | 44% | 27% | 35% | 15% | 32% | The tables below show analysis of barriers by age and overseas experience within each of the 3 market types. Overall, there are no consistent or significant differences in this respect, with the possible exception that more experienced exporters appear slightly more likely to report barriers in High Growth and ‘other’ markets.
Table 9.1.14 Summary Barriers – By Market Type & Age
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | Up to 5 yrs | 6-10 yrs | Over 10 yrs | Up to 5 yrs | 6-10 yrs | Over 10 yrs | Up to 5 yrs | 6-10 yrs | Over 10 yrs | | Base: All exporters | 35 | 42 | 107 | 96 | 74 | 120 | 97 | 95 | 192 |
| Number of Barriers | High Growth | EEA | Other | |--------------------|-------------|-----|-------| | At least one barrier | 77% | 81% | 84% | 59% | 55% | 56% | 62% | 63% | 66% | | - One | 20% | 17% | 16% | 21% | 19% | 18% | 16% | 21% | 15% | | - Two | 17% | 14% | 21% | 9% | 18% | 10% | 13% | 12% | 18% | | - Three | 3% | 12% | 14% | 5% | 9% | 13% | 10% | 8% | 14% | | - Four or more | 37% | 38% | 33% | 24% | 9% | 15% | 22% | 22% | 20% | | No significant barriers | 23% | 19% | 16% | 41% | 45% | 44% | 38% | 37% | 34% |
Table 9.1.15 Summary Barriers – By Market Type & Experience
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | Up to 2 yrs | 2-10 yrs | Over 10 yrs | Up to 2 yrs | 2-10 yrs | Over 10 yrs | Up to 2 yrs | 2-10 yrs | Over 10 yrs | | Base: All exporters | 22 | 85 | 74 | 54 | 160 | 68 | 65 | 188 | 128 |
| Number of Barriers | High Growth | EEA | Other | |--------------------|-------------|-----|-------| | At least one barrier | 85% | 82% | 84% | 50% | 56% | 60% | 58% | 63% | 70% | | - One | 26% | 14% | 16% | 25% | 16% | 19% | 18% | 19% | 13% | | - Two | 27% | 15% | 22% | 3% | 14% | 12% | 12% | 13% | 20% | | - Three | 5% | 13% | 14% | 6% | 9% | 16% | 6% | 11% | 15% | | - Four or more | 26% | 40% | 32% | 16% | 16% | 13% | 21% | 20% | 21% | | No significant barriers | 15% | 18% | 16% | 50% | 44% | 40% | 42% | 37% | 30% | When interpreting the data below, the low base sizes for firms with 250+ employees should be taken into account. With this in mind, it generally seems that for each type of market, smaller firms are less likely they are to have experienced significant barriers.
Table 9.1.16 Summary Barriers – By Market Type & Size
| Base: All exporters | High Growth | EEA | Other | |---------------------|-------------|-----|-------| | 0-9 | 10-249 | 250+| SME total | | 91 | 80 | 11 | 171 | | 193 | 87 | 6 | 280 | | 226 | 129 | 18 | 355 |
Types of Barriers
| Legal & regulatory | 55% | 62% | 45% | 59% | 29% | 34% | 20% | 31% | 36% | 46% | 39% | 40% | | Customs | 47% | 40% | 45% | 44% | 13% | 17% | 0% | 15% | 25% | 30% | 28% | 27% | | Contacts | 34% | 35% | 45% | 35% | 23% | 27% | 20% | 24% | 19% | 30% | 34% | 24% | | Information | 27% | 23% | 18% | 25% | 11% | 12% | 0% | 12% | 14% | 16% | 23% | 15% | | Resource | 33% | 23% | 27% | 28% | 15% | 9% | 20% | 13% | 20% | 25% | 6% | 22% | | Language & cultural| 30% | 33% | 18% | 31% | 10% | 24% | 0% | 15% | 19% | 16% | 23% | 18% | | Bias | 17% | 20% | 36% | 19% | 19% | 23% | 20% | 20% | 15% | 12% | 6% | 14% |
Number of Barriers
| At least one barrier | 82% | 81% | 91% | 82% | 53% | 63% | 40% | 56% | 60% | 71% | 73% | 64% | | - One | 17% | 12% | 27% | 15% | 19% | 17% | 20% | 18% | 16% | 20% | 6% | 18% | | - Two | 15% | 25% | 9% | 21% | 9% | 18% | 0% | 12% | 14% | 15% | 39% | 14% | | - Three | 13% | 10% | 27% | 11% | 7% | 16% | 20% | 10% | 11% | 15% | 6% | 13% | | - Four or more | 37% | 33% | 27% | 35% | 18% | 12% | 0% | 16% | 20% | 21% | 23% | 20% | | No sig. barriers | 18% | 19% | 9% | 18% | 47% | 37% | 60% | 44% | 40% | 29% | 27% | 36% |
As seen below, production sector firms appear marginally more likely to experience barriers to overseas trade, although this difference does not appear in EEA markets.
Table 9.1.17 Summary Barriers – By Market Type & Sector
| Base: All exporters | Total | High Growth | EEA | Other | |---------------------|-------|-------------|-----|-------| | Prod. | Serv. | Prod. | Serv. | Prod. | Serv. | Prod. | Serv. | | 287 | 552 | 72 | 110 | 90 | 188 | 125 | 254 |
Types of Barriers
| Legal & regulatory | 42% | 40% | 57% | 56% | 23% | 35% | 47% | 36% | | Customs | 30% | 25% | 37% | 47% | 18% | 12% | 33% | 23% | | Contacts | 32% | 25% | 43% | 31% | 24% | 26% | 30% | 21% | | Information | 18% | 15% | 21% | 26% | 12% | 9% | 19% | 14% | | Resource | 22% | 19% | 30% | 25% | 14% | 12% | 24% | 21% | | Language & cultural| 19% | 19% | 36% | 25% | 12% | 16% | 15% | 19% | | Bias | 18% | 17% | 21% | 18% | 19% | 21% | 15% | 14% |
Number of Barriers
| At least one barrier | 70% | 64% | 86% | 80% | 55% | 56% | 71% | 61% | | - One | 17% | 17% | 16% | 17% | 16% | 19% | 19% | 15% | | - Two | 16% | 15% | 23% | 17% | 11% | 11% | 16% | 16% | | - Three | 11% | 12% | 12% | 13% | 11% | 11% | 12% | 12% | | - Four or more | 25% | 20% | 35% | 33% | 17% | 15% | 24% | 19% | | No significant barriers | 30% | 36% | 14% | 20% | 45% | 44% | 29% | 39% | 9.2 Barriers (Detailed)
9.2.1 Dealing With Legal Or Tax Regulations & Standards (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.1 Dealing With Legal Or Tax Regulations & Standards
Dealing with legal or tax regulations and standards is one of the most widespread barriers, with 23% of firms experiencing it to a significant extent (i.e. 4 or 5 out of 5). Overall, 52% of internationalising firms reported at least some difficulties in this respect (i.e. 2-5 out of 5), with this more likely to be the case amongst UKTI users. 9.2.2 Protecting Your Intellectual Property (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.2 Protecting Your Intellectual Property
Only 14% of firms reported a significant problem with protecting their intellectual property, meaning that it was the least problematic of the barriers tested. However, it is clearly still an issue for a large number of firms, with 37% indicating that they had experienced at least some difficulties in this respect (i.e. 2-5 out of 5). As seen below, firms that hold some form of IP protection are more likely to experience difficulties protecting it overseas. However, it is interesting to note that around a third of those with no IP protection report some degree of difficulty in protecting their IP (i.e. give a score of 2-5 out of 5).
Table 9.2.2 Protecting Your Intellectual Property – By IP Activity
| IP Active | Yes | No | |----------------------------|-----|----| | Base: All exporters | 210 | 625| | 5 – Extremely difficult | 11% | 6% | | 4 | 8% | 6% | | 3 | 15% | 10%| | 2 | 15% | 12%| | 1 – Not at all difficult | 48% | 65%| | Don't know | 2% | 2% | 9.2.3 Ensuring You Get Paid & Enforcing Contracts (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.3 Ensuring You Get Paid & Enforcing Contracts
Overall, 55% of internationalising firms reported at least some problems with getting paid and enforcing contracts, with 23% indicating it had been a significant difficulty (i.e. 4-5 out of 5). As with all the barriers, UKTI users were more likely to encounter this issue. 9.2.4 Dealing With Customs Procedures & Paperwork (Customs Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.4 Dealing With Customs Procedures & Paperwork
Over a quarter of internationalising firms (27%) have experienced significant difficulties with customs procedures, making it the most widely reported of the barriers tested. Furthermore, 59% of firms have had at least some problems in this respect (i.e. score 2-5 out of 5), with this proportion increasing to 67% amongst UKTI users. 9.2.5 Identifying Who To Make Contact With In The First Instance (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.5 Identifying Who To Make Contact With In The First Instance
Just under half of all firms (48%) have experienced some level of difficulty with identifying initial contacts in their selected market, with 17% judging this to have been a significant barrier (i.e. scoring 4-5 out of 5). The majority of UKTI users (58%) have experienced at least some problems with this issue, which is consistent with other survey data that shows that a need to access suitable contacts is one of the major reasons for using UKTI support. 9.2.6 Establishing An Initial Dialogue With Prospective Customers Or Partners (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.6 Establishing An Initial Dialogue With Prospective Customers Or Partners
Whilst only 14% of firms indicated that this had been a significant difficulty in their selected market, half (51%) reported at least some problems in this respect. Once again, this was more likely to be an issue for UKTI users. 9.2.7 Building Relationships With Key Influencers Or Decision Makers (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.7 Building Relationships With Key Influencers Or Decision Makers
Overall, 56% of internationalising firms had experienced at least some difficulty in building relationships overseas, with this proportion increasing markedly (to 67%) amongst UKTI users. However, only 16% of all firms (and 21% of users) felt that this had been a significant problem. 9.2.8 Obtaining Basic Information About Doing Business In The Market (Information Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.8 Obtaining Basic Information About Doing Business In The Market
Overall, 55% of internationalising firms had experienced at least some problems in accessing basic information about doing business in their selected market, with 16% judging this to be a significant barrier. This highlights the need for an organisation such as UKTI to help fill these knowledge gaps, and the fact that UKTI users are more likely to report this barrier suggests that this is one of the key reasons why firms approach UKTI. 9.2.9 Finding The Necessary Management Time To Devote To Doing Business In The Market (Resource Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.9 Finding The Necessary Management Time To Devote To Doing Business In The Market
A lack of time and resources is clearly a barrier to the development of overseas business for many firms, with 55% indicating that they had had some difficulties in this respect (and 20% claiming it has been a significant problem in their selected market). As seen in Section 9.1, this issue effects firms of all sizes and is not just confined to those with relatively few staff. Once again, users of UKTI are more likely to report this barrier, emphasising the importance of UKTI’s role in helping firms use their often limited resources most effectively. 9.2.10 Negotiating The Language & Culture (Language & Cultural Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.10 Negotiating The Language & Culture
Overall, 19% of all internationalising firms have experienced significant problems with the language or cultural differences in their chosen market, with almost half (48%) reporting at least some difficulty in this regard. Again, this barrier is more likely to have been experienced by UKTI users. 9.2.11 A Preference On The Part Of Customers In The Market For Doing Business With Other Firms From That Market (Bias Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.11 A Preference On The Part Of Customers In The Market For Doing Business With Other Firms From That Market
Around half (49%) of firms claim to have encountered this problem to at least some extent (i.e. score 2-5 out of 5), with 17% indicating that it has been a significant barrier. 10. Benefits of Doing Business Overseas
10.1 Benefits
All firms were read out 4 possible benefits of doing business overseas, and asked to indicate the extent to which each one applied to them, on a 5 point scale where 5 meant they had benefited ‘to a critical extent’ and 1 meant ‘to no extent’. The chart below summarises these results.
The most widespread benefit of exporting is that it enables firms to achieve a level of growth otherwise not possible, with 38% of firms indicating that they have benefited in this way to a significant extent (i.e. scoring 4-5 out of 5).
Similar proportions of internationalising firms have benefited from being able to better use their existing capacity and through being exposed to new ideas (30% and 28% experiencing significant benefits respectively). Whilst it is the least widespread of the benefits tested, approaching a quarter of firms (22%) have still benefited significantly from exporting increasing the lifespan of their products or services. The table below provides further analysis UKTI users and non-users, showing the proportion of firms experiencing each benefit to a significant extent (4-5 out of 5) and to a moderate extent (3-5 out of 5). It is clear from this analysis that, as well as experiencing more barriers (as seen in Section 9), UKTI clients also report consistently greater benefits from overseas trade.
Table 10.1.1 Benefits of Overseas Business – By UKTI Usage
| Base | Total | UKTI Usage | | | | |------|-------|------------|---|---|---| | | | UKTI User | Non-User | | | | Proportion benefiting significantly (4-5 out of 5) from... | | | | | | | Growth | 38% | 48% | 34% | | | | Utilising capacity | 30% | 38% | 28% | | | | New ideas | 28% | 38% | 24% | | | | Increased lifespan | 22% | 33% | 18% | | | | Proportion benefiting moderately (3-5 out of 5) from... | | | | | | | Growth | 56% | 68% | 52% | | | | Utilising capacity | 53% | 63% | 49% | | | | New ideas | 48% | 59% | 44% | | | | Increased lifespan | 37% | 50% | 33% | | | | Summary | | | | | | | At least one sig. benefit | 54% | 69% | 49% | | | | At least one mod. benefit | 77% | 87% | 73% | | | | No sig. or mod. benefit | 23% | 13% | 27% | | |
The likelihood of reporting significant benefits appears to increase with age and size. However, this difference is likely to be largely to be at least partially due to the fact that these firms have been doing business overseas for longer.
Table 10.1.2 Benefits of Overseas Business – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | | | | | |---------------------|---------------------------|---|---|---|---| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | | | Proportion benefiting significantly (4-5 out of 5) from... | | | | | | | | | | | | Growth | 35% | 37% | 39% | 35% | 39% | 48% | 47% | 51% | | | | Utilising capacity | 23% | 29% | 33% | 27% | 32% | 33% | 45% | 45% | | | | New ideas | 30% | 25% | 29% | 27% | 24% | 42% | 47% | 27% | | | | Increased lifespan | 19% | 21% | 23% | 21% | 22% | 20% | 23% | 36% | | | | Proportion benefiting moderately (3-5 out of 5) from... | | | | | | | | | | | | Growth | 52% | 54% | 58% | 52% | 61% | 68% | 63% | 66% | | | | Utilising capacity | 44% | 50% | 56% | 46% | 59% | 60% | 65% | 75% | | | | New ideas | 51% | 47% | 48% | 47% | 44% | 58% | 55% | 63% | | | | Increased lifespan | 35% | 39% | 38% | 39% | 35% | 38% | 32% | 48% | | | | Summary | | | | | | | | | | | | At least one sig. benefit | 49% | 54% | 56% | 51% | 53% | 68% | 72% | 66% | | | | At least one mod. benefit | 72% | 77% | 78% | 73% | 79% | 83% | 84% | 84% | | | | No sig. or mod. benefit | 28% | 23% | 22% | 27% | 21% | 17% | 16% | 16% | | | As might be expected, the longer a firm has been doing business overseas and the more markets they operate in, the more likely they are to report significant benefits.
Table 10.1.3 Benefits of Overseas Business – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base | 185 | 433 | 270 | 411 | 214 | 268 |
Proportion benefiting significantly (4-5 out of 5) from...
| | Growth | Utilising capacity | New ideas | Increased lifespan | |-----------------|-----------------|-----------------|-----------------|-----------------| | Less than 2 years | 29% | 23% | 26% | 16% | | 2-10 years | 35% | 27% | 27% | 22% | | Over 10 years | 45% | 39% | 30% | 25% | | Up to 5 | 25% | 20% | 21% | 16% | | 6-10 | 34% | 34% | 24% | 18% | | More than 10 | 58% | 41% | 41% | 33% |
Proportion benefiting moderately (3-5 out of 5) from...
| | Growth | Utilising capacity | New ideas | Increased lifespan | |-----------------|-----------------|-----------------|-----------------|-----------------| | Less than 2 years | 50% | 44% | 49% | 35% | | 2-10 years | 54% | 48% | 47% | 37% | | Over 10 years | 62% | 63% | 50% | 39% | | Up to 5 | 41% | 43% | 39% | 31% | | 6-10 | 60% | 54% | 48% | 33% | | More than 10 | 74% | 65% | 60% | 49% |
Summary
| | At least one sig. benefit | At least one mod. benefit | No sig. or mod. benefit | |-----------------|-----------------|-----------------|-----------------| | Growth | 47% | 74% | 26% | | Utilising capacity | 53% | 74% | 26% | | New ideas | 61% | 81% | 19% | | Increased lifespan | 40% | 65% | 35% |
There is also a clear correlation between the number of overseas regions firms are active in and the extent to which they benefit from doing business overseas.
Table 10.1.4 Benefits of Overseas Business – By Number of Regions
| Number of Overseas Regions Active In | None | One | Two | Three | Four | Five | |-----------------|------|-----|-----|-------|------|------| | Base | 44 | 270 | 207 | 165 | 104 | 104 |
Proportion benefiting significantly (4-5 out of 5) from...
| | Growth | Utilising capacity | New ideas | Increased lifespan | |-----------------|-----------------|-----------------|-----------------|-----------------| | None | 38% | 40% | 43% | 26% | | One | 25% | 19% | 16% | 15% | | Two | 33% | 29% | 25% | 20% | | Three | 40% | 30% | 36% | 22% | | Four | 52% | 40% | 35% | 32% | | Five | 60% | 48% | 39% | 31% |
Proportion benefiting moderately (3-5 out of 5) from...
| | Growth | Utilising capacity | New ideas | Increased lifespan | |-----------------|-----------------|-----------------|-----------------|-----------------| | None | 70% | 71% | 77% | 58% | | One | 41% | 41% | 33% | 26% | | Two | 50% | 51% | 43% | 38% | | Three | 60% | 52% | 52% | 40% | | Four | 71% | 64% | 64% | 50% | | Five | 80% | 66% | 64% | 42% |
Summary
| | At least one sig. benefit | At least one mod. benefit | No sig. or mod. benefit | |-----------------|-----------------|-----------------|-----------------| | Growth | 68% | 91% | 9% | | Utilising capacity | 37% | 63% | 37% | | New ideas | 51% | 73% | 27% | | Increased lifespan | 57% | 81% | 19% | It is also the case that innovative and IP active firms experience the greatest benefits from overseas trade, and this is consistent with previous UKTI survey data.
Table 10.1.5 Benefits of Overseas Business – By Innovation
| | Innovative | IP Active | |----------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | **Base** | 398 | 680 | 222 | 224 | 655 |
**Proportion benefiting significantly (4-5 out of 5) from...**
| | Growth | Utilising capacity | New ideas | Increased lifespan | |----------------------|--------|--------------------|-----------|--------------------| | **Yes** | 45% | 36% | 35% | 28% | | **No** | 40% | 32% | 31% | 23% |
**Proportion benefiting moderately (3-5 out of 5) from...**
| | Growth | Utilising capacity | New ideas | Increased lifespan | |----------------------|--------|--------------------|-----------|--------------------| | **Yes** | 62% | 56% | 58% | 46% | | **No** | 59% | 54% | 53% | 40% |
**Summary**
| | At least one sig. benefit | At least one mod. benefit | No sig. or mod. benefit | |----------------------|---------------------------|---------------------------|-------------------------| | **Yes** | 63% | 81% | 19% | | **No** | 57% | 79% | 21% |
Firms with more ambitious growth objectives also report greater benefits, suggesting that the benefits generated from overseas business might be acting as a catalyst for this growth.
Table 10.1.6 Benefits of Overseas Business – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | |----------------------|-------------------|---------------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | Non innovative | | **Base** | 108 | 510 | 248 | 204 | 476 | 222 |
**Proportion benefiting significantly (4-5 out of 5) from...**
| | Growth | Utilising capacity | New ideas | Increased lifespan | |----------------------|--------|--------------------|-----------|--------------------| | **Yes** | 29% | 25% | 18% | 22% | | **No** | 36% | 29% | 28% | 20% |
**Proportion benefiting moderately (3-5 out of 5) from...**
| | Growth | Utilising capacity | New ideas | Increased lifespan | |----------------------|--------|--------------------|-----------|--------------------| | **Yes** | 46% | 44% | 39% | 37% | | **No** | 55% | 55% | 48% | 20% |
**Summary**
| | At least one sig. benefit | At least one mod. benefit | No sig. or mod. benefit | |----------------------|---------------------------|---------------------------|-------------------------| | **Yes** | 44% | 66% | 34% | | **No** | 54% | 78% | 22% |
OMB Research Ltd Report – D5 99 Firms that were classified as ‘born global’ using the alternative, tighter definition report consistently higher benefits (but there is no difference when the standard ‘born global’ definition is used). Firms that are classified as ‘young, technology intensive’ also appear to benefit more than other young firms.
Table 10.1.7 Benefits of Overseas Business – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | | Base | 255 | 136 | 44 | 126 | 647 | | Proportion benefiting significantly (4-5 out of 5) from... | | | | | | | Growth | 35% | 31% | 61% | 39% | 38% | | Utilising capacity | 23% | 21% | 43% | 26% | 32% | | New ideas | 30% | 30% | 45% | 36% | 28% | | Increased lifespan | 19% | 19% | 36% | 21% | 23% | | Proportion benefiting moderately (3-5 out of 5) from... | | | | | | | Growth | 52% | 48% | 80% | 56% | 57% | | Utilising capacity | 44% | 40% | 73% | 47% | 54% | | New ideas | 51% | 46% | 61% | 56% | 48% | | Increased lifespan | 35% | 32% | 50% | 42% | 38% | | Summary | | | | | | | At least one sig. benefit | 49% | 46% | 73% | 55% | 55% | | At least one mod. benefit | 72% | 65% | 91% | 79% | 77% | | No sig. or mod. benefit | 28% | 35% | 9% | 21% | 23% | 10.2 Impact on Product & Service Development
All firms were asked whether their experiences of doing business overseas had let them to develop and new products and services or modify any existing ones, with the following results.
Chart 10.2.1 Impact On Product/Service Development
| Develop any new products or services | 38% | | Make changes or modifications to any existing products or services | 46% | | Neither | 46% |
Base: All respondents (Base, Don't know) (902, 1%)
Just over half of all firms (53%) reported some degree of impact on their product or service development activity, with 38% indicating that doing business overseas had prompted them to develop new products or services and 46% that it had encouraged them to change or modify existing products or services.
As seen below, UKTI users are significantly more likely to have introduced new products or services or modified existing ones as a direct result of their overseas activity. Where the impact on product/service development related to changing or modifying existing products, in most cases this was felt to be a fundamental change rather than just cosmetic changes (such as packaging or translation), and this is true of both users and non-users.
Table 10.2.1 Impact On Product/Service Development – By UKTI Usage
| UKTI Usage | Total | UKTI User | Non-User | |------------|-------|-----------|----------| | Base | 902 | 235 | 667 | | Develop new products/services | 38% | 44% | 36% | | Change/modify existing ones | 46% | 56% | 42% | | - Something cosmetic | 17% | 20% | 15% | | - Something more fundamental | 35% | 45% | 31% | | Neither | 46% | 35% | 51% | | Don't know | 1% | 1% | 1% | Larger firms are more likely to have developed or modified their products or services, but there is no difference in this respect by age of firm.
Table 10.2.2 Impact On Product/Service Development – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | Develop new products/services | Change/modify existing ones | - Something cosmetic | - More fundamental | Neither | Don't know | |---------------------|-----------------------------|------|-------------------------------|-----------------------------|---------------------|-------------------|---------|------------| | Up to 5 | 6-10 | 255 | 37% | 46% | 18% | 36% | 45% | 0% | | 6-10 | 219 | 428 | 36% | 44% | 19% | 30% | 48% | 0% | | Over 10 | 545 | 222 | 36% | 46% | 15% | 36% | 46% | 1% | | 0-9 | 545 | 222 | 35% | 41% | 14% | 32% | 50% | 1% | | 10-49 | 52 | 28 | 45% | 49% | 19% | 35% | 46% | 0% | | 50-99 | 56 | 59% | 59% | 52% | 25% | 53% | 34% | 0% | | 100-249 | 52 | 58% | 58% | 58% | 25% | 36% | 30% | 0% | | 250+ | 35 | 35% | 35% | 35% | 13% | 24% | 30% | 0% |
As expected, innovative and IP active firms are significantly more likely to report an impact of overseas business on their product or service development activity.
Table 10.2.3 Impact On Product/Service Development – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 398 | 680 | 222 | 224 | 655 | | Develop new products/services | 50% | 45% | 16% | 53% | 33% | | Change/modify existing ones | 58% | 54% | 21% | 60% | 41% | | - Something cosmetic | 20% | 19% | 8% | 26% | 13% | | - More fundamental | 45% | 41% | 16% | 45% | 32% | | Neither | 33% | 38% | 72% | 31% | 52% | | Don't know | 1% | 1% | 1% | 0% | 1% |
Firms with substantial growth aspirations are significantly more likely to have developed new products or services and made fundamental changes to existing ones. This might suggest that ambitious firms are more open to tailoring their offering to market requirements in order to help them realise their growth potential. Innovative high growth firms are particularly likely to have developed or modified their offering as a result of their overseas activities.
Table 10.2.4 Impact On Product/Service Development – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non innovative | |-------------------|---------------------|---------------| | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | | Base | 108 | 510 | 248 | 204 | 476 | 222 | | Develop new products/services | 25% | 37% | 47% | 54% | 42% | 16% | | Change/modify existing ones | 33% | 44% | 55% | 61% | 51% | 21% | | - Something cosmetic | 9% | 16% | 20% | 21% | 19% | 8% | | - More fundamental | 27% | 33% | 43% | 49% | 38% | 16% | | Neither | 60% | 48% | 37% | 31% | 41% | 72% | | Don't know | 1% | 1% | 0% | 0% | 1% | 1% | Firms that are defined as ‘born global’ by the alternative definition are particularly likely to have developed new products/services or modified existing ones, and ‘young technology intensive’ firms are also more likely to have done so.
Table 10.2.5 Impact On Product/Service Development – By Born Global & Young, Tech Intensive
| | Up to 5 years old | | | Over 5 years old | |----------------------|-------------------|----------------------|----------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | | Base | 255 | 136 | 44 | 126 | 647 | | Develop new products/services | 37% | 36% | 52% | 44% | 38% | | Change/modify existing ones | 46% | 46% | 61% | 55% | 46% | | - Something cosmetic | 18% | 15% | 14% | 27% | 16% | | - More fundamental | 36% | 37% | 57% | 40% | 35% | | Neither | 45% | 46% | 30% | 36% | 47% | | Don’t know | 0% | 0% | 0% | 0% | 1% |
Whilst there are no significant differences between production and service sector firms when it comes to the proportion developing new products or services as a result of their overseas activities, it does appear that the former are slightly more likely to modify existing products.
Table 10.2.6 Impact On Product/Service Development – By Sector
| | Production | Services | |----------------------|------------|----------| | Base | 297 | 586 | | Develop new products/services | 41% | 37% | | Change/modify existing ones | 50% | 43% | | - Something cosmetic | 21% | 14% | | - More fundamental | 39% | 33% | | Neither | 44% | 48% | | Don’t know | 0% | 1% |
As seen below, firms engaged in less ‘traditional’ internationalisation modes (i.e. not just selling direct) are more likely to report an impact on their product or service development activity.
Table 10.2.7 Impact On Product/Service Development – By Modes Used
| | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |----------------------|----------------|---------------------|--------------------------|---------------| | Base | 815 | 361 | 79 | 113 | | Develop new products/services | 37% | 50% | 63% | 57% | | Change/modify existing ones | 45% | 56% | 73% | 70% | | - Something cosmetic | 16% | 25% | 28% | 23% | | - More fundamental | 34% | 42% | 56% | 57% | | Neither | 47% | 34% | 20% | 24% | | Don’t know | 1% | 1% | 0% | 1% | In cases where overseas business had influenced firms’ product/service development, firms were asked whether this development activity was designed for overseas customers, UK customers or both.
Chart 10.2.2 Geographic Focus Of Product/Service Development
In most cases where doing business overseas had influenced product or service development, this activity had been carried out with both the UK market and overseas markets in mind. As seen below, this is true for both users and non-users of UKTI.
Table 10.2.8 Geographic Focus Of Product/Service Development – By UKTI Usage
| | Total | UKTI Usage | |--------------------------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 902 | 235 | 667 | | Overseas customers | 12% | 17% | 10% | | UK customers | 2% | 2% | 2% | | Both | 36% | 43% | 33% | | Overseas business has not prompted | 46% | 35% | 50% | | any product/service development | | | | | Don’t know | 0% | 0% | 0% | | Not yet exporting | 4% | 3% | 4% | As seen below, there is little difference between the production and service sectors in this respect.
Table 10.2.9 Geographic Focus Of Product/Service Development – By Sector
| Sector | Production | Services | |---------------------------------------------|------------|----------| | Base | 297 | 586 | | Overseas customers | 10% | 12% | | UK customers | 3% | 2% | | Both | 26% | 34% | | Overseas business has not prompted any product/service development | 44% | 47% | | Don’t know | 0% | 0% | | Not yet exporting | 3% | 5% |
Those firms that had undertaken product or service development activity specifically for overseas customers were asked why this had been done.
Chart 10.2.3 Reasons For Undertaking Product/Service Development For Overseas Customers
- To comply with regulations or legal requirements overseas: 16%
- To solve technical or practical issues relating to overseas countries: 14%
- To take account of different cultures or consumer preferences overseas: 8%
- In response to specific requests from overseas customers: 7%
- Not done any product/service development for overseas customers: 48%
Base: All respondents (Base, None of these, Don’t know, Not yet exporting) (902, 2%, 0%, 4%)
The main catalysts for undertaking product or service development activity for overseas customers are a need to comply with overseas regulations and in order to solve technical or practical issues that apply in particular overseas markets. UKTI users are more likely to undertake innovation activity to comply with overseas regulations and to solve technical or practical issues. However, it should be noted that much of this difference is due to the fact that users are considerably more likely than non-users to be doing any product or service development activity for overseas customers.
Table 10.2.10 Reasons For Undertaking Product/Service Development For Overseas Customers – By UKTI Usage
| Reason | Total | UKTI Usage | | | |---------------------------------------------|-------|------------|----------|----------| | | Base | UKTI User | Non-User | | Comply with regulations etc | 16% | 22% | 14% | | Solve technical/practical issues | 14% | 19% | 12% | | Different cultures or preferences | 8% | 8% | 8% | | Customer requests | 7% | 9% | 7% | | None of these | 2% | 2% | 3% | | Not done product/service development for overseas customers | 48% | 37% | 53% | | Don’t know | 0% | 0% | 0% | | Not yet exporting | 4% | 3% | 4% |
As seen below, production sector firms are more likely to undertake product or service development to solve technical issues encountered overseas. They also appear more likely than service sector firms to do this in order to comply with overseas regulations, although this difference is not statistically significant.
Table 10.2.11 Reasons For Undertaking Product/Service Development For Overseas Customers – By Sector
| Reason | Sector | | | |---------------------------------------------|--------|----------|----------| | | Base | Production | Services | | Comply with regulations etc | 19% | 15% | | Solve technical/practical issues | 17% | 12% | | Different cultures or preferences | 8% | 8% | | Customer requests | 6% | 8% | | None of these | 1% | 3% | | Not done product/service development for overseas customers | 47% | 49% | | Don’t know | 0% | 0% | | Not yet exporting | 3% | 5% | Firms were also asked a number of questions to ascertain the extent to which internationalisation impacts on investment in product and service development activity. These results are summarised below.
Chart 10.2.4 Impacts On Investment In Product/Service Development
- Prompted you to invest more time and money in product or service development: 38%
- Increased the amount of money you have available to invest in product or service development: 37%
- Increased the return on investment that you get from product or service development: 46%
Base: All respondents (Base, No product/service development) (902, 2%, 35%)
Internationalisation can clearly increase the rewards from innovation activity, with approaching half of all firms (46%) reporting that doing business overseas had increased the return they received from their investment in product or service development. Over a third (38%) felt that doing business overseas had encouraged them to invest more resources in these activities, and a similar proportion (37%) indicated that it had enabled them to invest more money in product or service development activity.
As seen below, users of UKTI are more likely to report all of these impacts, particularly the increased return on investment on product/service development activity.
Table 10.2.12 Impacts On Investment In Product/Service Development – By UKTI Usage
| UKTI Usage | Total | UKTI User | Non-User | |------------|-------|-----------|----------| | Base | 902 | 235 | 667 | | Invest more time and money in NPD | 38% | 50% | 34% | | Increase money available for NPD | 37% | 46% | 34% | | Increase ROI in NPD | 46% | 60% | 41% | Whilst there are no clear differences in this respect by age of firm, larger companies with 100 or more employees are more likely to report these positive impacts on product/service development investment.
Table 10.2.13 Impacts On Investment In Product/Service Development – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|---------|------|---------|-----|-------|-------|---------|------| | Base | | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Invest more time and money in NPD | | 38% | 35% | 39% | 35% | 36% | 55% | 52% | 52% | | Increase money available for NPD | | 34% | 40% | 37% | 37% | 37% | 31% | 49% | 47% | | Increase ROI in NPD | | 40% | 46% | 47% | 41% | 47% | 54% | 62% | 66% |
As might be expected, innovative firms and those that are IP active are significantly more likely to indicate that doing business overseas has increased the resources they devote to product/service development, the capital they have available for it and the return they receive.
Table 10.2.14 Impacts On Investment In Product/Service Development – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 398 | 680 | 222 | 224 | 655 | | Invest more time and money in NPD | 51% | 45% | 17% | 51% | 34% | | Increase money available for NPD | 49% | 43% | 20% | 51% | 33% | | Increase ROI in NPD | 59% | 52% | 26% | 64% | 40% |
These impacts on product/service development investment are most likely to be experienced by firms with substantial growth objectives, and particularly innovative high growth firms.
Table 10.2.15 Impacts On Investment In Product/Service Development – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | Non innovative | | Base | 108 | 510 | 248 | 204 | 476 | 222 | | Invest more time and money in NPD | 27% | 35% | 51% | 57% | 40% | 17% | | Increase money available for NPD | 25% | 36% | 47% | 52% | 39% | 20% | | Increase ROI in NPD | 34% | 45% | 56% | 61% | 49% | 26% | Firms defined as being ‘born global’ by the alternative, tighter definition and those that are ‘young, technology intensive’ are also more likely to report these product/service development benefits.
Table 10.2.16 Impacts On Investment In Product/Service Development – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | | Base | 255 | 136 | 44 | 126 | | Invest more time and money in NPD | 38% | 36% | 52% | 52% | | Increase money available for NPD | 34% | 34% | 48% | 40% | | Increase ROI in NPD | 40% | 42% | 55% | 48% |
Interestingly, firms operating in the production sector are more likely to indicate that doing business overseas increases the return on investment they obtain from product/service development activities. However, there is no difference by sector when it comes to investing more in these activities or increasing the money available for product/service development.
Table 10.2.17 Impacts On Investment In Product/Service Development – By Sector
| | Sector | |----------------------|--------| | | Production | Services | | Base | 297 | 586 | | Invest more time and money in NPD | 39% | 38% | | Increase money available for NPD | 39% | 37% | | Increase ROI in NPD | 51% | 43% |
Firms involved in less traditional internationalisation modes (i.e. not just selling direct) are more likely to report these innovation benefits, and this is particularly true of those involved in contractual arrangements such as licensing, franchising or joint venturing.
Table 10.2.18 Impacts On Investment In Product/Service Development – By Modes Used
| | Modes Used | |----------------------|------------| | | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | | Base | 815 | 361 | 79 | 113 | | Invest more time and money in NPD | 37% | 49% | 66% | 59% | | Increase money available for NPD | 38% | 45% | 68% | 55% | | Increase ROI in NPD | 46% | 59% | 80% | 70% | 11. Opportunities in Emerging & Fast Growing Markets
11.1 Opportunities in Emerging & Fast Growing Markets
Firms were asked to consider the extent to which they felt that there were opportunities for them in a number of emerging or fast growing markets. For each market, firms were asked to indicate whether they were already doing business there, were very likely to do so in the next 2 years, quite likely to do so or unlikely to do so.
Chart 11.1.1 Opinions On Opportunities In Emerging & Fast Growing Markets
Of these markets, it appears that Saudi Arabia and the UAE represents the best opportunity for internationalising firms, with 24% of firms already doing business there and a further 26% very or quite likely to do so in the next 2 years.
South Africa, China and India are also felt to be relatively good opportunities, with a little under half of all firms either already operating in these markets or likely to do so. However, there appears to be least appetite for the Mexican and Brazilian markets. Results have been summarised as follows.
| Opportunities In Emerging & Fast Growing Markets - Summary | |----------------------------------------------------------| | **Firms have been defined as ‘already in’ if they...** | | • Are already in at least one emerging/fast growing market | | **Firms have been defined as being ‘very likely’ if they...** | | • Are not already in any of the emerging/fast growing markets | | • But feel they are ‘very likely’ to do business in at least one in the next 2 years | | **Firms have been defined as being ‘quite likely’ if they...** | | • Are not already in any of the emerging/fast growing markets | | • Do not feel that they are ‘very likely’ to do business in any in the next 2 years | | • But feel they are ‘quite likely’ to do business in at least one in next 2 years | | **Firms have been defined as ‘unlikely’ if they...** | | • Are not already in any of the emerging/fast growing markets |
When the data is viewed in this way, it shows that around half (48%) of internationalising firms are already doing business in at least one of the emerging/fast growing markets. Most of the remainder feel that they are very or quite likely to enter at least one of these markets in the next 2 years.
Chart 11.1.2 Opportunities In Emerging & Fast Growing Markets (Summary)
- **Already in**: 48%
- **Very likely**: 10%
- **Quite likely**: 22%
- **Unlikely**: 19%
Base: All respondents (Base, Don't know) (902, 1%) As seen below, the majority of UKTI users are already in at least one of these markets, and only 10% feel that they are unlikely to enter one in the next 2 years.
Table 11.1.1 Opportunities In Emerging & Fast Growing Markets (Summary) – By UKTI Usage
| | Total | UKTI Usage | |------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Already in | 48% | 61% | 44% | | Very likely | 10% | 11% | 9% | | Quite likely | 22% | 18% | 23% | | Unlikely | 19% | 10% | 22% | | Don't know | 1% | 0% | 2% |
Older firms and larger firms are more likely to already be operating in emerging or fast growing markets. However, it is not the case that these markets are only targeted by more established firms, as over a third of firms in the youngest age band (established up to 5 years) and the smallest size band (0-9 employees) are already doing business in at least one of these areas, and most of the remainder have some intention of doing so in the next 2 years.
Table 11.1.2 Opportunities In Emerging & Fast Growing Markets (Summary) – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Already in | 36% | 45% | 53% | 42% | 52% | 66% | 62% | 74% | | Very likely | 16% | 8% | 9% | 10% | 9% | 14% | 4% | 9% | | Quite likely | 27% | 24% | 20% | 24% | 20% | 16% | 14% | 11% | | Unlikely | 19% | 22% | 17% | 22% | 18% | 4% | 16% | 6% | | Don't know | 2% | 1% | 1% | 1% | 1% | 0% | 4% | 0% |
There is clear evidence that firms tend to enter fast growing markets later in their international life-cycle, with those that have been exporting longest significantly more likely to be operating in these markets. However, around a quarter of those that have been exporting for less than 2 years are already operating in these areas.
Table 11.1.3 Opportunities In Emerging & Fast Growing Markets (Summary) – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base | 185 | 433 | 270 | 411 | 214 | 268 | | Already in | 28% | 47% | 59% | 24% | 52% | 79% | | Very likely | 18% | 8% | 10% | 11% | 8% | 9% | | Quite likely | 29% | 23% | 18% | 29% | 24% | 10% | | Unlikely | 23% | 22% | 13% | 34% | 15% | 2% | | Don't know | 2% | 1% | 1% | 1% | 1% | 0% | Unsurprisingly, the more overseas regions a firm is active in, the more likely they are to be doing business in any of the emerging or fast growing markets.
Table 11.1.4 Opportunities In Emerging & Fast Growing Markets (Summary) – By Number of Regions
| Number of Overseas Regions Active In | None | One | Two | Three | Four | Five | |-------------------------------------|------|-----|-----|-------|------|------| | Base | 44 | 270 | 207 | 165 | 104 | 104 | | Already in | 0% | 20% | 44% | 60% | 79% | 89% | | Very likely | 29% | 6% | 15% | 9% | 13% | 4% | | Quite likely | 47% | 28% | 26% | 24% | 6% | 5% | | Unlikely | 22% | 44% | 14% | 7% | 2% | 0% | | Don’t know | 2% | 2% | 1% | 0% | 0% | 2% |
There is some suggestion that emerging or fast growing markets are more attractive to innovative firms than their non-innovative counterparts. However, even amongst this latter group, two-thirds of firms are either already in one of these markets or believe they are very or quite likely to enter one in the next 2 years.
Table 11.1.5 Opportunities In Emerging & Fast Growing Markets (Summary) – By Innovation
| Innovative | Yes (alternative) | Yes | No | Yes | No | |------------|-------------------|-----|----|-----|----| | Base | 398 | 680 | 222| 224 | 655| | Already in | 55% | 53% | 35%| 59% | 44%| | Very likely| 11% | 10% | 9% | 12% | 9% | | Quite likely| 20% | 22% | 23%| 15% | 25%| | Unlikely | 14% | 15% | 31%| 13% | 21%| | Don’t know | 0% | 1% | 3% | 0% | 1% |
Firms with substantial growth objectives, and particularly innovative high growth firms, are more likely to already be operating in emerging or fast growing markets.
Table 11.1.6 Opportunities In Emerging & Fast Growing Markets (Summary) – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | Stay same | Innovative | | Moderate growth | Expect substantial growth | | Substantial growth| Other | | Non-innovative | | | Base | 108 | 204 | 476 | 222 | | Already in | 39% | 62% | 49% | 35% | | Very likely | 5% | 11% | 10% | 9% | | Quite likely | 23% | 14% | 25% | 23% | | Unlikely | 33% | 13% | 16% | 31% | | Don’t know | 1% | 1% | 1% | 3% | As might be expected, ‘born global’ firms are more likely to be in these markets than other young firms that internationalised at some point after they were established.
Table 11.1.7 Opportunities In Emerging & Fast Growing Markets (Summary) – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | | Base | 255 | 136 | 44 | 126 | | Already in | 36% | 46% | 52% | 42% | | Very likely | 16% | 12% | 20% | 19% | | Quite likely | 27% | 24% | 18% | 24% | | Unlikely | 19% | 17% | 9% | 14% | | Don’t know | 2% | 1% | 0% | 1% |
As seen below, production sector firms are more likely to be operating in fast growing or emerging markets than those in the service sector. In both cases the likelihood of being in these markets increases with export experience, although this correlation is stronger for the production sector.
Table 11.1.8 Opportunities In Emerging & Fast Growing Markets (Summary) – By Sector & Experience
| | Production Sector | Services Sector | |------------------|-------------------|-----------------| | | Years Exporting | | Years Exporting | | | | Total | Less than 2 | 2-10 | Over 10 | Total | Less than 2 | 2-10 | Over 10 | | Base | 297 | 39 | 135 | 118 | 586 | 143 | 288 | 147 | | Already in | 56% | 23% | 49% | 69% | 45% | 29% | 46% | 51% | | Very likely | 7% | 16% | 6% | 7% | 11% | 18% | 9% | 12% | | Quite likely | 18% | 26% | 21% | 12% | 24% | 30% | 23% | 22% | | Unlikely | 18% | 35% | 22% | 12% | 19% | 20% | 22% | 14% | | Don’t know | 1% | 0% | 2% | 1% | 1% | 3% | 0% | 1% | 11.2 Influence of Economic Downturn
Firms were asked whether the economic downturn had prompted them to focus more attention on emerging or fast growing markets. The table below shows the proportion indicating that this was the case, at the total level and by UKTI usage.
Table 11.2.1 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By UKTI Usage
| | Total | UKTI Usage | |------------------|-------|------------| | | | UKTI User | Non-User | | Base | 902 | 235 | 667 | | Yes | 26% | 33% | 23% | | No | 74% | 67% | 77% | | Don't know | 0% | 0% | 1% |
Overall, a quarter of internationalising firms have responded to the poor economic climate by focussing more on emerging or fast growing markets, with this more likely to be the case amongst users of UKTI.
As seen below, larger firms with 50 or more employees are more likely to indicate that this is the case, and the same is true amongst older firms (although this difference is not large).
Table 11.2.2 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Yes | 21% | 26% | 27% | 24% | 22% | 38% | 29% | 45% | | No | 78% | 74% | 73% | 75% | 77% | 62% | 71% | 55% | | Don't know | 1% | 1% | 0% | 1% | 0% | 0% | 0% | 0% |
As well as being more likely to be already operating in fast growing markets, more experienced exporters (in terms of both time and number of markets) are also more inclined to have devoted more attention to these markets as a result of the downturn.
Table 11.2.3 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base | 185 | 433 | 270 | 411 | 214 | 268 | | Yes | 24% | 23% | 30% | 20% | 25% | 34% | | No | 75% | 76% | 70% | 79% | 75% | 65% | | Don't know | 0% | 1% | 0% | 0% | 0% | 1% | Innovative and IP active firms are more likely to have increased their focus on emerging and fast growing markets as a result of the recent economic conditions and, as seen previously, these firms were also more likely to already be operating in these markets.
Table 11.2.4 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Innovation
| | Innovative | IP Active | |----------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 398 | 680 | 222 | 224 | 655 | | Yes | 29% | 28% | 18% | 30% | 24% | | No | 70% | 72% | 81% | 70% | 75% | | Don't know | 0% | 0% | 1% | 0% | 0% |
Those firms that do not aspire to grow over the next 5 years are significantly less inclined to focus more on emerging and fast growing markets as a result of the downturn than those with growth ambitions.
Table 11.2.5 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | |----------------|-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Base | 108 | 510 | 248 | 204 | 476 | 222 | | Yes | 19% | 27% | 27% | 30% | 27% | 18% | | No | 80% | 72% | 73% | 69% | 73% | 81% | | Don't know | 1% | 0% | 1% | 1% | 0% | 1% |
Firms classified as being ‘born global’ by the standard definition and those judged to be ‘young, technology intensive’ are in fact no more likely to be devoting more attention to fast growing markets than other young firms. However, those defined as ‘born global’ via the alternative, tighter definition (whereby over 25% of their turnover has to come from overseas sales) are significantly more likely to be doing so than both other young firms and than older firms that have been established over 5 years.
Table 11.2.6 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | Born global | Born global (alternative) | Young, tech intensive | | Base | 255 | 136 | 44 | 126 | 647 | 23% | 36% | 25% | | Yes | 21% | 23% | 36% | 25% | 27% | 23% | 36% | 25% | | No | 78% | 76% | 61% | 75% | 73% | 76% | 61% | 75% | | Don't know | 1% | 1% | 2% | 0% | 0% | 1% | 2% | 0% | There is no difference by sector in terms of the proportion of firms that have devoted more attention to emerging or fast growing markets as a result of the economic downturn.
Table 11.2.7 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Sector & Experience
| | Production Sector | Services Sector | |----------------------|-------------------|-----------------| | | Total | | | | Less than 2 | 2-10 | Over 10 | Total | Less than 2 | 2-10 | Over 10 | | Base | 297 | 39 | 135 | 118 | 586 | 143 | 288 | 147 | | Yes | 26% | 24% | 24% | 29% | 25% | 24% | 22% | 31% | | No | 74% | 76% | 76% | 71% | 74% | 76% | 77% | 69% | | Don't know | 0% | 0% | 0% | 0% | 1% | 1% | 1% | 0% | 12. Impact of Economic Downturn
12.1 Product & Service Development
Overall, two-thirds of firms (65%) indicated that they were involved in some form of product or service development activity. These firms were asked whether the economic downturn had affected either the amount spent on these activities or their geographical focus.
The table below shows these results, at the total level and by users and non-users of UKTI services. Please note that all analysis in this section of the report is based only on those firms that carry out or commission product or service development.
Table 12.1.1 Impact Of Downturn On Product/service Development – By UKTI Usage
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base: All doing NPD | 585 | 183 | 402 | | Impact on Amount Spent on Product/Service Development | | | | | Spending more | 21% | 17% | 23% | | Spending less | 25% | 28% | 23% | | No impact | 53% | 55% | 52% | | Don't know | 1% | 1% | 2% | | Impact on Geographical Focus of Product/Service Development | | | | | More for overseas | 29% | 32% | 27% | | Less for overseas | 12% | 11% | 13% | | No change | 58% | 58% | 58% | | Don't know | 1% | 0% | 1% |
A quarter (25%) of those internationalising firms that undertake product or service development feel that the economic downturn has resulted in them spending less money on these activities. However, just over a fifth (21%) claim that the economic conditions have actually prompted them to invest more in product or service development.
There has also been considerable impact in terms of geographic focus, with 29% indicating that they have adjusted the balance of their product and service development activities and are now doing more for overseas customers than they were previously (with 12% now doing less for overseas customers).
Interestingly, UKTI users appear slightly less likely than non-users to have increased the product or service development spend as a result of the downturn, but slightly more likely to have adjusted the balance in favour of overseas markets. As seen below, there is no clear or consistent picture of the impact of the downturn on product and service development activity by either age or size of firm.
Table 12.1.2 Impact Of Downturn On Product/service Development – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|---------------------------|-----|-------|-------|---------|------| | Up to 5 | 160 | 144 | 281 | 330 | 152 | 41 | | 6-10 | | | | | | | | Over 10 | | | | | | | | Base: All doing NPD | | | | | | |
Impact on Amount Spent on Product/Service Development
| | Spending more | Spending less | No impact | Don't know | |----------------------|---------------|---------------|-----------|------------| | Spending more | 24% | 18% | 56% | 2% | | Spending less | 22% | 29% | 48% | 2% | | No impact | 19% | 25% | 55% | 1% | | Don't know | 15% | 23% | 52% | 1% |
Impact on Geographical Focus of Product/Service Development
| | More for overseas | Less for overseas | No change | Don't know | |----------------------|-------------------|-------------------|-----------|------------| | More for overseas | 31% | 8% | 60% | 1% | | Less for overseas | 26% | 13% | 60% | 1% | | No change | 30% | 13% | 56% | 1% | | Don't know | 28% | 13% | 57% | 1% |
There is also little difference by the various measures of overseas experience, although experienced exporters (e.g. operating in 10 or more markets) appear slightly less likely to be spending more on product and service development as a result of the downturn.
Table 12.1.3 Impact Of Downturn On Product/service Development – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|---------------| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | Up to 10% | 11 - 25% | 26 - 50% | Over 50% | | Base: All doing NPD | 113 | 277 | 187 | 234 | 137 | 208 | 231 | 99 | 83 | 139 |
Impact on Amount Spent on Product/Service Development
| | Spending more | Spending less | No impact | Don't know | |----------------------|---------------|---------------|-----------|------------| | Spending more | 21% | 24% | 52% | 1% | | Spending less | 23% | 25% | 50% | 2% | | No impact | 19% | 24% | 56% | 0% | | Don't know | 16% | 24% | 55% | 1% |
Impact on Geographical Focus of Product/Service Development
| | More for overseas | Less for overseas | No change | Don't know | |----------------------|-------------------|-------------------|-----------|------------| | More for overseas | 27% | 12% | 60% | 1% | | Less for overseas | 33% | 10% | 56% | 0% | | No change | 26% | 15% | 59% | 0% | | Don't know | 26% | 15% | 57% | 0% | Innovative firms are significantly more likely to have increased their spend on product and service development as a result of the economic climate, and are also more likely to be aiming more of this at overseas markets. However, there is no difference in this respect between firms that are IP active and those that are not.
Table 12.1.4 Impact Of Downturn On Product/service Development – By Innovation
| Base: All doing NPD | Innovative | IP Active | |---------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Spending more | 23% | 22% | 12% | 23% | 20% | | Spending less | 23% | 24% | 31% | 22% | 26% | | No impact | 52% | 53% | 53% | 53% | 54% | | Don't know | 1% | 1% | 4% | 2% | 1% |
Impact on Geographical Focus of Product/Service Development
| More for overseas | 31% | 30% | 19% | 31% | 28% | | Less for overseas | 14% | 12% | 15% | 9% | 14% | | No change | 54% | 57% | 65% | 58% | 58% | | Don't know | 1% | 1% | 2% | 2% | 0% |
In comparison to firms that merely aim to stay the same size, firms with growth ambitions are comparatively more likely to choose to spend more on product/service development as a result of the downturn, and to alter the balance of these activities in favour of overseas markets.
Table 12.1.5 Impact Of Downturn On Product/service Development – By Innovation & Growth
| Base: All doing NPD | Growth Objectives | Innovation & Growth | |---------------------|-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Spending more | 15% | 20% | 23% | 24% | 21% | 12% | | Spending less | 30% | 25% | 21% | 21% | 25% | 31% | | No impact | 55% | 54% | 52% | 53% | 53% | 54% | | Don't know | 0% | 0% | 2% | 2% | 1% | 3% |
Impact on Geographical Focus of Product/Service Development
| More for overseas | 18% | 28% | 34% | 35% | 28% | 19% | | Less for overseas | 15% | 13% | 9% | 9% | 14% | 14% | | No change | 67% | 59% | 55% | 55% | 58% | 65% | | Don't know | 0% | 0% | 2% | 1% | 0% | 2% | There is little difference by whether firms were ‘born global’ or are classified as being ‘young, technology intensive’.
Table 12.1.6 Impact Of Downturn On Product/service Development – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | | Base: All doing NPD | 160 | 85 | 32 | 95 | 425 |
Impact on Amount Spent on Product/Service Development
| | Spending more | Spending less | No impact | Don’t know | |----------------------|---------------|---------------|-----------|------------| | | 24% | 18% | 55% | 2% | | Born global | 24% | 24% | 51% | 2% | | Born global (alternative) | 26% | 21% | 53% | 5% | | Young, tech intensive | 26% | 18% | 53% | 2% |
Impact on Geographical Focus of Product/Service Development
| | More for overseas | Less for overseas | No change | Don’t know | |----------------------|-------------------|-------------------|-----------|------------| | | 30% | 8% | 59% | 1% | | Born global | 29% | 8% | 61% | 2% | | Born global (alternative) | 37% | 5% | 58% | 5% | | Young, tech intensive | 30% | 9% | 60% | 2% |
As seen below, service sector firms are slightly more likely to be spending more on innovation activities as a result of the downturn. However, there is no difference between service and production sector firms in terms of the impact on the geographic focus of these activities.
Table 12.1.7 Impact Of Downturn On Product/service Development – By Sector
| | Sector | |----------------------|--------| | | Production | Services | | Base: All doing NPD | 206 | 368 |
Impact on Amount Spent on Product/Service Development
| | Spending more | Spending less | No impact | Don’t know | |----------------------|---------------|---------------|-----------|------------| | | 17% | 24% | 58% | 1% | | Production | 23% | 24% | 52% | 1% |
Impact on Geographical Focus of Product/Service Development
| | More for overseas | Less for overseas | No change | Don’t know | |----------------------|-------------------|-------------------|-----------|------------| | | 29% | 13% | 57% | 1% | | Production | 29% | 11% | 60% | 1% | 12.2 Sterling Exchange Rates
All firms were asked to assess the overall impact of the recent decline in Sterling exchange rates on their business. As seen below, opinion is fairly evenly divided in this respect, with around a quarter reporting a net positive impact but a third reporting a negative impact.
Chart 12.2.1 Overall Impact Of Recent Decline in Sterling Exchange Rates
- Positive impact: 27%
- Negative impact: 35%
- No impact: 36%
Base: All respondents (Base, Don't know) (902, 2%)
Firms were also asked whether, if the Sterling exchange rates stayed at a similar level or fell further, this would prompt them to try and increase the share of their business accounted for by overseas sales. A significant proportion of internationalising firms (40%) felt that this would be the case.
Chart 12.2.2 Whether Will Try & Increase Share Of Business Accounted For By Overseas Sales If Sterling Stays At Similar Level Or Falls Further
- Yes: 40%
- No: 55%
- Don't know: 5%
Base: All respondents (Base) (902) As seen below, UKTI users are slightly more likely to indicate that the recent changes in Sterling exchange rates have had a positive impact on their business and are also more likely to feel that they will try and increase the share of their business accounted for by overseas sales if exchange rates stay at a similar level or fall further.
Table 12.2.1 Impact Of Sterling Exchange Rates – By UKTI Usage
| Impact of Recent Decline in Exchange Rates | Total | UKTI Usage | Non-User | |-------------------------------------------|-------|------------|----------| | Base | 902 | 235 | 667 | | Positive impact | 27% | 33% | 25% | | Negative impact | 35% | 34% | 36% | | No impact | 36% | 31% | 38% | | Don't know | 2% | 2% | 2% |
Whether Will Prompt to Increase Share of Business from Overseas Sales
| Whether Will Prompt to Increase Share of Business from Overseas Sales | Total | UKTI Usage | Non-User | |-----------------------------------------------------------------------|-------|------------|----------| | Yes | 40% | 47% | 37% | | No | 55% | 50% | 57% | | Don't know | 5% | 3% | 6% |
There is also some evidence that older firms are more likely to view the changes in exchange rates as a positive. However, there is no difference in this respect by size of firm.
Table 12.2.2 Impact Of Sterling Exchange Rates – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|---------------------------|---------|------|---------|-----|-------|-------|---------|------| | Base | | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Impact of Recent Decline in Exchange Rates | | | | | | | | | | | Positive impact | | 23% | 22% | 30% | 25% | 27% | 39% | 26% | 26% | | Negative impact | | 39% | 40% | 32% | 38% | 33% | 33% | 30% | 27% | | No impact | | 37% | 35% | 36% | 35% | 39% | 24% | 38% | 47% | | Don't know | | 1% | 4% | 1% | 2% | 1% | 4% | 6% | 0% | | Whether Will Prompt to Increase Share of Business from Overseas Sales| | | | | | | | | | | Yes | | 42% | 39% | 39% | 41% | 36% | 43% | 49% | 27% | | No | | 54% | 53% | 56% | 54% | 58% | 47% | 47% | 64% | | Don't know | | 4% | 6% | 5% | 4% | 6% | 10% | 4% | 9% | There is a clear correlation between overseas experience and the impact of the recent fall in Sterling exchange rates, with those firms that have been exporting the longest, operate in the most markets and have the highest proportion of their turnover accounted for by overseas sales all more likely to report a positive impact.
Table 12.2.3 Impact Of Sterling Exchange Rates – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|------------------|--------------| | | Less than 2 years| 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | Up to 10% | 11 - 25% | 26 - 50% | Over 50% | | Base | 185 | 433 | 270 | 411 | 214 | 268 | 424 | 133 | 119 | 170 |
Impact of Recent Decline in Exchange Rates
| | Positive impact | Negative impact | No impact | Don't know | |----------------------|-----------------|-----------------|-----------|------------| | Impact of Recent Decline in Exchange Rates | 19% 26% 32% 22% 28% 33% 18% 34% 37% 37% 38% | 40% 34% 34% 35% 42% 31% 40% 37% 29% 28% | 41% 38% 32% 40% 29% 34% 41% 28% 29% 33% | 0% 2% 1% 2% 1% 2% 1% 1% 5% 0% |
Whether Will Prompt to Increase Share of Business from Overseas Sales
| | Yes | No | Don't know | |----------------------|-----|----|------------| | Impact of Recent Decline in Exchange Rates | 44% 37% 42% 36% 44% 42% 35% 45% 51% 44% | 51% 58% 53% 60% 50% 51% 61% 48% 46% 52% | 5% 5% 5% 4% 5% 7% 4% 7% 4% 3% |
Similarly, the more regions a firm is active in, the more likely they are to feel that the decline in exchange rates has had a beneficial effect on their business.
Table 12.2.4 Impact Of Sterling Exchange Rates – By Number of Regions
| Number of Overseas Regions Active In | None | One | Two | Three | Four | Five | |--------------------------------------|------|-----|-----|-------|------|------| | Base | 44 | 270 | 207 | 165 | 104 | 104 |
Impact of Recent Decline in Exchange Rates
| | Positive impact | Negative impact | No impact | Don't know | |----------------------|-----------------|-----------------|-----------|------------| | Impact of Recent Decline in Exchange Rates | 12% 24% 22% 33% 32% 35% | 47% 33% 41% 35% 34% 28% | 41% 40% 36% 31% 31% 36% | 0% 3% 2% 1% 3% 1% |
Whether Will Prompt to Increase Share of Business from Overseas Sales
| | Yes | No | Don't know | |----------------------|-----|----|------------| | Impact of Recent Decline in Exchange Rates | 38% 32% 43% 47% 40% 40% | 53% 63% 52% 48% 55% 52% | 8% 5% 5% 5% 5% 8% | Innovative firms and IP active firms are more likely to report a negative impact on their business from the decline in exchange rates (although they are also marginally more likely to report a positive impact as well). They are also more likely to claim that they will seek to increase the share of their business accounted for by overseas sales if the situation continues.
Table 12.2.5 Impact Of Sterling Exchange Rates – By Innovation
| Base | Innovative | IP Active | |------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | 398 | 680 | 222 | 224 | 655 |
Impact of Recent Decline in Exchange Rates
| Impact of Recent Decline in Exchange Rates | Yes | No | Don't know | |-------------------------------------------|-----|----|------------| | Positive impact | 27% | 25%| 2% | | Negative impact | 37% | 29%| 2% | | No impact | 34% | 44%| 2% | | Don't know | 2% | 2% | 1% |
Whether Will Prompt to Increase Share of Business from Overseas Sales
| Whether Will Prompt to Increase Share of Business from Overseas Sales | Yes | No | Don't know | |-----------------------------------------------------------------------|-----|----|------------| | Yes | 44% | 27%| 4% | | No | 51% | 66%| 5% | | Don't know | 4% | 6% | 4% |
Firms with growth aspirations are more likely to have been effected (either positively or negatively) by the fall in exchange rates than those who are just aiming to remain the same size in the next 5 years. Innovative high growth firms appear to have been particularly hit by this, with 40% reporting a net negative impact.
Table 12.2.6 Impact Of Sterling Exchange Rates – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Base | 108 | 510 | 248 | 204 | 476 | 222 |
Impact of Recent Decline in Exchange Rates
| Impact of Recent Decline in Exchange Rates | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | |-------------------------------------------|-----------|-----------------|--------------------|--------------------------|-------|----------------| | Positive impact | 24% | 26% | 30% | 30% | 27% | 25% | | Negative impact | 25% | 35% | 38% | 40% | 36% | 29% | | No impact | 49% | 36% | 30% | 29% | 35% | 44% | | Don't know | 1% | 2% | 2% | 1% | 2% | 2% |
Whether Will Prompt to Increase Share of Business from Overseas Sales
| Whether Will Prompt to Increase Share of Business from Overseas Sales | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | |-----------------------------------------------------------------------|-----------|-----------------|--------------------|--------------------------|-------|----------------| | Yes | 24% | 41% | 47% | 50% | 41% | 27% | | No | 69% | 55% | 48% | 46% | 54% | 66% | | Don't know | 7% | 4% | 6% | 4% | 5% | 7% | Firms classified as being ‘born global’ under the alternative, tighter definition are more likely to report a positive impact of the falling exchange rates.
Table 12.2.7 Impact Of Sterling Exchange Rates – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | | Base | 255 | 136 | 44 | 126 | 647 | | Impact of Recent Decline in Exchange Rates | | | | | | Positive impact | 23% | 24% | 32% | 21% | 28% | | Negative impact | 39% | 38% | 30% | 42% | 35% | | No impact | 37% | 38% | 39% | 36% | 36% | | Don’t know | 1% | 1% | 0% | 1% | 2% |
Whether Will Prompt to Increase Share of Business from Overseas Sales
| | Yes | No | |----------------------|-----|----| | Base | 513 | 386| | Impact of Recent Decline in Exchange Rates | | | | Positive impact | 28% | 26%| | Negative impact | 41% | 27%| | No impact | 30% | 44%| | Don’t know | 1% | 2% |
As might be expected, importers are more likely to report a negative impact on their business from the fall in Sterling exchange rates. However, over a quarter of this group still report a net positive impact, suggesting that the higher costs of purchasing from overseas are off-set by stronger sales.
Table 12.2.8 Impact Of Sterling Exchange Rates – By Whether Import
| | Importer | |----------------------|----------| | | Yes | No | | Base | 513 | 386 | | Impact of Recent Decline in Exchange Rates | | | | Positive impact | 28% | 26% | | Negative impact | 41% | 27% | | No impact | 30% | 44% | | Don’t know | 1% | 2% |
Whether Will Prompt to Increase Share of Business from Overseas Sales
| | Yes | No | |----------------------|-----|----| | | 44% | 33%| | | 51% | 61%| | | 5% | 5% | As seen below, the decline in Sterling exchange rates appears to have hit service sector firms the hardest, with approaching two-fifths of this group pointing to a negative net impact (compared to just under a third of production sector firms).
Table 12.2.9 Impact Of Sterling Exchange Rates – By Sector
| Sector | Production | Services | |--------|------------|----------| | Base | 297 | 586 | | Impact of Recent Decline in Exchange Rates | | | | Positive impact | 30% | 25% | | Negative impact | 31% | 38% | | No impact | 38% | 35% | | Don’t know | 1% | 2% | | Whether Will Prompt to Increase Share of Business from Overseas Sales | | | | Yes | 43% | 37% | | No | 52% | 57% | | Don’t know | 5% | 6% | 12.3 Access to Finance
All firms were asked whether they had experienced any difficulties in accessing finance over the past 6 months and, if so, whether this had a negative impact on either the scale or scope of their overseas activities or the scale or scope of their product or service development activity.
Chart 12.3.1 Whether Difficulties Accessing Finance In Last 6 Months
- Yes: 15%
- Negative impact on scale or scope of overseas activities: 9%
- Negative impact on scale or scope of product/service development activity: 10%
- No: 83%
Base: All respondents (Base, Don’t know/Refused) (902, 2%)
Relatively few internationalising firms (15%) have experienced any difficulties accessing finance in the last 6 months, although it is not clear what proportion of firms have actually sought finance in this period.
In most cases where firms have had difficulties accessing finance this has impacted on both their overseas activities and their product or service development. As seen below, UKTI users appear to be slightly more likely to have experienced problems accessing finance, although this difference is not statistically significant. They are also more likely to indicate that this has impacted on the scale or scope of their overseas activities and their product or service development activity.
Table 12.3.1 Whether Difficulties Accessing Finance In Last 6 Months – By UKTI Usage
| UKTI Usage | Total | UKTI User | Non-User | |------------|-------|-----------|----------| | Base | 902 | 235 | 667 | | Yes | 15% | 18% | 14% | | - Negative impact on overseas activities | 9% | 13% | 8% | | - Negative impact on product/service dev’t | 10% | 13% | 9% | | No | 83% | 81% | 84% | | Don’t know/refused | 2% | 1% | 2% |
There are no major differences in this respect by age or size of firm, although there is some suggestion that firms established less than 10 years and those with under 50 employees are more likely to have had difficulties obtaining finance.
Table 12.3.2 Whether Difficulties Accessing Finance In Last 6 Months – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|---------|------|---------|-----|-------|-------|---------|------| | Base | | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Yes | | 17% | 21% | 12% | 16% | 16% | 13% | 2% | 9% | | - Negative impact on overseas activities | 12% | 12% | 8% | 11% | 9% | 9% | 2% | 6% | | - Negative impact on product/service dev’t | 13% | 12% | 8% | 12% | 10% | 7% | 2% | 3% | | No | | 82% | 78% | 86% | 83% | 82% | 79% | 95% | 91% | | Don’t know/refused | | 1% | 2% | 2% | 1% | 2% | 8% | 3% | 0% | There is also little relationship between overseas experience and the likelihood of having difficulties raising finance.
Table 12.3.3 Whether Difficulties Accessing Finance In Last 6 Months – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|---------------| | | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | Up to 10% | 11 - 25% | 26 - 50% | Over 50% | | Base | 185 | 433 | 270 | 411 | 214 | 268 | 424 | 133 | 119 | 170 | | Yes | 17% | 17% | 12% | 15% | 16% | 15% | 15% | 16% | 18% | 16% | | - Negative impact on overseas activities | 10% | 10% | 8% | 9% | 9% | 10% | 8% | 10% | 12% | 13% | | - Negative impact on product/service dev't | 8% | 12% | 9% | 9% | 11% | 10% | 9% | 11% | 10% | 14% | | No | 83% | 82% | 86% | 84% | 83% | 83% | 84% | 82% | 81% | 82% | | Don't know/refused | 0% | 1% | 2% | 1% | 1% | 2% | 1% | 1% | 1% | 1% |
However, innovative firms are clearly more likely to have problems accessing finance than their non-innovative counterparts.
Table 12.3.4 Whether Difficulties Accessing Finance In Last 6 Months – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 398 | 680 | 222 | 224 | 655 | | Yes | 19% | 17% | 8% | 17% | 15% | | - Negative impact on overseas activities | 14% | 11% | 4% | 11% | 9% | | - Negative impact on product/service dev't | 14% | 12% | 5% | 10% | 10% | | No | 79% | 81% | 90% | 81% | 84% | | Don't know/refused | 2% | 1% | 2% | 2% | 1% | Interestingly, firms with substantial growth aspirations are most likely to experience difficulties accessing finance, suggesting that this could potentially be a barrier to the realisation of this growth.
Table 12.3.5 Whether Difficulties Accessing Finance In Last 6 Months – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Base | 108 | 510 | 248 | 204 | 476 | 222 | | Yes | 12% | 13% | 21% | 23% | 15% | 8% | | - Negative impact on overseas activities | 9% | 7% | 16% | 18% | 9% | 4% | | - Negative impact on product/service dev't | 8% | 8% | 15% | 16% | 10% | 5% | | No | 88% | 85% | 77% | 75% | 84% | 90% | | Don't know/refused | 1% | 1% | 2% | 1% | 1% | 2% | 12.4 Export Credit Insurance
Firms were also asked whether they ever used export credit insurance and, if so, whether they had experienced any difficulties in accessing this over the past 6 months.
Chart 12.4.1 Whether Difficulties Accessing Export Credit Insurance In Last 6 Months
Only 2% of internationalising firms have had any difficulties accessing export credit insurance over the past 6 months. However, only 11% actually use this type of insurance, and this therefore means that almost 1 in 5 firms that use export credit insurance have experienced problems accessing it.
As seen below, UKTI users are both more likely to use export credit insurance and more likely to have had difficulty accessing it.
Table 12.4.1 Whether Difficulties Accessing Export Credit Insurance In Last 6 Months – By UKTI Usage
| UKTI Usage | Total | UKTI User | Non-User | |------------|-------|-----------|----------| | Base | 902 | 235 | 667 | | Yes | 2% | 5% | 1% | | No | 9% | 13% | 7% | | Do not use it | 80% | 75% | 82% | | Don't know | 6% | 4% | 6% | | Not yet exporting | 4% | 3% | 4% | Larger firms are more likely to be using export credit insurance and are correspondingly more likely to have experienced difficulties obtaining it. However, there is no difference in this respect by age of firm.
Table 12.4.2 Whether Difficulties Accessing Export Credit Insurance In Last 6 Months – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Yes | No | Do not use it | Don’t know | Not yet exporting | |---------------------|-----------------------------|-----|----|---------------|------------|------------------| | Up to 5 | 255 | 2% | 5% | 81% | 2% | 11% | | 6-10 | 219 | 3% | 8% | 81% | 4% | 4% | | Over 10 | 428 | 2% | 10%| 79% | 7% | 2% | | 0-9 | 545 | 1% | 5% | 88% | 1% | 6% | | 10-49 | 222 | 4% | 12%| 76% | 7% | 6% | | 50-99 | 53 | 2% | 12%| 65% | 16% | 4% | | 100-249 | 28 | 6% | 15%| 53% | 24% | 24% | | 250+ | 35 | 6% | 22%| 49% | | |
As might be expected, usage of export credit insurance increases with overseas experience. Experienced firms are also more likely to report difficulties accessing the insurance.
Table 12.4.3 Whether Difficulties Accessing Export Credit Insurance In Last 6 Months – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|---------------| | Less than 2 years | 185 | 1% | | 2-10 years | 433 | 2% | | Over 10 years | 270 | 3% | | Up to 5 | 411 | 1% | | 6-10 | 214 | 2% | | More than 10 | 268 | 4% | | Up to 10% | 424 | 1% | | 11 - 25% | 133 | 4% | | 26 - 50% | 119 | 2% | | Over 50% | 170 | 4% |
Whilst innovative firms are clearly more likely to use export credit insurance than their non-innovative counterparts, it is still the case that only 3% of innovative firms have experienced difficulties obtaining it.
Table 12.4.4 Whether Difficulties Accessing Export Credit Insurance In Last 6 Months – By Innovation
| Innovative | Yes (alternative) | Yes | No | Yes | No | |------------|-------------------|-----|----|-----|----| | Base | 398 | 680 | 222| 224 | 655| | Yes | 3% | 3% | 0% | 4% | 2% | | No | 13% | 11% | 2% | 15% | 6% | | Do not use it | 77% | 77% | 88%| 71% | 84%| | Don’t know | 3% | 6% | 5% | 5% | 4% | | Not yet exporting | 4% | 4% | 5% | 5% | 4% | Firms planning substantial growth appear marginally more likely to be using export credit insurance, although there is no difference in the proportion experiencing difficulties accessing it.
Table 12.4.5 Whether Difficulties Accessing Export Credit Insurance In Last 6 Months – By Innovation & Growth
| Innovation & Growth | Growth Objectives | | |---------------------|-------------------|---| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Base | 108 | 510 | 248 | 204 | 476 | 222 | | Yes | 2% | 2% | 2% | 3% | 3% | 0% | | No | 7% | 8% | 12% | 13% | 10% | 2% | | Do not use it | 90% | 80% | 75% | 73% | 78% | 88% | | Don't know | 2% | 5% | 7% | 4% | 6% | 5% | | Not yet exporting | 0% | 5% | 4% | 4% | 3% | 5% | 13. Marketing Channels
13.1 Channels Used
All respondents were read out a list of media/communication channels and asked to indicate which ones they personally used to obtain news or information that was relevant to their business. As well as the various media channels, respondents were also asked whether they had attended any seminars, tradeshows or conferences in the past year. The chart below summarises the penetration levels for each of these channels.
Chart 13.1.1 Proportion Using Each Channel For Business News/Information
- Websites: 82%
- Trade press: 72%
- Magazines: 49%
- National newspapers: 37%
- Social networking sites: 28%
- TV: 24%
- National radio: 18%
- Local newspapers: 16%
- Local radio: 10%
- Attended seminars, tradeshows or conferences in last year: 68%
Base: All respondents (Base, Don't know) (902, 0%)
Websites and the trade press are the most widely used channels for business news and information, and the majority of respondents had also attended seminars, tradeshows or conferences in the past year.
Although less widespread, half of all respondents indicated that they obtained news or information relevant to their business from magazines and over a third from national newspapers. Social networking sites were also used for business purposes by over a quarter of respondents. There is some evidence that young firms and those with less than 10 staff are more likely to use social networking sites for business news or information, but older and larger firms are comparatively more likely to use the trade press.
Table 13.1.1 Proportion Using Each Channel For Business News/Information – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|---------------------------|--------|------|---------|-----|-------|-------|---------|------| | Base | | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Websites | | 86% | 81% | 80% | 84% | 77% | 80% | 83% | 78% | | Trade press | | 65% | 70% | 74% | 67% | 73% | 81% | 94% | 91% | | Magazines | | 49% | 53% | 47% | 50% | 47% | 47% | 52% | 55% | | National newspapers | | 33% | 42% | 36% | 36% | 32% | 40% | 56% | 63% | | Social networking | | 43% | 37% | 20% | 31% | 23% | 25% | 26% | 22% | | TV | | 25% | 26% | 23% | 24% | 18% | 35% | 45% | 23% | | National radio | | 19% | 18% | 18% | 18% | 13% | 26% | 38% | 17% | | Local newspapers | | 19% | 17% | 15% | 14% | 14% | 22% | 30% | 29% | | Local radio | | 13% | 9% | 9% | 9% | 7% | 14% | 22% | 14% | | Seminars, etc | | 73% | 66% | 67% | 65% | 71% | 73% | 75% | 67% | | (None of these) | | 4% | 7% | 8% | 7% | 9% | 8% | 4% | 3% | | (Don't know) | | 0% | 0% | 1% | 0% | 2% | 0% | 0% | 0% |
There are no clear or consistent differences in the media channels used by the various measures of overseas experience.
Table 13.1.2 Proportion Using Each Channel For Business News/Information – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|---------------| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | Up to 10% | 11 - 25% | 26 - 50% | Over 50% | | Base | 185 | 433 | 270 | 411 | 214 | 268 | 424 | 133 | 119 | 170 | | Websites | 85% | 83% | 79% | 82% | 79% | 84% | 81% | 82% | 90% | 79% | | Trade press | 66% | 69% | 76% | 68% | 67% | 80% | 69% | 72% | 83% | 72% | | Magazines | 48% | 49% | 49% | 48% | 41% | 57% | 46% | 55% | 55% | 48% | | National newspapers | 34% | 36% | 39% | 34% | 31% | 45% | 35% | 38% | 40% | 40% | | Social networking | 33% | 31% | 22% | 27% | 26% | 30% | 25% | 28% | 33% | 29% | | TV | 24% | 25% | 23% | 22% | 21% | 28% | 23% | 26% | 26% | 22% | | National radio | 18% | 19% | 16% | 17% | 17% | 19% | 18% | 23% | 14% | 17% | | Local newspapers | 20% | 16% | 14% | 16% | 12% | 18% | 16% | 21% | 14% | 13% | | Local radio | 11% | 9% | 10% | 9% | 7% | 12% | 10% | 13% | 9% | 8% | | Seminars, etc | 66% | 69% | 67% | 64% | 70% | 71% | 64% | 71% | 68% | 77% | | (None of these) | 8% | 7% | 7% | 8% | 10% | 4% | 9% | 5% | 2% | 7% | | (Don't know) | 0% | 0% | 1% | 0% | 0% | 1% | 0% | 0% | 0% | 0% | Each of the media channels is more likely to be used by innovative firms than their non-innovative counterparts, suggesting that the former draw on a much broader range of sources to find information or news that is relevant to their business. This difference is particularly evident when it comes to usage of the trade press, usage of magazines and attendance at seminars, tradeshows and conferences.
Table 13.1.3 Proportion Using Each Channel For Business News/Information – By Innovation
| Channel | Innovative | IP Active | |--------------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 398 | 680 | 222 | 224 | 655 | | Websites | 86% | 84% | 74% | 84% | 81% | | Trade press | 77% | 77% | 56% | 80% | 69% | | Magazines | 55% | 54% | 33% | 57% | 46% | | National newspapers | 40% | 40% | 28% | 43% | 35% | | Social networking | 32% | 30% | 22% | 29% | 28% | | TV | 26% | 27% | 15% | 29% | 22% | | National radio | 22% | 20% | 10% | 25% | 16% | | Local newspapers | 20% | 18% | 9% | 22% | 14% | | Local radio | 11% | 11% | 5% | 12% | 9% | | Seminars, etc | 80% | 74% | 49% | 80% | 64% | | (None of these) | 3% | 4% | 18% | 4% | 8% | | (Don't know) | 0% | 0% | 1% | 0% | 0% |
Generally, firms that are planning to grow (either moderately or substantially) tend to use a wider range of information sources, and this is particularly true of innovative high growth firms.
Table 13.1.4 Proportion Using Each Channel For Business News/Information – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Base | 108 | 510 | 248 | 204 | 476 | 222 | | Websites | 74% | 82% | 87% | 87% | 83% | 74% | | Trade press | 65% | 73% | 75% | 78% | 76% | 56% | | Magazines | 39% | 50% | 51% | 54% | 54% | 33% | | National newspapers | 32% | 38% | 41% | 43% | 38% | 28% | | Social networking | 21% | 28% | 33% | 33% | 28% | 22% | | TV | 20% | 25% | 25% | 27% | 26% | 15% | | National radio | 13% | 18% | 20% | 22% | 20% | 10% | | Local newspapers | 9% | 18% | 18% | 20% | 18% | 9% | | Local radio | 5% | 11% | 11% | 12% | 11% | 5% | | Seminars, etc | 54% | 68% | 79% | 82% | 71% | 49% | | (None of these) | 14% | 7% | 4% | 4% | 4% | 18% | | (Don't know) | 1% | 0% | 1% | 1% | 0% | 1% | 13.2 Usefulness
For each media channel used, respondents were asked to rate its usefulness as a source of news or information that is relevant to their business, using a 1-5 scale where 1 meant it was ‘not at all useful’ and 5 meant it was ‘extremely useful’. The chart below summarises these results, showing the proportion of respondents rating each source as ‘useful’ (i.e. 4-5 out of 5). Please note that this analysis is based just on those using each channel.
Chart 13.2.1 Usefulness As A Source Of Business News/Information
| Channel | Proportion | |--------------------------------|------------| | Websites | 70% | | Trade press | 53% | | Magazines | 39% | | National newspapers | 25% | | Social networking sites | 45% | | TV | 22% | | National radio | 23% | | Local newspapers | 20% | | Local radio | 17% | | Seminars, tradeshows or conferences | 63% |
Base: All using channel (Base) (742, 636, 443, 331, 276, 218, 162, 149, 91, 616)
Broadly speaking, the perceived usefulness of the various channels reflects the usage patterns, with those channels that are most widely used also being rated as most useful. For example, websites, trade press and seminars/conferences were the most widely used sources of business information or news, and were also rated as the most useful.
The one exception to this is social networking sites, which were used for business purposes by only 28% of respondents but were rated as being useful by 45% of users. As seen below, there are no consistent or significant differences in the perceived usefulness of the various channels by either age or size of firm.
Table 13.2.1 Usefulness As A Source Of Business News/Information – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Websites | Trade press | Magazines | National newspapers | Social networking | TV | National radio | Local newspapers | Local radio | Seminars, etc | |---------------------|---------------------------|----------|-------------|-----------|---------------------|------------------|----|---------------|-----------------|-------------|--------------| | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | | | | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | | | | Websites | 74% | 74% | 67% | 72% | 67% | 68% | 59% | 66% | | | | | Trade press | 58% | 55% | 51% | 54% | 48% | 63% | 70% | 40% | | | | | Magazines | 37% | 43% | 37% | 40% | 38% | 38% | 37% | 30% | | | | | National newspapers | 33% | 22% | 24% | 27% | 22% | 26% | 41% | 5% | | | | | Social networking | 52% | 40% | 45% | 47% | 50% | 8% | 44% | 46% | | | | | TV | 22% | 29% | 20% | 23% | 21% | 26% | 25% | 0% | | | | | National radio | 27% | 26% | 21% | 27% | 21% | 19% | 20% | 0% | | | | | Local newspapers | 24% | 16% | 21% | 25% | 11% | 14% | 26% | 10% | | | | | Local radio | 19% | 16% | 18% | 19% | 11% | 35% | 0% | 21% | | | | | Seminars, etc | 67% | 62% | 62% | 65% | 63% | 66% | 50% | 46% | | | |
There is also no evidence of any major differences in the usefulness of each channel by overseas experience.
Table 13.2.2 Usefulness As A Source Of Business News/Information – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|---------------| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | Up to 10% | 11 - 25% | 26 - 50% | Over 50% | | Base | 185 | 433 | 270 | 411 | 214 | 268 | 424 | 133 | 119 | 170 | | Websites | 74% | 71% | 67% | 72% | 63% | 71% | 69% | 74% | 73% | 65% | | Trade press | 52% | 57% | 50% | 52% | 55% | 53% | 55% | 54% | 54% | 50% | | Magazines | 34% | 41% | 38% | 35% | 40% | 42% | 36% | 42% | 30% | 47% | | National newspapers | 36% | 23% | 23% | 25% | 22% | 27% | 28% | 20% | 23% | 19% | | Social networking | 43% | 49% | 42% | 47% | 41% | 46% | 40% | 48% | 56% | 44% | | TV | 16% | 25% | 21% | 22% | 23% | 23% | 21% | 23% | 21% | 21% | | National radio | 26% | 18% | 29% | 21% | 25% | 25% | 26% | 18% | 34% | 21% | | Local newspapers | 23% | 18% | 23% | 21% | 11% | 26% | 17% | 25% | 17% | 31% | | Local radio | 26% | 10% | 19% | 25% | 4% | 17% | 15% | 19% | 40% | 9% | | Seminars, etc | 70% | 60% | 62% | 61% | 60% | 66% | 59% | 61% | 68% | 64% | For innovative and non-innovative firms alike, the most useful sources of business information and news are websites, the trade press and attending seminars, tradeshows and conferences.
Table 13.2.3 Usefulness As A Source Of Business News/Information – By Innovation
| Source | Innovative | IP Active | |-------------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 398 | 680 | 222 | 224 | 655 | | Websites | 70% | 69% | 72% | 65% | 72% | | Trade press | 57% | 53% | 51% | 57% | 52% | | Magazines | 42% | 39% | 35% | 42% | 37% | | National newspapers | 28% | 26% | 21% | 28% | 24% | | Social networking | 46% | 45% | 47% | 39% | 48% | | TV | 25% | 24% | 13% | 30% | 20% | | National radio | 23% | 24% | 16% | 25% | 24% | | Local newspapers | 21% | 17% | 40% | 20% | 21% | | Local radio | 22% | 15% | 32% | 17% | 18% | | Seminars, etc | 66% | 63% | 59% | 68% | 60% |
There is some indication that firms with growth aspirations view the trade press, national newspapers and the radio as more useful sources of relevant business news and information.
Table 13.2.4 Usefulness As A Source Of Business News/Information – By Innovation & Growth
| Source | Growth Objectives | Innovation & Growth | |-------------------------|-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Base | 108 | 510 | 248 | 204 | 476 | 222 | | Websites | 70% | 69% | 73% | 71% | 69% | 72% | | Trade press | 43% | 51% | 62% | 62% | 50% | 51% | | Magazines | 36% | 37% | 41% | 44% | 37% | 35% | | National newspapers | 16% | 27% | 25% | 26% | 25% | 21% | | Social networking | 59% | 42% | 47% | 48% | 43% | 47% | | TV | 17% | 25% | 19% | 20% | 26% | 13% | | National radio | 4% | 29% | 19% | 21% | 26% | 16% | | Local newspapers | 20% | 23% | 14% | 11% | 20% | 40% | | Local radio | 0% | 22% | 9% | 7% | 19% | 32% | | Seminars, etc | 57% | 63% | 65% | 65% | 62% | 59% | 13.3 Marketing UKTI Services
All respondents were asked what they thought would be the best way for UKTI to let them know about a new service they were providing. The chart below summarises these results.
Chart 13.3.1 Best Way For UKTI To Communicate A New Service
| Medium | Percentage | |---------------------------------|------------| | Websites | 28% | | Trade press | 24% | | Email | 13% | | Direct mail | 6% | | National newspapers | 5% | | Seminars, tradeshows or conferences | 4% | | TV | 4% | | Magazines | 3% | | Social networking sites | 3% | | National radio | 1% | | Telephone | 1% | | Local newspapers | 1% | | Local radio | 1% | | Other | 1% |
Base: All respondents (Base, Don't know/None) (902, 7%)
Whilst a wide range of mediums were mentioned, websites and the trade press were felt to be the most effective marketing channels for UKTI to use by some distance. This is consistent with the fact that these are the most widely used channels and are also perceived to be the most useful as a source of business information or news.
Whilst a significant minority of respondents mentioned email, this is clearly only feasible where UKTI already have someone in the firm’s email address and hence is likely to only be an effective route to communicating with existing clients.(^7)
(^7) Please note that email was not included in the prompt list at this question and respondents were asked to assume that UKTI didn’t already have their contact details. However, a minority still gave answers such as ‘email’ or ‘telephone’. As seen below, younger and smaller firms are more likely to see websites as the most effective channel for UKTI to use, whereas older and larger firms are comparatively more likely to suggest the trade press.
Table 13.3.1 Best Way For UKTI To Communicate A New Service – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Websites | Trade press | Email | Direct mail | National newspaper | Seminars, etc | TV | Magazines | Social networking | National radio | Telephone | Local newspaper | Local radio | Other | Don’t know/None | |---------------------|-----------------------------|----------|-------------|-------|-------------|-------------------|---------------|----|-----------|------------------|---------------|-----------|----------------|------------|------|----------------| | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | | | | | | | | | | Base | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | | | | | | | | | Websites | 35% | 27% | 27% | 33% | 21% | 21% | 15% | 36%| | | | | | | | | | Trade press | 18% | 19% | 27% | 18% | 28% | 27% | 49% | 36%| | | | | | | | | | Email | 11% | 15% | 13% | 13% | 16% | 9% | 12% | 9% | | | | | | | | | | Direct mail | 6% | 10% | 4% | 6% | 6% | 8% | 3% | 0% | | | | | | | | | | National newspaper | 5% | 7% | 5% | 5% | 7% | 8% | 8% | 0% | | | | | | | | | | Seminars, etc | 3% | 3% | 4% | 4% | 4% | 4% | 0% | 4% | | | | | | | | | | TV | 2% | 4% | 4% | 3% | 5% | 6% | 2% | 0% | | | | | | | | | | Magazines | 2% | 5% | 3% | 4% | 2% | 4% | 4% | 3% | | | | | | | | | | Social networking | 5% | 3% | 2% | 3% | 3% | 2% | 0% | 0% | | | | | | | | | | National radio | 0% | 0% | 2% | 1% | 0% | 2% | 4% | 0% | | | | | | | | | | Telephone | 1% | 1% | 0% | 1% | 1% | 1% | 0% | 0% | | | | | | | | | | Local newspaper | 1% | 1% | 0% | 1% | 1% | 1% | 0% | 0% | | | | | | | | | | Local radio | 2% | 0% | 0% | 1% | 1% | 0% | 4% | 0% | | | | | | | | | | Other | 1% | 1% | 1% | 1% | 1% | 2% | 0% | 0% | | | | | | | | | | Don’t know/None | 9% | 7% | 5% | 7% | 6% | 4% | 7% | 0% | | | | | | | | |
There is also some indication that the trade press is more effective for communicating with experienced firms than with less advanced exporters.
Table 13.3.1 Best Way For UKTI To Communicate A New Service – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|---------------| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | Up to 10% | 11 - 25% | 26 - 50% | Over 50% | | Base | 185 | 433 | 270 | 411 | 214 | 268 | 424 | 133 | 119 | 170 | | Websites | 33% | 28% | 26% | 29% | 28% | 28% | 25% | 32% | 23% | 34% | | Trade press | 15% | 20% | 30% | 20% | 26% | 27% | 25% | 19% | 30% | 21% | | Email | 12% | 15% | 11% | 13% | 10% | 14% | 10% | 11% | 20% | 13% | | Direct mail | 6% | 6% | 5% | 7% | 5% | 5% | 6% | 5% | 5% | 5% | | National newspaper | 6% | 5% | 6% | 6% | 4% | 6% | 5% | 3% | 6% | 10% | | Seminars, etc | 3% | 6% | 2% | 4% | 7% | 1% | 5% | 5% | 1% | 1% | | TV | 2% | 4% | 4% | 3% | 5% | 4% | 3% | 7% | 3% | 2% | | Magazines | 4% | 3% | 4% | 3% | 4% | 4% | 5% | 4% | 1% | 1% | | Social networking | 4% | 3% | 3% | 3% | 3% | 3% | 3% | 3% | 4% | 2% | | National radio | 0% | 0% | 2% | 1% | 1% | 2% | 1% | 0% | 1% | 2% | | Telephone | 0% | 1% | 1% | 0% | 1% | 1% | 0% | 2% | 0% | 1% | | Local newspaper | 1% | 1% | 0% | 1% | 0% | 0% | 1% | 0% | 0% | 1% | | Local radio | 1% | 0% | 0% | 1% | 0% | 1% | 1% | 0% | 0% | 0% | | Other | 1% | 1% | 1% | 1% | 1% | 2% | 1% | 1% | 2% | 0% | | Don’t know/None | 9% | 7% | 5% | 7% | 6% | 4% | 7% | 7% | 4% | 5% | As seen in the tables below, there is little difference by innovation or growth objectives in terms of firms’ views on the best marketing channels for UKTI to use.
Table 13.3.1 Best Way For UKTI To Communicate A New Service – By Innovation
| | Innovative | IP Active | |----------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | **Base** | 398 | 680 | 222 | 224 | 655 | | Websites | 27% | 27% | 32% | 29% | 28% | | Trade press | 23% | 23% | 26% | 26% | 22% | | Email | 12% | 14% | 11% | 11% | 14% | | Direct mail | 6% | 6% | 6% | 4% | 6% | | National newspaper | 7% | 6% | 4% | 5% | 6% | | Seminars, etc | 6% | 5% | 2% | 4% | 4% | | TV | 4% | 4% | 2% | 4% | 3% | | Magazines | 2% | 4% | 3% | 4% | 3% | | Social networking | 3% | 3% | 2% | 2% | 3% | | National radio | 2% | 2% | 0% | 2% | 1% | | Telephone | 1% | 1% | 1% | 1% | 1% | | Local newspaper| 1% | 1% | 1% | 1% | 1% | | Local radio | 0% | 1% | 1% | 0% | 1% | | Other | 1% | 1% | 1% | 1% | 1% | | Don’t know/None| 6% | 6% | 9% | 7% | 7% |
Table 13.3.1 Best Way For UKTI To Communicate A New Service – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | |----------------|-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | **Base** | 108 | 510 | 248 | 204 | 476 | 222 | | Websites | 28% | 28% | 28% | 26% | 27% | 32% | | Trade press | 23% | 27% | 18% | 18% | 25% | 26% | | Email | 13% | 12% | 17% | 19% | 12% | 11% | | Direct mail | 6% | 5% | 6% | 6% | 6% | 6% | | National newspaper | 6% | 5% | 7% | 7% | 5% | 4% | | Seminars, etc | 1% | 4% | 6% | 6% | 4% | 2% | | TV | 5% | 3% | 4% | 5% | 4% | 2% | | Magazines | 4% | 3% | 4% | 4% | 3% | 3% | | Social networking | 2% | 3% | 3% | 2% | 3% | 2% | | National radio | 0% | 2% | 1% | 1% | 2% | 0% | | Telephone | 0% | 1% | 0% | 0% | 1% | 1% | | Local newspaper| 0% | 1% | 1% | 1% | 1% | 1% | | Local radio | 2% | 0% | 0% | 0% | 1% | 1% | | Other | 0% | 1% | 1% | 1% | 1% | 1% | | Don’t know/None| 10% | 6% | 4% | 4% | 6% | 9% | 13.4 Social Networking Sites
As seen previously, 28% of respondents indicated that they currently used social networking sites as a source of business information or news. Those that did not already use these sites for business purposes were asked whether they expected to do so in the next year.
Chart 13.4.1 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year
In addition to the 28% of respondents that already use social networking sites for business purposes, a further 14% plan to start doing so in the next year.
As seen below, younger and smaller firms are more likely to be currently using social networking sites and more likely to start doing so in the next year.
Table 13.4.1 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|--------|------|---------|-----|-------|-------|---------|------| | Base | | 255 | 219 | 428 | 545 | 222 | 53 | 28 | 35 | | Yes | | 19% | 13% | 13% | 15% | 15% | 9% | 8% | 12% | | No | | 37% | 47% | 66% | 54% | 58% | 66% | 66% | 61% | | Don't know | | 1% | 4% | 1% | 1% | 4% | 0% | 0% | 5% | | Already use them | | 43% | 37% | 20% | 31% | 23% | 25% | 26% | 22% | There are no consistent differences in this respect by the various measures of overseas experience.
Table 13.4.2 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|--------------| | | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | Up to 10% | 11 - 25% | 26 - 50% | Over 50% | | Base | 185 | 433 | 270 | 411 | 214 | 268 | 424 | 133 | 119 | 170 | | Yes | 20% | 15% | 10% | 16% | 12% | 13% | 15% | 14% | 13% | 13% | | No | 45% | 51% | 67% | 55% | 61% | 55% | 58% | 55% | 53% | 58% | | Don't know | 2% | 2% | 1% | 2% | 1% | 2% | 2% | 3% | 0% | 0% | | Already use them| 33% | 31% | 22% | 27% | 26% | 30% | 25% | 28% | 33% | 29% |
It appears that innovative firms have a greater appetite for social networking sites, with almost half using them already or planning to do so in the next year, compared to less than a third of non-innovative firms.
Table 13.4.3 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 398 | 680 | 222 | 224 | 655 | | Yes | 14% | 16% | 9% | 14% | 14% | | No | 52% | 53% | 68% | 56% | 57% | | Don't know | 2% | 2% | 1% | 1% | 1% | | Already use them | 32% | 30% | 22% | 29% | 28% |
Broadly speaking, the more ambitious a firm’s growth objectives are, the more likely they are to be using or planning to use social networking sites for business purposes.
Table 13.4.4 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Innovative | Non-innovative | | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Base | 108 | 510 | 248 | 204 | 476 | 222 | | Yes | 14% | 12% | 18% | 19% | 14% | 9% | | No | 64% | 59% | 46% | 45% | 56% | 68% | | Don't know | 1% | 2% | 2% | 2% | 2% | 1% | | Already use them | 21% | 28% | 33% | 33% | 28% | 22% | Annex A – Markets Selected (For Drivers & Barriers Questions)
For the sections of the interview relating to drivers of market and barriers, firms were asked to focus on just one market, as follows:
- Firms were asked to select the ‘most challenging’ country that they had done business in over the last 5 years
- If they were unable to pick one, they were asked to select the country they had started doing business in ‘most recently’
- Firms that were just considering overseas business were asked to select the country they were ‘likely to do business in first’
The table below gives details of the market selected by users and non-users of UKTI.
Table A.1 Market Selected – By UKTI Usage
| Country | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 902 | 235 | 667 | | USA | 11% | 14% | 10% | | France | 7% | 4% | 8% | | China | 6% | 7% | 6% | | Germany | 6% | 5% | 6% | | India | 5% | 8% | 4% | | Ireland (Republic) | 4% | 2% | 5% | | Italy | 4% | 2% | 4% | | Russia | 4% | 8% | 2% | | Nigeria | 3% | 3% | 2% | | UAE | 3% | 3% | 2% | | Australia | 2% | 2% | 2% | | Dubai | 2% | 0% | 3% | | Holland | 2% | 1% | 3% | | Japan | 2% | 5% | 2% | | Saudi Arabia | 2% | 3% | 1% | | Spain | 2% | 1% | 2% | | Belgium | 1% | 1% | 1% | | Brazil | 1% | 2% | 0% | | Canada | 1% | 0% | 1% | | Denmark | 1% | 1% | 1% | | Egypt | 1% | 1% | 1% | | Greece | 1% | 1% | 1% | | Hong Kong | 1% | 0% | 1% | | Iran | 1% | 1% | 0% | | Israel | 1% | 0% | 1% | | Korea (South) | 1% | 1% | 1% | | Kuwait | 1% | 1% | 1% | | Libya | 1% | 2% | 0% | | Country | 1% | 0% | 1% | |-------------------------|----|----|----| | Malta | 1% | 0% | 1% | | Middle East (unspecified)| 1% | 1% | 1% | | Norway | 1% | 1% | 1% | | Pakistan | 1% | 0% | 1% | | Poland | 1% | 1% | 2% | | Portugal | 1% | 0% | 1% | | Romania | 1% | 1% | 1% | | Singapore | 1% | 2% | 1% | | South Africa | 1% | 1% | 1% | | Sweden | 1% | 1% | 1% | | Switzerland | 1% | 1% | 1% | | Turkey | 1% | 1% | 1% | | Afghanistan | 0% | 1% | 0% | | Africa (unspecified) | 0% | 1% | 0% | | Algeria | 0% | 1% | 0% | | Angola | 0% | 1% | 0% | | Ghana | 0% | 1% | 0% | | Malaysia | 0% | 0% | 1% | | Mexico | 0% | 1% | 0% | | Ukraine | 0% | 0% | 1% | | Vietnam | 0% | 1% | 0% | Annex B – Questionnaire TARGET QUOTAS:
- 300 interviews with firms 0-5 years old
- 300 interviews with firms 6-10 years old
- 300 interviews with firms more than 10 years old
- All quotas to run from questionnaire (S7)
SCREENER
ASK ALL Could I please speak to either the owner or someone responsible for your firm’s strategy in relation to overseas business?
Good morning/afternoon, my name is ... and I am calling on behalf of OMB Research, an independent market research agency. We have been commissioned by UK Trade & Investment and the Department for Business, Innovation & Skills (BIS) to conduct a survey of businesses on the topic of doing business overseas.
IF NECESSARY We are interested in talking to firms who are either involved in any form of overseas business activity or who are seriously considering doing business overseas in the next year. This overseas business activity could include selling directly to customers based overseas, selling overseas through agents or distributors, licensing, franchising or joint venturing overseas, or operating your own overseas office or site.
INTERVIEWER NOTE - YOU MAY TAKE REFERRALS TO ANOTHER SITE WITHIN THE UK.
INTERVIEWER NOTE – IF FIRM IS NOT CURRENTLY DOING BUSINESS OVERSEAS, BUT PLANNING DOING SO WITHIN THE NEXT YEAR CONTINUE WITH THE INTERVIEW ON THIS BASIS
This research will cover areas such as your current and planned overseas activities, including the way you go about doing business overseas and any issues you may have faced. It will take around 15-20 minutes, depending on your answers. It doesn't matter how much or how little overseas business you do – we're interested in speaking to a range of firms about their experiences.
AS NECESSARY UKTI is responsible for helping UK firms do business overseas. They want to find out more about how firms are going about overseas business and any difficulties they have. This will help UKTI develop the type of help they offer to UK firms. We are able to offer all businesses taking part in this research an electronic link to a summary report of the research findings (which will be available later this year).
Is it convenient to speak to you now or would you prefer to make an appointment for another time?
The research is being conducted under the Code of Practice of the Market Research Society, which means that all of the answers you give are strictly confidential and anonymous. Participation in this survey is voluntary.
The responses of all organisations taking part will be combined into a statistical report.
Your organisation was selected at random from a list of UK businesses held by a commercial list broker.
If you wish to check that OMB Research is a bona fide market research agency, you can contact the Market Research Society on 0500 396999, or call James Murray at OMB Research on 01622 790900 or Heather Booth di Giovanni at UK Trade & Investment on 020 7215 4989.
Can I confirm that you are one of the people best qualified to talk about your company’s overseas business activity?
INTERVIEWER NOTE: IF KNOW ALREADY THAT YOU ARE SPEAKING TO THE CORRECT PERSON THEN CODE YES AUTOMATICALLY
REFERRALS CAN BE TAKEN TO ANY UK SITE WHEN THE CONTACT FEELS THAT THERE IS SOMEONE WITHIN THE COMPANY BETTER PLACED TO ANSWER QUESTIONS ON THE TOPIC AREAS OUTLINED
Yes ..................................................................................1 No – take referral and being transferred ..........................2 No – take referral and arrange call back ..........................3 No – refused referral ........................................................4
Which of the following overseas business activities has your firm been involved in, over the last 5 years? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
Selling directly to overseas customers .................................1 Selling to overseas customers through agents or distributors....2 Licensing or franchising overseas, or other contractual arrangements such as joint ventures ........................................3 Operating your own overseas site or office ..........................4 (None of these)...........................................................................5 (Don’t know) ...............................................................................6 – CLOSE IF NONE AT S2a (CODE 5) S2b – Are you seriously considering starting to conduct overseas business via any of these routes in the NEXT YEAR?
Yes .................................................................................................................1 No ..................................................................................................................2 - CLOSE (Don't know) ...............................................................................................3 - CLOSE
IF JUST CONSIDERING OVERSEAS BUSINESS (CODE 1 AT S2b) S2c – Which of the following overseas business activities are you planning to become involved in, in the next year? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
Selling directly to overseas customers .........................................................1 Selling to overseas customers through agents or distributors..................2 Licensing or franchising overseas, or other contractual arrangements such as joint ventures .........................................................3 Operating your own overseas site or office ..............................................4 (None of these) ..........................................................................................5 – CLOSE (Don't know) .............................................................................................6 – CLOSE
S4a – DELETED S4b – DELETED
IF CODE 4 AT S2a S5b – \<IF CODES 1, 2 OR 3 ALSO MENTIONED AT S2a You mentioned operating your own overseas office or site. > How many overseas sites do you have? READ OUT
One ..............................................................................................................1 2-5 ..............................................................................................................2 6-10 .........................................................................................................3 11-20 ......................................................................................................4 21-50 ......................................................................................................5 More than 50 ..........................................................................................6 (Don't know) ..........................................................................................7 (Refused) ...............................................................................................8 IF CODE 1 AT S5b OR (OR CODE 4 AT S2c & CODE 5 AT S2a) S5c1 – < IF CODE 4 AT S2c & CODE 5 AT S2a & CODES 1, 2 OR 3 ALSO MENTIONED AT S2c You mentioned operating your own overseas office or site. > Would you say that the MAIN purpose of this site < IF CODE 1 AT S5b is IF CODE 4 AT S2c & CODE 5 AT S2a will be > …? READ OUT – AIM FOR SINGLE CODE BUT MULTI ALLOWED
IF CODES 2-8 AT S5b S5c2 – Thinking about all of your overseas sites, do any of these have the following purposes? READ OUT – CODE ALL THAT APPLY
- Manufacturing or assembly ........................................ 1
- Call centre ..................................................................... 3
- Distribution or sales office ........................................... 4
- Service delivery ............................................................ 6
- Research, product or process development.................. 7
- (Don't know/None of these) ........................................... 97 – CLOSE IF ONLY CODE 4 AT S2a/S2c ((S2a=4 & S2a=Not 1, 2 OR 3) OR (S2a=5 & S2c=4 & S2c=Not 1, 2 or 3))
ASK ALL S6a – And can I just check, < IF CODES 1-4 AT S2a AND CODE 1 AT S5c other than from the manufacturing or assembly site that you've just mentioned > have you IMPORTED any goods or services over the last 5 years?
AS NECESSARY By importing I mean the buying in of goods or services from overseas suppliers.
- Yes .................................................................................. 1
- No .................................................................................... 2
- (Don't know) .................................................................... 3
IF CODE 1 AT S6a & NOT CODE 4 AT S2a From now on, when I'm asking questions about your overseas business activity please DO NOT include importing.
ASK ALL S7 – And how long ago was your business established in the UK? READ OUT – CLARIFY AS NECESSARY – THIS MEANS WHEN THE BUSINESS IN ITS CURRENT FORM STARTED TRADING AS NECESSARY – IF THE BUSINESS IS A SUBSIDIARY THIS REFERS TO THE SUBSIDIARY IN WHICH YOU WORK
- Within the last year ......................................................... 1
- Over 1, up to 2 years ago .................................................. 2
- Over 2, up to 3 years ago .................................................. 3
- Over 3, up to 4 years ago .................................................. 4
- Over 4, up to 5 years ago .................................................. 5
- Over 5, up to 10 years ago ............................................... 6
- Over 10, up to 20 years ago ............................................. 7
- Over 20 years ago ........................................................... 8
- (Not yet trading) .............................................................. 9
- (Don't know) .................................................................. 10 - CLOSE (Refused)........................................................................................................11 - CLOSE ASK IF ESTABLISHED 1-2 YEARS (CODES 1-2 AT S7) S7b – Can I just check, has your business actually started trading yet?
Yes ...................................................................................1 No ...................................................................................2 (Don’t know) .....................................................................3
ASK ALL H1b – Is the business UK or foreign-owned?
UK-owned........................................................................1 Foreign-owned .................................................................2 (Joint UK and foreign-owned)...........................................3 (Don’t know) .....................................................................4
READ OUT IF FOREIGN OWNED (CODES 2-3 AT H1b) For the rest of this interview, please just answer about the firm where you work, and not your parent company or any other group companies. So when I ask about your overseas business, please just focus on the overseas activities of your UK firm.
ASK ALL S8 – And what is the main activity of the business? PROBE FULLY FOR INDUSTRY TYPE - IF MANUFACTURING WHAT TYPE OF MANUFACTURING, IF FINANCIAL SERVICES WHAT KIND AND SO FORTH
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just tell me the activity of your UK firm, not your parent company
A – Agriculture, hunting & forestry.................................1 B – Fishing ........................................................................2 C – Mining & quarrying.....................................................3 D – Manufacturing............................................................4 E – Electricity, gas and water supply.................................5 F – Construction...............................................................6 G – Retail, wholesale & repair of motor vehicles...............7 H – Hotels and catering.....................................................8 I - Transport, storage and communication........................9 J - Financial intermediation (Finance)...............................10 K - Real estate, renting & business activities ....................11 L - Public administration and defence ..............................12 M – Education ....................................................................13 N - Health and social work .................................................14 O - Other community, social & personal service activities ....15 Other ..................................................................................96 (Don’t know) .....................................................................97 (Refused)............................................................................98
CATI TO INSERT TIME MARKER SECTION A – OVERSEAS BUSINESS ACTIVITY
ASK IF CODES 1-4 AT S2a UNLESS NOT YET TRADING OR ESTABLISHED \<1 YEAR (CODES 1 OR 9 AT S7 OR CODE 2 AT S7b)
A4 – And how long ago did your company start conducting business overseas? READ OUT AS NECESSARY
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
INTERVIEWER NOTE: IF RESPONDENT SAYS THEY’VE NOT YET STARTED DOING BUSINESS OVERSEAS THEN YOU NEED TO GO BACK TO S2a AND CHANGE TO ‘NONE OF THESE’ & THEN ASK S2b & S2c
CATI TO ONLY SHOW FEASIBLE CODES BASED ON ANSWER TO S7
Within the last year........................................................... 1 Over 1, up to 2 years ago.................................................. 2 Over 2, up to 3 years ago.................................................. 3 Over 3, up to 4 years ago.................................................. 4 Over 4, up to 5 years ago.................................................. 5 Over 5, up to 10 years ago............................................... 6 Over 10, up to 20 years ago............................................. 7 Over 20 years ago............................................................ 8 (Don’t know) ..................................................................... 9 (Refused).......................................................................... 10
ASK IF CODES 1-4 AT S2a
G5 – Which of the following regions of the world are you currently doing business in? < IF IMPORTER (CODE 1 AT S6a & NOT CODE 4 AT S2a) (but please DO NOT include countries that you have only imported from)> READ OUT. CODE ALL THAT APPLY
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just answer about the areas where your UK firm is doing business, but don’t include the activity of your parent company or any other group companies
Europe.............................................................................. 1 North America ................................................................. 3 South America & Latin America ....................................... 4 The Middle East & Africa............................................... 6 Asia Pacific....................................................................... 7 (Don’t know) ..................................................................... 9 ASK IF CODES 1-4 AT S2a A1b – How many overseas countries have you done business in < IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since your were established >, in any form < IF IMPORTER (CODE 1 AT S6a & NOT CODE 4 AT S2a) (although please DO NOT include countries that you have only imported from)>? READ OUT
One...................................................................................2 2-5 ....................................................................................3 6-10 ..................................................................................4 11-20 ................................................................................5 21-50 ................................................................................6 More than 50 .......................................................................7 (Don't know) .......................................................................8 (Refused)...........................................................................9
IF CODE 2 AT A1b A2 – Which country was this? WRITE IN
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY).............................................................. (Don't know) - CLOSE
ASK IF CURRENTLY EXPORTING (S2a=1-4) G7 – Over the next 3 years do you expect the number of countries in which you do business to increase, decrease or stay the same?
Increase............................................................................1 Decrease ...........................................................................2 Stay the same ....................................................................3 (Don't know) .....................................................................4
IF ONLY ACTIVITY IS A MANUFACTURING/CALL CENTRE OVERSEAS SITE (CODE 4 AT S2a & CODES 1 OR 3 AT S5c & NOT CODES 1-3 AT S2a) A5a – Can I just check, have you made any sales at all to customers in overseas countries in the last year?
Yes ..................................................................................1 No.....................................................................................2 (Don't know) .....................................................................3 A5b – DELETED
ASK IF CODES 1-4 AT S2a EXCEPT CODES 2-3 (NO/DON'T KNOW) AT A5a OR NOT YET TRADING (CODE 9 AT S7 OR CODE 2 AT S7b)
A5c – In the last financial year, approximately what percentage of your turnover was accounted for by overseas sales? READ OUT AS NECESSARY
IF CODE 3 AT S2a AS NECESSARY: Please include any fees received from overseas companies or overseas licensing deals.
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
Up to 5% .................................................................1 6 - 10% .................................................................2 11 - 15% ...............................................................3 16 – 25% ...............................................................4 26 – 50% ...............................................................5 51 – 75% ...............................................................6 More than 75% ......................................................7 (Don't know) ..........................................................8 (Refused) .............................................................9
ASK ALL EXCEPT CONSIDERS ONLY (S2a=5 & S2c=1-4)
A5d – In a year’s time, do you think that the percentage of your turnover accounted for by overseas sales will be higher than it is now, lower or about the same?
Higher .................................................................1 Lower .................................................................2 About the same ....................................................3 (Don't know) ........................................................4 (Refused) ............................................................5 ASK ALL A7 - I’m going to read out some possible benefits of doing business overseas, and I’d like you to tell me whether \<IF EXPORTING (S2a=1-4) each one applies to your business / IF NOT EXPORTING (S2b=1) you would expect to benefit in these ways when you start doing business overseas>. So firstly...
ON EACH OF THE A7 SCREENS SHOW (AT TOP): \<IF EXPORTING (S2a=1-4) Has doing business overseas... / IF NOT EXPORTING (S2a=1) Do you think that doing business overseas will...>
ORDER OF STATEMENTS TO BE RANDOMISED (a) \<IF S2a=1-4 Enabled / IF S2b=1 Enable> you to achieve a level of growth otherwise not possible? (b) \<IF S2a=1-4 Allowed / IF S2b=1 Allow> you to more fully utilise your existing capacity? (c) DELETED (d) \<IF S2a=1-4 Exposed / IF S2b=1 Expose> you to new ideas? (e) \<IF S2a=1-4 Increased / IF S2b=1 Increase> the commercial life span of any of your products or services? (f) DELETED
Yes ...................................................................................1 No ...................................................................................2 (Don’t know) ....................................................................3
ASK FOR EACH OF A7a-f THAT HAS BEEN A BENEFIT. ASK A8 DIRECTLY AFTER EACH A7 STATEMENT A8 - And to what extent do you feel that this \<IF S2a=1-4 has been / IF S2b=1 will be> a benefit of doing business overseas? Please give me a score of 1 to 5, where 5 means to a critical extent and 1 means to no extent. READ OUT AS NECESSARY
1 – To no extent ...............................................................1 2 ......................................................................................2 3 ......................................................................................3 4 ......................................................................................4 5 - To a critical extent ......................................................5 (Don’t know) ....................................................................6
ASK ALL A9a – Overall, \<IF S2a=1-4 would you say that your experiences of doing business overseas have led / IF S2b=1 do you think that doing business overseas will lead> you to...? READ OUT. CODE ALL THAT APPLY.
Develop any new products or services...........................................................1 Make changes or modifications to any of your existing products or services. 2 (None of these).........................................................................................3 (Don’t know) ..........................................................................................4 IF CHANGED PRODUCTS/SERVICES (CODE 2 AT A9a)
C1d – < IF CODES 1-4 AT S2a Were these changes or modifications IF CODE 1 AT S2b Are you expecting these changes or modifications to be > ...? READ OUT - MULTICODE
Something cosmetic such as packaging or translation ....1 Or something more fundamental.................................2 (Non of these)..............................................................3 (Don't know) .................................................................4
IF CURRENTLY EXPORTING & DEVELOPED OR CHANGED PRODUCTS/SERVICES (S2a=1-4 & A9a=1-2)
A9b – \<IF CODES 1 & 2 AT A9a Thinking about both the new products or services you've developed and the changes you've made to existing products or services, was this / IF JUST CODE 1 AT A9a OR JUST CODE 2 AT A9a And was this product or service development > designed specifically for overseas customers, UK customers or both?
Overseas .................................................................1 UK ..............................................................................2 Both ...........................................................................3 (Don't know) .................................................................4
IF OVERSEAS (CODE 1 OR 3 AT A9b)
A9c –And did you undertake this for any of the following reasons? READ OUT. CODE ALL THAT APPLY
To comply with specific regulations or legal requirements in overseas countries .. 1 To solve technical or practical issues that related to particular overseas countries 2 To take account of different cultures or consumer preferences overseas .......... 3 In response to specific requests from overseas customers .................................. 4 (Non of these) ........................................................................ 5 (Don't know) ........................................................................ 6
IF HAVE NOT DEVELOPED OR CHANGED PRODUCTS/SERVICES (CODES 3-4 AT A9a)
A9d – Can I just check, does your firm carry out or commission any product or service development? AS NECESSARY: This includes improving existing products or services as well as designing new products or services
Yes ..............................................................................1 No ..............................................................................2 (Don't know) .................................................................3 ASK ALL EXCEPT NOT DOING PRODUCT/SERVICE DEVELOPMENT (I.E. ALL EXCEPT CODES 2-3 AT A9d)
A10 –\<IF S2a=1-4 Has doing business overseas prompted / IF S2b=1 Do you think that doing business overseas will prompt > you to invest more time or money in product or service development?
Yes ...................................................................................1 No .....................................................................................2 (Don't know) ........................................................................3
ASK ALL EXCEPT NOT DOING PRODUCT/SERVICE DEVELOPMENT (I.E. ALL EXCEPT CODES 2-3 AT A9d)
A11 – And \<IF S2a=1-4 has doing business overseas increased / IF S2b=1 do you think that doing business overseas will increase > the amount of money you have available to invest in product or service development?
Yes ...................................................................................1 No .....................................................................................2 (Don't know) ........................................................................3
ASK ALL EXCEPT NOT DOING PRODUCT/SERVICE DEVELOPMENT (I.E. ALL EXCEPT CODES 2-3 AT A9d)
A12 – And in your view, \<IF S2a=1-4 has doing business overseas increased / IF S2b=1 will doing business overseas increase > the return on investment that you get from your product or service development?
Yes ...................................................................................1 No .....................................................................................2 (Don't know) ........................................................................3
ASK ALL EXCEPT NOT DOING PRODUCT/SERVICE DEVELOPMENT (I.E. ALL EXCEPT CODES 2-3 AT A9d)
A13 – Now I’d like you to think specifically about the effect of the recent economic downturn on any product or service development that you undertake. Would you say that the downturn has meant you are…?
Spending more on product or service development........1 Spending less........................................................................2 Or, has it had no impact .......................................................3 (Don't know) ........................................................................4
ASK ALL EXCEPT NOT DOING PRODUCT/SERVICE DEVELOPMENT (I.E. ALL EXCEPT CODES 2-3 AT A9d)
A14 – And as a result of the downturn would you say that you are…?
Doing more product or service development for overseas customers 1 Doing less product or service development for overseas customers ..2 Or, has there been no change..................................................3 (Don't know) ........................................................................4
CATI TO INSERT TIME MARKER SECTION C – DRIVERS OF MARKET
IF DOING BUSINESS IN MORE THAN ONE MARKET (A1b=3-9)
B4 – Thinking now about all the overseas countries that you have done business in < IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since you were established >, which of these was the most challenging country to do business in? RECORD ONE COUNTRY ONLY
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY).............................................................. (None/Don’t know)
IF NONE/DON’T KNOW AT B4 OR IF ONLY CONSIDERING EXPORTING (S2b=1)
B5 – Which overseas country \<IF B4=NONE/DK have you started doing business in most recently / IF S2b=1 are you likely to do business in first >? RECORD ONE COUNTRY ONLY IF NOT SURE ASK RESPONDENT TO JUST CHOOSE ONE OF THE COUNTRIES THAT THEY DO BUSINESS IN (E.G. THE ONE THEY KNOW MOST ABOUT)
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY)..............................................................
CATI TO ALLOCATE <MARKET> AS FOLLOWS: • FROM B4: IF MORE THAN ONE MARKET (A1b=3-9) AND MARKET PROVIDED AT B4 • FROM B5: IF MORE THAN ONE MARKET (A1b=3-9) & NONE/DON’T KNOW AT B4 • FROM B5: IF ONLY CONSIDERING EXPORTING (S2b=1) • FROM A2: IF ONLY ONE MARKET (A1b=2)
READ OUT FOR ALL I’d like to ask you some questions now about your < IF S2a=1-4 experience of doing business in / IF S2b=1 plans in relation to > <MARKET>.
IF CODES 1-4 AT S2a UNLESS NOT YET TRADING OR ESTABLISHED \<1 YEAR (CODES 1 OR 9 AT S7 OR CODE 2 AT S7b) OR UNLESS DOING BUSINESS OVERSEAS FOR \<1 YEAR (CODE 1 AT A4)
C1a – How long have you been doing business in < MARKET >? READ OUT AS NECESSARY – CATI TO ONLY SHOW FEASIBLE CODES BASED ON ANSWER TO A4
Less than a year...............................................................1 Over 1, up to 2 years......................................................2 Over 2, up to 3 years......................................................3 Over 3, up to 4 years......................................................4 Over 4, up to 5 years......................................................5 Over 5, up to 10 years.....................................................6 Over 10, up to 20 years...................................................7 Over 20 years..................................................................8 (Don’t know)..................................................................10 (Refused).......................................................................11 ASK ALL C4 - Please can you tell me the extent to which each of the following applied to you when you were FIRST CONSIDERING doing business in <MARKET>.
Please give me a score of 1 to 5, where 5 means that it is completely applicable and 1 means that it is not at all applicable. So firstly...READ OUT - RANDOMISE
(a) You had received an approach from someone in <MARKET> (b) DELETED (c) There was someone within your company who already had experience of <MARKET> (d) DELETED (e) DELETED
ADD TO SCREEN FOR EACH To what extent did that apply to you when you were FIRST CONSIDERING doing business in <MARKET>?
1 – Not at all applicable ....................................................1 2 ......................................................................................2 3 ......................................................................................3 4 ......................................................................................4 5 – Completely applicable ...............................................5 (Don’t know) .................................................................6
ASK IF ONLY DONE BUSINESS IN ONE MARKET (CODE 2 AT A1b) OR IF ONLY USE ONE MODE (ONLY ONE OF CODES 1-4 SELECTED AT S2a) B9 – Based on what you told me earlier about your overseas business, I believe that you do business in <MARKET> by... CATI TO LIST ALL OF THE FOLLOWING THAT APPLY
• IF S2a=1: Selling direct to customers. • IF S2a=2: Selling through agents or distributors. • IF S2a=3: Licensing, franchising or other contractual arrangements (such as joint ventures). • IF S2a=4: Operating your own site or office in <MARKET>.
Is that correct or do you do business in <MARKET> in any different ways?
Yes – correct ..............................................................................1 No – use different ways ..............................................................2 (Don’t know) ...............................................................................3 ASK IF DOING BUSINESS IN >1 MKT & USE MORE THAN 1 MODE (CODES 3-9 AT A1b & MORE THAN ONE OF CODES 1-4 SELECTED AT S2a) OR JUST CONSIDERING OVERSEAS BUSINESS (CODE 1 AT S2b) OR INFO WRONG AT B9 (CODE 2 AT B9)
B7 – In which of the following ways < IF S2a=1-4 have you done / IF S2b=1 are you planning to do > business in <MARKET>? READ OUT – CODE ALL THAT APPLY – DO NOT RANDOMISE
Selling directly to customers in <MARKET>...............................1 Selling through agents or distributors in <MARKET>....................2 Licensing, franchising or other contractual arrangements such as joint ventures .................................................................3 Operating your own site or office in <MARKET>.........................6 (None of these)...........................................................................7 (Don't know)..............................................................................8
IF OVERSEAS SITE (CODE 6 AT B7)
B8 – Would you say that the MAIN purpose of this site in <MARKET> < IF CODES 1-4 AT S2a is IF CODE 1 AT S2b will be > ...? READ OUT. SINGLE CODE
INTERVIEWER NOTE: IF THE FIRM HAS SEVERAL SITES IN THIS COUNTRY ASK THEM THE PURPOSE OF THEIR MOST IMPORTANT SITE
Manufacturing or assembly ................................................. 1 Call centre ............................................................................. 3 Distribution or sales office .................................................... 4 Service delivery ..................................................................... 6 Research, product or process development.......................... 7 (Don't know/None of these)..................................................... 8
MODE REFERENCES M1 - Selling direct (B7=1 OR (S2a=1 & B9=1)) M2 - Selling through agents/distributors (B7=2 OR (S2a=2 & B9=1)) M3 – Licensing, franchising, other contractual (B7=3 OR (S2a=3 & B9=1)) M4 – DELETED M5 – DELETED M6 – Production site ((B7=6 & B8=1) OR (S5c=1 & B9=1)) M7 – Call centre (B7=6 & B8=3) OR (S5c=3 & B9=1)) M8 – Sales/service site (B7=6 & B8=4-6) OR (S5c=4-6 & B9=1)) M9 – R&D site (B7=6 & B8=7) OR (S5c=7 & B9=1)) M10 – Unknown site (B7=6 & B8=8) OR (S5c=97 & B9=1)) M11 – Unknown mode (B7=7-8)
IF M6, 7 OR 9
C1b – Can I just check, < IF CODES 1-4 AT S2a does your IF CODE 1 AT S2b will this > site in < MARKET > sell any products or services directly to any customers in < MARKET >? READ OUT
Yes .............................................................................................1 No...............................................................................................2 (Don't know)..............................................................................3
CATI TO INSERT TIME MARKER SECTION E – BARRIERS
ASK IF CURRENTLY EXPORTING (S2a=1-4)
E1 – I’m now going to read out a list of issues that you may have had to tackle when trying to develop your business in <MARKET>. For each one, please give me a score of 1 to 5 for the extent to which you feel that this has been a difficulty, where 5 means it has been ‘extremely difficult’ and 1 means it has ‘not been at all difficult’.
So firstly... READ OUT ROTATE LIST BUT ALWAYS ASK B, C & D IN ORDER
ON EACH OF THE E1 SCREENS (AT BOTTOM) AS NECESSARY To what extent has this been a difficulty in <MARKET> (where 5 means it has been ‘extremely difficult’ and 1 means it has ‘not been at all difficult’)
(a) Obtaining basic information about doing business in <MARKET> (b) Identifying who to make contact with in the first instance < IF M2-3 or finding a suitable partner > (c) Establishing an initial dialogue with prospective < IF M1, M3, M8, M10, M11 OR YES AT C1b customers or > business partners in <MARKET> (d) Building relationships with key influencers or decision-makers (h) DELETED (i) < IF M1-3, M8, M10, M11 OR YES AT C1b A preference on the part of customers in <MARKET> for doing business with firms from <MARKET> (k) Finding the necessary management time to devote to doing business in <MARKET> (n) DELETED (p) DELETED (r) Dealing with legal or tax regulations or standards in <MARKET> (s) Negotiating the culture and language (t) Protecting your intellectual property (u) DELETED (v) DELETED (w) Ensuring you get paid and enforcing contracts (x) Dealing with customs procedures or paperwork
1 – Not at all difficult .................................................................1 2 ......................................................................................2 3 ......................................................................................3 4 ......................................................................................4 5 – Extremely difficult ......................................................5 (Don’t know) .....................................................................6
CATI TO INSERT TIME MARKER SECTION G – DIVERSIFICATION & EMERGING/FAST GROWING MARKETS
G6 – DELETED
READ OUT TO ALL I'm now going to ask you about the extent to which you see there being opportunities for YOUR FIRM in some of the world's fast growing and emerging economies over the next 2 years.
ASK ALL G1 – For each of these countries please could you tell me whether you are already doing business there, you are very likely to, you are quite likely to, or you are unlikely to do business there in the next 2 years.
So firstly, ... DO NOT ROTATE ORDER
a) Russia b) Turkey c) South Africa d) Saudi Arabia or the United Arab Emirates e) Brazil f) Mexico g) DELETED h) China i) India j) DELETED
AS NECESSARY Are you...?
Already doing business there ........................................................1 Very likely ......................................................................................2 Quite likely ....................................................................................3 Or, unlikely to do business there in the next 2 years.....................4 (Don't know) .................................................................................5
ASK ALL UNLESS 'UNLIKELY' (CODE 4) TO ALL OPTIONS AT G1 G4b– And has the economic downturn prompted you to devote more attention to any of the emerging or fast growing economies I've just mentioned?
Yes ....................................................................................1 No ....................................................................................2 (Don't know) .................................................................................3 ASK ALL G7c – Thinking about the recent decline in Sterling exchange rates, overall would you say that this has had...? READ OUT. SINGLE CODE
A positive impact on your business.................................1 A negative impact..........................................................3 Or, no impact on your business........................................5 (Don't know) .....................................................................6
ASK ALL G7d – If the Sterling exchange rates stay at a similar level or fall further, do you think that this will prompt you to try and increase the share of your business that is accounted for by overseas sales? SINGLE CODE.
Yes ...................................................................................1 No.....................................................................................3 (Don't know) ....................................................................4 (Refused)..........................................................................5
ASK ALL G8a – Can I just check, \<IF S2a=1-4 does your firm ever / IF S2b=1 when you start doing business overseas are you planning to> use export credit insurance?
INTERVIEWER NOTE: IF RESPONDENT DOES NOT KNOW WHAT EXPORT CREDIT INSURANCE IS THEN CODE AS ‘NO’
Yes ...................................................................................1 No.....................................................................................2 (Don't know) ....................................................................3
IF EXPORTING & USE EXPORT CREDIT INSURANCE (S2a=1-4 & G8a=1) G8b – And over the last 6 months, have you had any difficulties in accessing export credit insurance?
Yes ...................................................................................1 No.....................................................................................2 (Don't know) ....................................................................3 (Refused)..........................................................................4
ASK ALL G10a – Over the last 6 months, has your business had any difficulties in obtaining finance, either from within the company or from external sources?
Yes ...................................................................................1 No.....................................................................................2 (Don't know) ....................................................................3 (Refused)..........................................................................4 IF DIFFICULTIES ACCESSING FINANCE (G10a=1) G10e – Have these difficulties obtaining finance had any negative impact on the scale or scope of your <IF S2b=1 planned> overseas activities? SINGLE CODE.
Yes ................................................................................... 1 No ..................................................................................... 3 (Don't know) .................................................................... 4
IF DIFFICULTIES ACCESSING FINANCE (G10a=1) G10f – And have these difficulties obtaining finance had any negative impact on the scale or scope of your product or service development activity? SINGLE CODE.
Yes ................................................................................... 1 No ..................................................................................... 3 (Don't know) .................................................................... 4
CATI TO INSERT TIME MARKER I'd now like to ask you some questions about any sources of information or advice you are aware of that are available to help UK firms do business overseas.
**ASK ALL**
**F2 – Prior to this interview, had you heard of...? READ OUT**
(a) UK Trade & Investment or UKTI (b) The commercial services provided by British embassies and consulates overseas (c) DELETED (d) DELETED
Yes .................................................................1 No .................................................................2 (Don't know) ..................................................3
**IF YES AT ANY OF F2a-b**
**F2i – And have you used \<IF F2a=1 & F2b=2-3 UK Trade & Investment / IF F2a=2-3 & F2b=1 the commercial services provided by British embassies and consulates overseas / IF F2a=1 & F2b=1 either of these>?**
Yes .................................................................1 No .................................................................2 (Don't know) ..................................................3
**ASK ALL**
**F2k – And have you used Business Link?**
**IF NECESSARY:** Business Link is a free business advice and support service, available online and through local advisors
Yes .................................................................1 No .................................................................2 (Don't know) ..................................................3
**IF NOT USED BL (CODES 2-3 AT F2k)**
**F2j – Prior to this interview, had you heard of Business Link?**
**IF NECESSARY:** Business Link is a free business advice and support service, available online and through local advisors
Yes .................................................................1 No .................................................................2 (Don't know) ..................................................3
**IF AWARE OF BL BUT NOT USED (F2j=1)**
**F2l – Do you think you will use Business Link in future? READ OUT. SINGLE CODE**
Yes .................................................................1 No .................................................................2 (Don't know) ..................................................5 CATI TO INSERT TIME MARKER I'd now like to ask you some questions about your business just to classify your answers for analysis purposes.
ASK ALL
H2a – How many people are currently employed by your business in the UK?
INTERVIEWER NOTE AS NECESSARY Please include both full and part-time staff.
Write in number (0+): (Don't know) – PROMPT WITH RANGES (Refused)
IF DON'T KNOW AT H2a
H2b – If you had to estimate, approximately how many people are employed by your business in the UK? READ OUT AS NECESSARY
No employees ................................................................. 1 1-4 ................................................................................. 2 5-9 ................................................................................. 3 10-19 ............................................................................. 4 20-49 ............................................................................. 5 50-99 ............................................................................. 6 100-199 ......................................................................... 7 200-249 ......................................................................... 8 250-499 ......................................................................... 9 500 or more .................................................................... 10 (Don't know) ................................................................. 11 (Refused)........................................................................ 12
ASK ALL EXCEPT CODES 1, 2, 3 & 9 AT S7 OR CODE 2 AT S7b
H2c – Compared to this time three years ago, would you say that the number of people employed by your company is now...? READ OUT
Higher ............................................................................. 1 Lower .............................................................................. 2 Or, about the same as it was three years ago.................. 3 (Don't know) ................................................................. 4
IF HIGHER (CODE 1 AT H2c) & FIGURE GIVEN AT H2a
H2d – How many people were employed by your business three years ago? READ OUT
INTERVIEWER NOTE AS NECESSARY Please include both full and part-time staff.
Write in number (0+): (Don't know) (Refused) IF DON'T KNOW/REFUSED AT H2d OR (HIGHER (CODE 1 AT H2c) & NO FIGURE GIVEN AT H2a I.E. DON'T KNOW/REFUSED)
H2e – Over the last three years would you say that the number of people employed by your company has...? READ OUT
- Increased by more than 75% .....................................................1
- Increased by between 30-75%...................................................2
- Or, increased by less than 30% compared to 3 years ago...........3
- (Don't know) ...............................................................................4
H3a – DELETED
ASK ALL
H3b –< IF S7=NOT 1 & NOT 9 AND S7b=NOT 2 Can I just ask, what is the current annual turnover of your business? / IF S7=1 OR 9 OR S7b=2 What do you anticipate will be the turnover of your business in the first year of trading?> Would you say it is...? READ OUT
AS NECESSARY By this I mean your annual sales, income or receipts.
IF FOREIGN OWNED (CODES 2-3 AT H1b):
AS NECESSARY: Please just focus on your UK firm, not your parent company
- £0 ...................................................................................1
- £100,000 or less...............................................................2
- £100,001 - £500,000 ........................................................3
- £500,001 - £2million .........................................................4
- £2million - £10million.......................................................5
- £10million - £50million.....................................................6
- More than £50million.......................................................7
- (Don't know) .....................................................................8
- (Refused)..........................................................................9
ASK ALL EXCEPT CODES 1, 2, 3 & 9 AT S7 OR CODE 2 AT S7b
H3c – Compared to this time three years ago, would you say that your turnover is now ...? READ OUT
- Much higher.................................................................1
- A bit higher .................................................................2
- Lower.............................................................................3
- Or, about the same as it was three years ago...............4
- (Don't know) .................................................................5
ASK ALL UNLESS ESTABLISHED IN LAST TWO YEARS (I.E. NOT 1-2 OR 9 AT S7 & NOT CODE 2 AT S7b)
H7a – Have you introduced any new products or services over the last three years?
- Yes ..................................................................................1
- No....................................................................................2
- (Don't know) .....................................................................3 ASK IF YES AT H7a H7b - And are these new products or services... READ OUT - SINGLE CODE ADD AS NECESSARY: By completely new I mean that, to the best of your knowledge, they have not been introduced by anyone before you READ OUT – SINGLE CODE
Just new to your business................................................................. 1 New to your industry or sector .......................................................... 2 Or, are they completely new to the world........................................... 3 (Some are just new to the business and some are completely new)........ 4 (Don’t know).................................................................................... 5
ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b H4a – Approximately how many of your UK employees are engaged either wholly or partly in R&D activity? READ OUT AS NECESSARY
AS NECESSARY: By R&D I mean ‘research and development’
Zero .............................................................................................. 1 One ............................................................................................... 2 2-4 ............................................................................................... 3 5-9 ............................................................................................... 4 10-19 ........................................................................................... 5 20-49 ........................................................................................... 6 50-99 ........................................................................................... 7 100-199 ...................................................................................... 8 200-249 ...................................................................................... 9 250-499 ...................................................................................... 10 500 or more .................................................................................. 11 (Don’t know) ................................................................................ 12 (Refused)..................................................................................... 13
ASK IF H4a IS CODES 2-11 H4b – Can I just check, are any of these employees involved in activities that could be described as ‘the development of scientific or technical knowledge that is NOT commonly available’?
Yes .............................................................................................. 1 No ............................................................................................... 2 (Don’t know) ................................................................................ 3 ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b OR CODE1 AT H4a
H5 – And approximately how many of your UK employees are engaged either wholly or partly in new product or service development? READ OUT AS NECESSARY
Zero..................................................................................1 One...................................................................................2 2-4 ....................................................................................3 5-9 ....................................................................................4 10-19 ................................................................................5 20-49 ................................................................................6 50-99 ................................................................................7 100-199 ............................................................................8 200-249 ............................................................................9 250-499 ............................................................................10 500 or more......................................................................11 (Don't know) .....................................................................12 (Refused)..........................................................................13
ASK ALL EXCEPT CODES 2, 3 OR 4 AT H7b OR (CODE 1 AT H4b & CODES 3-11 AT H4a & CODES 3-11 AT H5)
H6 – In the last year have you commissioned anyone external to your business to conduct scientific or technical research, or any new product or service development activity for you?
Yes ..................................................................................1 No.....................................................................................2 (Don't know) .....................................................................3
Analysis
Innovative Firms
- ‘Innovative’ firms are those that...
- Have more than one employee engaged in R&D activity (H4a) and more than one employee engaged in new product or service development (H5)
- Or, have employed someone external to conduct new product or service development in the last year (H6)
- Or, derive at least some turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years
Innovative Firms – Alternative (Tighter) Definition
- ‘Innovative’ firms (by the alternative measure) are those that...
- Have more than one employee engaged in R&D activity (H4a) and more than one employee engaged in new product or service development (H5) and at least some R&D employees are engaged in the ‘development of scientific or technical knowledge that is not commonly available’ (H4b)
- Or, have employed someone external to conduct new product or service development in the last year (H6)
- Or, derive at least some turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years and these products & services are either ‘new to the world’ or ‘new to the industry/sector’ (H7b) ASK ALL H8b – Have you either applied for or obtained any patents, trademarks or other legal protection, either in the UK or overseas, for any of your products or services?
Yes ................................................................. 1 No ........................................................................ 2 (Don't know) ...................................................... 3
IF IP PROTECTION (CODE 1 AT H8b) H8c – And do these patents, trademarks or other legal protection relate to the UK or overseas countries? SINGLE CODE
UK ................................................................. 1 Overseas .......................................................... 2 Both ............................................................... 3 (Don't know) ...................................................... 4
ASK ALL H9a – Can I just check, do you have a current, written business plan?
Yes ................................................................. 1 No ........................................................................ 2 (Don't know) ...................................................... 3 (Refused) .......................................................... 4
ASK ALL EXCEPT ‘NOT YET TRADING’ (CODE 9 AT S7 OR CODE 2 AT S7b) H10 – Thinking about your business as a whole, what growth objectives do you have for the business over the next FIVE years? Do you plan to…? READ OUT
Remain the same size ........................................ 1 Become smaller ............................................... 2 Grow moderately ............................................. 3 Grow substantially ......................................... 4 (Don't know) ...................................................... 5 (Refused) .......................................................... 6
ASK IF CURRENTLY EXPORTING (S2a=1-4) UNLESS DO NOT SELL TO OVERSEAS CUSTOMERS (I.E. DO NOT ASK IF CODE 2 AT A5a) H18a – Thinking about your overseas customers, are these…? READ OUT. SINGLE CODE
Businesses ......................................................... 1 Individuals ....................................................... 2 Or both ............................................................ 3 (Other) ............................................................. 4 (Don't know) ...................................................... 5 ASK IF SELL TO BUSINESSES (CODES 1 OR 3 AT H18a) H18b – And are the businesses that you sell to the ‘end users’ of your products or services or are they part of the supply chain? AS NECESSARY: By ‘part of the supply chain’ I mean that they sell your products on to others, in either the same or modified form.
End users ........................................................................................................1 Part of supply chain......................................................................................2 Both ..............................................................................................................3 (Don't know) ..............................................................................................4
ASK IF SELL TO BUSINESSES & FOREIGN OWNED (CODES 1 OR 3 AT H18a & CODES 2-3 AT H1b) H18c – And do you sell to other firms within your group, firms that are not part of your group, or both? SINGLE CODE
AS NECESSARY: By ‘your group’ I mean your parent company and any other companies that they own
Just to firms in the group.................................................................1 Just to firms not in the group..........................................................2 Both ........................................................................................................3 (Don't know) .........................................................................................4
CATI TO INSERT TIME MARKER SECTION I – MARKETING
ASK ALL I1 – Finally, I'd just like to ask you a few questions about the types of media channels that you personally use and how useful these are to your business. So, do you get news or information that's relevant to your business from any of the following? READ OUT. CODE ALL THAT APPLY. DO NOT RANDOMISE ORDER
TV .................................................................1 National radio ..................................................2 Local radio .......................................................3 Trade press ......................................................4 National newspapers ........................................5 Local newspapers .............................................6 Magazines .......................................................7 Social networking sites ....................................8 Other websites ...............................................9 (None of these) ...............................................10 (Don't know) ..................................................11
IF CODES 1-9 AT I1 I2 – And how useful are each of these are as a source of news or information that is relevant to your business. Please answer on a scale of 1-5 where 5 is 'extremely useful' and 1 is 'not at all useful'. So firstly...? READ OUT.
CATI TO ONLY ASK FOR THOSE SELECTED AT I1
(a) TV (b) National radio (c) Local radio (d) Trade press (e) National newspapers (f) Local newspapers (g) Magazines (h) Social networking sites (i) <IF I1=8 Other> websites
ON EACH OF THE I2 SCREENS SHOW (AT BOTTOM): AS NECESSARY: How useful is this as a source of news or information for your business?
1 – Not at all useful ........................................1 2 .................................................................2 3 .................................................................3 4 .................................................................4 5 – Extremely useful .....................................5 (Don't know) .................................................6 I3a – DELETED
IF DO NOT USE SOCIAL NETWORKING (I1 IS NOT CODE 8) I3b – Do you expect to use any social networking sites for business purposes within the next year?
Yes ...................................................................................1 No.....................................................................................2 (Don't know) .................................................................3
ASK ALL I4 – During the last year, have you attended any business seminars, tradeshows or conferences?
Yes ...................................................................................1 No.....................................................................................2 (Don't know) .................................................................3
IF CODE 1 AT I4 I5 – How useful do you find these events as a source of information or news that is relevant to your business? AS NECESSARY: Please answer on a scale of 1-5 where 5 is 'extremely useful' and 1 is 'not at all useful'.
1 – Not at all useful...........................................................1 2 .......................................................................................2 3 .......................................................................................3 4 .......................................................................................4 5 – Extremely useful.........................................................5 (Don't know) .................................................................6
I6 – DELETED
ASK ALL I7 – Thinking about the various media channels I've just mentioned, if UK Trade & Investment wanted to let you know about a new service they were providing, what would be the best way to communicate this to you? SINGLE CODE. PROMPT AS NECESSARY.
AS NECESSARY: Please assume that UKTI don’t have your contact details, so wouldn’t be able to email or phone you
TV .................................................................1 National radio .............................................................2 Local radio ...............................................................3 Trade press ..............................................................4 National newspapers ..................................................5 Local newspapers ......................................................6 Magazines ...............................................................7 Social networking sites .............................................8 Other websites ........................................................9 Seminars, tradeshows or conferences .......................10 Other (SPECIFY) ....................................................11 (Don't know) ............................................................12 ASK ALL H14 – That’s the end of the interview, thank you very much for taking part. Would you be willing to take part in any future UK Trade & Investment research on this topic? AS NECESSARY If you say ‘yes’ you can always decline at the time if it’s not convenient.
Yes ................................................................................... 1 No ................................................................................... 2 (Don't know) ..................................................................... 3
ASK ALL H17a - We will be producing a summary report of the results from this survey. Would you like us to send you an electronic link to this summary report? READ OUT ADD AS NECESSARY The report will be available later this year.
Yes ................................................................................... 1 No ................................................................................... 2 (Don't know) ..................................................................... 3
IF YES AT H17a H17b - Can I take your e-mail address? AS NECESSARY: This will only be used to email you a link to the report and will not be passed on to anyone else
INTERVIEWER NOTE: PLEASE MAKE SURE YOU RECORD THE EMAIL ADDRESS CORRECTLY, & READ IT BACK TO THE RESPONDENT TO CHECK SPELLINGS ETC
Yes (WRITE IN) ................................................................ 1 No ................................................................................... 2 (Don't know) ..................................................................... 3
IF YES AT H17a BUT RESPONDENT DOESN’T HAVE AN EMAIL ADDRESS H17c – Can I confirm your postal address then and we will send you a letter containing the internet address for the electronic report?
.................................................................................................................... ....................................................................................................................
CATI TO INSERT TIME MARKER
ASK ALL H15 – Finally as proof of this interview please could I just confirm your business postcode? CATI TO DISPLAY POSTCODE IF AVAILABLE – AMEND IF MISSING OR INCORRECT
.................................
ASK ALL H16 – And may I take a note of your name? WRITE IN ................................................................. STANDARD THANK & CLOSE
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b81918014a78a4e638a0a8b9bf31558f0f7c6384 | UK Trade & Investment
International Business Strategies, Barriers & Awareness Monitoring Survey
Research Report
October 2008
JN: 4144 Contents
01. Executive Summary ........................................................................................................ 1 1.1 Introduction ........................................................................................................... 1 1.2 Summary Results ................................................................................................. 2
02. Introduction .................................................................................................................. 9
03. Research Objectives .................................................................................................... 10
04. Methodology ................................................................................................................ 11 4.1 Coverage .............................................................................................................. 11 4.2 Sample Design ..................................................................................................... 11 4.3 Questionnaire Design .......................................................................................... 12 4.4 Fieldwork ............................................................................................................. 12 4.5 Weighting ............................................................................................................. 13
05. Modes Of Internationalisation .................................................................................... 15 5.1 Usage - Types ...................................................................................................... 15 5.2 Usage - Number ................................................................................................... 24
06. Profile .......................................................................................................................... 26 6.1 Age of Business .................................................................................................... 26 6.2 Size of Business (Employees) ............................................................................. 28 6.3 Size of Business (Turnover) ................................................................................ 30 6.4 Industry Sector ..................................................................................................... 32 6.5 Ownership ........................................................................................................... 35 6.6 Experience of Doing Business Overseas ............................................................ 36 6.7 Innovation ............................................................................................................ 50 6.8 Growth ................................................................................................................ 55 6.9 Business Planning ............................................................................................... 62 6.10 Displacement ...................................................................................................... 63 6.11 Usage of UKTI Trade Support Services ............................................................ 64
07. Drivers of Geographical Focus .................................................................................... 65 7.1 Drivers of Geographical Focus (Summary) ............................................................ 65 7.2 Drivers of Geographical Focus (Detailed) ............................................................. 69 7.3 Market Perceptions (Summary) ............................................................................ 74 7.4 Market Perceptions (Detailed) ............................................................................. 84
08. Drivers of Mode ............................................................................................................ 97 8.1 Drivers of Mode (Unprompted) ............................................................................ 97 8.2 Drivers of Mode (Summary) ................................................................................ 99 8.3 Drivers of Mode (Detailed) ................................................................................ 115
09. Barriers ......................................................................................................................... 134 9.1 Barriers (Summary) .............................................................................................. 134 9.2 Barriers (Detailed) ............................................................................................... 149 9.3 Business Needs For External Help ....................................................................... 161
10. Opportunities In Emerging & Fast Growing Markets ........................................ 162 10.1 Opportunities In Emerging & Fast Growing Markets ................................ 162 10.2 Impact of Economic Downturn .................................................................. 168
11. Awareness ........................................................................................................ 173
Annex A – Individual Markets (Sample Sizes)
Annex B - Questionnaire
1. Executive Summary
1.1 Introduction
This research gathers evidence about trends in UK businesses’ international business strategies; barriers hindering such business, and associated needs for external help as well as awareness of, and propensity to use, UKTI; and related issues.
In terms of the specific research aims, the study was required to provide robust evidence to:
- Identify UK business use of different modes of internationalisation and overseas market entry;
- Identify strategic business drivers of internationalisation mode;
- Identify drivers of geographical focus, including awareness of, and potential interest in, the emerging and high growth markets;
- Understand the barriers encountered by UK businesses in seeking to develop overseas business;
- Identify business needs for external help to overcome barriers and to address knowledge and skill needs associated with developing overseas business;
- Measure awareness of UKTI support.
This summary outlines the key findings from this study. Please note that all of the data in this report has been weighted by age of firm to reflect a disproportionate stratified sampling approach. 1.2 Summary Results
1.2.1 Modes of Internationalisation
Firms were asked which of a list of overseas business activities they had been involved in, over the last five years. Those not involved in any of these overseas activities were asked whether they were seriously considering starting to conduct overseas business via any of these routes in the next year, and only those responding positively to this question were invited to take part in the research. This group (the ‘considerers’) were asked to indicate which types of activities they were planning to become involved in.
Table 1.2.1 Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’)
| Modes Used | Modes Considering | |------------|--------------------| | Selling | 98% | | Selling direct | 86% | 4% | | Selling through agents or distributors | 30% | 2% | | Contractual agreements | 7% | | | Licensing | 3% | 0% | | Franchising | 0% | 0% | | Other partnerships or joint ventures | 3% | 0% | | Overseas site | 11% | | | Production site | 2% | 0% | | Call centre | 0% | 0% | | Sales/service delivery site | 6% | 0% | | R&D facility | 0% | 0% | | Total | 100% | 100% |
Base: All respondents (Base) – (900)
Virtually all of the firms interviewed (who were either already internationalising, or considering doing so in the next year) were involved in the more traditional ‘selling’ modes of internationalisation; whether this be selling direct to businesses or individuals based abroad, or selling through agents or distributors. Only a small minority were involved in any other ‘contractual arrangements’ (such as licensing and franchising), but around 1 in 9 had overseas sites.
Interestingly, the pattern of usage of the various different modes of internationalisation is actually very similar for younger (internationalising) firms as it is for older firms. There is some evidence to suggest that innovative and IP active firms are more likely to be involved in a number of modes of internationalisation beyond direct sales, including selling through agents/distributors, licensing and other partnerships/JVs and operating an overseas site. Innovative firms are also more likely to import. 1.2.2 Drivers of Geographical Focus
The table below shows the proportions of firms scoring against each of 9 summary categories of drivers of geographical focus.
Table 1.2.2 Drivers of Geographical Focus (Summary)
| % scoring | Total | Mode | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |--------------------|-------|------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | Networks & serendipity | 81% | 80% | 84% | 95% | 100% | 91% | 86%| 100% | 90% | 87% | | | Independent analysis | 53% | 49% | 61% | 59% | 100% | 39% | 53%| 100% | 95% | 100% | | | Solely reactive | 15% | 18% | 9% | 18% | 0% | 14% | 0% | 0% | 0% | 0% | | | Contacts | 81% | 82% | 77% | 95% | 100% | 95% | 62%| 26% | 85% | 26% | | | Practicalities | 62% | 62% | 63% | 68% | 50% | 65% | 43%| 0% | 47% | 75% | | | Language & culture | 84% | 84% | 82% | 82% | 50% | 91% | 72%| 26% | 83% | 64% | | | Risk & IP | 63% | 63% | 64% | 59% | 50% | 61% | 53%| 26% | 71% | 39% | | | Resources | 65% | X | X | X | X | X | 72%| 100% | 56% | 75% | | | Demand | 35% | 33% | 39% | 59% | 50% | 35% | 19%| 0% | 68% | 26% | | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
This analysis clearly highlights ‘contacts’ and ‘language & culture’ as key, alongside ‘networks & serendipity’ across all modes.
There is, however, some evidence to suggest some differences for those operating overseas sites, with ‘practicalities’ less important for this group but ‘demand’ more important.
Interestingly, the pattern in terms of drivers of geographical focus is very similar for firms within each of the three age groups(^1). There is some evidence to suggest that innovative firms (defined either through the main ‘innovative’ firms definitions or via IP activity) are more likely than those classified as ‘non-innovative’ to perceive difficulties with their chosen market in all areas. That said, they are also more likely to be driven by ‘independent analysis’ and to perceive the demand in this market as either ‘fairly’ or ‘very’ high. This is the case for innovation measured via the main ‘innovative firms’ definitions as well as through IP activity, and for young, technology intensive firms.
(^1) Firms aged up to 5 years, 5-10 years and more than 10 years. 1.2.3 Drivers of Mode
The table below shows the proportions of firms scoring against each of 8 summary categories of drivers of mode.
Table 1.2.3 Drivers of Mode (Summary)
| % scoring | Total | Mode | Own Site | |-----------|-------|------|----------| | | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | | 'Meeting customer needs' | 68% | 73% | 49% | 50% | 100% | 60% | 19% | 26% | 97% | 62% | | 'ROI, cost & risk' | 68% | 66% | 73% | 87% | 0% | 60% | 53% | 26% | 95% | 62% | | 'Accessing partner capabilities & connections' | 84% | X | 85% | 87% | 100% | 69% | X | X | X | X | | 'Control of IP & product/service quality' | 58% | 67% | 20% | 41% | 50% | 5% | X | X | 90% | X | | 'Accessing locations of expertise' | 50% | X | X | X | X | X | 0% | 100% | 66% | 74% | | 'Non-analytical factors' | 50% | 50% | 55% | 51% | 50% | 47% | 0% | 0% | 56% | 38% | | 'Solely reactive' | 15% | 18% | 9% | 18% | 0% | 14% | 0% | 0% | 0% | 0% | | None | 13% | 13% | 11% | 0% | 0% | 31% | 47% | 0% | 0% | 13% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
For those firms that have chosen to sell direct, the importance of ‘meeting customer needs’ is highlighted, alongside maintaining control of IP and product/service quality. For those electing to sell via agents or distributors, the capabilities and connections of the partner firm are highlighted as strong drivers of this choice. For those opting to enter into contractual arrangements the small base sizes make it difficult to draw robust conclusions, but the capabilities of the partner firm again appear to be important. Those operating their own overseas sales sites appear to be driven by similar considerations to those selling direct, namely ‘meeting customer needs’ as well as maintaining control of IP and product/service quality.
Across all modes, ‘ROI, cost & risk’ is highlighted as an important driver of choice of mode, a category that essentially addresses the issue of profitability and firms making money.
Interestingly, the pattern in terms of drivers of mode is very similar for firms within each of the three age groups. Whilst ‘meeting customer needs’ seems to apply to innovative and non-innovative firms alike, there is some evidence to suggest that innovative firms are slightly more likely to be driven by factors relating to ‘ROI, cost & risk’ and ‘accessing partner capabilities & connections’ than non-innovative firms. This finding, alongside the finding that innovative firms are more likely than those classified as ‘non-innovative’ to perceive difficulties with their chosen market in all areas could be interpreted as implying that innovative firms face greater challenges than non-innovative firms in the implementation of a successful internationalisation strategy, specifically in respect of success in commercial terms. This could be due to a number of factors, with the relative difficulty of the task of selling innovative products/services (in comparison with more straightforward, non-technical and ‘easy to explain and sell’ products/services) a possibility as well as a lack of commercial/marketing skills on the part of innovative firms. This is the case for innovation measured via the main ‘innovative firms’ definitions as well as through IP activity, and for young, technology intensive firms.
1.2.4 Barriers
Following difficulties encountered in previous studies in measuring barriers through direct questioning techniques, a projective questioning technique was employed for this research. This technique attempts to get over issues relating to the reluctance of firms to acknowledge barriers by asking them to talk about issues that other similar firms would face. The table below shows the proportions of firms scoring against each of 6 summary categories of barriers as well as the proportion scoring against any of these categories.
Table 1.2.4 Barriers (Summary)
| % scoring | Total | Mode | |-----------|-------|------| | | | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | | At least one barrier ‘to a significant extent’ | 79% | 78% | 85% | 69% | 100% | 78% | 81% | 100% | 88% | 74% | | Legal & regulatory barriers | 42% | 40% | 42% | 50% | 50% | 39% | 71% | 100% | 54% | 61% | | Contacts barriers | 46% | 45% | 49% | 50% | 50% | 35% | 47% | 100% | 58% | 49% | | Information barriers | 21% | 20% | 25% | 31% | 50% | 0% | 42% | 100% | 22% | 13% | | Fixed costs barriers | 63% | 60% | 69% | 50% | 50% | 61% | 76% | 74% | 83% | 74% | | Language & cultural barriers | 26% | 24% | 29% | 36% | 50% | 22% | 47% | 100% | 27% | 36% | | Bias barriers | 21% | 18% | 30% | 14% | 50% | 30% | 28% | 26% | 22% | 49% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
The overall incidence of firms encountering barriers is similar across modes, with 79% of all internationalising firms reporting at least one significant barrier. As has been the case in past studies, fixed cost barriers and contacts barriers are highlighted amongst the most important, with the key point of difference between this and previous studies being that legal & regulatory barriers are highlighted as amongst the most important (with this being the case for all modes where sample sizes allow for reasonably robust analysis).
The ‘legal and regulatory’ category covers perceptions in relation to negotiating the legal and regulatory framework or standards, intellectual property protection and contract enforcement (as well as opinions on the extent to which the obtaining of work permits or visas is a barrier in the case of firms with overseas sites). A quarter of all firms indicated that negotiating the legal and regulatory framework or standards in their chosen market has been ‘fairly’ or ‘very’ difficult, with 15% reporting difficulties in respect of intellectual property protection. Around a fifth indicated that they perceived a ‘fairly’ or ‘very’ high risk in relation to ‘getting paid and enforcing contracts’. Whilst it appears to be the case that older firms are slightly less likely to report barriers at all, the pattern is similar across the three age groups (with ‘fixed costs’, ‘contacts’ and ‘legal and regulatory’ barriers the most prevalent). It is also the case that innovative and IP active firms are more likely to report barriers of all types. However, it should be noted that across all groups, it is ‘fixed costs barriers’, ‘contacts barriers’ and ‘legal and regulatory barriers’ that are again the most prevalent.
1.2.5 Opportunities In Emerging & Fast Growing Markets
The chart below shows firms’ opinions on opportunities in the priority fast growing markets. Please note that, of the Asian fast growing markets, only China and India were addressed individually, with the remainder covered under a single ‘other Asian markets’ category.
Opinions vary across the markets, from just 7% indicating that Mexico was a ‘good opportunity’ and 60% that they felt that this market was ‘unlikely’ to provide them with an opportunity, to 12% feeling that India was a ‘good opportunity’ and just 38% feeling that it was unlikely to provide them with an opportunity.
Overall, approaching half (45%) of internationalising firms are already doing business in at least one of the emerging/fast growing markets (with almost half of this group made up of small firms with less than 10 employees). The majority of the remainder see at least one market as either a good or possible opportunity. Only around 1 in 8 feel that none of these markets are likely to provide them with an opportunity.
It appears to be the case that the likelihood of a firm trading in these fast growing markets increases with both age and size, with younger and smaller firms more likely to see these markets as merely a ‘good’ or ‘possible’ opportunity (rather than already doing business there). That said, still as many as 40% of firms with less than 10 employees. employees are already doing business in at least one of the priority fast growing markets. Both non-innovative firms and those that are not IP active are more likely to feel that the priority fast growing markets are unlikely to offer them an opportunity and less likely to be doing business in them than ‘innovative’ and IP active firms.
Firms were asked whether their business had been ‘negatively affected by the apparent downturn in the US or UK markets over the last year’, and if so about whether this had prompted them to focus more on emerging or fast growing markets. Please note that fieldwork was conducted during August and early-September 2008.
Table 1.2.5 Impact Of Economic Downturn
| | Total | |--------------------------------------|-------| | Negatively affected by downturn | 42% | | Devoting more attention to fast growing | 18% | | Not devoting more attn to fast growing | 24% | | Not affected by downturn | 56% | | Total | 100% |
Base: All respondents (Base) – (900)
Overall, around two-fifths of internationalising firms mentioned that they had been affected, but less than half of this group (18% of all internationalising firms) mentioned that they were devoting more attention to emerging or fast growing markets as a consequence.
There is no consistent pattern by age of firm. However, there is some evidence to suggest that, perceptions at least, amongst non-innovative firms is that they are less likely to have been negatively affected by the downturn than innovative firms, however, there is no such difference evident by whether or not firms are IP active. 1.2.6 Awareness
Firms were asked to consider sources of information or advice that they are aware of that are available to help UK firms do business overseas, and then read out a list of UKTI products and services and asked to indicated whether or not they had heard of each one. As well as the list of 7 products and services, firms were also asked whether or not they had heard of 'UK Trade & Investment or UKTI' (prior to the interview).
Table 1.2.6 Awareness (UKTI & UKTI Products/Services)
| | Total | |------------------------|-------| | Aware (at least one) | 80% | | UKTI | 51% | | Overseas posts | 55% | | ITAs | 59% | | Passport | 34% | | EMRS | 22% | | ECR | 13% | | TAP | 26% | | OMIS | 26% | | Used (at least one) | 35% | | Total | 100% |
Base: All respondents (Base) (900)
Overall, around half (51%) of internationalising firms claimed that they had heard of UKTI, with awareness of both posts and ITAs slightly higher (at 55% and 59% respectively). Awareness of Passport was relatively high at 34%, with TAP and OMIS recognised by around a quarter of firms. Only around a fifth of internationalising firms indicated that they hadn’t heard of any of the products and services listed (or UKTI).
These results are consistent with those collected via the old awareness study, which this research has been designed to replace. The 2006 survey measured awareness of UKTI at 48% and had been showing a steady increase in awareness levels over the past few years. 2. Introduction
UK Trade & Investment (UKTI) commissioned this piece of research in order to gather evidence about trends in UK businesses’ international business strategies; barriers hindering such business, and associated needs for external help as well as awareness of, and propensity to use, UKTI; and related issues.
The study was designed with a view to the results being used to help inform UKTI policy development and other aspects of UK Government policy relating to international trade and investment and the ability of British business to optimise opportunities in global markets.
The survey was intended to complement evidence already available from other surveys of UK business, in particular:
- The Community Innovation Survey, which is nationally representative of firms with at least 10 employees, and captures some evidence about international aspects of innovation activity, including international partnerships and other linkages, as well as export activity;
- UKTI’s Performance and Impact Monitoring Survey (PIMS) of businesses who have used UKTI trade services, which also captures some contextual evidence about overseas business experience and aspects of strategy;
- UKTI’s annual survey of exporters who have not used UKTI trade services, which gathers evidence about some aspects of overseas business strategy as well as evidence about barriers to overseas business and associated needs for external help.
Whilst there is data on outward investment available from that collected by the Office of National Statistics, prior to this study there was no source of reliable quantitative data about internationalisation modes used by UK firms. The PIMS data suggests that the benefits derived from UKTI support may vary according to the different internationalisation modes. A key aim of this survey was therefore to begin to fill these gaps and to understand specifically whether there are issues facing these firms that are not being addressed within UKTI’s current portfolio of services.
This survey replaces the former annual UKTI awareness survey. It is envisaged that the study will be repeated annually, but with variation in some of the topics covered, so that annual monitoring with consistent data will be achieved where needed, as well as data captured on a wider range of issues at less frequent intervals. 3. Research Objectives
In terms of the specific research aims, the study was required to provide robust evidence to:
- Identify UK business use of different modes of internationalisation and overseas market entry, including among young innovation and technology intensive firms;
- Identify strategic business drivers of internationalisation mode, and how these may vary with increasing overseas business experience, and other business characteristics, including size and innovation activity, or with characteristics of the target overseas market;
- Identify drivers of geographical focus, including awareness of, and potential interest in, the emerging and high growth markets (as identified in UKTI’s 5 year strategy, published in 2006);
- Understand the barriers encountered by UK businesses in seeking to develop overseas business, both for new exporters and for firms seeking to enter new markets;
- Subject to constraints of interview length, the research will also seek to identify how these vary by market entry or internationalisation mode, and across markets;
- Identify business needs for external help to overcome barriers and to address knowledge and skill needs associated with developing overseas business;
- Measure awareness of UKTI support.
Whilst this study aimed to build on the former annual UKTI awareness survey in terms of measuring awareness of UKTI support, it was effectively the first wave of a new piece of research. As such an important secondary objective was to build a robust and intelligent research design, both in terms of the sampling approach and the questionnaire, so as to establish the foundation for an annual monitoring survey that will provide consistent year-on-year survey evidence as well as address all of the current research objectives. 4. Methodology
The research was conducted via quantitative, CATI(^2) interviews, administered by a specialist team of business-to-business researchers with extensive experience of conducting similar studies with this type of audience.
4.1 Coverage
A total of 900 interviews were conducted with firms involved in overseas business activities covering the full range of internationalisation modes, including selling to overseas customers both directly and via agents or distributors, operating via contractual agreements and firms operating their own overseas sites. Whilst data was collected on import activity, only those firms also involved in other overseas business activities were selected for interview.
Whilst the majority of the firms interviewed (845 of the total 900) were involved in at least one of these forms of internationalisation at the time of the interview, a small number (55) were only planning to become involved in this type of activity (although this did have to be within the next year before they were included in the study). This latter group have been labelled ‘considerers’ in the analysis.
4.2 Sample Design
Since one of the key objectives of this research was to ensure coverage of firms doing overseas business via the full range of modes, and not just simply exporting in the traditional sense, the sample frame was built from a random sample of all businesses which was then screened to ascertain involvement in overseas business activity. This approach had the further advantage of allowing the inclusion of ‘considerers’ in the research.
The initial sample frame was sourced from a Dunn & Bradstreet-based list provided by Experian, with the sample stratified by age of firm. It was decided that a disproportionate sample design would be used, so that a roughly equal number of firms were interviewed that were aged up to 5 years, aged 6-10 years and aged more than 10 years (to allow for robust analysis by age group).
In order that the incidence within the sample frame of firms eligible for interview (i.e. engaging in international business activity) was kept to within sensible limits, an approach was taken to the construction of the initial sample frame whereby a small number of industry sectors with a very low proportion of firms expected to be involved in overseas business activity were excluded(^3). The exclusions were made on the basis of analysis of data from the Community Innovation Survey (CIS) on the incidence of exporting for individual industry sectors within each of the three age groups(^4). Due to sample size restrictions, this analysis only allows for exclusions at the level of 2-digit SIC codes. Thus, further ‘common sense’ exclusions were applied manually at the sample processing stage, for example the removal of sub-post offices from SIC code 64 (post and telecommunications).
(^2) Computer Assisted Telephone Interviewing. (^3) Sectors where the incidence of firms qualifying for interview was likely to be less than 1 in 5 were excluded from the sample frame. (^4) Based on analysis by Professor Richard Harris, University of Glasgow. Whilst both users and non-users of UKTI were included in the research, the sample lists were screened against lists of firms participating in the very recently conducted PIMS waves in an attempt to reduce the burden of research on individual businesses.
4.3 Questionnaire Design
Strong emphasis was placed on questionnaire design in the early stages of this project, with the importance of ensuring that the questionnaire was easily understandable, clearly worded, flowed logically, acceptable in terms of length and capable of delivering high quality data across all the areas necessary to answer the research objectives recognised throughout the design phase of the study. Given that this research covers areas that have not been covered in previous studies, it was felt that an initial qualitative phase was required to help inform the quantitative questionnaire design. This consisted of a total of 10 telephone depth interviews conducted by the project executives, with the initial interviews conducted using a discussion guide agreed following meetings with the UKTI project manager and project steering group, and a second tranche of interviews conducted using a revised discussion guide that incorporated findings from the initial qualitative interviews and further discussions with the steering group and UKTI project manager.
Following this qualitative phase the quantitative questionnaire was drafted, with a full ‘live’ pilot conducted on CATI prior to the main fieldwork. A copy of the final questionnaire is appended to this report.
4.4 Fieldwork
Main fieldwork was conducted between August and September 2008 at BMG Research’s telephone centre in Birmingham, with interviews lasting an average of 19 minutes.
The following table summarises the number of sample records selected for CATI, the approximate number of records lost due to screening-out or incorrect contact details, and the number of interviews completed along with the associated response and refusal rates.
| CATI SCREENING | | |-----------------------------------------------------|-------| | Selection for CATI | 16,753| | Unusable – no overseas business activity | 11,008| | Unusable – contact details incorrect | 1,299 |
| ACHIEVED INTERVIEWS / RESPONSE RATES | | |-----------------------------------------------------|-------| | Total useable sample | 4,446 | | Interviews achieved | 900 | | Response rate (%) | 20% | | Refusal rate (%) | 28% | 4.5 Weighting
All of the data presented in this report has been weighted to account for the disproportionate nature of the sample design (i.e. the disproportionate sampling by age of firm). The weighting regime draws on data from the 2006 Annual Small Business Survey on the profile of SME exporters (displayed below), with the data having been weighted to the profile shown.
Table 4.5.1 Weighting – By Age
| 2006 ASBS | Weighting | |-----------|-----------| | All SMEs | All Employers | | Up to 5 years | 20% | 19% | 19% | | 5-10 years | 19% | 18% | 19% | | More than 10 years | 61% | 63% | 62% |
In a number of sections of the questionnaire, firms involved in a number of forms of internationalisation are asked to focus on just one internationalisation mode. This mode is selected at random from those they are involved in. However, since certain modes are more likely to be employed by those already involved in other arguably ‘easier’ modes, when data collected on the basis of this one randomly selected mode is analysed at the total level, this should be accounted for by a further layer of weighting.
The table below and overleaf provides an analysis of the impact of each of the potential layers of weighting on the observed profile of firms in terms of overseas business experience, size and innovation as well as age.
Table 4.5.2 Weighting – Comparison Of Weighting Regimes
| Weighted | Unweighted | |----------|------------| | By Age Only | By Age & Mode | | Age: | | | | Less than 2 years | 6% | 4% | 4% | | 2-5 years | 25% | 15% | 16% | | 5-10 years | 32% | 19% | 19% | | 10-20 years | 19% | 31% | 31% | | More than 20 years | 18% | 31% | 30% | | Experience: | | | | Less than 2 years | 20% | 14% | 14% | | 2-5 years | 31% | 23% | 24% | | 5-10 years | 26% | 25% | 24% | | 10-20 years | 12% | 20% | 20% | | More than 20 years | 10% | 18% | 18% | | Size: | Unweighted | Weighted | Weighted | |---------------|------------|----------|----------| | | | By Age Only | By Age & Mode | | 0-9 | 56% | 51% | 50% | | 10-49 | 33% | 36% | 36% | | 50-99 | 5% | 5% | 5% | | 100-249 | 2% | 2% | 3% | | 250+ | 3% | 4% | 5% | | Innovative?: | | | | | Yes | 73% | 72% | 74% | | Yes (tighter defn) | 46% | 47% | 48% |
Since the results are similar whether or not this additional layer of weighing is applied, the view has been taken that this adds an unnecessary level of complexity to the analysis (to then have little or no impact on the results) and as such has not been applied to the data contained in this report. 5. Modes Of Internationalisation
5.1 Usage - Types
Firms were asked which of a list of overseas business activities (covering selling direct, selling through agents or distributors, licensing, franchising or other contractual arrangements and operating an overseas site) they had been involved in, over the last five years. Those not involved in any of these overseas activities were asked whether they were seriously considering starting to conduct overseas business via any of these routes in the next year, and only those responding positively to this question were invited to take part in the research. This group (the ‘considerers’) were asked to indicate which types of activities they were planning to become involved in.
The chart below shows usage (and consideration for ‘considerers’) of these overseas business activities, which summary figures shown for ‘selling’ (which includes selling direct and selling through agents or distributors), ‘contractual arrangements’ (which includes licensing, franchising and other partnerships or joint ventures) and ‘overseas site’ (which includes firms with overseas production sites, call centres, sales offices and R&D facilities). Also included is data on usage of importing.
Chart 5.1 Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’)
Virtually all of the firms interviewed (who were either already internationalising, or considering doing so in the next year) were involved in the more traditional ‘selling’ modes of internationalisation; whether this be selling direct to businesses or individuals based abroad, or selling through agents or distributors. Only a small
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5 With checks included in the questionnaire to ensure that this was not simply importing through a UK-based intermediary. minority were involved in any other ‘contractual arrangements’ (such as licensing and franchising), but around 1 in 9 had overseas sites.
Those firms involved in ‘other partnerships or joint ventures’ or in some form of overseas site where asked to provide details of the purpose of the partnership/site.
Table 5.1.1 Main Purpose of Partnership/Site
| Mode | JVs & Other Partnerships | Overseas Sites | |-------------------------------------------|--------------------------|----------------| | Production | 21% | 22% | | Manufacturing | 21% | 22% | | Assembly | 9% | 0% | | Call centre | 7% | 2% | | Sales site | 68% | 61% | | Distribution/sales office | 49% | 38% | | After-sales office | 23% | 6% | | Service delivery | 35% | 17% | | Research, product or process development | 18% | 5% | | Other | 18% | - | | Total | 100% | 100% |
Base: All respondents (Base, Don’t know) – JVs/partnerships (32, 2%), Overseas site (103, 9%)
The majority of these partnerships/sites are sales sites (a categorisation which covers distribution/sales offices, after-sales offices and service delivery offices), with around 1 in 5 production sites (which covers manufacturing and assembly sites).
Those operating production sites, call centres and R&D facilities were asked whether or not they also sold any goods or services to customers in the market in question. Whilst the small base sizes must be borne in mind when interpreting these results, 5 of the 9 of firms operating overseas production sites, 1 of the 2 firms operating call centres and 2 of the 6 firms operating R&D facilities also sell direct to customers in that market. Firms with overseas sites were also asked to indicate how many sites it was that they had, with the following results.
Table 5.1.2 Number of Sites
| Overseas Sites | | |----------------|---| | None (considerers) | 7% | | One | 36% | | 2-5 | 35% | | 6-10 | 11% | | 11-20 | 7% | | 21-50 | 2% | | More than 50 | 2% | | Total | 100% |
Base: All respondents (Base, Don't know/Refused) – Overseas site (103, 1%)
Well over half of those with overseas sites indicated having more than one such operation, although for most the figure lies within the 2-5 banding.
The table below shows usage of the various different modes of internationalisation by age of firm.
Table 5.1.3 Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’) – By Age Of Firm
| Age (Years Trading) | Up to 5 | 6-10 | More than 10 | |---------------------|---------|------|--------------| | Selling | 96% | 98% | 98% | | Selling direct | 90% | 93% | 89% | | Selling through agents/distributors | 29% | 29% | 34% | | Contractual arrangements | 7% | 6% | 7% | | Licensing | 3% | 2% | 3% | | Franchising | 1% | 1% | 0% | | Other partnerships or JVs | 5% | 2% | 4% | | Overseas site | 12% | 13% | 10% | | Own site - production | 2% | 2% | 3% | | Own site - call centre | 0% | 0% | 0% | | Own site - sales | 8% | 9% | 5% | | Own site - R&D | 1% | 1% | 0% | | Importing | 48% | 48% | 55% | | Total | 100% | 100% | 100% |
Base: All respondents (Base, Don't know) – Up to 5 (283, 0%), 6-10 (286, 0%), More than 10 (331, 0%) Interestingly, the pattern of usage of the various different modes of internationalisation is actually very similar for younger (internationalising) firms as it is for older firms.
The table below shows this data by firm size (measured via number of employees).
Table 5.1.4 Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’) – By Size Of Firm
| Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |----------------------------|-----|-------|-------|---------|------| | Selling | 98% | 99% | 95% | 100% | 91% | | Selling direct | 91% | 90% | 91% | 100% | 72% | | Selling through agents/distributors | 29% | 35% | 24% | 42% | 40% | | Contractual arrangements | 6% | 5% | 7% | 26% | 15% | | Licensing | 3% | 2% | 2% | 8% | 13% | | Franchising | 0% | 0% | 1% | 3% | 0% | | Other partnerships or JVs | 2% | 4% | 6% | 8% | 10% | | Overseas site | 8% | 11% | 20% | 37% | 19% | | Own site - production | 2% | 2% | 1% | 8% | 9% | | Own site - call centre | 0% | 1% | 0% | 0% | 0% | | Own site - sales | 4% | 7% | 14% | 29% | 9% | | Own site - R&D | 1% | 0% | 0% | 0% | 0% | | Importing | 52% | 54% | 40% | 58% | 59% | | Total | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know) – 0-9 (502, 0%), 10-49 (300, 0%), 50-99 (45, 0%), 100-249 (18, 0%), 250+ (28, 0%)
There is some evidence to suggest that some modes of internationalisation are more popular with larger firms (of 50+ employees), including licensing, other partnerships & joint ventures, overseas production sites and overseas sales sites. The table below shows patterns of usage of the various different modes of internationalisation by experience (measured via the number of years firms have been involved in overseas business activity).
Table 5.1.5 Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’) – By Experience
| Experience (Number of Years) | Less than 2 years | 2-10 years | More than 10 years | |-----------------------------|-------------------|------------|--------------------| | Selling | 96% | 98% | 98% | | Selling direct | 87% | 91% | 91% | | Selling through agents/distributors | 27% | 27% | 40% | | Contractual arrangements | 6% | 7% | 6% | | Licensing | 2% | 3% | 3% | | Franchising | 0% | 1% | 0% | | Other partnerships or JVs | 5% | 4% | 3% | | Overseas site | 10% | 11% | 11% | | Own site - production | 1% | 3% | 3% | | Own site - call centre | 0% | 1% | 0% | | Own site - sales | 7% | 7% | 7% | | Own site - R&D | 1% | 0% | 1% | | Importing | 42% | 49% | 60% | | Total | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know) – Experience: Less than 2 years (182, 0%), 2-10 years (515, 0%), More than 10 years (199, 0%)
Whilst the pattern of usage of the various different modes of internationalisation does not appear to alter with the age of the firm, there is some evidence to suggest that those firms that have been involved in overseas business activity for more than 10 years are more likely to be involved in both selling through agents and/or distributors and importing (but not other contractual arrangements or establishing an overseas site). The table below shows patterns of usage of the various different modes of internationalisation by various measures of innovation and usage of IP protection. For the definitions of ‘innovative’ firms and IP active firms used in this analysis, see Chapter 6.7.
Table 5.1.6 Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’) – By Innovation & IP
| Mode | Innovative? | IP Active? | |-------------------------------|-------------|------------| | | Yes (Tighter Defn) | Yes | No | Yes | No | | Selling | 98% | 98% | 97% | 98% | 98% | | Selling direct | 90% | 89% | 92% | 91% | 90% | | Selling through agents/distributors | 41% | 37% | 17% | 40% | 28% | | Contractual arrangements | 9% | 8% | 3% | 12% | 4% | | Licensing | 5% | 4% | 1% | 4% | 2% | | Franchising | 1% | 0% | 0% | 1% | 0% | | Other partnerships or JVs | 4% | 4% | 2% | 7% | 2% | | Overseas site | 13% | 13% | 6% | 15% | 8% | | Own site - production | 3% | 3% | 2% | 5% | 1% | | Own site - call centre | 1% | 0% | 0% | 0% | 0% | | Own site - sales | 7% | 8% | 3% | 10% | 5% | | Own site - R&D | 0% | 1% | 0% | 0% | 1% | | Importing | 62% | 59% | 35% | 58% | 50% | | Total | 100% | 100% | 100%| 100%| 100%|
Base: All respondents (Base) – Innovation: Innovative (Alternative) (418), Innovative (659), Non-innovative (241) – IP Active: Yes (267), No (608)
There is some evidence to suggest that innovative and IP active firms are more likely to be involved in a number of modes of internationalisation beyond direct sales, including selling through agents/distributors, licensing and other partnerships/JVs and operating an overseas site. Innovative firms are also more likely to import. The table below shows patterns of usage of the various different modes of internationalisation by whether or not younger firms (aged up to five years) are ‘born global’ (i.e. have been conducting business overseas since the outset) or ‘young, technology intensive’ firms. For the definition of ‘young, technology intensive firms’ used in this analysis, see Chapter 6.7.
Table 5.1.7 Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’) – By Young Technology Intensive Firms/Born Globals
| Age (Years Trading) | Total | Born global | Young, Technology Intensive | More than 5 | |---------------------|-------|-------------|-----------------------------|-------------| | | Up to 5 | | | | | Selling | 96% | 98% | 97% | 98% | | Selling direct | 90% | 93% | 89% | 90% | | Selling through agents/distributors | 29% | 30% | 31% | 33% | | Contractual arrangements | 7% | 6% | 9% | 6% | | Licensing | 3% | 4% | 4% | 3% | | Franchising | 1% | 1% | 1% | 0% | | Other partnerships or JVs | 5% | 3% | 6% | 3% | | Overseas site | 12% | 13% | 13% | 11% | | Own site - production | 2% | 3% | 2% | 2% | | Own site - call centre | 0% | 0% | 0% | 0% | | Own site - sales | 8% | 9% | 10% | 6% | | Own site - R&D | 1% | 0% | 0% | 0% | | Importing | 48% | 60% | 55% | 53% | | Total | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), Up to 5/born global (152), Up to 5/innovative or IP active (210), More than 5 (617)
Both born global firms and young, technology intensive firms are very similar in respect of their usage of the various modes of internationalisation to both young firms overall and older firms. The table below shows patterns of usage of the various different modes of internationalisation by firms’ growth. For details of the definitions of growth used in this analysis, see Chapter 6.9.
Table 5.1.8 Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’) – By Growth
| Growth (ASBS Definition) | Growth (OECD Definition) | |--------------------------|--------------------------| | Sustained | Contained | New | No growth | High-growth | Gazelles | | Selling | 98% | 98% | 94% | 99% | 98% | 100% | | Selling direct | 93% | 85% | 88% | 92% | 92% | 98% | | Selling through agents/distributors | 37% | 36% | 28% | 30% | 29% | 33% | | Contractual arrangements | 11% | 7% | 6% | 5% | 13% | 11% | | Licensing | 5% | 1% | 4% | 3% | 4% | 7% | | Franchising | 0% | 0% | 0% | 1% | 1% | 2% | | Other partnerships or JVs | 6% | 6% | 4% | 2% | 9% | 4% | | Overseas site | 15% | 11% | 18% | 8% | 17% | 13% | | Own site - production | 1% | 4% | 7% | 1% | 2% | 2% | | Own site - call centre | 0% | 0% | 1% | 0% | 1% | 0% | | Own site - sales | 13% | 6% | 7% | 5% | 14% | 11% | | Own site - R&D | 0% | 0% | 1% | 1% | 0% | 0% | | Importing | 58% | 59% | 46% | 51% | 54% | 63% | | Total | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Growth (ASBS): Sustained (148), Contained (148), New (165), No growth (439) – Growth (OECD): High-growth (143), Gazelles (46)
There is some evidence to suggest that those firms exhibiting higher growth are also more likely to be involved in some of the modes of internationalisation beyond direct sales, and particularly contractual arrangements or establishing an overseas site. The table below shows patterns of usage of the various different modes of internationalisation by industry sector. This analysis is shown at the summary level (production versus services) as well as at 1-digit SIC level for individual sectors within which at least 30 interviews were conducted.
Table 5.1.9 Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’) – By Industry Sector
| Sector (Summary) | Sector (Detailed) | |------------------|-------------------| | | Product | Services | D – Manufacturing | G – Retail & Wholesale | I – Transport, Storage & Comm | K – Real Estate, Renting & Bus Act. | | Selling | 97% | 98% | 97% | 100% | 95% | 99% | | Selling direct | 88% | 92% | 88% | 93% | 84% | 93% | | Selling through agents/distributors | 39% | 26% | 39% | 2% | 33% | 24% | | Contractual arrangements | 5% | 8% | 5% | 3% | 7% | 9% | | Licensing | 3% | 3% | 3% | 0% | 5% | 4% | | Franchising | 0% | 0% | 0% | 0% | 0% | 0% | | Other partnerships or JVs | 2% | 5% | 2% | 2% | 2% | 5% | | Overseas site | 12% | 10% | 11% | 7% | 11% | 12% | | Own site - production | 5% | 0% | 5% | 0% | 0% | 0% | | Own site - call centre | 0% | 0% | 0% | 0% | 0% | 0% | | Own site - sales | 6% | 7% | 6% | 5% | 9% | 9% | | Own site - R&D | 1% | 0% | 1% | 0% | 0% | 1% | | Importing | 64% | 43% | 64% | 65% | 37% | 30% | | Total | 100 | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Production (377), Services (505) – D - Manufacturing (372), G – Retail, Wholesale & Repair of Motor Vehicles (151), I – Transport, Storage & Communication (33), K – Real Estate, Renting & Business Activities (268)
Whilst the production and service industries appear to be very similar in terms of usage by internationalising firms of contractual arrangements and the establishment of overseas sites, firms in service industries are much less likely to be importing. However, the picture does vary across individual service industries, with firms in the retail and wholesale sector as likely as firms in the production sector to import. 5.2 Usage - Number
The chart below provides an analysis of the number of modes firms have been involved in (in the last five years, or considering for ‘considerers’), out of the nine modes captured.
Chart 5.2.1 Number Of Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’)
The majority are involved in (or considering) just one of these modes (with this mode being selling direct for 88% of this group). Whilst more than 1 in 5 are involved in (or considering) two modes, only a small minority are involved in three or more.
However, this picture varies considerably across modes. In particular those involved in some form of ‘contractual arrangement’ or with their own overseas site are very likely to be involved in at least two different forms of internationalisation (and in many cases three or more). Please note the very small base sizes for some of the rarer modes of internationalisation when interpreting these results. The chart below shows the number of modes firms are involved in when the various forms of internationalisation are summarised into the three groups: ‘selling’, ‘contractual arrangements’ and ‘overseas sites’.
Chart 5.2.2 Number Of Modes Of Internationalisation Used In Last 5 Years (Summary) (Or Considering In Next Year For ‘Considerers’)
Again, the majority are involved in (or considering) just one of these summary modes (with this mode being ‘selling’ for the majority). Whilst around 1 in 8 are involved in (or considering) two of these summary modes, only a very small minority are involved in all three.
However, this picture varies considerably across modes. In particular those involved in either ‘contractual arrangements’ or having an ‘overseas site’ are generally involved either two or all three of these summary modes. 6. Profile
6.1 Age of Business
The chart below shows the profile of firms in terms of their age. This analysis provides data on the overall profile of firms, but also the profiles of all firms involved in each of the internationalisation modes(^6) (or considering in the case of ‘considerers’).
Chart 6.1 When Business Established
As detailed earlier, the overall sample frame for this study was stratified by age, with a roughly similar number of interviews conducted with firms aged up to 5 years, firms aged 5-10 and firms more than 10 years old. The data has then been weighted to the known profile of internationalising firms (based on data provided by BERR and taken from the 2006 Annual Small Business Survey), and the overall profile of firms reflects this.
Interestingly, the age profile of users of the various modes of internationalisation is relatively similar (taking into account the small base sizes for some modes).
(^6) And not just those selected to focus on each mode in the main body of the questionnaire. The table below shows this age data by firm size (measured via number of employees).
Table 6.1 When Business Established – By Size Of Firm
| Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |----------------------------|-----|-------|-------|---------|------| | Within the last 2 years | 5% | 2% | 2% | 3% | 0% | | 2-5 years ago | 20% | 11% | 12% | 0% | 5% | | 5-10 years ago | 21% | 18% | 14% | 19% | 8% | | 10-20 years ago | 31% | 34% | 27% | 16% | 18% | | More than 20 years ago | 22% | 34% | 44% | 62% | 70% | | Total | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don't know) – Size: 0-9 (502, 0%), 10-49 (300, 0%), 50-99 (45, 0%), 100-249 (18, 0%), 250+ (28, 0%)
As expected, this analysis shows that larger firms tend to be older than their younger counterparts; although it should be noted that a significant proportion of the smallest internationalising firms (with less than 10 employees) have been established for some time (31% between 10 and 20 years and 22% over 20 years). 6.2 Size of Business (Employees)
The chart below shows the size profile of firms, measured via their number of employees.
Chart 6.2 Number of Employees
Around half of internationalising firms have less than 10 employees and by far the majority have less than 50 employees. This reinforces the importance of consideration of the needs of smaller firm when formulating policy in the area of trade support. The table below shows firm size analysed by age.
Table 6.2 Number of Employees – By Age Of Firm
| Age (Years Trading) | Up to 5 | 6-10 | More than 10 | |---------------------|---------|------|--------------| | Less than 10 | 69% | 57% | 44% | | 10-49 | 25% | 34% | 40% | | 50-99 | 4% | 4% | 6% | | 100-249 | 0% | 2% | 3% | | 250 or more | 1% | 2% | 6% | | Total | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know/refused, Not yet trading) – Age: Up to 5 (283, 0%, 0%), 6-10 (286, 1%, 0%), More than 10 (331, 1%, 0%)
Again, the expected relationship between age and size of firm is highlighted. 6.3 Size of Business (Turnover)
The chart below shows the size profile of firms as measured by their annual turnover.
Chart 6.3 Annual Turnover
Over half of internationalising firms have fairly modest turnovers of up to £2million, with firms with turnovers of over £10million very much in the minority. The table below shows firm size measured via turnover analysed by both size (measured by number of employees) and age.
Table 6.3 Annual Turnover - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | > 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Up to £500,000 | 41% | 32% | 22% | 49% | 7% | 0% | 0% | 0% | | £500,000-£2million | 23% | 31% | 24% | 24% | 34% | 7% | 6% | 4% | | £2million-£10million| 13% | 12% | 20% | 6% | 29% | 44% | 34% | 9% | | £10million-£50million| 1% | 2% | 4% | 0% | 4% | 18% | 23% | 10% | | More than £50million| 1% | 2% | 4% | 0% | 1% | 6% | 18% | 46% | | Total | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know/refused, Not yet trading) – Age: Up to 5 (283, 20%, 0%), 6-10 (286, 20%, 0%), More than 10 (331, 26%, 0%) - Size: 0-9 (502, 22%, 0%), 10-49 (300, 24%, 0%), 50-99 (45, 25%, 0%), 100-249 (18, 18%, 0%), 250+ (28, 31%, 0%)
There is a strong relationship between size measured by turnover and size measured by number of employees. The expected relationship between turnover and age is also evident, with older firms more likely to have the larger turnovers (of over £2million). However, it is certainly not the case that all older firms have larger turnovers: 22% of firms established more than 10 years ago have turnovers of £500,000 or less and around half have turnovers of less than £2million. 6.4 Industry Sector
The chart below shows the profile of firms in terms of their industry sector. The data on sector is collected at the level of 1-digit SIC code, but for the purposes of this analysis has been summarised into primary industries, production, construction and services. A more detailed breakdown is shown overleaf.
Chart 6.4 Industry Sector
Overall, roughly similar proportions of firms are in production/construction and services. There is some evidence to suggest that firms opting to sell via agents or distributors are more likely to be in production than internationalising firms as a whole. The table below provides a more detailed breakdown of sector.
### Table 6.4.1 Industry Sector (Detailed)
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |-----------------------------|-------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | A - Agriculture, hunting & forestry | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | B - Fishing | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | C - Mining & quarrying | 1% | 1% | 1% | 0% | 0% | 0% | 0% | 0% | 3% | 0% | | D - Manufacturing | 45% | 44% | 56% | 45% | 60% | 30%| 92% | 0% | 39% | 61% | | F - Construction | 2% | 2% | 1% | 0% | 0% | 2% | 0% | 0% | 2% | 0% | | G - Retail, wholesale & repair of motor vehicles | 16% | 16% | 12% | 2% | 0% | 7% | 0% | 0% | 11% | 0% | | I - Transport, storage and communication | 4% | 3% | 4% | 6% | 0% | 2% | 0% | 0% | 5% | 0% | | J - Financial intermediation (Finance) | 2% | 2% | 3% | 5% | 0% | 2% | 3% | 26% | 2% | 0% | | K - Real estate, renting & business activities | 26% | 27% | 20% | 37% | 20% | 37%| 3% | 0% | 37% | 39% | | L - Public administration and defence | 1% | 1% | 1% | 2% | 20% | 7% | 0% | 74% | 0% | 0% | | M - Education | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | N - Health and social work | 2% | 1% | 2% | 2% | 0% | 10%| 3% | 0% | 1% | 0% | | O - Other community, social & pers service act | 1% | 1% | 0% | 0% | 0% | 2% | 0% | 0% | 0% | 0% | | Total | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100%|
Base: All respondents (Base, Don’t know/Refused) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6)
As seen above, 26% of all internationalising firms fall into the ‘real estate, renting and business activities’ sector but this proportion drops to 20% amongst those using agents or distributors, suggesting that firms in this sector are comparatively less likely to adopt this internationalisation mode. A similar picture is also seen in the ‘retail, wholesale and repair of motor vehicles’. The table below shows both the summarised and detailed industry sector data analysed by both size (measured by number of employees) and age.
Table 6.4.2 Industry Sector - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | > 10 | 0-9 | 10 - 49 | 50 - 99 | 100 - 249 | 250+ | | Primary | 0% | 1% | 0% | 0% | 1% | 1% | 3% | 0% | | Production | 36% | 36% | 53% | 41% | 50% | 54% | 55% | 63% | | Construction | 1% | 2% | 2% | 1% | 4% | 0% | 0% | 0% | | Services | 63% | 62% | 45% | 58% | 46% | 45% | 42% | 37% | | A - Agriculture, hunting & forestry | 0% | 1% | 0% | 0% | 0% | 1% | 3% | 0% | | B - Fishing | 0% | 0% | 0% | 0% | 1% | 0% | 0% | 0% | | C - Mining & quarrying | 0% | 1% | 1% | 1% | 0% | 0% | 0% | 4% | | D - Manufacturing | 36% | 35% | 52% | 40% | 50% | 54% | 55% | 59% | | F - Construction | 1% | 2% | 2% | 1% | 4% | 0% | 0% | 0% | | G - Retail, wholesale & repair of motor vehicles | 22% | 15% | 14% | 17% | 14% | 22% | 6% | 9% | | I - Transport, storage and communication | 4% | 3% | 3% | 2% | 3% | 7% | 16% | 16% | | J - Financial intermediation (Finance) | 3% | 2% | 2% | 1% | 3% | 0% | 11% | 0% | | K - Real estate, renting & business activities | 32% | 37% | 21% | 34% | 20% | 15% | 11% | 10% | | L - Public administration and defence | 0% | 1% | 1% | 0% | 2% | 0% | 0% | 0% | | M - Education | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | N - Health and social work | 2% | 2% | 2% | 2% | 2% | 1% | 0% | 2% | | O - Other community, social & pers service act | 1% | 1% | 2% | 1% | 2% | 0% | 0% | 0% | | Total | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
There is some evidence to suggest that a larger proportion of both older and larger internationalising firms are in the production sector than is the case for younger and smaller firms. 6.5 Ownership
The table below provides an analysis of the ownership of firms in terms of whether they are domestically or foreign owned.
Table 6.5 Ownership
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | Own Site | |---------------|-------|--------|------------------|-----------|-------------|----|----------| | | | | | | | | Production | Call centre | Sales | R&D | | UK-owned | 100% | 89% | 87% | 89% | 100% | 89%| 66% | 100% | 74% | 100%| | Foreign-owned | 9% | 9% | 9% | 9% | 0% | 4% | 29% | 0% | 21% | 0% | | Joint UK and foreign-owned | 2% | 2% | 3% | 2% | 0% | 7% | 6% | 0% | 5% | 0% | | Total | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100%|
Base: All respondents (Base) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6)
Whilst the vast majority of the firms interviewed are UK-owned, around 1 in 10 are in foreign ownership (either wholly or partly). There is some evidence to suggest that the incidence of foreign ownership is higher amongst those operating their own overseas site in comparison with those internationalising via other means. 6.6 Experience of Doing Business Overseas
6.6.1 Overall Assessment of Experience
The chart below shows firms’ own assessment of their overseas business experience. Firms were asked to select from the four options detailed below.
Chart 6.6.1 Experience – Overall Assessment
Very few firms feel that they are 'not at all experienced' across all modes. Overall, around a quarter of firms feel that they are 'very experienced' in overseas markets. Whilst the base sizes are too small for a robust analysis, there appears to be some evidence to suggest that those firms operating their own overseas sites are more likely to feel that they are 'very experienced' than those operating via other modes. The table below shows firms' overall assessment of their overseas business experience analysed by both size (measured by number of employees) and age.
Table 6.6.1 Experience – Overall Assessment - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|-----|-------|-------|---------|------| | Up to 5 | 18% | 22% | 25% | 36% | 47% | 54% | | 6-10 | 24% | 41% | 48% | 44% | 32% | 25% | | > 10 | 29% | 25% | 22% | 20% | 21% | 19% | | Total | 100% | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don't know, Not involved in targeted overseas business activities in last 5 years) – Age: Up to 5 (283, 0%, 13%), 6-10 (286, 0%, 4%), More than 10 (331, 0%, 2%) – Size: 0-9 (502, 0%, 6%), 10-49 (300, 0%, 4%), 50-99 (45, 0%, 1%), 100-249 (18, 0%, 0%), 250+ (28, 0%, 2%)
There is the expected link between age and size of firm and firms’ overall assessment of their experience, with older and larger firms more likely to feel that they have higher levels of experience. 6.6.2 Number Of Years Doing Business Overseas
The chart below shows the experience profile of firms as measured by the length of time they have been involved in overseas business activity.
Chart 6.6.2 Experience – Number Of Years Doing Business Overseas
Interestingly, the experience profile of firms as measured by the length of time they have been involved in overseas business activity is reasonably similar across modes (given the base sizes involved), although there is some evidence to suggest that firms selling through agents or distributors have a slightly more experienced profile than those opting for other modes of internationalisation. The table below shows the length of time firms have been involved in overseas business activity analysed by both size (measured by number of employees) and age.
Table 6.6.2.1 Experience – Number Of Years Doing Business Overseas - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Less than 2 years | 45% | 13% | 5% | 18% | 12% | | 2-5 years | 55% | 30% | 12% | 25% | 23% | | 6-10 years | 0% | 56% | 23% | 26% | 28% | | 11-20 years | 0% | 0% | 32% | 19% | 22% | | More than 20 years | 0% | 0% | 28% | 13% | 18% | | Total | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know/Refused) – Age: Up to 5 (283, 0%), 6-10 (286, 1%), More than 10 (331, 0%) – Size: 0-9 (502, 0%), 10-49 (300, 0%), 50-99 (45, 0%), 100-249 (18, 0%), 250+ (28, 0%)
As expected, there is a very strong link between the age of the firm and the length of time they have been doing business overseas, suggesting that when firms do internationalise they often do so reasonably early on. Similarly, there is a link between size and the length of time firms have been involved in overseas business activity, with smaller firms tending to have been involved in overseas business activity for a shorter period than the larger firms.
The table below shows the proportion of firms that are classified as being ‘born global’. In this context, ‘born global’ has been defined as any firms that have been established up to 5 years and have been doing business overseas since they were established.
Table 6.6.2.2 Experience – ‘Born Global’ Firms
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |------|-------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | ‘Born Global’ | 10% | 11% | 9% | 14% | 40% | 9% | 14% | 0% | 14% | 0% | | More than 5 years old | 81% | 81% | 83% | 79% | 40% | 76% | 83% | 100% | 77% | 61% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6)
Around 1 in 10 internationalising firms have been established for 5 years or less and have been doing business overseas from the outset, and are therefore classified as being ‘born global’. This equates to just over half of all firms established within the last 5 years. 6.6.3 Number Of Markets
The chart below shows the number of overseas markets firms are doing business in.
Chart 6.6.3 Experience – Number of Markets Done Business in During Last 5 Years
Just over half of internationalising firms have done business in more than five markets (over the last five years), and approaching a third have done business in more than 10. Only a minority of firms have done business in just one overseas market.
The number of markets firms have done business in tends to be higher for firms involved in modes beyond simply selling direct. The table below shows the number of markets firms have been doing business in over the last five years analysed by both size (measured by number of employees) and age.
Table 6.6.3 Experience – Number of Markets Done Business in During Last 5 Years - By Size And Age
| Age (Years Trading) | Up to 5 | 6-10 | > 10 | |---------------------|---------|------|------| | None | 13% | 4% | 2% | | One | 12% | 12% | 8% | | 2-5 | 36% | 30% | 28% | | 6-10 | 20% | 25% | 27% | | More than 10 | 17% | 28% | 35% | | Total | 100% | 100% | 100% |
| Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |----------------------------|-----|-------|-------|---------|------| | None | 6% | 4% | 1% | 0% | 2% | | One | 13% | 7% | 8% | 3% | 4% | | 2-5 | 35% | 27% | 24% | 8% | 6% | | 6-10 | 26% | 25% | 21% | 21% | 22% | | More than 10 | 19% | 37% | 46% | 68% | 66% | | Total | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know) – Age: Up to 5 (283, 1%), 6-10 (286, 0%), More than 10 (331, 0%) – Size: 0-9 (502, 0%), 10-49 (300, 1%), 50-99 (45, 0%), 100-249 (18, 0%), 250+ (28, 0%)
The number of markets firms have done business in over the last five years tends to increase with increasing age and size. 6.6.4 Proportion Of Turnover Accounted For By Overseas Sales
The chart below shows firms’ experience as measured by the proportion of their turnover that is accounted for by overseas sales.
Chart 6.6.4 Experience – Proportion Of Turnover Accounted For By Overseas Sales
Whilst for a significant proportion of firms (around two-fifths) overseas business makes up 10% or less of their overall turnover, for around a quarter overseas business accounts for over half of their turnover. This increases to a third of those operating their own overseas sales sites. The table below shows the proportion of firms' turnover accounted for by overseas business analysed by both size (measured by number of employees) and age.
Table 6.6.4 Experience – Proportion Of Turnover Accounted For By Overseas Sales - By Size And Age
| Age (Years Trading) | Up to 5 | 6-10 | > 10 | |---------------------|---------|------|------| | Zero | 14% | 4% | 2% | | Less than 10% | 37% | 37% | 31% | | 11%-25% | 12% | 13% | 16% | | 26%-50% | 14% | 15% | 15% | | 51%-75% | 5% | 14% | 10% | | More than 75% | 11% | 11% | 17% | | Total | 100% | 100% | 100% |
| Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |----------------------------|-----|-------|-------|---------|------| | Zero | 7% | 4% | 2% | 0% | 2% | | Less than 10% | 40% | 28% | 18% | 21% | 28% | | 11%-25% | 11% | 21% | 16% | 3% | 4% | | 26%-50% | 15% | 15% | 17% | 34% | 4% | | 51%-75% | 8% | 10% | 13% | 13% | 18% | | More than 75% | 15% | 13% | 18% | 11% | 25% | | Total | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know/refused) – Age: Up to 5 (283, 6%), 6-10 (286, 7%), More than 10 (331, 8%) – Size: 0-9 (502, 4%), 10-49 (300, 9%), 50-99 (45, 15%), 100-249 (18, 18%), 250+ (28, 19%)
Not only do younger and smaller firms tend to have lower turnovers, but lower proportions of their overall turnovers tend to be accounted for by overseas business than older and larger firms. 6.6.5 Overall Assessment of Experience – Selected Mode
The chart below shows firms’ own assessment of their overseas business experience in relation to one specific mode (further details of the selection of this mode is provided in Chapter 8).
Chart 6.6.5 Experience – Overall Assessment – Selected Mode
Very few firms feel that they are ‘not at all experienced’ across all modes. Overall, around a quarter of firms feel that they are ‘very experienced’ in this particular mode. Whilst the base sizes are too small for a robust analysis across all modes, there appears to be some evidence to suggest that those firms selling directly are less likely to feel that they are ‘very experienced’ than those selling through agents or distributors or via their own overseas site. The table below shows firms’ assessment of their experience of this one specific mode analysed by both size (measured by number of employees) and age.
Table 6.6.5 Experience – Overall Assessment - Selected Mode - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Very experienced | 17% | 24% | 30% | 20% | 28% | 36% | 55% | 54% | | Quite experienced | 38% | 43% | 42% | 41% | 45% | 45% | 24% | 23% | | Not very experienced| 28% | 25% | 21% | 26% | 21% | 18% | 21% | 21% | | Not at all experienced| 5% | 3% | 3% | 5% | 2% | 0% | 0% | 0% | | Total | 100%| 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know/refused, Not yet started) – Age: Up to 5 (283, 0%, 13%), 6-10 (286, 0%, 4%), More than 10 (331, 1%, 2%) – Size: 0-9 (502, 1%, 6%), 10-49 (300, 1%, 4%), 50-99 (45, 0%, 1%), 100-249 (18, 0%, 0%), 250+ (28, 0%, 2%)
There is the expected link between age and size of firm and firms’ assessment of their experience, with older and larger firms more likely to feel that they have higher levels of experience. 6.6.6 Number Of Years Doing Business Overseas – Selected Mode
The chart below shows the experience profile of firms as measured by the length of time they have been involved in this overseas business activity.
Chart 6.6.6 Experience – Number Of Years Doing Business Overseas – Selected Mode
Interestingly, the experience profile of firms as measured by the length of time they have been involved in overseas business activity is reasonably similar across modes (given the base sizes involved). The table below shows the length of time firms have been involved in this particular overseas business activity analysed by both size (measured by number of employees) and age.
Table 6.6.6 Experience – Number Of Years Doing Business Overseas – Selected Mode - By Size And Age
| Age (Years Trading) | Up to 5 | 6-10 | > 10 | |---------------------|---------|------|------| | Within the last 2 years | 60% | 32% | 27% | | 2-5 years | 39% | 33% | 24% | | 6-10 years | 0% | 33% | 16% | | 10-20 years | 0% | 0% | 19% | | More than 20 years | 0% | 0% | 13% | | Total | 100% | 100% | 100% |
| Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------------|-----|-------|-------|---------|------| | Within the last 2 years | 40% | 36% | 29% | 26% | 29% | | 2-5 years | 30% | 29% | 42% | 42% | 11% | | 6-10 years | 17% | 13% | 13% | 17% | 18% | | 10-20 years | 7% | 14% | 4% | 0% | 14% | | More than 20 years | 4% | 7% | 11% | 8% | 27% | | Total | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know/refused) – Age: Up to 5 (283, 1%), 6-10 (286, 3%), More than 10 (331, 1%) – Size: 0-9 (502, 2%), 10-49 (300, 1%), 50-99 (45, 1%), 100-249 (18, 8%), 250+ (28, 0%)
As expected, there is a very strong link between the age of the firm and the length of time they have been doing business overseas via the mode in question. Similarly, there is a link between size and the length of time firms have been involved in this overseas business activity, with smaller firms tending to have been involved in this overseas business activity for a shorter period than the larger firms. 6.6.7 Number Of Markets – Selected Mode
The chart below shows the number of overseas markets firms are doing business in via the selected mode (or are considering doing business in for ‘considerers’).
Chart 6.6.7 Experience – Number of Overseas Countries Have Adopted/Are Considering Selected Approach In – Selected Mode
Approaching half of internationalising firms have done business in more than five markets via the selected mode, with this figure of around half holding for both selling direct and selling through agents or distributors. There is some evidence to suggest that in the case of overseas sites, firms involved in this mode of internationalisation tend to do so in fewer markets, but the small base sizes must be borne in mind when interpreting this result. The table below shows the number of markets firms have been doing business in over via the selected mode analysed by both size (measured by number of employees) and age.
Table 6.6.7 Experience – Number of Overseas Countries Have Adopted/Are Considering Selected Approach In – Selected Mode - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | None | 0% | 0% | 0% | 0% | 0% | | One | 20% | 17% | 11% | 18% | 12% | | 2-5 | 45% | 34% | 34% | 42% | 33% | | 6-10 | 18% | 23% | 24% | 22% | 25% | | More than 10 | 17% | 25% | 30% | 18% | 30% | | Total | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know/refused) – Age: Up to 5 (283, 1%), 6-10 (286, 0%), More than 10 (331, 1%) – Size: 0-9 (502, 1%), 10-49 (300, 1%), 50-99 (45, 0%), 100-249 (18, 0%), 250+ (28, 0%)
The number of markets firms have employed the given mode in tends to increase with increasing age and size. 6.7 Innovation
6.7.1 ‘Innovative’ Firms
Information on the engagement of employees in R&D and new product (or service) development activity, externally commissioned product (or service) development and sales of new products and services has been used to classify firms as either ‘innovative’ or ‘non-innovative’. The details of this classification are provided below, which replicates exactly the PIMS definition of innovation.
**‘Innovative’ Firms**
Firms have been classified as ‘innovative’ if they...
- Have more than one employee engaged either wholly or partly in R&D activity (H4a) and have more than one employee engaged either wholly or partly in new product or service development (H5)
- Or, have employed someone external to the business to conduct new product or service development activity in the last year (H6)
- Or, derive some of their turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years
The table below shows the proportions of firms classified as ‘innovative’ via this definition.
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |---------------|-------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | Innovative | 72% | 72% | 85% | 91% | 80% | 85%| 79% | 100% | 85% | 74% | | Total | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100%|
Base: All respondents (Base) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6)
Overall, 72% of internationalising firms are ‘innovative’. There is some evidence to suggest that the incidence of ‘innovative’ firms is higher amongst those involved in modes beyond simple direct selling (where base sizes allow for comparisons to be made). The table below shows levels of innovative firms analysed by both size (measured by number of employees) and age.
Table 6.7.1.2 'Innovative' Firms - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 0-9 | | 6-10 | 10-49 | | > 10 | 50-99 | | | 100-249 | | | 250+ |
| Innovative | 69% | 80% | 70% | | | 68% | 77% | 64% | | | 92% | 88% | 100% | | Total | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
There is no consistent pattern by either age or size of firm.
A further, tighter definition of innovation has also been constructed that also takes account of whether or not employees engaged in R&D are engaged in what the respondent would describe as ‘the development of scientific or technical knowledge that is not commonly available’ and whether or not any new products or services they have introduced are ‘novel’ (i.e. new to sector or new to world as opposed to just new to their business). The details of this classification are provided below, which again replicates exactly the tighter PIMS definition of innovation.
‘Innovative’ Firms - Alternative (Tighter) Definition
Firms have been classified as ‘innovative’ under the alternative (tighter) definition if they...
- Have more than one employee engaged either wholly or partly in R&D activity (H4a) and have more than one employee engaged either wholly or partly in new product or service development (H5) and any R&D employees are involved in the ‘development of scientific or technical knowledge that is not commonly available’ (H4b)
- Or, have employed someone external to the business to conduct new product or service development activity in the last year (H6)
- Or, derive at least some of their turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years and these products & services are completely new and have not been introduced by anyone else previously (H7b) The table below shows the proportions of firms classified as ‘innovative’ via this tighter definition.
Table 6.7.1.3 'Innovative' Firms – Alternative (Tighter) Definition
| Mode | Own Site | Total | |-----------------------|----------|-------| | | Prod. | Call centre | Sales | R&D | | Innovative (tighter definition) | 47% | 60% | 72% | 80% | 57% | 66% | 100% | 50% | 38% | | Total | 100% | 100% | 100% | 100%| 100%| 100%| 100% | 100%| 100%|
Base: All respondents (Base) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6)
Overall, just under half of these firms are classified as innovative via this alternative definition. There is again some evidence to suggest that the incidence of innovative firms is higher amongst those involved in selling via agents or distributors and those involved in contractual arrangements.
The table below shows levels of innovative firms as determined by this alternative definition analysed by both size (measured by number of employees) and age.
Table 6.7.1.4 'Innovative' Firms – Alternative (Tighter) Definition - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | 6-10 | 45% | 51% | 32% | 68% | 46% | | > 10 | 41% | 51% | 47% | | | | Total | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
There is no consistent pattern evident by either age or size of firm. 6.7.2 IP Active Firms
Firms were asked to indicate whether or not they hold any patents or trademarks, either in the UK or overseas, for any of their products or services. This data has then been used to create a measure of ‘IP active’ firms, as detailed in below.
‘IP Active’ Firms
Firms have been classified as ‘IP active’ if they...
- Currently hold any patents of trademarks, either in the UK or overseas (H8b)
The table below shows the proportions of firms classified as IP active via this definition.
Table 6.7.2.1 IP Active Firms
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |---------------|-------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | IP active | 31% | 31% | 39% | 46% | 60% | 64%| 63% | 26% | 45% | 13% | | Total | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100%|
Base: All respondents (Base) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6)
Just under a third of firms are classified as IP active under this definition, with this proportion higher amongst those involved in modes beyond simply selling direct.
The table below shows the incidence of IP active firms by both size (measured by number of employees) and age.
Table 6.7.2.2 IP Active Firms - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | 6-10 | | | | | | | > 10 | | | | | | | IP active | 27% | 29% | 33% | | | | Total | 100%| 100% | 100% | | |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
There is evidence to suggest that the incidence of IP active firms increases with both age and size of firm. 6.7.3 Young, Technology Intensive Firms
Firms aged up to 5 years old classified as either ‘innovative’ or IP active under the above definitions have been classified as ‘young, technology intensive firms’.
The table below shows the proportions of firms classified as ‘young, technology intensive’ via this definition.
Table 6.7.3.1 Young, Technology Intensive Firms
| Mode | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |-----------------------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | Young, technology intensive | 14% | 14% | 14% | 21% | 60%| 22% | 14% | 0% | 20% | 13% | | More than 5 years old | 81% | 81% | 83% | 79% | 40%| 76% | 83% | 100% | 77% | 61% | | Total | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100%| 100%|
Base: All respondents (Base) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6)
One in 7 internationalising firms are also ‘young, technology intensive’.
The table below shows levels of young, technology intensive firms analysed by both size (measured by number of employees) and age.
Table 6.7.3.2 Young, Technology Intensive Firms - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | > 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Young, technology intensive | 74% | 0% | 0% | 19% | 10% | 7% | 3% | 3% | | More than 5 years old | 0% | 100% | 100% | 74% | 87% | 85% | 97% | 95% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
The incidence of young, technology intensive firms decreases with increasing firm size, although the extent to which this is related to the increased likelihood of firms being more than 5 years old as they get larger should be taken into account when interpreting this result. 6.8 Growth
6.8.1 Past Growth
Firms that have been in existence for at least three years were asked whether, compared to this time three years ago, the number of people they employed now was higher, lower or about the same. Those indicating that their employee numbers had grown were also asked to indicate the number of people that were employed by their firm three years ago(^7). This data has been combined to create a single measure of past growth, as follows.
| Past Growth (Employees) | |-------------------------| | Firms have been classified as having ‘decreased’ if… | | • Their employee numbers have decreased over the last 3 years (H2) | | Firms have been classified as having ‘stayed the same’ if… | | • Their employee numbers are the same as they were 3 years ago (H2) | | Firms have been classified as having ‘grown slightly’ if… | | • Their employee numbers have grown by less than 30% over the last 3 years (H2) | | Firms have been classified as having ‘grown moderately’ if… | | • Their employee numbers have grown by between 30-75% over the last 3 years (H2) | | Firms have been classified as having ‘grown substantially’ if… | | • Their employee numbers have grown by more than 75% over the last 3 years (H2) |
(^7) With those unable to provide an exact figure asked instead to indicate whether their employee numbers had increased by more than 75%, between 30-75% or less than 30%. The table below shows firms’ past growth profile, as determined by growth in employee numbers.
Table 6.8.1.1 Past Growth (Employees)
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | |-----------------------|-------|--------|------------------|-----------|-------------|----| | Decreased | 16% | 15% | 15% | 13% | 40% | 2% | | Stayed the same | 43% | 44% | 41% | 50% | 20% | 35%| | Grown slightly | 5% | 5% | 9% | 0% | 0% | 7% | | Grown moderately | 12% | 12% | 14% | 6% | 0% | 14%| | Grown substantially | 13% | 13% | 11% | 16% | 20% | 32%| | Total | 100% | 100% | 100% | 100% | 100% | 100%|
Base: All respondents (Base, Established in last 3 years, Don’t know (past growth), Don’t know (future growth)) – Selling direct (815, 9%, 2%, 5%), Agents/distributors (275, 8%, 3%, 4%), Licensing (28, 9%, 6%, 2%), Franchising (5, 20%, 0%, 20%), JVs/partnerships (32, 9%, 0%, 4%), Production site (20, 11%, 8%, 15%), Call centre (2, 0%, 0%, 0%), Sales site (67, 15%, 6%, 2%), R&D facility (6, 26%, 0%, 0%)
Well over half of firms have either stayed the same size or even decreased in size when growth is measured by changes in employee numbers (with a further 9% less than 3 years old).
There is some evidence to suggest that levels of growth are highest for those with overseas sales sites, and specifically levels of ‘substantial’ growth.
Firms were also asked to indicated whether, compared to this time three years ago, their turnover was now higher, lower or about the same (with those indicating that it was higher this time only asked to indicate whether it is ‘much’ or ‘a bit’ higher).
Table 6.8.1.2 Past Growth (Turnover)
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | |-----------------------|-------|--------|------------------|-----------|-------------|----| | Lower | 12% | 12% | 13% | 5% | 40% | 11%| | About the same | 18% | 18% | 21% | 30% | 20% | 19%| | A bit higher | 29% | 30% | 28% | 35% | 20% | 32%| | Much higher | 26% | 26% | 25% | 15% | 0% | 29%| | Total | 100% | 100% | 100% | 100% | 100% | 100%|
Base: All respondents (Base, Established in last 3 years, Don’t know) – Selling direct (815, 9%, 5%), Agents/distributors (275, 8%, 5%), Licensing (26, 9%, 6%), Franchising (5, 20%, 0%), JVs/partnerships (32, 9%, 0%), Production site (20, 11%, 18%), Call centre (2, 0%, 0%), Sales site (67, 15%, 3%), R&D facility (6, 26%, 0%)
In comparison with number of employees, growth measured by turnover shows fewer firms indicating that they have either stayed same size or decreased (less than a third). However, growth measured by turnover again indicates higher levels of growth for those operating their own overseas sales sites, and specifically those indicating that their turnover is now ‘much’ higher.
The table below shows past growth in terms of both employees and turnover analysed by both size (measured by number of employees) and age.
Table 6.8.1.3 Past Growth (Employees & Turnover) - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | 6-10 | | | | | | | > 10 | | | | | | | Employees: | | | | | | | Decreased | 8% | 15% | 18% | | | | Stayed the same | 22% | 39% | 50% | | | | Grown slightly | 1% | 4% | 7% | | | | Grown moderately | 6% | 15% | 13% | | | | Grown substantially | 16% | 25% | 8% | | | | Turnover: | | | | | | | Lower | 6% | 10% | 15% | | | | About the same | 7% | 18% | 22% | | | | A bit higher | 14% | 29% | 34% | | | | Much higher | 24% | 38% | 23% | | | | Total | 100%| 100% | 100% | | |
Base: All respondents (Base, Established in last 3 years, Don’t know (employees), Don’t know (turnover)) – Age: Up to 5 (283, 46%, 0%, 2%), 6-10 (286, 0%, 2%, 4%), More than 10 (331, 0%, 3%, 7%) – Size: 0-9 (502, 12%, 1%, 3%), 10-49 (300, 5%, 2%, 6%), 50-99 (45, 8%, 0%, 8%), 100-249 (18, 3%, 8%, 11%), 250+ (28, 3%, 14%, 18%)
Whilst the fact that approaching half of firms aged up to 5 years are in fact less than three years old (and so were not asked questions on past growth) must be taken into account when interpreting the data for the youngest firms, there is evidence to suggest that the oldest firms demonstrate lower levels of growth (and particularly substantial growth). 6.8.2 Future Growth
All firms (regardless of age) were asked their opinions on their future growth, assessing their business as a whole. The table below shows firms’ growth objectives for the next five years.
Table 6.8.2.1 Future Growth
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |------|-------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | Remain the same size | 12% | 12% | 5% | 0% | 0% | 5% | 8% | 0% | 5% | 0% | | Become smaller | 2% | 2% | 2% | 0% | 0% | 0% | 0% | 0% | 1% | 0% | | Grow moderately | 50% | 50% | 57% | 54% | 60% | 49% | 24% | 0% | 47% | 62% | | Grow substantially | 31% | 31% | 31% | 44% | 20% | 40% | 53% | 100% | 45% | 38% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know) – Selling direct (815, 5%), Agents/distributors (275, 4%), Licensing (26, 2%), Franchising (5, 20%), JVs/partnerships (32, 4%), Production site (20, 15%), Call centre (2, 0%), Sales site (67, 2%), R&D facility (6, 0%)
Whilst the majority of firms indicated that they expect to grow, there were more likely to feel that this growth would be ‘moderate’ rather than ‘substantial’. There is perhaps some evidence to suggest that, as well as exhibiting higher levels of growth over the last 3 years, aspirations for the next 5 years are also higher amongst those with overseas sales sites.
The table below shows firms’ expectations in respect of future growth analysed by both size (measured by number of employees) and age.
Table 6.8.2.2 Future Growth - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 6-10 | > 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Remain the same size | 11% | 12% | 12% | 17% | 6% | 7% | 0% | 14% | | Become smaller | 1% | 2% | 2% | 3% | 1% | 4% | 0% | 0% | | Grow moderately | 45% | 41% | 55% | 48% | 55% | 40% | 58% | 48% | | Grow substantially | 41% | 41% | 24% | 28% | 34% | 39% | 27% | 26% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know) – Age: Up to 5 (283, 2%), 6-10 (286,4%). More than 10 (331, 6%) – Size: 0-9 (502, 3%), 10-49 (300, 4%), 50-99 (45, 10%), 100-249 (18, 16%), 250+ (28, 12%)
It appears that, as well as exhibiting lower levels of growth over the last 3 years, firms that have been established over 10 years are also less likely to be anticipating substantial growth over the next five. 6.8.3 Growth (ASBS Definition)
Firms have been divided into four ‘growth categories’, as detailed in the panel below; a categorisation that takes account of both past and future growth. This analysis has sought to replicate, as far as is possible with the data available, an analysis of growth conducted for BERR’s Annual Small Business Survey (ASBS).
**Growth – ASBS Definition**
Firms have been classified as displaying ‘sustained growth’ if…
- Their employee numbers have grown over the last 3 years (H2)
- **And**, they are anticipating substantial growth over the next 5 years (H10)
Firms have been classified as displaying ‘contained growth’ if…
- Their employee numbers have grown over the last 3 years (H2)
- **But**, they are not anticipating substantial growth over the next 5 years (H10)
Firms have been classified as displaying ‘new growth’ if…
- Their employee numbers have not grown over the last 3 years *including firms established in the last 3 years* (H2)
- **But**, they are anticipating substantial growth over the next 5 years (H10)
Firms have been classified as displaying ‘no growth’ if…
- Their employee numbers have not grown over the last 3 years *including firms established in the last 3 years* (H2)
- **And**, they are not anticipating substantial growth over the next 5 years (H10)
The table below shows the profile of firms in respect of this definition of growth.
**Table 6.8.3.1 Growth – ASBS Definition**
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |------|-------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | Sustained growth | 14% | 15% | 17% | 24% | 20% | 23% | 8% | 26% | 27% | 13% | | Contained growth | 17% | 16% | 19% | 5% | 0% | 30% | 26% | 0% | 14% | 0% | | New growth | 16% | 16% | 15% | 20% | 0% | 16% | 45% | 74% | 18% | 26% | | No growth | 52% | 53% | 49% | 51% | 80% | 30% | 21% | 0% | 40% | 62% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6) By this definition, around half of internationalising firms are displaying growth, with roughly equal proportions displaying ‘sustained’, ‘contained’ and ‘new’ growth.
There is some evidence to suggest that firms internationalising via their own overseas sales sites are more likely to be classified as displaying ‘sustained’ growth (i.e. the highest levels of growth).
The table below shows growth, based on the ASBS definition, analysed by both size (measured by number of employees) and age.
Table 6.8.3.2 Growth – ASBS Definition - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|---------------------------|-----|-------|-------|---------|------| | Up to 5 | | 14% | 25% | 11% | | | | 6-10 | | 10% | 21% | 19% | | | | > 10 | | 27% | 16% | 13% | | | | Sustained growth | | 11% | 19% | 20% | 11% | 6% | | Contained growth | | 13% | 21% | 22% | 23% | 37% | | New growth | | 17% | 15% | 18% | 16% | 19% | | No growth | | 59% | 46% | 40% | 50% | 38% | | Total | | 100%| 100% | 100% | | |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
There does not appear to be any consistent pattern by either age or size of firm.
6.8.4 Growth (OECD Definition)
Additional analysis has been conducted seeking to replicate the OECD categories of growth. Again, this analysis has replicated the approach as far as possible given the data available, with the details of the analysis provided in the panel below.
Growth – OECD Definition
Firms have been defined as ‘high-growth’ if...
- Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years (H2)
Firms have been defined as ‘gazelles’ if...
- Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years (H2)
- And, they are less than 5 years old The table below shows the proportions of firms classified under each of the OECD growth categories.
Table 6.8.4.1 Growth – OECD Definition
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |------|-------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | High growth | 100% | 13% | 13% | 11% | 16% | 20% | 32% | 8% | 26% | 26% | 0% | | Gazelles | 100% | 3% | 3% | 3% | 7% | 20% | 4% | 3% | 0% | 5% | 0% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6)
Around 1 in 8 internationalising firms display ‘high growth’ under this definition, with this figure rising to 26% amongst those with their own overseas sales site.
The table below shows growth, based on the OECD definition, analysed by both size (measured by number of employees) and age.
Table 6.8.4.2 Growth – OECD Definition - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | > 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | High growth | 16% | 25% | 8% | 12% | 15% | 11% | 18% | 7% | | Gazelles | 16% | 0% | 0% | 3% | 4% | 0% | 0% | 0% | | Total | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (44), 100-249 (18), 250+ (28)
There is no consistent pattern by either age or size of firm (beyond that expected for ‘gazelles’ given the restriction of this category to firms less than 5 years old). 6.9 Business Planning
Firms were asked to indicate whether or not they have a current, written business plan, with the following results.
Table 6.9.1 Current, Written Business Plan
| Mode | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |---------------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | Yes | 61% | 61% | 65% | 72% | 80%| 71% | 56% | 100% | 78% | 75% | | No | 33% | 34% | 31% | 28% | 20%| 22% | 26% | 0% | 17% | 25% | | Total | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100%| 100%|
Base: All respondents (Base, Don’t know) – Selling direct (815, 5%), Agents/distributors (275, 4%), Licensing (26, 0%), Franchising (5, 0%), JVs/partnerships (32, 7%), Production site (20, 18%), Call centre (2, 0%), Sales site (67, 5%), R&D facility (6, 0%)
Around three-fifths of firms indicated that they do indeed have a current, written business plan. There is perhaps some evidence to suggest that firms involved in contractual arrangements and with their own overseas sites are slightly more likely to have a written plan.
The table below shows this data analysed by both size (measured by number of employees) and age.
Table 6.9.2 Current, Written Business Plan - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | 6-10 | 53% | 70% | 70% | 71% | 71% | | > 10 | 45% | 24% | 17% | 18% | 12% | | Total | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base, Don’t know) – Age: Up to 5 (283, 2%), 6-10 (286, 4%), More than 10 (331, 7%) – Size: 0-9 (502, 3%), 10-49 (300, 6%), 50-99 (45, 13%), 100-249 (18, 11%), 250+ (28, 18%)
Whilst larger firms (with 10 employees or more) appear to be more likely to have a current, written business plan than the smallest firms (with less than 10 employees), there is no variation by age of firm. 6.10 Displacement
Firms were asked to indicate the location of their main competitors, in terms of whether these were domestic or overseas firms.
Table 6.10.1 Displacement – Location of Main Competitors
| Mode | Total | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |---------------|-------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | UK-based | 39% | 39% | 25% | 20% | 20% | 19%| 3% | 0% | 17% | 38% | | Overseas-based| 19% | 18% | 30% | 31% | 40% | 36%| 37% | 26% | 28% | 36% | | Both | 39% | 40% | 42% | 47% | 40% | 43%| 57% | 74% | 54% | 13% | | Total | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100%|
Base: All respondents (Base, Have no competitors) – Selling direct (815, 2%), Agents/distributors (275, 2%), Licensing (26, 2%), Franchising (5, 0%), JVs/partnerships (32, 0%), Production site (20, 3%), Call centre (2, 0%), Sales site (67, 1%), R&D facility (6, 13%)
Approaching three-fifths of firms indicated that at least some of their main competitors are based overseas. Indications are that this proportion is higher for those operating overseas sites (with the figure 82% for those with overseas sales sites).
The table below shows this data analysed by both size (measured by number of employees) and age.
Table 6.10.2 Displacement – Location of Main Competitors - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | 6-10 | | | | | | | > 10 | | | | | | | UK-based | 43% | 45% | 35% | | | | Overseas-based | 19% | 15% | 20% | | | | Both | 34% | 36% | 42% | | | | Total | 100%| 100% | 100% | | |
Base: All respondents (Base, Have no competitors) – Age: Up to 5 (283, 2%), 6-10 (286, 3%), More than 10 (331, 2%) – Size: 0-9 (502, 3%), 10-49 (300, 1%), 50-99 (45, 0%), 100-249 (18, 0%), 250+ (28, 0%)
There is some evidence to suggest that both older and larger firms are more likely to see overseas firms making up at least some of their main competition. 6.11 Usage of UKTI Trade Support Services
Firms were asked a series of questions to determine awareness of both UKTI and UKTI’s key products and services (details provided in Chapter 11). Those aware of at least one of these products/services, or UKTI itself, where then asked to indicate whether or not they had used any of them. This data has been used to categorise firms into UKTI users and non-users, with the following results.
Table 6.11.1 UKTI User?
| Mode | Direct | Agents / Distrib | Licensing | Franchising | JV Production | Call centre | Sales | R&D | |---------------|--------|------------------|-----------|-------------|---------------|-------------|-------|-----| | Yes | 35% | 36% | 46% | 50% | 60% | 37% | 42% | 0% | 36% | 13% | | No | 65% | 64% | 54% | 50% | 40% | 63% | 58% | 100%| 64% | 87% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100%| 100%| 100%|
Base: All respondents (Base) – Selling direct (815), Agents/distributors (275), Licensing (26), Franchising (5), JVs/partnerships (32), Production site (20), Call centre (2), Sales site (67), R&D facility (6)
Around a third of internationalising firms indicated that they have used UKTI products or services.
The table below shows UKTI usage analysed by both size (measured by number of employees) and age.
Table 6.11.2 UKTI User? - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | > 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Yes | 34% | 35% | 35% | 30% | 41% | 50% | 42% | 28% | | No | 66% | 65% | 65% | 70% | 59% | 50% | 58% | 72% | | Total | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
Whilst usage levels do not seem to vary with age of firm, it appears that the very smallest firms (with less than 10 employees) and the very largest (with 250 or more employees) are less likely to have used UKTI services than those in the 10-249 range. 7. Drivers of Geographical Focus
7.1 Drivers of Geographical Focus (Summary)
Once it had been established which of the various internationalisation modes firms were involved in, one mode was selected at random (by CATI) for them to focus on for the sections of the interview relating to drivers or geographical focus, drivers of mode and barriers. Firms were also asked to focus on just one market, with the market that had presented them with the greatest challenges in relation to the mode in question selected in cases where they were operating via the selected mode in more than one market. In cases where the firm did not feel able to pinpoint a single, ‘challenging’ market the interviewer asked them to focus on the one they had started doing business in most recently via the chosen mode (this applied to only around 1 in 10 firms).
With specific reference to the selected market, interviewers read out the following:
I’m going to read out some of the individual circumstances that other firms have found themselves in when looking at doing business in specific overseas locations and I’d like you to tell me the extent to which each one applied to you when you were FIRST CONSIDERING < SELECTED MODE > in < MARKET >.
Please give me a score of 1 to 5, where 5 means that it is completely applicable and 1 means that it is not at all applicable.
Firms were then read out a list of five statements, and asked to rate each one on the above 5-point scale. The chart below shows the proportion of firms giving a score of 4 or 5 on this scale. Details of the full distribution of scores are shown later in this Chapter.
Table 7.1.1 Drivers of Geographical Focus
| % scoring 4 or 5 | Total | Mode | |------------------|-------|------| | | | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | | Received an approach | 59% | 61% | 55% | 46% | 50% | 74% | 47% | 0% | 47% | 26% | | Suggested by someone external | 30% | 28% | 29% | 36% | 100% | 65% | 38% | 74% | 46% | 87% | | Someone internal with experience | 34% | 32% | 36% | 72% | 50% | 55% | 29% | 100% | 56% | 0% | | Considering a number of markets | 19% | 17% | 23% | 13% | 50% | 22% | 53% | 74% | 53% | 51% | | Identified internally as opportunity | 49% | 46% | 55% | 59% | 100% | 35% | 38% | 26% | 88% | 100% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
A large proportion of firms (59%) indicated that ‘we had received an approach from someone in (this market)’ applied to them, giving a score of 4 or 5 on the 5-point scale. It appears that this is particularly likely to apply to those choosing to sell direct, but is a key factor across all modes. Firms having ‘identified internally that (this market) offered a potential opportunity’ is also a popular driver of geographical focus, applying to around half of firms overall and particularly those operating overseas sales sites.
Amongst those selling direct, through agents or distributors, or engaging in contractual arrangements only a minority indicated having ‘been considering a number of countries at the time, and decided to focus on (this market)’. Amongst those setting up their own overseas site however this was far more popular, applying in around half of cases.
Immediately after being questioned on these specific potential drivers, firms were provided with an opportunity to describe, in their own words, any other major reasons for looking at this particular market. These responses have been coded into common themes and the most popular answers (mentioned by 5% or more of firms) are shown in the table below.
Table 7.1.2 Drivers of Geographical Focus – Any Other Reasons? (Unprompted)
| Top mentions (5%+) | Total | Mode | Own Site | |--------------------|-------|------|----------| | | Direct| Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | | None | 49% | 53% | 42% | 23% | 0% | 31% | 43% | 0% | 29% | 26% | | Someone approached us | 10% | 11% | 9% | 13% | 50% | 17% | 0% | 0% | 5% | 0% | | A large/growing market | 6% | 4% | 10% | 9% | 0% | 22% | 14% | 0% | 5% | 0% | | Existing customers/contacts in the area | 5% | 4% | 9% | 13% | 0% | 0% | 0% | 0% | 12% | 0% | | Total | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100%| 100%| 100%|
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
Around half of firms had nothing further to add, and amongst those that did pass comment a wide variety of issues were raised. Interestingly, the most popular included aspects already covered by prompted questioning, i.e. that there had been an approach made to the firm in relation to this specific market, that the firm had recognised the size of the market in question as making it an opportunity for them, or that they already had customers in the area. This indicates that the prompted questions are adequately covering the key drivers of geographical focus. A selection of the comments made by individual firms is provided below.
“We were approached, that’s the only major reason” – Selling direct
“It just developed. We had a client who wanted to do business there” – Selling direct
“We were given the work by an existing client” – Selling direct
“The opportunity arose rather than us actually looking for it” – Selling direct
“We have a major customer who has a plant there, and they wanted a supplier that has a local base” - Licensing
“The market was ready there, and we estimated them to be positively predisposed to our offering” – Licensing
“It is a developed country with a large population and healthcare spending is big” – Licensing
“The size of the market, in terms of the potential” – Selling direct
“It was the obvious market to export in (our sector)” – Selling direct
“Opportunity. There’s a requirement for the goods we provide, and we took advantage” – Agent/distributor
“One of the directors is from the USA, and so we have contacts” – Overseas site (sales)
“We have existing relationships in Morocco” – Selling direct
“Because they were an old contact” – Agents/distributors
“I’m Greek. I have family and friends there, and they introduced me to the market” – Selling direct
“We had some connections out there which we followed up on” – Agents/distributors The five drivers of choice of geographical focus firms were prompted with have been summarised further as outlined below.
**Drivers Of Geographical Focus - Summary**
Firms have been defined as being motivated to a significant extent by ‘networks & serendipity’ if they scored 4 or 5 on a 5-point scale for…
- Received an approach from someone in the market
- Or, it had been suggested to them by an external source that the market might offer them an opportunity
- Or, Someone in the company already had connections in that market
Firms have been defined as being motivated to a significant extent by ‘independent analysis’ if they scored 4 or 5 on a 5-point scale for…
- Had been considering a number of markets and decided to focus on this one
- Or, Identified internally that the market offered a potential opportunity for them
Firms have been defined as ‘solely reactive’ if…
- They score 4 or 5 for ‘received an approach from someone in the market’
- But did not score 3, 4 or 5 for having connections, considering a number of markets or internal identification of an opportunity
The table below shows the proportions of firms scoring against each of these summary categories.
**Table 7.1.3 Drivers of Geographical Focus (Summary)**
| % scoring | Total | Mode | Own Site | |--------------------|-------|------|----------| | | Direct| Agents/Distrib| Licensing| Franchising| JV| Production| Call centre| Sales| R&D | | Networks & serendipity | 81% | 80% | 84% | 95% | 100% | 91% | 86% | 100% | 90% | 87% | | Independent analysis | 53% | 49% | 61% | 59% | 100% | 39% | 53% | 100% | 95% | 100% | | Solely reactive | 15% | 18% | 9% | 18% | 0% | 14% | 0% | 0% | 0% | 0% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
This analysis clearly demonstrates that whilst independent analysis is certainly an important factor, it only applies to around half of all internationalising firms. As many as 81% score against the ‘networks & serendipity’ measure, which provides a clear indication of the strong role that existing contacts and the element of chance play in firms’ path to internationalisation. This balance between 'independent analysis' and 'networks & serendipity' is similar for those selling both directly and through agents/distributors and those involved in contractual arrangements, but there is evidence to suggest a more deliberate approach is adopted amongst those with their own overseas site, with 'independent analysis' as important a factor as 'networks & serendipity' for this group.
Overall, 15% of firms are classified as 'solely reactive', essentially selecting the market in question purely as a result of enquiries received. However, and as expected, this did not apply in any of the cases where firms had set up their own overseas site.
7.2 Drivers of Geographical Focus (Detailed)
7.2.1 Received An Approach
The chart below shows the full distribution of scores on the 5-point scale for the statement 'we had received an approach from someone in (this market)'.
Chart 7.2.1 We Had Received An Approach From Someone In <Market>
Around half of firms indicated that this was 'completely applicable' to them, scoring 5 on the 5-point scale. Only around a quarter indicated that this was 'not at all applicable' to them in this particular instance (although this does rise to a third amongst those operating their own overseas sales site). 7.2.2 Suggested By Someone External
Firms were also asked to indicate the extent to which ‘it had been suggested to us by someone external to the company that (this market) might be an opportunity for us’, with the following results.
Chart 7.2.2 Suggested By Someone External
Only around 1 in 5 firms felt that this was ‘completely applicable’ to them, rising to approaching a third if scores of 4 or 5 out of 5 are taken into account. Half felt that it was ‘not at all applicable.’ 7.2.3 Someone Internal With Experience
The chart below shows the full distribution of scores on the 5-point scale for the statement ‘there was someone within the company who already had experience of (this market)’.
Chart 7.2.3 There Was Someone Within The Company Who Already Had Experience Of <Market>
Around a quarter of firms indicated that this was ‘completely applicable’ to them. This appears to be particularly likely to be the case for those involved in contractual arrangements and overseas sites (although not R&D sites on the evidence of the six firms taking part in this study with this type of facility). 7.2.4 Considering A Number of Markets
The chart below shows the full distribution of scores on the 5-point scale for the statement ‘we had been considering a number of countries at the time, and decided to focus on (this market)’.
Chart 7.2.4 We Had Been Considering A Number of Countries At The Time, And Decided To Focus On <Market>
More than half of firms indicated that this was ‘not at all applicable’ to them, with a further 15% scoring just 2 out of 5. Only around 1 in 8 firms indicated that this was ‘completely applicable’, although this rises to more than two-fifths amongst those with an overseas sales site. 7.2.5 Identified Internally As An Opportunity
The chart below shows the full distribution of scores on the 5-point scale for the statement ‘we had identified internally that (this market) offered a potential opportunity for us’.
Chart 7.2.5 We Had Identified Internally That <Market> Offered A Potential Opportunity For Us
Just 28% of firms indicated that they feel that this is ‘not at all applicable’ to them and 36% that this is ‘completely applicable’. As many as three-quarters of those with overseas sales sites indicated that this is ‘completely applicable’ to them. 7.3 Market Perceptions (Summary)
Firms were also asked a series of questions about their perceptions of the chosen market in respect to a number of characteristics (covering the ease of doing business there, perceptions on levels of demand/costs and levels of risk), to help shed further light on drivers of geographical focus. This approach was favoured over a more direct questioning approach (asking firms to indicate whether various aspects of the market in question ‘drove’ them to pursue this market via the selected mode) after problems getting the concept across in a telephone interview environment without respondents misinterpreting the question.
Again, respondents were asked to answer on a 5-point scale, but with semantic scales favoured over numeric scales on this occasion to aid correct interpretation of the questions. The table below shows summarised results, with the proportion not scoring in the top two boxes shown. For example, firms were asked ‘how easy has it been for you to find customers in (this market). Was it very easy, fairly easy, average, fairly hard or very hard.’ The proportion not indicating that it was ‘fairly hard’ or ‘very hard’ is shown in the table below; i.e. the proportion not perceiving difficulties in this respect (which we interpret as indicating a draw towards the market). The exception to this is the level of demand, where the proportion indicating that it is ‘fairly high’ or ‘very high’ is shown.
Please note that firms were not asked to rate aspects of the market that were not relevant to the mode in question. For example, if the mode did not involve any form of partnership then they were not asked to rate the ‘ease of finding suitable partners’. It should be noted that the ‘total’ results shown in the table below represent the total across just those modes for which the aspect has been rated.
Table 7.3.1 Drivers of Geographical Focus (Perceptions Of The Market)
| % not scoring 4 or 5 | Total | Mode | |----------------------|-------|------| | | Direct| Agents/Distrib| Licensing| Franchising| JV| Production| Call centre| Sales| R&D | | Ease of finding customers | 82% | 82% | X | X | X | 95% | 62% | 26% | 85% | 26% | | Ease of finding suitable partner | 80% | X | 77% | 95% | 100% | 95% | X | X | X | X | | Ease of negotiating framework | 75% | 75% | 80% | 86% | 50% | 91% | 43% | 0% | 54% | 87% | | Ease of logistics of doing business | 74% | 75% | 71% | 82% | 100% | 74% | 72% | 26% | 66% | 87% | | Ease of product modification | 94% | 94% | 95% | 82% | 50% | 87% | 100% | 100% | 92% | 100% | | Ease of negotiation lang/culture | 84% | 84% | 82% | 82% | 50% | 91% | 72% | 26% | 83% | 64% | | Ease of IP protection | 85% | 87% | 82% | 77% | 50% | 61% | 86% | 26% | 88% | 64% | | Risk: getting paid | 81% | 80% | 82% | 82% | 100% | 83% | 86% | 100% | 88% | 87% | | Risk: guaranteeing quality | 79% | 78% | 82% | 69% | 50% | 78% | 67% | 100% | 97% | 87% | | Risk: return on investment | 73% | 71% | 78% | 82% | 100% | 78% | 72% | 100% | 93% | 75% | | Ease of staff recruitment/retention | 78% | X | X | X | X | X | 72% | 100% | 80% | 75% | | Cost of resources | 80% | X | X | X | X | X | 100% | 100% | 64% | 100% | | Level of demand\* | 35% | 33% | 39% | 59% | 50% | 35% | 19% | 0% | 68% | 26% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
- Figures shown are for % scoring 4 or 5 (i.e. high demand)
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6) This analysis indicates that all of the above factors included are important for large numbers of internationalising firms in respect of the markets they choose to pursue not presenting difficulties in these respects. The potential exception is demand, although the methodological difference in how this particular measure is constructed should be taken into account when interpreting this result.
There is some evidence to suggest some differences for those operating overseas sites, for which issues such as the ease of negotiating the business framework and the logistics of doing business are less important, but perceptions in respect of the level of demand more important.
These 13 elements of market have been summarised further into 6 themes as outlined below.
| Market Perceptions - Summary | |------------------------------| | Firms have been defined as perceiving the market favourably with respect to ‘contacts’ if they do not score 4 (fairly hard) or 5 (very hard) on a 5-point scale for… | | • Ease of finding customers | | • And, the ease of finding a suitable partner | | Firms have been defined as perceiving the market favourably with respect to ‘practicalities’ if they do not score 4 (fairly hard) or 5 (very hard) on a 5-point scale for… | | • Ease of negotiating the legal & regulatory framework or standards | | • And, the ease of dealing with the logistics of doing business | | • And, the ease of making product/service modifications (including those making no product/service modifications) | | Firms have been defined as perceiving the market favourably with respect to ‘language & culture’ if they do not score 4 (fairly hard) or 5 (very hard) on a 5-point scale for… | | • Ease of negotiating the culture and language | | Firms have been defined as perceiving the market favourably with respect to ‘risk & IP’ if they do not score 4 or 5 on a 5-point scale for … | | • Ease of protecting your Intellectual Property (not 4 (fairly hard) or 5 (very hard)) | | • And, risk of ensuring you get paid and enforcing contracts (not 4 (fairly high risk) or 5 (very high risk)) | | • And, being able to guarantee the quality of the goods or services provided (not 4 (fairly high risk) or 5 (very high risk)) | | • And, the financial risk in terms of ensuring a return on investment (not 4 (fairly high risk) or 5 (very high risk)) | Firms have been defined as perceiving the market favourably with respect to ‘resources’ if they scored as follows…
- Ease of recruiting and retaining suitable staff (not 4 (fairly hard) or 5 (very hard))
- Or, the cost of resources in comparison with the UK (not 4 (fairly hard) or 5 (very hard))
Firms have been defined as perceiving the market favourably with respect to ‘demand’ if they scored 4 (fairly high) or 5 (very high) on a 5-point scale for…
- The potential level of demand for products/services
The table below shows the proportions of firms scoring against each of these summary categories, with the ‘networks & serendipity’, ‘independent analysis’, and ‘solely reactive’ categories outlined earlier in this Chapter also included.
Table 7.3.2 Drivers of Geographical Focus (Including Market Perceptions) (Summary)
| % scoring | Total | Mode | Own Site | |--------------------|-------|------|----------| | | Direct| Agents/Distrib| Licensing| Franchising| JV| Production| Call centre| Sales| R&D | | Networks & serendipity | 81% | 80% | 84% | 95% | 100% | 91% | 86% | 100% | 90% | 87% | | Independent analysis | 53% | 49% | 61% | 59% | 100% | 39% | 53% | 100% | 95% | 100% | | Solely reactive | 15% | 18% | 9% | 18% | 0% | 14% | 0% | 0% | 0% | 0% | | Contacts | 81% | 82% | 77% | 95% | 100% | 95% | 62% | 26% | 85% | 26% | | Practicalities | 62% | 62% | 63% | 68% | 50% | 65% | 43% | 0% | 47% | 75% | | Language & culture | 84% | 84% | 82% | 82% | 50% | 91% | 72% | 26% | 83% | 64% | | Risk & IP | 63% | 63% | 64% | 59% | 50% | 61% | 53% | 26% | 71% | 39% | | Resources | 65% | X | X | X | X | X | 72% | 100% | 56% | 75% | | Demand | 35% | 33% | 39% | 59% | 50% | 35% | 19% | 0% | 68% | 26% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100%| 100% |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
This analysis clearly highlights ‘contacts’ and ‘language & culture’ as key, alongside ‘networks & serendipity’ across all modes.
There is, however, some evidence to suggest some differences for those operating overseas sales sites, with ‘practicalities’ less important for this group but ‘demand’ more important. The table below provides analysis of the above drivers of geographical focus by age of firm, both at the total level and within mode. Please note that contractual arrangements (i.e. licensing, franchising and other partnerships/JVs) have been grouped for this analysis, as have the various types of overseas sites, but base sizes are still very small and results should be treated as indicative only.
Table 7.3.3 Drivers of Geographical Focus (Including Market Perceptions) – By Age Of Firm (And Mode)
| % scoring | Total | Mode/Age | Direct | Agents/Distributors | |----------------------------|-------|----------|--------|---------------------| | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | Networks & serendipity | 84% | 84% | 80% | 85% | 84% | 77% | 74% | 79% | 87% | | Independent analysis | 57% | 55% | 51% | 54% | 52% | 47% | 57% | 55% | 63% | | Solely reactive | 13% | 17% | 16% | 14% | 20% | 19% | 10% | 10% | 8% | | Contacts | 80% | 78% | 82% | 81% | 80% | 84% | 76% | 69% | 79% | | Practicalities | 61% | 57% | 63% | 60% | 57% | 64% | 62% | 62% | 63% | | Language & culture | 83% | 83% | 84% | 80% | 84% | 86% | 95% | 76% | 81% | | Risk & IP | 67% | 59% | 63% | 67% | 60% | 63% | 67% | 55% | 66% | | Resources | 81% | 50% | 64% | X | X | X | X | X | X | | Demand | 42% | 35% | 33% | 41% | 34% | 30% | 40% | 31% | 40% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| % scoring | Contractual Arrangements | Overseas site | |----------------------------|--------------------------|---------------| | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | Networks & serendipity | 80% | 86% | 100% | 100% | 88% | 86% | | Independent analysis | 50% | 57% | 50% | 88% | 94% | 79% | | Solely reactive | 30% | 14% | 10% | 0% | 0% | 0% | | Contacts | 90% | 86% | 100% | 69% | 81% | 64% | | Practicalities | 60% | 14% | 80% | 63% | 56% | 36% | | Language & culture | 90% | 57% | 90% | 81% | 94% | 64% | | Risk & IP | 80% | 29% | 60% | 75% | 69% | 50% | | Resources | X | X | X | 81% | 50% | 64% | | Demand | 50% | 29% | 50% | 50% | 69% | 36% | | Total | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about… (Base) – Total: Up to 5 (283), 6-10 (286), More than 10 (331), Selling direct: Up to 5 (215), 6-10 (221), More than 10 (245), Agents/distributors: Up to 5 (42), 6-10 (42), More than 10 (62), Contractual arrangements: Up to 5 (10), 6-10 (7), More than 10 (10), Overseas site: Up to 5 (16), 6-10 (16), More than 10 (14)
Interestingly, the pattern in terms of drivers of geographical focus is very similar for firms within each of the three age groups. The table below provides an analysis of the drivers of geographical focus by emerging/fast growing markets(^8) and ‘others’. Please note that small base sizes restrict robust analysis by individual markets(^9).
Table 7.3.4 Drivers of Geographical Focus (Including Market Perceptions) – By Market (And Mode)
| % scoring | Total | Mode/Market | |----------------------------|-------|-------------| | | Fast growing | Other | Fast growing | Other | Fast growing | Other | Fast growing | Other | Fast growing | Other | | Networks & serendipity | 78% | 83% | 75% | 82% | 81% | 85% | 88% | 96% | 91% | 88% | | Independent analysis | 58% | 51% | 54% | 47% | 63% | 59% | 50% | 52% | 88% | 81% | | Solely reactive | 11% | 17% | 12% | 20% | 11% | 7% | 6% | 21% | 0% | 0% | | Contacts | 80% | 82% | 80% | 83% | 83% | 74% | 100% | 93% | 64% | 73% | | Practicalities | 54% | 65% | 54% | 65% | 59% | 64% | 55% | 72% | 43% | 49% | | Language & culture | 77% | 86% | 78% | 87% | 81% | 83% | 72% | 93% | 58% | 88% | | Risk & IP | 53% | 67% | 53% | 67% | 57% | 68% | 40% | 72% | 43% | 73% | | Resources | 67% | 63% | X | X | X | X | X | 67% | 63% | | Demand | 44% | 31% | 41% | 30% | 52% | 33% | 61% | 38% | 43% | 49% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about... (Base) – Total: Fast growing (253), Other (647), Selling direct: Fast growing (184), Other (497), Agents/distributors: Fast growing (40), Other (106), Contractual arrangements: Fast growing (10), Other (17), Overseas site: Fast growing (19), Other (27)
There is some evidence to suggest some differences between fast growing markets and others, with those firms operating in fast growing markets more likely to be driven by some of the more proactive elements, including ‘independent analysis’ and ‘demand’, and less likely to be driven by ‘networks & serendipity’, ‘practicalities’, ‘language & culture’ and ‘risk & IP’. However, it should be noted that even for this group the overall pattern of ‘contacts’ and ‘language & culture’, alongside ‘networks & serendipity’ as being the key drivers still holds.
______________________________________________________________________
(^8) For the purposes of this study, emerging/fast growing markets cover the UKTI priority fast growing markets as identified in UKTI’s five year strategy published in 2006 ‘Prosperity in a Changing World’, i.e. Brazil, China, GCC countries (Saudi Arabia and UAE), India, Indonesia, Mexico, Russia, South Africa, Turkey, Malaysia, Qatar, Singapore, South Korea, Thailand and Vietnam.
(^9) Annex A contains details of numbers of interviews conducted for individual markets. The table below provides an analysis of the drivers of geographical focus by overseas business experience (measured by the number of years the firm has been involved in overseas business activity).
Table 7.3.5 Drivers of Geographical Focus (Including Market Perceptions) – By Experience (And Mode)
| % scoring | Total | Mode/Experience (Number of Years) | |-----------|-------|----------------------------------| | | Less than 2 | 2-10 | More than 10 | Less than 2 | 2-10 | More than 10 | Less than 2 | 2-10 | More than 10 | | Networks & serendipity | 77% | 83% | 81% | 76% | 82% | 78% | 73% | 82% | 88% | | Independent analysis | 57% | 50% | 55% | 51% | 49% | 49% | 75% | 48% | 69% | | Solely reactive | 16% | 17% | 14% | 19% | 19% | 16% | 6% | 8% | 10% | | Contacts | 83% | 81% | 81% | 83% | 82% | 83% | 88% | 77% | 74% | | Practicalities | 64% | 61% | 61% | 64% | 62% | 63% | 66% | 67% | 57% | | Language & culture | 85% | 83% | 84% | 84% | 83% | 86% | 94% | 83% | 79% | | Risk & IP | 68% | 64% | 60% | 66% | 64% | 61% | 75% | 69% | 57% | | Resources | 83% | 60% | 63% | X | X | X | X | X | X | | Demand | 41% | 35% | 32% | 39% | 34% | 29% | 42% | 39% | 38% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about... (Base) – Total: Less than 2 (182), 2-10 (515), More than 10 (199), Selling direct: Less than 2 (140), 2-10 (394), More than 10 (144), Agents/distributors: Less than 2 (25), 2-10 (78), More than 10 (42), Contractual arrangements: Less than 2 (5), 2-10 (17), More than 10 (5), Overseas site: Less than 2 (12), 2-10 (26), More than 10 (8)
As with age of firm, the pattern in terms of drivers of geographical focus is very similar regardless of experience. The table below provides an analysis of the drivers of geographical focus by the number of markets firms are doing business in.
Table 7.3.6 Drivers of Geographical Focus (Including Market Perceptions) – By Number of Markets (And Mode)
| % scoring | Total | Mode/Number of Markets | |----------------------------|-------|------------------------| | | | Direct | Agents/Distributors | | | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | Networks & serendipity | | | | | | | | | | | 78% | 85% | 84% | 76% | 85% | 82% | | | | 77% | 86% | 86% | 77% | 86% | 86% | | Independent analysis | | 48% | 53% | 59% | 44% | 52% | 56% | | | | 68% | 52% | 62% | 68% | 52% | 62% | | Solely reactive | | 20% | 15% | 9% | 23% | 16% | 12% | | | | 2% | 17% | 7% | 2% | 17% | 7% | | Contacts | | 83% | 80% | 79% | 85% | 78% | 82% | | | | 81% | 83% | 70% | 81% | 83% | 70% | | Practicalities | | 68% | 60% | 54% | 68% | 59% | 54% | | | | 68% | 66% | 57% | 68% | 66% | 57% | | Language & culture | | 87% | 80% | 81% | 87% | 79% | 84% | | | | 94% | 79% | 77% | 94% | 79% | 77% | | Risk & IP | | 68% | 66% | 54% | 68% | 62% | 55% | | | | 66% | 75% | 55% | 66% | 75% | 55% | | Resources | | 71% | 86% | 47% | X | X | X | | | | 71% | 88% | 47% | X | X | X | | Demand | | 27% | 38% | 44% | 26% | 36% | 42% | | | | 32% | 40% | 43% | 32% | 40% | 43% | | Total | | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about... (Base) – Total: Up to 5 (434), 6-10 (217), More than 10 (245), Selling direct: Up to 5 (356), 6-10 (162), More than 10 (161), Agents/distributors: Up to 5 (47), 6-10 (43), More than 10 (55), Contractual arrangements: Up to 5 (11), 6-10 (3), More than 10 (13), Overseas site: Up to 5 (20), 6-10 (9), More than 10 (16)
There is evidence to suggest that those involved in fewer markets are more likely to be classified as ‘solely reactive’ and less likely to be responding to ‘independent analysis’ or perceive the market as holding a high demand. The table below provides an analysis of the drivers of geographical focus by the various measures of innovation (including IP activity).
Table 7.3.7 Drivers of Geographical Focus (Including Market Perceptions) – By Innovation/IP (And Mode)
| % scoring | Total | Mode/Innovation & IP | |-----------|-------|----------------------| | | | Direct | | | | Innovative (alt) | | | | Innovative | | | | Non-innovative | | | | IP Active | | | | Young tech intensive | | | | Innovative (alt) | | | | Innovative | | | | Non-innovative | | | | IP Active | | | | Young tech intensive | | Networks & serendipity | 82% | 83% | 78% | 82% | 84% | 81% | 82% | 77% | 82% | 86% | | Independent analysis | 57% | 56% | 45% | 61% | 58% | 53% | 51% | 45% | 60% | 55% | | Solely reactive | 15% | 15% | 16% | 14% | 14% | 19% | 18% | 17% | 18% | 16% | | Contacts | 77% | 79% | 87% | 79% | 80% | 78% | 80% | 87% | 80% | 80% | | Practicalities | 51% | 57% | 74% | 51% | 56% | 51% | 57% | 74% | 49% | 56% | | Language & culture | 80% | 82% | 89% | 79% | 83% | 81% | 83% | 87% | 81% | 81% | | Risk & IP | 58% | 61% | 70% | 59% | 64% | 59% | 61% | 69% | 57% | 62% | | Resources | 54% | 58% | 93% | 78% | 75% | X | X | X | X | X | | Demand | 40% | 38% | 26% | 45% | 43% | 38% | 36% | 26% | 43% | 41% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| % scoring | Mode/Innovation & IP | |-----------|----------------------| | | Agents/Distributors | | | Contractual Arrangements | | | Innovative (alt) | | | Innovative | | | Non-innovative | | | IP Active | | | Young tech intensive | | | Innovative (alt) | | | Innovative | | | Non-innovative | | | IP Active | | | Young tech intensive | | Networks & serendipity | 78% | 83% | 89% | 75% | 71% | 97% | 95% | 79% | 100% | 80% | | Independent analysis | 65% | 65% | 37% | 65% | 63% | 63% | 57% | 0% | 52% | 50% | | Solely reactive | 7% | 9% | 6% | 6% | 6% | 10% | 14% | 21% | 8% | 30% | | Contacts | 74% | 75% | 92% | 73% | 74% | 93% | 95% | 100% | 96% | 90% | | Practicalities | 57% | 59% | 84% | 57% | 57% | 53% | 66% | 59% | 66% | 60% | | Language & culture | 82% | 80% | 97% | 67% | 94% | 80% | 86% | 79% | 85% | 90% | | Risk & IP | 61% | 63% | 74% | 63% | 63% | 40% | 57% | 79% | 56% | 80% | | Resources | X | X | X | X | X | X | X | X | X | X | | Demand | 41% | 40% | 21% | 44% | 46% | 56% | 52% | 0% | 55% | 50% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | | % scoring | Mode/Innovation & IP | Overseas Site | |----------------------------|----------------------|---------------| | | Innovative (alt) | Innovative | Non-innovative | IP Active | Young tech intensive | | Networks & serendipity | 90% | 89% | 93% | 89% | 100% | | Independent analysis | 85% | 89% | 65% | 74% | 83% | | Solely reactive | 0% | 0% | 0% | 0% | 0% | | Contacts | 65% | 69% | 70% | 74% | 83% | | Practicalities | 31% | 42% | 65% | 34% | 58% | | Language & culture | 62% | 69% | 100% | 85% | 75% | | Risk & IP | 49% | 54% | 85% | 74% | 83% | | Resources | 54% | 58% | 93% | 78% | 75% | | Demand | 47% | 49% | 35% | 56% | 58% | | Total | 100% | 100% | 100% | 100% | 100% |
Base: All answering about... (Base) – Total: Innovative (alternative) (418), Innovative (659), Non-innovative (241), IP active (267), Young & innovative or IP active (210), Selling direct: Innovative (alternative) (289), Innovative (475), Non-innovative (206), IP active (188), Young & innovative or IP active (153), Agents/distributors: Innovative (alternative) (86), Innovative (124), Non-innovative (22), IP active (49), Young & innovative or IP active (35), Contractual arrangements: Innovative (alternative) (18), Innovative (24), Non-innovative (3), IP active (15), Young & innovative or IP active (10)
There is some evidence to suggest that innovative firms (defined either through the main ‘innovative’ firms definitions or via IP activity) are more likely than those classified as ‘non-innovative’ to perceive difficulties with their chosen market in all areas. That said, they are also more likely to be driven by ‘independent analysis’ and to perceive the demand in this market as either ‘fairly’ or ‘very’ high.
This is the case for innovation measured via the main ‘innovative firms’ definitions as well as through IP activity, and for young, technology intensive firms. The table below provides an analysis of the drivers of geographical focus by usage of UKTI.
Table 7.3.8 Drivers of Geographical Focus (Including Market Perceptions) – By Usage Of UKTI (And Mode)
| % scoring | Total | Mode/Usage of UKTI | Direct | Agents/Distrib | Contractual Arrangements | Overseas Site | |----------------------------|-------|--------------------|--------|----------------|--------------------------|---------------| | | User | Non-user | User | Non-user | User | Non-user | | Networks & serendipity | 82% | 81% | 81% | 79% | 81% | 85% | 93% | 93% | 83% | 91% | | Independent analysis | 62% | 48% | 57% | 45% | 71% | 52% | 74% | 40% | 77% | 86% | | Solely reactive | 11% | 18% | 13% | 20% | 8% | 9% | 0% | 22% | 0% | 0% | | Contacts | 79% | 83% | 79% | 84% | 76% | 78% | 86% | 100% | 77% | 67% | | Practicalities | 57% | 64% | 58% | 64% | 57% | 67% | 33% | 80% | 48% | 46% | | Language & culture | 82% | 84% | 83% | 85% | 82% | 83% | 74% | 90% | 77% | 74% | | Risk & IP | 59% | 66% | 59% | 65% | 60% | 68% | 35% | 71% | 60% | 60% | | Resources | 60% | 66% | X | X | X | X | X | X | X | X | | Demand | 40% | 32% | 38% | 30% | 41% | 37% | 86% | 28% | 48% | 46% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about... (Base) – Total: Users (311), Non-users (589), Selling direct: Users (225), Non-users (456), Agents/distributors: Users (66), Non-users (80), Contractual arrangements: Users (9), Non-users (18), Overseas site: Users (11), Non-users (35)
Encouragingly, users of UKTI trade support services are more likely to be motivated by ‘independent analysis’ in their choice of market, and less likely to be classified as ‘solely reactive’. They are also more likely to perceive their chosen market as having ‘fairly’ or ‘very’ high demand. 7.4 Market Perceptions (Detailed)
7.4.1 Ease Of Finding Customers
The chart below shows firms’ perceptions of their chosen market in respect of ‘how easy of difficult has it been for you to find customers in (that market)’. Those firms with overseas production sites, call centres and R&D facilities not selling to customers in this market were not asked this question, and are shown as a separate category in the analysis.
Although only around 1 in 6 of firms engaged in relevant internationalisation activities indicated that they had found it difficult to find customers, it is interesting to note that only around a quarter indicated that it had been ‘very easy’. 7.4.2 Ease Of Finding A Suitable Partner
For the relevant modes (i.e. selling through agents or distributors and contractual arrangements), firms were also asked ‘how easy or difficult has it been to for you to find a suitable partner’. Please note the small base sizes when interpreting these results.
Chart 7.4.2 Ease Of Finding A Suitable Partner
Around a fifth of firms involved in these modes felt that it had been difficult to find a suitable partner, but just under half had found it either ‘fairly’ or ‘very’ easy. 7.4.3 Ease Of Negotiating Framework
Firms were also asked ‘how easy or difficult has it been for you to negotiate the legal and regulatory framework or standards in (this market)’.
Interestingly, only 1 in 6 firms felt that this had been ‘very easy’, with around a quarter reporting that it had been either ‘fairly’ or ‘very’ difficult. 7.4.4 Ease Of Logistics Of Doing Business
The chart below shows firms’ perceptions of their chosen market in respect of ‘how easy or difficult has it been for you to deal with the logistics of doing business in (this market)’.
Chart 7.4.4 Ease Of Dealing With The Logistics Of Doing Business In <Market>
Whilst around a quarter of firms felt that it was difficult to deal with the logistics of doing business in this market, more than half felt that it was easy. 7.4.5 Ease Of Product Modification
Firms were also asked to indicate whether they had had to modify any of their products or services for customers in this market, and if so ‘how easy or difficult has it been for you to make any modifications to your products or services so that they are suitable for customers in (this market)’.
Chart 7.4.5 Ease Of Making Modifications To Products/Services So That They Are Suitable For Customers In <Market>
This analysis clearly shows that those needing to make modifications to their products or services are in the minority (applying to less than a third of firms). Amongst those that have had to do this, only a small proportion reported difficulties. 7.4.6 Ease Of Negotiating The Language And Culture
Firms were also asked ‘how easy or difficult has it been for you to negotiate the culture and language in (this market)’.
Chart 7.4.6 Ease Of Negotiating The Language And Culture
Those reporting that it has been ‘very difficult’ to negotiate the language and culture are very much in the minority (just 1 in 20 firms), with approaching two-thirds feeling that this was either ‘fairly’ or ‘very’ easy. 7.4.7 Ease Of IP Protection
The chart below shows firms’ perceptions of their chosen market in respect of ‘how easy or difficult has it been for you to protect your Intellectual Property’.
Chart 7.4.7 Ease Of IP Protection
Overall, 15% of firms reported difficulties in this respect, with approaching two-fifths feeling that it had been either ‘fairly’ or ‘very’ easy and a further 29% that IP protection was not relevant for them. Problems in this respect do appear to be more commonplace amongst those selling through agents or distributors in comparison with those selling direct, but still only around a fifth of this group felt that this had been either ‘fairly’ or ‘very’ difficult. 7.4.8 Ensuring You Get Paid And Enforcing Contracts
Firms were also asked about their views of the risk of doing business in this market in respect of ‘ensuring you get paid and enforcing contracts’.
Chart 7.4.8 Ensuring You Get Paid And Enforcing Contracts
Those perceiving a high risk in this respect are in the minority (1 in 5), however more than a quarter felt that the risk was ‘average’ in this respect rather than low. 7.4.9 Guaranteeing Quality
Firms were also asked to assess the risk in terms of ‘being able to guarantee the quality of the goods or service you provide’. Please note that those firms indicating that they had chosen the market in question because they had ‘received an approach’ but not scoring either 3, 4 or 5 out of 5 for any of the remaining four drivers of geographical focus were not asked to assess this element.
Chart 7.4.9 Being Able To Guarantee The Quality Of The Goods Or Service You Provide
Interestingly, those operating through agents or distributors hold very similar views in this respect to those selling direct, with fewer than 1 in 10 reporting a high risk in this respect. 7.4.10 Return On Investment
Firms were also asked for their views of ‘the financial risk in terms of the investment required and being able to ensure a return on that investment’. Again, those firms indicating that they had chosen the market in question because they had ‘received an approach’ but not scoring either 3, 4 or 5 out of 5 for any of the remaining four drivers of geographical focus were not asked to assess this element.
Chart 7.4.10 The Financial Risk In Terms Of The Investment Required And Being Able To Ensure A Return On That Investment
Only around 1 in 7 firms reported that this posed either a ‘fairly’ or ‘very’ high risk, with this again very similar for those selling through agents or distributors and those selling direct. 7.4.11 Ease of Staff Recruitment/Retention
Those answering with reference to overseas sites were also asked ‘how easy or difficult has it been for you to recruit and retain suitable staff’.
Chart 7.4.11 Ease of Recruiting and Retaining Suitable Staff
Although the small base sizes mean that these results should be treated as indicative only, and particularly for production sites, call centres and R&D facilities, indications are that approaching a quarter of firms establishing overseas sites find recruiting and retaining suitable staff either ‘fairly’ or ‘very’ difficult. Only around 1 in 10 find it ‘very easy’. 7.4.12 Cost of Resources
This group were also asked to indicate whether ‘in comparison with the UK, the cost of resources (and by that I mean things like wage costs and the cost of raw materials) in (this market)’ are very low, fairly low, average, fairly high or very high.
Chart 7.4.12 Cost of Resources (In Comparison With The UK)
Again, these results should be treated as indicative only, and particularly for production sites, call centres and R&D facilities, however, the indications are that low costs may well be particularly important for production sites & R&D facilities. 7.4.13 Level of Demand
The chart below shows firms’ perceptions of their chosen market in respect of ‘the potential level of demand for your products or services in (this market)’. Those firms with overseas production sites, call centres and R&D facilities not selling to customers in this market were not asked this question nor were those firms indicating that they had chosen the market in question because they had ‘received an approach’ but not scoring either 3, 4 or 5 out of 5 for any of the remaining four drivers of geographical focus.
Chart 7.4.13 The Potential Level of Demand in <Market>
Over a third of firms indicated that they saw the demand as either ‘fairly’ or ‘very’ high in this market. Interestingly approaching 1 in 5 indicated that they saw the demand as either ‘fairly’ or ‘very’ low with these firms almost exclusively opting to either sell direct or sell through agents or distributors (with two of these firms opting for JV or other partnership arrangements). 8. Drivers of Mode
8.1 Drivers of Mode (Unprompted)
Prior to being questioned on specific potential drivers of choice of mode, firms were provided with an opportunity to describe, in their own words, their reasons for choosing the mode in question rather than an alternative approach on this occasion. These responses have been coded into common themes and the most popular answers (mentioned by 3% or more of firms) are shown in the table below.
Table 8.1 Drivers of Mode (Unprompted)
| Top mentions (3%+) | Total | Mode | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |--------------------|-------|------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | They approached us | 27% | 33% | 12% | 5% | 0% | 22% | 0% | 0% | 2% | 0% | | | Cost effective/cheaper | 13% | 13% | 9% | 31% | 0% | 9% | 28%| 74% | 12% | 0% | | | Specialised products/technical issues | 7% | 8% | 1% | 0% | 0% | 5% | 0% | 0% | 7% | 0% | | | Already have established contacts/customers/relationships | 5% | 6% | 2% | 0% | 0% | 13% | 5% | 26% | 2% | 0% | | | Easy/convenient | 5% | 3% | 14% | 5% | 0% | 0% | 0% | 0% | 5% | 0% | | | Always done it this way | 4% | 3% | 5% | 13% | 50% | 0% | 0% | 0% | 3% | 0% | | | More control | 4% | 4% | 1% | 0% | 0% | 0% | 14%| 0% | 10% | 49% | | | Agents/distributors have greater knowledge of market/established client base | 3% | 0% | 20% | 5% | 0% | 0% | 0% | 0% | 0% | 0% | | | Prefer to deal personal/one-to-one level | 3% | 4% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 3% | 0% | | Small business/low level of business | 3% | 2% | 7% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | Language/cultural issues | 3% | 1% | 10% | 18% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | | Nature of business opportunity/no choice | 3% | 2% | 3% | 13% | 50% | 0% | 14%| 0% | 10% | 13% | | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100%|
Base: All answering about... (Base, Don't know) – Selling direct (681, 2%), Agents/distributors (146, 1%), Licensing (12, 0%), Franchising (2, 0%), JVs/partnerships (13, 5%), Production site (9, 19%), Call centre (2, 0%), Sales site (29, 7%), R&D facility (6, 13%)
This suggests that firms often sell direct because they receive approaches from potential overseas customers (with this also happening in some cases with those choosing to operate through third parties). The cost element is also clearly an important aspect of choice of mode that applies across all approaches.
Amongst those selling through agents or distributors, the knowledge and connections that the overseas partner can offer is the most popular spontaneous reason given for choosing to approach a market in this way, with the ease/convenience of such an arrangement also important. A selection of the comments made by individual firms is provided below.
“It keeps the price down not having to pay an agent and you also keep a direct relationship with customers” – Selling direct
“This is the method we always use and it is the most cost efficient method too” – Selling direct
“There’s a greater margin for me as I have no middle man.” – Selling direct
“The main reason was the customer approached us directly” – Selling direct
“Because they are the ones who approach us” – Agents/distributors
“Essentially we are developing our business and we do not have the resources in terms of manpower to cover the countries in other ways” – Agents/distributors
“It’s the easiest and cheapest way” – Agents/distributors
“To keep costs low and risks down” – Agents/distributors 8.2 Drivers of Mode (Summary)
In order to determine the drivers of mode, a series of 19 hypotheses were generated during initial design phases of the study, with these hypotheses describing the various potential drivers of choice of mode identified in the initial design phase. For each individual mode, between 7 and 11 of the full 19 hypotheses are relevant, with wording of the survey questions used to address each relevant objective tailored to the individual mode.
For example, one of the hypotheses identified has been labelled ‘customers’ and deals with firms choosing to operate their own sales site or establish a partnerships because their customers require them to have a local presence and firms choosing to set up a production/call centre/R&D facility because their customers require it. This hypothesis was identified as being relevant to all modes except selling direct, with those firms selling through agents or distributors, involved in contractual arrangements or their own overseas sales site asked the extent to which ‘our customers in (this market) require a local presence’. Those firms with their own production sites, call centres or R&D facilities were asked the extent to which ‘our customers require us to have a local production facility/presence/R&D site’.
Firms answered on a 5-point scale, where 5 means the statement is completely applicable and 1 means that it does not apply at all. The tables below show, for each individual mode, the hypotheses measured, the question text used and the proportion scoring 4 or 5 on the 5-point scale for each hypothesis (details of the full distributions of scores are shown later in this Chapter). Also shown is the proportion of firms classified as ‘solely reactive’ (as described in Chapter 7) and those not scoring against any of the 19 hypotheses (labelled ‘none’).
Table 8.2.1 Drivers Of Mode – Selling Direct
| % scoring 4 or 5 | | |---------------------------------------------------------------------------------|-------| | ‘Meeting needs’ – it was the best way to build up strong working relationships with our overseas customers | 73% | | ‘ROI/Risk’ – we didn’t want to reduce our profit margins by paying a ‘middle man’ | 44% | | ‘Level of demand’ – it was the best approach given the level of demand in <market> | 53% | | ‘IP’ – it was the best way to protect our intellectual property | 29% | | ‘Quality’ – it was the best way to ensure quality or customer service | 66% | | ‘Habit’ – we always approach overseas markets by selling direct to customers | 44% | | ‘Advice’ – we were advised to approach <market> by selling direct to customers | 18% | | Solely reactive | 18% | | None | 13% | | Total | 100% |
Base: All answering about… (Base) – Selling direct (681)
For firms electing to sell direct, 7 of the 19 hypotheses are relevant. This group appear to be most likely to be driven by customer-centred considerations, i.e. meeting customer needs through the building up of strong working relationships and ensuring quality or customer service. Approaching 1 in 5 firms choosing to sell direct are classified as ‘solely reactive’ and account for most of those labelled as having ‘none’ of the drivers.
The table below shows drivers of mode for those choosing to sell through agents or distributors.
Table 8.2.2 Drivers Of Mode – Agents/Distributors
| % scoring 4 or 5 | | |---------------------------------------------------------------------------------|-------| | ‘Customers’ – our customers in >market> require a local presence | 49% | | ‘ROI/Risk’ – it reduced the financial risk of doing business in <market> | 51% | | ‘Level of demand’ – it was the best approach given the level of demand in <market> | 64% | | ‘Finding Buyers’ – our overseas partner was better placed than we were to identify potential customers in <market> | 73% | | ‘Human resources (Capabilities)’ – it was the best way to access people who understand the market in <market> | 66% | | ‘Language & culture’ – it was the easiest way for us to cope with the practicalities of the language/culture in <market> | 53% | | ‘Business framework (Capabilities)’ – it was the easiest way for us to cope with the practicalities of doing business in <market> in terms of regulations, transport, logistics, getting paid etc. | 64% | | ‘IP’ – it was the best way to protect our intellectual property | 20% | | ‘Habit’ – we always approach overseas markets in this way | 40% | | ‘Advice’ – we were advised to approach <market> in this way | 30% | | Solely reactive | 9% | | None | 11% | | Total | 100% |
Base: All answering about… (Base) – Agents/distributors (146)
For this group the abilities of the agent/distributor are key, with the abilities of the partner to find buyers, their understanding of the market & their ability to cope with framework issues (as well as the language & culture) the most popular of the hypotheses. Having a need for a local presence appears to be less important, but still around half of those choosing to operate via this mode feel that it is applicable. In comparison with those selling direct, fewer firms are classified as ‘solely reactive’. The table below shows the drivers of mode for those choosing to pursue licensing, franchising or other partnership/JV arrangements.
Table 8.2.3 Drivers Of Mode – Contractual Arrangements
| % scoring 4 or 5 | Licensing | Franchising | JV's | |------------------|-----------|-------------|------| | 'Customers' – our customers in >market< require a local presence | 50% | 100% | 60% | | 'ROI/Risk' – it reduced the financial risk of doing business in <market> | 82% | 0% | 35% | | 'Level of demand' – it was the best approach given the level of demand in <market> | 42% | 0% | 43% | | 'Finding Buyers' – our overseas partner was better placed than we were to identify potential customers in <market> | 60% | 50% | 65% | | 'Human resources (Capabilities)' – it was the best way to access people who understand the market in <market> | 60% | 50% | 55% | | 'Language & culture' – it was the easiest way for us to cope with the practicalities of the language/culture in <market> | 60% | 100% | 43% | | 'Business framework (Capabilities)' – it was the easiest way for us to cope with the practicalities of doing business in <market> in terms of regulations, transport, logistics, getting paid etc. | 73% | 0% | 60% | | 'IP' – it was the best way to protect our intellectual property | 41% | 50% | 5% | | 'Quality' – it was the best way to ensure quality or customer service | X | 0% | X | | 'Habit' – we always approach overseas markets in this way | 41% | 0% | 22% | | 'Advice' – we were advised to approach <market> in this way | 10% | 50% | 43% | | Solely reactive | 18% | 0% | 14% | | None | 0% | 0% | 31% | | Total | 100% | 100% | 100% |
Base: All answering about… (Base) – Licensing (12), Franchising (2), JV’s (13)
Although the base sizes are too small to draw robust conclusions on the drivers of these less popular modes, risk appears to be an important consideration for licensing certainly, as well as ability of the partner firm. The table below shows the drivers of mode for those with their own production site.
Table 8.2.4 Drivers Of Mode – Production Sites
| % scoring 4 or 5 | | |---------------------------------------------------------------------------------|-------| | ‘Customers’ – our customers require us to have a local production facility | 5% | | ‘Meeting needs’ – it was the best way to build up strong working relationships with customers in <market> | 19% | | ‘Meeting needs’ – it enabled us to offer quicker response times or reduced shipment costs | 19% | | ‘Level of demand’ – it was the best approach given the level of demand in <market> | 5% | | ‘Cost of resources’ – it enabled us to access cheaper resources, such as cheaper wages or cheaper raw materials | 33% | | ‘Business framework (ROI, Cost & Risk)’ – it enabled us to overcome import restrictions, avoid import duties or gain other tax advantages | 14% | | ‘Human resources (Location)’ – it was the best way to access people with the specialist knowledge and skills we required | 0% | | ‘Competitors’ – our competitors have production sites in <market>, so we decided to do the same | 0% | | Solely reactive | 0% | | None | 47% | | Total | 100% |
Base: All answering about… (Base) – Production sites (9)
As this data is based on just 9 firms base sizes are certainly too small to draw robust conclusions, however amongst these 9 firms at least, access to cheaper resources appears to be important.
The table below shows the drivers of mode for those with an overseas call centre.
Table 8.2.5 Drivers Of Mode – Call Centres
| % scoring 4 or 5 | | |---------------------------------------------------------------------------------|-------| | ‘Customers’ – our customers require us to have a local presence | 0% | | ‘Meeting needs’ – it enabled us to offer quicker response times | 26% | | ‘Level of demand’ – it was the best approach given the level of demand in <market> | 0% | | ‘Cost of resources’ – it enabled us to access cheaper resources, such as cheaper wages or cheaper raw materials | 26% | | ‘Business framework (ROI, Cost & Risk)’ – it provides tax advantages | 0% | | ‘Human resources (Location)’ – it was the best way to access people with the specialist knowledge and skills we required | 100% | | ‘Competitors’ – our competitors have call centres in <market>, so we decided to do the same | 0% | | Solely reactive | 0% | | None | 0% | | Total | 100% |
Base: All answering about… (Base) – Call centres (2)
In this case, the data is based on just 2 firms and base sizes are definitely too small to draw any real conclusions. The table below shows drivers of mode for those operating their own overseas sales sites.
Table 8.2.6 Drivers Of Mode – Sales/Service Sites
| % scoring 4 or 5 | | |---------------------------------------------------------------------------------|-------| | ‘Customers’ – our customers in >market< require a local presence | 73% | | ‘Meeting needs’ – it was the best way to build up strong working relationships with our overseas customers | 97% | | ‘ROI/Risk’ – we didn’t want to reduce our profit margins by paying a ‘middle man’ | 56% | | ‘Level of demand’ – it was the best approach given the level of demand in <market> | 90% | | ‘Product development (ROI, Cost & Risk)’ – it enabled us to overcome import restrictions, avoid import duties or gain other tax advantages | 17% | | ‘IP’ – it was the best way to protect our intellectual property | 49% | | ‘Quality’ – it was the best way to ensure quality or customer service | 88% | | ‘Human resources (Locations)’ – it was the best way to access people with the specialist knowledge and skills we required | 66% | | ‘Habit’ – we always approach overseas markets in this way | 32% | | ‘Advice’ – we were advised to approach <market> in this way | 49% | | Solely reactive | 0% | | None | 0% | | Total | 100% |
Base: All answering about… (Base) – Sales sites (29)
As is the case for those selling direct, firms electing to establish their own overseas sales site are likely to have customer-centred reasons for doing so (meeting customer needs through the building up of strong working relationships and ensuring quality or customer service). However, in the case of those with overseas sales sites, this is coupled with a large proportion indicating it being an appropriate course of action given the level of demand (which applied to fewer firms choosing to sell direct (53%)). As expected, this group are not solely reactive. The table below shows the drivers of mode for those choosing to operate their own overseas R&D facility.
Table 8.2.7 Drivers Of Mode – R&D Facilities
| % scoring 4 or 5 | | |---------------------------------------------------------------------------------|-------| | ‘Customers’ – our customers require us to have a local R&D site | 13% | | ‘Product development (meeting needs)’ – it enabled us to speed up the research and development process | 49% | | ‘Cost of resources’ – it enabled us to access cheaper resource, such as cheaper wages or cheaper raw materials | 62% | | ‘Product development (ROI, Cost & Risk)’ – it was the best way to get the necessary product development done for our customers in <market> | 0% | | ‘Business framework (ROI, Cost & Risk)’ – it enabled us to overcome import restrictions, avoid import duties or gain other tax advantages | 13% | | ‘Human resources (Location)’ – it was the best way to access people with the specialist knowledge and skills we required | 62% | | ‘Location’ – it meant that we could be close to an important centre or expertise in our industry | 49% | | ‘Competitors’ – our competitors have R&D facilities in <market>, so we decided to do the same | 38% | | Solely reactive | 0% | | None | 13% | | Total | 100% |
Base: All answering about… (Base) – R&D sites (6)
As only 6 firms were questioned in connection with an overseas R&D facility, the small base size means that it is not possible to draw robust conclusions. However, there is some evidence to suggest that access to resources is important both in terms of access to human resources (i.e. people with the specialist knowledge and skills) and cheap resources (i.e. cheaper wages or raw materials). The table below provides an overview of the above results in a single location.
### Table 8.2.8 Drivers of Mode
| % scoring 4 or 5 | Total | Mode | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |------------------|-------|------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | 'Customers' | 49% | X | 49% | 50% | 100% | 60% | 5% | 0% | 73% | 13% | | | 'Meeting needs' | 72% | 73% | X | X | X | X | 19%| 26% | 97% | X | | | 'Product Development (Meeting Needs)' | 49% | X | X | X | X | X | X | X | 49% | | 'ROI/Risk' | 46% | 44% | 51% | 82% | 0% | 35% | X | X | 56% | X | | | 'Level of demand' | 55% | 53% | 64% | 42% | 0% | 43% | 5% | 0% | 90% | X | | 'Cost of resources' | 39% | X | X | X | X | X | 33% | 26% | X | 62% | | 'Product development (ROI, Cost & Risk)' | 0% | X | X | X | X | X | X | X | X | 0% | | 'Business framework (ROI, Cost & Risk)' | 15% | X | X | X | X | X | 14% | 0% | 17% | 13% | | 'Finding Buyers' | 72% | X | 73% | 60% | 50% | 65% | X | X | X | X | | | 'Human resources (Capabilities)' | 65% | X | 66% | 60% | 50% | 55% | X | X | X | X | | 'Language & culture' | 53% | X | 53% | 60% | 100% | 43% | X | X | X | X | | 'Business framework (Capabilities)' | 64% | X | 64% | 73% | 0% | 60% | X | X | X | X | | 'IP' | 28% | 29% | 20% | 41% | 50% | 5% | X | X | 49% | X | | | 'Quality' | 66% | 66% | X | X | 0% | X | X | X | 88% | X | | | 'Human resources (Locations)' | 49% | X | X | X | X | X | 0% | 100% | 66% | 62% | | 'Location' | 49% | X | X | X | X | X | X | X | 49% | X | | | 'Habit' | 42% | 44% | 40% | 41% | 0% | 22% | X | X | 32% | X | | | 'Competitors' | 10% | X | X | X | X | X | 0% | 0% | X | 38% | | | 'Advice' | 21% | 18% | 30% | 10% | 50% | 43% | X | X | 49% | X | | | Solely reactive | 15% | 18% | 9% | 18% | 0% | 14% | 0% | 0% | 0% | 0% | | | None | 13% | 13% | 11% | 0% | 0% | 31% | 47%| 0% | 0% | 13% | | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100% |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6) The 19 drivers of choice of mode firms were prompted with have been summarised further as outlined below.
| Drivers Of Mode - Summary | |---------------------------| | Firms have been defined as being motivated to a significant extent by ‘meeting customer needs’ if they scored 4 or 5 on a 5-point scale for… | | • ‘Customers’ or ‘meeting needs’ or ‘product development (meeting needs)’ | | Firms have been defined as being motivated to a significant extent by ‘ROI, cost & risk’ if they scored 4 or 5 on a 5-point scale for… | | • ‘ROI/Risk’, ‘level of demand’, ‘cost of resources’, ‘product development (ROI, cost & risk)’ or ‘business framework (ROI, cost & risk)’ | | Firms have been defined as being motivated to a significant extent by ‘accessing partner capabilities & connections’ if they scored 4 or 5 on a 5-point scale for… | | • ‘Finding buyers’, ‘human resources (capabilities)’, ‘language & culture’ or ‘business framework (capabilities)’ | | Firms have been defined as being motivated to a significant extent by ‘control of IP & product/service quality’ if they scored 4 or 5 on a 5-point scale for… | | • ‘IP’ or ‘quality’ | | Firms have been defined as being motivated to a significant extent by ‘accessing locations of expertise’ if they scored 4 or 5 on a 5-point scale for… | | • ‘Human resources (locations)’ or ‘location’ | | Firms have been defined as being motivated to a significant extent by ‘non-analytical factors’ if they scored 4 or 5 on a 5-point scale for… | | • ‘Habit’, ‘competitors’ or ‘advice’ | | Firms have been defined as being ‘solely reactive’ if… | | • They score 4 or 5 for ‘received an approach from someone in the market’ | | • But did not score 3, 4 or 5 for having connections, considering a number of markets or internal identification of an opportunity | The table below shows the proportions of firms scoring against each of these summary categories.
Table 8.2.9 Drivers of Mode (Summary)
| % scoring | Total | Mode | Own Site | |-----------------------------------------------|-------|------|----------| | | | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | | 'Meeting customer needs' | 68% | 73% | 49% | 50% | 100% | 60% | 19% | 26% | 97% | 62% | | 'ROI, cost & risk' | 68% | 66% | 73% | 87% | 0% | 60% | 53% | 26% | 95% | 62% | | 'Accessing partner capabilities & connections' | 84% | X | 85% | 87% | 100% | 69% | X | X | X | X | | 'Control of IP & product/service quality' | 58% | 67% | 20% | 41% | 50% | 5% | X | X | 90% | X | | 'Accessing locations of expertise' | 50% | X | X | X | X | 0% | 100% | 66% | 74% | | | 'Non-analytical factors' | 50% | 50% | 55% | 51% | 50% | 47% | 0% | 0% | 56% | 38% | | 'Solely reactive' | 15% | 18% | 9% | 18% | 0% | 14% | 0% | 0% | 0% | 0% | | None | 13% | 13% | 11% | 0% | 0% | 31% | 47% | 0% | 0% | 13% | | Total | 100% | 100% | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100%|
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
For those firms that have chosen to sell direct, the importance of ‘meeting customer needs’ is highlighted, alongside maintaining control of IP and product/service quality. For those electing to sell via agents or distributors, the capabilities and connections of the partner firm are highlighted as strong drivers of this choice. For those opting to enter into contractual arrangements the small base sizes make it difficult to draw robust conclusions, but the capabilities of the partner firm again appear to be important. Those operating their own overseas sales sites appear to be driven by similar considerations to those selling direct, namely ‘meeting customer needs’ as well as maintaining control of IP and product/service quality.
Across all modes, ‘ROI, cost & risk’ is highlighted as an important driver of choice of mode, a category that essentially addresses the issue of profitability and firms making money. The table below provides analysis of the above drivers of mode by age of firm, both at the total level and within mode. Please note that contractual arrangements (i.e. licensing, franchising and other partnerships/JVs) have been grouped for this analysis, as have the various types of overseas sites, but base sizes are still very small and results should be treated as indicative only.
Table 8.2.10 Drivers of Mode – By Age Of Firm (And Mode)
| % scoring | Total | Mode/Age | Direct | Agents/Distributors | |----------------------------------|-------|----------|--------|---------------------| | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | 'Meeting customer needs' | 63% | 69% | 69% | 67% | 71% | 75% | 45% | 48% | 50% | | 'ROI, cost & risk' | 63% | 70% | 68% | 62% | 67% | 66% | 67% | 76% | 74% | | 'Accessing partner capabilities & connections' | 77% | 82% | 86% | X | X | X | 81% | 79% | 87% | | 'Control of IP & product/service quality' | 56% | 59% | 59% | 62% | 67% | 69% | 26% | 12% | 21% | | 'Accessing locations of expertise' | 56% | 63% | 43% | X | X | X | X | X | X | | 'Non-analytical factors' | 46% | 55% | 50% | 46% | 56% | 50% | 43% | 48% | 60% | | 'Solely reactive' | 13% | 17% | 16% | 14% | 20% | 19% | 10% | 10% | 8% | | None | 15% | 12% | 12% | 15% | 12% | 12% | 14% | 14% | 10% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| % scoring | Contractual Arrangements | Overseas site | |----------------------------------|--------------------------|---------------| | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | 'Meeting customer needs' | 50% | 57% | 60% | 69% | 94% | 57% | | 'ROI, cost & risk' | 40% | 71% | 80% | 75% | 88% | 71% | | 'Accessing partner capabilities & connections' | 60% | 100% | 80% | X | X | X | | 'Control of IP & product/service quality' | 20% | 43% | 20% | 100% | 92% | 83% | | 'Accessing locations of expertise' | X | X | X | 56% | 63% | 43% | | 'Non-analytical factors' | 50% | 43% | 50% | 44% | 63% | 21% | | 'Solely reactive' | 30% | 14% | 10% | 0% | 0% | 0% | | None | 40% | 0% | 10% | 6% | 6% | 21% | | Total | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about... (Base) – Total: Up to 5 (283), 6-10 (286), More than 10 (331), Selling direct: Up to 5 (215), 6-10 (221), More than 10 (245), Agents/distributors: Up to 5 (42), 6-10 (42), More than 10 (62), Contractual arrangements: Up to 5 (10), 6-10 (7), More than 10 (10), Overseas site: Up to 5 (16), 6-10 (16), More than 10 (14)
Interestingly, the pattern in terms of drivers of mode is very similar for firms within each of the three age groups. The table below provides an analysis of the drivers of mode by business size (as measured by number of employees).
Table 8.2.11 Drivers of Mode – By Size of Firm (And Mode)
| % scoring | Total | Mode/Size (Number of Employees) | |----------------------------------|-------|---------------------------------| | | | Direct | Agents/Distributors | | | 0-9 | 10-49 | 50+ | 0-9 | 10-49 | 50+ | 0-9 | 10-49 | 50+ | | 'Meeting customer needs' | 64% | 68% | 82% | 68% | 75% | 86% | 48% | 48% | 71% | | 'ROI, cost & risk' | 65% | 69% | 80% | 62% | 68% | 79% | 79% | 67% | 79% | | 'Accessing partner capabilities & connections' | 85% | 81% | 95% | X | X | X | 88% | 82% | 91% | | 'Control of IP & product/service quality' | 54% | 60% | 67% | 60% | 74% | 79% | 27% | 16% | 9% | | 'Accessing locations of expertise' | 52% | 50% | 47% | X | X | X | X | X | X | | 'Non-analytical factors' | 49% | 50% | 59% | 49% | 50% | 59% | 56% | 50% | 79% | | 'Solely reactive' | 19% | 14% | 8% | 21% | 17% | 7% | 12% | 6% | 4% | | None | 15% | 12% | 10% | 14% | 12% | 11% | 16% | 8% | 10% | | Total | 100% | 100% | 100%| 100%| 100% | 100%| 100%| 100% | 100%|
| % scoring | Total | Mode/Size (Number of Employees) | |----------------------------------|-------|---------------------------------| | | | Contractual Arrangements | Overseas site | | | 0-9 | 10-49 | 50+ | 0-9 | 10-49 | 50+ | | 'Meeting customer needs' | 57% | 41% | 75% | 61% | 69% | 79% | | 'ROI, cost & risk' | 43% | 77% | 87% | 73% | 78% | 79% | | 'Accessing partner capabilities & connections' | 57% | 77% | 100% | X | X | X | | 'Control of IP & product/service quality' | 7% | 30% | 32% | 100%| 72% | 100%| | 'Accessing locations of expertise’ | X | X | X | 52% | 50% | 47% | | 'Non-analytical factors' | 43% | 47% | 57% | 37% | 37% | 31% | | 'Solely reactive' | 22% | 0% | 25% | 0% | 0% | 0% | | None | 22% | 23% | 0% | 21% | 0% | 21% | | Total | 100% | 100% | 100%| 100%| 100% | 100%|
Base: All answering about... (Base) – Total: 0-9 (502), 10-49 (300), 50+ (91), Selling direct: 0-9 (393), 10-49 (218), 50+ (64), Agents/distributors: 0-9 (76), 10-49 (57), 50+ (12), Contractual arrangements: 0-9 (10), 10-49 (9), 50+ (8), Overseas site: 0-9 (23), 10-49 (16), 50+ (7)
Whilst smaller firms are more likely to be ‘solely reactive’ or to feel that none of the hypotheses apply strongly to them, all of the remaining drivers of mode are more likely to apply to larger firms. The table below provides an analysis of the drivers of mode by overseas business experience (measured by the number of years the firm has been involved in overseas business activity).
Table 8.2.12 Drivers of Mode – By Experience (And Mode)
| % scoring | Total | Mode/Experience (Number of Years) | Direct | Agents/Distributors | |----------------------------------|-------|----------------------------------|--------|---------------------| | | | Less than 2 | 2-10 | More than 10 | Less than 2 | 2-10 | More than 10 | Less than 2 | 2-10 | More than 10 | | 'Meeting customer needs' | | | | | | | | | | | | | | 63% | 68% | 70% | 67% | 72% | 76% | 45% | 52% | 48% | | 'ROI, cost & risk' | | 59% | 71% | 67% | 57% | 68% | 66% | 78% | 79% | 67% | | 'Accessing partner capabilities & connections' | | 76% | 83% | 87% | X | X | X | 81% | 83% | 88% | | 'Control of IP & product/service quality' | | 56% | 58% | 60% | 62% | 65% | 72% | 24% | 21% | 19% | | 'Accessing locations of expertise' | | 58% | 55% | 38% | X | X | X | X | X | X | | 'Non-analytical factors' | | 35% | 53% | 53% | 34% | 52% | 56% | 38% | 60% | 55% | | 'Solely reactive' | | 16% | 17% | 14% | 19% | 19% | 16% | 6% | 8% | 10% | | None | | 18% | 12% | 12% | 18% | 12% | 11% | 16% | 12% | 10% | | Total | | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| % scoring | Total | Mode/Experience (Number of Years) | Contractual Arrangements | Overseas site | |----------------------------------|-------|----------------------------------|--------------------------|---------------| | | | Less than 2 | 2-10 | More than 10 | Less than 2 | 2-10 | More than 10 | | 'Meeting customer needs' | | 20% | 63% | 60% | 75% | 61% | 75% | | 'ROI, cost & risk' | | 20% | 74% | 80% | 58% | 82% | 75% | | 'Accessing partner capabilities & connections' | | 40% | 85% | 80% | X | X | X | | 'Control of IP & product/service quality' | | 20% | 15% | 40% | 100% | 95% | 75% | | 'Accessing locations of expertise' | | X | X | X | X | X | X | | 'Non-analytical factors' | | 0% | 74% | 20% | 42% | 40% | 25% | | 'Solely reactive' | | 40% | 18% | 0% | 0% | 0% | 0% | | None | | 60% | 4% | 20% | 8% | 10% | 25% | | Total | | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about… (Base) – Total: Less than 2 (182), 2-10 (515), More than 10 (199), Selling direct: Less than 2 (140), 2-10 (394), More than 10 (144), Agents/distributors: Less than 2 (25), 2-10 (78), More than 10 (42), Contractual arrangements: Less than 2 (5), 2-10 (17), More than 10 (5), Overseas site: Less than 2 (12), 2-10 (26), More than 10 (8)
Focusing first on those firms selling direct, the general trend appears to be for all of the drivers of mode to become more important with experience. However, this is particularly noticeable for non-analytical factors, with the ‘habit’ hypotheses (i.e. that firms ‘always approach overseas markets in this way’) the element driving this difference (26% of firms that have been doing business overseas for less than 2 years indicated that they always do business by selling direct, compared with 47% of those who having being doing business overseas for 2-10 years and the same proportion of the ‘more than 10 years’ group.) A similar phenomenon in respect of non-analytical factors is evident for those selling through agents or distributors, with the ‘habit’ hypothesis again the element driving this difference (12% of firms that have been doing business overseas via agents or distributors for less than 2 years indicated that they always do business this way, compared with 50% of those who having being doing business overseas for 2-10 years and the 38% of the ‘more than 10 years’ group.
The table below provides an analysis of the drivers of mode by the number of markets firms are doing business in.
Table 8.2.13 Drivers of Mode – By Number of Markets (And Mode)
| % scoring | Total | Mode/Number of Markets | |------------------------------------|-------|------------------------| | | | Direct | Agents/Distributors | | | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | 'Meeting customer needs' | 65% | 71% | 70% | 69% | 76% | 76% | 39% | 54% | 52% | | 'ROI, cost & risk' | 64% | 73% | 69% | 63% | 71% | 66% | 74% | 81% | 68% | | 'Accessing partner capabilities & connections' | 71% | 92% | 88% | X | X | 75% | 92% | 86% | | 'Control of IP & product/service quality' | 60% | 59% | 54% | 65% | 71% | 68% | 29% | 19% | 17% | | 'Accessing locations of expertise' | 50% | 36% | 57% | X | X | X | X | X | | 'Non-analytical factors' | 43% | 61% | 52% | 44% | 62% | 53% | 51% | 63% | 52% | | 'Solely reactive' | 20% | 15% | 9% | 23% | 16% | 12% | 2% | 17% | 7% | | None | 15% | 12% | 10% | 14% | 12% | 11% | 16% | 8% | 10% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| % scoring | Mode/Number of Markets | |------------------------------------|------------------------| | | Contractual Arrangements | Overseas site | | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | 'Meeting customer needs' | 26% | 100% | 74% | 55% | 59% | 82% | | 'ROI, cost & risk' | 47% | 100% | 82% | 67% | 65% | 91% | | 'Accessing partner capabilities & connections' | 53% | 100% | 95% | X | X | X | | 'Control of IP & product/service quality' | 11% | 21% | 35% | 90% | 100% | 85% | | 'Accessing locations of expertise' | X | X | X | 50% | 36% | 57% | | 'Non-analytical factors' | 21% | 100% | 61% | 38% | 25% | 41% | | 'Solely reactive' | 26% | 21% | 5% | 0% | 0% | 0% | | None | 32% | 0% | 5% | 8% | 35% | 9% | | Total | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about... (Base) – Total: Up to 5 (434), 6-10 (217), More than 10 (245), Selling direct: Up to 5 (356), 6-10 (162), More than 10 (161), Agents/distributors: Up to 5 (47), 6-10 (43), More than 10 (55), Contractual arrangements: Up to 5 (11), 6-10 (3), More than 10 (13), Overseas site: Up to 5 (20), 6-10 (9), More than 10 (16)
This analysis again illustrates the point that those involved in fewer markets are more likely to be classified as ‘solely reactive’. The table below provides an analysis of the drivers of geographical focus by the various measures of innovation (including IP activity).
Table 8.2.14 Drivers of Mode – By Innovation/IP (And Mode)
| % scoring | Total | Mode/Innovation & IP | |-----------|-------|----------------------| | | Direct | IP Active | Young tech intensive | Direct | IP Active | Young tech intensive | | | Innovative | Non-innovative | IP Active | Innovative | Non-innovative | IP Active | Young tech intensive | | 'Meeting customer needs' | 67% | 68% | 68% | 72% | 65% | 71% | 72% | 73% | 75% | 68% | | 'ROI, cost & risk' | 69% | 71% | 59% | 71% | 68% | 67% | 69% | 59% | 68% | 67% | | 'Accessing partner capabilities & connections' | 89% | 88% | 58% | 93% | 80% | X | X | X | X | X | | 'Control of IP & product/service quality' | 57% | 58% | 59% | 59% | 58% | 68% | 69% | 64% | 70% | 64% | | 'Accessing locations of expertise' | 54% | 50% | 50% | 45% | 58% | X | X | X | X | X | | 'Non-analytical factors' | 50% | 52% | 45% | 46% | 49% | 49% | 53% | 46% | 47% | 49% | | 'Solely reactive' | 15% | 15% | 16% | 14% | 14% | 19% | 18% | 17% | 18% | 16% | | None | 10% | 10% | 18% | 9% | 13% | 11% | 10% | 18% | 10% | 12% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| % scoring | Mode/Innovation & IP | |-----------|----------------------| | | Agents/Distributors | Contractual Arrangements | | | Innovative | Non-innovative | IP Active | Young tech intensive | Innovative | Non-innovative | IP Active | Young tech intensive | | 'Meeting customer needs' | 53% | 52% | 32% | 59% | 51% | 67% | 62% | 21% | 74% | 50% | | 'ROI, cost & risk' | 72% | 75% | 65% | 80% | 77% | 69% | 76% | 21% | 88% | 40% | | 'Accessing partner capabilities & connections' | 90% | 88% | 63% | 93% | 86% | 83% | 86% | 21% | 92% | 60% | | 'Control of IP & product/service quality' | 23% | 22% | 10% | 20% | 31% | 26% | 24% | 21% | 33% | 20% | | 'Accessing locations of expertise' | X | X | X | X | X | X | X | X | X | X | | 'Non-analytical factors' | 50% | 58% | 36% | 48% | 51% | 60% | 52% | 21% | 48% | 50% | | 'Solely reactive' | 7% | 9% | 6% | 6% | 6% | 10% | 14% | 21% | 8% | 30% | | None | 9% | 11% | 13% | 5% | 11% | 7% | 7% | 79% | 8% | 40% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | Whilst ‘meeting customer needs’ seems to apply to innovative and non-innovative firms alike, there is some evidence to suggest that innovative firms are slightly more likely to be driven by factors relating to ‘ROI, cost & risk’ and ‘accessing partner capabilities & connections’ than non-innovative firms. This finding, alongside the finding that innovative firms are more likely than those classified as ‘non-innovative’ to perceive difficulties with their chosen market in all areas could be interpreted as implying that innovative firms face greater challenges than non-innovative firms in the implementation of a successful internationalisation strategy, specifically in respect of success in commercial terms. This could be due to a number of factors, with the relative difficulty of the task of selling innovative products/services (in comparison with more straightforward, non-technical and ‘easy to explain and sell’ products/services) as possibility as well as a lack of commercial/marketing skills on the part of innovative firms.
This is the case for innovation measured via the main ‘innovative firms’ definitions as well as through IP activity, and for young, technology intensive firms. The table below provides an analysis of the drivers of mode by usage of UKTI.
Table 8.2.15 Drivers of Mode – By Usage Of UKTI (And Mode)
| % scoring | Total | Mode/Usage of UKTI | |----------------------------------|-------|--------------------| | | User | Non-user | Direct | User | Non-user | Agents/Distrib | User | Non-user | Contractual Arrangements | User | Non-user | Overseas Site | User | Non-user | | 'Meeting customer needs' | 70% | 67% | 75% | 72% | 54% | 44% | 86% | 44% | 77% | 65% | | 'ROI, cost & risk' | 70% | 66% | 69% | 64% | 72% | 74% | 79% | 65% | 65% | 79% | | 'Accessing partner capabilities & connections' | 91% | 79% | X | X | 90% | 80% | 93% | 72% | X | X | | 'Control of IP & product/service quality' | 56% | 59% | 69% | 67% | 17% | 23% | 26% | 22% | 90% | 91% | | 'Accessing locations of expertise' | 35% | 55% | X | X | X | X | X | X | 35% | 55% | | 'Non-analytical factors' | 48% | 52% | 47% | 52% | 51% | 59% | 60% | 44% | 35% | 36% | | 'Solely reactive' | 11% | 18% | 13% | 20% | 8% | 9% | 0% | 22% | 0% | 0% | | None | 10% | 14% | 10% | 14% | 9% | 13% | 7% | 19% | 17% | 14% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about... (Base) – Total: Users (311), Non-users (589), Selling direct: Users (225), Non-users (456), Agents/distributors: Users (66), Non-users (80), Contractual arrangements: Users (9), Non-users (18), Overseas site: Users (11), Non-users (35)
As seen when looking at drivers of geographical focus, users of UKTI trade support services are less likely to be classified as ‘solely reactive’ than those who have not received assistance through UKTI. UKTI users are also slightly less likely to be motivated by ‘non-analytical’ factors, suggesting a more deliberate approach to internationalisation on the part of these firms. 8.3 Drivers of Mode (Detailed)
Below is an analysis of the full distributions of scores on the 5-point scale for each of the drivers of mode hypotheses. In each case, the actual survey questions posed to address the hypothesis in question for each individual mode is included on the right-hand side of the chart.
8.3.1 ‘Customers’ Hypothesis
The chart below shows the distribution of scores for the ‘customers’ hypothesis.
Chart 8.3.1 ‘Customers’
This hypothesis applies to all modes except selling direct and refers to customer requirements for a local presence. Amongst this group more than a third of firms felt that this was completely applicable to them (giving a score of 5 on the 5-point scale). 8.3.2 ‘Meeting Needs’ Hypothesis
The chart below shows results for the ‘meeting needs’ hypothesis. Please note that firms operating their own overseas production site were asked to rate two aspects of ‘meeting needs’ and both of these aspects are included, but as separate bars, in the chart.
Chart 8.3.2 ‘Meeting Needs’
This hypothesis applies to firms selling direct as well as those with overseas production sites, call centres or R&D facilities. Amongst this group just over half felt that this was completely applicable to them, and just 1 in 8 that it was ‘not at all applicable (i.e. giving a score of 1 on the 5-point scale). 8.3.3 ‘Product Development (Meeting Needs)’ Hypothesis
The chart below shows results for the ‘product development’ hypothesis that relates to meeting customer needs (a further ‘product development’ hypothesis relating to ROI, cost & risk is shown later in this section).
Chart 8.3.3 ‘Product Development (Meeting Needs)’
This hypothesis applies only to those firms operating their own overseas R&D facility and refers to the speeding-up of the research and development process. Since only 6 firms were questioned on this mode, these results should be treated as indicative only. 8.3.4 ‘ROI/Risk’ Hypothesis
The chart below shows results for the ‘ROI/Risk’ hypothesis.
Chart 8.3.4 ‘ROI/Risk’
This hypothesis applies to all modes except those operating overseas production sites, call centres or R&D facilities. Similar proportions of firms for whom the ‘ROI/Risk’ hypothesis applies feel that it is ‘completely applicable’ to them as feel that it is ‘not at all applicable’. 8.3.5 ‘Level of Demand’ Hypothesis
The chart below shows results for the ‘level of demand’ hypothesis.
Chart 8.3.5 ‘Level of Demand’
The hypothesis applies to all firms except those operating R&D facilities (although amongst those operating production sites or call centres, only those also selling to customers in the market in question were questioned on this topic). Around half of firms selling direct gave a score of 4 or 5 out of 5 for ‘level of demand’, with this rising to almost two-thirds amongst those selling through agents or distributors and 90% amongst those with overseas sales sites. 8.3.6 ‘Cost of Resources’ Hypothesis
The chart below shows the results for the ‘cost of resources’ hypothesis.
Chart 8.3.6 ‘Cost of Resources’
It enabled us to access cheaper resources, such as cheaper wages or cheaper raw materials.
This hypothesis applies only to those firms operating their own overseas production sites, call centre or R&D facilities. Amongst this group similar proportions of firms feel that this hypothesis is applicable to them as feel that it does not apply (although the small base sizes must be taken into account when interpreting this result). 8.3.7 ‘Product Development (ROI, Cost & Risk)’ Hypothesis
The chart below shows results for the ‘product development’ hypothesis that relates to ROI, cost and risk.
Chart 8.3.7 ‘Product Development (ROI, Cost & Risk)’
This hypothesis applies only to those firms with their own overseas R&D facility, and then only those indicating that they had needed to modify at least some of their products or services for customers in the market in question. Only 1 of the 6 firms indicated having needed to make product modifications for these customers, with this firm giving a score of 3 out of 5 for the extent to which they felt that operating their own overseas R&D facility was ‘the best way to get the necessary product development done for our customers in (this market)’. 8.3.8 ‘Business Framework (ROI, Cost & Risk)’ Hypothesis
The chart below shows results for the ‘business framework’ hypothesis that relates to ROI, cost and risk (a further ‘business framework’ hypothesis relating to ‘capabilities’ is shown later in this section).
Chart 8.3.8 ‘Business Framework (ROI, Cost & Risk)’
This hypothesis applies only to those firms operating their own overseas sites. Amongst this group, the majority feel that this is ‘not at all applicable’ to them, giving a score of 1 out of 5. Only around 1 in 10 indicated that it was ‘completely applicable’. 8.3.9 ‘Finding Buyers’ Hypothesis
The chart below shows results for the ‘finding buyers’ hypothesis.
Chart 8.3.9 ‘Finding Buyers’
This hypothesis applies to those modes where a partner firm is involved, namely those selling through agents or distributors and those entering into some form of contractual arrangement. Amongst this group more than half of firms feel that this is completely applicable to them (giving a score of 5 on the 5-point scale). 8.3.10 ‘Human Resources (Capabilities)’ Hypothesis
The chart below shows results for the ‘human resources’ hypothesis that relates to ‘capabilities’ (a further ‘human resources’ hypothesis relating to location is shown later in this section).
Chart 8.3.10 ‘Human Resources (Capabilities)’
This hypothesis also applies to those modes where a partner firm is involved, namely those selling through agents or distributors and those entering into some form of contractual arrangement, and refers to the human resources these partner firms possess (and particularly their understanding of the market in question). Amongst this group more than two-fifths of firms feel that this is completely applicable to them (giving a score of 5 on the 5-point scale). 8.3.11 ‘Language And Culture’ Hypothesis
The chart below shows results for the ‘language and culture’ hypothesis.
Chart 8.3.11 ‘Language & Culture’
Again this hypothesis applies to those modes where a partner firm is involved, namely those selling through agents or distributors and those entering into some form of contractual arrangement, and refers to the ability of the partner firm to ‘cope with the practicalities’ of the language and culture in the market in question. Approaching two-fifths of these firms feel that this is completely applicable to them, with just 22% feeling that it is ‘not at all applicable’. 8.3.12 'Business Framework (Capabilities)' Hypothesis
The chart below shows results for the 'business framework' hypothesis that relates to 'capabilities'.
Chart 8.3.12 'Business Framework (Capabilities)'
This hypothesis also applies to those modes where a partner firm is involved, namely those selling through agents or distributors and those entering into some form of contractual arrangement, and refers to the ability of the partner firm to deal with the 'practicalities of doing business', such as 'regulations, transport, logistics, getting paid etc.' This hypothesis is also 'completely applicable' to approaching two-fifths of this group, with a further 25% of these firms giving a score of 4 out of 5. Just 16% feel that this is 'not at all applicable' to them. 8.3.13 ‘IP’ Hypothesis
The chart below shows results for the ‘IP’ hypothesis.
Chart 8.3.13 ‘IP’
This hypothesis applies to all modes except firms operating their own overseas product sites, call centres or R&D facilities. Approaching half of these firms feel that this hypothesis (which refers to protection of intellectual property) is ‘not at all applicable’ to them, and those giving a score of 5 out of 5 are in the minority. 8.3.14 ‘Quality’ Hypothesis
The chart below shows results for the ‘quality’ hypothesis.
Chart 8.3.14 ‘Quality’
This hypothesis applies to those selling direct, through their own overseas site or entering into franchising arrangements and refers to whether or not the chosen mode was the best way to ensure quality or customer service. Approaching half of these firms feel that this is ‘completely applicable’ to them, with a further 20% giving a score of 4 out of 5. Please note the small base size (2 firms) when interpreting the results for franchising. 8.3.15 ‘Human Resources (Location)’ Hypothesis
The chart below shows results for the ‘human resources’ hypothesis that relates to location.
Chart 8.3.15 ‘Human Resources (Location)’
It was the best way to access people with the specialist knowledge and skills we required.
This hypothesis applies to those firms operating their own overseas site and refers to access to people with the necessary ‘specialist knowledge and skills’. Overall, around a quarter of these firms feel that this is ‘completely applicable’ to them, rising to 44% amongst those operating via their own overseas sales site. 8.3.16 ‘Location’ Hypothesis
The chart below shows results for the ‘location’ hypothesis.
Chart 8.3.16 ‘Location’
It meant that we could be close to an important centre of expertise in our industry
This hypothesis applies only to those firms operating their own overseas R&D facility and refers to the importance of proximity to ‘an important centre of expertise’ in the industry. The small base size (6 firms) must be borne in mind when interpreting this result, with 3 of the 6 firms interviewed indicating that this was ‘completely applicable’ in their case and 2 of the 6 indicating that it was ‘not at all applicable’. 8.3.17 'Habit' Hypothesis
The chart below shows results for the 'habit' hypothesis.
Chart 8.3.17 'Habit'
This hypothesis applies to all modes except firms operating their own overseas production sites, call centres or R&D facilities and refers to the idea of firms always approaching overseas market 'in this way'. A third of these firms feel that this is completely applicable to them, but a similar proportion feel that it is 'not at all applicable'. 8.3.18 ‘Competitors’ Hypothesis
The chart below shows results for the ‘competitors’ hypothesis.
Chart 8.3.18 ‘Competitors’
This hypothesis applies only to those firms operating their own production sites, call centres or R&D facilities. Whilst the small base sizes must be borne in mind when interpreting these results, this hypothesis does not appear to be applicable in the majority of cases. 8.3.19 ‘Advice’ Hypothesis
The chart below shows results for the ‘advice’ hypothesis.
Chart 8.3.19 ‘Advice’
This hypothesis applies to all firms except those operating their own overseas production sites, call centres or R&D facilities and refers to firms being ‘advised’ to approach the market in question ‘in this way’. This hypothesis does not apply to the majority of these firms, with 60% indicating that this is ‘not at all applicable’. 9. Barriers
9.1 Barriers (Summary)
Following difficulties encountered in previous studies in measuring barriers through direct questioning techniques, a projective questioning technique was employed for this research. This technique attempts to get over issues relating to the reluctance of firms to acknowledge barriers by asking them to talk about issues that other similar firms would face. Firms were asked:
I’d now like you to think about the difficulties or problems that a firm in a similar position to yourself in terms of size, sector and structure might face doing business overseas.
I’m going to read out a list of possible issues and I’d like you to tell me the extent to which a firm similar to yourself would encounter each one when trying to do business in <market> via <mode>.
Please give me a score of 1 to 5 for the extent to which you feel that this is likely to be a difficulty, where 5 means it would be ‘extremely difficult’ and 1 means it would ‘not be a problem at all’.
Again, this line of questioning asked firms to answer in the context of the one internationalisation mode and the one market that were the focus of the sections on drivers of geographical focus and drivers of mode. This is another point of difference with previous studies.
A series of 12 potential barriers were tested with this questioning approach, with the table overleaf detailing the summarised proportions scoring 4 or 5 on the 5-point scale for each of these elements. Also shown is data from the section on drivers of geographical focus that is also pertinent to the issue of barriers. A total of 6 of the elements from this earlier section are included here, with firms indicating that their chosen market was either ‘fairly’ or ‘very’ difficult in these respects shown in the analysis. Please note that for these 6 items, data is based on firms’ own experience (but is still specific to the market and mode under discussion)
### Table 9.1.1 Barriers
| % scoring 4 or 5 | Total | Mode | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |------------------|-------|------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | Problems obtaining work permits/visas | 41% | X | X | X | X | X | 57% | 74% | 36% | 13% | | Identifying who to make contact with | 34% | 33% | 39% | 46% | 0% | 17% | 33% | 100% | 34% | 13% | | Establishing an initial dialogue | 29% | 28% | 30% | 46% | 0% | 30% | 33% | 74% | 32% | 13% | | Building relationships | 30% | 28% | 34% | 46% | 50% | 22% | 28% | 26% | 48% | 49% | | Obtaining basic information | 21% | 20% | 25% | 31% | 50% | 0% | 42% | 100% | 22% | 13% | | Costs associated with doing business | 23% | 23% | 26% | 14% | 0% | 38% | 14% | 0% | 24% | 49% | | Finding the necessary management time | 24% | 23% | 22% | 28% | 0% | 22% | 62% | 0% | 42% | 62% | | Exchange rates and currency | 28% | 27% | 34% | 13% | 50% | 5% | 47% | 0% | 30% | 13% | | Not having an office or site | 20% | 19% | 29% | 18% | 50% | 13% | X | X | X | X | | Cultural differences | 17% | 15% | 18% | 23% | 0% | 22% | 47% | 26% | 25% | 36% | | A bias for dealing with domestic firms | 21% | 18% | 30% | 14% | 50% | 30% | X | X | 22% | X | | A bias amongst customers for UK goods | 33% | X | X | X | X | X | 28% | 26% | 49% |
**Perceptions of the Market**
| Ease of negotiating framework | 25% | 25% | 20% | 14% | 50% | 9% | 57% | 100% | 46% | 13% | | Ease of protecting Intellectual Property | 15% | 13% | 18% | 23% | 50% | 39% | 14% | 74% | 12% | 36% | | Risk of ensuring you get paid etc. | 19% | 20% | 18% | 18% | 0% | 17% | 14% | 0% | 12% | 13% | | Ease of logistics of doing business | 26% | 25% | 29% | 18% | 0% | 26% | 28% | 74% | 34% | 13% | | Ease of recruiting & retaining staff | 22% | X | X | X | X | X | 28% | 0% | 20% | 25% | | Ease of negotiating lang/culture | 16% | 16% | 18% | 18% | 50% | 9% | 28% | 74% | 17% | 36% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
This analysis highlights issues relating to both identifying and building relationships with contacts as being amongst the most commonly perceived barriers, with exchange rates and currency also clearly an issue. Please note that not all of the barriers tested are relevant for all internationalisation modes. An example of this is ‘problems obtaining work permits or visas for staff to allow them to relocate to (this market)’. This issue is relevant only to those firms operating their own overseas sites, and the data shown at the ‘total’ level is based just on this sub-group of firms. Amongst this group this is clearly an important issue, although the small base sizes should be borne in mind when interpreting this result.
Interestingly, none of the barriers that apply to the majority of firms were seen as significant by more than a third.
Whilst firms selling direct and firms selling through agents or distributors are very similar in many respects when it comes to the barriers they face (with contacts and exchange rates and currency highlighted as the key barriers), there is some evidence to suggest that those firms opting to sell through agents or distributors are more likely to report issues with a bias for dealing with domestic firms than those simply selling direct. The 12 individual barriers and 6 market perception elements firms were prompted with have been summarised further as outlined below.
| Barriers - Summary | |--------------------| | Firms have been defined as perceiving significant ‘legal & regulatory’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Problems obtaining work permits or visas for staff to allow them to relocate to <market> (projected) | | • Or, Difficulty negotiating the legal and regulatory framework or standards in <market> (own experience) | | • Or, Difficulty protecting Intellectual Property (own experience) | | • Or, Difficulty ensuring you get paid and enforcing contracts (own experience) |
| Firms have been defined as perceiving significant ‘contacts’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Identifying who to make contact with in the first instance or finding a suitable partner (projected) | | • Or, Establishing an initial dialogue with prospective customers or business partners (projected) | | • Or, Building relationships with key influencers or decision makers (projected) |
| Firms have been defined as perceiving significant ‘information’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Obtaining basic information about doing business in <market> (projected) |
| Firms have been defined as perceiving significant ‘fixed costs’ barriers if they scored 4 or 5 on a 5-point scale for… | | • The costs associated with doing business in <market> (projected) | | • Or, Finding the necessary management time to devote to doing business in <market> (projected) | | • Or, Exchange rates and currency (projected) | | • Or, Not having an office or site in <market> (projected) | | • Or, Difficulty dealing with the logistics of doing business in <market> (own experience) | | • Or, Difficulty with staff recruitment and retention (own experience) |
| Firms have been defined as perceiving significant ‘language & cultural’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Cultural differences outside of any language barriers (projected) | | • Or, Difficulty negotiating the culture and language in <market> (own experience) |
| Firms have been defined as perceiving significant ‘bias’ barriers if they scored 4 or 5 on a 5-point scale for… | | • A bias or preference on the part of overseas customers for dealing with domestic firms (projected) | | • Or, A bias or preference on the part of UK customers for UK goods/call centres/R&D (projected) | The table below shows the proportions of firms scoring against each of these summary categories as well as an analysis of the number of barriers mentioned (with this latter analysis not taking account of the market perceptions data, in order to provide comparability with previous research).
Table 9.1.2 Barriers (Summary)
| % scoring | Total | Mode | |-----------|-------|------| | | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | | At least one barrier 'to a significant extent' | 79% | 78% | 85% | 69% | 100% | 78% | 81% | 100% | 88% | 74% | | - Legal & regulatory barriers | 42% | 40% | 42% | 50% | 50% | 39% | 71% | 100% | 54% | 61% | | - Contacts barriers | 46% | 45% | 49% | 50% | 50% | 35% | 47% | 100% | 58% | 49% | | - Information barriers | 21% | 20% | 25% | 31% | 50% | 0% | 42% | 100% | 22% | 13% | | - Fixed costs barriers | 63% | 60% | 69% | 50% | 50% | 61% | 76% | 74% | 83% | 74% | | - Language & cultural barriers | 26% | 24% | 29% | 36% | 50% | 22% | 47% | 100% | 27% | 36% | | - Bias barriers | 21% | 18% | 30% | 14% | 50% | 30% | 28% | 26% | 22% | 49% | | No significant barriers | 21% | 22% | 15% | 31% | 0% | 22% | 19% | 0% | 12% | 26% |
Number of Barriers (excludes market perceptions)
| At least one barrier 'to a significant extent' | 72% | 70% | 79% | 69% | 100% | 74% | 67% | 100% | 88% | 74% | | - One | 18% | 18% | 22% | 5% | 50% | 26% | 0% | 0% | 10% | 0% | | - Two | 13% | 13% | 14% | 0% | 0% | 13% | 5% | 0% | 20% | 13% | | - Three | 11% | 11% | 6% | 27% | 0% | 17% | 19% | 0% | 22% | 13% | | - Four or more | 31% | 28% | 37% | 37% | 50% | 17% | 42% | 100% | 37% | 49% | | No significant barriers | 28% | 30% | 21% | 31% | 0% | 26% | 33% | 0% | 12% | 26% |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6)
The overall incidence of firms encountering barriers is similar across modes, with 79% of all internationalising firms reporting at least one significant barrier. Whilst this does appear to be higher than the levels recorded in previous studies, where firms were asked directly about barriers they themselves had faced (so excluding the barriers derived from the market perceptions questions), the overall pattern of results is very similar (with 72% encountering at least one significant barrier).
As has been the case in past studies, fixed cost barriers and contacts barriers are highlighted amongst the most important, with the key point of difference between this and previous studies being that legal & regulatory barriers are highlighted as amongst the most important (with this being the case for all modes where sample sizes allow for reasonably robust analysis).
The ‘legal and regulatory’ category is mainly based on market perceptions data (rather than data specifically on barriers), covering perceptions in relation to negotiating the legal and regulatory framework or standards, intellectual property protection and contract enforcement (as well as opinions on the extent to which the obtaining of work permits or visas is a barrier in the case of firms with overseas sites). A quarter of all firms indicated that negotiating the legal and regulatory framework or standards in their chosen market has been ‘fairly’ or ‘very’ difficult, with 15% reporting difficulties in respect of intellectual property protection. Around a fifth indicated that they perceived a ‘fairly’ of ‘very’ high risk in relation to ‘getting paid and enforcing contracts’.
The table below provides an analysis of barriers by age of firm, both at the total level and within mode. Please note that contractual arrangements (i.e. licensing, franchising and other partnerships/JVs) have been grouped for this analysis, as have the various types of overseas sites, but base sizes are still very small and results should be treated as indicative only.
Table 9.1.3 Barriers – By Age Of Firm (And Mode)
| % scoring | Total | Mode/Age | |-----------|-------|----------| | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | At least one barrier ‘to a significant extent’ | 80% | 85% | 77% | 80% | 85% | 75% | 88% | 79% | 85% | | - Legal & regulatory barriers | 40% | 48% | 40% | 41% | 46% | 38% | 36% | 48% | 42% | | - Contacts barriers | 47% | 51% | 44% | 45% | 51% | 43% | 64% | 50% | 45% | | - Information barriers | 25% | 27% | 18% | 23% | 28% | 17% | 43% | 21% | 21% | | - Fixed costs barriers | 63% | 68% | 61% | 61% | 67% | 58% | 79% | 62% | 68% | | - Language & cultural barriers | 26% | 29% | 25% | 28% | 27% | 22% | 14% | 36% | 31% | | - Bias barriers | 20% | 22% | 21% | 18% | 20% | 18% | 33% | 24% | 31% | | No significant barriers | 20% | 15% | 23% | 20% | 15% | 25% | 12% | 21% | 15% |
Types of Barriers (includes market perceptions)
| Number of Barriers (excludes market perceptions) | Total | Mode/Age | |-----------------------------------------------|-------|----------| | At least one barrier ‘to a significant extent’ | 73% | 77% | 71% | 71% | 76% | 68% | 86% | 71% | 79% | | - One | 14% | 17% | 20% | 14% | 18% | 19% | 10% | 14% | 27% | | - Two | 14% | 9% | 13% | 14% | 9% | 13% | 14% | 10% | 15% | | - Three | 12% | 15% | 10% | 14% | 14% | 10% | 10% | 14% | 3% | | - Four or more | 33% | 36% | 28% | 29% | 36% | 26% | 52% | 33% | 34% | | No significant barriers | 27% | 23% | 29% | 29% | 24% | 32% | 14% | 29% | 21% | | % scoring | Contractual Arrangements | Overseas site | |-----------|--------------------------|---------------| | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | Types of Barriers (includes market perceptions) | | | | | | | | At least one barrier 'to a significant extent' | 70% | 100% | 70% | 69% | 100% | 86% | | - Legal & regulatory barriers | 30% | 86% | 40% | 44% | 56% | 71% | | - Contacts barriers | 40% | 57% | 40% | 38% | 56% | 64% | | - Information barriers | 10% | 14% | 20% | 19% | 31% | 36% | | - Fixed costs barriers | 40% | 100% | 50% | 63% | 81% | 86% | | - Language & cultural barriers | 10% | 57% | 30% | 31% | 31% | 43% | | - Bias barriers | 10% | 57% | 20% | 19% | 31% | 29% | | No significant barriers | 30% | 0% | 30% | 31% | 0% | 14% | | Number of Barriers (excludes market perceptions) | | | | | | | | At least one barrier 'to a significant extent' | 60% | 100% | 70% | 69% | 100% | 79% | | - One | 30% | 29% | 10% | 6% | 19% | 0% | | - Two | 0% | 0% | 10% | 31% | 13% | 7% | | - Three | 0% | 14% | 30% | 0% | 31% | 21% | | - Four or more | 30% | 57% | 20% | 31% | 38% | 50% | | No significant barriers | 40% | 0% | 30% | 31% | 0% | 21% |
Base: All answering about... (Base) – Total: Up to 5 (283), 6-10 (286), More than 10 (331), Selling direct: Up to 5 (215), 6-10 (221), More than 10 (245), Agents/distributors: Up to 5 (42), 6-10 (42), More than 10 (62), Contractual arrangements: Up to 5 (10), 6-10 (7), More than 10 (10), Overseas site: Up to 5 (16), 6-10 (16), More than 10 (14)
Whilst it appears to be the case that older firms are slightly less likely to report barriers at all, the pattern is similar across the three age groups (with ‘fixed costs’, ‘contacts’ and ‘legal and regulatory’ barriers the most prevalent). The table below provides an analysis of barriers by business size (as measured by number of employees).
### Table 9.1.4 Barriers – By Size Of Firm (And Mode)
| % scoring | Total | Mode/Size (Number of Employees) | Direct | Agents/Distributors | |-----------|-------|---------------------------------|--------|---------------------| | | 0-9 | 10-49 | 50+ | 0-9 | 10-49 | 50+ | 0-9 | 10-49 | 50+ | | At least one barrier 'to a significant extent' | 81% | 77% | 80% | 80% | 74% | 79% | 84% | 85% | 83% | | - Legal & regulatory barriers | 40% | 41% | 53% | 39% | 38% | 50% | 37% | 47% | 46% | | - Contacts barriers | 50% | 41% | 45% | 48% | 41% | 41% | 53% | 43% | 50% | | - Information barriers | 21% | 21% | 27% | 21% | 19% | 23% | 20% | 28% | 38% | | - Fixed costs barriers | 61% | 62% | 68% | 60% | 58% | 64% | 64% | 74% | 79% | | - Language & cultural barriers | 25% | 25% | 34% | 24% | 23% | 28% | 23% | 32% | 46% | | - Bias barriers | 20% | 20% | 27% | 18% | 17% | 22% | 25% | 33% | 46% | | No significant barriers | 19% | 23% | 20% | 20% | 26% | 21% | 16% | 15% | 17% |
### Number of Barriers (excludes market perceptions)
| % scoring | Total | Mode/Size (Number of Employees) | Contractual Arrangements | Overseas site | |-----------|-------|---------------------------------|--------------------------|---------------| | | 0-9 | 10-49 | 50+ | 0-9 | 10-49 | 50+ | | At least one barrier 'to a significant extent' | 74% | 70% | 73% | 73% | 67% | 69% | 78% | 78% | 83% | | - One | 18% | 18% | 15% | 19% | 16% | 19% | 19% | 27% | 12% | | - Two | 13% | 13% | 11% | 12% | 14% | 10% | 15% | 11% | 21% | | - Three | 12% | 9% | 13% | 12% | 9% | 10% | 6% | 3% | 17% | | - Four or more | 31% | 29% | 34% | 29% | 28% | 30% | 38% | 37% | 33% | | No significant barriers | 26% | 30% | 27% | 27% | 33% | 31% | 22% | 22% | 17% |
Base: All answering about... (Base) – Total: 0-9 (502), 10-49 (300), 50+ (91), Selling direct: 0-9 (393), 10-49 (218), 50+ (64), Agents/distributors: 0-9 (76), 10-49 (57), 50+ (12), Contractual arrangements: 0-9 (10), 10-49 (9), 50+ (8), Overseas site: 0-9 (23), 10-49 (16), 50+ (7) Whilst the general trend is the same across the three age groups (with ‘fixed costs’, ‘contacts’ and ‘legal and regulatory’ barriers highlighted as the most prevalent) there is evidence to suggest higher reporting of legal and regulatory barriers amongst larger firms (with 50 or more employees). In particular, these larger firms are more likely to feel that it has been difficult for them to negotiate ‘the legal and regulatory framework or standards in (this market)’ (with levels of reporting of difficulties with protection of intellectual property and ‘ensuring you get paid and enforcing contracts’ similar to smaller firms).
The table below provides an analysis of barriers by emerging/fast growing markets and ‘others’. Please note that small base sizes restrict robust analysis by individual markets.10
Table 9.1.5 Barriers – By Market (And Mode)
| % scoring | Total | Mode/Market | |-----------|-------|-------------| | | Fast growing | Other | Fast growing | Other | Fast growing | Other | Fast growing | Other | Fast growing | Other | | Types of Barriers (includes market perceptions) | | | | | | | | | | | | At least one barrier ‘to a significant extent’ | 81% | 78% | 79% | 77% | 89% | 83% | 78% | 73% | 85% | 85% | | - Legal & regulatory barriers | 52% | 37% | 52% | 36% | 45% | 41% | 66% | 32% | 69% | 56% | | - Contacts barriers | 50% | 45% | 50% | 43% | 54% | 47% | 22% | 55% | 54% | 58% | | - Information barriers | 25% | 20% | 23% | 19% | 31% | 22% | 16% | 17% | 36% | 27% | | - Fixed costs barriers | 66% | 61% | 66% | 58% | 63% | 71% | 62% | 52% | 78% | 80% | | - Language & cultural barriers | 37% | 21% | 36% | 20% | 34% | 27% | 44% | 21% | 48% | 29% | | - Bias barriers | 22% | 20% | 19% | 18% | 30% | 30% | 33% | 18% | 33% | 22% | | No significant barriers | 19% | 22% | 21% | 23% | 11% | 17% | 22% | 27% | 15% | 15% |
Number of Barriers (excludes market perceptions)
| % scoring | Total | Mode/Market | |-----------|-------|-------------| | | Fast growing | Other | Fast growing | Other | Fast growing | Other | Fast growing | Other | Fast growing | Other | | At least one barrier ‘to a significant extent’ | 74% | 72% | 72% | 70% | 80% | 78% | 72% | 73% | 76% | 85% | | - One | 18% | 18% | 17% | 18% | 22% | 22% | 34% | 7% | 3% | 8% | | - Two | 11% | 13% | 10% | 14% | 15% | 13% | 0% | 10% | 13% | 15% | | - Three | 8% | 12% | 8% | 13% | 3% | 7% | 16% | 24% | 15% | 22% | | - Four or more | 37% | 28% | 37% | 25% | 40% | 35% | 22% | 32% | 45% | 41% | | No significant barriers | 26% | 28% | 28% | 30% | 20% | 22% | 28% | 27% | 24% | 15% |
Base: All answering about… (Base) – Total: Fast growing (253), Other (647), Selling direct: Fast growing (184), Other (497), Agents/distributors: Fast growing (40), Other (106), Contractual arrangements: Fast growing (10), Other (17), Overseas site: Fast growing (19), Other (27)
Firms answering in relation to a fast growing market were more likely to report both ‘legal and regulatory’ and ‘language and cultural’ barriers than those focussing on other markets. In the case of the language and cultural barriers, those answering in relation to fast growing markets were more likely to report both ‘cultural differences outside of language barriers’ and that it had been difficult for them ‘to negotiate the culture and language in (this market)’.
In the case of the legal and regulatory barriers, firms answering in relation to fast growing markets were more likely to report having had difficulties with both
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10 Annex A contains details of numbers of interviews conducted for individual markets. 'negotiating the legal and regulatory framework and standards (in this market)' and protecting Intellectual Property.
The table below provides an analysis of barriers by experience (measured by the length of time firms have been involved in overseas business activity).
Table 9.1.6 Barriers – By Experience (And Mode)
| % scoring | Total | Mode/Experience (Number of Years) | |-----------|-------|----------------------------------| | | | Less than 2 | 2-10 | More than 10 | Less than 2 | 2-10 | More than 10 | | At least one barrier 'to a significant extent' | 77% | 79% | 80% | 76% | 78% | 78% | 88% | 84% | 86% | | - Legal & regulatory barriers | 40% | 41% | 43% | 42% | 40% | 39% | 28% | 37% | 50% | | - Contacts barriers | 39% | 48% | 47% | 41% | 45% | 47% | 34% | 58% | 45% | | - Information barriers | 24% | 22% | 19% | 25% | 20% | 19% | 25% | 34% | 17% | | - Fixed costs barriers | 63% | 60% | 66% | 60% | 59% | 63% | 81% | 65% | 69% | | - Language & cultural barriers | 23% | 27% | 26% | 24% | 26% | 22% | 12% | 29% | 33% | | - Bias barriers | 17% | 22% | 21% | 18% | 20% | 17% | 12% | 32% | 33% | | No significant barriers | 23% | 21% | 20% | 24% | 22% | 22% | 12% | 16% | 14% |
Types of Barriers (includes market perceptions)
| At least one barrier 'to a significant extent' | 69% | 73% | 73% | 66% | 71% | 71% | 81% | 79% | 79% | | - One | 18% | 18% | 19% | 14% | 18% | 19% | 41% | 15% | 24% | | - Two | 12% | 12% | 14% | 11% | 12% | 13% | 9% | 14% | 14% | | - Three | 9% | 13% | 9% | 10% | 14% | 8% | 6% | 7% | 5% | | - Four or more | 30% | 30% | 31% | 31% | 27% | 30% | 25% | 42% | 36% | | No significant barriers | 31% | 27% | 27% | 34% | 29% | 29% | 19% | 21% | 21% |
Number of Barriers (excludes market perceptions) | % scoring | Mode/Experience (Number of Years) | Contractual Arrangements | Overseas site | |-----------|----------------------------------|--------------------------|---------------| | | Less than 2 | 2-10 | More than 10 | Less than 2 | 2-10 | More than 10 | | Types of Barriers (includes market perceptions) | | | | | | | | At least one barrier ‘to a significant extent’ | 80% | 71% | 80% | 67% | 90% | 88% | | - Legal & regulatory barriers | 0% | 56% | 40% | 50% | 58% | 75% | | - Contacts barriers | 40% | 45% | 40% | 25% | 63% | 63% | | - Information barriers | 0% | 8% | 40% | 17% | 39% | 25% | | - Fixed costs barriers | 60% | 41% | 80% | 67% | 79% | 88% | | - Language & cultural barriers | 20% | 26% | 40% | 42% | 36% | 38% | | - Bias barriers | 20% | 37% | 0% | 17% | 24% | 38% | | No significant barriers | 20 | 29 | 20 | 33 | 10 | 12 |
| Number of Barriers (excludes market perceptions) | | | | | | | | At least one barrier ‘to a significant extent’ | 60% | 71% | 80% | 67% | 90% | 75% | | - One | 40% | 22% | 0% | 0% | 11% | 0% | | - Two | 0% | 0% | 20% | 33% | 8% | 13% | | - Three | 0% | 15% | 40% | 8% | 18% | 25% | | - Four or more | 20% | 34% | 20% | 25% | 52% | 38% | | No significant barriers | 40% | 29% | 20% | 33% | 10% | 25% |
Base: All answering about… (Base) – Total: Less than 2 (182), 2-10 (515), More than 10 (199), Selling direct: Less than 2 (140), 2-10 (394), More than 10 (144), Agents/distributors: Less than 2 (25), 2-10 (78), More than 10 (42), Contractual arrangements: Less than 2 (5), 2-10 (17), More than 10 (5), Overseas site: Less than 2 (12), 2-10 (26), More than 10 (8)
Interestingly, the barriers reported by those with less overseas experience are very similar to those reported by more experienced firms. That said, there is some evidence to suggest that ‘contacts barriers’ are less of an issue amongst the most inexperienced group. In particular, both ‘identifying who to make contact with in the first instance’ and ‘establishing an initial dialogue with prospective customers or business partners’ are less likely to be mentioned by those who have been involved in overseas business activity for less than 2 years (but opinions on ‘building relationships’ are similar). The table below provides an analysis of barriers by the number of markets firms are doing business in.
### Table 9.1.7 Barriers – By Number of Markets (And Mode)
| % scoring | Total | Mode/Number of Markets | Direct | Agents/Distributors | |-----------|-------|------------------------|--------|---------------------| | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | At least one barrier 'to a significant extent' | 72% | 85% | 86% | 70% | 86% | 85% | 81% | 85% | 88% | | - Legal & regulatory barriers | 35% | 41% | 53% | 36% | 41% | 48% | 28% | 37% | 55% | | - Contacts barriers | 38% | 55% | 50% | 38% | 56% | 48% | 34% | 54% | 55% | | - Information barriers | 20% | 23% | 22% | 19% | 23% | 20% | 28% | 27% | 21% | | - Fixed costs barriers | 56% | 64% | 71% | 54% | 65% | 68% | 74% | 59% | 73% | | - Language & cultural barriers | 20% | 33% | 28% | 21% | 32% | 24% | 15% | 37% | 31% | | - Bias barriers | 16% | 24% | 26% | 15% | 22% | 21% | 19% | 33% | 35% | | No significant barriers | 28% | 15% | 14% | 30% | 14% | 15% | 19% | 15% | 12% |
### Number of Barriers (excludes market perceptions)
| % scoring | Contractual Arrangements | Overseas site | |-----------|--------------------------|---------------| | | Up to 5 | 6-10 | More than 10 | Up to 5 | 6-10 | More than 10 | | At least one barrier 'to a significant extent' | 68% | 100% | 75% | 84% | 59% | 100% | | - Legal & regulatory barriers | 5% | 79% | 70% | 53% | 36% | 81% | | - Contacts barriers | 47% | 79% | 31% | 53% | 30% | 72% | | - Information barriers | 0% | 21% | 30% | 36% | 12% | 34% | | - Fixed costs barriers | 47% | 58% | 62% | 75% | 59% | 93% | | - Language & cultural barriers | 0% | 58% | 48% | 41% | 18% | 43% | | - Bias barriers | 11% | 79% | 22% | 17% | 6% | 47% | | No significant barriers | 32% | 0% | 25% | 16% | 41% | 0% |
Base: All answering about... (Base) – Total: Up to 5 (434), 6-10 (217), More than 10 (245), Selling direct: Up to 5 (356), 6-10 (162), More than 10 (161), Agents/distributors: Up to 5 (47), 6-10 (43), More than 10 (55), Contractual arrangements: Up to 5 (11), 6-10 (3), More than 10 (13), Overseas site: Up to 5 (20), 6-10 (9), More than 10 (16) It appears to be the case that firms operating in more markets are more likely to report barriers (with ‘information barriers’ being the one exception to this rule). However, it should be noted that across all groups, it is ‘fixed costs barriers’, ‘contacts barriers’ and ‘legal and regulatory barriers’ that are the most prevalent.
The table below provides an analysis of barriers by the various measures of innovation (including IP activity).
Table 9.1.8 Barriers – By Innovation/IP (And Mode)
| % scoring | Total | Mode Innovation & IP | |-----------|-------|----------------------| | | Innovative (alt) | Innovative | Non-Innovative | IP Active | Young tech intensive | Innovative (alt) | Innovative | Non-Innovative | IP Active | Young tech intensive | | At least one barrier ‘to a significant extent’ | 87% | 84% | 66% | 86% | 85% | 87% | 83% | 67% | 85% | 86% | | - Legal & regulatory barriers | 48% | 45% | 32% | 50% | 44% | 46% | 44% | 33% | 50% | 46% | | - Contacts barriers | 55% | 52% | 31% | 51% | 52% | 55% | 51% | 32% | 51% | 50% | | - Information barriers | 25% | 24% | 14% | 23% | 28% | 23% | 23% | 14% | 21% | 27% | | - Fixed costs barriers | 71% | 67% | 52% | 71% | 69% | 70% | 65% | 52% | 67% | 67% | | - Language & cultural barriers | 31% | 30% | 16% | 30% | 26% | 29% | 28% | 17% | 26% | 28% | | - Bias barriers | 24% | 24% | 14% | 27% | 22% | 20% | 20% | 14% | 22% | 20% | | No significant barriers | 13% | 16% | 34% | 14% | 15% | 13% | 17% | 33% | 15% | 14% |
Number of Barriers (excludes market perceptions)
| At least one barrier ‘to a significant extent’ | 82% | 78% | 58% | 78% | 78% | 81% | 76% | 57% | 75% | 77% | | - One | 19% | 17% | 21% | 16% | 13% | 19% | 17% | 21% | 17% | 13% | | - Two | 12% | 13% | 12% | 16% | 13% | 12% | 13% | 11% | 18% | 14% | | - Three | 11% | 12% | 9% | 13% | 13% | 13% | 12% | 9% | 12% | 16% | | - Four or more | 40% | 36% | 16% | 33% | 39% | 38% | 34% | 17% | 29% | 34% | | No significant barriers | 18% | 22% | 42% | 22% | 22% | 19% | 24% | 43% | 25% | 23% | | % scoring | Mode/Innovation & IP | Contractual Arrangements | |-----------|---------------------|--------------------------| | | Agents/Distributors | | | | Innovative (alt) | Innovative | | | Non-innovative | IP Active | | | Young tech intensive| Innovative (alt) | | | Non-innovative | IP Active | | | Young tech intensive| | | Types of Barriers (includes market perceptions) | | | | At least one barrier 'to a significant extent' | 86% | 89% | 61% | 91% | 89% | 87% | 72% | 100% | 74% | 70% | | - Legal & regulatory barriers | 45% | 45% | 21% | 45% | 40% | 67% | 48% | 21% | 52% | 30% | | - Contacts barriers | 51% | 51% | 35% | 57% | 69% | 53% | 48% | 0% | 37% | 40% | | - Information barriers | 24% | 26% | 19% | 29% | 43% | 26% | 19% | 0% | 26% | 10% | | - Fixed costs barriers | 68% | 72% | 48% | 85% | 83% | 57% | 50% | 100% | 60% | 40% | | - Language & cultural barriers | 29% | 31% | 13% | 44% | 14% | 43% | 31% | 21% | 29% | 10% | | - Bias barriers | 32% | 34% | 8% | 44% | 37% | 33% | 26% | 0% | 30% | 10% | | No significant barriers | 14% | 11% | 39% | 9% | 11% | 13% | 28% | 0% | 26% | 30% | | Number of Barriers (excludes market perceptions) | | | | At least one barrier 'to a significant extent' | 81% | 82% | 61% | 86% | 86% | 87% | 72% | 79% | 70% | 60% | | - One | 21% | 22% | 26% | 17% | 9% | 24% | 17% | 21% | 19% | 30% | | - Two | 16% | 14% | 11% | 13% | 9% | 0% | 0% | 58% | 0% | 0% | | - Three | 5% | 6% | 6% | 12% | 9% | 23% | 23% | 0% | 22% | 0% | | - Four or more | 39% | 40% | 19% | 44% | 60% | 40% | 31% | 0% | 30% | 30% | | No significant barriers | 19% | 18% | 39% | 14% | 14% | 13% | 28% | 21% | 30% | 40% |
| % scoring | Mode/Innovation & IP | Overseas Site | |-----------|---------------------|---------------| | | Innovative (alt) | Innovative | | | Non-innovative | IP Active | | | Young tech intensive| | | Types of Barriers (includes market perceptions) | | | | At least one barrier 'to a significant extent' | 97% | 92% | 57% | 92% | 75% | | - Legal & regulatory barriers | 71% | 68% | 35% | 66% | 50% | | - Contacts barriers | 69% | 66% | 15% | 44% | 42% | | - Information barriers | 51% | 35% | 15% | 26% | 17% | | - Fixed costs barriers | 92% | 88% | 43% | 88% | 75% | | - Language & cultural barriers | 56% | 45% | 7% | 33% | 42% | | - Bias barriers | 41% | 32% | 7% | 37% | 25% | | No significant barriers | 3% | 8% | 43% | 8% | 25% | | Number of Barriers (excludes market perceptions) | | | | At least one barrier 'to a significant extent' | 97% | 87% | 57% | 81% | 75% | | - One | 5% | 5% | 7% | 0% | 8% | | - Two | 11% | 7% | 43% | 22% | 25% | | - Three | 13% | 21% | 7% | 15% | 0% | | - Four or more | 69% | 53% | 0% | 44% | 42% | | No significant barriers | 3% | 13% | 43% | 19% | 25% |
Base: All answering about... (Base) – Total: Innovative (alternative) (418), Innovative (659), Non-innovative (241), IP active (257), Young & innovative or IP active (210), Selling direct: Innovative (alternative) (289), Innovative (475), Non-innovative (206), IP active (188), Young & innovative or IP active (153), Agents/distributors: Innovative (alternative) (86), Innovative (124), Non-innovative (22), IP active (49), Young & innovative or IP active (35), Contractual arrangements: Innovative (alternative) (18), Innovative (24), Non-innovative (3), IP active (15), Young & innovative or IP active (10) It is also the case that innovative and IP active firms are more likely to report barriers of all types. However, it should be noted that across all groups, it is ‘fixed costs barriers’, ‘contacts barriers’ and ‘legal and regulatory barriers’ that are again the most prevalent.
The table below provides a comparison of barriers across users of UKTI services and non-user firms.
Table 9.1.9 Barriers – By Usage Of UKTI (And Mode)
| % scoring | Total | Mode/Usage of UKTI | |-----------|-------|--------------------| | | User | Non-user | User | Non-user | User | Non-user | User | Non-user | | At least one barrier ‘to a significant extent’ | 88% | 75% | 85% | 74% | 94% | 77% | 100% | 63% | 94% | 82% | | - Legal & regulatory barriers | 48% | 38% | 46% | 37% | 47% | 38% | 79% | 29% | 76% | 58% | | - Contacts barriers | 51% | 44% | 49% | 43% | 50% | 48% | 74% | 28% | 70% | 53% | | - Information barriers | 23% | 20% | 21% | 20% | 27% | 22% | 39% | 7% | 40% | 28% | | - Fixed costs barriers | 70% | 59% | 66% | 58% | 77% | 61% | 93% | 38% | 82% | 79% | | - Language & cultural barriers | 28% | 25% | 25% | 24% | 30% | 28% | 72% | 10% | 40% | 37% | | - Bias barriers | 26% | 18% | 22% | 17% | 36% | 25% | 33% | 19% | 40% | 23% | | No significant barriers | 12% | 25% | 15% | 26% | 6% | 23% | 0% | 37% | 6% | 18% |
Types of Barriers (includes market perceptions)
| Number of Barriers (excludes market perceptions) | Total | Mode/Usage of UKTI | |------------------------------------------------|-------|--------------------| | At least one barrier ‘to a significant extent’ | 81% | 68% | 77% | 67% | 90% | 69% | 100% | 59% | 94% | 77% | | - One | 20% | 17% | 18% | 18% | 27% | 18% | 14% | 19% | 18% | 2% | | - Two | 15% | 11% | 16% | 11% | 16% | 12% | 0% | 9% | 12% | 14% | | - Three | 11% | 11% | 12% | 11% | 5% | 7% | 19% | 22% | 23% | 17% | | - Four or more | 35% | 28% | 31% | 27% | 42% | 32% | 67% | 10% | 40% | 44% | | No significant barriers | 19% | 32% | 23% | 33% | 10% | 31% | 0% | 41% | 6% | 23% |
Base: All answering about… (Base) – Total: Users (311), Non-users (589), Selling direct: Users (225), Non-users (456), Agents/distributors: Users (66), Non-users (80), Contractual arrangements: Users (9), Non-users (18), Overseas site: Users (11), Non-users (35)
As has been demonstrated by previous studies, users of UKTI services tend to report more barriers than non-user firms. User firms are more likely to report ‘legal and regulatory barriers’, ‘contacts barriers’, ‘fixed costs barriers’ and ‘bias barriers’, and are far less likely than non-users to report no significant barriers (19% compared with 32% for non-users). The table below provides an analysis of barriers by whether or not firms are in foreign ownership.
### Table 9.1.10 Barriers – By Ownership (And Mode)
| % scoring | Total | Mode/Foreign Ownership | |-----------|-------|------------------------| | | | Direct | Agents/Distribs | Contractual Arrangements | Overseas Site | | | Yes | No | Yes | No | Yes | No | Yes | No | | At least one barrier ‘to a significant extent’ | 84% | 79% | 86% | 77% | 86% | 85% | 66% | 75% | 75% | 90% | | - Legal & regulatory barriers | 53% | 40% | 50% | 39% | 62% | 39% | 66% | 43% | 54% | 65% | | - Contacts barriers | 51% | 45% | 50% | 44% | 53% | 49% | 33% | 43% | 58% | 56% | | - Information barriers | 21% | 21% | 19% | 20% | 28% | 24% | 0% | 18% | 25% | 34% | | - Fixed costs barriers | 70% | 62% | 68% | 60% | 73% | 68% | 66% | 55% | 75% | 81% | | - Language & cultural barriers | 30% | 25% | 28% | 24% | 31% | 29% | 33% | 29% | 34% | 40% | | - Bias barriers | 17% | 21% | 13% | 19% | 21% | 31% | 0% | 25% | 34% | 24% | | No significant barriers | 16% | 21% | 14% | 23% | 14% | 15% | 34% | 25% | 25% | 10% |
### Types of Barriers (includes market perceptions)
| At least one barrier ‘to a significant extent’ | 68% | 73% | 68% | 70% | 76% | 79% | 66% | 73% | 63% | 90% | | - One | 19% | 18% | 20% | 18% | 30% | 21% | 33% | 16% | 0% | 8% | | - Two | 9% | 13% | 14% | 13% | 0% | 15% | 0% | 7% | 0% | 20% | | - Three | 12% | 11% | 6% | 12% | 14% | 5% | 33% | 20% | 29% | 14% | | - Four or more | 28% | 31% | 27% | 28% | 32% | 37% | 0% | 30% | 34% | 47% | | No significant barriers | 32% | 27% | 32% | 30% | 24% | 21% | 34% | 27% | 37% | 10% |
Base: All answering about… (Base) – Total: Yes (89), No (810), Selling direct: Yes (59), No (621), Agents/distributors : Yes (17), No (129), Contractual arrangements : Yes (3), No (24), Overseas site : Yes (10), No (36)
There are no statistically significant differences between firms with foreign owners and the remainder, and there is certainly no evidence to suggest that those with foreign owners are less likely to report issues in relation to aspects such as ‘contacts’ or ‘fixed costs’. 9.2 Barriers (Detailed)
9.2.1 Obtaining Work Permits/Visas
The chart below shows firms’ perceptions of their chosen market in respect of the extent to which they feel that firms in a similar position to themselves would have ‘problems obtaining work permits or visas for staff to allow them to relocate to (this market)’. Please note that only firms answering in relation to overseas sites were asked this question.
Chart 9.2.1 Problems Obtaining Work Permits Or Visas For Staff To Allow Them To Relocate
Whilst the low base sizes must be borne in mind when interpreting this result, this does appear to be something that these firms feel could well be an issue, with more than two-fifths giving a score of 4 or 5 out of 5. Just 1 in 4 felt that it was likely to be ‘no problem at all’. 9.2.2 Identifying Who To Make Contact With
Firms were also asked whether they felt that it would be difficult to ‘identify who to make contact with in the first instance’ (or find a suitable partner in the case of those operating via agents or distributors, or entering into other contractual arrangements).
Chart 9.2.2 Identifying Who To Make Contact With In the First Instance
As many as 15% of firms gave a score of 5 out of 5 to indicated that they felt that it would be ‘extremely difficult’ for firms such as themselves to identify who to make contact with and just 25% felt that it would be no problem at all (giving a score of 1 out of 5). 9.2.3 Establishing An Initial Dialogue
Firms were also asked whether they felt that it would be difficult to ‘establish an initial dialogue with prospective customers or business partners (in this market)’.
Chart 9.2.3 Establishing An Initial Dialogue with Prospective Customers Or Business Partners
Again, only around a quarter of firms gave a score of 1 out of 5 to indicated that they felt that this would be ‘no problem at all’, with 1 in 10 feeling that it would be ‘extremely difficult’ (giving a score of 5) and a further 19% giving a score of 4 out of 5. 9.2.4 Building Relationships
Firms were also asked whether they felt that it would be difficult to ‘build relationships with key influencers or decision makers’, with the following results.
Chart 9.2.4 Building Relationships With Key Influencers Or Decision-Makers
These results are very similar to those for ‘establishing an initial dialogue’, with around 1 in 10 firms feeling that it would be ‘extremely difficult’ (giving a score of 5 out of 5) and a quarter feeling that building relationships would be ‘no problem at all’ (giving a score of 1). 9.2.5 Obtaining Basic Information
The chart below shows firms' perceptions of 'obtaining basic information'.
Chart 9.2.5 Obtaining Basic Information
Only around 1 in 5 firms felt that this would be difficult (giving a score of 4 or 5 out of 5), and approaching 1 in 3 felt that it would be 'no problem at all' (giving a score of 1). This is in line with previous studies, where obtaining basic information has not been amongst the most prevalent barriers. 9.2.6 Costs Associated With Doing Business
Firms were also asked whether they felt others would have difficulty with 'the costs associated with doing business in (this market)'.
Chart 9.2.6 The Costs Associated With Doing Business In <Market>
Again, approaching 1 in 3 firms felt that this was likely to be 'no problem at all' (giving a score of 1 out of 5) with only 7% of firms indicating that it would be 'extremely difficult' (giving a score of 5). 9.2.7 Finding The Necessary Management Time
Firms were also asked to indicate whether they felt that ‘finding the necessary management time to devote to doing business in (this market)’ was likely to be an issue.
Chart 9.2.7 Finding The Necessary Management Time
Whilst approaching a quarter of firms felt that this would be a difficulty (giving a score of 4 or 5 out of 5), 28% felt that it would be ‘no problem at all’ (giving a score of 1). 9.2.8 Exchange Rates And Currency
The chart below shows firms' perceptions of 'exchange rates and currency'.
Chart 9.2.8 Exchange Rates And Currency
Whilst more than a quarter of firms felt that this would be a difficulty (giving a score of 4 or 5 out of 5), almost a third felt that it would be 'no problem at all' (giving a score of 1). There is some evidence to suggest that, in comparison with those selling direct, firms selling through agents or distributors are more likely to feel that this is a potential barrier. 9.2.9 Not Having An Office Or Site
Firms were also asked whether they felt that others would find ‘not having their own office or site in (this market)’ difficult. Of course, this question was not asked to those answering in relation to operating overseas sites.
Chart 9.2.9 Not Having A (Local) Office Or Site
Amongst these firms, only around a fifth felt that this was a difficulty (giving a score of 4 or 5 out of 5). Interestingly, this is higher amongst those selling through agents or distributors than those selling direct. 9.2.10 Cultural Differences
Firms were also asked whether they felt that others would have find ‘cultural differences outside of any language barriers’ difficult.
Chart 9.2.10 Cultural Differences Outside Of Language Barriers
Only around 1 in 6 firms felt that this would be difficult (giving a score of 4 or 5 out of 5), with well over half feeling that it would not be a problem (giving a score of 1 or 2). 9.2.11 A Bias For Dealing With Domestic Firms
The chart below shows firms’ perceptions of difficulties in respect of ‘a bias on the part of overseas customers for doing business with domestic firms’. Please note that firms operating their own production sites, call centres and R&D facilities were not asked this question.
Chart 9.2.11 A Bias On The Part Of Overseas Customers For Doing Business With Domestic Firms
Only 7% of this group felt that this would be ‘extremely difficult’ (giving a score of 5 out of 5) and a third felt that it would be ‘no problem at all (giving a score of 1). 9.2.12 A Bias Amongst Customers For UK Goods
Firms answering in relation to production sites, call centres and R&D facilities were instead asked whether they felt that others in a similar position to themselves would have difficulties with 'a bias of preference on the part of UK customers for sourcing goods produced in the UK/using call centres based in the UK/research and development being undertaken in the UK'.
Chart 9.2.12 A Bias Or Preference On The Part Of UK Customers For Goods/Services From The UK
Although the very small base size must be borne in mind when interpreting this result, opinions seem fairly divided on whether or not this is likely to be a difficulty. 9.3 Business Needs For External Help
This analysis of the barriers faced by internationalising firms suggests that the areas that firms are having most problems with are fixed costs, contacts and legal & regulatory issues.
In the case of fixed costs, similar proportions of firms feel that there are difficulties in each area, i.e. in terms of the costs associated with doing business overseas (23% giving a score of 4 or 5 out of 5), finding the necessary management time (24%), exchange rates and currency (28%) and not having an office or site (20%), implying that firms needs for external help are likely to cover all of these aspects of the fixed costs of doing business overseas.
In the case of contacts, both identifying who to make contact with in the first instance and issues relating to building relationships (i.e. establishing a dialogue with prospective customers/partners and building relationships with key decision makers) are clearly important. This implies that firms need assistance in both of these areas (and not just in terms of the provision of contacts/introductions)
In the case of legal and regulatory barriers, it is negotiating the legal and regulatory framework or standards in a particular market that are the most widespread issue, followed by problems relating to ‘getting paid and enforcing contracts’ and then Intellectual Property protection.
The analysis of barriers by UKTI usage demonstrates that these are the major issues facing both existing UKTI users and non-users alike, suggesting that needs for external help are similar across these groups.
Firms appear to be less likely to be facing problems with gaining basic information, negotiating language and cultural differences, and issues relating to biases on the part of customers for buying domestically, suggesting that there is less need for assistance in these areas (or at least any new assistance beyond that which is currently available both from UKTI and elsewhere). 10. Opportunities In Emerging & Fast Growing Markets
10.1 Opportunities In Emerging & Fast Growing Markets
Firms were asked to consider the extent to which they felt that there were opportunities for them in the UKTI priority fast growing markets(^\\text{11}). For each market in turn, firms were asked to indicate whether they saw it as being a good opportunity for them over the next 2 years, a possible opportunity, or unlikely to provide them with an opportunity over this timeframe (with those already doing business in each market also recorded).
The chart below shows firms’ opinions on opportunities in the priority fast growing markets. Please note that, of the Asian fast growing markets, only China and India were addressed individually, with the remainder covered under a single ‘other Asian markets’ category.
Chart 10.1.1 Opinions On Opportunities In Emerging & Fast Growing Markets
Opinions vary across the markets, from just 7% indicating that Mexico was a ‘good opportunity’ and 60% believing that this market was ‘unlikely’ to provide them an opportunity, to 12% feeling that India was a ‘good opportunity’ and just 38% indicating that it was unlikely to provide them an opportunity.
______________________________________________________________________
(^{11}) For the purposes of this study, emerging/fast growing markets cover the UKTI priority fast growing markets as identified in UKTI’s five year strategy published in 2006 ‘Prosperity in a Changing World’, i.e. Brazil, China, GCC countries (Saudi Arabia and UAE), India, Indonesia, Mexico, Russia, South Africa, Turkey, Malaysia, Qatar, Singapore, South Korea, Thailand and Vietnam. Results have been summarised as follows.
| Opportunities In Emerging & Fast Growing Markets - Summary | |-----------------------------------------------------------| | Firms have been defined as ‘already in’ if… | | • They are already in at least one emerging/fast growing market | | Firms have been defined as perceiving a ‘good opportunity’ if… | | • Not already in any of the emerging/fast growing markets | | • But feel that at least one is a ‘good’ opportunity | | Firms have been defined as perceiving a ‘possible opportunity’ if… | | • Not already in any of the emerging/fast growing markets | | • Feel that none of the markets are a ‘good’ opportunity | | • But feel that at least one is a ‘possible’ opportunity | | Firms have been defined as ‘unlikely’ if… | | • Not already in any of the emerging/fast growing markets | | • And feel that none of the markets are either a ‘good’ or ‘possible’ opportunity |
The table below shows the results of this summary analysis.
| Table 10.1.1 Opportunities In Emerging & Fast Growing Markets (Summary) | |-----------------------------------------------------------------------| | Total | 100% | |-------|------| | Already in | 45% | | Good opportunity | 19% | | Possible opportunity | 24% | | Unlikely | 12% | | Total | 100% |
Base: All respondents (Base, Don’t know) – Total (900, 1%)
When the data is viewed in this way, it shows that approaching half (45%) of internationalising firms are already doing business in at least one of the emerging/fast growing markets (with almost half of this group made up of small firms with less than 10 employees). The majority of the remainder see at least one market as either a good or possible opportunity. Only around 1 in 8 feel that none of these markets are likely to provide them with an opportunity. The table below shows firms’ opinions on opportunities in the UKTI priority fast growing markets by age of firm and size (measured via number of employees).
Table 10.1.2 Opportunities In Emerging & Fast Growing Markets (Summary) - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | 6-10 | 40% | 49% | 53% | 55% | 54% | | > 10 | 19% | 20% | 15% | 18% | 12% | | | 29% | 18% | 25% | 8% | 12% | | | 12% | 12% | 7% | 11% | 18% | | | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
It appears to be the case that the likelihood of a firm trading in these fast growing markets increases with both age and size, with younger and smaller firms more likely to see these markets as merely a ‘good’ or ‘possible’ opportunity (rather than already doing business there). That said, still as many as 40% of firms with less than 10 employees are already doing business in at least one of the priority fast growing markets.
The table below shows opinions by both industry sector and displacement.
Table 10.1.3 Opportunities In Emerging & Fast Growing Markets (Summary) - By Sector & Displacement
| Sector | Main Competitors (Location) | |--------|-----------------------------| | | UK | Overseas | Both | | Already in | 50% | 41% | 33% | 63% | 48% | | Good | 17% | 21% | 16% | 19% | 21% | | Possible| 21% | 26% | 31% | 13% | 23% | | Unlikely| 12% | 12% | 20% | 5% | 7% | | Total | 100%| 100%| 100%| 100%| 100%|
Base: All respondents (Base) – Sector: Production (377), Services (505) – Main Competitors: UK (369), Overseas (164), Both (337) It appears that firms in the production sector are more likely than service companies to already be doing business in these fast growing markets. There is a sharp contrast between firms who see their main competition as being domestic against those mentioning overseas competition, with the former far less likely to be doing business in the priority fast growing markets and much more likely to feel that these markets are unlikely to provide them with an opportunity.
The table below shows opinions on opportunities in the priority fast growing markets by usage of UKTI and the extent to which firms had been affected by the current economic climate at the time of the interview.
Table 10.1.4 Opportunities In Emerging & Fast Growing Markets (Summary) - By Usage of UKTI & The Economic Climate
| Usage of UKTI | Negatively Affected By Downturn? | |---------------|----------------------------------| | User | Yes | No | | Non-user | | | | Already in | 52% | 41% | 40% | 48% | | Good | 23% | 16% | 21% | 17% | | Possible | 19% | 26% | 26% | 22% | | Unlikely | 5% | 15% | 13% | 12% | | Total | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Usage of UKTI: User (311), Non-user (589) – Negatively Affected by Downturn?: Yes (371), No (509)
Users of UKTI services are more likely than non-users to be doing business in at least one of the priority fast growing markets and less likely to feel that these markets are unlikely to provide them with an opportunity. There is evidence to suggest that those firms that were not reporting having been negatively affected by the economic downturn were also slightly more likely to be doing business in these fast growing markets as opposed to just seeing them as a ‘good’ or ‘possible’ opportunity. The table below shows firms’ opinions by various measures of innovation (including IP activity).
Table 10.1.5 Opportunities In Emerging & Fast Growing Markets (Summary) – By Innovation & IP
| | Innovative? | IP Active? | |----------------|-------------|------------| | | Yes (Tighter Defn) | Yes | No | Yes | No | | Already in | 49% | 46% | 42% | 52% | 41% | | Good | 22% | 22% | 9% | 20% | 19% | | Possible | 22% | 22% | 28% | 21% | 26% | | Unlikely | 5% | 9% | 20% | 7% | 15% | | Total | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Innovation: Innovative (Alternative) (418), Innovative (659), Non-innovative (241) – IP Active: Yes (267), No (608)
Both non-innovative firms and those that are not IP active are more likely to feel that the priority fast growing markets are unlikely to offer them an opportunity and less likely to be doing business in them than ‘innovative’ and IP active firms.
The table below compares opinions on opportunities in the priority fast growing markets between born global and ‘young, technology intensive’ firms, with younger firms overall and firms that have been established for more than five years.
Table 10.1.6 Opportunities In Emerging & Fast Growing Markets (Summary) – By Young Innovative Firms/Born Globals
| Age (Years Trading) | Total | Born global | Innovative or IP active | More than 5 | |---------------------|-------|-------------|-------------------------|-------------| | | | | | | | Already in | 35% | 43% | 37% | 47% | | Good | 24% | 20% | 25% | 17% | | Possible | 30% | 27% | 28% | 22% | | Unlikely | 10% | 9% | 9% | 13% | | Total | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), Up to 5/born global (152), Up to 5/innovative or IP active (210), More than 5 (617)
Firms that were born global are more likely than younger firms overall to be already doing business in at least one of these markets. The table below shows the results by various measures of growth, including both past and future growth as well as the ASBS and OECD definitions.
Table 10.1.7 Opportunities In Emerging & Fast Growing Markets (Summary) – By Growth
| Past Growth (Employees) | Growth Objectives | |-------------------------|------------------| | Smaller | Same | Slight growth | Mod growth | Subs growth | Stay same | Mod growth | Subs growth | | Already in | 40% | 46% | 40% | 47% | 64% | 41% | 44% | 49% | | Good | 16% | 15% | 25% | 26% | 12% | 15% | 17% | 23% | | Possible | 31% | 24% | 23% | 17% | 19% | 19% | 26% | 22% | | Unlikely | 11% | 15% | 12% | 8% | 5% | 23% | 13% | 5% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| Growth (ASBS Definition) | Growth (OECD Definition) | |--------------------------|--------------------------| | Sustained | Contained | New | No growth | High-growth | Gazelles | | Already in | 53% | 44% | 45% | 43% | 40% | 33% | | Good | 24% | 20% | 22% | 15% | 25% | 26% | | Possible | 15% | 24% | 29% | 24% | 23% | 28% | | Unlikely | 7% | 10% | 4% | 16% | 12% | 13% | | Total | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Past Growth (Employees): Become smaller (126), Remained the same (341), Grown slightly (less than 30%) (143), Grown moderately (30-74%) (105), Grown substantially (75%+) (38) – Growth Objectives: Stay the same size (105), Grow moderately (425), Grow substantially (313) – Growth (ASBS): Sustained (148), Contained (148), New (165), No growth (439) – Growth (OECD): High-growth (143), Gazelles (46)
Firms who have either seen substantial growth or are anticipating it are less likely to feel these markets are unlikely to offer them an opportunity than those exhibiting less ambitious growth and/or growth plans. Firms that have seen substantial growth (of 75%+ in employee numbers) are more likely to already be doing business in at least one of these markets than those exhibiting only modest (or no) growth. 10.2 Impact of Economic Downturn
Firms were asked whether their business had been ‘negatively affected by the apparent downturn in the US or UK markets over the last year’, and if so about whether this had prompted them to focus more on emerging or fast growing markets. Please note that fieldwork was conducted during August and early-September 2008.
Chart 10.2.1 Impact Of Economic Downturn
Overall, around two-fifths of internationalising firms mentioned that they had been affected, but less than half of this group (18% of all internationalising firms) mentioned that they were devoting more attention to emerging or fast growing markets as a consequence.
The table below shows these results analysed by age and size of firm.
Table 10.2.1 Impact Of Economic Downturn - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | Up to 5 | 6-10 | > 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Negatively affected by downturn | 39% | 41% | 44% | 44% | 41% | 40% | 42% | 44% | | More attention to these markets | 21% | 18% | 17% | 19% | 16% | 27% | 32% | 7% | | No more attention | 18% | 22% | 26% | 25% | 25% | 13% | 11% | 32% | | Not affected by downturn | 57% | 58% | 55% | 54% | 58% | 56% | 50% | 56% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
There is no consistent pattern by either age or size of firm. The table below provides an analysis by various measures of innovation (including IP activity).
Table 10.2.2 Impact Of Economic Downturn – By Innovation & IP
| Innovative? | IP Active? | |-------------|------------| | Yes (Tighter Defn) | Yes | No | Yes | No | | Negatively affected by downturn | 47% | 47% | 31% | 44% | 42% | | More attention to these markets | 21% | 21% | 11% | 18% | 18% | | No more attention | 26% | 26% | 20% | 24% | 24% | | Not affected by downturn | 52% | 52% | 65% | 55% | 57% | | Total | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Innovation: Innovative (Alternative) (418), Innovative (659), Non-innovative (241) – IP Active: Yes (267), No (608)
There is some evidence to suggest that, perceptions at least, amongst non-innovative firms is that they are less likely to have been negatively affected by the downturn than innovative firms, however, there is no such difference evident by whether or not firms are IP active.
The table below compares opinions between born global and ‘young, technology intensive’ firms, with younger firms overall and firms that have been established for more than five years.
Table 10.2.3 Impact Of Economic Downturn – By Young Innovative Firms/Born Globals
| Age (Years Trading) | Up to 5 | More than 5 | |---------------------|---------|-------------| | Total | Born global | Innovative or IP active | | | Negatively affected by downturn | 39% | 40% | 45% | 43% | | More attention to these markets | 21% | 21% | 24% | 17% | | No more attention | 18% | 19% | 21% | 25% | | Not affected by downturn | 57% | 57% | 53% | 56% | | Total | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), Up to 5/born global (152), Up to 5/innovative or IP active (210), More than 5 (617) The table below provides an analysis by various measures of growth, including both past and future growth as well as the ASBS and OECD definitions.
Table 10.2.4 Impact of Economic Downturn – By Growth
| Growth Objectives | Stay same | Mod growth | Subs growth | |-------------------|-----------|------------|-------------| | Negatively affected by downturn | 40% | 45% | 40% | | More attention to these markets | 13% | 20% | 19% | | No more attention | 28% | 24% | 22% | | Not affected by downturn | 59% | 54% | 58% | | Total | 100% | 100% | 100% |
| Growth (ASBS Definition) | Sustained | Contained | New | No growth | |--------------------------|-----------|-----------|-----|-----------| | Negatively affected by downturn | 38% | 34% | 42% | 46% | | More attention to these markets | 14% | 17% | 23% | 18% | | No more attention | 24% | 16% | 20% | 28% | | Not affected by downturn | 61% | 63% | 56% | 52% | | Total | 100% | 100% | 100% | 100% |
| Growth (OECD Definition) | High-growth | Gazelles | |--------------------------|-------------|-----------| | Negatively affected by downturn | 37% | 50% | | More attention to these markets | 19% | 30% | | No more attention | 18% | 20% | | Not affected by downturn | 62% | 48% | | Total | 100% | 100% |
Base: All respondents (Base) – Growth Objectives: Stay the same size (105), Grow moderately (425), Grow substantially (313) - Growth (ASBS): Sustained (148), Contained (148), New (165), No growth (439) – Growth (OECD): High-growth (143), Gazelles (46)
There is no consistent pattern by growth. The table below shows these results by the number of markets firms are doing business in and usage of UKTI.
Table 10.2.5 Impact Of Economic Downturn – By Markets & Usage of UKTI
| Number of Markets | Usage of UKTI | |-------------------|---------------| | | User | Non-user | | Up to 5 | 41% | 43% | | 6-10 | 16% | 17% | | More than 10 | 24% | 26% | | | 57% | 56% | | | 100% | 100% |
Base: All respondents (Base) – Number of Markets: Up to 5 (434), 6-10 (217), More than 10 (245) – Usage of UKTI: Users (311), Non-users (589)
Non-users and users are similar in terms of the likelihood of their having been affected by the downturn, but there is some evidence to suggest that users are marginally more likely to have devoted more attention to emerging or fast growing markets as a result (which is expected given their higher propensity to be doing business in these markets at all).
The table below provides an analysis by sector.
Table 10.2.6 Impact of Economic Downturn – By Sector
| Sector (Summary) | Sector (Detailed) | |------------------|-------------------| | | D – Manufacturing | G – Retail, Wholesale | I – Transport, Storage & Comm | K – Real Estate, Renting & Bus Act | | | Produ | Serv | 45% | 44% | 31% | 37% | | | 40% | | 20% | 20% | 13% | 14% | | | 25% | 23% | 25% | 24% | 19% | 23% | | | 54% | 57% | 54% | 53% | 61% | 61% | | | 100% | 100% | 100%| 100%| 100%| 100%|
Base: All respondents (Base) – Production (377), Services (505) – D - Manufacturing (372), G – Retail, Wholesale & Repair of Motor Vehicles (151), I – Transport, Storage & Communication (33), K – Real Estate, Renting & Business Activities (268)
There is some evidence to suggest that some sectors are more likely to have been negatively affected by the downturn, namely the production and retail sectors. The table below shows these results by internationalisation mode.
### Table 10.2.6 Impact of Economic Downturn – By Mode
| % scoring | Mode | Direct | Agents / Distrib | Licensing | Franchising | JV | Production | Call centre | Sales | R&D | |----------------------------|-----------------------|--------|------------------|-----------|-------------|----|------------|-------------|-------|-----| | Negatively affected by downturn | 41% | 45% | 63% | 100% | 14% | 28% | 100% | 44% | 62% | | More attention to these markets | 15% | 26% | 31% | 100% | 5% | 14% | 0% | 27% | 62% | | No more attention | 26% | 19% | 31% | 0% | 9% | 14% | 100% | 17% | 0% | | Not affected by downturn | 57% | 53% | 37% | 0% | 82% | 67% | 0% | 56% | 38% | | Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
Base: All answering about… (Base) – Selling direct (681), Agents/distributors (146), Licensing (12), Franchising (2), JVs/partnerships (13), Production site (9), Call centre (2), Sales site (29), R&D facility (6) 11. Awareness
Firms were asked to consider sources of information or advice that they are aware of that are available to help UK firms do business overseas, and then read out a list of UKTI products and services and asked to indicated whether or not they had heard of each one. As well as the list of 7 products and services, firms were also asked whether or not they had heard of ‘UK Trade & Investment or UKTI’ prior to the interview.
The chart below shows the results of this questioning on awareness, with the proportion of firms aware of each individual product/service who also indicated that they were aware of UKTI shown on the right-hand side.
Chart 11.1 Awareness (UKTI & UKTI Products/Services)
| Product/Service | % Aware of UKTI | |-----------------|-----------------| | UKTI | 51% | | Overseas posts | 55% | | ITAs | 59% | | Passport | 34% | | EMRS\* | 22% | | ECR\* | 13% | | TAP | 26% | | OMIS | 26% | | None of these | 20% |
Base: All respondents (Base) (900)
- Please note that firms were only asked awareness of EMRS & ECR if aware of either UKTI or the ITAs
Overall, around half (51%) of internationalising firms claimed that they had heard of UKTI, with awareness of both posts and ITAs slightly higher (at 55% and 59% respectively). Awareness of Passport was relatively high at 34%, with TAP and OMIS recognised by around a quarter of firms. Only around a fifth of internationalising firms indicated that they hadn’t heard of any of the products and services listed (or UKTI).
Around a third (35%) had used at least one of these products/services.
These results are consistent with those collected via the old awareness study, which this research has been designed to replace. The 2006 survey measured awareness of UKTI at 48% and had been showing a steady increase in awareness levels over the past few years.
It should be noted that not all firms that had heard of various UKTI products and services had heard of UKTI itself. For example only 75% of those who had heard of Passport had also heard of UKTI and only around two-thirds of those that claimed that they had heard of overseas posts or ITAs.
The table below shows these results analysed by age and size of firm.
Table 11.1 Awareness (UKTI & UKTI Products/Services) - By Size And Age
| Age (Years Trading) | Size (Number of Employees) | |---------------------|---------------------------| | | Up to 5 | 6-10 | > 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Aware (at least one) | 80% | 81% | 80% | 77% | 84% | 85% | 84% | 81% | | UKTI | 46% | 50% | 53% | 50% | 54% | 55% | 42% | 38% | | Overseas posts | 51% | 55% | 57% | 53% | 59% | 62% | 68% | 53% | | ITAs | 58% | 59% | 59% | 60% | 59% | 60% | 56% | 48% | | Passport | 35% | 35% | 33% | 31% | 36% | 47% | 32% | 28% | | EMRS | 21% | 22% | 22% | 19% | 26% | 34% | 21% | 16% | | ECR | 10% | 13% | 14% | 11% | 14% | 23% | 8% | 10% | | TAP | 23% | 25% | 28% | 23% | 30% | 40% | 26% | 16% | | OMIS | 28% | 23% | 26% | 23% | 28% | 44% | 37% | 15% | | Used (at least one) | 34% | 35% | 35% | 30% | 41% | 50% | 42% | 28% | | Total | 100% | 100% | 100% | 100%| 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Age: Up to 5 (283), 6-10 (286), More than 10 (331) – Size: 0-9 (502), 10-49 (300), 50-99 (45), 100-249 (18), 250+ (28)
Both awareness and usage levels do not vary with age of firm. There is some evidence to suggest that the smallest firms (with less than 10 employees) are perhaps slightly less likely to have heard of any of the products/services (77%) or to have used any of them (30%). The table below shows these results by the number of markets firms are doing business in and usage of UKTI.
Table 11.2 Awareness (UKTI & UKTI Products/Services) – By Markets & Usage of UKTI
| | Number of Markets | Usage of UKTI | |----------------------|-------------------|---------------| | | Up to 5 | 6-10 | More than 10 | User | Non-user | | Aware (at least one) | 74% | 85% | 86% | 100% | 70% | | UKTI | 42% | 51% | 64% | 79% | 36% | | Overseas posts | 47% | 59% | 65% | 84% | 40% | | ITAs | 54% | 67% | 61% | 84% | 46% | | Passport | 33% | 36% | 32% | 56% | 21% | | EMRS | 19% | 18% | 29% | 38% | 13% | | ECR | 13% | 10% | 15% | 23% | 7% | | TAP | 23% | 23% | 34% | 46% | 16% | | OMIS | 21% | 27% | 31% | 49% | 13% | | Used (at least one) | 29% | 39% | 40% | 100% | 0% | | Total | 100% | 100% | 100% | 100% | 100% |
Base: All respondents (Base) – Number of Markets: Up to 5 (434), 6-10 (217), More than 10 (245) – Usage of UKTI: Users (311), Non-users (589)
Both awareness and usage levels are higher amongst firms who are doing business in more than five overseas markets (although awareness of Passport specifically is quite similar).
Of course, awareness of all products/services is higher amongst users of UKTI services, but still 70% of non-users claim to be aware of at least one of the products/services named (but only just over a third are aware of UKTI (which is consistent with the results of the PIMS non-user surveys)). Most of the non-user awareness is of overseas posts & ITAs. Annex A – Individual Markets (Sample Sizes)
The table below provides an analysis of the numbers of firms answering questions on drivers of geographical focus, drivers of mode and barriers in relation to individual markets. Please note that this analysis only shows those markets that were the focus of more than 10 firms.
Table A.1 Interviews Conducted – By Market
| Market | Number of Interviews | |-------------|----------------------| | USA | 123 | | China | 59 | | France | 53 | | Ireland | 47 | | Germany | 43 | | India | 40 | | Spain | 36 | | Russia | 33 | | Holland | 28 | | Nigeria | 28 | | UAE | 27 | | Poland | 22 | | Japan | 21 | | Australia | 19 | | Italy | 18 | | South Africa| 17 | | Canada | 12 | | Saudi Arabia| 12 | | Turkey | 11 | Annex B – Questionnaire
OMB RESEARCH LIMITED UKTI – International Business Strategies, Barriers & Awareness Survey Questionnaire July/August 2008
TARGET QUOTAS:
- 300 interviews with firms 0-5 years old
- 300 interviews with firms 6-10 years old
- 300 interviews with firms more than 10 years old
SCREENER
ASK ALL Could I please speak to either the owner or someone responsible for your firm’s strategy in relation to overseas business?
Good morning/afternoon, my name is ... and I am calling on behalf of OMB Research, an independent market research agency. We have been commissioned by UK Trade & Investment and the Department for Business, Enterprise & Regulatory Reform (BERR) to conduct a survey of businesses on the topic of doing business overseas.
IF NECESSARY We are interested in talking to firms involved in any form of overseas business activity, including exporters, firms selling overseas via agents or distributors and firms who have operations overseas (such as factories or other offices).
INTERVIEWER NOTE - YOU MAY TAKE REFERRALS TO ANOTHER SITE WITHIN THE UK.
INTERVIEWER NOTE – IF FIRM IS NOT CURRENTLY DOING BUSINESS OVERSEAS, BUT PLANNING DOING SO WITHIN THE NEXT YEAR CONTINUE WITH THE INTERVIEW ON THIS BASIS
This research will cover areas such as your current overseas business activities, covering the way you go about doing business overseas and any issues you may have faced. It will take around 15-20 minutes, depending on your answers. It doesn’t matter how much or how little overseas business you do – we’re interested in speaking to a range of firms about their experiences.
AS NECESSARY UKTI is responsible for helping UK firms do business overseas. They want to find out more about how firms are going about overseas business and any difficulties they have. This will help UKTI develop the type of help they offer to UK firms.
AS NECESSARY We are able to offer all businesses taking part in this research an electronic link to a summary report of the research findings (which will be available late 2008)
Is it convenient to speak to you now or would you prefer to make an appointment for another time? ADD IF NECESSARY
- The research is being conducted under the Code of Practice of the Market Research Society, which means that all of the answers you give are strictly confidential and anonymous. Participation in this survey is voluntary.
- The responses of all organisations taking part will be combined into a statistical report
- Your organisation was selected at random from a list of UK businesses held by a commercial list broker
- If you wish to check that OMB Research is a bona fide market research agency, you can contact the Market Research Society on 0500 396999, or call James Murray at OMB Research on 01622 790900 or Heather Booth di Giovanni at UK Trade & Investment on 020 7215 4989.
OFFER FAX REASSURANCE IF NECESSARY
ASK ALL S1 – Can I confirm that you are one of the people best qualified to talk about your company’s overseas business activity?
INTERVIEWER NOTE: IF KNOW ALREADY THAT YOU ARE SPEAKING TO THE CORRECT PERSON THEN CODE YES AUTOMATICALLY
REFERRALS CAN BE TAKEN TO ANY SITE WHEN THE CONTACT FEELS THAT THERE IS SOMEONE WITHIN THE COMPANY BETTER PLACED TO ANSWER QUESTIONS ON THE TOPIC AREAS OUTLINED
Yes ........................................................................................................1 No – take referral and being transferred.................................2 No – take referral and arrange call back .........................3 No – refused referral.................................................................4 ASK ALL S2a – Which of the following overseas business activities has your firm been involved in, over the last 5 years? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
Selling directly to businesses or individuals abroad .................. 1 Selling to businesses or individuals abroad through agents or distributors ................................................................................. 2 Licensing or franchising overseas, or other contractual arrangements (including joint ventures) ............................................................ 3 Operating your own overseas site or office ............................... 4 (None of these) .............................................................................. 5 (Don’t know) .............................................................................. 6 – CLOSE
IF NONE AT S2a (CODE 5) S2b – Are you seriously considering starting to conduct overseas business via any of these routes in the NEXT YEAR?
Yes ............................................................................................ 1 No .............................................................................................. 2 - CLOSE (Don’t know) .............................................................................. 3 - CLOSE
IF YES AT S2b S2c - Which of the following overseas business activities are you planning to become involved in, in the next year? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
Selling directly to businesses or individuals abroad .................. 1 Selling to businesses or individuals abroad through agents or distributors ................................................................................. 2 Licensing or franchising overseas, or other contractual arrangements (including joint ventures) ............................................................ 3 Operating your own overseas site or office ............................... 4 (None of these) .............................................................................. 5 - CLOSE (Don’t know) .............................................................................. 6 – CLOSE
S3 – DELETED IF CODE 3 AT S2a OR S2c
S4a – \<IF CODES 1, 2 OR 4 ALSO MENTIONED AT S2A OR S2C You mentioned licensing or franchising overseas, or other contractual arrangements, but > < IF CODE 3 AT S2a is this IF CODE 3 AT S2c will this be > licensing, franchising or some other partnership or joint venture arrangement? MULTICODE ALLOWED
INTERVIEWER NOTE: IF RESPONDENT HAS ALREADY PROVIDED THIS INFORMATION DO NOT ASK QUESTION AND CODE AS APPROPRIATE
INTERVIEWER NOTE: IF IN DOUBT, RESPONDENT SHOULD SELECT THE MOST APPROPRIATE OPTION
Licensing ................................................................. 1 Franchising ............................................................. 2 Other partnership or joint venture arrangement ............ 3 (Don't know) ............................................................ 4 - CLOSE IF ONLY CODE 3 AT S2a/S2c ((S2a=3 & S2a=Not 1, 2 OR 4) OR (S2c=3 & S2c=Not 1, 2 or 4))
IF CODE 3 AT S4a
S4b – Would you say that the MAIN purpose of this partnership or joint venture < IF CODE 3 AT S2a is IF CODE 3 AT S2c will be > …? READ OUT – MULTICODE
Manufacturing ......................................................... 1 Assembly ................................................................. 2 Call centre ............................................................... 3 Distribution/sales office ........................................... 4 After-sales office ..................................................... 5 Service delivery ....................................................... 6 Research, product or process development .................. 7 (Something else (SPECIFY)) ..................................... 95 (Don't know) ............................................................ 97
S5a – DELETED
IF CODE 4 AT S2a
S5b – \<IF CODES 1, 2 OR 3 ALSO MENTIONED AT S2A You mentioned operating your own overseas office or site. > How many overseas sites do you have? READ OUT
One ................................................................. 1 2-5 ................................................................. 2 6-10 .............................................................. 3 11-20 ............................................................ 4 21-50 ............................................................ 5 More than 50 .................................................. 6 (Don't know) .................................................... 7 (Refused) ....................................................... 8 IF CODE 1 AT S5b OR CODE 4 AT S2c S5c – < IF CODE 4 AT S2c AND CODES 1, 2 OR 3 ALSO MENTIONED AT S2c You mentioned operating your own overseas office or site. > Would you say that the MAIN purpose of this site < IF CODE 1 AT S5b is IF CODE 4 AT S2c will be > ...? READ OUT – SINGLE CODE
IF CODES 2-8 AT S5b S5c – Thinking just about the last overseas site that you established, what is the MAIN purpose of this site? Is it...? READ OUT – SINGLE CODE
Manufacturing.................................................. 1 Assembly .......................................................... 2 Call centre .......................................................... 3 Distribution/sales office...................................... 4 After-sales office ............................................... 5 Service delivery ............................................... 6 Research, product or process development.... 7 (Don't know/None of these)................................. 97 – CLOSE IF ONLY CODE 4 AT S2a/S2c ((S2a=4 & S2a=Not 1, 2 OR 3) OR (S2c=4 & S2c=Not 1, 2 or 3))
S5d – DELETED S5e – DELETED
ASK ALL S6a – And can I just check, < IF CODES 1-4 AT S2a AND CODE 1 OR 2 AT S4b AND (CODE 1 OR 2 AT S5c) other than through the partnership or joint venture and the production site that we've already spoken about / IF CODES 1-4 AT S2a AND CODE 1 OR 2 AT S4b (& NOT CODE 1 OR 2 AT S5c) other than through the partnership or joint venture that we've already spoken about / IF CODES 1-4 AT S2a AND CODE 1 OR 2 AT S5c (& NOT CODE 1 OR 2 AT S4b) other than through the production site that we've already spoken about > have you IMPORTED any goods or services over the last 5 years?
AS NECESSARY By importing I mean the buying in of goods or services from overseas suppliers.
Yes ........................................................................................................ 1 No ........................................................................................................ 2 (Don't know) .................................................................................... 3
IF CODE 1 (YES) AT S6a S6b – Do you import...? READ OUT
Direct from an overseas supplier ................................................. 1 Or, through a UK-based intermediary ........................................ 2 Or, both......................................................................................... 3 (Don't know) .................................................................................. 4
IF CODE 1 AT S6a & NOT CODE 4 AT S2a From now on, when I'm asking questions about your overseas business activity please DO NOT include importing. ASK ALL S7 – And can I just ask, how long ago was your business established? READ OUT – CLARIFY AS NECESSARY – THIS MEANS WHEN THE BUSINESS STARTED TRADING AS NECESSARY – THIS MEANS THE BUSINESS IN ITS CURRENT FORM AS NECESSARY – IF THE BUSINESS IS A SUBSIDIARY THIS REFERS TO THE SUBSIDIARY IN WHICH YOU WORK
Within the last year ...........................................................1 Over 1, up to 2 years ago ..................................................2 Over 2, up to 3 years ago ....................................................3 Over 3, up to 4 years ago ....................................................4 Over 4, up to 5 years ago ....................................................5 Over 5, up to 10 years ago ..................................................6 Over 10, up to 20 years ago ...............................................7 Over 20 years ago .............................................................8 (Not yet trading) ................................................................9 (Don’t know) .....................................................................10 (Refused) ..........................................................................11
ASK IF ESTABLISHED 1-2 YEARS (CODES 1-2 AT S7) S7b – Can I just check, has your business actually started trading yet?
Yes ...................................................................................1 No ....................................................................................2 (Don’t know) .....................................................................3
ASK ALL S8 – And what is the main activity of the business? OPEN ENDED QUESTION – PROBE FULLY FOR INDUSTRY TYPE - IF MANUFACTURING WHAT TYPE OF MANUFACTURING, IF FINANCIAL SERVICES WHAT KIND AND SO FORTH
A – Agriculture, hunting & forestry ........................................1 B – Fishing ...........................................................................2 C – Mining & quarrying .......................................................3 D – Manufacturing .............................................................4 E – Electricity, gas and water supply ....................................5 F – Construction ..................................................................6 G – Retail, wholesale & repair of motor vehicles ....................7 H – Hotels and catering .......................................................8 I - Transport, storage and communication ............................9 J - Financial intermediation (Finance) .................................10 K - Real estate, renting & business activities .......................11 L - Public administration and defence .................................12 M – Education .....................................................................13 N - Health and social work ..................................................14 O - Other community, social & personal service activities ....15 Other ..................................................................................96 (Don’t know) .....................................................................97 (Refused) ..........................................................................98
CATI TO INSERT TIME MARKER SECTION A – OVERSEAS BUSINESS ACTIVITY
ASK IF CODES 1-4 AT S2a A3 – As a company would you say you are...? READ OUT – SINGLE CODE
Very experienced in overseas markets.................1 Quite experienced.............................................2 Not very experienced.......................................3 Or not at all experienced in overseas markets ....4 (Don’t know) ....................................................5 (Refused) .......................................................6
ASK IF CODES 1-4 AT S2a A4 – And how long ago did your company start conducting business overseas? READ OUT AS NECESSARY – CATI TO ONLY SHOW FEASIBLE CODES BASED ON ANSWER TO S7
Within the last year .................................................1 Over 1, up to 2 years ago .......................................2 Over 2, up to 3 years ago .......................................3 Over 3, up to 4 years ago .......................................4 Over 4, up to 5 years ago .......................................5 Over 5, up to 10 years ago .....................................6 Over 10, up to 20 years ago ...................................7 Over 20 years ago ................................................8 (Have not yet started doing business overseas) ....9 (Don’t know) .....................................................10 (Refused) .......................................................11
A1a - DELETED
ASK IF CODES 1-4 AT S2a A1b – How many overseas countries have you done business in over the last 5 years, in any form < IF IMPORTER (CODE 1 AT S6a) (although please DO NOT include countries that you have only imported from)? READ OUT
NO CODE 1 ALLOWED ........................................1 One.................................................................2 2-5 .................................................................3 6-10 ..............................................................4 11-20 ............................................................5 21-50 ............................................................6 More than 50 ..................................................7 (Don’t know) ...................................................8 (Refused) .....................................................9 IF CODE 2 AT A1b A2 – Which country is this? WRITE IN
Write in..............................................................................
IF ONLY ACTIVITY IS A MANUFACTURING/ASSEMBLY/CALL CENTRE OVERSEAS SITE/JV (CODES 3-4 AT S2a & (CODES 1, 2 OR 3 AT S5c OR CODES 1, 2 OR 3 AT S4b) & NOT CODE 1 OR 2 AT S2a & NOT CODES 1-2 AT S4a)) A5a – Can I just check, have you made any sales at all to customers in overseas markets in the last year?
Yes ..................................................................................1 No.....................................................................................2 (Don’t know) .....................................................................3
ASK IF CODES 1-4 AT S2a EXCEPT CODES 2-3 (NO/DON’T KNOW) AT A5a OR NOT YET TRADING (CODE 9 AT S7 OR CODE 2 AT S7b) A5b – In the last financial year, approximately what percentage of your turnover was accounted for by overseas sales? RECORD PERCENTAGE IF CODE 3 AT S2a Please include any fees received from overseas companies or overseas licensing deals.
Write in (%) (Don’t know) (Refused) CATI TO CHECK NUMBER IS BETWEEN 0 AND 100
IF DON’T KNOW AT A5b A5c – If you had to estimate this percentage, into which of the following bands would you put your business? READ OUT
Up to 5% .................................................................1 6 - 10% .................................................................2 11 - 15% .................................................................3 16 – 25% .................................................................4 26 – 50% .................................................................5 51 – 75% .................................................................6 More than 75% .......................................................7 (Don’t know) .............................................................8 (Refused) ...............................................................9
CATI TO INSERT TIME MARKER SECTION B – SELECTION OF FOCUS OF INTERVIEW (MODE & MARKET)
B1 – CATI TO SELECT MODE AT RANDOM, ALLOCATING TO ONE OF THE FOLLOWING ‘MODE GROUPS’ – SINGLE CODE
M1 - Selling direct (CODE 1 AT S2a OR S2c) ........................................... 1 M2 - Selling through agents/distributors (CODE 2 AT S2a OR S2c) ....... 2 M3 – Licensing (CODE 1 AT S4a) .......................................................... 3 M4 – Franchising (CODE 2 AT S4a) ..................................................... 4 M5 – Other partnerships/JVs (CODE 3 AT S4a) ................................. 5 M6 – Production site (CODE 1 OR 2 AT S5c) ..................................... 6 M7 – Call centre (CODE 3 AT S5c) ..................................................... 7 M8 – Sales/service site (CODES 4, 5 OR 6 AT S5c) ............................ 8 M9 – R&D site (CODE 7 AT S5c) ....................................................... 9
TEXT SUBSTITUTIONS FOR USE THROUGHOUT
VARIATION 1
- M1 – selling direct to overseas customers
- M2 – selling through agents or distributors
- M3 – overseas licensing
- M4 – overseas franchising
- M5 – overseas partnerships or joint ventures
- M6 – operating an overseas production facility
- M7 – operating an overseas call centre
- M8 – operating an overseas sales or service delivery site
- M9 – operating an overseas research & development site
VARIATION 2
- M1 - sold direct to overseas customers
- M2 - sold through agents or distributors
- M3 - used licensing agreements
- M4 - operated franchising agreements
- M5 - established overseas partnerships or joint ventures
- M6 - operated an overseas production facility
- M7 - operated an overseas call centre
- M8 - operated an overseas sales or service delivery site
- M9 - operated an overseas research & development site
VARIATION 3
- M1 – selling through agents or distributors or operating your own overseas site
- M2 – selling direct to overseas customers or operating your own overseas site
- M3 – selling direct to overseas customers or operating your own overseas site
- M4 – selling direct to overseas customers or operating your own overseas site
- M5 – selling direct to overseas customers or operating your own overseas site
- M6 – setting up a joint venture or partnership with an overseas company
- M7 – setting up a joint venture or partnership with an overseas company
- M8 – selling through agents or distributors or setting up a joint venture or partnership with an overseas company
- M9 – setting up a joint venture or partnership with an overseas company VARIATION 4
- M1 - sell direct to overseas customers
- M2 - sell through agents or distributors
- M3 – use licensing agreements
- M4 – operate franchising agreements
- M5 – establish overseas partnerships or joint ventures
- M6 – operate an overseas production facility
- M7 – operate an overseas call centre
- M8 – operate an overseas site
- M9 – operate an overseas research & development site
IF QUALIFYING FOR MORE THAN ONE OF M1-M9 For the rest of this interview I'd like you to focus just on < IF CODES 1-4 AT S2a your experiences of IF CODE 1 AT S2b your plans in relation to >> VARIATION 1 >
IF CODES 1-4 AT S2a AND SELECTED AS M1 & QUALIFYING FOR MORE THAN ONE OF M1-M9
A6a – Thinking specifically now about selling directly to businesses or individuals based abroad, how experienced would you say you are in this form of overseas business? Would you say that you are...? READ OUT – SINGLE CODE
Very experienced at selling directly to customers overseas................. 1 Quite experienced ................................................................................. 2 Not very experienced............................................................................. 3 Or not at all experienced at selling directly to customers overseas...... 4 (Don't know) .......................................................................................... 5 (Refused)............................................................................................... 6
IF CODES 1-4 AT S2a AND SELECTED AS M2 & QUALIFYING FOR MORE THAN ONE OF M1-M9
A6b – Thinking specifically now about selling through agents, distributors or other partners, how experienced would you say you are in this form of overseas business? Would you say that you are...? READ OUT – SINGLE CODE
Very experienced in selling through agents or distributors.............. 1 Quite experienced ................................................................................. 2 Not very experienced............................................................................. 3 Or not at all experienced in selling through agents or distributors...... 4 (Don't know) .......................................................................................... 5 (Refused)............................................................................................... 6 IF CODES 1-4 AT S2a AND SELECTED AS M3, M4 OR M5 & QUALIFYING FOR MORE THAN ONE OF M1-M9
A6c – Thinking specifically now about < IF M3 licensing IF M4 franchising IF M5 partnerships and other joint venture arrangements >, how experienced would you say you are in this form of overseas business? Would you say that you are...? READ OUT – SINGLE CODE
Very experienced at overseas < IF M3 licensing, IF M4 franchising, IF M5 partnerships and other joint venture arrangements >............................ 1 Quite experienced ................................................................................. 2 Not very experienced............................................................................. 3 Or not at all experienced at overseas < IF M3 licensing, IF M4 franchising, IF M5 partnerships and other joint venture arrangements >................. 4 (Don't know) .......................................................................................... 5 (Refused)............................................................................................... 6
IF CODES 1-4 AT S2a AND SELECTED AS M6, M7, M8 OR M9 & QUALIFYING FOR MORE THAN ONE OF M1-M9
A6d – Thinking specifically now about operating an overseas site, how experienced would you say you are in this form of overseas business? Would you say that you are...? READ OUT – SINGLE CODE
Very experienced at operating overseas sites....................................... 1 Quite experienced ................................................................................. 2 Not very experienced............................................................................. 3 Or not at all experienced at operating overseas sites ........................... 4 (Don't know) .......................................................................................... 5 (Refused)............................................................................................... 6
IF CODE 1 AT S2b
B2c – Is it just the one country that you're thinking about < VARIATION 1 > in over the next year, or is it more than one?
Just one country ..............................................................1 More than one .................................................................2
B2a – DELETED
IF (CODES 1-4 AT S2a & QUALIFYING FOR MORE THAN ONE OF M1-M9 AND NOT CODE 2 AT A1b) OR IF CODE 2 AT B2c
B2b – How many overseas countries < IF CODES 1-4 AT S2a have you adopted this approach in, in the last 5 years / IF CODE 2 AT B2c are you considering using this approach in >? READ OUT
NO CODE 1 ALLOWED ...................................................1 One.................................................................2 2-5 .................................................................3 6-10 ...............................................................4 11-20 ...............................................................5 21-50 ...............................................................6 More than 50 ..........................................................7 (Don't know) .............................................................8 (Refused)..............................................................9
IF CODE 2 AT B2b OR CODE 1 AT B2c
B3 – Which country is this? WRITE IN Write in..................................................................
IF MORE THAN ONE MARKET (B2b CODES 3-9 OR (B2b NOT ASKED & A1b CODES 3-9)) B4 – < IF B2b CODES 3-9 Which ONE of these countries IF B2b NOT ASKED & A1b CODES 3-9 Which overseas country > would you say < IF CODES 1-4 AT S2a has presented / IF CODE 1 AT S2b is likely to present > you with the greatest challenges < IF QUALIFYING FOR MORE THAN ONE OF M1-M9 in relation to < VARIATION 1 >> < IF CODES 1-4 AT S2a in the last 5 years >? WRITE IN ONE MARKET
Write in .................................................................. (Non/Don't know)
IF NONE/DON'T KNOW AT B4 B5 – < IF B2b CODES 3-9 Which ONE of these countries IF B2b NOT ASKED & A1b CODES 3-9 Which overseas country > < IF CODES 1-4 AT S2a have you started / IF CODE 1 AT S2b are you likely to start > doing business in < IF QUALIFYING FOR MORE THAN ONE OF M1-M9 via < VARIATION 1 >> < IF CODES 1-4 AT S2a most recently / IF CODE 1 AT S2b first >? WRITE IN ONE MARKET – IF NOT SURE ASK RESPONDENT TO PROVIDE BEST GUESS
Write in ..................................................................
CATI TO ALLOCATE <MARKET> AS FOLLOWS:
• FROM B4 IF MORE THAN ONE MARKET (B2b CODES 3-9 OR (B2b NOT ASKED & A1b CODES 3-9)) AND MARKET PROVIDED AT B4 • FROM B5 IF MORE THAN ONE MARKET (B2b CODES 3-9 OR (B2b NOT ASKED & A1b CODES 3-9)) AND NONE/DON'T KNOW AT B4 AND MARKET PROVIDED AT B5 • FROM B3 IF B2b = 2 OR B2c = 1 • FROM A2 IF A1b = 2
READ OUT FOR ALL I'd like to ask you some questions now < IF QUALIFYING FOR MORE THAN ONE OF M1- M9 just > about your < IF CODES 1-4 AT S2a experience of / IF CODE 1 AT S2b plans in relation to > < VARIATION 1 > in <MARKET>.
INTERVIEWER NOTE: IF RESPONDENT INDICATES THAT THEY DO NOT \<IF CODE 1 AT S2b PLAN TO > \<VARIATION 4> IN <MARKET> THEN GO BACK TO START, GO OVER ANSWERS TO EARLIER QUESTIONS, WORK OUT WHAT IS WRONG & CHANGE AS NECESSARY
CATI TO INSERT TIME MARKER SECTION C – DRIVERS OF MARKET
IF CODES 1-4 AT S2a & (QUALIFYING FOR MORE THAN ONE OF M1-M9 OR (A1b = CODES 3-9))
C1a – How long have you < IF QUALIFYING FOR MORE THAN ONE OF M1-M9 < VARIATION 2 > / IF QUALIFYING FOR JUST ONE OF M1-M9 been doing business > in < MARKET >?
READ OUT AS NECESSARY – CATI TO ONLY SHOW FEASIBLE CODES BASED ON ANSWER TO A4
Less than a year ...............................................................1 Over 1, up to 2 years ........................................................2 Over 2, up to 3 years ........................................................3 Over 3, up to 4 years ........................................................4 Over 4, up to 5 years ........................................................5 Over 5, up to 10 years ......................................................6 Over 10, up to 20 years ....................................................7 Over 20 years ...................................................................8 (Have not yet started) .......................................................9 (Don’t know) .....................................................................10 (Refused)..........................................................................11
IF M6, 7 OR 9
C1b – Can I just check, < IF CODES 1-4 AT S2a does your IF CODE 1 AT S2b would this > < IF M6 production site IF M7 call centre IF M9 research & development site > in < MARKET > sell any products or services directly to any customers in < MARKET >?
READ OUT – SINGLE CODE
Yes ............................................................................................ 1 No.............................................................................................. 2 (Don’t know) .............................................................................. 3
IF M1-5 OR M8 OR YES (CODE 1) AT C1b
C1c - < IF CODES 1-4 AT S2a Have you had to IF CODE 1 AT S2b Do you expect to need to > modify any of your products or services for customers in < MARKET >?
Yes ...................................................................................1 No.....................................................................................2 (Don’t know) .....................................................................3
IF YES (CODE 1) AT C1c
C1d – < IF CODES 1-4 AT S2a Was this IF CODE 1 AT S2b Are you expecting this to be > ...? READ OUT - MULTICODE
Something cosmetic such as packaging or translation.....1 Or something more fundamental ......................................2 (None of these).....................................................................3 (Don’t know) ......................................................................4 IF (M5 & CODES 1-2 AT S4b) OR M6 C1e – Can I just check, IF CODES 1-4 AT S2a do you IF CODE 1 AT S2b would you > import into the UK at all < IF M5 through this partnership or joint venture IF M6 from this production site >? READ OUT – SINGLE CODE
Yes ...................................................................................1 No .....................................................................................2 (Don’t know) .................................................................3
C2 – DELETED
C3 – MOVED
ASK ALL C4 - I’m going to read out some of the individual circumstances that other firms have found themselves in when looking at doing business in specific overseas locations and I’d like you to tell me the extent to which each one applied to you when you were FIRST CONSIDERING < IF M5-9 < VARIATION 1 > in > < MARKET >.
Please give me a score of 1 to 5, where 5 means that it is completely applicable and 1 means that it is not at all applicable. So firstly...READ OUT - RANDOMISE
(a) We had received an approach from someone in < MARKET > (b) It had been suggested to us by someone external to the company that < MARKET > might be an opportunity for us (c) There was someone within the company who already had experience of < MARKET > (d) We had been considering a number of countries at the time, and decided to focus on < MARKET > (e) We had identified internally that < MARKET > offered a potential opportunity for us
ADD TO SCREEN FOR EACH To what extent did that apply to you when you were FIRST CONSIDERING < IF M5-9 < VARIATION 1 > in > < MARKET >?
1 – Not at all applicable ....................................................1 2 .......................................................................................2 3 .......................................................................................3 4 .......................................................................................4 5 – Completely applicable .............................................5 (Don’t know) .................................................................6
ASK ALL C3 – Were there any other major reasons for looking at this market that we haven’t already covered? If so, what were these reasons?
............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................
4144 (Internationalisation) – QUS – F1 – 07/11/2008 - W:RO, C:J Analysis
- Independent analysis
- Proportion of firms providing a rating of ‘4’ or ‘5’ at C4d or C4e
- Networks & serendipity
- Proportion of firms providing a rating of ‘4’ or ‘5’ at C4a, C4b or C4c
- Solely reactive
- Proportion of firms providing a rating of ‘4’ or ‘5’ at C4a but not scoring above ‘2’ for C4c-e
C5a – DELETED C5b – DELETED C6 – DELETED C7 – DELETED
ASK ALL C8 – Thinking now about your < IF CODES 1-4 AT S2a experiences so far of IF CODE 1 AT S2b your plans for > doing business in < MARKET > < IF QUALIFYING FOR MORE THAN ONE OF M1-M9 via < VARIATION 1 >, how easy or difficult < IF CODES 1-4 AT S2a has it been IF CODE 1 AT S2b do you expect it to be > …? READ OUT - RANDOMISE
(a) (IF M1,5 OR 8 OR (M6, 7 OR 9 & C1b IS YES)) How easy or difficult < IF CODES 1-4 AT S2a has it been IF CODE 1 AT S2b do you expect it to be > for you to find customers in < MARKET >
(b) IF M2-5 How easy or difficult < IF CODES 1-4 AT S2a has it been IF CODE 1 AT S2b do you expect it to be > for you to find a suitable partner
(c) How easy or difficult < IF CODES 1-4 AT S2a has it been IF CODE 1 AT S2b do you expect it to be > for you to negotiate the legal and regulatory framework or standards in < MARKET >
(d) How easy or difficult < IF CODES 1-4 AT S2a has it been IF CODE 1 AT S2b do you expect it to be > for you to negotiate the culture and language in < MARKET >
(e) How easy or difficult < IF CODES 1-4 AT S2a has it been IF CODE 1 AT S2b do you expect it to be > for you to protect your Intellectual Property
(f) How easy or difficult has it been for you to deal with the logistics of doing business in < MARKET >
(g) IF M6-9 How easy or difficult < IF CODES 1-4 AT S2a has it been IF CODE 1 AT S2b do you expect it to be > for you to recruit and retain suitable staff
(h) IF YES AT C1c How easy or difficult < IF CODES 1-4 AT S2a has it been IF CODE 1 AT S2b do you expect it to be > for you to make any modifications to your products or services so that they are suitable for customers in < MARKET > ADD TO EACH SCREEN Would you say that it < IF CODES 1-4 AT S2a has been IF CODE 1 AT S2b will be > ...? READ OUT SCALE AS NECESSARY
Very easy.................................................................1 Fairly easy ..............................................................2 Average .....................................................................3 Fairly difficult ..........................................................4 Or, very difficult .......................................................5 (Not relevant) ............................................................6 (Don't know) ............................................................7
ASK IF AT LEAST ONE OF C4b-e = 3, 4 OR 5 OR C4a = 1, 2, 3 OR 6 C8 – Still thinking about < MARKET >, from your perspective would you say that...? READ OUT - RANDOMISE
(i) (IF M1-5 OR M8 OR (M6, 7 OR 9 & C1b IS YES)) & AT LEAST ONE OF C4b-e = 3, 4 OR 5 OR C4a = 1, 2, 3 OR 6) The potential level of demand for your products or services in < MARKET > is...
(j) IF M6-9 & AT LEAST ONE OF C4b-e = 3, 4 OR 5 OR C4a = 1, 2, 3 OR 6) In comparison with the UK, the cost of resources (and by that I mean things like wage costs and the cost of raw materials) in < MARKET > is...
Very low.................................................................1 Fairly low ..............................................................2 Average .....................................................................3 Fairly high ............................................................4 Or, very high ..........................................................5 (Not relevant) ............................................................6 (Don't know) ............................................................7
ASK ALL C8 – And how do you view the RISK of doing business in < MARKET > < IF M2-7 OR M9 via < VARIATION 1 >>, in terms of the following? READ OUT - RANDOMISE
(k) Ensuring you get paid and enforcing contracts? (l) IF AT LEAST ONE OF C4b-e = 3, 4 OR 5 OR C4a = 1, 2, 3 OR 6) Being able to guarantee the quality of the goods or service you provide? (m) IF AT LEAST ONE OF C4b-e = 3, 4 OR 5 OR C4a = 1, 2, 3 OR 6) The financial risk in terms of the investment required and being able to ensure a return on that investment?
ADD TO EACH SCREEN Would you say that the risk in < MARKET > is...? READ OUT SCALE AS NECESSARY
A very low risk ..........................................................1 A fairly low risk ........................................................2 An average risk ..........................................................3 A fairly high risk .......................................................4 Or, a very high risk ....................................................5 (Not relevant) ............................................................6 (Don't know) ............................................................7
C9 – DELETED CATI TO INSERT TIME MARKER I'd now like to move on to talking specifically about your choice to plans when doing business in.
ASK ALL D1 – So why did you decide to on this occasion are you thinking about, rather than use an alternative approach such as? What were the key factors in your decision? PROBE FULLY
IF M1 D2 – I'm now going to read out some reasons that other firms have given for choosing and I'd like you to tell me the extent to which each one applied to you when you decided to consider adopting this approach in.
Please give me a score of 1 to 5, where 5 means it was completely applicable and 1 means that it did not apply at all.
So firstly... READ OUT – DO NOT ROTATE
AS NECESSARY Did this apply TO YOU when you decided to?
(a) DELETED (b) We were advised to approach by selling direct to customers (c) We always approach overseas markets by selling direct to customers (d) It was the best approach given the level of demand in (e) We didn't want to reduce our profit margins by paying a 'middle man' (f) It was the best way to protect our intellectual property (g) It was the best way to ensure quality or customer service (h) It was the best way to build up strong working relationships with our overseas customers
1 – Did not apply at all 2 3 4 5 – Completely applicable (Don't know) IF M2-5 D4 – I’m now going to read out some reasons that other firms have given for choosing to < VARIATION 4 > and I’d like you to tell me the extent to which each one applied to you when you < IF CODES 1-4 AT S2a decided to adopt IF CODE 1 AT S2b considered adopting > this approach in < MARKET >.
Please give me a score of 1 to 5, where 5 means it was completely applicable and 1 means that it did not apply at all.
So firstly... READ OUT – DO NOT ROTATE
AS NECESSARY Did this apply TO YOU when you decided to < VARIATION 4 >?
(a) Our customers in < MARKET > require a local presence (b) DELETED (c) We were advised to approach < MARKET > in this way (d) IF S2a=1-4 We always approach overseas markets by < VARIATION 1 > (e) It was the best approach given the level of demand in < MARKET > (f) Our overseas partner was better placed than we were to identify potential customers in < MARKET > (g) It reduced the financial risk of doing business in < MARKET > (h) It was the best way to access people who understand the market in < MARKET > (i) It was the best way to protect our intellectual property (j) IF M4 It was the best way to ensure quality or customer service (k) DELETED (l) It was the easiest way for us to cope with the practicalities of the language and culture in < MARKET > (m) It was the easiest way for us to deal with the practicalities of doing business in < MARKET > in terms of regulations, transport, logistics, getting paid, etc
1 – Did not apply at all ......................................................1 2 ....................................................................................2 3 ....................................................................................3 4 ....................................................................................4 5 – Completely applicable .............................................5 (Don’t know) .................................................................6 D6 – I’m now going to read out some reasons that other firms have given for choosing to < VARIATION 4 > and I’d like you to tell me the extent to which each one applied to you when you < IF CODES 1-4 AT S2a decided to adopt IF CODE 1 AT S2b considered adopting > this approach in <MARKET>.
Please give me a score of 1 to 5, where 5 means it was completely applicable and 1 means that it did not apply at all.
So firstly... READ OUT – DO NOT ROTATE
AS NECESSARY Did this apply TO YOU when you decided to < VARIATION 4 >?
(a) Our customers require us to have a local production facility in < MARKET > (b) Our competitors have production sites in < MARKET >, so we decided to do the same (c) DELETED (d) IF YES AT C1b It was the best approach given the level of demand in < MARKET > (e) It was the best way to access people with the specialist knowledge and skills we required (f) It enabled us to access cheaper resources, such as cheaper wages or cheaper raw materials (g) IF YES AT C1b It was the best way to build up strong working relationships with our customers in < MARKET > (h) It enabled us to offer quicker response times or reduced shipments costs (i) DELETED (j) It enabled us to overcome import restrictions, avoid import duties or gain other tax advantages (k) DELETED
1 – Did not apply at all ......................................................1 2 ....................................................................................2 3 ....................................................................................3 4 ....................................................................................4 5 – Completely applicable ...............................................5 (Don’t know) ....................................................................6 I'm now going to read out some reasons that other firms have given for choosing to adopt this approach in <MARKET>.
Please give me a score of 1 to 5, where 5 means it was completely applicable and 1 means that it did not apply at all.
So firstly... READ OUT – DO NOT ROTATE
AS NECESSARY Did this apply TO YOU when you decided to adopt this approach in <MARKET>?
(a) IF YES AT C1b Our customers in <MARKET> require us to have a local presence (b) Our competitors have call centres in <MARKET>, so we decided to do the same (c) DELETED (d) IF YES AT C1b It was the best approach given the level of demand in <MARKET> (e) It was the best way to access people with the specialist knowledge and skills we required (f) It enabled us to access cheaper resources, such as cheaper wages or cheaper raw materials (g) DELETED (h) It enabled us to offer quicker response times for our customers (i) DELETED (j) It provides tax advantages (k) DELETED
1 – Did not apply at all ......................................................1 2 ....................................................................................2 3 ....................................................................................3 4 ....................................................................................4 5 – Completely applicable ...............................................5 (Don't know) ....................................................................6 I'm now going to read out some reasons that other firms have given for choosing to adopt this approach in <MARKET> and I'd like you to tell me the extent to which each one applied to you when you decided to adopt this approach in <MARKET>.
Please give me a score of 1 to 5, where 5 means it was completely applicable and 1 means that it did not apply at all.
So firstly... READ OUT – DO NOT ROTATE
AS NECESSARY Did this apply TO YOU when you decided to adopt this approach in <MARKET>?
(a) Our customers in <MARKET> require a local presence (b) DELETED (c) We were advised to approach <MARKET> by setting up our own office (d) IF S2a=1-4 We always approach overseas markets in this way (e) It was the best approach given the level of demand in <MARKET> (f) It was the best way to access people with the specialist knowledge and skills we required (g) We didn’t want to reduce our profit margins by paying a ‘middle man’ (h) It was the best way to protect our intellectual property (i) It was the best way to ensure quality or customer service (j) It was the best way to build up strong working relationships with our overseas customers (k) DELETED
1 – Did not apply at all .................................................................1 2 ..........................................................................................2 3 ..........................................................................................3 4 ..........................................................................................4 5 – Completely applicable ......................................................5 (Don’t know) ........................................................................6 IF M9 D12 – I’m now going to read out some reasons that other firms have given for choosing to < VARIATION 4 > and I’d like you to tell me the extent to which each one applied to you when you < IF CODES 1-4 AT S2a decided to adopt IF CODE 1 AT S2b considered adopting > this approach in <MARKET>.
Please give me a score of 1 to 5, where 5 means it was completely applicable and 1 means that it did not apply at all.
So firstly... READ OUT – DO NOT ROTATE
AS NECESSARY Did this apply TO YOU when you decided to < VARIATION 4 >?
(a) IF YES AT C1b Our customers in < MARKET > require us to have a local research & development site (b) Our competitors have research & development sites in < MARKET >, so we decided to do the same (c) DELETED (d) It was the best way to access people with the specialist knowledge and skills we required (e) It enabled us to access cheaper resources, such as cheaper wages or cheaper raw materials (f) IF YES AT C1c It was the best way to get the necessary product development done for customers in < MARKET > (g) It enabled us to speed up the research and development process (h) It enabled us to overcome import restrictions, avoid import duties or gain other tax advantages (i) It meant that we could be close to an important centre of expertise in our industry
1 – Did not apply at all ......................................................1 2 ....................................................................................2 3 ....................................................................................3 4 ....................................................................................4 5 – Completely applicable .............................................5 (Don’t know) .................................................................6
CATI TO INSERT TIME MARKER Hypotheses
- ‘Customers’
- Firms choose to operate their own sales site or establish a partnership because their customers require them to have a local presence (D4a, D10a)
- Firms choose to set up a production/call centre/product development facility because their customers require it (D6a, D8a, D12a)
- ‘Competitors’
- Firms choose to go down a certain route because they see their competitors doing the same (D6b, D8b, D12b)
- ‘Advice’
- Firms choose a certain route on the advice of someone, probably external to the firm (but potentially a parent/group company) (D2b, D4c, D10c)
- ‘Habit’
- Firms do things via a given route in one market, then apply the same model in subsequent overseas markets (D2c, D4d, D10d)
- ‘Level of Demand’
- Firms will choose a specific mode as a result of either the current level of demand or the perceived level of demand. For example, firms may choose to sell direct because the demand is very low. However, if the demand is expected to be high they may choose to work with a partner of some description or even open their own site overseas. They could also choose to sell direct because the demand is expected to be high (i.e. high enough to justify investing in resource to deal with the business from the UK) (D2d, D4e, D6d, D8d, D10e)
- ‘Finding Buyers’
- Firms will decide to work with a partner so that they can find overseas buyers for their product/service for them – i.e. the overseas firm takes care of marketing (D4f)
- ‘ROI/Risk’
- Firms sell direct so as not to erode their profit margins (D2e, D10f)
- Firms may decide to work with a partner so that they take on much of the risk of investing in marketing etc., minimising any losses if it doesn’t work out (D4g)
- ‘Human Resources (Capabilities)’
- Firms will decide to work with a partner to access people with the right connections, who know the market, know how to do business there etc. (D4h)
- ‘Human Resources (Location)’
- Firms will decide to produce goods/do product development overseas in order to access specialist resources in terms of skills and/or knowledge (D6e, D8e, D10l, D12d)
- ‘Cost of Resources’
- Firms will set up operations overseas in order to access cheaper resources, probably cheaper labour costs but also potentially cheaper raw materials (D6f, D8f, D12e)
- ‘IP’
- Firms will choose to sell direct/operate their own site in order to maintain control over their IP (D2f, D10g)
- Firms will choose to work with a partner who they allow to use their IP under an agreed set of conditions in a market to avoid others in the market copying them or to achieve market entry within a given timeframe so that they can retain IP rights (D4i)
- ‘Quality’
- Firms will choose to sell direct/franchise/operate their own site in order to maintain (at least some) control over the quality of their product/service (D2g, D4j, D10h) Hypotheses
- ‘Meeting Needs’
- Firms will choose to sell direct/operate their own overseas site because they feel that they are best able to meet the needs of the customer this way through the building up of closer/stronger relationships (D2h, D10i)
- Firms set up a production site with a view to selling to the market and feel that doing so will mean that they are better able to meet the needs of the customer through the building up of close/stronger relationships (D6g)
- Firms set up a production facility so that they are geographically closer to their customers so that they are able to offer reduced response times and/or reduced shipment costs (D6h, D8h)
- ‘Product Development (ROI, Cost & Risk)’
- Firms may set up a product development facility as an efficient way of doing product development work (because of access to resources, wage costs etc.) (D12f)
- ‘Product Development (Meeting Needs)’
- Firms may set-up a product development facility that crosses time zones to allow for ‘24-hour’ product development (D12g)
- ‘Language & Culture’
- Firms will decide to work with a partner in order to negotiate issues to do with language and the culture in an overseas market (D4l)
- ‘Business Framework (Capabilities)’
- Firms will decide to work with a partner in order to negotiate issues to do with the practicalities of doing business in an overseas market, i.e. the business framework (D4m)
- Business Framework (ROI, Cost & Risk)’
- Firms will decide to set up their own production facility/call centre/site/product development facility to overcome import restrictions or duties, or to gain tax advantages (D6j, D8j, D10j, D12h)
- ‘Location’
- Firms set up a site in an overseas market to be close to important centres of expertise in their industry (e.g. India for cheap, skilled researchers or the UK for key frontline developments) (D12i) ASK ALL E1 – I’d now like you to think about the difficulties or problems that a firm IN A SIMILAR POSITION TO YOURSELF in terms of size, sector and structure might face doing business overseas.
I’m going to read out a list of possible issues and I’d like you tell me the extent to which a firm SIMILAR TO YOURSELF would encounter each one when trying to do business in < MARKET > by < VARIATION 1 >.
Please give me a score of 1 to 5 for the extent to which you feel that this is likely to be a difficulty, where 5 means it would be ‘extremely difficult’ and 1 means it would ‘not be a problem at all’.
So firstly, ... READ OUT - ROTATE LIST ALWAYS ASK STATEMENT H AFTER STATEMENT G ALWAYS ASK STATEMENTS B, C & D IN ORDER ON EACH OF THE E1 SCREENS ADD AFTER EACH STATEMENT AS NECESSARY Would that be difficult for other firms?
(a) Obtaining basic information about < IF M1 doing business IF M2-9 < VARIATION 1 >> in < MARKET > (b) Identifying who to make contact with in the first instance < IF M2-5 or finding a suitable partner > (c) Establishing an initial dialogue with prospective < IF M1, M5 OR M8 OR YES AT C1b customers or > business partners in < MARKET > (d) Building relationships with key influencers or decision-makers (e) DELETED (f) DELETED (g) Cultural differences outside of any language barriers (h) IF M1-5 Not having < IF M1 an IF M2-5 their own > office or site in < MARKET > (i) < IF M1-5 A bias or preference on the part of overseas customers for doing business with firms from < MARKET > / IF M6 A bias or preference on the part of UK customers for sourcing goods produced in the UK / IF M7 A bias or preference on the part of UK customers for using call centres based in the UK / IF M8 A bias or preference on the part of overseas customers for doing business with firms from < MARKET > / IF M9 A bias or preference on the part of UK customers for research and development being undertaken in the UK > (j) The costs associated with doing business in < MARKET > (k) Finding the necessary management time to devote to doing business in < MARKET > (l) DELETED (m) DELETED (n) Exchange rates and currency (o) DELETED (p) IF M6-9 Problems obtaining work permits or visas for staff to allow them to relocate to < MARKET > (q) DELETED SECTION F – AWARENESS & NEEDS
I’d now like to ask you some more questions about any sources of information or advice you are aware of that are available to help UK firms do business overseas.
F1 - DELETED
ASK ALL
F2 – Prior to this interview, had you heard of...? READ OUT – ROTATE STATEMENTS d-h (a, b & c TO ALWAYS BE ASKED FIRST)
(a) UK Trade & Investment or UKTI (b) The commercial services provided by British embassies and Consulates overseas (c) The International Trade Advisors based in Business Links or Regional Development Agencies (d) Passport to Export (e) IF YES AT F2a OR F2c The Export Marketing Research Scheme or EMRS (f) IF YES AT F2a OR F2c Export Communication Reviews or ECR (g) The Tradeshows Access Programme or TAP (h) The Overseas Market Information Service or OMIS
Yes .................................................................1 No .................................................................2 (Don’t know) ..................................................3
IF YES AT ANY OF F2a-h
F2i – Have you used any of these?
Yes .................................................................1 No .................................................................2 (Don’t know) ..................................................3 ASK ALL F2j – Prior to this interview, had you heard of Business Link?
Yes ...................................................................................1 No .....................................................................................2 (Don't know) ........................................................................3
F3 – DELETED
CATI TO INSERT TIME MARKER
SECTION G – EMERGING/FAST GROWING MARKETS
I’d now like you to think about the extent to which you see there being opportunities for YOUR FIRM in some of the world’s fast growing and emerging economies.
ASK ALL G1 – For each of these countries please could you tell me whether you see it as being a good opportunity for your firm over the next 2 years, a possible opportunity, or unlikely to provide you with an opportunity over this timeframe.
So firstly, ... ROTATE ORDER OF a-g, ALWAYS ASKING i,j & h LAST
(a) Russia (b) Turkey (c) South Africa (d) Saudi Arabia or the United Arab Emirates (e) Qatar (f) Brazil (g) Mexico (i) China (j) India (h) Other countries in Asia (not including Japan)
AS NECESSARY Would you say that < xxx > is ...?
A good opportunity for your firm ........................................... 1 A possible opportunity ......................................................... 2 Unlikely to provide an opportunity over the next 2 years........... 3 Or, are you already doing business there............................... 4 (Don't know) ........................................................................ 5
G2 – DELETED G3 – DELETED ASK ALL EXCEPT ‘NOT YET TRADING’ (CODE 9 AT S7 OR CODE 2 AT S7b) G4a – In your opinion, has your business been negatively affected by the apparent downturn in the US or UK markets over the last year? SINGLE CODE. IF YES, PROBE FOR US, UK OR BOTH.
Yes ...................................................................................1 No ....................................................................................4 (Don't know) .................................................................5
ASK IF YES (CODE 1) AT G4a G4b – And has this prompted you to devote more attention to any of the emerging or fast growing economies I've just mentioned?
AS NECESSARY For example China, India, Brazil or Russia
Yes ...................................................................................1 No ....................................................................................2 (Don't know) .................................................................3
CATI TO INSERT TIME MARKER I'd now like to ask you some questions about your business just to classify your answers for analysis purposes. You may of course skip any question you do not wish to answer.
**H1a - DELETED**
**ASK ALL**
**H1b – Can I just check, is the business UK or foreign-owned?**
- UK-owned........................................................................1
- Foreign-owned..................................................................2
- (Joint UK and foreign-owned)...........................................3
- (Don't know) .....................................................................4
**ASK ALL**
**H2a – How many people are currently employed by your business in the UK?**
**INTERVIEWER NOTE AS NECESSARY** Please include both full and part-time staff.
Write in number (0+):
- (Don't know) – PROMPT WITH RANGES
- (Refused)
**IF DON'T KNOW AT H2a**
**H2b – If you had to estimate, approximately how many people are employed by your business in the UK? READ OUT AS NECESSARY**
- No employees...................................................................1
- 1-4 ....................................................................................2
- 5-9 ....................................................................................3
- 10-19 ................................................................................4
- 20-49 ................................................................................5
- 50-99 ................................................................................6
- 100-199 ............................................................................7
- 200-249 ............................................................................8
- 250-499 ............................................................................9
- 500 or more ......................................................................10
- (Don't know) .....................................................................11
- (Refused)..........................................................................12
**ASK ALL EXCEPT CODES 1, 2, 3 & 9 AT S7 OR CODE 2 AT S7b**
**H2c – Compared to this time three years ago, would you say that the number of people employed by your company is now...? READ OUT**
- Higher ...............................................................................1
- Lower..................................................................................2
- Or, about the same as it was three years ago..................3
- (Don't know) .....................................................................4 IF HIGHER (CODE 1 AT H2c) & FIGURE GIVEN AT H2a H2d – How many people were employed by your business three years ago? READ OUT INTERVIEWER NOTE AS NECESSARY Please include both full and part-time staff.
Write in number (0+): (Don’t know) (Refused)
IF DON’T KNOW/REFUSED AT H2d OR (HIGHER (CODE 1 AT H2c) & NO FIGURE GIVEN AT H2a I.E. DON’T KNOW/REFUSED) H2e – Over the last three years would you say that the number of people employed by your company has...
READ OUT
Increased by more than 75%..................................................... 1 Increased by between 30-75% .................................................. 2 Or, increased by less than 30% compared to 3 years ago....... 3 (Don’t know) .............................................................................. 4
ASK ALL H3a –
IF NOT ESTABLISHED IN THE LAST YEAR (S7 NOT CODE 1 & NOT CODE 9 AND S7b NOT CODE 2) Can I ask, what is the current annual turnover of your business? IF ESTABLISHED IN LAST YEAR (CODES 1 OR 9 AT S7 OR CODE 2 AT S7b) What do you anticipate will be the turnover of your business in the first year of trading?
AS NECESSARY By this I mean your annual sales, income or receipts. AS NECESSARY Please give me the turnover for the UK part of your business, but include overseas sales made by the UK
Write in amount in £ (£0+): (Refused) (Don’t know) – PROMPT WITH RANGES
CATI TO VALIDATE AMOUNT ENTERED USING RANGES IN H3b – ON THESE CHECK QUESTIONS CAN IT ALL BE IN WORDS EG. LESS THAN ONE HUNDRED THOUSAND ETC
IF DON’T KNOW AT H3a H3b - If you had to estimate your total turnover, into which of the following bands would you put yourself? READ OUT AS NECESSARY
£0 .................................................................1 £100,000 or less .........................................................2 £100,001 - £500,000 ..................................................3 £500,001 - £2million ................................................4 £2million - £10million ..............................................5 £10million - £50million ...........................................6 More than £50million ..............................................7 (Don’t know) ..........................................................8 (Refused)..............................................................9
ASK ALL EXCEPT CODES 1, 2, 3 & 9 AT S7 OR CODE 2 AT S7b H3c – Compared to this time three years ago, would you say that your turnover is now...
? READ OUT Much higher.................................................................1 A bit higher ...............................................................2 Lower........................................................................3 Or, about the same as it was three years ago..............4 (Don't know)..............................................................5
H3d – DELETED H3e – DELETED
ASK ALL UNLESS ESTABLISHED IN LAST TWO YEARS (I.E. NOT 1-2 OR 9 AT S7 & NOT CODE 2 AT S7b)
H7a – Have you introduced any new products or services over the last three years?
Yes ..............................................................................1 No..................................................................................2 (Don't know)..................................................................3
ASK IF YES AT H7a
H7b - And are these new products or services... READ OUT - SINGLE CODE ADD AS NECESSARY: By completely new I mean that, to the best of your knowledge, they have not been introduced by anyone before you READ OUT – SINGLE CODE
Just new to your business..............................................1 New to your industry or sector.......................................2 Or, are they completely new to the world......................3 (Some are just new to the business and some are completely new)........4 (Don't know)..................................................................5
ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b
H4a – Approximately how many of your UK employees are engaged either wholly or partly in R&D activity? READ OUT AS NECESSARY
Zero ..............................................................................1 One..............................................................................2 2-4 ..............................................................................3 5-9 ..............................................................................4 10-19 .........................................................................5 20-49 .........................................................................6 50-99 .........................................................................7 100-199 ......................................................................8 200-249 ......................................................................9 250-499 .....................................................................10 500 or more ..................................................................11 (Don't know)..................................................................12 (Refused)......................................................................13 ASK IF H4a IS CODES 2-11 H4b – Can I just check, are any of these employees involved in activities that could be described as ‘the development of scientific or technical knowledge that is NOT commonly available’?
Yes ...................................................................................1 No.....................................................................................2 (Don't know) .....................................................................3
ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b OR CODE1 AT H4a H5 – And approximately how many of your UK employees are engaged either wholly or partly in new product or service development? READ OUT AS NECESSARY
Zero ..................................................................................1 One...................................................................................2 2-4 ....................................................................................3 5-9 ....................................................................................4 10-19 ..............................................................................5 20-49 ..............................................................................6 50-99 ..............................................................................7 100-199 ..........................................................................8 200-249 ..........................................................................9 250-499 ..........................................................................10 500 or more .....................................................................11 (Don't know) .....................................................................12 (Refused)..........................................................................13
ASK ALL EXCEPT CODES 2, 3 OR 4 AT H7b OR (CODE 1 AT H4b & CODES 3-11 AT H4a & CODES 3-11 AT H5) H6 – In the last year have you employed or commissioned anyone external to your business to conduct scientific or technical research, or any new product or service development activity for you?
Yes ...................................................................................1 No.....................................................................................2 (Don't know) .....................................................................3 Analysis
Innovative Firms
- ‘Innovative’ firms are those that...
- Have more than one employee engaged in R&D activity (H4a) and more than one employee engaged in new product or service development (H5)
- Or, have employed someone external to conduct new product or service development in the last year (H6)
- Or, derive at least some turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years
Innovative Firms – Alternative (Tighter) Definition
- ‘Innovative’ firms (by the alternative measure) are those that...
- Have more than one employee engaged in R&D activity (H4a) and more than one employee engaged in new product or service development (H5) and at least some R&D employees are engaged in the ‘development of scientific or technical knowledge that is not commonly available’ (H4b)
- Or, have employed someone external to conduct new product or service development in the last year (H6)
- Or, derive at least some turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years and these products & services are either ‘new to the world’ or ‘new to the industry/sector’ (H7b)
H8a – DELETED
ASK ALL H8b – Do you currently hold any patents or trademarks, either in the UK or overseas, for any of your products or services?
Yes .................................................................................. 1 No.....................................................................................2 (Don't know) .....................................................................3
ASK ALL H9a – Can I just check, do you have a current, written business plan?
Yes ...................................................................................1 No .................................................................................... 2 (Don't know) ....................................................................3 (Refused)..........................................................................4
H9b - DELETED ASK ALL EXCEPT ‘NOT YET TRADING’ (CODE 9 AT S7 OR CODE 2 AT S7b)
H10 – Thinking about your business as a whole, what growth objectives do you have for the business over the next FIVE years? Do you plan to…?
READ OUT
Remain the same ......................................................1 Become smaller ..........................................................2 Grow moderately .......................................................3 Grow substantially ....................................................4 (Don’t know) .............................................................5 (Refused) .................................................................6
H11 - DELETED H12 - DELETED
ASK ALL EXCEPT ‘NOT YET TRADING’ (CODE 9 AT S7 OR CODE 2 AT S7b)
H17 – Thinking now about your main competitors, are they UK-based companies or companies based overseas?
UK-based companies ..................................................1 Companies based overseas .........................................2 (Don’t have any competitors) .......................................3 (Both UK and overseas companies) ............................4 (Don’t know) .............................................................5
H13a - DELETED H13b – DELETED
ASK ALL
H14 – That’s almost the end of the interview, thank you very much for taking part. Would you be willing to take part in any future UK Trade & Investment or BERR research on this topic?
AS NECESSEARY BERR is the Department for Business, Enterprise & Regulatory Reform (formerly the DTI).
Yes .................................................................1 No .................................................................2 (Don’t know) ........................................................3
ASK ALL
H17a - We will be producing a summary report of the results from this survey. Would you like us to send you an electronic link to this summary report? READ OUT
ADD AS NECESSEARY The report will be available late 2008.
Yes .................................................................1 No .................................................................2 (Don’t know) ........................................................3 IF YES AT H15a H17b - Can I take your e-mail address? REASSURE RESPONDENT THAT THIS WILL NOT BE PASSED ON & ONLY USED TO MAIL A LINK TO THE REPORT
IF YES AT H15a BUT RESPONDENT DOESN'T HAVE AN EMAIL ADDRESS H17c – Can I confirm your postal address then and we will send you a letter containing the internet address for the electronic report? REASSURE RESPONDENT THAT THIS WILL NOT BE PASSED ON & ONLY USED TO MAIL A LINK TO THE REPORT
.................................................................................................................... .................................................................................................................... ....................................................................................................................
CATI TO INSERT TIME MARKER
ASK ALL H15 – Finally as proof of this interview please could I just confirm your business postcode? CATI TO DISPLAY POSTCODE IF AVAILABLE – AMEND IF MISSING OR INCORRECT
H16 – And may I take a note of your name? WRITE IN
STANDARD THANK & CLOSE
CATI TO INSERT TIME MARKER
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} |
2cbbcc9f6d8a13874986610ad1e3be3faa438ad4 | UK Trade & Investment
International Business Strategies, Barriers & Awareness Monitoring Survey 2013
Research Report
July 2013
JN: 4351
# Table of Contents
1. Executive Summary ........................................................................................................... 1\
1.1 Awareness & Use of UKTI ......................................................................................... 1\
1.2 Business Profile & Growth ..................................................................................... 2\
1.3 Innovation .............................................................................................................. 4\
1.4 Overseas Activity & Experience ............................................................................. 4\
1.5 Overseas Business Risks ....................................................................................... 7\
1.6 Barriers to Overseas Trade ..................................................................................... 7\
1.7 Conclusions ............................................................................................................ 8
2. Introduction ....................................................................................................................... 9
3. Research Objectives ......................................................................................................... 10
4. Methodology .................................................................................................................... 11\
4.1 Coverage ................................................................................................................ 11\
4.2 Sample Design ....................................................................................................... 11\
4.3 Questionnaire Design ............................................................................................ 12\
4.4 Fieldwork .............................................................................................................. 12\
4.5 Analysis & Weighting ............................................................................................ 13
5. Awareness & Usage .......................................................................................................... 16\
5.1 Awareness & Use of UKTI ...................................................................................... 16\
5.2 Awareness of the Intellectual Property Attaché Network ....................................... 21\
5.3 Use of Open to Export ......................................................................................... 23
6. Profile ............................................................................................................................... 25\
6.1 Age of Business ..................................................................................................... 25\
6.2 Employee Numbers ............................................................................................... 27\
6.3 Annual Turnover .................................................................................................... 29\
6.4 Profitability ............................................................................................................ 31\
6.5 Industry Sector ...................................................................................................... 33\
6.6 Ownership ............................................................................................................. 35
7. Innovation & Product/Service Development .................................................................. 36\
7.1 Innovative Firms .................................................................................................... 36\
7.2 IP Active Firms ...................................................................................................... 38\
7.3 Young, Technology Intensive Firms ...................................................................... 42\
7.4 Innovative High Growth Firms ............................................................................. 43\
7.5 Planned Product & Service Development ............................................................. 45\
7.6 Geographical Focus of Product & Service Development ....................................... 49\
7.7 Key Markets Driving Innovation .......................................................................... 52
8. Importing & Overseas Supply Chains ................................................................. 156 14.1 Importing Activity ..................................................................................... 156 14.2 Importing Decision-Making & Supply Chain Relationships (Qualitative) .. 162
Annex A: Markets Selected ..................................................................................... 177 A.1 Most Recent Market ................................................................................. 177 A.2 Most Challenging Market ......................................................................... 178
Annex B: Questionnaire .......................................................................................... 179
1. Executive Summary
UKTI’s International Business Strategies, Barriers, and Awareness Survey is a telephone-based survey with a random representative sample of 950 internationalising UK firms who are exporting or intending to begin doing so within the next year. Respondents include users and non-users of UKTI.
Throughout this report, any differences referred to in the commentary are statistically significant at the 95% level of confidence unless otherwise stated.
1.1 Awareness & Use of UKTI
Awareness of the UKTI name itself stands at 62%, although 75% of internationalising firms had heard of either UKTI or the commercial services provided by overseas embassies and consulates.
However, only half (51%) of firms knew that UKTI provides assistance to help UK firms do business overseas (i.e. UKTI’s role). This suggests that as well as focusing on increasing awareness of the UKTI name, it is also important that UKTI’s marketing seeks to improve understanding of what the organisation actually does.
Not all UKTI users had actually heard of ‘UK Trade & Investment’, with 9% having used the services provided by overseas posts but not realised the link to UKTI.
Only 49% of non-users recognised the UKTI name, and just a third were aware of its role. This clearly demonstrates that there are many internationalising firms that could benefit from UKTI’s services but have either never heard of the organisation or do not equate it with export support.
Awareness of UKTI and its role is lowest among micro SMEs, and those that have only started exporting within the last 2 years. Encouragingly, awareness of UKTI is fairly high amongst firms that have not yet started doing business overseas (but plan to in the next year), indicating that significant numbers of these firms do know that there is support out there to help them get started overseas.
Although not shown in the chart, there is clear evidence that innovative, IP active and growing firms are all more engaged with UKTI, with awareness and usage levels significantly higher amongst these groups.
At the total level, awareness of the UKTI name has risen significantly over the last year, continuing the upward trend seen since 2010. 1.2 Business Profile & Growth
UKTI users tend to be older than non-users. They are also significantly larger in terms of both employee numbers and annual turnover, although it should be noted that more than half of UKTI users still have less than 10 staff.
There are no differences between user and non-users when it comes to the broad sector in which they operate.
Most UKTI clients are on an upwards growth trajectory. Overall, 23% have grown ‘substantially’ over the last 5 years (with a further 43% reporting ‘moderate’ growth) and 31% are planning ‘substantial’ growth for the next 5 years (with 52% expecting ‘moderate’ growth).
UKTI users also tend to have a positive outlook when it comes to the development of their overseas business. Over half (59%) expect to enter new markets over the next 3 years and a similar proportion (57%) anticipate that export sales will become more important to their business, in terms of the proportion of turnover that they account for.
The majority of firms accessing UKTI support have a clear senior management strategy for achieving their overall growth objectives for the business and for developing their overseas business, and half have a current business plan that includes targets for overseas revenues.
UKTI clients are clearly more dynamic than non-users, particularly when it comes to their overseas development. They are significantly more likely to report substantial growth over the last 5 years and to anticipate an increase in both the number of markets they operate in and the proportion of turnover accounted for by exports.
There is also evidence that users are strategically better placed to expand overseas than non-users; they are more likely to have a clear management strategy for developing their overseas business and to have a written business plan containing overseas targets.
Overall, there has been little change in the growth aspirations of internationalising firms over the last 4 years. Most firms are primarily looking at their existing markets and their existing products/services when it comes to achieving their growth objectives.
However, a different situation is seen when it comes to the customer types that firms will be focussing on, with firms more likely to be targeting new customers than existing ones.
The more ambitious a firm’s growth objectives, the more likely they are to be focussing on new markets, new customers and new products or services.
Over three-quarters of internationalising firms are currently making an annual profit, and the average profit margin is 14%.
There is a clear relationship between overseas activity and financial performance, with experienced exporters significantly more likely to be profitable (particularly in comparison to firms that have not yet started exporting).
It is also the case the foreign-owned firms are less likely to be making a profit than UK-owned businesses, and also have a lower average profit margin.
Many internationalising firms make a profit ‘immediately’ upon entering a new market. Presumably this typically relates to firms that ‘enter’ a market simply by selling a good/service to a customer based there, rather than adopting a more strategic, investment-heavy approach to establishing a market presence.
The larger the firm is, the longer it takes to see a profit, perhaps reflecting the greater investment that larger firms make when entering new markets.
However, firms with at least 2 years overseas experience are more likely to make a profit immediately on entering a new market.
### Role of Overseas Markets in Achieving Growth
| Whether growth objectives will mainly be achieved through... | Total | Stay same | Moderate | Substantial | |-------------------------------------------------------------|-------|-----------|----------|-------------| | Base | 875 | 116 | 486 | 273 | | New countries | 43% | 26% | 40% | 56% | | Existing countries | 89% | 91% | 90% | 87% | | New Customers | 80% | 61% | 81% | 87% | | Existing customers | 67% | 80% | 67% | 62% | | New products/services | 52% | 35% | 52% | 62% | | Existing products/services | 80% | 85% | 79% | 78% |
### Link Between Overseas Experience & Profitability
- **Making a profit**
- Total: 77%
- Not yet exp.: 55%
- Exp. < 2 yrs: 70%
- Exp. 2-10 yrs: 81%
- Exp. >10 yrs: 79%
- Foreign owned: 66%
- UK owned: 78%
### Time Required to Make Profit in New Markets
- **How long did it/will it take to make a profit in the last market you entered?**
- Exp. < 2 yrs: 72%
- Exp. 2-10 yrs: 60%
- Exp. >10 yrs: 41%
- 0-9 emps: 54%
- 10-49 emps: 53%
- 50-249 emps: 43%
- 250+ emps: 34%
Base: Total (950), Not exp (97), \<2 yrs (117), 2-10 yrs (368), >10 yrs (351), Foreign (101), UK (848)
Base: All exporters - \<2 yrs (119), 2-10 yrs (368), >10 yrs (351), 0-9 emps (507), 10-49 emps (215), 50-249 emps (66), 250+ emps (63) 1.3 Innovation
One of the most notable differences between users and non-users of UKTI services is in the area of innovation. The former are significantly more likely to be classed as ‘innovative’, particularly when the alternative, tighter definition is employed.
UKTI users are also more inclined to obtain patents, trademarks or other legal protection for their products and services, and hence be defined as ‘IP active’.
The vast majority of internationalising firms are planning to undertake some sort of product or service development activity over the next 3 years (covering both creating new products/services and improving or modifying existing ones). Again, this is more likely to be the case among UKTI clients.
Innovation is typically a customer-focussed process and, in the case of internationalising firms, product/service development activity is most often targeted at both UK customers and overseas customers.
UKTI clients are comparatively more likely to focus their product/service development activity on overseas markets (95% vs. 80% of non-users).
1.4 Overseas Activity & Experience
It is clear that UKTI users tend to have significantly greater overseas experience than non-users. They have been operating overseas for longer, are typically active in a greater number of markets, and export sales account for a significantly higher proportion of their total turnover.
However, that is not to say that all UKTI clients are experienced exporters, with 12% having been doing business overseas for less than 2 years. Furthermore, a third indicate that overseas sales contribute less than 10% of their annual turnover and a similar proportion are selling to 5 markets or less.
UKTI users are also less likely to be ‘intermittent exporters’ (defined as those that have export sales some years but not others). It is undoubtedly the case that larger firms and those with more overseas experience tend to be active in a greater number of markets.
However, it is also clear that export development patterns are diverse. A significant minority of very recent exporters are already selling to a wide range of markets and, conversely, many long-established exporters still have fairly limited overseas operations.
A similar picture is seen when it comes to the overseas regions which firms are selling to. Firms that have been exporting for longer and those with more employees are significantly more likely to be selling to most of the five regions. The exception to this is Europe, where there is less difference by size and experience, suggesting that firms tend to target European markets when they first start selling overseas.
However, the diversity of firms’ export development should again be noted. A third of very recent exporters with less than 2 years overseas experience are already selling to markets in North America, Middle East/Africa and Asia Pacific. Similarly, significant proportions of micro SMEs are also active in these geographic regions.
Two-fifths (43%) of internationalising firms are already doing business in at least one high growth market (HGM), and most of the remainder feel that they are very or quite likely to do so in the next 2 years. In terms of specific markets, the UAE is felt to represent the best opportunity but firms are least enthusiastic about doing business in Mexico and Brazil.
Approaching two-thirds of UKTI users are already active in one of these markets, compared to just a third of non-user firms.
The likelihood of a firm trading in HGMs also increases with size and export experience. However, it is certainly not the case that these markets are only targeted by more established firms, as around a third of micro SMEs and firms with less than 2 years export experience are already doing business in these countries.
Since 2010, there has been a significant decline in the proportion of firms selling to HGMs, although this has stabilised over the last year. However, this is largely down to a significant increase in the number of UKTI users active in these markets, and the proportion of non-users selling to HGMs continues to fall. The vast majority of internationalising firms sell direct to businesses or individuals overseas. However, a significant minority also adopt more ‘advanced’ modes such as setting up overseas sites and approaching half of all firms (46%) use two or more different modes when doing business overseas.
Most firms with overseas sites classify these as sales/service delivery offices (9% of all firms), with a relatively small proportion operating overseas manufacturing/assembly sites (3% of all firms).
It should be noted that 4% of internationalising firms are ‘web only’ exporters, in the sense that they do not sell overseas through any other channel and do not use any other internationalisation modes.
UKTI clients are significantly more likely than non-users to sell through agents/distributors, use contractual arrangements and operate their own overseas sites.
Aside from a dramatic jump in the proportion using agents/distributors between 2008 and 2010, there has been little change in the proportion of firms using each of the internationalisation modes over time. There has been a small but steady rise over the past 5 years in the proportion using contractual arrangements, but this appears to have levelled off in 2013.
There is clear evidence that outward investment is associated with more intensive export activity. Generally, the longer a firm has been exporting, the greater the importance of export sales to the business and the more markets they are selling to, the more likely they are to operate overseas sites.
However, it is interesting to note that a relatively high proportion of firms that have not yet started selling overseas are planning to set up an overseas site in the next year (so this will presumably be one of the first internationalisation modes they adopt). 1.5 Overseas Business Risks
Overall, 63% of firms have been put off from entering an overseas market due to the risks involved. The risk of not being paid (in full or on time) is the most significant deterrent to overseas expansion, but all of the individual risks tested have a significant impact on the behaviour of internationalising firms, with at least 22% reporting that they have decided against market entry because of each one.
When asked specifically about the risks involved in the BRIC markets and Mexico, firms were most concerned about doing business in Russia, with 54% describing it as very or fairly risky. This was followed by Mexico (46%), China (41%) and then Brazil and India (each 36%).
In each case, firms that were already doing business in these markets were much less concerned about the risks involved. For example, only 11% of firms already selling to Brazil felt that it was a very or fairly risky market, compared to 39% of those not doing business there.
This might suggest that some firms are being deterred by a perception that these markets are high risk when the reality may not be as bad as they fear. However, we currently have no evidence to this effect and it may simply be that the circumstances of firms operating in these markets differ from those that are not, leading to different exposure to risks.
1.6 Barriers to Overseas Trade
Almost two-thirds of exporters have experienced at least one significant barrier, confirming that there is a clear need for external assistance to help firms overcome these barriers and successfully trade overseas. Reflecting the results from previous UKTI studies, legal and regulatory barriers prove the most common barrier experienced, followed by customs and contacts barriers.
While it might be expected that larger firms and more experienced exporters are less likely to experience barriers due to their greater resources and/or knowledge, in fact the opposite is true and these groups are more likely to report barriers.
Firms with ‘substantial’ growth aspirations are also more likely to encounter significant barriers, suggesting that they are most in need of support to enable them to fulfil their growth ambitions. 1.7 Conclusions
- Awareness of the UKTI name among internationalising firms has increased over the past 3 years, but is still relatively low at 62%. This falls to just 49% among firms that have not used UKTI services (i.e. potential new clients).
- Furthermore, some firms recognise the UKTI name but have no knowledge that the organisation provides assistance to help firms do business overseas – only 51% of internationalising firms (and just 33% of non-users) are aware of UKTI’s role.
- Driving up awareness of the organisation and its remit should be a key priority, particularly given UKTI’s target of assisting 50,000 individual firms a year by 2015. To this end, it should be recognised that awareness levels are lowest among micro SMEs and very recent exporters, who potentially have the greatest need for assistance.
- Most UKTI clients are on an upwards growth trajectory, with the majority having grown over the past 5 years and anticipating further growth over the next 5 years. Overseas business clearly plays a significant role in these growth expectations, with most UKTI users planning to enter more markets over the next 3 years and to increase the proportion of their turnover accounted for by overseas sales.
- UKTI users are considerably more dynamic than non-users firms, particularly in regards to their overseas growth. They are also more strategic in their approach, in the sense that they are more likely to have a clear management strategy for developing their overseas business and more likely to have a business plan containing overseas targets.
- There is a clear relationship between overseas activity and financial performance, with experienced exporters significantly more likely to be profitable (particularly in comparison to firms that have not yet started exporting).
- There are strong links between exporting and innovation. The vast majority of internationalising firms intend to undertake product/service development in the next few years, and this activity is typically targeted at both UK customers and overseas customers. It should be noted that UKTI clients are significantly more likely to be innovative and IP active than non-users.
- As might be expected, larger firms and those with more overseas experience tend to be active in a greater number of markets. However, export development patterns are extremely diverse; some micro SMEs are active in many different markets and regions, while some large firms only operate in a few overseas countries.
- Approaching half of exporters (43%) sell to at least one high growth market. These markets are not solely the preserve of larger, more established exporters – over a third of micro SMEs and firms with less than 2 years export experience are active in high growth markets.
- Although the vast majority of firms sell direct to overseas customers, almost half (46%) also adopt other internationalisation modes such as using agents/distributors, licensing/franchising or setting up overseas sites. Outward investment is strongly associated with more intensive export activity; the more overseas experience a firms has and the more markets it is doing business in, the more likely it is to operate overseas sites.
- Two-thirds of firms (63%) have been put off from entering an overseas market due to the risks involved. The risk of not being paid (in full or on time) is the most significant deterrent to overseas expansion. Russia is perceived as the most risky of the BRIC markets.
- The majority of exporters (64%) have encountered significant barriers to their overseas development. Barriers are common among all types of firm, irrespective of size or overseas experience. This illustrates the need for effective external assistance to help firms overcome these barriers and successfully trade overseas.
2. Introduction
UK Trade & Investment (UKTI) commissioned this research in order to gather evidence about trends in UK businesses’ international business strategies, barriers faced by internationalising firms, awareness and usage of UKTI, and related issues. The study was designed to inform UKTI policy development and other aspects of UK Government policy relating to international trade and investment and the ability of British business to optimise opportunities in global markets.
The survey was intended to complement evidence already available from other surveys of UK business, in particular:
- The Community Innovation Survey, which is nationally representative of firms with at least 10 employees, and captures some evidence about international aspects of innovation activity, including international partnerships and other linkages, as well as export activity;
- UKTI’s Performance & Impact Monitoring Survey (PIMS), which covers businesses that have recently used UKTI trade services and, in addition to evaluating the impact of UKTI support, also captures some contextual evidence about overseas business experience and aspects of strategy;
- UKTI’s annual survey of exporters who have not used UKTI trade services, which gathers evidence about some aspects of overseas business strategy as well as evidence about barriers to overseas business and associated needs for external help.
The ‘International Business Strategies, Barriers & Awareness Monitoring Survey’ (henceforth referred to as the Internationalisation Survey) is undertaken on an annual basis, and this is the sixth wave conducted to date. Whilst the core content of the survey is kept consistent each year, there is variation in some of the topics covered. This ensures that the survey provides consistent annual monitoring data where needed, but also captures data on other topical issues at less frequent intervals.
The 2013 survey provides new, interesting and robust evidence on:
- Awareness of what UKTI does (in addition to simple recognition of the UKTI name);
- The proportion of exporters making a profit, and the typical profit margins;
- The time taken to make a profit in new overseas markets;
- Importing and overseas supply chains.
It also continues to track the following key areas:
- Awareness and use of UKTI amongst internationalising firms
- Activity and interest in high growth markets
- Barriers to overseas development
- The business characteristics of UKTI users and non-users, including profile, growth, innovation and export experience/approach
3. Research Objectives
In terms of the specific research aims, the 2013 Internationalisation Survey was required to provide robust evidence to:
- Understand the role of international markets in business development strategies, including effects on growth, profitability, innovation and investment in R&D and new product development;
- Identify the extent to which engagement in international supply chains or in international collaborations may impact on business performance, innovation or investment in R&D or new product development;
- Track use of diverse modes of overseas business among internationalising UK businesses;
- Track awareness of, and potential interest in, selected emerging and high growth markets;
- Understand the barriers and risks encountered by UK businesses in seeking to develop overseas business, and what impact these may have on export market entry, both for new exporters and for firms seeking to enter new markets;
- The survey should also seek to identify how these barriers and risks may vary across markets and by firm characteristics, such as innovation, size and export experience.
- Track awareness and use of UKTI support, including government support relating to intellectual property issues associated with doing business overseas;
- Capture evidence about the characteristics of users and non-users of UKTI services, including innovation activity, scope of international business and modes of internationalisation.
This study built on the five previous survey waves, replicating the previous methodology so as to provide consistent year-on-year data, whilst developing the previous questionnaire to ensure that the 2013 objectives were fully addressed. 4. Methodology
The research was conducted via quantitative CATI(^1) interviews, administered by a specialist team of business-to-business researchers with extensive experience of conducting similar studies with this type of audience.
4.1 Coverage
A total of 950 interviews were conducted with a random sample of firms involved in overseas business activities, covering the full range of internationalisation modes such as selling to overseas customers directly, selling through agents or distributors, doing business overseas via licensing, franchising and other contractual agreements, and operating overseas sites. Whilst data was also collected on import activity, only those firms also involved in other overseas business activities were eligible for interview.
The majority of the sample (855 of the 950 interviews) were involved in at least one of these forms of internationalisation at the time of the interview, although a small number (95) were not yet doing business overseas. However, to be eligible for the study firms had to indicate that they were planning to start selling overseas in the next year.
4.2 Sample Design
Since one of the key objectives of this research was to ensure coverage of firms doing overseas business via the full range of modes, and not just simply exporting in the traditional sense, the sample frame was built from a random sample of UK businesses which was then screened to identify those engaged in overseas business. This approach had the further advantage of allowing the identification and inclusion of firms that were not yet exporting (but planning to start in the next year).
The initial sample frame was sourced from a Companies House-based list provided by Market Location. In order that the incidence within the sample frame of firms eligible for interview (i.e. engaging in international business activity) was kept to within sensible limits, a small number of industry sectors where export propensity is very low were excluded from the initial sample frame. The exclusions were made on the basis of analysis of data from the Community Innovation Survey (CIS) on the incidence of exporting for individual industry sectors by age group(^2). The available data only enabled exclusions to be made at the level of 2-digit SIC codes, but a number of more detailed sub-sectors were also excluded based on both common sense and the research team’s experiences of the previous surveys and pilot sessions (e.g. sub-post offices, taxi firms, dispensing chemists, etc).
Both users and non-users of UKTI were included in the research, but the initial sample was screened against a list of firms that had been interviewed in the most recent UKTI Performance & Impact Monitoring Survey (PIMS) so as not to over-burden businesses.
______________________________________________________________________
(^1) Computer Assisted Telephone Interviewing.
(^2) Based on analysis by Professor Richard Harris, University of Glasgow. In order to ensure sufficient coverage of younger firms (including ‘born global’ exporters) we adopted a disproportionate sample design that involved stratifying the sample by 3 company age bands (0-5 years, 6-10 years and over 10 years). Firms established within the last 5 years were then over-sampled to enable robust analysis of this group (with older firms slightly under-sampled). We also included a ‘boost’ of 50 additional interviews with large firms of 250+ employees to allow more robust analysis of this group.
4.3 Questionnaire Design
Strong emphasis was placed on questionnaire design in the early stages of this project to ensure that the questionnaire was easily understandable, flowed logically, was of an acceptable length and was capable of delivering high quality data across all the areas necessary to answer the research objectives.
Given that some of the question areas had not been covered in previous studies, an initial qualitative piloting phase was undertaken to help test and develop these questions. This consisted of a total of 4 in-depth, less-structured interviews to ensure that the new question areas made sense to respondents and covered all of the pertinent issues.
Following this qualitative phase the questionnaire was revised where necessary, and then a full ‘live’ quantitative pilot was conducted on CATI. This took place over the course of 2 days and involved OMB executives and UKTI representatives listening to ‘live’ interviews conducted by the telephone research team. Based on this session, further changes were then made to the questionnaire script prior to the start of main fieldwork. A copy of the final questionnaire is appended to this report.
4.4 Fieldwork
Main fieldwork was conducted between February and April 2013, and interviews lasted an average of c.20 minutes.
The following table summarises the number of sample records selected for CATI, the number of records lost due to screening-out or incorrect contact details, and the number of interviews completed along with the associated response rate.
| Table 4.4 Sample Analysis | |---------------------------| | **CATI SCREENING** | | Selection for CATI | 15,241 | | - Unusable: No overseas business activity | 9,775 | | - Unusable: Other reason (e.g. contact details incorrect) | 1,140 | | **INTERVIEWS / RESPONSE RATES** | | Total useable sample | 4,326 | | Interviews achieved | 950 | | Response rate (%) | 22% | | Refusal rate (%) | 29% | 4.5 Analysis & Weighting
4.5.1 Weighting
All of the core sample data has been weighted to account for the disproportionate nature of the sample design (i.e. the disproportionate sampling by business age and the ‘boost’ of 250+ employee firms). The weighting regime uses data from the 2007/8 Annual Small Business Survey on the profile of UK exporters (displayed below), with the survey data weighted to the profile shown below.
Table 4.5.1 Weighting
| Age | Size | UK exporters (2007/8 ASBS) | Interviewed firms | Weighting | |----------------|------------|---------------------------|-------------------|-----------| | Up to 5 years | 0-249 emps | 16.8% | 21.2% | 0.79 | | | 250+ emps | 0.01% | 0.2% | 0.03 | | 5-10 years | 0-249 emps | 23.4% | 20.6% | 1.13 | | | 250+ emps | 0.03% | 0.2% | 0.12 | | More than 10 years | 0-249 emps | 59.5% | 51.6% | 1.15 | | | 250+ emps | 0.24% | 6.2% | 0.04 |
4.5.2 Base Size Descriptions
Under each chart in this report is a base description, which provides details of:
- The group(s) of firm that the analysis is based on (e.g. All respondents, All exporters, etc)
- The unweighted number of firms included in the analysis (i.e. the base)
- The percentage falling into any categories that are not shown in the chart itself (e.g. ‘Don’t know/refused’ responses).
For example, the base description below indicates that the analysis is based on all firms that are currently exporting, the ‘total’ results in the chart are based on 832 firms, and 3% of these answered ‘don’t know’ to this particular question. It also shows that the ‘UKTI users’ results are based on 178 firms (1% of whom answered ‘don’t know’) and the ‘Non Users’ results are based on 654 firms (4% of whom answered ‘don’t know’)
Example base description Base: All currently exporting (Base, Don’t know) Total (832, 3%), UKTI Users (178, 1%), Non-Users (654, 4%) 4.5.3 Statistical Significance
Throughout this report, any differences referred to in the commentary are statistically significant at the 95% level of confidence unless otherwise stated.
4.5.4 Rounding
Throughout this report results are typically presented to the nearest whole number (e.g. 24.7% will be rounded up and displayed as 25%). For this reason there can be apparent discrepancies between the charts/tables and the commentary when several figures are combined. For example, values of 8.4% and 15.3% would be shown as 8% and 15% respectively in a chart, but the combined value if referred to in the commentary would be 23.7% and hence displayed as 24%.
4.5.4 Analysis Definitions
Throughout this report, sub-analysis has been provided by a number of variables relating to key business characteristics. Some of these are constructed from a number of different survey questions, and the following provides details of how these variables have been defined.
| Innovative Firms | |------------------| | Firms have been defined as ‘innovative’ if they… | | • Have more than one employee engaged in R&D activity and more than one employee engaged in new product/service development | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years except firms established in the last 2 years |
| Innovative Firms (Alternative, Tighter Definition) | |--------------------------------------------------| | Firms have been defined as ‘innovative’ under the alternative, tighter definition if they … | | • Have more than one employee engaged in R&D activity and more than one employee engaged in new product or service development and at least some employees are involved in the development of scientific or technical knowledge not commonly available | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years and these are ‘new to the world’ or ‘new to the sector’ |
### IP Active Firms
Firms have been defined as 'IP Active' if they…
- Have applied for or obtained any patents, trademarks or other legal protection for their products or services, either in the UK or overseas
### Young, Technology Intensive Firms
Firms have been defined as being ‘young, technology intensive’ if they…
- Have been established for 5 years or less
- And are classified as being innovative using the alternative (tighter) definition or are classified as IP active
### Born Global Firms
Firms have been defined as being ‘born global’ if they…
- Have been established for 5 years or less
- And have been doing business overseas for as long as they have been established
### Born Global Firms (Alternative, Tighter Definition)
Firms have been defined as being ‘born global’ under the alternative (tighter) definition if they…
- Have been established for 5 years or less
- And have been doing business overseas for as long as they have been established
- And the proportion of turnover accounted for by overseas sales is over 25%
5. Awareness & Usage
5.1 Awareness & Use of UKTI
All firms were asked whether, prior to the interview, they had heard of either UK Trade & Investment or the commercial services provided by British embassies and consulates overseas. If so, they were also asked whether they had ever used either of these. Those firms that recognised the UK Trade & Investment name were also asked if they were aware that UKTI provide assistance to help UK firms do business overseas (i.e. UKTI’s role). The table below provides details of awareness and usage levels, at the total level and shown separately for users and non-users of UKTI.
Table 5.1.1 Awareness & Use of UKTI – By UKTI Usage
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 950 | 303 | 647 | | **Aware (at least one)** | | | | | - UK Trade & Investment or UKTI| 62% | 91% | 49% | | - Commercial services provided by embassies and consulates overseas | 56% | 90% | 41% | | **Aware of UKTI's role** | 51% | 90% | 33% | | **Used (at least one)** | 31% | 100% | 0% | | - UK Trade & Investment or UKTI| 24% | 78% | 0% | | - Commercial services provided by embassies and consulates overseas | 20% | 65% | 0% |
Overall, 75% of internationalising firms had heard of either UKTI or the commercial services provided by overseas posts. Awareness of the UKTI name stands at 62%, with a slightly lower awareness level (56%) recorded for the services provided by overseas posts.
However, although 62% of firms had heard of UKTI, only 51% were aware of the organisation’s role (i.e. that it provides assistance to help UK firms do business overseas).
Almost a third of firms (31%) claim to have used UKTI (including the commercial services provided by overseas posts). UKTI ‘users’ were defined as those that have used either UKTI services or the commercial services provided by British embassies and consulates overseas. It should be noted that no time frame was put on this question, so it should not be assumed that firms classified as UKTI ‘users’ have necessarily accessed UKTI services recently.
It is also worth noting that only 91% of UKTI users have actually heard of ‘UK Trade & Investment’ itself, meaning that 9% have used the services provided by overseas posts but not realised the link to UKTI. Awareness of the UKTI name amongst non-users stands at 49% (although 64% have heard of either UKTI or the services provided by overseas posts). However, significant numbers of non-user firms that recognise the UKTI name still have no understanding of what the organisation does, with only 33% of non-users aware of UKTI’s role. This indicates that there are many internationalising firms that could benefit from UKTI’s services but have either never heard of the organisation or do not equate it with export support. It also suggests that as well as focusing on increasing awareness of the UKTI name, it is also critical that UKTI’s marketing also seeks to improve understanding of what the organisation actually does.
The table below provides details of awareness and usage levels over time. Please note that there is no time series data on awareness of UKTI’s role as this question was only introduced in 2013, and there is also no separate data on usage of UKTI and overseas posts available from the 2010 survey.
Table 5.1.2 Awareness & Use of UKTI – Over Time
| | Internationalisation Survey | |----------------------|-----------------------------| | | 2010 | 2011 | 2012 | 2013 | | **Base** | 902 | 903 | 900 | 950 | | **Aware (at least one)** | 68% | 71% | 70% | 75% | | - UK Trade & Investment or UKTI | 51% | 53% | 56% | 62% | | - Commercial services provided by embassies and consulates overseas | 53% | 56% | 51% | 56% | | **Used (at least one)** | 27% | 29% | 24% | 31% | | - UK Trade & Investment or UKTI | N/A | 22% | 18% | 24% | | - Commercial services provided by embassies and consulates overseas | N/A | 18% | 15% | 20% |
Awareness of the UKTI name has risen steadily since 2010 and now stands at 62%. Awareness of posts services has also risen significantly over the last year and is now back to the 56% seen in 2011.
There has also been a statistically significant increase since last year in the proportion of firms that have used UKTI services, up from 24% to 31%. This is encouraging in the context of UKTI’s target of supporting 50,000 firms a year by 2015. However, it should be noted that the recent increase largely serves to return usage to the levels seen in 2011 (29%), rather than being indicative of an on-going upward trend. As seen below, both awareness and usage of UKTI increase among firms with more employees. Older firms are also more likely to be aware of UKTI’s role and to have used UKTI services, but it should be noted that there are no statistically significant differences by age when it comes to awareness of the UKTI name or of the services provided by overseas posts.
Table 5.1.3 Awareness & Use of UKTI – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|---------------------------|-----|-----|-------|-------|--------|------|---------| | Base | | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Aware (at least one)| | 71% | 73% | 77% | 56% | 73% | 73% | 80% | 79% | 87% | 75% | | - UKTI | | 57% | 63% | 63% | 41% | 59% | 58% | 70% | 69% | 70% | 62% | | - Posts | | 47% | 54% | 60% | 40% | 56% | 56% | 59% | 51% | 76% | 56% | | Aware of UKTI’s role| | 41% | 53% | 53% | 25% | 48% | 47% | 57% | 56% | 63% | 51% | | Used (at least one) | | 18% | 32% | 34% | 15% | 27% | 27% | 37% | 44% | 58% | 31% | | - UKTI | | 14% | 25% | 26% | 7% | 21% | 20% | 31% | 31% | 45% | 24% | | - Posts | | 10% | 21% | 22% | 12% | 17% | 17% | 25% | 30% | 54% | 20% |
The following table provides analysis of UKTI awareness and usage by firms’ overseas experience and shows that, in comparison to very recent exporters, firms that have been operating overseas for at least 2 years are more likely to have heard of UKTI, be aware of their role, and to have used their services. However, there is relatively little difference in awareness once firms reach this point, with levels similar for firms that have been exporting 2-10 years and those that have been exporting over 10 years.
Encouragingly, awareness of UKTI is fairly high amongst firms that have not yet started doing business overseas (but plan to in the next year), with 63% recognising the UKTI name and 45% aware that UKTI provide assistance to help UK firms do business overseas. This demonstrates that significant numbers of these firms do know that there is support out there to help them get started overseas.
Table 5.1.4 Awareness & Use of UKTI – By Overseas Experience
| Years Exporting | Exports as % of Turnover | |-----------------|-------------------------| | | 0-2 | 2-10 | >10 | 0% | 1-10% | 11-25% | 26-50% | >50% | | Base | 97 | 117 | 214 | 368| 351 | 124 | 345 | 109 | 107 | 201 | | Aware (at least one) | 70% | 65% | 67% | 77%| 78% | 65% | 68% | 83% | 84% | 85% | | - UKTI | 63% | 51% | 57% | 64%| 62% | 57% | 57% | 71% | 68% | 68% | | - Posts | 46% | 45% | 45% | 55%| 65% | 43% | 48% | 63% | 65% | 74% | | Aware of UKTI’s role | 45% | 37% | 41% | 53%| 54% | 42% | 45% | 58% | 62% | 59% | | Used (at least one) | 19% | 17% | 18% | 30%| 40% | 18% | 21% | 44% | 43% | 45% | | - UKTI | 17% | 13% | 15% | 24%| 29% | 14% | 17% | 35% | 33% | 34% | | - Posts | 9% | 10% | 10% | 18%| 28% | 11% | 12% | 27% | 25% | 35% | As seen on the previous table, awareness and usage of UKTI also increase notably once overseas sales account for more than 10% of a firm’s turnover. However, once exports have exceeded 10% of turnover then awareness and usage levels hit a plateau, with no notable differences between firms where exports contribute 11-25%, 26-50% or over 50% of total sales.
As shown below, there is clear evidence that once firms are active in 6 or more markets then they are significantly more likely to be aware of UKTI (or the commercial services provided by posts), be aware of the organisation’s role and to have accessed UKTI support. There is also a broadly linear relationship between the number of regions firms are doing business in and their likelihood of being aware of UKTI and accessing UKTI services.
Table 5.1.5 Awareness & Use of UKTI – By Number of Markets & Regions
| Number of Markets | Number of Overseas Regions | |-------------------|---------------------------| | Base | | | 0 | 95 | | 1-5 | 374 | | 6-10 | 176 | | >10 | 295 | | None | 95 | | One | 226 | | Two | 176 | | Three | 172 | | Four | 145 | | Five | 136 |
| Aware (at least one) | 70% | 68% | 83% | 82% | 70% | 65% | 78% | 78% | 80% | 83% | |----------------------|-----|-----|-----|-----|-----|-----|-----|-----|-----|-----| | - UKTI | 63% | 53% | 71% | 68% | 63% | 52% | 63% | 64% | 65% | 71% | | - Posts | 46% | 46% | 64% | 68% | 46% | 43% | 57% | 58% | 72% | 68% |
| Aware of UKTI's role | 45% | 40% | 59% | 61% | 45% | 39% | 49% | 53% | 61% | 63% | |----------------------|-----|-----|-----|-----|-----|-----|-----|-----|-----|-----| | - UKTI | 20% | 19% | 34% | 49% | 20% | 17% | 29% | 30% | 45% | 53% | | - Posts | 10% | 11% | 18% | 37% | 10% | 9% | 16% | 16% | 34% | 42% |
There is also clear evidence that innovative and IP active firms are more engaged with UKTI, with both awareness and usage levels significantly higher among these groups.
Table 5.1.6 Awareness & Use of UKTI – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 462 | 689 | 261 | 256 | 674 | | Aware (at least one) | 81% | 78% | 67% | 81% | 73% | | - UKTI | 71% | 67% | 49% | 68% | 59% | | - Posts | 63% | 60% | 47% | 68% | 52% | | Aware of UKTI's role | 62% | 56% | 35% | 60% | 47% | | Used (at least one) | 38% | 34% | 22% | 45% | 25% | | - UKTI | 31% | 28% | 14% | 37% | 19% | | - Posts | 25% | 22% | 14% | 30% | 16% | Awareness and usage of UKTI is also highest among firms that plan to grow over the next 5 years, which is encouraging given that this group are most likely to need assistance to achieve their growth ambitions. Awareness of UKTI peaks amongst innovative high-growth firms (82%), a key group for UKTI.
Table 5.1.7 Awareness & Use of UKTI – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non innovative | |-------------------|---------------------|---------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | | Base | 116 | 486 | 273 | 215 | 474 | 261 | | Aware (at least one) | 62% | 77% | 78% | 82% | 77% | 67% | | - UKTI | 41% | 64% | 67% | 72% | 64% | 49% | | - Posts | 51% | 56% | 58% | 63% | 58% | 47% | | Aware of UKTI's role | 35% | 51% | 56% | 62% | 54% | 35% | | Used (at least one) | 24% | 31% | 35% | 40% | 32% | 22% | | - UKTI | 13% | 24% | 28% | 33% | 25% | 14% | | - Posts | 18% | 19% | 23% | 27% | 20% | 14% | 5.2 Awareness of the Intellectual Property Attaché Network
The UK government has a network of Intellectual Property attachés based in China, India, Brazil and South East Asia, with the aim of strengthening advice and support on intellectual property protection and further developing trade for UK companies in these markets. Firms were asked whether they had heard of the UK Government’s Intellectual Property Attaché network, and results are summarised below.
Chart 5.2.1 Awareness of the IP Attaché Network – By UKTI Usage
Overall awareness of this network is relatively low (9%), although this rises significantly amongst UKTI users. As seen below, there has been no statistically significant change in awareness since this question was first asked in 2012.
Table 5.2.1 Awareness of the IP Attaché Network – Over Time
| | Internationalisation Survey | |----------------|-----------------------------| | | 2012 | 2013 | | **Base** | 900 | 950 | | **Yes** | 92% | 91% | | **No** | 8% | 9% | As might be expected, awareness of the Intellectual Property Attaché Network is highest among IP active firms, although it still only stands at 13%. Innovative firms are also significantly more likely to have heard of the network than their non-innovative counterparts.
Table 5.2.2 Awareness of the IP Attaché Network – By Innovation
| | Innovative | IP Active | |----------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 462 | 689 | 261 | 256 | 674 | | Yes | 11% | 10% | 6% | 13% | 8% | | No | 89% | 90% | 94% | 87% | 92% |
The network of Intellectual Property attachés are based in China, India, Brazil and South East Asia and it is possible to examine awareness levels among firms that are active in these markets. As seen below, awareness of the Intellectual Property Attaché Network is higher than average amongst firms that are doing business in China and India. However, only 9% of firms that sell to Brazil are aware of the network, in line with the overall average of internationalising firms.
Table 5.2.3 Awareness of the IP Attaché Network – By Key Markets
| Markets Doing Business In | China | India | Brazil | |---------------------------|-------|-------|--------| | Base | 178 | 180 | 111 | | Yes | 14% | 13% | 9% | | No | 86% | 87% | 91% |
Although there is no increase in awareness of the network among firms operating in Brazil, the table below demonstrates that firms that are selling to any Latin American markets do display higher than average awareness levels.
Awareness is lowest among firms that are active in between 1-5 markets, although interestingly firms that are not doing business in any overseas markets (i.e. not yet exporting) are more likely to have heard of the IP attaché network.
Table 5.2.4 Awareness of the IP Attaché Network – By Number of Markets & Regions Doing Business In
| Number of Markets | Regions | |-------------------|---------| | | Europe | North America | Latin America | M.East / Africa | Asia Pacific | | 0 | 781 | 438 | 226 | 460 | 449 | | 1-5 | 374 | 176 | 295 | | | | 6-10 | 176 | 295 | | | | | >10 | 295 | 9% | 10% | 13% | 11% | | | 91% | 90% | 87% | 89% | 89% | | | 88% | 88% | 89% | | | 5.3 Use of Open to Export
All respondents were also asked whether they had ever visited the Open to Export website, with results are summarised below.
Almost a fifth of internationalising firms (19%) have visited the Open to Export website, with UKTI clients around four times as likely to have done so as non-users.
As seen below, there is little difference in usage of Open to Export by age of firm, but those with 10-49 employees are significantly more likely to have visited the site than micro SMEs.
Table 5.3.1 Proportion Visiting the Open to Export Website – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | Base | | | | | | | | | | Up to 5 | 203 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | 6-10 | 198 | 4% | 16% | 15% | 26% | 19% | 19% | 19% | | Over 10 | 549 | 87% | 81% | 81% | 72% | 80% | 81% | 79% | | Yes | | | | | | | | | | No | | | | | | | | | | Don't know | | | | | | | | |
Base: All respondents (Base, Don’t know/refused) Total (950, 3%), UKTI Users (303, 3%), Non-Users (647, 3%) There are no statistically significant differences by export experience when it comes to the likelihood of visiting the Open to Export site. However, usage does seem to increase in line with export intensity and very engaged exporters where overseas sales account for over 50% of turnover are most likely to have visited the site.
Table 5.3.2 Proportion Visiting the Open to Export Website – By Overseas Experience
| Years Exporting | Exports as % of Turnover | |-----------------|-------------------------| | 0-2 | 0% 1-10% 11-25% 26-50% >50% | | 0 \<2 Total | 124 345 109 107 201 | | Base | 97 117 214 368 351 | | Yes | 18% 15% 16% 20% 20% | | No | 81% 82% 82% 77% 77% | | Don't know | 1% 3% 2% 3% 3% |
Base
Yes
No
Don't know 6. Profile
6.1 Age of Business
The sample for this survey was stratified by age of firm to enable robust analysis to be conducted by 3 different age groups (firms established 0-5 years, 6-10 years and over 10 years). To account for this disproportionate sampling approach, the final data has been weighted back to the true age profile of internationalising firms (using data from the Annual Small Business Survey). Please note that this also incorporated further weighting by size of firm to account for the ‘boost’ of 250+ employee firms.
The table below provides details of the actual (unweighted) age distribution of sampled firms, the weighting regime applied, and the weighted proportion of firms in the final sample.
| Age of Business | No. of interviews | % of interviews (unweighted) | True profile of exporters (ASBS data) | % of interviews (Weighted) | |--------------------------|-------------------|------------------------------|--------------------------------------|---------------------------| | Not yet trading | 14 | 1% | 17% | 1% | | Within the last 2 years | 112 | 12% | 23% | 9% | | 2-5 years ago | 77 | 8% | 23% | 6% | | 6-10 years ago | 198 | 21% | 60% | 29% | | 11-20 years ago | 244 | 26% | 60% | 31% | | More than 20 years ago | 305 | 32% | 60% | 31% | | Total | 950 | 100% | 100% | 100% |
As detailed above, young firms established in the last 5 years are slightly over-represented in the sample for this survey, accounting for 21% of all interviews compared to 17% of all exporting firms, and as a result have been down-weighted in the final analysis. In contrast, firms established 6-10 years and over 10 years have both been marginally under-represented and have therefore been up-weighted.
Please note that all results shown in this report have been weighted. The chart below shows the weighted profile of internationalising firms in terms of their age, at both the total level and by UKTI users and non-users.
**Chart 6.1.1 When Business Established – By UKTI Usage**
Overall, UKTI users have a slightly older profile than non-users, with 39% and 27% respectively established for more than 20 years.
Unsurprisingly, larger firms tend to be older than their smaller counterparts. However, it should be noted that over half of the smallest internationalising firms (with less than 10 employees) have been established for more than 10 years.
**Table 6.1.2 When Business Established – By Size of Firm**
| Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |----------------------------|-----|-----|-------|-------|--------|------|---------| | **Base** | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Not yet trading | 5% | 2% | 2% | 0% | 0% | 0% | 1% | | Within the last 2 years | 11% | 13% | 13% | 3% | 2% | 0% | 9% | | 2-5 years ago | 8% | 8% | 8% | 3% | 3% | 3% | 6% | | 5-10 years ago | 16% | 25% | 24% | 24% | 13% | 9% | 23% | | 10-20 years ago | 32% | 30% | 30% | 31% | 14% | 9% | 29% | | More than 20 years ago | 28% | 22% | 23% | 39% | 68% | 79% | 31% | There are no statistically significant differences in the age profile of foreign-owned and UK-owned firms.
Table 6.1.3 When Business Established – By Company Ownership
| Ownership | Foreign | UK | |----------------------------|---------|-----| | Base | 101 | 848 | | Not yet trading | 0% | 1% | | Within the last 2 years | 10% | 9% | | 2-5 years ago | 8% | 6% | | 5-10 years ago | 17% | 24% | | 10-20 years ago | 34% | 28% | | More than 20 years ago | 30% | 31% |
6.2 Employee Numbers
The chart below shows the size profile of firms, measured via their number of employees. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.2.1 Number of Employees – By UKTI Usage
Base: All respondents (Base, Don’t know/refused) Total (950, 1%), UKTI Users (303, 0%), Non-Users (647, 1%) The majority of internationalising firms are relatively small in terms of staff numbers, with almost two-thirds having less than 10 employees and most of the remainder having less than 50 employees. This reinforces the importance of considering the needs of smaller firms when formulating policy in the area of trade support.
UKTI users tend to be larger than non-users, although it is still the case that the majority of UKTI clients are micro SMEs with fewer than 10 employees.
The correlation between age and size of firm is again highlighted in the table below. However, it should be noted that over half of the well-established internationalising firms (i.e. those trading for over 10 years) still have less than 10 employees.
Table 6.2.1 Number of Employees – By Age of Firm
| Age (Years Trading) | Up to 5 | 6-10 | Over 10 | |---------------------|---------|------|---------| | Base | 203 | 198 | 549 | | 0 | 4% | 2% | 3% | | 1-9 | 83% | 65% | 54% | | 10-49 | 9% | 28% | 31% | | 50-99 | 1% | 3% | 7% | | 100-249 | 1% | 2% | 4% | | 250 or more | 0% | 0% | 0% | | Don’t know/refused | 1% | 1% | 1% |
Foreign-owned firms have a slightly larger profile than UK-owned ones, although half are still micro SMEs with fewer than 10 employees.
Table 6.2.2 Number of Employees – By Company Ownership
| Ownership | Foreign | UK | |-----------|---------|----| | Base | 101 | 848| | 0 | 1% | 3% | | 1-9 | 50% | 62%| | 10-49 | 36% | 26%| | 50-99 | 4% | 5% | | 100-249 | 6% | 3% | | 250 or more | 1% | 0% | | Don’t know/refused | 1% | 0% | 6.3 Annual Turnover
The chart below shows the size profile of firms as measured by their annual turnover. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.3.1 Annual Turnover – By UKTI Usage
More than a third (38%) of internationalising firms have fairly modest turnovers of £500,000 or less. As well as being slightly larger than non-users in staffing terms (see previous section), UKTI users are also significantly larger in financial terms, with 30% and 19% respectively reporting a turnover in excess of £2million.
Overall, just 3% of firms have a turnover of between £25million-£500million and therefore fall into UKTI’s Medium Sized Business classification (MSB). Unsurprisingly, there is a strong relationship between turnover and employee numbers. Overall, 38% of SMEs have annual sales of less than £500,000.
A similar relationship between turnover and age is also evident. However, it is certainly not the case that all older firms have large turnovers, with a third (32%) of those established more than 10 years reporting a turnover of £500,000 or less, and a quarter (24%) reporting a turnover of between £500,000 and £2million.
Table 6.3.1 Annual Turnover - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | Base | | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Up to £500,000 | | 65% | 35% | 32% | 83% | 55% | 57% | 6% | 2% | 0% | 38% | | £500,000-£2million | | 11% | 28% | 24% | 7% | 23% | 22% | 31% | 6% | 0% | 23% | | £2million-£10million| | 7% | 18% | 19% | 4% | 7% | 7% | 36% | 34% | 1% | 17% | | £10million-£25million| | 0% | 3% | 4% | 0% | 0% | 0% | 4% | 21% | 9% | 3% | | £25million-£500million| | 0% | 2% | 3% | 0% | 1% | 1% | 1% | 15% | 64% | 2% | | More than £500 million| | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 9% | 0% | | Don’t know/refused | | 16% | 15% | 18% | 7% | 14% | 13% | 22% | 23% | 16% | 17% |
As seen below, foreign-owned firms report significantly higher sales than domestic ones, with 44% having a turnover of more than £2million compared to just 20% of UK-owned firms.
Table 6.3.2 Annual Turnover – By Company Ownership
| Ownership | Foreign | UK | |-----------|---------|----| | Base | 101 | 848| | Up to £500,000 | 10% | 41% | | £500,000-£2million | 32% | 22% | | £2million-£10million | 28% | 16% | | £10million-£25million | 6% | 3% | | £25million-£500million | 10% | 1% | | More than £500 million | 0% | 0% | | Don’t know/refused | 14% | 17% | 6.4 Profitability
Firms were also asked whether they were currently making a profit or loss and, if applicable, what their profit margin was (defined as the proportion of their turnover accounted for by pre-tax profits). These results have been provided at the total level and by UKTI users and non-users.
Three quarters (77%) of internationalising firms are currently making a profit, and the average profit margin is 14%. Please note that the mean profit margin includes firms that are breaking even or making a loss, with these firms allocated a profit margin of 0%.
There are no significant differences in between UKTI users and non-users, either in the proportion making a profit or the mean profit margin. Unsurprisingly, younger firms that have been established no more than 5 years are least likely to be making a profit, and the same is true of small firms with 0-9 employees (and particularly those with zero employees). However, it is interesting to note that these groups still report mean profit margins that are similar to older and larger firms, suggesting that those young firms that are profitable are making higher than average profits.
Table 6.4.1 Whether Making Profit or Loss - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | Profit | Break even | Loss | Don't know/refused | Mean profit margin | |---------------------|---------------------------|------|--------|------------|------|-------------------|-------------------| | Up to 5 | 0-9 | 203 | 61% | 10% | 22% | 6% | 16% | | 6-10 | 1-9 | 198 | 82% | 4% | 10% | 5% | 16% | | Over 10 | Total | 549 | 79% | 9% | 7% | 5% | 13% | | | 0 | 28 | 60% | 11% | 16% | 13% | 16% | | | 1-9 | 559 | 73% | 9% | 14% | 4% | 15% | | | Total | 587 | 73% | 9% | 14% | 4% | 15% | | | 0 | 227 | 83% | 5% | 4% | 8% | 13% | | | 1-9 | 68 | 84% | 5% | 4% | 8% | 13% | | | Total | 63 | 84% | 5% | 4% | 8% | 13% | | | All SMEs | 882 | 76% | 5% | 6% | 9% | 14% |
As seen below, there is also clear evidence that once firms have been exporting for 2 years they are more likely to be profitable, which might suggest that this is the typical period required for overseas activity to start having a significant impact on overall business performance.
Table 6.4.2 Whether Making Profit or Loss – By Overseas Experience
| Years Exporting | Exports as % of Turnover | Base | Profit | Break even | Loss | Don't know/refused | Mean profit margin | |-----------------|--------------------------|------|--------|------------|------|-------------------|-------------------| | 0-2 | 0-2 | 97 | 55% | 12% | 18% | 16% | 15% | | | \<2 | 117 | 70% | 10% | 19% | 2% | 17% | | | Total | 214 | 63% | 11% | 18% | 8% | 16% | | | 2-10 | 368 | 81% | 9% | 10% | 3% | 16% | | | >10 | 351 | 79% | 5% | 7% | 5% | 15% | | | 0% | 124 | 56% | 12% | 19% | 13% | 14% | | | 1-10% | 345 | 79% | 7% | 12% | 3% | 12% | | | 11-25% | 109 | 84% | 7% | 7% | 2% | 19% | | | 26-50% | 107 | 79% | 10% | 8% | 3% | 16% | | | >50% | 201 | 81% | 7% | 8% | 3% | 16% |
Although foreign-owned firms reported significantly higher turnovers than UK-owned firms, they are less likely to be making an annual profit in the UK, with 17% making a loss. The mean profit margin is also lower for foreign-owned firms.
Table 6.4.3 Whether Making Profit or Loss – By Company Ownership
| Ownership | Base | Profit | Break even | Loss | Don't know/refused | Mean profit margin | |-----------|------|--------|------------|------|-------------------|-------------------| | Foreign | 101 | 66% | 9% | 17% | 7% | 11% | | UK | 848 | 78% | 8% | 10% | 5% | 15% | 6.5 Industry Sector
The chart below shows the profile of firms in terms of their industry sector, both at the total level and by UKTI usage. Please note that the sector classification was taken directly from the sample data (originating from Companies House) rather than being collected during the interview. As detailed earlier (Chapter 4.2), certain sectors were excluded from the sample frame because the proportion of firms within that sector that exported was extremely low, and this is why none of the interviewed firms were in either the primary or construction sectors.
Almost two-thirds of internationalising firms are in the service sector, and there is no significant difference between UKTI users and non-users in this respect. This data is consistent with the main PIMS survey of recent UKTI users, which shows that 64% are in the service sector.(^3)
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(^3) PIMS 28-31 As seen below, older and larger internationalising firms are more likely to be in the production sector.
Table 6.5.1 Industry Sector - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Production | Services | |---------------------|-----------------------------|------------|----------| | Up to 5 | 0-9 | 27% | 73% | | 6-10 | 1-9 | 39% | 61% | | Over 10 | Total | 39% | 61% |
It appears that a greater proportion of foreign-owned firms operate in the production sector than is the case for domestic firms, but it should be noted that this apparent difference is not statistically significant.
Table 6.5.2 Industry Sector – By Company Ownership
| Ownership | Foreign | UK | |-----------|---------|----| | Base | 101 | 848| | Production| 42% | 36%| | Services | 58% | 64%| 6.6 Ownership
The table below provides an analysis of the ownership of firms in terms of whether they are domestically or foreign owned. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.6.1 Company Ownership – By UKTI Usage
The vast majority of internationalising firms are UK-owned, with just under 1 in 10 under foreign ownership (either wholly or partly). There is no statistically significant difference between users and non-users in this respect.
As seen below, foreign ownership increases dramatically among large firms with 250 or more employees, with a third of this group indicating that they are foreign owned.
Table 6.6.1 Company Ownership - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | | Up to 5 | 6-10 | Over 10 | | | | | | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | UK owned | 90% | 93% | 90% | 97% | 93% | 93% | 88% | 89% | 66% | 91% | | Foreign owned | 8% | 4% | 8% | 3% | 6% | 6% | 9% | 11% | 31% | 7% | | Joint | 1% | 3% | 2% | 0% | 2% | 2% | 3% | 0% | 2% | 2% | 7 Innovation & Product/Service Development
7.1 Innovative Firms
Survey data on the extent of firms’ engagement in R&D and new product/service development has been used to categorise them as either ‘innovative’ or ‘non-innovative’. The details of how these have been defined are shown below.
The table below shows the proportions of firms classified as ‘innovative’ via each of these definitions. Comparative results have also been provided for from the PIMS surveys.
Table 7.1.1 Innovative Firms – By UKTI Usage
| | Total | UKTI Usage | PIMS Data | |----------------|-------|------------|-----------| | | | UKTI User | Non-User | UKTI User (PIMS 27-30) | Non-User (2012 Survey) | | Base | 950 | 303 | 647 | 4584 | 300 | | Innovative | 72% | 80% | 69% | 82% | 63% | | Innovative (alternative) | 47% | 58% | 42% | 62% | 33% |
Almost three-quarters of internationalising firms are classified as being innovative by the main definition, although this falls to 47% when the tighter, alternative definition is employed. UKTI users are significantly more likely to be innovative than non-users, irrespective of which definition is used.
Results are broadly consistent with the PIMS evidence, particularly for users, demonstrating that the Internationalisation survey provides a good representation of UKTI clients. It is clear from the following analysis that the larger a firm is (in terms of employee numbers), the more likely it is to be innovative. There is also strong evidence that firms established for less than 5 years are least likely to be engaged in innovation activities.
Table 7.1.2 Innovative Firms - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | Up to 5 | 0-9 | 0 | | 6-10 | 1-9 | 1 | | Over 10 | Total | 2 | | Base | 203 | 53% | | Innovative | 198 | 79% | | Innovative (alternative) | 549 | 75% | | | 28 | 53% | | | 559 | 69% | | | 587 | 69% | | | 227 | 77% | | | 68 | 88% | | | 63 | 94% | | | 882 | 72% |
Innovation levels also increase among firms that have been exporting for more than 2 years, suggesting that internationalisation activities can act as a spur to innovation. However, the intensity of firms’ export activity (in terms of its contribution to total turnover) appears to have little impact on innovation activities, implying that the innovation effects apply even in the case of relatively ‘low level’ exporters. The only major difference by export intensity is that firms where overseas sales account for 0% of turnover(^4) are much less likely to be innovative than those reporting some level of overseas sales.
Table 7.1.3 Innovative Firms – By Overseas Experience
| Years Exporting | Exports as % of Turnover | |-----------------|--------------------------| | 0-2 | 0% 1-10% 11-25% 26-50% >50% | | 0 \<2 Total | 124 345 109 107 201 | | Base | 97 117 214 368 351 | | Innovative | 55% 53% 54% 80% 73% | | Innovative (alternative) | 44% 34% 39% 52% 47% | | | 42% 46% 57% 53% 49% |
As seen below, there is some suggestion that UK-owned firms are more innovative than foreign-owned ones, although it should be noted that this difference is not statistically significant.
Table 7.1.4 Innovative Firms – By Company Ownership
| Ownership | Foreign | UK | |-----------|---------|----| | Base | 101 | 848| | Innovative| 65% | 73%| | Innovative (alternative) | 41% | 48% |
(^4) This group contains firms that have not yet started exporting (but plan to do so) and those who have done business overseas in the last 5 years but did not make any export sales in the last 12 months. 7.2 IP Active Firms
Firms were asked to indicate whether or not they had applied for or obtained any patents or trademarks, either in the UK or overseas, for any of their products or services. This data has then been used to create a measure of ‘IP active’ firms, as detailed below.
| ‘IP Active’ Firms | |-------------------| | Firms have been defined as ‘IP Active’ if they… | | • Have applied for or obtained any patents, trademarks or other legal protection for their products or services, either in the UK or overseas |
The table below shows the proportions of firms classified as ‘IP active’, as well as details of the specific type of IP protection held, whether it relates to the UK or overseas markets, and whether firms have any triadic patents5.
Table 7.2.1 IP Protection – By UKTI Usage
| | Total | UKTI Usage | |----------------------|-------|------------| | | | UKTI User | Non-User | | Base | 950 | 303 | 647 | | IP Active | | | | | Yes (IP active) | 26% | 37% | 21% | | No | 73% | 59% | 78% | | Don’t know | 2% | 3% | 1% | | Type of IP Protection| | | | | Patents | 13% | 20% | 10% | | Trademarks | 16% | 23% | 12% | | Design Rights | 7% | 9% | 5% | | Other legal protection| 4% | 7% | 3% | | Not IP active | 74% | 63% | 79% | | Geographical Coverage of IP Protection | | | | | UK only | 6% | 7% | 5% | | Overseas only | 0% | 1% | 0% | | Both | 19% | 28% | 15% | | Not IP active | 74% | 63% | 79% | | Triadic Patents | 3% | 5% | 3% |
A quarter of internationalising firms (26%) have applied for or obtained some form of legal protection for any of their products or services, and are therefore defined as being IP active. The most common forms of IP protection are trademarks and patents, and the majority of those with IP protection indicate that this covers both the UK and some overseas markets (although only 3% of firms hold a triadic patent).
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5 A patent held for the same product or innovation in the USA, Europe and Japan. Reflecting the fact that they are more likely to be defined as innovative, UKTI users are also significantly more likely to be IP active (37% vs. 21% of non-users) and are more likely to hold each type of IP protection.
As seen below, the larger a firm is the more inclined it is to obtain some form of IP protection. It is also the case that firms established over 5 years are most likely to be IP active.
Table 7.2.2 IP Protection - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | IP Active | Type of IP Protection | Geographical Coverage of IP Protection | |---------------------|-----------------------------|-----------|-----------------------|---------------------------------------| | | | Yes (IP active) | Patents | Trademarks | Design Rights | Other IP protection | Not IP active | UK only | Overseas only | Both | Not IP active | Triadic Patents | | | | No | 7% | 12% | 5% | 5% | 80% | 5% | 1% | 14% | 80% | 1% | | | | Don't know | 1% | 1% | 2% | 0% | 1% | 1% | 2% | 1% | 1% | 3% | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | 26% | 2% | | | 6-10 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | 26% | 2% | | | Over 10 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | 26% | 2% | 2% | | | 0-9 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | 26% | 2% | 2% | 2% | | | 1-9 | 559 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | 26% | 2% | 2% | | | Total | 587 | 227 | 68 | 63 | 882 | 26% | 2% | 2% | 2% | 2% | 2% | | | All SMEs | 882 | 26% | 2% | 2% | 2% | 2% | 2% | 2% | 2% | 2% | 2% | Generally, the likelihood of taking out IP protection increases as firms enter more markets. There is relatively little difference based on the broad regions in which firms are operating, although it does appear that firms selling to Europe are least likely to be IP active and those selling to Latin America are most likely to be so.
Table 7.2.3 IP Protection – By Number of Markets & Regions Doing Business In
| Number of Markets | Regions | Europe | North America | Latin America | M.East / Africa | Asia Pacific | |-------------------|------------------|--------|---------------|---------------|-----------------|--------------| | 0 | Base | 95 | 374 | 176 | 295 | 781 | 438 | 226 | 460 | 449 | | 1-5 | | | | | | | | | | | | 6-10 | | | | | | | | | | | | >10 | | | | | | | | | | |
**IP Active**
- Yes (IP active): 24% 19% 28% 35% 27% 31% 35% 30% 32%
- No: 76% 81% 70% 62% 71% 66% 63% 67% 66%
- Don’t know: 0% 1% 2% 3% 2% 2% 2% 3% 2%
**Type of IP Protection**
- Patents: 14% 9% 14% 18% 14% 15% 17% 16% 15%
- Trademarks: 11% 10% 17% 24% 17% 20% 23% 18% 21%
- Design Rights: 4% 4% 7% 11% 7% 8% 10% 9% 8%
- Other IP protection: 4% 3% 6% 6% 5% 5% 7% 5% 6%
- Not IP active: 76% 81% 72% 65% 73% 69% 65% 70% 68%
**Geographical Coverage of IP Protection**
- UK only: 6% 5% 10% 4% 6% 5% 2% 5% 6%
- Overseas only: 1% 0% 0% 1% 0% 1% 1% 1% 1%
- Both: 16% 13% 18% 29% 21% 25% 31% 24% 24%
- Not IP active: 76% 81% 72% 65% 73% 69% 65% 70% 68%
- Triadic Patents: 3% 2% 3% 5% 3% 5% 6% 4% 3% Foreign-owned firms appear more likely to hold IP protection than UK-owned firms, but it should be noted that the difference in the overall proportion classified as IP Active is not statistically significant. However, foreign owned firms are significantly more likely to have patents and/or design rights, to hold IP protection covering both overseas markets and the UK, and to hold triadic patents.
Table 7.2.4 IP Protection - By Company Ownership
| | Foreign | UK | |----------------------|---------|-----| | **Base** | 101 | 848 | | **IP Active** | | | | Yes (IP active) | 32% | 25% | | No | 66% | 73% | | Don’t know | 2% | 2% | | **Type of IP Protection** | | | | Patents | 23% | 12% | | Trademarks | 16% | 16% | | Design Rights | 13% | 6% | | Other IP protection | 8% | 4% | | Not IP active | 68% | 75% | | **Geographical Coverage of IP Protection** | | | | UK only | 4% | 6% | | Overseas only | 0% | 0% | | Both | 27% | 18% | | Not IP active | 68% | 75% | | **Triadic Patents** | 7% | 3% |
Firms that operate overseas through licensing, franchising or other contractual arrangements are most likely to hold IP protection.
Table 7.2.5 IP Protection - By Modes Used
| | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |----------------------|----------------|---------------------|--------------------------|---------------| | **Base** | 860 | 416 | 139 | 138 | | **IP Active** | | | | | | Yes (IP active) | 26% | 32% | 45% | 37% | | No | 72% | 65% | 54% | 60% | | Don’t know | 2% | 3% | 1% | 3% | | **Type of IP Protection** | | | | | | Patents | 13% | 18% | 26% | 19% | | Trademarks | 15% | 20% | 31% | 29% | | Design Rights | 7% | 9% | 13% | 12% | | Other IP protection | 5% | 5% | 8% | 10% | | Not IP active | 74% | 68% | 55% | 63% | | **Geographical Coverage of IP Protection** | | | | | | UK only | 6% | 5% | 8% | 3% | | Overseas only | 1% | 1% | 2% | 2% | | Both | 19% | 25% | 34% | 32% | | Not IP active | 74% | 68% | 55% | 63% | | **Triadic Patents** | 4% | 5% | 7% | 3% | 7.3 Young, Technology Intensive Firms
Certain firms have been classified as ‘young, technology intensive’, and the details of this definition are shown below.
| ‘Young, Technology Intensive’ Firms | |-------------------------------------| | Firms have been defined as being ‘young, technology intensive’ if they… | | • Have been established for 5 years or less | | • And are classified as being innovative using the alternative (tighter) definition or are classified as IP active |
The table below shows the proportions of firms classified as ‘young, technology intensive’. Analysis has been provided based on all respondents and based just on younger firms.
Table 7.3.1 Young, Technology Intensive Firms – By UKTI Usage
| All firms | Firms aged up to 5 years | |-----------|--------------------------| | | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | Base | 950 | 303 | 647 | 189 | 36 | 153 | | Young tech intensive | 8% | 7% | 8% | 45% | 69% | 40% | | Up to 5 years old but not young tech intensive | 9% | 3% | 12% | 54% | 31% | 60% | | Over 5 years old | 83% | 90% | 80% | - | - | - |
Overall, 8% of all internationalising firms are classified as being ‘young, technology intensive’, which equates to 45% of those established in the last 5 years. Looking at the analysis based on all firms, it appears as if there is no difference between UKTI users and non-users. However, this is a function of the older age profile of UKTI users, and when the analysis is based solely on firms aged 5 years or less then it becomes clear that UKTI users are in fact significantly more likely to be ‘young, technology intensive’ (69% vs. 40% of non-users).
A similar scenario is seen when it comes to size of firm. At the total level it appears that smaller firms are more likely to be ‘young, technology intensive’ but this is simply due to the fact that a greater proportion of small firms have been established for less than 5 years. When the analysis is run based just on young firms, it is evident that firms with 10 or more staff are most likely to be ‘young, technology intensive’.
Table 7.3.2 Young, Technology Intensive Firms – By Size
| All firms | Firms aged up to 5 years | |-----------|--------------------------| | | Total | 0-9 emps | 10+ emps | Total | 0-9 emps | 10+ emps | | Base | 950 | 587 | 358 | 189 | 163 | 25 | | Young tech intensive | 8% | 9% | 4% | 45% | 41% | 72% | | Up to 5 years old but not young tech intensive | 9% | 14% | 2% | 55% | 59% | 28% | | Over 5 years old | 83% | 77% | 95% | - | - | - | 7.4 Innovative High Growth Firms
The survey data on innovation activity and growth objectives has been combined in the analysis to identify ‘innovative high growth firms’, as this is a key group for UKTI to target.
The table below provides analysis of the combined innovative and growth data, analysed at the total level and by UKTI usage.
Table 7.4.1 Innovation & Growth Objectives – By UKTI Usage
| | Total | UKTI Usage | |------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 950 | 303 | 647 | | Innovative & expect substantial growth | 22% | 28% | 19% | | Innovative & expect moderate growth | 38% | 41% | 36% | | Innovative & expect no growth or negative growth | 13% | 11% | 14% | | Non-innovative | 28% | 20% | 31% |
Overall 22% of internationalising firms are defined as being ‘innovative high growth’, with this rising slightly to 28% amongst UKTI users. However, it should be noted that 19% of firms that do not use UKTI are still in this critical category, confirming that there are many ‘innovative high growth’ internationalising firms that UKTI are not yet reaching.
As seen below, older firms that have been established for more than 10 years are significantly less likely to be classified as ‘innovative high growth’. However, the proportion does increase amongst larger companies, indicating that firms that have been established for 10 years or less and have 10 or more employees are most likely to be ‘innovative high growth’.
Table 7.4.2 Innovation & Growth Objectives – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | Up to 5 | 0-9 | 250+ | All | | 6-10 | 10-49 | 50-249 | | | Over 10 | 1-9 | 250+ | | | | Total | 250+ | | | Base | 203 | 198 | 549 | 882 | | Innovative & expect substantial growth | 24% | 30% | 18% | 7% | 18% | 18% | 27% | 36% | 37% | 22% | | Innovative & expect moderate growth | 22% | 38% | 42% | 20% | 37% | 36% | 40% | 44% | 46% | 38% | | Innovative & expect no/negative growth | 7% | 12% | 15% | 26% | 14% | 15% | 9% | 9% | 10% | 13% | | Non-innovative | 47% | 21% | 25% | 47% | 31% | 31% | 23% | 12% | 6% | 28% | As detailed below, firms that are currently not doing business in any overseas markets (i.e. not yet started exporting but planning to do so) are most likely to fall into the innovative high growth category. This suggests that it would be beneficial for UKTI to identify such firms and help them develop their overseas business.
There are no notable differences in the proportion of innovative high growth firms by the broad geographical regions in which firms are doing business.
Table 7.4.3 Innovation & Growth Objectives – By Number of Markets & Regions Doing Business In
| Number of Markets | Europe | North America | Latin America | M.East / Africa | Asia Pacific | |-------------------|--------|---------------|---------------|-----------------|-------------| | 0 | 781 | 438 | 226 | 460 | 449 | | 1-5 | 20% | 23% | 23% | 20% | 22% | | 6-10 | 25% | 23% | 23% | 20% | 22% | | >10 | 20% | 23% | 23% | 20% | 22% |
Similar proportions of UK and foreign-owned firms (22%) are classified as being ‘innovative high growth’.
Table 7.4.4 Innovation & Growth Objectives – By Company Ownership
| Ownership | Foreign | UK | |-----------|---------|----| | Base | 101 | 848| | Innovative & expect substantial growth | 22% | 22% | | Innovative & expect moderate growth | 37% | 38% | | Innovative & expect no/negative growth | 7% | 14% | | Non-innovative | 35% | 27% | 7.5 Planned Product & Service Development
All firms were asked about their plans for product and service development over the next three years.
Chart 7.5.1 Planned Product & Service Development Activity
- Develop any new products/services: 73%
- Make changes or modifications to existing products/services: 76%
- Neither of these: 11%
- Net: Anticipating any product/service development: 88%
The majority (88%) of internationalising firms are planning some form of product or service development over the next 3 years, with most of these expecting to develop new products/services and make changes or modifications to their existing ones.
As seen below, UKTI users are significantly more likely than non-users to engage in product/service development over the next 3 years.
Table 7.5.1 Planned Product & Service Development Activity – By UKTI Usage
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 950 | 303 | 647 | | Develop new products/services | 73% | 79% | 70% | | Make changes or modifications to existing products/services | 76% | 83% | 73% | | None of these | 11% | 7% | 13% | | Don’t know | 1% | 0% | 2% | | Net: Anticipating any product/service development activity | 88% | 93% | 85% | Larger firms are slightly more likely to be planning new developments or modifications to their products or services. Interestingly, young firms that have started trading within the last 5 years are more inclined to develop new products or services than more long-established firms.
Table 7.5.2 Planned Product & Service Development Activity – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | Up to 5 | 6-10 | Over 10 | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Develop new products/services | 79% | 71% | 72% | 51% | 72% | 71% | 75% | 78% | 88% | 73% | | Make changes to existing products/services | 79% | 77% | 75% | 58% | 76% | 75% | 76% | 81% | 87% | 76% | | None of these | 9% | 11% | 12% | 27% | 11% | 11% | 13% | 4% | 3% | 11% | | Don't know | 1% | 2% | 1% | 0% | 1% | 1% | 1% | 2% | 0% | 1% | | Net: Anticipating any product/service dev't activity | 90% | 87% | 87% | 73% | 88% | 88% | 86% | 94% | 97% | 88% |
As expected, innovative and IP active firms are much more likely to undertake product or service development over the next 3 years.
Table 7.5.3 Planned Product & Service Development Activity – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 462 | 689 | 261 | 256 | 674 | | Develop new products/services | 86% | 81% | 50% | 87% | 68% | | Make changes or modifications to existing products/services | 84% | 82% | 60% | 80% | 74% | | None of these | 3% | 5% | 29% | 6% | 13% | | Don't know | 1% | 1% | 1% | 0% | 1% | | Net: Anticipating any product/service dev't activity | 96% | 94% | 70% | 94% | 85% | As detailed below, there are strong links between growth and innovation, with the likelihood of undertaking product or service development activity increasing amongst firms with more ambitious growth objectives. This suggests that firms are innovating to help achieve their growth aspirations, both through creating new products/services and by tailoring existing ones to meet market requirements. This is further demonstrated by the fact that 97% of all ‘innovative high growth’ firms are planning to carry out some sort of product or service development over the next 3 years.
Table 7.5.4 Planned Product & Service Development Activity – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non innovative | |-------------------|---------------------|---------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | | Base | 116 | 486 | 273 | 215 | 474 | 261 | | Develop new products/services | 49% | 74% | 86% | 88% | 78% | 50% | | Make changes or modifications to existing products / services | 64% | 77% | 80% | 83% | 81% | 60% | | None of these | 26% | 9% | 4% | 2% | 6% | 29% | | Don’t know | 1% | 2% | 0% | 1% | 1% | 1% | | Net: Anticipating any product/service dev’t activity | 73% | 89% | 95% | 97% | 93% | 70% |
Analysis has also been provided by whether or not younger firms were ‘born global’ (i.e. have been conducting business overseas since they were established) or are defined as being ‘young, technology intensive’. The definition of ‘young, technology intensive’ firms has already been set out in Chapter 7.3. For full details of the ‘born global’ classification please refer to Chapter 8.9.
Firms that are defined as ‘young technology intensive’ are particularly likely to undertake products/service development over the next 3 years. However, firms that were ‘born global’ are significantly less likely to get involved in these activities than other young firms that started exporting at some point after they were established.
Table 7.5.5 Planned Product & Service Development Activity – By Born Global & Young, Tech Intensive
| Up to 5 years old | Total | Born global | Born global (alternative) | Young, tech intensive | Over 5 years old | |-------------------|-------|-------------|---------------------------|----------------------|------------------| | Base | 203 | 95 | 34 | 92 | 747 | | Develop new products/services | 79% | 72% | 73% | 86% | 72% | | Make changes or modifications to existing products / services | 79% | 77% | 79% | 81% | 75% | | None of these | 9% | 16% | 15% | 4% | 12% | | Don’t know | 1% | 0% | 0% | 0% | 1% | | Net: Anticipating any product/service dev’t activity | 90% | 84% | 85% | 96% | 87% | As illustrated below, there is little difference in the product/service development plans of production and service sector firms.
Table 7.5.6 Planned Product & Service Development Activity – By Sector
| Sector | Production | Services | |--------|------------|----------| | Base | 346 | 601 | | Develop new products/services | 75% | 71% | | Make changes or modifications to existing products/services | 73% | 77% | | None of these | 11% | 12% | | Don’t know | 2% | 1% | | Net: Anticipating any product/service development activity | 87% | 88% |
It is also the case that similar proportions of UK-owned and foreign-owned firms are planning to undertake product/service development over the next 3 years.
Table 7.5.7 Planned Product & Service Development Activity – By Company Ownership
| Ownership | Foreign | UK | |-----------|---------|----| | Base | 101 | 848| | Develop new products/services | 74% | 73% | | Make changes or modifications to existing products/services | 82% | 75% | | None of these | 12% | 9% | | Don’t know | 1% | 1% | | Net: Anticipating any product/service development activity | 90% | 87% | 7.6 Geographical Focus of Product & Service Development
As seen in the previous section, 88% of internationalising firms were expecting to undertake some type of product or service development activity over the next 3 years. These firms were asked whether this would be aimed at UK customers or overseas customers. Please note that all analysis in this section is based just on those planning product/service development activity in the next 3 years.
Chart 7.6.1 Geographical Focus of Product/Service Development Activity
The majority of firms that are planning product/service development activity over the next 3 years expect that this will be aimed at both UK and overseas customers (79%). As detailed below, UKTI clients are comparatively more likely to focus their product/service development activity on overseas markets (95% vs. 80% of non-users).
Table 7.6.1 Geographical Focus of Product/Service Development – By UKTI Usage
| | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | Base: All anticipating product/service dev't | 839 | 281 | 558 | | UK Customers | 15% | 4% | 20% | | Overseas Customers | 6% | 10% | 5% | | Both | 79% | 86% | 75% | | Don't know | 0% | 0% | 0% | | Net: UK customers | 94% | 90% | 95% | | Net: Overseas customers | 85% | 95% | 80% | There is some evidence that firms with 10 or more staff are more likely to carry out product/service development activity targeted at overseas customers than micro SMEs. However, there are no significant differences in this respect by age of firm.
Table 7.6.2 Geographical Focus of Product/Service Development – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | Up to 5 | | | | | | | | | | 6-10 | | | | | | | | | | Over 10 | | | | | | | | | | Base: All anticipating product/service dev’t | 183 | 173 | 483 | 21 | 494 | 515 | 195 | 64 | 61 | 774 | | UK Customers | | | | | | | | | | Overseas Customers | | | | | | | | | | Both | | | | | | | | | | Don’t know | | | | | | | | | | Net: UK customers | | | | | | | | | | Net: Overseas customers | | | | | | | | |
As detailed below, firms that plan to grow over the next 5 years are more likely to be targeting product/service development at overseas customers than is the case for those that simply intend to remain the same size.
Table 7.6.3 Geographical Focus of Product/Service Development – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Innovative | Non innovative | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | | Base: All anticipating product/service dev’t | 87 | 436 | 260 | 210 | 442 | 187 | | UK Customers | 25% | 15% | 12% | 11% | 16% | 17% | | Overseas Customers | 5% | 6% | 7% | 7% | 6% | 5% | | Both | 70% | 78% | 81% | 82% | 78% | 77% | | Don’t know | 0% | 0% | 0% | 0% | 0% | 1% | | Net: UK customers | 95% | 93% | 93% | 93% | 94% | 94% | | Net: Overseas customers | 75% | 85% | 88% | 89% | 84% | 82% | It is interesting to note that there is a correlation between company ownership and the focus of any product/service development activity, with foreign-owned firms more likely to be targeting overseas customers and UK-owned firms more likely to be targeting domestic customers.
Table 7.6.4 Geographical Focus of Product/Service Development – By Company Ownership
| Ownership | Foreign | UK | |----------------------------------|---------|-----| | Base: All anticipating product/service dev’t | 93 | 745 | | UK Customers | 3% | 16% | | Overseas Customers | 13% | 6% | | Both | 84% | 78% | | Don’t know | 0% | 0% | | Net: UK customers | 87% | 94% | | Net: Overseas customers | 97% | 84% | 7.7 Key Markets Driving Innovation
Those firms that expected to undertake product or service development activity over the next 3 years were asked if there were any specific countries which were more important than others in terms of being a stimulus for their innovation and product or service development. Please note that individual markets mentioned by more than 3% of firms have been shown in the analysis below.
Table 7.7.1 Key Markets Driving Innovation - By UKTI Usage
| Market | Total | UKTI Usage | |--------------|-------|------------| | | | User | Non-User | | Base: All anticipating product/service dev't | 839 | 281 | 558 | | Yes | 54% | 60% | 52% | | - USA | 15% | 15% | 15% | | - Germany | 12% | 10% | 13% | | - UK | 10% | 7% | 12% | | - China | 9% | 11% | 8% | | - France | 7% | 5% | 8% | | - India | 6% | 7% | 6% | | - UAE | 5% | 5% | 4% | | - Netherlands| 4% | 2% | 5% | | - Spain | 4% | 4% | 4% | | - Australia | 4% | 6% | 3% | | - Russia | 4% | 4% | 3% | | No | 44% | 38% | 47% | | Don't know | 2% | 2% | 2% |
Just over half of firms (54%) felt that certain markets were more critical than others in terms of being a stimulus for their innovation activity, with this more likely to be the case amongst UKTI users (60%).
The most widely identified market in this respect was the USA (15%), with Germany and China highlighted by around 1 in 10 firms. It is also interesting to note that although this survey was amongst internationalising firms, a significant proportion of these (10%) indicated that the UK was a key driver of their innovation activity. The table below provides similar analysis, but by firms’ growth objectives over the next 5 years.
Table 7.7.2 Key Markets Driving Innovation - By Growth Objectives
| Growth Objectives | Stay the same size | Moderate growth | Substantial growth | |-------------------|--------------------|-----------------|--------------------| | Base: All anticipating product/service dev't | 87 | 436 | 260 | | Yes | 46% | 54% | 62% | | - USA | 7% | 15% | 21% | | - Germany | 9% | 11% | 16% | | - UK | 10% | 10% | 14% | | - China | 5% | 8% | 14% | | - France | 4% | 7% | 9% | | - India | 5% | 7% | 7% | | - UAE | 3% | 4% | 8% | | - Netherlands | 3% | 5% | 5% | | - Spain | 3% | 4% | 4% | | - Australia | 4% | 3% | 5% | | - Russia | 6% | 3% | 4% | | No | 51% | 44% | 36% | | Don’t know | 3% | 2% | 2% |
The greater a firm’s growth ambitions, the more likely they are to identify one or more markets as being critical to driving innovation. 8. Overseas Activity & Experience
8.1 Modes Used
Firms were asked which of a list of overseas business activities they had been involved in over the last five years. Those not involved in any of these overseas activities were asked whether they were seriously considering starting to conduct overseas business via any of these routes in the next year, and only those responding positively to this question were invited to take part in the research. This group were asked to indicate which types of activities they were planning to become involved in.
The chart below shows usage of these overseas business activities (or planned use in the case of those firms that were not yet exporting).
Chart 8.1.1 Modes of Internationalisation Used in Last 5 Years (Or planning in next year for those not yet exporting)
- Selling direct: 90%
- Selling through agents or distributors: 43%
- Licensing, franchising or contractual arrangements: 13%
- Operating overseas site: 12%
The vast majority of internationalising firms sell direct to businesses or individuals overseas, and two-fifths use agents or distributors. A significant minority also sell overseas through contractual arrangements and a similar proportion are engaged in outward investment (i.e. operating their own overseas sites).
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6 Please note that 95 of the 950 firms interviewed (10%) were not yet doing business overseas but were planning to do so in the next year. The table below shows separate analysis of internationalisation modes for firms that are already engaged in overseas business and those that are not yet exporting but planning to start in the next year.
Table 8.1.1 Modes of Internationalisation Used – By Export Status (Or planning in next year for those not yet exporting)
| | Total | Exporting | |----------------------|-------|-----------| | | | Yes | No (planned in next year) | | **Base** | 950 | 855 | 95 | | Selling direct | 90% | 92% | 77% | | Agents/distributors | 43% | 42% | 52% | | Contractual arrangements | 13% | 12% | 31% | | Overseas site | 12% | 11% | 21% |
As seen above, firms that are not yet exporting but planning to embark on overseas business in the next year are less likely to be focussing on simply selling direct and more inclined to be considering less ‘standard’ modes such as contractual arrangements or setting up their own overseas site.
The chart below shows how the modes used by internationalising firms have changed over time. Aside from a dramatic jump in the proportion using agents/distributors between 2008 and 2010, there has been little change in each of the internationalisation modes over time. There has been a small but steady rise over the past 5 years in the proportion using contractual arrangements, but this appears to have levelled off in 2013. 8.2 Number & Type of Overseas Sites
As seen previously, 12% of firms operated their own overseas sites (or were planning to do so in the next year). These firms were asked to provide details of the main purpose of the site(s).
Most overseas sites are either distribution/sales offices or service delivery sites. Approaching a quarter are manufacturing or assembly sites and a fifth are R&D facilities.
The table below provides analysis by age of firm, and indicates that there are no consistent or statistically significant differences in this respect.
| Purpose of Overseas Sites | Age (Years Trading) | |---------------------------|---------------------| | | Up to 5 | 6-10 | Over 10 | | Base: All with or considering overseas site(s) | 32 | 21 | 85 | | Manufacturing or assembly | 32% | 15% | 22% | | Call centre | 13% | 10% | 9% | | Distribution or sales office | 55% | 50% | 69% | | Service delivery | 36% | 50% | 39% | | Research, product or process development | 26% | 20% | 17% | | Don’t know | 3% | 10% | 5% | Firms with overseas sites were also asked to indicate how many sites they had, with the following results. Please note that those firms that were not yet exporting have been excluded from the analysis below.
Chart 8.2.2 Number of Overseas Sites
| Number of Sites | Up to 5 | 6-10 | Over 10 | |-----------------|--------|------|---------| | One | 39% | | | | 2-5 | 49% | | | | 6-10 | 5% | | | | 11-20 | 4% | | | | 21-50 | 1% | | | | Over 50 | 0% | | |
Base: All with overseas sites (Base, Don't know) – (117, 1%)
The majority of firms with overseas sites have at least 2 of them. However, only 5% have more than 10 sites.
It appears that the older a firm is the more likely it is to have multiple overseas sites. However, please be aware that most of the apparent differences shown below are not statistically significant due to the low base sizes when analysing the data at this level.
Table 8.2.2 Number of Overseas Sites – By Age
| Age (Years Trading) | Up to 5 | 6-10 | Over 10 | |---------------------|--------|------|---------| | Base: All with overseas site(s) | 17 | 18 | 82 | | One | 62% | 41% | 34% | | 2-5 | 37% | 41% | 53% | | 6-10 | 0% | 12% | 4% | | 11-20 | 0% | 6% | 4% | | 21-50 | 0% | 0% | 2% | | Over 50 | 0% | 0% | 0% | | Don’t know | 0% | 0% | 2% | 8.3 Direct Web Sales
To understand the impact of the internet on UK export activity, firms were asked whether they made any overseas sales directly through their websites and, if so, whether they only sold overseas through their website.
As seen above, 27% of internationalising firms make at least some sales through their websites. However, only a small minority (4%) are classified as ‘web only exporters’ on the basis that they do not make sales through any other channels or modes and solely rely on their online operation.
There is no statistically significant difference between UKTI users and non-users when it comes to the proportion making any overseas sales directly through their websites, but non-users are more likely to be ‘web only exporters’. As seen below, the proportion of firms selling overseas through their websites is broadly similar, irrespective of how long they have been doing business overseas. However, firms that are very new to overseas business are more likely to be ‘web only exporters’.
Table 8.3.1 Direct Web Sales – By Export Experience
| Overseas Experience | Less than 2 years (exc. not yet exporting) | 2-10 years | More than 10 years | |---------------------|--------------------------------------------|------------|-------------------| | Base | 117 | 368 | 351 | | Any web sales | 29% | 30% | 30% | | - Only sell through website (web only exporters) | 12% | 4% | 3% | | - Sell through website & other channels/modes | 17% | 26% | 27% | | No web sales | 71% | 70% | 70% | | Don’t know | 0% | 0% | 0% |
The table below provides details of the sector profile of ‘web only’ exporters, in comparison to internationalising firms as a whole. There is some suggestion that firms that do business overseas solely through their website are comparatively more likely to operate in the wholesale and retail sector, although this difference is not statistically significant.
Table 8.3.2 Web Only Exporters – Sector Profile
| Sector Profile | Web only exporters | Not web only | |----------------|--------------------|--------------| | Base | 36 | 914 | | D – Manufacturing | 30% | 36% | | G – Wholesale & retail trade | 31% | 21% | | I – Transport, storage & communication | 3% | 8% | | J – Financial intermediation | 0% | 2% | | K – Real estate, renting & business activities | 25% | 29% | | O – Other community, social & personal service activities | 11% | 3% | 8.4 Internationalisation Modes by Firm Profile
This section provides more detailed analysis of the internationalisation modes used by firm characteristic (such as UKTI usage, size, innovation, etc). Please note that those firms not yet exporting are included in this analysis, but the data relates to the modes they are planning to start using in the next year.
As seen below, whilst users and non-users are equally likely to sell direct to customers overseas, UKTI users are more inclined to also use agents or distributors, use contractual arrangements (such as licensing or franchising) and operate their own overseas sites.
Table 8.4.1 Modes of Internationalisation – By UKTI Usage
| | Total | UKTI Usage | |----------------------|-------|------------| | | Base | UKTI User | Non-User | | Selling direct | 90% | 92% | 90% | | - 'Web only' exporters | 4% | 1% | 5% | | Agents/distributors | 43% | 56% | 37% | | Contractual arrangements | 13% | 19% | 11% | | Overseas site | 12% | 16% | 10% | | - Manufacturing/assembly | 3% | 3% | 3% | | - Call centre | 1% | 1% | 1% | | - Sales/service delivery | 9% | 13% | 8% | | - R&D | 2% | 5% | 1% |
Small firms with less than 10 employees are less likely to use more advanced modes such (i.e. everything other than simply selling direct). However, they are slightly more inclined to only sell overseas through their website (i.e. ‘web only’ exporters). There are no major differences in the modes used by age of firm.
Table 8.4.2 Modes of Internationalisation – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Selling direct | 90% | 89% | 91% | 79% | 89% | 89% | 95% | 91% | 93% | 91% | | - 'Web only' exporters | 7% | 4% | 3% | 4% | 5% | 5% | 3% | 0% | 0% | 4% | | Agents/distributors | 41% | 43% | 43% | 27% | 40% | 40% | 47% | 54% | 43% | 43% | | Contractual arrangements | 15% | 13% | 13% | 21% | 12% | 12% | 14% | 18% | 31% | 13% | | Overseas site | 15% | 10% | 11% | 0% | 9% | 9% | 17% | 20% | 51% | 12% | | - Manufacturing/assembly | 5% | 2% | 3% | 0% | 2% | 2% | 4% | 7% | 1% | 3% | | - Call centre | 2% | 1% | 1% | 0% | 1% | 1% | 1% | 0% | 0% | 1% | | - Sales/service delivery | 10% | 8% | 10% | 0% | 7% | 7% | 14% | 22% | 0% | 10% | | - R&D | 4% | 2% | 2% | 0% | 1% | 1% | 4% | 3% | 0% | 2% | It might be expected that inexperienced exporters would be less likely to use the more ‘advanced’ internationalisation modes but, as detailed in the table below, there is no evidence that this is the case. In fact, firms that have not yet started doing business overseas are more likely to anticipate that they will adopt these approaches than firms that are already internationalising.
The ‘not yet exporting’ firms are interesting as they differ considerably from firms that have started internationalising very recently, even though it might be expected that they would have a similar profile. However, it is possible that although many of these firms currently intend to adopt some of the less widespread internationalisation modes, it may be that they change (or delay) their plans when they actually start doing business overseas.
If firms reporting zero overseas sales are excluded (for the reasons detailed above), then there does seem to be a relationship between export intensity and the modes used. Generally, the higher the proportion of turnover accounted for by exports, the more likely firms are to use agents, utilise contractual arrangements and set up their own overseas sites.
Table 8.4.3 Modes of Internationalisation Used – By Overseas Experience
| Years Exporting | Exports as % of Turnover | |-----------------|-------------------------| | | 0-2 | 2-10 | >10 | 0% | 1-10% | 11-25% | 26-50% | >50% | | Base | 97 | 117 | 214 | 368| 351 | 124 | 345 | 109 | 107 | 201 | | Selling direct | 77% | 94% | 86% | 91%| 93% | 76% | 92% | 95% | 98% | 91% | | - ‘Web only’ exporters | 0% | 12% | 6% | 4% | 3% | 1% | 8% | 3% | 3% | 1% | | Agents/distributors | 51% | 36% | 43% | 40%| 45% | 46% | 29% | 46% | 52% | 55% | | Contractual arrangements | 30% | 10% | 20% | 12%| 12% | 25% | 10% | 7% | 19% | 15% | | Overseas site | 22% | 7% | 14% | 9% | 14% | 21% | 4% | 11% | 20% | 15% | | - Manufacturing/assembly | 8% | 2% | 5% | 1% | 3% | 7% | 0% | 3% | 4% | 3% | | - Call centre | 3% | 2% | 2% | 1% | 1% | 4% | 0% | 1% | 1% | 0% | | - Sales/service delivery | 12% | 6% | 9% | 7% | 12% | 12% | 4% | 9% | 20% | 11% | | - R&D | 5% | 2% | 3% | 2% | 2% | 4% | 1% | 2% | 4% | 3% | As might be expected, the more markets a firm is active in, the more likely they are to be using each of the different modes (aside from the small group of firms that are not yet exporting). There is also evidence that firms doing business in European markets are less inclined to use agents/distributors and to sell through contractual arrangements such as licensing.
Table 8.4.4 Modes of Internationalisation Used – By Number of Markets & Regions Doing Business In
| Number of Markets | Regions | Europe | North America | Latin America | M.East / Africa | Asia Pacific | |-------------------|------------------|--------|---------------|---------------|-----------------|--------------| | 0 | Base | 95 | 374 | 176 | 295 | 781 | 438 | 226 | 460 | 449 | | 1-5 | Selling direct | 77% | 89% | 94% | 95% | 93% | 92% | 95% | 94% | 93% | | 6-10 | - ‘Web only’ exporters | 0% | 4% | 5% | 4% | 4% | 5% | 4% | 4% | 4% | | >10 | Agents/distributors | 52% | 29% | 45% | 58% | 42% | 49% | 55% | 51% | 51% | | | Contractual arrangements | 31% | 8% | 10% | 18% | 12% | 16% | 20% | 15% | 18% | | | Overseas site | 21% | 7% | 11% | 17% | 11% | 12% | 15% | 13% | 14% | | | - Manufacturing/assembly | 7% | 2% | 1% | 3% | 2% | 2% | 2% | 2% | 3% | | | - Call centre | 3% | 1% | 0% | 1% | 1% | 1% | 1% | 1% | 1% | | | - Sales/service delivery | 12% | 5% | 8% | 16% | 10% | 11% | 14% | 12% | 12% | | | - R&D | 5% | 1% | 3% | 3% | 2% | 2% | 3% | 3% | 2% |
It is clear from the analysis below that innovative and IP active firms are more likely to be engaged in the less common internationalisation modes (i.e. agents, contractual arrangements and overseas sites).
Table 8.4.5 Modes of Internationalisation – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 462 | 689 | 261 | 256 | 674 | | Selling direct | 89% | 91% | 90% | 91% | 90% | | - ‘Web only’ exporters | 3% | 4% | 4% | 3% | 4% | | Agents/distributors | 48% | 46% | 35% | 53% | 39% | | Contractual arrangements | 19% | 15% | 9% | 24% | 10% | | Overseas site | 14% | 13% | 9% | 17% | 10% | | - Manufacturing/assembly | 3% | 3% | 3% | 4% | 2% | | - Call centre | 2% | 1% | 1% | 2% | 1% | | - Sales/service delivery | 11% | 11% | 7% | 14% | 8% | | - R&D | 4% | 3% | 1% | 3% | 2% | The analysis below demonstrates that firms that plan to grow substantially over the next 5 years are significantly more likely to use modes other than just selling direct.
Table 8.4.6 Modes of Internationalisation – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non innovative | |-------------------|---------------------|---------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | | Base | 116 | 486 | 273 | 215 | 474 | 261 | | Selling direct | 86% | 93% | 89% | 89% | 92% | 90% | | - 'Web only' exporters | 1% | 4% | 4% | 4% | 4% | 4% | | Agents/distributors | 35% | 41% | 49% | 53% | 43% | 35% | | Contractual arrangements | 13% | 11% | 20% | 21% | 13% | 9% | | Overseas site | 7% | 12% | 15% | 17% | 11% | 9% | | - Manufacturing/assembly | 2% | 3% | 3% | 3% | 2% | 3% | | - Call centre | 1% | 1% | 2% | 3% | 1% | 1% | | - Sales/service delivery | 7% | 10% | 11% | 13% | 10% | 7% | | - R&D | 0% | 1% | 6% | 7% | 1% | 1% |
As seen below, firms that are classified as ‘young, tech intensive’ are more likely to do business overseas through contractual arrangements, use agents/distributors and operate their own overseas sites. However, it is interesting to note that ‘born global’ firms are actually less inclined to adopt these modes than other young firms, and instead are more likely to simply sell direct to overseas customers.
Table 8.4.7 Modes of Internationalisation – By Born Global & Young, Tech Intensive
| Up to 5 years old | Total | Born global | Born global (alternative) | Young, tech intensive | Over 5 years old | |-------------------|-------|-------------|---------------------------|-----------------------|------------------| | Base | 203 | 95 | 34 | 92 | 747 | | Selling direct | 90% | 96% | 94% | 89% | 91% | | - 'Web only' exporters | 7% | 13% | 3% | 5% | 3% | | Agents/distributors | 41% | 32% | 46% | 53% | 43% | | Contractual arrangements | 15% | 11% | 9% | 22% | 13% | | Overseas site | 15% | 12% | 9% | 18% | 11% | | - Manufacturing/assembly | 5% | 2% | 0% | 4% | 2% | | - Call centre | 2% | 2% | 3% | 3% | 1% | | - Sales/service delivery | 10% | 11% | 6% | 11% | 9% | | - R&D | 4% | 3% | 3% | 7% | 2% | 8.5 Number of Modes Used
The chart below provides an analysis of the number of modes firms have been involved in the last five years (or are planning to do in the next year in the case of those firms that are not yet exporting).
Chart 8.5.1 Number of Modes Used in Last 5 Years – By UKTI Usage (Or planning in next year for those not yet exporting)
Over half of all internationalising firms (54%) are only using a single mode when doing business overseas, although 11% are involved in 3 or 4 different modes.
UKTI users are considerably more likely to employ multiple approaches when doing business overseas, with 64% using more than one mode compared to only 38% of non-users. As seen below, this picture varies considerably across modes. In particular, those doing business overseas through some form of contractual arrangements or by operating their own overseas site are much more likely to be involved in 3 or 4 different modes, suggesting that firms tend to adopt these approaches later in their international development.
Table 8.5.1 Number of Modes – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 860 | 416 | 139 | 138 | | One | 52% | 12% | 10% | 8% | | Two | 36% | 63% | 27% | 47% | | Three | 10% | 21% | 52% | 33% | | Four | 2% | 4% | 11% | 13% |
There are no significant differences in this respect by age of firm.
Table 8.5.2 Number of Modes – By Age
| Age (Years Trading) | Up to 5 | 6-10 | More than 10 | |---------------------|---------|------|--------------| | Base | 203 | 198 | 549 | | One | 56% | 54% | 54% | | Two | 30% | 38% | 35% | | Three | 11% | 8% | 10% | | Four | 3% | 1% | 1% | 8.6 Export Experience
The chart below shows the number of years that firms have been doing business overseas. Analysis has been provided at the total level, and by UKTI users and non-users.
UKTI users tend to be more experienced overseas, with 47% having been exporting for over 10 years, compared to just 32% of non-user firms. As detailed below, the export experience profile of the Internationalisation Survey sample has remained very consistent over time.
Table 8.6.1 Number of Years Doing Business Overseas – Over Time
| | Total 2010 | Total 2011 | Total 2012 | Total 2013 | UKTI Users 2010 | UKTI Users 2011 | UKTI Users 2012 | UKTI Users 2013 | Non-Users 2010 | Non-Users 2011 | Non-Users 2012 | Non-Users 2013 | |------------------|------------|------------|------------|------------|-----------------|-----------------|-----------------|-----------------|----------------|----------------|----------------|----------------| | Base | 902 | 903 | 900 | 950 | 235 | 248 | 189 | 303 | 667 | 655 | 711 | 647 | | Not yet exporting| 4% | 6% | 6% | 10% | 3% | 2% | 5% | 6% | 4% | 7% | 6% | 11% | | Less than 2 years| 12% | 12% | 10% | 11% | 8% | 10% | 6% | 6% | 13% | 12% | 12% | 13% | | 2-5 years | 20% | 17% | 22% | 16% | 16% | 13% | 15% | 12% | 21% | 19% | 23% | 18% | | 6-10 years | 25% | 23% | 24% | 25% | 30% | 27% | 22% | 28% | 24% | 22% | 25% | 24% | | 11-20 years | 20% | 22% | 22% | 20% | 20% | 22% | 26% | 25% | 21% | 22% | 20% | 18% | | More than 20 years| 17% | 20% | 16% | 17% | 22% | 25% | 25% | 22% | 16% | 18% | 14% | 15% | | Don’t know/refused| 2% | 0% | 0% | 2% | 1% | 1% | 1% | 1% | 2% | 0% | 0% | 2% | The following table below shows the 2013 survey data on the length of time firms have been involved in overseas business activity analysed by both size and age.
Table 8.6.2 Number of Years Doing Business Overseas - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | Up to 5 | | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | 6-10 | | 29% | 6% | 5% | 30% | 11% | 12% | 5% | | Over 10 | | 45% | 7% | 2% | 3% | 15% | 14% | 4% | | 0-9 | | 24% | 26% | 10% | 16% | 17% | 17% | 4% | | 1-9 | | 60% | 19% | 12% | 24% | 23% | 32% | 21% | | Total | | 12% | 19% | 12% | 24% | 23% | 32% | 21% | | 10-49 | | 28% | 18% | 19% | 22% | 24% | 16% | 20% | | 50-249 | | 12% | 13% | 13% | 17% | 42% | 57% | 17% | | 250+ | | 0% | 0% | 28% | 0% | 1% | 1% | 3% | | All SMEs | | 0% | 0% | 28% | 0% | 1% | 1% | 3% |
Aside from the obvious fact that older firms have been doing business overseas for longer, the above analysis suggests that when firms do internationalise they often do so reasonably early on. 45% of young firms (established for 5 years or less) have been exporting for 2-5 years, 60% of firms aged 6-10 years have been exporting for 6-10 years, and 62% of firms aged over 10 years have been exporting for more than 10 years.
Similarly, there is a link between size and the length of time firms have been involved in overseas business activity, with smaller firms tending to have been involved in overseas business activity for a shorter period than the larger firms. 8.7 Intermittent Exporters
As an additional indicator of export activity firms were also asked whether, in the last 5 years, they had made overseas sales every year or whether there had been some years with no overseas sales(^7). Please note that this question was only asked to firms that had been doing business overseas for at least 2 years.
A fifth of internationalising firms are ‘intermittent’ exporters, in the sense that they have not consistently made overseas sales since they started exporting. Whilst this is less likely to be the case amongst users of UKTI, a significant minority have still dipped in and out of overseas business.
(^7) Firms that had been exporting for less than 5 years were asked whether they had made overseas sales every year since they started exporting (rather than over the last 5 years). As seen below, the smaller the firm the more likely they are to be an intermittent exporter. Older firms that have been established over 5 years are more likely to report intermittent export activity, although this is likely to be connected to these firms starting exporting longer ago and hence having more opportunity to experience some years with no overseas sales.
Table 8.7.1 Intermittent Exporters (Last 5 Years) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|---------------------------|-----|-----|-------|-------|--------|------|---------| | Up to 5 | | 53 | 173 | 510 | 18 | 388 | 407 | 204 | 62 | 61 | 673 | | 6-10 | | | | | | | | | | | | | Over 10 | | | | | | | | | | | | | Base: All exporting 2 years or more | | 12% | 19% | 18% | 23% | 20% | 20% | 16% | 8% | 2% | 18% | | Some years with no overseas sales | | 88% | 78% | 81% | 71% | 78% | 78% | 82% | 92% | 98% | 80% | | Overseas sales every year | | 0% | 3% | 1% | 6% | 2% | 2% | 1% | 0% | 0% | 2% | | Don't know | | | | | | | | | | | |
Unsurprisingly, firms that are active in fewer markets are more likely to have experienced interruptions to their overseas business. There is no statistically significant difference in this regard between ‘web only’ exporters and those that sell through other channels.
Table 8.7.2 Intermittent Exporters (Last 5 Years) - By Number of Markets & Web Only Exporters
| Number of Markets | 'Web only' exporters | |-------------------|----------------------| | 1-5 | 6-10 | Over 10 | Yes | No | | Base: All exporting 2 years or more | | 289 | 157 | 281 | 22 | 714 | | Some years with no overseas sales | | 35% | 7% | 4% | 24% | 18% | | Overseas sales every year | | 63% | 93% | 94% | 76% | 81% | | Don't know | | 1% | 0% | 2% | 0% | 2% | The table below compares the profile of intermittent exporters with that of firms that have recorded export sales in each of the last 5 years.
Table 8.7.3 Intermittent Exporters – Profile Comparison
| Profile | Export sales every year | Intermittent exporters | |--------------------------------|-------------------------|------------------------| | **Base: All exporting 2 years or more** | | | | Age | | | | 0-5 years | 6% | 4% | | 6-10 years | 25% | 27% | | Over 10 years | 70% | 69% | | Size | | | | 0-9 employees | 57% | 68% | | 10-249 employees | 42% | 32% | | 250+ employees | 0% | 0% | | Sector | | | | Production | 39% | 36% | | Services | 61% | 64% | | Innovation classifications | | | | Innovative | 77% | 77% | | Innovative (alt) | 51% | 43% | | IP active | 30% | 19% | | Financial performance | | | | Profit | 82% | 71% | | Break even | 6% | 8% | | Loss | 7% | 17% | | Years exporting | | | | 2-5 years | 20% | 23% | | 6-10 years | 29% | 41% | | Over 10 years | 50% | 31% | | Overseas sales as % of total turnover | | | | 0-10% | 34% | 80% | | 11-25% | 15% | 6% | | 26-50% | 15% | 5% | | Over 50% | 28% | 6% | | Past growth (last 5 years) | | | | Grown substantially | 18% | 18% | | Grown moderately | 46% | 37% | | Same/smaller | 35% | 45% | | Future growth (next 5 years) | | | | Grow substantially | 23% | 24% | | Grow moderately | 54% | 49% | | Same/smaller | 17% | 21% | | Current written business plan | | | | Yes | 57% | 53% | | With overseas targets | 37% | 23% | | Clear management strategy for...| | | | Achieving growth objectives | 84% | 80% | | Developing overseas business | 66% | 40% |
There are a number of interesting differences between intermittent exporters and firms that have recorded overseas sales every year. The former tend to be smaller, are less likely to be IP active and are less likely to be profitable. They have generally been doing business overseas for less time, and overseas sales are much less crucial to their business (in terms of contribution to total turnover).
Intermittent exporters also have a slightly less dynamic growth trajectory and are much less likely to have a clear management strategy for developing their overseas business or to have a business plan containing targets for overseas revenues. 8.8 Proportion of Turnover Accounted for by Overseas Sales
The chart below shows firms’ export intensity, as measured by the proportion of their turnover that is accounted for by overseas sales. Analysis has been provided at the total level, and by UKTI users and non-users.
Consistent with the fact that they have generally been doing business overseas for longer, users of UKTI also report that a significantly greater proportion of their turnover is accounted for by overseas sales than is the case for non-users. Smaller firms, and those established in the last 5 years, are more likely to report that overseas sales currently do not contribute anything to their total turnover. However, aside from the increased proportion of ‘not yet exporting’ firms within these groups, there are relatively few clear or consistent differences in export intensity by age or size. It is important to note that a significant minority of young and small firms are still extremely intensive exporters, with 15% of firms established in the last 5 years and 20% of those with less than 10 employees indicating that overseas sales account for more than half of their total revenues.
Table 8.8.1 Proportion of Turnover Accounted for by Overseas Sales - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-------|--------|------|---------| | | Up to 5 | 6-10 | Over 10 | | | | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Zero | 31% | 10% | 9% | 41% | 15% | 16% | 7% | 5% | 0% | 13% | | Less than 10% | 30% | 36% | 39% | 29% | 37% | 36% | 39% | 35%| 33%| 37% | | 11%-25% | 9% | 12% | 13% | 3% | 12% | 12% | 12% | 9% | 7% | 12% | | 26%-50% | 7% | 14% | 11% | 11% | 11% | 11% | 11% | 15%| 15%| 11% | | 51%-75% | 6% | 7% | 0% | 4% | 6% | 6% | 12% | 14%| 10%| 8% | | More than 75% | 9% | 16% | 13% | 8% | 14% | 14% | 11% | 13%| 17%| 13% | | Don't know/refused | 6% | 7% | 6% | 4% | 5% | 5% | 8% | 10%| 18%| 6% | 8.9 ‘Born Global’ Firms
Certain younger firms have been classified as ‘born global’, based on whether they started doing business overseas from the outset. The details of the ‘born global’ definition, and the alternative tighter definition, are shown below.
| ‘Born Global’ Firms | |---------------------| | Firms have been defined as being ‘born global’ if they… | | • Have been established for 5 years or less | | • And have been doing business overseas for as long as they have been established |
Firms have been defined as being ‘born global’ under the alternative (tighter) definition if they…
• Have been established for 5 years or less • And have been doing business overseas for as long as they have been established • And the proportion of turnover accounted for by overseas sales is over 25%
The table below shows the proportions of firms classified as ‘born global’ via each of these definitions. Analysis has been provided based on all respondents and based just on younger firms.
| Table 8.9.1 Born Global Firms – By UKTI Usage | |-----------------------------------------------| | All firms | Firms aged up to 5 years | | Base | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | Born global | 950 | 303 | 647 | 189 | 36 | 153 | | Born global (alternative) | 8% | 5% | 9% | 50% | 54% | 49% | | Up to 5 years old but not born global | 8% | 4% | 9% | 50% | 46% | 51% | | Over 5 years old | 83% | 90% | 80% | - | - | - |
Overall, 8% of firms are classified as being ‘born global’ under the main definition and 3% under the tighter, alternative definition (equating to 50% and 18% respectively when based just on firms established in the last 5 years).
Using the standard definition, it appears that UKTI users are slightly less likely to be ‘born global’ than non-users (5% vs. 9). However, this is largely down to the older profile of UKTI users, with this group containing fewer firms aged 5 years or less. When the analysis is based just on young firms, there is no statistically significant difference in the proportion of users and non-users classified as ‘born global’. There is also no significant difference between users and non-users when it comes to the alternative, tighter ‘born global’ definition. When based on firms established in the last 5 years, there are no statistically significant differences by size of firm in terms of the likelihood of being ‘born global’.
Table 8.9.2 Born Global Firms – By Size
| | All firms | Firms aged up to 5 years | |--------------------------------|-----------|--------------------------| | | Total | 0-9 emps | 10+ emps | Total | 0-9 emps | 10+ emps | | **Base** | 950 | 587 | 358 | 189 | 163 | 25 | | Born global | 8% | 11% | 2% | 50% | 52% | 35% | | Born global (alternative) | 3% | 4% | 1% | 18% | 18% | 13% | | Up to 5 years old but not born | 8% | 10% | 4% | 50% | 48% | 65% | | global | Over 5 years old | 83% | 77% | 94% | - | - | - | 8.10 Number of Markets
The chart below shows the number of overseas markets firms have done business in over the last 5 years. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 8.10.1 Number of Markets Done Business in During Last 5 Years – By UKTI Usage
Approaching half of all internationalising firms (48%) have done business in more than five markets over the last five years, with 29% indicating that they are active in more than 10.
Users of UKTI clearly have more overseas experience in this respect, with 46% having done business in more than 10 markets compared to only 22% of non-users. As seen below, the number of markets firms operate in tends to increase in line with age and size. However, this is not universal and there are significant numbers of small firms that operate in over 10 markets and, conversely, some very large firms are only active in a small number of markets.
Table 8.10.1 Number of Markets Done Business in During Last 5 Years - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | Up to 5 | | | | | | | | | | 6-10 | | | | | | | | | | Over 10 | | | | | | | | | | Base | | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | None | | 28% | 6% | 5% | 30% | 11% | 12% | 5% | 3% | 0% | 9% | | One | | 12% | 12% | 10% | 12% | 12% | 12% | 8% | 6% | 2% | 11% | | 2-5 | | 30% | 31% | 31% | 34% | 34% | 34% | 27% | 22% | 7% | 31% | | 6-10 | | 13% | 22% | 20% | 9% | 20% | 19% | 22% | 12% | 13% | 19% | | More than 10 | | 14% | 27% | 34% | 15% | 22% | 22% | 38% | 57% | 75% | 29% | | Don’t know/refused | | 1% | 1% | 1% | 0% | 1% | 1% | 1% | 0% | 3% | 1% |
Unsurprisingly there is also a correlation between the time firms have been exporting, the proportion of turnover accounted for by overseas sales and the number of markets they operate in. However, it is also important to note that export development patterns are very diverse; some very recent exporters are already selling to numerous markets, and many long-established exporters still have fairly limited global operations.
Table 8.10.2 Number of Markets Done Business in During Last 5 Years – By Overseas Experience
| Years Exporting | 0-2 | 2-10 | >10 | Exports as % of Turnover | |-----------------|-----|------|-----|-------------------------| | | 0% | 1-10%| 11-25%| 26-50%| >50% | | Base | 97 | 117 | 214 | 368 | 351 | 124 | 345 | 109 | 107 | 201 | | None | 100%| 0% | 47% | 0% | 0% | 74% | 0% | 0% | 0% | 0% | | One | 0% | 28% | 16% | 12% | 7% | 11% | 20% | 5% | 1% | 6% | | 2-5 | 0% | 43% | 23% | 37% | 27% | 12% | 48% | 25% | 21% | 19% | | 6-10 | 0% | 16% | 8% | 22% | 22% | 2% | 19% | 30% | 23% | 22% | | More than 10 | 0% | 12% | 6% | 28% | 43% | 0% | 13% | 40% | 54% | 52% | | Don’t know/refused | 0% | 1% | 0% | 1% | 1% | 1% | 1% | 0% | 0% | 1% |
A quarter of those firms that report exports make a 0% contribution to total turnover indicate that they have done business in one or more overseas markets. Although this initially seems counter-intuitive, it is because the export turnover data relates to the most recent financial year, whereas the number of markets data refers to activity over the last 5 years – so these firms are intermittent exporters who have previously done business overseas but not had any export sales in the last year. 8.11 Overseas Regions
The table below shows the geographical regions in which firms have done business over the last 5 years. Analysis has been provided at the total level, and by UKTI users and non-users.
| Regions | Total | UKTI Usage | | | |--------------------------|-------|------------|----------|----------| | | | UKTI User | Non-User | | Base | 950 | 303 | 647 | | Europe | 83% | 88% | 81% | | North America | 46% | 55% | 41% | | South & Latin America | 23% | 36% | 17% | | Middle East & Africa | 48% | 65% | 40% | | Asia Pacific | 46% | 60% | 39% | | Not yet exporting | 9% | 6% | 11% |
The vast majority of internationalising firms are doing business in Europe, and approaching half are operating in North America, Asia Pacific and the Middle East/Africa. However, less than a quarter are active in South or Latin American markets.
A quarter of firms are only doing business in a single region (typically Europe), although 14% are selling to all 5 areas.
UKTI users are more likely to be doing business in each of these regions and tend to be active in a significantly greater number of regions, with 62% operating in 3 or more regions compared to just 39% of non-users. The older and larger a firm is, the more geographic areas they tend to be operating in. However, the diversity of firms’ overseas development is again illustrated, with significant proportions of young and small firms active in multiple regions.
8.11.2 Regions Doing Business In - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Regions | |---------------------|-----------------------------|---------| | | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | | Up to 5 | 28 | 559 | 227 | 68 | 63 | 882 | | 6-10 | 549 | 587 | 68 | 63 | 882 | | Over 10 | 203 | 198 | 549 | 587 | 68 | 63 |
| Europe | 61% | 87% | 88% | 59% | 79% | 78% | 92% | 90% | 94% | 94% | 83% | | North America | 34% | 44% | 49% | 39% | 42% | 41% | 53% | 56% | 64% | 64% | 46% | | South & Latin America| 12% | 22% | 26% | 15% | 17% | 17% | 32% | 37% | 51% | 51% | 23% | | Middle East & Africa| 28% | 49% | 53% | 33% | 43% | 43% | 56% | 62% | 78% | 48% | | Asia Pacific | 33% | 46% | 49% | 24% | 41% | 40% | 53% | 64% | 87% | 45% | | Not yet exporting | 28% | 6% | 5% | 30% | 11% | 12% | 5% | 3% | 0% | 9% |
| Number of Regions | None/not exporting | One | Two | Three | Four | Five | |---------------------|--------------------|-----|-----|-------|------|------| | Europe | 28% | 27% | 14% | 15% | 8% | 7% | | North America | 6% | 23% | 22% | 17% | 17% | 16% | | South & Latin America| 5% | 20% | 31% | 3% | 7% | 13% | | Middle East & Africa| 30% | 20% | 17% | 18% | 14% | 11% | | Asia Pacific | 11% | 17% | 14% | 12% | 14% | 9% | | Not yet exporting | 12% | 5% | 3% | 0% | 3% | 9% |
Generally firms that have been exporting for longer are more likely to have done business in each of these areas (and hence are typically active in a greater number of these regions).
8.11.3 Regions Doing Business In – By Overseas Experience
| Years Exporting | 0-2 | 2-10 | >10 | Exports as % of Turnover | |-----------------|-----|------|-----|--------------------------| | | 0% | \<2% | Total | 0% | 1-10% | 11-25% | 26-50% | >50% | | Base | 97 | 117 | 214 | 368 | 351 | 124 | 345 | 109 | 107 | 201 |
| Regions | Europe | North America | South & Latin America | Middle East & Africa | Asia Pacific | Not yet exporting | |-----------------|--------|---------------|-----------------------|----------------------|--------------|-------------------| | | 0% | 83% | 44% | 92% | 94% | 17% | | | 0% | 36% | 19% | 45% | 60% | 8% | | | 0% | 10% | 5% | 21% | 34% | 1% | | | 0% | 35% | 18% | 51% | 62% | 9% | | | 0% | 35% | 18% | 47% | 59% | 7% | | | 100% | 0% | 47% | 0% | 0% | 74% |
| Number of Regions | None/not exporting | One | Two | Three | Four | Five | |-------------------|--------------------|-----|-----|-------|------|------| | | 100% | 0% | 47% | 0% | 0% | 0% | | | 0% | 49% | 26% | 29% | 18% | 15% | | | 0% | 20% | 11% | 24% | 21% | 9% | | | 0% | 21% | 11% | 20% | 18% | 2% | | | 0% | 4% | 2% | 16% | 21% | 0% | | | 0% | 6% | 3% | 11% | 22% | 1% |
OMB Research Ltd 2013 Internationalisation Report – D4 78 As shown in the previous table, firms where exports account for more than 10% of turnover are much more likely to be active in multiple regions than those where overseas sales contribute relatively little to total turnover. However, once export sales exceed 10% of turnover there is relatively little difference in the number of regions that firms do business in.
A quarter of those firms reporting zero export sales have still done business in one or more overseas regions. As mentioned in Section 8.10, this is because the export turnover data relates to the most recent financial year, whereas the number of markets data refers to activity over the last 5 years.
Unsurprisingly there is a strong correlation between the number of markets firms operate in and the number of broad regions that they sell to. The more markets a firm does business in the more likely they are to be active in each of the regions, with the exception of Europe.
### 8.11.4 Regions Doing Business In – By Number of Markets
| Number of Markets | 0 | 1-5 | 6-10 | >10 | |-------------------|---|-----|------|-----| | **Base** | 95| 374 | 176 | 295 | | **Regions** | | | | | | Europe | 0%| 85% | 95% | 98% | | North America | 0%| 28% | 57% | 78% | | South & Latin America | 0%| 4% | 23% | 58% | | Middle East & Africa | 0%| 27% | 62% | 84% | | Asia Pacific | 0%| 24% | 55% | 84% | | Not yet exporting | 100%| 0% | 0% | 0% |
| Number of Regions | 100% | 0% | 0% | 0% | |-------------------|------|---|---|---| | None/not exporting| 0% | 52%| 9% | 3% | | One | 0% | 31%| 25%| 8% | | Two | 0% | 15%| 37%| 15%| | Three | 0% | 2% | 23%| 32%| | Four | 0% | 0% | 6% | 42%| 8.12 Senior Management Experience
All firms were asked about if there was anyone in the senior management team of their company who had significant experience of doing business overseas before they joined the firm. The chart below shows responses at the total level and separately for users and non-users of UKTI.
UKTI users are significantly more likely to benefit from a senior management team that has brought export experience with them to the firm.
Unsurprisingly, given that they tend to have more partners and directors, larger firms are more likely to have previous overseas experience within their senior management team. However, there is no similar correlation by age of firm and in fact older firms are less likely to have management with previous export experience.
8.12.1 Senior Management with Previous Overseas Experience - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Yes | 45% | 53% | 38% | 41% | 40% | 40% | 45% | 51% | 72% | 43% | | No | 54% | 46% | 60% | 59% | 58% | 58% | 53% | 43% | 15% | 56% | | Don’t know | 1% | 2% | 2% | 0% | 1% | 1% | 2% | 6% | 13% | 2% | 9 Business Growth & Overseas Strategy
9.1 Past Growth
Firms were asked to whether their business had grown, remained the same size or become smaller over the past 5 years, with results summarised below. Please note that firms that had been established less than a year or that had not yet started trading were not asked this question and have been excluded from the analysis.
Almost two-thirds of internationalising firms have grown over the past 5 years, although in most cases this was described as ‘moderate’ growth. UKTI users are significantly more likely than non-users to have grown ‘substantially’ over this period. Older firms that have been trading more than 10 years are least likely to have grown over the past 5 years, and almost a fifth of this group (17%) have in fact become smaller. Micro SMEs (0-9 employees) are also least likely to have grown recently, with 43% either remaining the same size or becoming smaller, suggesting that they may be less resilient to challenging economic conditions.
Table 9.1.1 Past Growth (Last 5 Years) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | Base: All est. >1 year | Up to 5 | 6-10 | Over 10 | 0 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | | Grown substantially | 127 | 198 | 549 | 23 | 495 | 518 | 222 | 67 | 63 | 807 | | Grown moderately | 25% | 24% | 16% | 8% | 13% | 13% | 29% | 33% | 28% | 19% | | Stayed the same | 50% | 51% | 40% | 20% | 45% | 44% | 44% | 43% | 44% | | Become smaller | 22% | 15% | 26% | 60% | 25% | 26% | 17% | 16% | 12% | 23% | | Don't know | 2% | 9% | 17% | 12% | 17% | 17% | 9% | 8% | 12% | 14% |
Base: All est. >1 year 9.2 Future Growth
Firms were also asked their opinions on their growth objectives for their business as a whole over the next 5 years.
Chart 9.2.1 Growth Objectives (Next 5 Years) – By UKTI Usage
Whilst the majority of firms indicated that they expect to grow, most felt that this growth would be ‘moderate’ rather than ‘substantial’. UKTI users are slightly more ambitious than non-users and are more likely to anticipate some level of growth over the next 5 years (and this difference is statistically significant). The table below provides an analysis of the growth objectives of UKTI users and non-users over time. There is some indication that growth aspirations among UKTI users have fallen recently, with 89% anticipating growth in 2012 compared to 83% currently, although it should be noted this difference is not statistically significant.
Table 9.2.1 Growth Objectives (Next 5 Years) – Over Time
| | Total 2010 | Total 2011 | Total 2012 | Total 2013 | UKTI Users 2010 | UKTI Users 2011 | UKTI Users 2012 | UKTI Users 2013 | Non-Users 2010 | Non-Users 2011 | Non-Users 2012 | Non-Users 2013 | |----------------|------------|------------|------------|------------|----------------|----------------|----------------|----------------|----------------|----------------|----------------|----------------| | Base | 902 | 903 | 900 | 950 | 235 | 248 | 189 | 303 | 667 | 655 | 711 | 647 | | Grow substantially | 25% | 28% | 27% | 27% | 31% | 29% | 32% | 31% | 23% | 27% | 25% | 26% | | Grow moderately | 58% | 54% | 54% | 51% | 55% | 58% | 57% | 52% | 59% | 52% | 53% | 51% | | Stay the same | 13% | 13% | 15% | 13% | 10% | 11% | 10% | 10% | 14% | 13% | 17% | 14% | | Become smaller | 2% | 3% | 2% | 2% | 1% | 1% | 0% | 1% | 2% | 3% | 3% | 3% | | Don’t know | 2% | 2% | 2% | 6% | 2% | 2% | 1% | 6% | 2% | 4% | 2% | 6% |
The following table provides a comparison with the growth expectation data collected in the main PIMS survey (covering UKTI users) and the PIMS Non-User survey.
Table 9.2.2 Growth Objectives (Next 5 Years) – Comparison with PIMS
| | UKTI Users | Non-Users | |----------------|------------|-----------| | | Int Survey 2013 | PIMS 27-30 | Int Survey 2013 | PIMS Non-Users 2013 | | Base | 303 | 4584 | 647 | 301 | | Grow substantially | 31% | 42% | 26% | 23% | | Grow moderately | 52% | 48% | 51% | 50% | | Stay the same | 10% | 6% | 14% | 19% | | Become smaller | 1% | 1% | 3% | 3% | | Don’t know | 6% | 2% | 6% | 5% |
Results for non-users are broadly consistent between the Internationalisation Survey and the PIMS Non-User survey. However, in the case of UKTI users, the PIMS research shows significantly stronger growth aspirations, with 42% planning to grow substantially compared to just 31% in the Internationalisation Survey. This difference is likely to be linked to the timing of the interviews. The PIMS survey takes place c.6 months after firms access UKTI support, and it is likely that in some cases this support is driving firms’ growth predictions, or that firms are using UKTI at the time they are seeking to grow (to help realise their ambitions). In contrast, in the Internationalisation survey firms are defined as UKTI users if they indicate that they have ever received UKTI support, so this ‘recent support’ impact is less likely to be a factor. Younger firms have significantly more ambitious growth objectives than those established 10 years or more, suggesting that many firms’ growth trajectory hits a plateau after this time. However, it is interesting to note that firms with fewer than 10 employees have less dynamic growth projections than larger firms, with just under a fifth (16%) simply aiming to remain the same size.
Table 9.2.3 Growth Objectives (Next 5 Years) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-------|--------|------|---------| | Up to 5 | 6-10 | Over 10 | 0 | 1-9 | Total | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Grow substantially | 41% | 35% | 21% | 18% | 24% | 24% | 32% | 38%| 39%| 27% | | Grow moderately | 46% | 48% | 54% | 45% | 52% | 51% | 52% | 51%| 49%| 52% | | Stay the same | 7% | 8% | 16% | 29% | 15% | 16% | 8% | 6% | 7% | 13% | | Become smaller | 1% | 4% | 2% | 4% | 3% | 3% | 1% | 0% | 0% | 2% | | Don’t know | 5% | 6% | 7% | 4% | 6% | 6% | 7% | 5% | 5% | 6% |
Firms that are not currently selling to any overseas markets (but plan to do so in the next year) display the most ambitious growth objectives. Aside from this, there is no clear or consistent link between the number of markets firms operate in and their growth plans, and there is also no difference in this respect by the geographical regions in which firms are active in.
Table 9.2.4 Growth Objectives (Next 5 Years) – By Number of Markets & Regions Doing Business In
| Number of Markets | Regions | Europe | North America | Latin America | M.East / Africa | Asia Pacific | |-------------------|---------|--------|---------------|---------------|-----------------|--------------| | 0 | 95 | 374 | 176 | 295 | 781 | 438 | 226 | 460 | 449 | | 1-5 | 47% | 25% | 21% | 28% | 25% | 27% | 27% | 25% | 26% | | 6-10 | 46% | 50% | 56% | 53% | 52% | 52% | 52% | 54% | 52% | | >10 | 2% | 17% | 15% | 9% | 14% | 11% | 13% | 12% | 12% | | Base | 0% | 2% | 4% | 2% | 2% | 3% | 2% | 3% | 2% | | Grow substantially| 5% | 5% | 5% | 8% | 6% | 7% | 7% | 7% | 7% | | Grow moderately | 5% | 5% | 5% | 8% | 6% | 7% | 7% | 7% | 7% | | Stay the same | 5% | 5% | 5% | 8% | 6% | 7% | 7% | 7% | 7% | | Become smaller | 5% | 5% | 5% | 8% | 6% | 7% | 7% | 7% | 7% | | Don’t know | 5% | 5% | 5% | 8% | 6% | 7% | 7% | 7% | 7% | 9.3 How Growth Objectives Will Be Achieved
All firms planning on either growing or staying the same size over the next 5 years were asked how they would achieve these objectives. The question wording differed for these 2 groups, as follows:
- If planning to grow: “Do you expect this growth to mainly come from…?”
- If planning to stay same size: “To help maintain your current sales levels, will you be mainly focusing on…?”
Firms were asked about how they would achieve their growth objectives in 3 different areas, as follows:
- Markets (new or existing)
- Customers (new or existing)
- Products/services (new or existing)
The table below summarises these results, both at the total level and by the level of firms’ growth objectives.
Table 9.3.1 Meeting Growth Objectives - By Growth Objectives
| Will this mainly be through...? | Total | Growth Objectives | |--------------------------------|-------|-------------------| | | | Stay Same | Moderate Growth | Substantial Growth | | **Base: All planning to grow or stay same** | 875 | 116 | 486 | 273 | | Markets | | | | | | Entering new overseas countries| 9% | 7% | 8% | 13% | | Increasing sales to existing countries | 56% | 73% | 58% | 44% | | Both | 34% | 19% | 32% | 43% | | Don't know | 1% | 2% | 2% | 1% | | Customers | | | | | | Selling to new customers | 32% | 18% | 32% | 37% | | Increasing sales to existing customers | 19% | 37% | 18% | 12% | | Both | 48% | 43% | 49% | 50% | | Don't know | 1% | 2% | 0% | 1% | | Products/Services | | | | | | Introducing new products/services | 20% | 13% | 20% | 22% | | Increasing sales of existing products/services | 47% | 63% | 48% | 38% | | Both | 33% | 22% | 31% | 40% | | Don't know | 1% | 2% | 0% | 0% | | Summary | | | | | | New countries | 43% | 26% | 40% | 56% | | Existing countries | 89% | 91% | 90% | 87% | | New Customers | 80% | 61% | 81% | 87% | | Existing customers | 67% | 80% | 67% | 62% | | New products/services | 52% | 35% | 52% | 62% | | Existing products/services | 80% | 85% | 79% | 78% | When it comes to the geographical focus of their growth ambitions, most firms are concentrating on the intensive margins (i.e. existing markets) rather than the extensive margins (i.e. new markets), with 89% and 43% focussing on each of these areas respectively. However, the proportion expecting to realise their growth objectives though new markets increases amongst those with more ambitious plans, with 56% of firms with 'substantial' growth aspirations indicating that they will achieve these by entering new markets (often in conjunction with increasing sales to existing countries).
A similar situation is seen when it comes to products and services, with firms more likely to feel that their growth objectives will be achieved through sales of existing products/services than by developing new ones (80% and 52% respectively). Firms that simply aim to remain the same size over the next 5 years are most likely to be focussing on their existing product range, whereas those intending to grow (particularly substantially) are comparatively more likely to feel that this growth will be at least partly driven by the introduction of new products/services.
However, a different situation is seen when it comes to the customer types that firms will be focussing on, with firms more likely to be targeting new customers than existing ones (80% and 67% respectively). That said, half of firms (48%) believe that it will be a combination of (increased) sales to existing customers and the identification of new customers that will help them meet their growth objectives. Again there is a difference between firms that aim to grow and those that are seeking to remain the same size, with the former significantly more likely to be prioritising sales to new customers, and the latter more likely to be focussing on increasing/maintaining sales to existing ones. As seen below, there is little difference between users and non users in terms of how whether they are focussing on new/existing customers and new/existing products and services. However, UKTI users are significantly more likely to be planning growth through expansion into new countries (57% vs. 37% of non-users), although the proportion also focussing on existing markets is similar.
Table 9.3.2 Meeting Growth Objectives - By UKTI usage
| Will this mainly be through...? | Total | UKTI Usage | Non-User | |--------------------------------|-------|------------|----------| | **Base: All planning to grow or stay same** | 875 | 283 | 592 | | Markets | | | | | Entering new overseas countries | 9% | 12% | 8% | | Increasing sales to existing countries | 56% | 43% | 62% | | Both | 34% | 45% | 28% | | Don't know | 1% | 0% | 2% | | Customers | | | | | Selling to new customers | 32% | 34% | 31% | | Increasing sales to existing customers | 19% | 18% | 20% | | Both | 48% | 48% | 49% | | Don't know | 1% | 0% | 1% | | Products/Services | | | | | Introducing new products/services | 20% | 19% | 20% | | Increasing sales of existing products/services | 47% | 43% | 49% | | Both | 33% | 38% | 30% | | Don't know | 1% | 0% | 1% | | Summary | | | | | New countries | 43% | 57% | 37% | | Existing countries | 89% | 88% | 90% | | New Customers | 80% | 82% | 79% | | Existing customers | 67% | 66% | 68% | | New products/services | 52% | 57% | 50% | | Existing products/services | 80% | 80% | 79% | 9.4 Management Strategy for Achieving Growth Objectives
Firms were asked if their Senior Management team had a clear strategy for achieving their growth objectives, with results summarised below.
The vast majority of internationalising firms (83%) believe that their senior management team has a clear strategy in place for how they will achieve their growth objectives. There is no difference in this respect between UKTI users and non-users. As seen below, the likelihood of having a clear management strategy for achieving growth increases amongst larger companies. However, there are no statistically significant differences by age of firm.
Table 9.4.1 Management Strategy for Achieving Growth Objectives - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base: All planning to grow or stay same size | Yes | No | Don't know/Refused | |---------------------|-----------------------------|---------------------------------------------|-----|----|-------------------| | | | Up to 5 | 6-10 | Over 10 | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | | | | 192 | 180 | 503 | 26 | 512 | 538 | 209 | 65 | 60 | 812 | | | | 84% | 86% | 82% | 70% | 82% | 81% | 86% | 91% | 94% | 83% | | | | 15% | 13% | 17% | 26% | 17% | 18% | 14% | 9% | 6% | 16% | | | | 1% | 1% | 1% | 4% | 1% | 1% | 1% | 0% | 0% | 1% |
Firms with 'substantial' growth objectives are more likely to indicate that the senior management team has a clear strategy for achieving these. Unsurprisingly, there is also a clear link between firms having a formal business plan and the management team having a clear growth strategy. That said, 73% of those without a written business plan claim to have a clear growth strategy, indicating that a significant proportion of businesses have concrete plans in place but choose not to formally document them.
Table 9.4.2 Management Strategy for Achieving Growth Objectives - By Growth Objectives & Business Planning
| Growth Objectives | Current Business Plan | Base: All planning to grow or stay same size | Yes | No | Don't know/Refused | |-------------------|-----------------------|---------------------------------------------|-----|----|-------------------| | Stay same | Moderate growth | Substantial growth | Yes, with overseas targets | Yes, but no overseas targets | No plan | | | | | 116 | 486 | 273 | 328 | 215 | 303 | | | | | 80% | 81% | 89% | 92% | 86% | 73% | | | | | 20% | 18% | 10% | 8% | 13% | 26% | | | | | 1% | 1% | 1% | 0% | 1% | 1% | 9.5 Management Strategy for Developing Overseas Business
Firms were further asked if their senior management team had a clear strategy for developing their overseas business, with results summarised below.
The majority of internationalising firms report that their senior management team has a clear strategy for the development of their overseas business (61%). Encouragingly, this proportion increases significantly amongst UKTI clients (73%). As seen below, the larger the company the more likely it is to have a clear strategy in place for developing its overseas business. However, there is no statistically significant difference in this respect by age of firm.
Table 9.5.1 Management Strategy for Developing Overseas Business - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | Total | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Yes | 63% | 64% | 59% | 45% | 58% | 58% | 62% | 79% | 88% | 61% | | No | 30% | 30% | 35% | 55% | 35% | 36% | 32% | 18% | 12% | 33% | | Don't know/refused | 2% | 3% | 1% | 0% | 1% | 1% | 2% | 3% | 0% | 2% | | Not aiming to develop overseas business | 4% | 4% | 5% | 0% | 5% | 4% | 0% | 0% | 5% |
As detailed in the table below, the more ambitious a firm’s growth objectives, the more likely they are to indicate that the senior management has a clear strategy for developing their overseas business, suggesting that overseas sales are fundamental to meeting these growth aspirations. However, it is still the case that 25% of internationalising firms that are aiming to grow substantially do not have a clear overseas strategy.
Unsurprisingly, firms who have a business plan that specifies targets for overseas sales are most likely to indicate that they have a clear overseas development strategy.
Table 9.5.2 Management Strategy for Developing Overseas Business - By Growth Objectives & Business Planning
| Growth Objectives | Current Business Plan | |-------------------|-----------------------| | Stay same | Moderate growth | Substantial growth | Yes, with overseas targets | Yes, but no overseas targets | No plan | | Base | 116 | 486 | 273 | 345 | 231 | 340 | | Yes | 51% | 62% | 70% | 79% | 46% | 54% | | No | 39% | 33% | 25% | 19% | 45% | 39% | | Don't know/Refused| 3% | 1% | 3% | 2% | 1% | 1% | | Not aiming to develop overseas business | 7% | 4% | 2% | 1% | 8% | 6% | 9.6 Business Planning
Firms were asked to indicate whether or not they had a current written business plan and, if so, whether this specifically covered revenues from overseas sales.
Table 9.6.1 Formal Business Plans – By UKTI Usage
| Do you have a current written business plan? | Total | UKTI Usage | |---------------------------------------------|-------|------------| | | Base | UKTI User | Non-User | | Yes | 950 | 303 | 647 | | In progress | 3% | 1% | 3% | | No | 38% | 31% | 42% | | Don't know | 2% | 2% | 3% |
| Does the plan contain targets relating to revenues from overseas sales? | Total | UKTI Usage | |------------------------------------------------------------------------|-------|------------| | | Base | UKTI User | Non-User | | Yes | 34% | 50% | 26% | | No | 25% | 17% | 28% | | Don't know | 1% | 1% | 1% | | No business plan | 38% | 31% | 42% | | Don't know if have business plan | 2% | 2% | 3% |
UKTI users appear to be more strategic in their approach than non-users, with two-thirds having a current written business plan compared to just over half of non-users. Users are also twice as likely to have a plan that specifically covers overseas business.
The table below provides details of how the proportion of internationalising firms with a business plan has changed over time. Please note that it is not possible to track the incidence of plans with overseas targets, as this question was only included in the 2013 survey wave.
Table 9.6.2 Formal Business Plans – Over Time
| Do you have a current written business plan? | Total | UKTI Users | Non-Users | |---------------------------------------------|-------|------------|-----------| | | Base | 2008 2010 2011 2012 2013 | 2008 2010 2011 2012 2013 | 2008 2010 2011 2012 2013 | | Yes | 900 | 900 902 903 900 950 | 311 235 248 189 303 | 589 667 655 711 647 | | In progress | - | - - - 2% 3% | - - - 3% 1% | - - - 2% 3% | | No | 33% | 38% 38% 46% 38% | 30% 27% 25% 32% 31% | 35% 42% 43% 50% 42% | | Don't know | 5% | 5% 3% 2% 2% | 2% 5% 2% 1% 2% | 7% 5% 4% 2% 3% |
Aside from a sharp dip in 2012, the proportion of firms with a written business plan has been broadly consistent over time. As seen below, older firms are least likely to have a current business plan but, on the other hand, the larger the firm the more likely it is to have a plan in place. This indicates that firms that have been established for over 10 years but still have relatively few employees are least likely to have formal business plans.
Table 9.6.3 Formal Business Plans - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|---------------------------|-----|-----|-------|-------|--------|------|---------| | Base | | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 |
Do you have a current written business plan?
| Yes | 62% | 65% | 52% | 35% | 51% | 51% | 66% | 73% | 91% | 56% | | In progress | 6% | 2% | 2% | 3% | 3% | 3% | 2% | 0% | 0% | 3% | | No | 31% | 32% | 43% | 63% | 44% | 45% | 29% | 23% | 4% | 39% | | Don't know | 1% | 1% | 3% | 0% | 1% | 1% | 4% | 5% | 5% | 2% |
Does the plan contain targets relating to revenues from overseas sales?
| Yes | 37% | 39% | 31% | 23% | 27% | 27% | 42% | 58% | 73% | 33% | | No | 29% | 27% | 23% | 15% | 27% | 26% | 25% | 13% | 12% | 25% | | Don't know | 2% | 1% | 0% | 0% | 1% | 1% | 0% | 1% | 6% | 1% | | No business plan | 31% | 32% | 43% | 63% | 44% | 45% | 29% | 23% | 4% | 39% | | Don't know if have business plan | 1% | 1% | 3% | 0% | 1% | 1% | 4% | 5% | 5% | 2% |
Firms that are not currently in any overseas markets (but planning to export in the next year) and those that operate in more than 10 markets are most likely to have a business plan or be in the process of writing one. The latter group are also significantly more likely to have a plan containing overseas targets.
Table 9.6.4 Formal Business Plans – By Number of Markets & Regions Doing Business In
| Number of Markets | Regions | Europe | North America | Latin America | M.East / Africa | Asia Pacific | |-------------------|---------|--------|---------------|---------------|-----------------|-------------| | Base | 95 | 374 | 176 | 295 | 781 | 438 | 226 | 460 | 449 |
Do you have a current written business plan?
| Yes | 60% | 55% | 51% | 61% | 56% | 56% | 57% | 58% | 57% | | In progress | 11% | 2% | 2% | 2% | 2% | 2% | 1% | 1% | 2% | | No | 29% | 41% | 46% | 33% | 39% | 39% | 38% | 38% | 38% | | Don't know | 0% | 2% | 1% | 5% | 3% | 3% | 4% | 3% | 3% |
Does the plan contain targets relating to revenues from overseas sales?
| Yes | 23% | 26% | 31% | 50% | 35% | 39% | 42% | 40% | 41% | | No | 47% | 30% | 21% | 11% | 23% | 18% | 15% | 19% | 17% | | Don't know | 1% | 1% | 1% | 1% | 1% | 1% | 1% | 1% | 1% | | No business plan | 29% | 41% | 46% | 33% | 39% | 39% | 38% | 38% | 38% | | Don't know if have business plan | 0% | 2% | 1% | 5% | 3% | 3% | 4% | 3% | 3% | Firms with more ambitious growth objectives are clearly more strategic in the sense that they are much more likely to have a current written business plan. The fact that they are also more inclined to detail overseas targets in this plan suggests that in many cases they are looking to export markets to help achieve this growth.
Table 9.6.5 Formal Business Plans - By Growth Objectives & Business Planning
| Growth Objectives | Stay same | Moderate growth | Substantial growth | |-------------------|-----------|-----------------|--------------------| | Base | 116 | 486 | 273 | | Do you have a current written business plan? | | | | | Yes | 35% | 55% | 75% | | In progress | 1% | 2% | 4% | | No | 63% | 40% | 21% | | Don't know | 2% | 3% | 0% | | Does the plan contain targets relating to revenues from overseas sales? | | | | | Yes | 10% | 32% | 52% | | No | 25% | 25% | 26% | | Don't know | 0% | 1% | 2% | | No business plan | 63% | 40% | 21% | | Don't know if have business plan | 2% | 3% | 0% | 9.7 Expected Overseas Growth
9.7.1 Number of Markets
Firms were asked whether they expected the number of markets they were doing business in to increase, decrease or stay the same over the next 3 years.
Chart 9.7.1.1 Anticipated Change in Number of Markets (Next 3 Years) – By UKTI Usage
Half of internationalising firms expect to expand into more markets over the next 3 years, with only a very small minority (4%) anticipating a decline in this respect.
UKTI users are significantly more likely than non-users to expect an increase in the number of overseas markets they operate in over the next 3 years. At the total level, the proportion of firms expecting to increase the number of markets they operate in has remained broadly consistent over the last 4 years. There is some indication that UKTI users are more optimistic in this respect than they were in 2012, although the difference is not statistically significant and the figures are still slightly lower than those reported in 2010 and 2011.
Table 9.7.1.1 Anticipated Change in Number of Markets (Next 3 Years) – Over Time
| | Total | UKTI Users | Non-Users | |----------------|-------|------------|-----------| | | 2010 | 2011 | 2012 | 2013 | 2010 | 2011 | 2012 | 2013 | | Base | 902 | 903 | 900 | 950 | 235 | 248 | 189 | 303 | | Increase | 50% | 53% | 48% | 51% | 63% | 64% | 52% | 59% | | Stay the same | 44% | 40% | 47% | 42% | 33% | 31% | 44% | 37% | | Decrease | 5% | 3% | 4% | 4% | 5% | 2% | 3% | 2% | | Don't know/refused | 2% | 3% | 2% | 3% | 0% | 3% | 1% | 2% |
Although older firms tend to be active in a greater number of markets, it is younger firms that are more positive in terms of their growth plans, with 75% of firms established in the last 5 years expecting to enter new markets, compared to less than half of older firms. There is no clear pattern by size of firm in this respect.
Table 9.7.1.2 Anticipated Change in Number of Markets (Next 3 Years) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | Base | | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Increase | | 51% | 50% | 50% | 57% | 45% | 60% | 52% | | Stay the same | | 45% | 42% | 42% | 37% | 52% | 37% | 42% | | Decrease | | 4% | 5% | 5% | 3% | 1% | 2% | 4% | | Don't know/refused | | 0% | 3% | 3% | 3% | 2% | 2% | 3% |
As expected, the more ambitious a firm’s growth plans, the more likely they are to envisage an increase in the number of markets they operate in over the next 3 years.
Table 9.7.1.3 Anticipated Change in Number of Markets (Next 3 Years) - By Growth Objectives
| Growth Objectives | Stay same | Moderate growth | Substantial growth | |-------------------|-----------|-----------------|--------------------| | Base | 116 | 486 | 273 | | Increase | 18% | 51% | 75% | | Stay the same | 66% | 45% | 23% | | Decrease | 8% | 3% | 1% | | Don't know/refused| 7% | 1% | 1% | 9.7.2 Export Turnover
Firms were also asked whether they expected the proportion of their turnover accounted for by overseas sales to increase, decrease or stay the same over the next 3 years.
Reflecting the fact that 51% of firms expect to increase the number of markets they operate in, 50% of internationalising firms also anticipate an increase in the importance of overseas sales to their total turnover.
Again, UKTI users are more ambitious or positive when it comes to their plans for overseas growth, with 57% expecting an increase in the proportion of turnover coming from overseas sales compared to 46% of non-users. There is some indication the number of firms anticipating an increase in the proportion of their turnover accounted for by overseas sales has risen over the past 3 years, but this is not statistically significant.
Table 9.7.2.1 Anticipated Change in Proportion of Turnover Accounted for by Overseas Sales (Next 3 Years) – Over Time
| | Total | UKTI Users | Non-Users | |----------------|--------|------------|-----------| | | 2010 | 2011 | 2012 | 2013 | 2010 | 2011 | 2012 | 2013 | | Base | 902 | 903 | 900 | 950 | 235 | 248 | 189 | 303 | 667 | 655 | 711 | 647 | | Higher | 46% | 47% | 47% | 50% | 56% | 52% | 53% | 57% | 42% | 44% | 44% | 46% | | About the same | 44% | 45% | 43% | 40% | 36% | 41% | 40% | 35% | 46% | 46% | 43% | 42% | | Lower | 7% | 6% | 7% | 7% | 6% | 4% | 5% | 6% | 7% | 7% | 8% | 7% | | Don’t know/refused | 4% | 3% | 4% | 3% | 2% | 3% | 2% | 1% | 5% | 3% | 4% | 4% |
As seen below, younger firms are significantly more positive about the likely increase in their overseas turnover. Whereas there was no clear pattern by size of firm when it came to the expected change in number of markets, there is a relationship with growth in export turnover and larger firms are more inclined to forecast an increase in the proportion of sales accounted for by overseas sale. It
Table 9.7.2.2 Anticipated Change in Proportion of Turnover Accounted for by Overseas Sales (Next 3 Years) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | Base | | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Higher | | 66% | 51% | 44% | 54% | 47% | 47% | 54% | 54% | 70% | 49% | | About the same | | 26% | 39% | 44% | 46% | 41% | 41% | 39% | 40% | 25% | 40% | | Lower | | 5% | 7% | 8% | 0% | 9% | 9% | 4% | 3% | 3% | 7% | | Don’t know/refused | | 3% | 3% | 4% | 0% | 4% | 3% | 3% | 3% | 2% | 3% | Firms that are already doing business in 6 or more markets are more likely than those in fewer markets to forecast an increase in the proportion of their turnover accounted for by overseas sales. The exception to this is firms that are not yet doing business in any overseas markets as, by definition, their overseas sales must be expected to increase (because they qualified for the survey on the basis that they plan to start exporting in the next 12 months).
There are no significant differences in this respect by the geographic regions in which firms are operating.
Table 9.7.2.3 Anticipated Change in Proportion of Turnover Accounted for by Overseas Sales (Next 3 Years) – By No. of Markets & Regions Doing Business In
| Number of Markets | Europe | North America | Latin America | M.East / Africa | Asia Pacific | |-------------------|--------|---------------|---------------|-----------------|-------------| | 0 | 781 | 438 | 226 | 460 | 449 | | 1-5 | 45% | 47% | 48% | 47% | 46% | | 6-10 | 44% | 43% | 45% | 44% | 45% | | >10 | 8% | 7% | 4% | 6% | 6% |
The more ambitious a firm’s growth objectives, the more likely it is to anticipate an increase in the proportion of turnover accounted for by overseas sales. This suggests that many growing firms believe that this growth will be driven by their overseas activity rather than the UK market.
Table 9.7.2.3 Anticipated Change in Proportion of Turnover Accounted for by Overseas Sales (Next 3 Years) - By Growth Objectives
| Growth Objectives | Stay same | Moderate growth | Substantial growth | |-------------------|-----------|-----------------|--------------------| | Base | 116 | 486 | 273 | | Higher | 20% | 48% | 72% | | About the same | 62% | 44% | 20% | | Lower | 9% | 5% | 6% | | Don’t know/refused| 8% | 2% | 1% | 9.8 Difficulties Accessing Finance
All firms were asked whether they had experienced any difficulties in accessing finance over the past 6 months and, if so, whether this had a negative impact on the scale or scope of their overseas activities.
Chart 9.8.1 Whether Difficulties Accessing Finance in Last 6 Months
Approaching a fifth of all internationalising firms (19%) have experienced difficulties accessing finance in the past 6 months, and in most cases this was felt to have had a negative impact on their overseas business.
As seen below, the number of firms reporting difficulty in accessing finance is the same as it was last year, and is still significantly lower than it was in 2011 (but significantly higher than in 2010). The impact of this on firms’ overseas activities follows a similar pattern (i.e. same as 2012, lower than 2011, higher than 2010).
Table 9.8.1 Whether Difficulties Accessing Finance in Last 6 Months – By UKTI Usage & Over Time
| | Total | UKTI Users | Non-Users | |------------------|--------|------------|-----------| | | 2010 | 2011 | 2012 | 2013 | 2010 | 2011 | 2012 | 2013 | | Base | 902 | 903 | 900 | 950 | 235 | 248 | 189 | 303 | 667 | 655 | 711 | 647 | | Yes | 15% | 25% | 19% | 19% | 18% | 28% | 23% | 23% | 14% | 24% | 18% | 17% | | - Negative impact on overseas activities | 9% | 17% | 13% | 13% | 13% | 17% | 17% | 16% | 8% | 17% | 11% | 11% | | - No impact on overseas activities | 6% | 8% | 6% | 7% | 5% | 11% | 6% | 7% | 6% | 7% | 6% | 6% | | No | 83% | 73% | 80% | 79% | 81% | 71% | 75% | 75% | 84% | 73% | 81% | 81% | | Don’t know / refused | 2% | 3% | 1% | 2% | 1% | 248 | 2% | 2% | 2% | 3% | 1% | 2% | The above table provides consistent evidence to suggest that UKTI users are more likely to have difficulty accessing finance. As seen previously, UKTI users tend to have more ambitious growth objectives (particularly for their overseas business), so this difference may be at least partly down to a higher proportion of UKTI users actually attempting to obtain finance.
As seen below, the younger the firm the more likely it is to encounter problems accessing finance and report that this has had a negative impact on their overseas business.
There does not appear to be any relationship between size of firm and the likelihood of encountering problems accessing finance. However, it is interesting to note that although SMEs and large firms (250+ employees) are equally likely to experience difficulties, SMEs do appear more likely to feel that this has had a detrimental effect on their overseas activities (13% vs. 5%), although it should be noted that this difference is not statistically significant.
Table 9.8.2 Whether Difficulties Accessing Finance in Last 6 Months – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|---------------------------|-----|-------|--------|------|---------| | Up to 5 | | | | | | | | 6-10 | | | | | | | | Over 10 | | | | | | | | Base | | 203 | 198 | 549 | 28 | 559 | | Yes | | 28% | 20% | 16% | 20% | 20% | | - Negative impact on overseas activities | | 20% | 13% | 10% | 7% | 14% | | - No impact on overseas activities | | 7% | 7% | 6% | 13% | 5% | | No | | 70% | 79% | 81% | 80% | 79% | | Don’t know/refused | | 2% | 1% | 2% | 0% | 1% |
There is also evidence that the likelihood of experiencing difficulties accessing finance recedes once firms have been exporting for over 10 years.
Table 9.8.3 Whether Difficulties Accessing Finance in Last 6 Months – By Overseas Experience
| Years Exporting | Exports as % of Turnover | |-----------------|--------------------------| | | 0-2 | 2-10 | >10 | 0% | 1-10% | 11-25% | 26-50% | >50% | | 0 | | | | 124| 345 | 109 | 107 | 201 | | \<2 | | | | 23%| 21% | 17% | 23% | 17% | | Total | | | | 25%| 23% | 24% | 22% | 15% | | Base | | | | 19%| 16% | 17% | 13% | 10% | | - Negative impact on overseas activities | | 17% | 12% | 10% | 16% | 14% | | - No impact on overseas activities | | 7% | 9% | 7% | 7% | 3% | | No | | | | 74%| 75% | 74% | 77% | 83% | | Don’t know/refused | 1% | 2% | 2% | 1% | 2% | 0% | 2% | 1% | There are no significant differences between innovative and non innovative firms in terms of access to finance, nor between those who are IP active and those who are not.
Table 9.8.4 Whether Difficulties Accessing Finance in Last 6 Months – By Innovation
| | Innovative | IP Active | |----------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | **Base** | 462 | 689 | 261 | 256 | 674 | | **Yes** | 22% | 21% | 16% | 22% | 18% | | - Negative impact on overseas activities | 15% | 14% | 10% | 15% | 12% | | - Negative impact on product/service dev't | 7% | 7% | 5% | 6% | 7% | | **No** | 77% | 78% | 82% | 77% | 80% | | Don't know/refused | 1% | 2% | 2% | 1% | 2% |
Firms with substantial growth aspirations are most likely to experience difficulties accessing finance, suggesting that this could potentially be a barrier to the realisation of this growth. It is worth noting that 25% of the key group of ‘innovative high growth’ firms have had difficulties raising finance.
Table 9.8.5 Whether Difficulties Accessing Finance in Last 6 Months – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | |----------------------|-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | **Base** | 116 | 486 | 273 | 215 | 474 | 261 | | **Yes** | 16% | 18% | 24% | 25% | 19% | 16% | | - Negative impact on overseas activities | 11% | 12% | 16% | 16% | 12% | 10% | | - No impact on overseas activities | 5% | 6% | 8% | 9% | 6% | 5% | | **No** | 82% | 80% | 75% | 74% | 79% | 82% | | Don't know/refused | 2% | 2% | 2% | 2% | 2% | 2% | The table below investigates whether firms that have experienced difficulties accessing finance are any less dynamic or ambitious in their growth ambitions.
Table 9.8.6 Growth Profile – By Difficulties Accessing Finance
| Difficulty accessing finance | Yes & impacted on overseas activities | Yes but no impact on overseas activities | No | |-----------------------------|--------------------------------------|------------------------------------------|-----| | Base | 119 | 67 | 742 | | Past growth (last 5 years) | | | | | Grown substantially | 21% | 21% | 18% | | Grown moderately | 40% | 33% | 46% | | Remained same size | 17% | 32% | 23% | | Become smaller | 22% | 16% | 12% | | Future growth (next 5 years)| | | | | Grow substantially | 34% | 34% | 26% | | Grow moderately | 49% | 47% | 52% | | Remain same size | 11% | 11% | 13% | | Become smaller | 1% | 4% | 2% | | Number of overseas markets (next 3 years) | Increase | 63% | 42% | 50% | | Stay the same | 32% | 50% | 43% | | Decrease | 3% | 6% | 4% | | Exports as % of turnover (next 3 years) | Higher | 53% | 56% | 48% | | About the same | 35% | 29% | 42% | | Lower | 11% | 11% | 6% |
Overall, there is no evidence that firms that have experienced difficulties accessing finance have lower growth expectations than those that have not. Firms that have experienced problems in this respect are in fact significantly more likely to be planning substantial growth over the next 5 years. 9.9 Event Attendance
Firms were asked whether they had attended any business seminars, tradeshows or conferences in the past year.
Chart 9.9.1 Proportion Attending Business Events in Last Year – By UKTI Usage
Over half of all internationalising firms have attended business events in the last year, with this rising to 78% in the case of UKTI users.
As seen below, larger firms and those established for over 5 years are most likely to attend seminars, tradeshows and conferences.
Table 9.9.1 Proportion Attending Business Events in Last Year - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|---------------------------|-----|-------|--------|------|---------| | Up to 5 | 6-10 | Over 10 | 0 | 1-9 | Total | | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Yes | 50% | 62% | 60% | 56% | 54% | 54% | 66% | 70% | 72% | 59% | | No | 50% | 38% | 40% | 44% | 46% | 46% | 34% | 30% | 28% | 41% | There is some evidence that the more markets a firm is active in, the more inclined they are to attend seminars, conferences, etc (although firms that have not yet started exporting are also relatively likely to do so).
Table 9.9.2 Proportion Attending Business Events in Last Year – By Number of Markets & Regions Doing Business In
| Number of Markets | Europe | North America | Latin America | M.East / Africa | Asia Pacific | |-------------------|--------|---------------|---------------|-----------------|-------------| | 0 | 781 | 438 | 226 | 460 | 449 | | 1-5 | 176 | 60% | 64% | 62% | 64% | | 6-10 | 295 | 60% | 64% | 64% | 64% | | >10 | 295 | 60% | 64% | 64% | 64% |
Firms that plan to grow over the next 5 years are more likely to attend business events than those that simply aim to remain the same size (or become smaller). This might suggest that seminars, conferences and tradeshows are seen by firms as a means of achieving growth, or that attendance at these events prompts firms to become more ambitious.
Table 9.9.3 Proportion Attending Business Events in Last Year - By Growth Objectives
| Growth Objectives | Stay same | Moderate growth | Substantial growth | |-------------------|-----------|-----------------|--------------------| | Base | 116 | 486 | 273 | | Yes | 40% | 60% | 65% | | No | 60% | 40% | 35% | 10. High Growth Markets
10.1 Opportunities in High Growth Markets
Firms were asked to consider the extent to which they felt that there were opportunities for them in a number of high growth markets. For each market, firms were asked to indicate whether they were already doing business there, were very likely to do so in the next 2 years, quite likely to do so or unlikely to do so.
Chart 10.1.1 Opinions on Opportunities in High Growth Markets
Of these markets, it appears that the UAE represents the best opportunity for internationalising firms, with 21% of firms already doing business there and a further 11% very likely to do so in the next 2 years.
There is comparatively little enthusiasm for doing business in Latin America, with just 8% of firms already active in Mexico (with only another 4% very likely to enter it in the next 2 years) and 11% active in Brazil (with 9% very likely to enter it). To enable more detailed analysis of interest and activity in high growth markets by firm profile, results have been summarised across all 9 of these markets as follows:
| Opportunities In High Growth Markets - Summary | |-----------------------------------------------| | **Firms have been defined as ‘already in’ if they...** | | • Are already in at least one high growth market | | **Firms have been defined as being ‘very likely’ if they...** | | • Are not already in any of the high growth markets | | • But feel they are ‘very likely’ to do business in at least one in the next 2 years | | **Firms have been defined as being ‘quite likely’ if they...** | | • Are not already in any of the high growth markets | | • Do not feel that they are ‘very likely’ to do business in any in the next 2 years | | • But feel they are ‘quite likely’ to do business in at least one in next 2 years | | **Firms have been defined as ‘unlikely’ if they...** | | • Are not already in any of the high growth markets |
When the data is viewed in this way, it shows that 43% of internationalising firms are already doing business in at least one of these high growth markets. Only a fifth of firms thought it was unlikely that they would do business in any of these markets in the next two years.
Chart 10.1.2 Opportunities in High Growth Markets (Summary)
- **Already in**: 43%
- **Very likely**: 16%
- **Quite likely**: 20%
- **Unlikely**: 20%
Base: All respondents (Base, Don’t know) (950, 0%) Over half of UKTI users are already in at least one of these markets and only 8% feel that they are unlikely to enter one in the next 2 years. In contrast, over a quarter (26%) of non-users are not in any high growth markets and have no intention of entering any.
Table 10.1.1 Opportunities in High Growth Markets (Summary) – By UKTI Usage
| | Total | UKTI Usage | | | | | | | | | | | |------------------|-------|------------|----------|----------|----------|----------|----------|----------|----------|----------|----------|----------| | | Base | | | | | | | | | | | | | | 950 | 303 | 647 | | | | | | | | | | | Already in | 43% | 64% | 34% | | | | | | | | | | | Very likely | 16% | 16% | 16% | | | | | | | | | | | Quite likely | 20% | 13% | 23% | | | | | | | | | | | Unlikely | 20% | 8% | 26% | | | | | | | | | | | Don’t know | 0% | 0% | 1% | | | | | | | | | |
The table below tracks how activity and interest in high growth markets has changed over time. There has been a significant increase since 2012 in the proportion of UKTI users that are operating in high growth markets.
Table 10.1.2 Opportunities in High Growth Markets (Summary) – Over Time
| | Total | UKTI Users | | | | | | | | | | | |------------------|-------|------------|----------|----------|----------|----------|----------|----------|----------|----------|----------|----------| | | Base | | | | | | | | | | | | | | 902 | 235 | 303 | 667 | 655 | 711 | 647 | | | | | | | Already in | 48% | 61% | 59% | 54% | 64% | 44% | 40% | 37% | 34% | | | | | Very likely | 10% | 11% | 16% | 11% | 16% | 9% | 14% | 12% | 16% | | | | | Quite likely | 22% | 18% | 14% | 21% | 13% | 23% | 21% | 24% | 23% | | | | | Unlikely | 19% | 10% | 14% | 8% | 22% | 24% | 27% | 26% | | | | | | Don’t know | 1% | 0% | 1% | 0% | 2% | 1% | 0% | 1% | | | | | The table below provides a more detailed time series analysis by individual market. Please note that in 2011 respondents were asked about “UAE or Saudi Arabia” (rather than assessing these markets separately), so as a result the data for these markets has been combined in 2012 and 2013 to allow comparisons to be made over time.
Table 10.1.3 Opportunities in Individual High Growth Markets – Over Time
| | Russia | Turkey | South Africa | UAE or Saudi Arabia | |----------------|--------|--------|--------------|---------------------| | | 2011 | 2012 | 2013 | 2011 | 2012 | 2013 | 2011 | 2012 | 2013 | | Base | 903 | 900 | 950 | 903 | 900 | 950 | 903 | 900 | 950 | | Already in | 17% | 13% | 17% | 16% | 16% | 16% | 22% | 14% | 19% | | Very likely | 5% | 4% | 7% | 6% | 4% | 6% | 5% | 5% | 9% | | Quite likely | 14% | 14% | 16% | 18% | 12% | 17% | 18% | 18% | 16% | | Unlikely | 62% | 67% | 59% | 58% | 66% | 60% | 52% | 61% | 55% | | Don't know | 2% | 1% | 1% | 2% | 2% | 1% | 2% | 2% | 1% |
As seen below, older and larger firms are more likely to already be operating in high growth markets. However, it is not the case that these markets are only targeted by more established firms, as half of firms in the youngest age band (established up to 5 years) and the smallest size band (0-9 employees) are either already doing business in at least one of these areas or feel that it is ‘very likely’ they will enter one in the next 2 years.
Table 10.1.4 Opportunities in High Growth Markets (Summary) – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | | Base | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | Already in | 33% | 41% | 46% | 29% | 38% | 37% | 51% | 60% | 72% | 43% | | Very likely | 22% | 17% | 14% | 16% | 17% | 17% | 16% | 12% | 9% | 16% | | Quite likely | 30% | 21% | 17% | 17% | 23% | 23% | 17% | 7% | 12% | 20% | | Unlikely | 14% | 20% | 22% | 37% | 22% | 23% | 15% | 21% | 7% | 20% | | Don't know | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | The table below provides further analysis by growth objectives. There is little difference in the proportion of firms already doing business in high growth markets by their growth objectives. However, firms planning substantial growth are significantly more likely to claim that it is ‘very likely’ they will enter one or more of these markets in the next 2 years.
Table 10.1.5 Opportunities in High Growth Markets (Summary) – By Growth Objectives & Attitude to Risk
| Growth Objectives | Stay same | Moderate Growth | Substantial Growth | |-------------------|-----------|-----------------|--------------------| | Base | 116 | 486 | 273 | | Already in | 39% | 43% | 41% | | Very likely | 11% | 14% | 25% | | Quite likely | 16% | 21% | 23% | | Unlikely | 32% | 21% | 11% | | Don’t know | 1% | 0% | 0% |
As detailed below, there is evidence that firms tend to enter high growth markets later in their international life-cycle, with those that have been exporting longest significantly more likely to be operating in these markets. It is also the case that the more important overseas sales are to a firm (in terms of contribution to total turnover), the more likely it is to be active in high growth markets.
Table 10.1.6 Opportunities in High Growth Markets (Summary) – By Overseas Experience
| Years Exporting | Exports as % of Turnover | |-----------------|--------------------------| | | 0% | 1-10% | 11-25% | 26-50% | >50% | | 0-2 | | | | | | | 0 | 97 | 117 | 214 | 368 | 351 | | \<2 | 124| 345 | 109 | 107 | 201 | | Total | 201| 66% | 66% | 66% | | | Already in | | | | | | | 0 | 3% | 37% | 21% | 42% | 56% | | \<2 | 5% | 30% | 57% | 66% | 66% | | Total | 66%| 66% | 66% | 66% | | | Very likely | | | | | | | 0 | 41%| 14% | 27% | 16% | 11% | | \<2 | 32%| 13% | 16% | 11% | 14% | | Total | 14%| 14% | 14% | 14% | | | Quite likely | | | | | | | 0 | 38%| 28% | 33% | 20% | 13% | | \<2 | 38%| 23% | 16% | 17% | 10% | | Total | 10%| 10% | 10% | 10% | | | Unlikely | | | | | | | 0 | 17%| 21% | 19% | 22% | 19% | | \<2 | 25%| 34% | 11% | 6% | 9% | | Total | 9% | 9% | 9% | 9% | | | Don’t know | | | | | | | 0 | 0% | 0% | 1% | 0% | 0% | | \<2 | 0% | 0% | 0% | 0% | 0% | | Total | 0% | 0% | 0% | 0% | 0% | The more markets and overseas regions a firm is active in, the more likely it is to be doing business in any of the high growth markets. That said, a significant minority of firms that are doing business in just 1-5 markets or just a single region are already active in high growth markets.
Table 10.1.7 Opportunities in High Growth Markets (Summary) – By Number of Markets & Regions
| Number of Markets | Number of Overseas Regions | |-------------------|---------------------------| | 0 | None | | 1-5 | One | | 6-10 | Two | | >10 | Three | | | Four | | | Five | | Base | 95 | | Already in | 3% | | Very likely | 40% | | Quite likely | 39% | | Unlikely | 17% | | Don’t know | 0% |
IP active firms are more likely to be operating in high growth markets, but there is no significant difference in this respect between innovative and non-innovative firms.
Table 10.1.8 Opportunities in High Growth Markets (Summary) – By Innovation
| Innovative | Yes (alternative) | Yes | No | IP Active | Yes | No | |------------|-------------------|-----|----|-----------|-----|----| | Base | 462 | 689 | 261| 256 | 674 | | Already in | 47% | 44% | 41%| 51% | 40% | | Very likely| 18% | 16% | 17%| 19% | 15% | | Quite likely| 20% | 20% | 20%| 19% | 21% | | Unlikely | 15% | 20% | 21%| 11% | 24% | | Don’t know | 0% | 0% | 0% | 0% | 0% |
As might be expected, ‘born global’ firms (particularly via the alternative, tighter definition) are more likely to be in these markets than other young firms that internationalised at some point after they were established.
Table 10.1.9 Opportunities in High Growth Markets (Summary) – By Born Global & Young, Tech Intensive
| Up to 5 years old | Total | Born global | Born global (alternative) | Young, tech intensive | Over 5 years old | |-------------------|-------|-------------|---------------------------|----------------------|------------------| | Base | 203 | 95 | 34 | 92 | 747 | | Already in | 33% | 45% | 61% | 40% | 45% | | Very likely | 22% | 16% | 15% | 19% | 15% | | Quite likely | 30% | 26% | 18% | 29% | 18% | | Unlikely | 14% | 13% | 6% | 13% | 22% | | Don’t know | 0% | 0% | 0% | 0% | 0% | 10.2 Reasons for Not Doing Business in High Growth Markets
Every firm that indicated that they were unlikely to do business in one or more of the high growth markets was allocated one of these markets at random and asked whether this was because there was little or no demand for their products/services there, or for some other reason. These results have been summarised below (combined across all markets).
Chart 10.2.1 Reasons for Not Considering High Growth Markets
Approaching half of those firms that are not likely to enter one of the high growth markets indicated that this is because they perceive there to be little or no demand for their products and services there.
The table below provides a similar analysis by individual market, and indicates that Turkey and South Africa were the markets most likely to be avoided due to a lack of demand for the firm’s products and services. China, Brazil and Russia were most likely to be discounted for other reasons, which may relate to the perceived difficulties involved (and in the case of China and Russia this would be consistent with other evidence on the risks faced and barriers encountered in these markets, as set out in Sections 11 and 13 of this report).
Table 10.2.1 Reasons for Not Considering High Growth Markets – By Individual Market
| Base: All unlikely to enter selected market | Russia | Turkey | South Africa | UAE | Saudi Arabia | Brazil | Mexico | China | India | |-------------------------------------------|--------|--------|--------------|-----|--------------|--------|--------|-------|-------| | Little or no demand | 34% | 59% | 58% | 50% | 48% | 33% | 45% | 28% | 45% | | Other reason | 62% | 40% | 38% | 47% | 50% | 65% | 54% | 69% | 54% | | Don’t know | 4% | 1% | 4% | 3% | 1% | 2% | 2% | 3% | 2% | As shown below, there are no significant differences between UKTI users and non-users in this respect.
Table 10.2.2 Reasons for Not Considering High Growth Markets - By UKTI Usage
| Base: All unlikely to enter selected market | Total | UKTI Usage | |-------------------------------------------|-------|------------| | | 874 | 273 | | Little or no demand | 44% | 41% | | Other reason | 53% | 57% | | Don’t know | 2% | 2% |
There is also no consistent pattern in this respect by age of firm, and no significant differences by firm size.
Table 10.2.3 Reasons for Not Considering High Growth Markets - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|----------------------------|-----|-----|-------|-------|--------|------|----------| | Up to 5 | | | | | | | | | | 6-10 | | | | | | | | | | Over 10 | | | | | | | | | | Base: All unlikely to enter selected market | 188 | 183 | 503 | 28 | 524 | 552 | 206 | 59 | 52 | 817 | | Little or no demand | 52% | 35% | 46% | 45% | 43% | 43% | 47% | 46% | 40% | 44% | | Other reason | 47% | 62% | 52% | 55% | 54% | 54% | 52% | 49% | 52% | 53% | | Don’t know | 1% | 3% | 3% | 0% | 2% | 2% | 2% | 5% | 7% | 2% |
As shown below, there is also no difference when looking at these reasons by firms’ growth objectives.
Table 10.2.4 Reasons for Not Considering High Growth Markets - By Growth Objectives & Attitude to Risk
| Growth Objectives | Stay same | Mod. Growth | Sub. Growth | |-------------------|-----------|-------------|-------------| | Base: All unlikely to enter selected market | 112 | 449 | 246 | | Little or no demand | 44% | 45% | 46% | | Other reason | 54% | 52% | 52% | | Don’t know | 2% | 3% | 2% | 11. Overseas Business Risks
11.1 Impact of Perceived Risks on Overseas Activity
Firms were read out a list of 6 possible risks when doing business overseas, and asked whether they had been put off from entering any overseas markets in the last 5 years as a result of each one. These results are summarised below.
Chart 11.1.1 Proportion Deterred from Entering an Overseas Market Due to Risk
- Not being paid in full or on time: 43%
- Political or economic instability in that country: 32%
- Not seeing a return on the investment you’d need to make to enter that country: 31%
- Bribery, corruption or organised crime: 28%
- Intellectual property theft: 23%
- Safety or security of your staff: 22%
- None of these: 36%
Overall, around two-thirds (63%) of internationalising firms have been put off from entering a market due to one of the above risks.
All of the individual risks tested have a significant impact on the behaviour of internationalising firms, with at least 22% reporting that they have decided against entering an overseas market because of each one. However, the risk of not being paid (in full or on time) is the most significant deterrent to overseas expansion. As seen below, UKTI users are significantly more likely than non-users to have decided against entering overseas markets because of the risks involved (74% vs. 59%). However, this should not be interpreted as meaning that UKTI users are more risk averse. Instead, it may be a reflection of the fact that UKTI users tend to be more ‘involved’ exporters (i.e. have been exporting longer, operate in more markets) and hence have had more opportunity to encounter these risks. It is also the case that users are significantly more likely to be active in fast growing or emerging markets, where the likelihood of encountering some of these risks may be higher.
Table 11.1.1 Proportion Deterred from Entering an Overseas Market Due to Risk - By UKTI Usage
| Base | Total | UKTI Usage | Non-User | |------|-------|------------|----------| | | 950 | 303 | 647 | | Not being paid in full or on time | 43% | 49% | 40% | | Safety or security of staff | 22% | 30% | 19% | | Political or economic instability | 32% | 40% | 28% | | IP Theft | 23% | 31% | 20% | | Bribery, corruption or organised crime | 28% | 33% | 26% | | Not seeing return on investment | 31% | 37% | 28% | | None of these | 36% | 26% | 41% | | Don't know | 0% | 0% | 1% | | Net: Put off by any risk | 63% | 74% | 59% |
As seen below, younger firms (established within the last 5 years) are least likely to have been put off by any of these risks. There are no clear or consistent differences by size of firm.
Table 11.1.2 Proportion Deterred from Entering an Overseas Market Due to Risk – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-------|--------|------|---------| | Base | | | | | | | | Up to 5 | 203 | 198 | 549 | 28 | 559 | 587 | 227 | 68 | 63 | 882 | | 6-10 | | | | | | | | Over 10 | | | | | | | | Not being paid in full or on time | 39% | 41% | 45% | 29% | 45% | 44% | 42% | 37% | 49% | 43% | | Safety or security of staff | 17% | 27% | 22% | 20% | 22% | 22% | 24% | 15% | 46% | 22% | | Political or economic instability | 28% | 32% | 32% | 11% | 32% | 31% | 33% | 30% | 46% | 32% | | IP Theft | | | | | | | | Bribery, corruption or organised crime | 25% | 26% | 22% | 11% | 25% | 25% | 23% | 13% | 31% | 23% | | Not seeing return on investment | 26% | 34% | 26% | 25% | 29% | 29% | 27% | 22% | 48% | 28% | | None of these | | | | | | | | Don't know | | | | | | | | Net: Put off by any risk | 56% | 67% | 64% | 51% | 64% | 63% | 65% | 59% | 76% | 63% | There is some evidence that the more markets a firm is active in, the more likely they are to have been deterred from entering other markets by the potential risks. However, the proportion put off by the risk of not seeing a return on the investment required is similar, irrespective of the number of markets firms are doing business in. There are no significant differences in the impact of perceived risks by the regions in which firms are operating.
Table 11.1.3 Impact of Perceived Risk on Overseas Activity – By Number of Markets & Regions Doing Business In
| Number of Markets | Regions | Europe | North America | Latin America | M.East / Africa | Asia Pacific | |-------------------|------------------|--------|---------------|---------------|-----------------|--------------| | 0 | Base | 95 | 374 | 176 | 295 | 781 | | 1-5 | Not being paid in full or on time | 40% | 39% | 47% | 48% | 44% | 42% | 41% | 46% | 45% | | 6-10 | Safety or security of staff | 25% | 18% | 25% | 25% | 22% | 20% | 22% | 26% | 23% | | >10 | Political or economic instability | 37% | 25% | 35% | 37% | 31% | 32% | 37% | 34% | 34% | | | IP Theft | 36% | 18% | 25% | 27% | 23% | 25% | 25% | 25% | 29% | | | Bribery, corruption or organised crime | 39% | 23% | 28% | 32% | 27% | 28% | 33% | 31% | 28% | | | Not seeing return on investment | 33% | 31% | 30% | 31% | 31% | 30% | 26% | 32% | 31% | | | None of these | 42% | 44% | 32% | 25% | 35% | 33% | 30% | 30% | 30% | | | Don't know | 0% | 1% | 1% | 0% | 1% | 1% | 1% | 1% | 1% | | | Net: Put off by any risk | 58% | 56% | 68% | 75% | 65% | 66% | 69% | 69% | 69% |
There is some suggestion that firms who have already grown substantially or plan to in the future are more likely to have been put off from doing business in overseas markets due to these risks, but it should be noted that these differences are not statistically significant.
Table 11.1.4 Impact of Perceived Risk on Overseas Activity – By Growth
| Past Growth | Growth Objectives | |-------------|-------------------| | Stayed same | Moderate growth | Substantial growth | Stayed same | Moderate growth | Substantial growth | | Base | 192 | 388 | 172 | 116 | 486 | 273 | | Not being paid in full or on time | 46% | 42% | 40% | 45% | 45% | 43% | | Safety or security of staff | 22% | 25% | 19% | 18% | 23% | 24% | | Political or economic instability | 35% | 30% | 33% | 26% | 33% | 35% | | IP Theft | 20% | 22% | 27% | 18% | 23% | 29% | | Bribery, corruption or organised crime | 30% | 27% | 31% | 21% | 30% | 32% | | Not seeing return on investment | 30% | 29% | 38% | 24% | 32% | 36% | | None of these | 37% | 37% | 30% | 38% | 36% | 31% | | Don't know | 0% | 1% | 0% | 0% | 0% | 1% | | Net: Put off by any risk | 63% | 62% | 70% | 62% | 64% | 68% | 11.2 Risk Perception of Key Markets
11.2.1 Overview
Firms were asked to assess how risky they felt it would be to do business in each of the BRIC markets plus Mexico, and these results are summarised below. Please note that these questions were asked to all firms, irrespective of whether or not they were already doing business in these countries.
Chart 11.2.1 Risk Perception of BRIC Markets – Summary
As demonstrated above, Russia is considered to be the most risky of these markets, with 54% of internationalising firms judging it to be ‘very’ or ‘fairly’ risky. India and Brazil are considered to be the least risky markets, with just 36% perceiving these markets to be ‘very’ or ‘fairly’ risky. 11.2.2 Brazil
As seen below, there is some suggestion that UKTI users view Brazil as being slightly less risky than non-users, although this difference is not statistically significant.
There is a notable difference in perceptions between firms that are currently doing business in Brazil and those that are not, with the former much less likely to view Brazil as a risky proposition. This implies that firms are being put off by their perception of Brazil, when the reality of doing business there may not involve as many risks as they fear. However, we currently have no evidence to confirm whether this is the correct interpretation, and it may simply be that the circumstances of firms operating in Brazil differ from those that are not, leading to different perceptions of, and exposure to, risks.
Table 11.2.2.1 Perceived Risk of Brazil - By UKTI Usage & Whether Doing Business There
| Perceived Risk of Brazil | Total | UKTI Usage | Doing Business in Brazil | |-------------------------|-------|------------|--------------------------| | | Base | UKTI User | Non-User | Yes | No | | Very risky | 950 | 303 | 647 | 111 | 824 | | Fairly risky | 28% | 26% | 29% | 9% | 31% | | Not particularly risky | 32% | 38% | 30% | 49% | 30% | | Not at all risky | 20% | 20% | 20% | 38% | 18% | | Don't know | 13% | 11% | 13% | 2% | 13% |
Unsurprisingly, the lower the perceived risk of Brazil, the more likely the firm is to do business there. Just 5% of firms that judge Brazil to be ‘very risky’ are either already operating there or very likely to do so. However, it should be noted that risk is clearly not the only reason that firms are not doing business in Brazil, with 53% of those that feel it is ‘not at all risky’ still not intending to enter the market. As seen in Section 10.2, a third of firms indicated that they would not consider doing business in Brazil simply because of a (perceived) lack of demand for their products/services there.
Table 11.2.2.2 Likelihood of Doing Business in Brazil - By Perceived Risk
| Perceived Risk of Brazil | Very risky | Fairly risky | Not particularly risky | Not at all risky | |-------------------------|------------|--------------|------------------------|-----------------| | Base | 68 | 266 | 310 | 189 | | Already in | 3% | 3% | 16% | 20% | | Very likely | 2% | 8% | 10% | 11% | | Quite likely | 5% | 12% | 23% | 14% | | Unlikely | 90% | 76% | 50% | 53% | | Don't know | 0% | 0% | 1% | 1% | 11.2.3 Russia
As noted previously, Russia is seen as the highest risk of the BRIC markets. Whilst there is little difference between users and non-users of UKTI in this respect, it is clear that firms that are not doing business in Russia are more negative about the associated risks. It may be that firms are being deterred by a perception that Russia is a high risk market when the reality is more positive. However, there is no evidence to confirm whether this is the correct interpretation, and it may simply be that the circumstances of firms operating in this market differ from those that are not, leading to different perceptions of, and exposure to, risks.
It is also worth noting that many firms that are currently operating in Russia are still conscious of the risks involved, with 38% of this group describing it as very or fairly risky.
Table 11.2.3.1 Perceived Risk of Russia
- By UKTI Usage & Whether Doing Business There
| Perceived Risk of Russia | Total | UKTI Usage | Doing Business in Russia | |-------------------------|-------|------------|--------------------------| | | Base | UKTI User | Non-User | Yes | No | | Very risky | 900 | 189 | 711 | 113 | 778 | | Fairly risky | | 34% | 37% | 33% | 28% | 36% | | Not particularly risky | | 21% | 24% | 20% | 36% | 18% | | Not at all risky | | 16% | 17% | 16% | 25% | 15% | | Don't know | | 8% | 4% | 10% | 1% | 10% |
As expected, firms that do not perceive Russia to be a risky market are more inclined to do business there.
Table 11.2.3.2 Likelihood of Doing Business in Russia
- By Perceived Risk
| Perceived Risk of Russia | Very risky | Fairly risky | Not particularly risky | Not at all risky | |-------------------------|------------|--------------|------------------------|-----------------| | Base | 184 | 331 | 206 | 150 | | Already in | 9% | 14% | 28% | 26% | | Very likely | 4% | 6% | 11% | 10% | | Quite likely | 11% | 18% | 20% | 13% | | Unlikely | 76% | 62% | 39% | 50% | | Don't know | 0% | 1% | 2% | 1% | 11.2.4 India
As with the other BRIC markets, firms currently doing business in India tend to view it as less risky than those not operating there, suggesting that some firms may be put off by a perception of the business environment in India that does not entirely reflect the reality. However, there is no evidence to confirm whether this is the correct interpretation, and it may just be that the circumstances of firms operating in this market differ from those that are not, leading to different perceptions of the risks involved.
There is no difference in the risk perception of India between UKTI users and non-users.
Table 11.2.4.1 Perceived Risk of India - By UKTI Usage & Whether Doing Business There
| Perceived Risk of India | Total | UKTI Usage | Doing Business in India | |-------------------------|-------|------------|-------------------------| | | | UKTI User | Non-User | | Base | 950 | 303 | 647 | | Very risky | 9% | 9% | 9% | | Fairly risky | 26% | 28% | 26% | | Not particularly risky | 35% | 34% | 36% | | Not at all risky | 22% | 24% | 21% | | Don't know | 7% | 5% | 7% |
As seen below, the greater the perceived risk of doing business in India, the less likely firms are to export there.
Table 11.2.4.2 Likelihood of Doing Business in India - By Perceived Risk
| Perceived Risk of India | Very risky | Fairly risky | Not particularly risky | Not at all risky | |-------------------------|------------|--------------|------------------------|------------------| | Base | 84 | 248 | 342 | 213 | | Already in | 8% | 11% | 19% | 30% | | Very likely | 3% | 7% | 10% | 12% | | Quite likely | 15% | 20% | 21% | 17% | | Unlikely | 75% | 62% | 49% | 40% | | Don't know | 0% | 0% | 1% | 1% | 11.2.5 China
Firms that are not doing business in China are more negative about the associated risks, although it should be noted that 28% of firms that are active in China still perceive it as very or fairly risky (but presumably with sufficient rewards to outweigh these risks). It may be that firms not currently selling to China are being put off by a perception that it is a high risk market when the reality is more positive. However, there is no evidence to confirm whether this is the correct interpretation, and it may simply be that the circumstances of firms operating in China differ from those that are not, leading to different perceptions of, and exposure to, risks.
There is no difference in the risk perception of China between UKTI users and non-users.
Table 11.2.5.1 Perceived Risk of China - By UKTI Usage & Whether Doing Business There
| Perceived Risk of China | Total | UKTI Usage | Doing Business in China | |-------------------------|-------|------------|-------------------------| | | Base | UKTI User | Non-User | Yes | No | | Very risky | 13% | 13% | 13% | 7% | 14% | | Fairly risky | 29% | 29% | 28% | 21% | 30% | | Not particularly risky | 28% | 28% | 28% | 25% | 29% | | Not at all risky | 22% | 22% | 23% | 45% | 18% | | Don't know | 8% | 8% | 8% | 2% | 10% |
As was the case with the other BRIC markets, firms that perceive China as a lower risk are more likely to do business there.
Table 11.2.5.2 Likelihood of Doing Business in China - By Perceived Risk
| Perceived Risk of China | Very risky | Fairly risky | Not particularly risky | Not at all risky | |-------------------------|------------|--------------|------------------------|------------------| | Base | 122 | 268 | 267 | 215 | | Already in | 9% | 13% | 15% | 34% | | Very likely | 4% | 7% | 7% | 11% | | Quite likely | 7% | 18% | 23% | 10% | | Unlikely | 78% | 61% | 55% | 44% | | Don't know | 1% | 1% | 0% | 1% | 11.2.6 Mexico
Non-users of UKTI tend to see Mexico as a more risky prospect than users. As with the other markets, firms that are not doing business in Mexico have a much more negative perception of the risks involved. It could be that these firms are being put off by a negative perception of the risks involved, when in fact the reality of doing business there may not involve as many risks as they fear. However, there is no evidence to confirm whether this is the correct interpretation, and it may simply be that the circumstances of firms operating in Mexico differ from those that are not.
Table 11.2.6.1 Perceived Risk of Mexico
- By UKTI Usage & Whether Doing Business There
| Perceived Risk of Mexico | Total | UKTI Usage | Doing Business in Mexico | |--------------------------|-------|------------|--------------------------| | | | UKTI User | Non-User | | | | Yes | No | | Base | 950 | 303 | 647 | | Very risky | 13% | 12% | 13% | | Fairly risky | 33% | 29% | 35% | | Not particularly risky | 24% | 31% | 21% | | Not at all risky | 16% | 17% | 16% | | Don’t know | 13% | 11% | 14% |
As seen below, the greater the perceived risk of doing business in Mexico, the less likely firms are to export there. However, risk is not the only reason that firms are not doing business in Mexico, as almost two-thirds of those that feel it is ‘not at all risky’ still not intending to enter the market. As detailed previously (Section 10.2), almost half of firms indicating they would not do business in Mexico reported that this was down to a perceived lack of demand for their products/services there.
Table 11.2.6.2 Likelihood of Doing Business in Mexico
- By Perceived Risk
| Perceived Risk of Mexico | Very risky | Fairly risky | Not particularly risky | Not at all risky | |--------------------------|------------|--------------|------------------------|-----------------| | Base | 121 | 314 | 235 | 154 | | Already in | 2% | 4% | 13% | 15% | | Very likely | 1% | 3% | 3% | 8% | | Quite likely | 4% | 9% | 18% | 11% | | Unlikely | 92% | 82% | 65% | 64% | | Don’t know | 1% | 1% | 1% | 2% | 12. New Market Entry
12.1 Market Entry Motivations
Firms were asked whether, when they entered their most recent overseas market, this was mainly prompted by an enquiry from a potential customer, the identification that there may be opportunities for their business there or because they already had contacts there. Please note that although a firm’s decision to enter a market could be influenced by a combination of these factors, they were asked to pick the single main reason for first investigating that market.
Chart 12.1.1 Market Entry Motivations (Most Recent Market) - By UKTI Usage
As demonstrated above, most firms were fairly opportunistic when deciding to target their most recent market, with 57% reacting to enquiries from potential customers and 26% prompted by the fact they already had contacts there. Only 17% indicated that the primary reason for considering this market was that they had identified internally that there may be opportunities there.
While this broad pattern is true of both users and non-users, the former are significantly more likely to have decided to enter the market as a result of identifying opportunities there. The table below illustrates that even amongst older firms market entry decisions are largely driven by customer enquiries. However, larger firms tend to be a little less reactive and are more likely to have identified internally that the market represented an opportunity for their business.
Table 12.1.1 Market Entry Motivations (Most Recent Market) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|---------------------------|-----|-----|-------|-------|--------|------|---------| | Up to 5 | | 19 | 488 | 507 | 215 | 66 | 63 | 788 | | 6-10 | | 146 | 186 | 523 | | | | | | Over 10 | | | | | | | | | | Base: All exporting | | | | | | | | | | Enquiry from customer| | 49% | 55% | 59% | 64% | 58% | 58% | 56% | | Identified possible opportunity | | 18% | 20% | 15% | 15% | 15% | 17% | 26% | | Already had contacts there | | 32% | 24% | 25% | 21% | 26% | 26% | 25% | | Don't know | | 1% | 1% | 1% | 0% | 1% | 1% | 2% |
There are no statistically significant differences in market entry motivations by the number of years firms have been doing business overseas or the proportion of their turnover accounted for by overseas sales.
Table 12.1.2 Market Entry Motivations (Most Recent Market) - By Overseas Experience
| Years Exporting | Exports as % of Turnover | \<2 | 2-10 | >10 | 0% | 1-10% | 11-25% | 26-50% | >50% | |-----------------|--------------------------|----|------|-----|----|-------|--------|--------|------| | Base: All exporting | | 119| 368 | 351 | 29 | 345 | 109 | 107 | 201 | | Enquiry from customer | | 53%| 58% | 57% | 44%| 61% | 57% | 55% | 53% | | Identified possible opportunity | | 15%| 17% | 16% | 10%| 15% | 18% | 17% | 19% | | Already had contacts there | | 32%| 24% | 26% | 42%| 23% | 24% | 29% | 28% | | Don't know | | 0% | 1% | 1% | 4% | 1% | 1% | 0% | 1% |
Firms with a small international presence (active in 1-5 markets) are significantly more likely to enter a market as a result of already having contacts there, and less likely to do so as a result of identifying that it offered opportunities for them.
Table 12.1.3 Market Entry Motivations (Most Recent Market) – By Number of Markets & Regions Doing Business In
| Number of Markets | 1-5 | 6-10 | >10 | |-------------------|-----|------|-----| | Base: All exporting | 374 | 176 | 295 | | Enquiry from customer | 57% | 53% | 60% | | Identified possible opportunity | 13% | 22% | 18% | | Already had contacts there | 30% | 23% | 21% | | Don't know | 1% | 2% | 1% | There are few differences in the motivations for entering high growth, EEA or other markets, although firms targeting high growth markets are least likely to indicate that this was because they had existing contacts there.
Table 12.1.4 Market Entry Motivations (Most Recent Market) - By Market Type & Region
| | Market Type | Market Area | |----------------------|-------------|-------------| | | High growth | EEA | Other | Europe | North America | Latin America | M.East & Africa | Asia Pacific | | Base: All exporting | 241 | 344 | 270 | 413 | 82 | 45 | 138 | 173 | | Enquiry from customer| 60% | 58% | 52% | 58% | 45% | 72% | 55% | 59% | | Identified possible opportunity | 18% | 15% | 18% | 15% | 20% | 16% | 17% | 20% | | Already had contacts there | 20% | 26% | 29% | 27% | 35% | 12% | 25% | 21% | | Don’t know | 2% | 1% | 1% | 1% | 0% | 0% | 3% | 0% | 12.2 Time Taken to Make Profit
Firms were asked how long it had taken (or was expected to take) to make a profit in the overseas market that they had entered most recently, taking account of any investment they had needed to make or costs they had incurred.
Chart 12.2.1 Profit Period (Most Recent Market) - By UKTI Usage
As detailed above, half of all internationalising firms indicated that they made a profit immediately when entering their most recent market. It is likely that in most cases this refers to firms that ‘enter’ a market simply by selling a good or service to a customer based there, rather than adopt a more strategic, investment-heavy approach to establishing a presence there. The table below suggests that older firms are more likely to report an immediate profit upon entering a new market. It also appears that the larger the firm is, the longer it takes to see a profit, perhaps reflecting the greater investment that larger firms make when entering new markets.
Table 12.2.1 Profit Period (Most Recent Market)
- By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|---------------------------|-----|-----|-------|-------|--------|------|---------| | Up to 5 | | | | | | | | | | 6-10 | | | | | | | | | | Over 10 | | | | | | | | | | Base: All exporting | 146 | 186 | 523 | 19 | 488 | 507 | 215 | 66 | 63 | 788 | | Immediate | 42% | 49% | 54% | 62% | 54% | 54% | 48% | 33% | 24% | 51% | | Within 6 months | 28% | 18% | 21% | 17% | 21% | 21% | 22% | 22% | 10% | 21% | | 7-12 months | 15% | 13% | 10% | 15% | 10% | 10% | 15% | 12% | 22% | 12% | | 1-2 years | 6% | 9% | 6% | 0% | 6% | 6% | 5% | 19% | 9% | 7% | | 2-3 years | 0% | 3% | 2% | 0% | 2% | 2% | 2% | 5% | 7% | 2% | | More than 3 years | 1% | 0% | 2% | 0% | 1% | 1% | 0% | 5% | 2% | 1% | | Will not make profit| 3% | 3% | 1% | 6% | 2% | 2% | 1% | 2% | 0% | 2% | | Don't know | 6% | 5% | 4% | 0% | 4% | 4% | 7% | 3% | 25% | 5% |
In line with the findings by age of firm, there is evidence that firms with at least 2 years overseas experience are more likely to make a profit immediately on entering a new market. Firms where overseas sales account for over 25% of their turnover typically take longer to see a return from a new market than less intensive exporters.
Table 12.2.2 Profit Period (Most Recent Market)
- By Overseas Experience
| Years Exporting | Exports as % of Turnover | \<2 | 2-10 | >10 | 0% | 1-10% | 11-25% | 26-50% | >50% | |-----------------|--------------------------|----|------|-----|----|-------|--------|--------|------| | Base: All exporting | | 119| 368 | 351 | 29 | 345 | 109 | 107 | 201 | | Immediate | | 38%| 54% | 53% | 44%| 61% | 55% | 39% | 45% | | Within 6 months | | 29%| 18% | 22% | 41%| 15% | 22% | 28% | 23% | | 7-12 months | | 17%| 11% | 11% | 6% | 10% | 10% | 16% | 16% | | 1-2 years | | 7% | 8% | 6% | 0% | 6% | 9% | 11% | 7% | | 2-3 years | | 1% | 3% | 2% | 0% | 2% | 1% | 3% | 3% | | More than 3 years| | 2% | 1% | 1% | 0% | 1% | 1% | 1% | 2% | | Will not make profit | | 2% | 2% | 1% | 5% | 3% | 0% | 0% | 1% | | Don't know | | 3% | 4% | 4% | 4% | 3% | 2% | 1% | 3% | Although the base is low, it is clear that firms that solely make overseas sales through their website make a profit from new market entry much faster than other firms, with 89% doing so within 6 months (and most indicating that it is immediate).
Table 12.2.3 Profit Period (Most Recent Market) - By Web Only Exporters
| | Web Only Exporter | |----------------------|-------------------| | | Yes | No | | **Base: All exporting** | 36 | 819 | | Immediate | 68% | 40% | | Within 6 months | 21% | 21% | | 7-12 months | 3% | 12% | | 1-2 years | 0% | 7% | | 2-3 years | 0% | 2% | | More than 3 years | 0% | 1% | | Will not make profit | 2% | 2% | | Don't know | 5% | 5% |
The table below provides analysis by the mode(s) firms use when doing business overseas. Firms can be included in multiple modes, and it should be noted that they will not necessarily have used all of these modes in their most recent market (which the profit period data relates to). However, in most cases it will be the same mode so should still give an indication of the comparative speed with which firms make profit through each mode.
Table 12.2.4 Profit Period (Most Recent Market) - By Modes Used
| | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |----------------------|----------------|---------------------|--------------------------|---------------| | **Base: All exporting** | 786 | 367 | 111 | 117 | | Immediate | 51% | 42% | 35% | 33% | | Within 6 months | 21% | 25% | 25% | 22% | | 7-12 months | 11% | 15% | 17% | 25% | | 1-2 years | 7% | 8% | 8% | 3% | | 2-3 years | 2% | 2% | 5% | 1% | | More than 3 years | 1% | 1% | 2% | 3% | | Will not make profit | 1% | 2% | 2% | 1% | | Don't know | 5% | 5% | 5% | 11% |
Unsurprisingly, selling direct to overseas customers appears to be the quickest route to making a profit in an overseas market, and more complex and investment heavy approaches such as licensing/franchising or setting up a site tend to require a longer period before becoming profitable. It should be noted that this analysis does not take account of the scale of any profits made and simply reports the time required to see any profit – and it may well be that those modes that take longer to turn a profit may deliver greater returns once this point has been reached. 13. Barriers to Overseas Trade
13.1 Barriers (Summary)
As mentioned previously, for the sections of the interview relating to drivers of market and barriers, firms were asked to focus on just one market, as follows:
- Firms were asked to select the ‘most challenging’ country that they had done business in over the last 5 years
- If they were unable to pick one, they were asked to select the country they had started doing business in ‘most recently’
For full details of the markets selected by users and non-users of UKTI, please refer to Annex A.
Firms were then read out 11 potential barriers that they might have faced when trying to develop their business in the selected market, and asked to indicate the extent to which each one had been a difficulty (using a 5 point scale, where 5 meant it had been ‘extremely difficult’ and 1 meant it had ‘not been at all difficult’). The barriers tested were as follows:
- Dealing with legal or tax regulations or standards in <MARKET>
- Protecting your intellectual property
- Ensuring you get paid and enforcing contracts
- Dealing with customs procedures or paperwork
- Identifying who to make contact with in the first instance or finding a suitable partner
- Establishing an initial dialogue with prospective customers or business partners in <MARKET>
- Building relationships with key influencers or decision-makers
- Obtaining basic information about doing business in <MARKET>
- Finding the necessary management time to devote to doing business in <MARKET>
- Negotiating the culture and language
- Customers in <MARKET> preferring to do business with firms from <MARKET> (rather than with UK firms)
Please note that all analysis in this section of the report is based just on firms that were already doing business overseas. The chart below shows the proportion of firms experiencing each barrier to a significant extent (i.e. scoring 4 or 5 out of 5 for the extent to which it was a difficulty). Details of the full distribution of scores for each individual barrier are shown in Chapter 13.2.
Chart 13.1.1 Individual Barriers
- Dealing with customs procedures & paperwork: 27%
- Dealing with legal or tax regulations & standards: 27%
- Ensuring you get paid & enforcing contracts: 23%
- Negotiating the language & culture: 17%
- Finding the necessary management time to do business there: 15%
- Identifying who to make contact with in the first instance or finding a suitable partner: 15%
- Building relationships with key influencers or decision-makers: 15%
- Customers preferring to do business with firms from their own country: 15%
- Obtaining basic information about doing business in that country: 14%
- Establishing an initial dialogue with prospective customers or partners: 12%
- Protecting your intellectual property: 11%
Base: All exporters (Base) (855)
The most widely experienced barriers all relate to the formalities and bureaucracy of doing business overseas, with 27% of firms reporting significant problems with customs procedures, 27% dealing with legal or tax regulations and 23% ensuring they get paid.
As seen earlier (in Chapter 11.1), 43% of firms had been deterred from entering a new market due to the risk of not being paid, and it is clear from the above analysis that this fear is not without substance. The table below shows further analysis of the barriers encountered by users and non-users of UKTI.
Table 13.1.1 Individual Barriers – By UKTI Usage
| Proportion experiencing significant difficulty (4-5 out of 5) with... | Total | UKTI Usage | |---------------------------------------------------------------|-------|------------| | | | UKTI User | Non-User | | **Base: All exporters** | 855 | 286 | 569 | | Dealing with customs procedures & paperwork | 27% | 31% | 24% | | Dealing with legal or tax regulations & standards | 27% | 30% | 26% | | Ensuring you get paid and enforcing contracts | 23% | 25% | 22% | | Negotiating the language & culture | 17% | 21% | 15% | | Finding the necessary management time to devote to doing business in there | 15% | 20% | 12% | | Identifying who to make contact with in the first instance or finding a suitable partner | 15% | 19% | 13% | | Building relationships with key influencers or decision-makers | 15% | 20% | 13% | | Customer preference for doing business with firms from their own country | 15% | 15% | 15% | | Obtaining basic information about doing business in that country | 14% | 13% | 14% | | Establishing an initial dialogue with prospective customers or partners | 12% | 13% | 11% | | Protecting your intellectual property | 11% | 13% | 10% |
It appears that UKTI users are more likely to experience most of these barriers than non-users. These differences are statistically significant for customs procedures, negotiation language and culture, finding the necessary management time, identifying the first contact and building relationships.
This marked difference between users and non-users suggests that the experience of encountering these difficulties prompts firms to contact UKTI. However, at this stage it should be remembered that respondents were asked to talk about the ‘most challenging’ market that they had done business in, and this is likely to be contributing towards the difference in the barriers experienced by users and non-users. UKTI users tend to have been doing business overseas longer, be operating in more markets and are more likely to be doing business in high growth markets. As such, they would appear to have a higher chance of having encountered a particularly ‘challenging’ market which involves significant barriers. The 11 individual barriers firms were prompted with have been summarised further as outlined below.
| Barriers - Summary | |--------------------| | Firms have been defined as perceiving significant ‘legal & regulatory’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Dealing with legal or tax regulations or standards in <MARKET> | | • Or, Protecting your intellectual property | | • Or, Ensuring you get paid and enforcing contracts | | Firms have been defined as perceiving significant ‘customs’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Dealing with customs procedures or paperwork | | Firms have been defined as perceiving significant ‘contacts’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Identifying who to make contact with in the first instance or finding a suitable partner | | • Or, Establishing an initial dialogue with prospective customers or business partners in <MARKET> | | • Or, Building relationships with key influencers or decision-makers | | Firms have been defined as perceiving significant ‘information’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Obtaining basic information about doing business in <market> | | Firms have been defined as perceiving significant ‘resource’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Finding the necessary management time to devote to doing business in <MARKET> | | Firms have been defined as perceiving significant ‘language & cultural’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Negotiating the language & culture | | Firms have been defined as perceiving significant ‘bias’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Customers in <MARKET> preferring to do business with firms from <MARKET> (rather than UK firms) | The table below shows the proportions of firms scoring against each of these summary categories as well as an analysis of the number of individual barriers experienced to a significant extent.
Table 13.1.2 Summary Barriers – By UKTI Usage
| Types of Barriers | Total | UKTI Usage | |-----------------------------------|-------|------------| | | | UKTI User | Non-User | | Base: All exporters | 855 | 286 | 569 | | Legal & regulatory barriers | 43% | 48% | 40% | | Customs barriers | 27% | 31% | 24% | | Contacts barriers | 25% | 33% | 22% | | Information barriers | 14% | 13% | 14% | | Resource barriers | 15% | 20% | 12% | | Language & cultural barriers | 17% | 21% | 15% | | Bias barriers | 15% | 15% | 15% |
| Number of Barriers | | | |----------------------------------|-------|-----------| | At least one significant individual barrier | 64% | 73% | 59% | | - One | 17% | 16% | 18% | | - Two | 13% | 17% | 12% | | - Three | 12% | 15% | 11% | | - Four or more | 20% | 24% | 18% | | No significant barriers | 37% | 27% | 41% |
As has been the case in past UKTI studies, internationalising firms are most likely to be affected by legal and regulatory barriers, customs barriers and contacts barriers.
Overall, two-thirds (64%) of firms have experienced at least one significant barrier in their selected market (which, it should be remembered, is the ‘most challenging market’ they have done business in). In addition a fifth (20%) have encountered significant difficulties with four or more of the individual barriers, suggesting there is a clear need for some form of external assistance to help firms overcome these barriers and successfully trade in overseas markets.
UKTI users clearly come across more significant barriers than non-users, with 73% experiencing at least one, compared to only 59% of non-users. Users are more likely to encounter most of the barrier types (the exceptions being information barriers and bias barriers, which are equally prevalent among non-users). The table below provides further analysis of the barriers experienced by whether firms were prompted to enter the market as a result of a customer enquiry and whether they already employed someone with experience/contacts in the market when they started doing business there.
Table 13.1.3 Summary Barriers – By Market Entry Context
| Market Entry Context | Received approach or enquiry from potential customer or partner in <MARKET> | Already employed someone with experience of <MARKET> or contact there | Neither | |----------------------|--------------------------------------------------------------------------|---------------------------------------------------------------------|---------| | Base: All exporters | 692 | 320 | 92 |
Types of Barriers
| Types of Barriers | Legal & regulatory barriers | Customs barriers | Contacts barriers | Information barriers | Resource barriers | Language & cultural barriers | Bias barriers | |------------------------------------|-----------------------------|------------------|-------------------|----------------------|-------------------|-----------------------------|---------------| | | 45% | 29% | 24% | 14% | 14% | 17% | 15% | | | 46% | 26% | 25% | 10% | 14% | 14% | 16% | | | 28% | 13% | 27% | 13% | 13% | 19% | 11% |
Number of Barriers
| Number of Barriers | At least one significant individual barrier | One | Two | Three | Four or more | No significant barriers | |--------------------|---------------------------------------------|-----|-----|--------|--------------|-------------------------| | | 65% | 18% | 14% | 13% | 20% | 35% | | | 66% | 20% | 12% | 14% | 20% | 34% | | | 48% | 13% | 10% | 7% | 18% | 52% |
Interestingly firms who entered markets in response to an approach from a potential customer/partner or because they already had staff with experience and/or contacts there were actually more likely to encounter significant barriers than those who did not. This demonstrates that even in cases where the contacts have already been made, firms can still run into problems (e.g. with legal/regulatory issues or customs procedures).
Please note that it is not possible to provide meaningful analysis by market entry mode, as data was only collected on all modes used by the firm when doing business overseas and not the specific mode employed in this particular market. However, the 2012 survey did identify the market-specific mode and analysis by this variable revealed that firms operating overseas sites were most likely to have encountered all of the barrier types and also tended to experience a greater number of barriers. Doing business overseas through contractual arrangements was also associated with a greater incidence of barriers. While it might be expected that larger firms are less likely to experience barriers due to their greater resources (and typically greater overseas experience), in fact the opposite is true and it is firms with less than 50 employees that are least likely to report barriers. It is particularly notable that large firms are considerably more likely to encounter legal and regulatory issues and customs barriers.
There are no major differences by age of firm in terms of the likelihood of encountering barriers or the types of barrier experienced.
Table 13.1.4 Summary Barriers – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|-----|-----|-------|-------|--------|------|---------| | Up to 5 | 6-10 | Over 10 | 0 | 1-9 | Total | 10-49 | 50-249 | 250+ | All SMEs | | Base: All exporters | 146 | 186 | 523 | 19 | 488 | 507 | 215 | 66 | 63 | 788 |
Types of Barriers
- Legal & regulatory: 44% 42% 43% 23% 43% 42% 43% 45% 70% 43%
- Customs: 28% 28% 26% 23% 26% 26% 29% 25% 45% 27%
- Contacts: 26% 26% 25% 17% 23% 23% 28% 37% 33% 25%
- Information: 17% 13% 14% 11% 15% 15% 12% 12% 12% 14%
- Resource: 13% 17% 14% 11% 15% 15% 14% 14% 21% 15%
- Language & cultural: 13% 21% 16% 10% 16% 15% 20% 17% 24% 17%
- Bias: 19% 10% 17% 13% 12% 12% 21% 16% 12% 15%
Number of Barriers
- At least one barrier: 65% 61% 64% 64% 63% 63% 63% 67% 79% 64%
- One: 17% 16% 18% 26% 18% 19% 15% 17% 15% 17%
- Two: 17% 10% 14% 26% 12% 13% 14% 18% 18% 14%
- Three: 9% 12% 13% 11% 12% 12% 13% 12% 13% 12%
- Four or more: 22% 23% 19% 0% 20% 19% 22% 21% 33% 20%
- No significant barriers: 35% 39% 36% 36% 37% 37% 37% 33% 21% 36% There is no evidence that barriers decline as firms become more experienced overseas and in fact the converse is true, as the more markets a firm does business in, the more likely they are to encounter barriers. However, it should be remembered that this data relates to firms’ most challenging market, and experienced exporters are more likely to have encountered more difficult markets.
Table 13.1.5 Summary Barriers – By Overseas Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | | Less than 2 years | 2-10 years | Over 10 years | 1-5 | 6-10 | More than 10 | | Base: All exporters | 119 | 368 | 351 | 374 | 176 | 295 |
Types of Barriers
| Types of Barriers | Less than 2 years | 2-10 years | Over 10 years | 1-5 | 6-10 | More than 10 | |-------------------|-------------------|------------|---------------|-----|------|-------------| | Legal & regulatory | 39% | 42% | 46% | 36% | 40% | 55% | | Customs | 25% | 25% | 29% | 20% | 29% | 34% | | Contacts | 30% | 23% | 27% | 21% | 29% | 29% | | Information | 17% | 14% | 13% | 11% | 16% | 16% | | Resource | 13% | 15% | 15% | 12% | 18% | 17% | | Language & cultural | 13% | 19% | 16% | 12% | 19% | 23% | | Bias | 17% | 15% | 16% | 14% | 15% | 18% |
Number of Barriers
| Number of Barriers | Less than 2 years | 2-10 years | Over 10 years | 1-5 | 6-10 | More than 10 | |--------------------|-------------------|------------|---------------|-----|------|-------------| | At least one barrier | 62% | 61% | 67% | 54% | 64% | 76% | | - One | 17% | 17% | 19% | 17% | 16% | 18% | | - Two | 16% | 11% | 16% | 13% | 11% | 16% | | - Three | 8% | 13% | 14% | 9% | 13% | 17% | | - Four or more | 21% | 21% | 19% | 15% | 25% | 25% | | No significant barriers | 38% | 39% | 33% | 46% | 36% | 24% |
Firms that are active in only one overseas region are significantly less likely to have experienced any barriers.
Table 13.1.6 Summary Barriers – By Number of Regions
| Number of Overseas Regions Active In | One | Two | Three | Four | Five | |-------------------------------------|-----|-----|-------|------|------| | Base: All exporters | 226 | 176 | 172 | 145 | 136 |
Types of Barriers
| Types of Barriers | One | Two | Three | Four | Five | |-------------------|-----|-----|-------|------|------| | Legal & regulatory | 30% | 41% | 49% | 55% | 49% | | Customs | 18% | 25% | 31% | 30% | 35% | | Contacts | 21% | 23% | 28% | 31% | 27% | | Information | 12% | 15% | 15% | 15% | 13% | | Resource | 8% | 14% | 20% | 18% | 19% | | Language & cultural | 9% | 16% | 17% | 25% | 23% | | Bias | 13% | 18% | 16% | 17% | 14% |
Number of Barriers
| Number of Barriers | One | Two | Three | Four | Five | |--------------------|-----|-----|-------|------|------| | At least one barrier | 48% | 65% | 67% | 74% | 73% | | - One | 15% | 19% | 20% | 17% | 17% | | - Two | 12% | 13% | 11% | 14% | 20% | | - Three | 7% | 14% | 11% | 19% | 14% | | - Four or more | 15% | 19% | 25% | 25% | 21% | | No significant barriers | 52% | 35% | 33% | 26% | 27% | As seen below, IP active firms report more barriers to overseas trade, but there is no different between innovative and non-innovative firms.
Table 13.1.7 Summary Barriers – By Innovation
| Types of Barriers | Innovative | IP Active | |-------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | 02 | 422 | 638 | 217 | 233 | 641 |
Types of Barriers
| Types of Barriers | Innovative | IP Active | |-------------------|------------|-----------| | Legal & regulatory| 46% | 44% | 40% | 48% | 41% | | Customs | 30% | 27% | 25% | 28% | 25% | | Contacts | 30% | 26% | 24% | 31% | 23% | | Information | 15% | 14% | 14% | 13% | 14% | | Resource | 16% | 15% | 14% | 19% | 13% | | Language & cultural| 20% | 17% | 15% | 19% | 16% | | Bias | 17% | 15% | 15% | 17% | 15% |
Number of Barriers
| Number of Barriers | Innovative | IP Active | |--------------------|------------|-----------| | At least one barrier| 68% | 64% | 61% | 70% | 61% | | - One | 18% | 17% | 17% | 19% | 17% | | - Two | 13% | 14% | 13% | 16% | 13% | | - Three | 14% | 13% | 11% | 13% | 12% | | - Four or more | 24% | 20% | 20% | 22% | 20% | | No significant barriers | 32% | 36% | 39% | 30% | 39% |
The more ambitious a firm’s growth objectives, the more likely they are to encounter significant barriers. This suggests that growing firms are most in need of external assistance to enable them to fulfil their aspirations.
Table 13.1.8 Summary Barriers – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Innovative | Non innovative | | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | | Base: All exporters | 114 | 443 | 228 | 186 | 452 | 217 |
Types of Barriers
| Types of Barriers | Innovative | Non innovative | |-------------------|------------|----------------| | Legal & regulatory| 42% | 40% | | Customs | 21% | 25% | | Contacts | 17% | 14% | | Information | 7% | 18% | | Resource | 6% | 14% | | Language & cultural| 13% | 14% | | Bias | 13% | 15% |
Number of Barriers
| Number of Barriers | Innovative | Non innovative | |--------------------|------------|----------------| | At least one barrier| 53% | 61% | | - One | 17% | 17% | | - Two | 13% | 13% | | - Three | 10% | 13% | | - Four or more | 14% | 20% | | No significant barriers | 47% | 39% | There is some suggestion that firms classified as ‘born global’ under the tighter definition and young, technology intensive firms are more likely to experience barriers than other young firms, but these differences are not statistically significant.
Table 13.1.9 Summary Barriers – By Born Global & Young, Tech Intensive
| Types of Barriers | Up to 5 years old | Over 5 years old | |-------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | | Base: All exporters | 146 | 95 | 34 | 69 | 709 | | Legal & regulatory | 44% | 44% | 52% | 49% | 43% | | Customs | 28% | 30% | 36% | 31% | 26% | | Contacts | 26% | 26% | 24% | 32% | 25% | | Information | 17% | 19% | 18% | 12% | 13% | | Resource | 13% | 18% | 21% | 10% | 15% | | Language & cultural | 13% | 18% | 15% | 13% | 17% | | Bias | 19% | 21% | 27% | 21% | 15% |
Number of Barriers
| At least one barrier | 65% | 67% | 73% | 72% | 63% | |----------------------|-----|-----|-----|-----|-----| | - One | 17% | 16% | 18% | 21% | 17% | | - Two | 17% | 16% | 15% | 21% | 13% | | - Three | 9% | 8% | 6% | 6% | 13% | | - Four or more | 22% | 27% | 33% | 25% | 20% | | No significant barriers | 35% | 33% | 27% | 28% | 37% |
There is clear evidence that high growth and other markets are associated with greater barriers than those in the European Economic Area. However, it should be noted that half of the firms that were focussing on EEA markets had still experienced at least one significant barrier.
Table 13.1.10 Summary Barriers – By Market Type
| Market | High Growth | EEA | Other | |--------|-------------|-----|-------| | Base: All exporters | 313 | 262 | 280 | | Legal & regulatory | 50% | 30% | 48% | | Customs | 38% | 12% | 29% | | Contacts | 29% | 20% | 26% | | Information | 20% | 9% | 12% | | Resource | 18% | 10% | 16% | | Language & cultural | 25% | 11% | 13% | | Bias | 16% | 15% | 15% |
Number of Barriers
| At least one barrier | 73% | 52% | 65% | |----------------------|-----|-----|-----| | - One | 16% | 19% | 18% | | - Two | 16% | 10% | 14% | | - Three | 14% | 9% | 14% | | - Four or more | 27% | 13% | 19% | | No significant barriers | 27% | 49% | 35% | The table below provides analysis of the barriers experienced by individual market. Please note that it has only been possible to provide this analysis for markets selected by at least 30 respondents.
Table 13.1.11 Summary Barriers – By Individual Market
| Individual Market (selected by 30+ respondents) | China | France | Germany | India | Ireland | Nigeria | Russia | UAE | USA | |-------------------------------------------------|-------|--------|---------|-------|---------|---------|--------|-----|-----| | Base: All exporters | 54 | 45 | 33 | 42 | 45 | 34 | 69 | 32 | 57 | | Types of Barriers | | | | | | | | | | | Legal & regulatory | 56% | 26% | 34% | 54% | 18% | 72% | 57% | 50% | 49% | | Customs | 29% | 14% | 7% | 46% | 6% | 47% | 55% | 19% | 27% | | Contacts | 39% | 35% | 21% | 37% | 15% | 36% | 26% | 24% | 36% | | Information | 22% | 9% | 8% | 0% | 9% | 25% | 39% | 19% | 13% | | Resource | 19% | 12% | 8% | 27% | 14% | 29% | 24% | 7% | 14% | | Language & cultural | 42% | 22% | 13% | 21% | 0% | 18% | 23% | 24% | 2% | | Bias | 21% | 26% | 26% | 4% | 11% | 15% | 19% | 13% | 25% | | Number of Barriers | | | | | | | | | | | At least one barrier | 83% | 61% | 53% | 72% | 38% | 87% | 84% | 63% | 64% | | - One | 23% | 19% | 25% | 17% | 12% | 22% | 12% | 10% | 11% | | - Two | 11% | 9% | 4% | 7% | 10% | 14% | 25% | 19% | 17% | | - Three | 17% | 9% | 13% | 16% | 6% | 7% | 17% | 10% | 21% | | - Four or more | 33% | 24% | 12% | 32% | 10% | 44% | 30% | 24% | 15% | | No sig. barriers | 17% | 39% | 47% | 28% | 62% | 13% | 17% | 37% | 36% |
Based on the above analysis, there are significant variations in the type and extent of barriers experienced in different markets. Nigeria, Russia and China appear to be the most challenging markets, with the vast majority of firms (87%, 84% and 83% respectively) reporting at least one significant barrier. However, even in an established, English-speaking market like the USA the majority of firms still report significant difficulties (64%).
Legal and regulatory issues are very significant issues in Nigeria, with 72% reporting a significant difficulty in these areas (compared to 43% across all markets). Customs procedures are a major problem for firms doing business in Russia, Nigeria and India, with around half of firms reporting issues in this area (compared to 27% overall).
It also appears that many firms are having difficulty finding basic information about the Russian market, with 39% experiencing this barrier (compared to 14% across all markets), suggesting a need for more accessible guidance in this area.
Perhaps unsurprisingly, China was the market most widely cited as involving language and cultural barriers (42%, compared to 17% across all markets).
As in previous years, bias barriers (i.e. where firms in an overseas market demonstrate a preference for doing business with other firms from their own market) are considerably higher than average in France, although they also emerge as an issue in Germany and the USA. As seen below, other than in high growth markets UKTI users are more likely to report significant barriers than non-users. This suggests that the greater incidence of barriers amongst UKTI clients is not simply a reflection of the type of markets they do business in.
Table 13.1.12 Summary Barriers – By Market Type & UKTI Usage
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | Base: All exporters | 143 | 170 | 47 | 215 | 96 | 184 | | Legal & regulatory | 50% | 51% | 26% | 30% | 59% | 43% | | Customs | 34% | 41% | 14% | 11% | 37% | 25% | | Contacts | 34% | 24% | 36% | 17% | 28% | 26% | | Information | 18% | 22% | 6% | 10% | 9% | 13% | | Resource | 22% | 15% | 14% | 9% | 19% | 15% | | Language & cultural | 28% | 24% | 16% | 10% | 13% | 13% | | Bias | 12% | 19% | 25% | 13% | 15% | 15% |
Number of Barriers
| At least one barrier | 73% | 73% | 66% | 48% | 76% | 60% | |----------------------|-----|-----|-----|-----|-----|-----| | - One | 14% | 17% | 25% | 18% | 15% | 19% | | - Two | 17% | 15% | 10% | 10% | 21% | 11% | | - Three | 16% | 12% | 11% | 9% | 17% | 13% | | - Four or more | 26% | 28% | 20% | 12% | 23% | 18% | | No significant barriers | 27% | 27% | 34% | 52% | 24% | 40% |
Similarly, when the analysis compares users and non-users that are active in a similar number of markets, UKTI users are still more likely to report significant barriers (although this difference is only significant for those active in 1-5 markets).
Table 13.1.13 Summary Barriers – By Number of Markets & UKTI Usage
| Types of Barriers | 1-5 markets | 6-10 markets | More than 10 markets | |-------------------|-------------|--------------|----------------------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | Base: All exporters | 72 | 302 | 58 | 118 | 150 | 145 | | Legal & regulatory | 39% | 35% | 42% | 39% | 58% | 52% | | Customs | 32% | 18% | 31% | 28% | 31% | 36% | | Contacts | 28% | 20% | 27% | 30% | 38% | 21% | | Information | 12% | 11% | 14% | 17% | 13% | 19% | | Resource | 18% | 10% | 22% | 16% | 19% | 15% | | Language & cultural | 18% | 10% | 25% | 15% | 21% | 25% | | Bias | 18% | 13% | 13% | 16% | 15% | 21% |
Number of Barriers
| At least one barrier | 65% | 52% | 68% | 62% | 79% | 74% | |----------------------|-----|-----|-----|-----|-----|-----| | - One | 16% | 18% | 16% | 16% | 16% | 20% | | - Two | 16% | 12% | 7% | 13% | 22% | 10% | | - Three | 15% | 8% | 16% | 11% | 16% | 18% | | - Four or more | 19% | 14% | 30% | 22% | 25% | 26% | | No significant barriers | 35% | 48% | 32% | 38% | 21% | 26% | As seen below, there are no clear or consistent differences by age of firm within any of the 3 market types.
Table 13.1.14 Summary Barriers – By Market Type & Age
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | Up to 5 yrs old | 6-10 yrs old | Over 10 yrs old | Up to 5 yrs old | 6-10 yrs old | Over 10 yrs old | | Base: All exporters | 46 | 54 | 213 | 47 | 68 | 147 | 53 | 64 | 163 |
| Number of Barriers | High Growth | EEA | Other | |--------------------|-------------|-----|-------| | At least one barrier | 76% | 78% | 71% | 47% | 49% | 54% | 71% | 60% | 66% | | - One | 20% | 13% | 16% | 9% | 20% | 21% | 22% | 14% | 18% | | - Two | 24% | 19% | 14% | 11% | 4% | 12% | 16% | 10% | 16% | | - Three | 4% | 7% | 17% | 11% | 9% | 9% | 12% | 19% | 12% | | - Four or more | 28% | 39% | 24% | 17% | 16% | 11% | 22% | 18% | 20% | | No significant barriers | 24% | 22% | 29% | 53% | 51% | 46% | 29% | 40% | 34% |
There is no difference in the likelihood of encountering barriers in high growth markets, irrespective of export experience. There is also no clear pattern in this respect in EEA or other markets.
Table 13.1.15 Summary Barriers – By Market Type & Overseas Experience
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | Exp. up to 2 yrs | Exp. 2-10 yrs | Exp. over 10 yrs | Exp. up to 2 yrs | Exp. 2-10 yrs | Exp. over 10 yrs | Exp. up to 2 yrs | Exp. 2-10 yrs | Exp. over 10 yrs | | Base: All exporters | 37 | 111 | 162 | 45 | 126 | 85 | 37 | 131 | 104 |
| Number of Barriers | High Growth | EEA | Other | |--------------------|-------------|-----|-------| | At least one barrier | 74% | 73% | 73% | 47% | 49% | 58% | 71% | 64% | 66% | | - One | 19% | 11% | 18% | 14% | 17% | 24% | 19% | 20% | 14% | | - Two | 17% | 19% | 13% | 11% | 7% | 14% | 23% | 9% | 20% | | - Three | 9% | 13% | 15% | 9% | 9% | 12% | 5% | 16% | 14% | | - Four or more | 29% | 30% | 26% | 14% | 17% | 8% | 24% | 18% | 18% | | No significant barriers | 26% | 27% | 27% | 53% | 50% | 42% | 29% | 36% | 34% | Although the bases are very low and the apparent differences are not statistically significant, there is some indication that large firms with 250+ employees are most likely to encounter barriers in each of the three types of market (particularly legal and regulatory barriers).
Table 13.1.16 Summary Barriers – By Market Type & Size
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | 0-9 | 10-249 | 250+ | SME total | 0-9 | 10-249 | 250+ | SME total | 0-9 | 10-249 | 250+ | SME total | | Base: All exporters | 174 | 105 | 33 | 279 | 162 | 89 | 8 | 251 | 171 | 87 | 22 | 258 |
| Number of Barriers | At least one barrier | One | Two | Three | Four or more | No sig. barriers | |--------------------|----------------------|-----|-----|--------|--------------|-----------------| | High Growth | 73% | 16% | 14% | 27% | 27% | | EEA | 72% | 15% | 14% | 28% | 30% | | Other | 82% | 12% | 15% | 21% | 18% |
At the total level, there are no significant differences between production and service sector firms. However, service sector firms are significantly more likely to encounter legal and regulatory barriers in High Growth markets.
Table 13.1.17 Summary Barriers – By Market Type & Sector
| Types of Barriers | Total | High Growth | EEA | Other | |-------------------|-------|-------------|-----|-------| | | Prod. | Serv. | Prod. | Serv. | Prod. | Serv. | Prod. | Serv. | | Base: All exporters | 318 | 534 | 125 | 187 | 109 | 153 | 84 | 194 |
| Number of Barriers | At least one barrier | One | Two | Three | Four or more | No sig. barriers | |--------------------|----------------------|-----|-----|--------|--------------|-----------------| | Total | 60% | 18% | 13% | 9% | 19% | 40% | | High Growth | 66% | 17% | 14% | 8% | 21% | 34% | | EEA | 67% | 16% | 16% | 7% | 12% | 33% | | Other | 50% | 21% | 15% | 11% | 8% | 37% | 13.2 Barriers (Detailed)
13.2.1 Dealing with Legal or Tax Regulations & Standards (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.1 Dealing with Legal or Tax Regulations & Standards – By UKTI Usage
Dealing with legal or tax regulations and standards is one of the most widespread barriers, with over a quarter of firms (27%) experiencing it to a significant extent (i.e. 4 or 5 out of 5). The majority of internationalising firms (58%) reported at least some difficulties in this respect (i.e. 2-5 out of 5), with this more likely to be the case amongst UKTI users. 13.2.2 Protecting Your Intellectual Property (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.2 Protecting Your Intellectual Property – By UKTI Usage
Only 11% of firms reported a significant problem with protecting their intellectual property, making it the least prevalent of all the individual barriers tested. However, it is clearly still an issue to some degree for a large number of firms, with 38% indicating that they had experienced at least some difficulties in this respect (i.e. 2-5 out of 5). As seen below, firms that hold some form of IP protection are slightly more likely to report significant problems protecting their IP overseas (15% vs. 10%), and this of course may have prompted them to obtain the IP protection in the first place.
Table 13.2.2 Protecting Your Intellectual Property – By IP Activity
| IP Active | Yes | No | |-----------|-----|----| | Base: All exporters | 233 | 602 | | 5 – Extremely difficult | 9% | 4% | | 4 | 6% | 6% | | 3 | 13% | 9% | | 2 | 21% | 15% | | 1 – Not at all difficult | 50% | 62% | | Don’t know | 1% | 4% | | Significant barrier (4-5) | 15% | 10% | 13.2.3 Ensuring You Get Paid & Enforcing Contracts (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.3 Ensuring You Get Paid & Enforcing Contracts – By UKTI Usage
Over half of all internationalising firms (54%) reported at least some difficulty with getting paid and enforcing contracts, with 23% indicating it had been a significant difficulty (i.e. 4-5 out of 5).
It is worth noting that the risk of not being paid is the most likely reason for firms not doing business in a specific market (as seen in Section 11.1), with 43% of all respondents stating they have been put off from entering an overseas market for this reason. 13.2.4 Dealing with Customs Procedures & Paperwork (Customs Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.4 Dealing with Customs Procedures & Paperwork – By UKTI Usage
Over a quarter of internationalising firms (27%) have experienced significant difficulties with customs procedures, making it the most widely reported of the barriers tested. Overall 61% of firms have had at least some problems in this respect (i.e. score 2-5 out of 5), with this proportion increasing to 69% amongst UKTI users. 13.2.5 Identifying Who to Make Contact With in the First Instance (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.5 Identifying Who to Make Contact With in the First Instance – By UKTI Usage
Half of all firms (48%) have experienced some level of difficulty with identifying initial contacts in their selected market, with this rising to 55% amongst UKTI users. This is consistent with other survey data that shows that a need to access suitable contacts is one of the major reasons for using UKTI support. 13.2.6 Establishing an Initial Dialogue with Prospective Customers or Partners (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.6 Establishing an Initial Dialogue with Prospective Customers or Partners – By UKTI Usage
Similar to the “Establishing who to make contact with in the first instance” barrier, half of firms (48%) have experienced some level of difficulty with establishing an initial dialogue with prospective customers or partners in the market in question although only 12% judged this to have been a significant problem (i.e. 4-5 out of 5). 13.2.7 Building Relationships with Key Influencers or Decision Makers (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.7 Building Relationships with Key Influencers or Decision Makers – By UKTI Usage
Overall, 15% of firms reported significant difficulties building relationships with key influencers or decision makers in an overseas market, with 57% indicating that they had experienced at least some problems in this respect (i.e. 2-5 out of 5).
When taken in conjunction with the 48% reporting some level of difficulty establishing who to make contact with in the first instance and the 48% experiencing problems establishing an initial dialogue, this clearly demonstrates that contact identification and facilitation is a major area where internationalising firms can benefit from additional support.
The fact that UKTI users are more likely to report each of these contacts barriers implies that this is a common reason for firms approaching UKTI. 13.2.8 Obtaining Basic Information about Doing Business in the Market (Information Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.8 Obtaining Basic Information about Doing Business in the Market – By UKTI Usage
14% of firms indicated that obtaining basic information about an overseas market had been a significant problem (i.e. 4-5 out of 5), However, it should be noted that over half (56%) reported that they had experienced at least some difficulty in this respect, highlighting the need for an organisation such as UKTI to help fill these knowledge gaps. 13.2.9 Finding the Necessary Management Time to Devote to Doing Business in the Market (Resource Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.9 Finding the Necessary Management Time to Devote to Doing Business in the Market – By UKTI Usage
Lack of time and resources is clearly a hindrance to the development of overseas business for many firms, with 54% indicating that they have had some difficulties in this respect (and 15% claiming that it has been a significant problem). Once again, users of UKTI are more likely to report this barrier, emphasising the importance of UKTI’s role in helping firms target their often limited resources most effectively.
Whilst it might be assumed this would be a particular problem for smaller firms, it is actually reported as a significant problem (score 4 or 5) by larger firms in 21% of cases, compared to 15% for SMEs. 13.2.10 Negotiating the Language & Culture (Language & Cultural Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.10 Negotiating the Language & Culture – By UKTI Usage
Overall, 17% of all internationalising firms have experienced significant problems with language or cultural differences in their most challenging market, with almost half (47%) reporting at least some difficulty in this regard (i.e. 2-5 out of 5). Again, this barrier is more likely to have been experienced by UKTI users. 13.2.11 Customers Preferring to Do Business with Firms from Their Own Market (Bias Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.11 Customers Preferring to Do Business with Firms from Their Own Market (Rather than with UK Firms) – By UKTI Usage
Approaching half of all internationalising firms (47%) claim to have encountered bias issues to at least some extent (i.e. score 2-5 out of 5). There is little difference between UKTI users and non users in this respect, with 15% reporting that it has been a significant barrier (4-5 out of 5) in each case. 14. Importing & Overseas Supply Chains
14.1 Importing Activity
14.1.1 Whether Imported in Last 5 Years
Firms were also asked whether they had bought any goods or services from overseas suppliers in the previous 5 years, and the chart below summarises these results. Please note that firms were not eligible to participate in the research purely on the basis of import activity, and they had to also be involved in one of the outward internationalisation modes to qualify for interview.
Over half of exporters have also imported in the last 5 years, and this is significantly more likely to be the case for UKTI users than non-users. This proportion has been very consistent over time, ranging from 56% to 58% over the last 4 years of the Internationalisation Survey.
UKTI users are more likely to import goods or services, and the same is true of foreign-owned firms.
For the remainder of this section of the report all the analysis is based solely on the 56% of firms that have imported in the last 5 years. 14.1.2 Types of Goods/Services Imported
Firms were asked what types of goods and services they had imported in the last 5 years.
Table 14.1.2 Types of Goods/Services Imported – By UKTI Usage & Company Ownership
| | Total | UKTI Usage | Company Ownership | |--------------------------|-------|------------|-------------------| | | | UKTI User | Non-User | UK | Foreign | | **Base: All importers** | 540 | 200 | 340 | 468 | 71 | | Finished products | 68% | 70% | 67% | 69% | 64% | | Components | 48% | 55% | 44% | 48% | 44% | | Raw materials | 31% | 36% | 28% | 29% | 41% | | Business services | 25% | 22% | 27% | 25% | 23% | | R&D | 11% | 14% | 10% | 11% | 12% | | Don’t know | 2% | 1% | 2% | 2% | 0% |
Two-thirds of importing firms purchase finished products from overseas suppliers, with around half sourcing components.
14.1.3 Where Imported From
Firms were also asked whether these goods and services were provided by a company related to their business (e.g. a parent company, subsidiary, sister company, etc).
Chart 14.1.3 Whether Imported From Related Companies – By UKTI Usage & Company Ownership
Base: All importers (Base, Don’t know) Total (540, 1%), UKTI Users (200, 1%), Non-Users (340, 1%), UK Owned (468, 1%), Foreign Owned (71, 0%) As detailed above, the vast majority of firms (83%) solely import from suppliers that are not related to their company. However, the glaring exception to this is foreign-owned firms, with 68% of this group sourcing goods or services from associated companies (and 29% importing solely from within their wider organisation).
14.1.4 Reasons for Importing
Those firms that had imported in the last 5 years were asked for their reasons for doing so, with the most widely mentioned responses shown below.
Table 14.1.4.1 Reasons For Importing – By UKTI Usage & Company Ownership
| Top Mentions (4%+) | Total | UKTI Usage | Company Ownership | |-------------------|-------|------------|-------------------| | | | UKTI User | Non-User | UK | Foreign | | Base: All importers | 540 | 200 | 340 | 468 | 71 | | To get more competitive prices | 66% | 64% | 67% | 67% | 57% | | No UK supplier of these products/services | 59% | 60% | 58% | 61% | 43% | | To get better quality products or services | 43% | 43% | 44% | 44% | 36% | | No control over procurement (e.g. dictated by parent, customer, etc) | 4% | 2% | 5% | 2% | 17% |
The main drivers of import activity are cost and a perceived lack of UK alternatives, with each of these mentioned by the majority of firms. Product/service quality is also a significant factor, with two-fifths of firms also citing this as a reason for purchasing from overseas suppliers.
At the total level, only a small minority of firms (4%) indicated that they import because they have no choice (i.e. their procurement channels are dictated by another party, such as their parent company or the end customer). However, this proportion rises sharply among foreign-owned firms, to 17%. To shed more light on the perceived lack of availability of (suitable) alternatives in the UK, firms were also asked which of the types of goods/services that they imported they would find it most difficult to find a suitable UK-based alternative for.
Table 14.1.4.2 Goods/Services Most Difficult to Find UK Alternative For – By UKTI Usage & Company Ownership
| | Total | UKTI Usage | Company Ownership | |--------------------------|-------|------------|-------------------| | | | UKTI User | Non-User | UK | Foreign | | Base: All importers | 540 | 200 | 340 | 468 | 71 | | Finished products | 42% | 40% | 43% | 43% | 34% | | Components | 17% | 19% | 16% | 16% | 22% | | Raw materials | 16% | 18% | 15% | 15% | 27% | | Business services | 12% | 11% | 13% | 13% | 6% | | R&D | 4% | 4% | 3% | 4% | 4% | | Other goods/services | 1% | 2% | 0% | 1% | 0% | | None of these/could source UK alternative for all of them | 6% | 6% | 6% | 6% | 4% | | Don’t know | 3% | 2% | 4% | 3% | 4% |
Reflecting the fact that most importers were sourcing finished products from overseas, this is the type of good that was most commonly identified as being difficult to find a suitable UK alternative for.
Broadly similar proportions of firms felt that components, raw materials and business services were the most difficult type of good/service to find a suitable alternative for from a UK supplier. 14.1.5 Import Proportion (% of all Purchases)
Importing firms were asked to estimate the proportion of all their purchases (in cost terms) that were sourced from overseas supplier.
Chart 14.1.5 Proportion of Total Purchases Sourced From Overseas Suppliers – By UKTI Usage & Company Ownership
As detailed above, a third of firms are very substantial importers, sourcing over 50% of their goods or services from overseas suppliers. This is more likely to be the case among foreign-owned firms, half of whom import the majority of their purchases. Firms also asked whether the proportion of their total purchases accounted for by imports had changed over the last 3 years, and whether they expected it to change over the next 3 years.
Table 14.1.5.1 Changes in Import Proportion Over Time – By UKTI Usage & Company Ownership
| | Total | UKTI Usage | Company Ownership | |----------------------|-------|------------|-------------------| | | | UKTI User | Non-User | UK | Foreign | | Base: All importers | 540 | 200 | 340 | 468 | 71 | | Last 3 years - Change in % of purchases accounted for by imports | | | | | | | Increased | 37% | 38% | 37% | 37% | 38% | | Stayed same | 51% | 54% | 49% | 51% | 51% | | Decreased | 10% | 7% | 12% | 11% | 9% | | Don't know | 2% | 1% | 2% | 2% | 2% | | Next 3 years – Anticipated change in % of purchases accounted for by imports | | | | | | | Increase | 36% | 35% | 36% | 35% | 43% | | Stay same | 52% | 54% | 51% | 53% | 41% | | Decrease | 9% | 8% | 9% | 8% | 13% | | Don't know | 4% | 4% | 4% | 4% | 4% |
As seen above, imports appear to have grown in importance over the past 3 years and are expected to increase further over the next 3 years. There are no notable differences by UKTI usage or company ownership in this respect.
The table below provides further analysis of the change in the import proportion by the current proportion of firms’ purchase that are accounted for by imports.
Table 14.1.5.2 Changes in Import Proportion Over Time – By Current Import Proportion
| | Total | Current Import Proportion (% of all purchases) | |----------------------|-------|-----------------------------------------------| | | | 1-10% | 11-20% | 21-50% | >50% | | Base: All importers | 540 | 200 | 54 | 95 | 164 | | Last 3 years - Change in % of purchases accounted for by imports | | | | | | | Increased | 37% | 26% | 53% | 46% | 41% | | Stayed same | 51% | 61% | 40% | 38% | 50% | | Decreased | 10% | 12% | 7% | 16% | 7% | | Don't know | 2% | 0% | 0% | 0% | 1% | | Next 3 years – Anticipated change in % of purchases accounted for by imports | | | | | | | Increase | 36% | 27% | 42% | 45% | 39% | | Stay same | 52% | 63% | 41% | 46% | 47% | | Decrease | 9% | 7% | 13% | 5% | 12% | | Don't know | 4% | 2% | 4% | 3% | 2% |
It appears that the overall increase in import proportions is not simply a trend towards the mean (i.e. lower-level importers doing more), but is instead driven by slightly larger importers (who already import over 10% of their purchases) buying more from overseas. 14.2 Importing Decision-Making & Supply Chain Relationships (Qualitative)
14.2.1 Background
Purpose & Objectives of Qualitative Research
A small stage of qualitative research was conducted after completion of the main quantitative Internationalisation Survey. The purpose of this stage was to explore the following two broad issues in further detail:
1. How firms make decisions about purchased inputs in general and specifically importing. What are the factors driving purchase and import decision-making? To what extent do firms have formal policies in place regarding importing?
2. The nature of firms' relationships with other members of supply chains. To what extent do they form deep and lasting linkages with others in the chain, and what are the benefits of doing so?
Methodology & Sample
We conducted 10 qualitative depth interviews by telephone. Each interview lasted approximately 30 – 45 minutes, depending on the time each firm had available and the level of detail of their responses.
The sample consisted of firms that had taken part in the main quantitative survey and agreed to be re-contacted for further UKTI research. To be eligible for this study, firms needed to be both importers and exporters of goods or services. We interviewed a mix in terms of company ownership as follows:
- UK owned: 5 interviews
- Foreign-owned: 5 interviews
We targeted more involved importers who indicated that imports account for more than 50% of their total purchases. We also included a mix of firms according to their size, sector and overseas experience.
14.2.2 Doing Business in the UK
Profile of Foreign-Owned Firms
This qualitative sample included five foreign-owned firms. Of these, two were involved in the production of physical goods and two with the distribution of goods and/or the provision of specialist services to support the sale of products or systems. Specific business activities included producers of tooling equipment, computer peripherals and consumables, plastic sleeve products and domestic boilers.
The UK arms of these companies reported a range of different activities and roles within their parent companies' overall structures and strategies.
- Two firms described large, multi-functional UK operations. They were engaged in manufacture (or assembly), sales, R&D and after sales service activities. In both cases, the firms explained that their UK operations focused on a particular product line or group of products which other sites around the world were not producing (to the same extent).
“The UK deals with a particular type of xxxx. The sales in that area are all driven out of the UK office. It has just built up that way over the years. Sales in that area are doing very well at the moment.” (Foreign-owned)
- The remaining three firms were primarily involved with reselling items, or derivations of items produced by their parent companies. However, the nature of their activity varied to some extent. One provided added value processes and services to their parent company’s core product range by combining various individual parts. The others were essentially importing and exporting completed products.
Two firms explained that they purchased almost exclusively from their parent or related companies. These firms were involved in re-selling whole products or repackaging/combining products for resale to the UK and European markets.
Three firms were not tied to purchasing from related companies, although two of them did so for some inputs. These firms purchased a range of inputs, from raw materials such as rubber through to research and analytical services from consultants.
Reasons for Choosing the UK
The foreign owned firms within our sample reported a range of different motivations for choosing to do business in the UK. With such a limited sample size, it is not possible to draw overall conclusions, but the following broad factors emerge as initial motivations for investing in the UK:
- Desire to expand in terms of turnover and global coverage: For two firms, opening offices in the UK (through greenfield investment or acquisition) enabled them to implement a strategy of global expansion and increase of market share. The UK was selected as a location due to the availability of suitable talent, the ease of doing business (i.e. lack of language barriers) or the location of the UK as a potential ‘hub’ for further expansion.
“It was all about finding a suitable hub, with suitable talent. The UK has become a springboard for everything that is not US. We don’t have subsidiaries anywhere else, just distributors in a number of markets.” (Foreign-owned)
- Attraction of the UK as a market: Two firms were directly motivated by a desire to be in the UK market for their particular goods or services. They explained that the UK represented a large and potentially lucrative market for them. In these cases, the firms had initially built relationships with UK-owned distributors/re-sellers which they had subsequently acquired.
“We were originally a re-seller for xxx. We had been their exclusive agent for a while and then about ten years ago they bought us.” (Foreign-owned) • **Diversification**: One firm explained that they had entered the UK market after capitalising on an opportunity to expand into a new sector. They had acquired a UK firm in order to achieve this. This was described as a somewhat reactive step, as expansion into this area had not necessarily been planned. Rather, the firm became aware of the opportunity to make the acquisition and felt that it represented a chance of entering a large and lucrative market by meeting a clear, niche requirement.
“We have been here since 2006. The UK is an important market, but we did not think we could really challenge the competition. Then an opportunity came along to acquire a company. It was a new sector for us.” (Foreign-owned)
14.2.3 Supplier Choice & Import Decision-Making
**Factors Affecting Supplier Choice**
Firms described a range of factors affecting their decision-making in relation to their suppliers. These factors differed from firm to firm, depending to some extent on their size, sector and ownership. However, they also varied within firms, depending on the type of input required.
Some firms reported multiple supply chains reflecting the range of goods they sold. The decision-making relating to these different products or services was affected by the availability of the inputs, demand for them (or the products and services which they related to) and the overall importance of them to the business as a whole.
“We sell a lot of different things, so there are a great many supply chains. Some suppliers are much more important than others though. It’s the 80-20 rule.” (UK-owned)
Firms generally described a combination of factors driving their decision-making. They explained a need to weigh-up the various pros and cons of each potential supplier, as well as the potential benefits of loyalty vs. shopping around.
Most firms in the sample described loyalty to at least one of their core suppliers. They described the benefits of building lasting relationships with suppliers (discussed in more detail below) and therefore acknowledged that historic behaviour and habit play a role in decision-making to some extent. While a cheaper option may be considered beneficial, the cost savings need to be considerable before some firms consider switching suppliers to take advantage.
However, in some circumstances firms described a willingness or even necessity to shop around as much as possible. When sourcing basic components or raw materials, achieving the best price possible was sometimes only considered viable by constantly reviewing suppliers and negotiating on price for each transaction.
“Our decision-making is really dynamic to reflect how price sensitive the product is. The big factors we consider are exchange rate and the cost of bringing materials in from certain markets. We are playing the commodities market.” (UK-owned) It is possible to identify the primary factors which firms most commonly consider important in the supplier decision-making process. The process is generally pragmatic, and in many cases characterised by the perception that there is a limited choice of suppliers who are able to meet certain ‘must have’ criteria relating to the quality and suitability of inputs. Firms reported particular quality standards for products, components or services which were either determined by their own customers, themselves (based on experience) or in some cases official accreditation or certification bodies (e.g. for food and technical production).
“Our main inputs are research and data really...we go wherever we find the best providers of the services we need for a particular project and client. We avoid agencies and would rather use individual contractors who we can trust. Usually we find people by networking.” (UK-owned)
“We really have a very limited choice of possible suppliers. Traceability is absolutely key for us and our customers. There is a finite pool of accredited and certified suppliers.” (Foreign-owned)
Firms generally agreed that in order to meet these minimum standards for their purchased products or services, the pool of potential suppliers was limited to some extent. Furthermore, they explained the importance of meeting demand in terms of volume. They considered availability of inputs in the volumes required as a critical factor. Some firms explained that they were only able to meet their volume requirements by using multiple suppliers for the same raw materials (switching between them regularly or doubling up suppliers). Others explained that they adopted dual sourcing policies to provide a ‘back-up’ provider, should their first choice supplier be unable to meet their requirements.
“We have a low-cost country sourcing policy. But we will always dual source from a western provider to pick up any shortfall. We need to make sure that the products are available when we need them.” (Foreign-owned)
Often, firms explained that these critical factors of quality and availability were more important than price, and that they were willing to pay a little more to get the quality they needed or that their customers expected. However, when selecting from the pool of suitable suppliers (i.e. those that meet the quality/availability criteria), cost is nearly always the key factor driving decisions. Many firms explained that they are motivated by a need to increase their margins as much as possible, and that minimising the cost of inputs is a crucial means of achieving this in the current economic climate.
Some firms explained that they are willing to compromise on other factors to achieve a lower price. For example, while high quality service (e.g. account management, communications, relationship building) were often considered important, firms purchasing components, raw materials or basic completed products (not requiring high levels of technical support) described a willingness to forfeit these to an extent for a lower overall price.
“We certainly have a preference for partnership with our suppliers, but the reality of business survival is such that we will basically always chase the money.” (UK-owned) While certain aspects of ‘service’ (as outlined above) were described as ‘nice to have’ factors, others were often considered more crucial. Speed of delivery was often described as key. Firms were typically not willing to pay less for a product if its delivery time was likely to be outside of their requirements, or if a supplier was known to be late with deliveries. Similarly, firms described the importance of flexibility and a willingness on the part of suppliers to make exceptions for them or go the extra mile to deliver on a request quickly and/or within a certain price constraint. Firms often reported greater flexibility and willingness to ‘go the extra mile’ among their regular suppliers. This is explored in more detail in Section 14.2.5.
Country of origin was rarely described as a factor in itself when selecting suppliers. However, some firms explained that they equated certain markets with certain characteristics in terms of suppliers, such as lower price (e.g. China) or better/best quality. Furthermore, some foreign-owned firms were limited to purchasing many core inputs from their parent companies, and therefore from their country of origin.
“We just source things from wherever we can get it really. We don’t think about the market as such.” (UK-owned)
14.2.4 Approach to Importing
All firms within the sample sourced at least 50% of their purchases from overseas suppliers. In some cases, the proportion was as high as 100% (some foreign owned firms), while others reported a greater mix.
When discussing the reasons for importing, firms usually described a lack of any viable option to do otherwise. Most firms described an informal approach to their consideration and thinking around country of origin, or indeed, no conscious decision-making on the matter at all. They explained that they tended to purchase from whichever markets were able to meet their key selection criteria, as outlined above, and that this had increasingly meant looking to overseas markets.
Despite the lack of a formal policy on importing, some UK-owned firms described an underlying intention or preference to ‘buy British’ if at all possible. In most cases this was due to a simple sense of duty or national loyalty, and awareness that the economy (and consequently themselves and their business) would benefit from UK firms in general increasing sales.
“We don’t really consider this too much. I guess we would try to source from the UK if we can…it’s just the right thing to do really.” (UK-owned)
However, many noted that the supply of particular products, components or raw materials had dried up in the UK in recent years, or that the price demanded by UK suppliers was simply prohibitive compared with those offered by their competitors overseas.
“Over the years, our ability to build the products ourselves has sort of diminished really. The tools and manufacturing equipment are no longer available...the market has sort of forced itself overseas.” (UK-owned)
When discussing the underlying preference to buy British, some firms explained that they try to complement their importing activity with at least some purchases from UK suppliers. One firm explained that while large volume purchases of certain components had been switched to a Chinese supplier, they maintained long term relationships with certain key UK suppliers. They noted that by doing so, they were able to access better customer service and flexibility of delivery and price terms.
Others noted that they would always look to source inputs from the UK in the first instance in order to avoid the ‘hassle’ associated with importing from overseas and to minimise their risks. They were concerned with slow delivery or a failure to deliver from overseas suppliers with whom they had limited experience. They also wanted to avoid price fluctuations based on changes in currency exchange rates.
“In some instances we will be a bit more loyal to a UK supplier, but that is mainly to avoid currency risk, or sometimes because if we deal with UK firms we can get better terms.” (UK-owned)
Only a small minority of firms in our sample reported more formal approaches or policies regarding importing. The most common circumstance mentioned was among foreign-owned firms that had policies in place to purchase from other companies within their group or from their parent company. In these cases, the primary driver for importing was to keep revenue within the business. While firms generally felt that this policy made sense (or that no other course of action was feasible), one firm felt that the rigid stance adopted by their overseas parent company resulted in them losing sales in the UK because customers demanded different products.
“Sometimes I just ignore what head office says. If a customer really needs a certain product and they can’t provide it, I’ll go elsewhere...but I’m really not supposed to do that.” (Foreign-owned) Two firms reported formal strategic planning regarding import activity. While their specific motivations and approaches differed, both were driven by a need to keep costs down and by the reduction in available inputs from UK suppliers.
- One reported a ‘low cost country’ sourcing policy. After studying the range of available suppliers of components they had concluded that China provided the best option in terms of cost. However, they added that they also dual sourced from European and UK suppliers to mitigate against any potential delivery shortfall from their Chinese supplier, whom they felt had the potential to be unreliable.
- One explained that they had made a strategic decision to cease their in-house manufacturing operations and source components and products from overseas instead. They explained that this decision was made as a result of the increased costs associated with sourcing raw materials and the need to keep costs to a minimum in order to remain competitive.
14.2.5 Supply Chain Relationships
Benefits of Building Long-Lasting & Strong Linkages with Supply Chains
Generally, firms recognised the potential benefits of building long-lasting and strong linkages with other companies in supply chains. While the specific benefits reported varied to some extent, it is possible to identify a number of universally recognised benefits, which can be broadly categorised as either:
- hard financial benefits; or
- soft, indirect benefits.
These are explored in more detail below.
Hard financial benefits
When considering strong relationships with their suppliers or customers, firms described a number of commercial benefits. Firstly, they noted that longer standing relationships can lead to a recognition of loyalty from their suppliers. This can in turn deliver lower prices (either for higher volume purchases or because suppliers are more willing to offer special one-off prices and negotiate with loyal customers).
“We have been working with one particular supplier for over twenty years. It is a great relationship. It’s mutually beneficial. We get discounts and they are flexible to work with.” (UK-owned)
Firms also described direct financial benefits associated with building strong and lasting relationships with customers. The most common and basic of these was the ability to secure more business. There was agreement that by simply demonstrating a level of interest and offering a degree of flexibility and a willingness to add value, customers were more likely return, increase the scale and scope of orders/projects and recommend the firm to others. Beyond these direct benefits of increased sales and better prices, firms explained that strong relationships with customers or suppliers enabled them to negotiate more favourable payment or delivery terms. Many described a degree of interdependency between themselves and others in the supply chain, whereby they realised that if they treated others well (demonstrating a willingness to be flexible and helpful) they would be able to ‘call in the favour’ in return at some point in the future.
“You build up trust and good will. The suppliers we know well will help us out if we have stock issues by really pulling out all the stops on a delivery. Or they might be willing to wait for payment on larger orders.” (Foreign-owned)
Some firms also noted that they were able to strike exclusive deals with suppliers or customers once they had built a level of trust and mutual respect. They explained that they were able to negotiate because they had proved themselves to be strong and commercially suitable through their on-going relationships.
Firms report these financial benefits when dealing with both domestic and international customers. However, some noted that exporting has widened their customer base and led to even greater increases in sales due to repeat orders and recommendation than would have been the case had they only been selling to the UK market.
Soft or indirect benefits Firms also described benefits associated with building strong and lasting relationships which were less tangible and measureable. These ‘softer’ benefits often contributed indirectly to increased sales, better prices or more suitable purchased inputs. However, they were also considered important in themselves as a means of facilitating more successful and efficient trading overall.
A number of firms welcomed the ability to work in partnership with either their suppliers or customers. They explained that by cooperating on the development of new products and services they were able to approach bigger clients or clients in new or previously un-tapped sectors. Some firms explained that they formed formal partnerships with their direct customers to develop service or product ‘packages’ for customers further down the supply chain. In these instances, both partnering firms benefited from an ability to service customers they would otherwise have been unable to.
“We work in close partnership with our customers, to the point where we are pretty much their public face. We would not be able to work directly with the kinds of brands they work with, and without us, they would not be able to either.” (UK-owned)
Firms often explained that working in partnership was reliant on them gaining a better understanding of their suppliers’ capabilities and their customers' needs and requirements (and those of their customers’ customers). Even those who did not report true partnership working appreciated that closer relationships enabled them to gain greater understanding and therefore adapt their own offer accordingly. At the simplest level, greater understanding of customers’ needs and the existing services provided was said to enable firms to deliver consistently against expectations and avoid disappointing their customers. Gaining useful feedback and insight into needs was considered an important basic requirement of relationship building.
“We take time to visit customers and call them as much as possible. It is vital that we understand what they need so that we can develop new products to suit them.” (UK-owned)
Firms also described how gaining a better understanding of their customer’s needs enables them to develop or introduce new products/services or variations on existing ones. This clearly has potential to deliver financial benefits which go beyond increasing sales to the customer in question. Some firms explained that they had developed new services or products which had enhanced their overall portfolio and increased sales in general.
When specifically considering international customers and suppliers, firms explained that building strong relationships enabled them to gain an understanding of potentially new and different needs and requirements, some of which may challenge their existing approach to production or service delivery. Some noted that exposure to new overseas customers has helped them improve their offerings as a result.
Firms also noted that stronger relationships enabled them to gain a better understanding of their suppliers’ capabilities and the scope of their offers. Some explained that by understanding what their suppliers were developing and the potential benefits of this, they were able to consider new solutions to their own clients’ needs or new applications which may open up opportunities in new markets or sectors.
“We are always looking to understand what new formulations of materials they are developing. We can then find applications for them, by our own understanding of our customers and the wider market.” (UK-owned)
As well as gaining knowledge about their own specific customers or suppliers, firms also noted that building stronger relationships with others in the supply chain can increase and improve their understanding of the sector as a whole, and of particular overseas markets. One firm of consultants who work in close collaboration with clients explained how each new project provided them with new information and experience in their chosen sectors of expertise. This in turn enabled them to talk with greater credibility and confidence to prospective clients in the same sector.
“We don’t undermine client confidentiality, but each project gives us more of an understanding of the relevant sector. That is always useful when talking to new clients. It helps us have intelligent conversations.” (UK-owned) Other firms explained that by visiting customers and/or suppliers in overseas markets, they were able to experience first-hand the market conditions, factors driving decision-making and in one case different approaches to working. One firm (smaller, UK-owned) described being introduced to an alternative distribution model when visiting an overseas customer and discussing new opportunities. They adopted this approach themselves to positive effect, both in terms of enabling them to work with new customers in the market, and the profitability of their activity.
Realising benefits
Relationships within the supply chain can be considered in terms of their length and ‘depth’. Firms described building up relationships over time, often due to habit or a sense of loyalty to a particular supplier. They also described a reliance on certain suppliers whom they trusted to deliver on quality and service. Firms agreed that building long term relationships often resulted in commercial and functional benefits for themselves and the suppliers/customers in question (e.g. stability of prices, flexibility and speed of delivery).
However, as illustrated in the figure below, dealing with a supplier or customer for many years may not always indicate a deep or rich relationship. Highly transactional long term relationships are not uncommon, and do not yield the same ‘softer’ benefits as deeper relationships which involve closer personal relationships between individuals such as face-to-face visits, regular telephone conversations and formal/informal partnering on projects or in general.
Relationships which are both long-term and deeper are likely to deliver the most benefits to firms. In general, it is also likely that the longer relationships go on, the deeper they become. However, by forging deep relationships quickly, the softer benefits identified above can be realised sooner.
Figure 14.2.5.1 The Benefits of Longer & Deeper Relationships Barriers to Building Long-Lasting & Strong Linkages with Supply Chains
Firms’ ability and desire to recognise the benefits set out above vary, especially when considering international supply chains. Some firms feel more able to build relationships than other (often smaller) firms. The main barriers to building deep relationships with supply chain partners were described as follows:
- **Lack of resources:** Some firms explained that they did not have the personnel or the spare cash to send their staff to visit their customers or suppliers as often as they would like to. This barrier exists in relation to both the domestic and overseas markets, but is clearly more pronounced in relation to the latter. The capital costs associated with overseas travel are more pronounced than travel within the UK, and staff are required to be out of the office and diverted from their core activities for even longer. Smaller firms are often not able to employ staff with a specific remit to visit customers or suppliers.
- **Language barriers:** While the physical barriers associated with visiting partners face-to-face can be overcome to some extent through use of audio and visual conferencing technology, firms noted that forging deep and nuanced relationships with overseas suppliers and customers can also be impeded by language and cultural barriers. Some explained that they had much stronger relationships with UK partners because they were simply able to better relate to the individuals involved and build strong personal connections.
“We would like to have strong relationships with overseas suppliers, but it just isn’t as easy. You can’t quite speak to them in the same way.” (UK-owned)
- **Attitudes of partners / potential suppliers:** One firm explained that their overseas suppliers (notably in China) tended to adopt a more ‘hard-edged’ and transactional attitude to doing business than their UK counterparts. They explained that the overseas supplier was highly focused on increasing sales and pursued this quite aggressively, with less time spent understanding needs, discussing quality or negotiating on terms.
“The Chinese are pretty cut-throat really.” (UK-owned)
- **Constraints of parent company:** One foreign-owned firm explained that they were forbidden by their parent company from working closely with any other suppliers. They felt that this prevented them from gaining not only additional sales by meeting their potential customers’ needs, but also a deeper understanding of the market and competitive landscape in general.
As well as barriers which prevent deep relationships forming, some firms did not feel it appropriate or necessary to build such relationships due to the nature of their business. This variation in perceived need is most stark in relation to firms’ attitude towards building relationships with suppliers, rather than customers. Some firms explained that they felt it was the responsibility of suppliers to engage with them and, if they did not do so, run the risk of losing their business. Others simply felt that they had nothing to gain from increasing the frequency or intensity of contact with suppliers as they were confident that they were already getting the best possible service and terms. “It just isn’t really necessary. We are not going to really get much from it. There is plenty of competition out there. If we want a better price, we can find one.” (Foreign-owned)
Relationships with Customers’ Customers & Suppliers’ Suppliers
Firms are often a single link in a longer supply chain. This study sought to explore the degree to which they forged relationships with others further up and down the chain, and (where relevant) the benefits associated with doing so. The figure below illustrates that overall, linkages beyond direct customers and suppliers tend not to be as deep, strong or indeed common.
Figure 14.2.5.2 The Relative Strength of Supply Chain Relationships
Customers’ customers
Relationships were not commonly reported with customers’ customers or ‘end-users’ within our sample. A number of firms explained that it was simply not necessary or appropriate to do so (an issue explored in more detail in subsequent sections).
Many firms explained that contact with their customers’ customers was usually infrequent and limited to dealing with end-customer complaints or technical questions which their direct customer was unable to deal with. These firms (often manufacturers) noted that they needed to be available to provide expertise when needed, but that this was not expected in a ‘business as usual’ scenario.
“If an end client has a problem and it looks like we are the only ones who can address it, we will go and meet them or visit the site. But generally we don’t get involved.” (Foreign-owned) However, some service delivery firms such as consultants and technical service providers described a different scenario. They explained that forging strong relationships with their customers' customers was essential for them to be able to deliver a high quality service. In one case, the firm explained that they effectively appeared to be part of their customers' full time staff in the eyes of the end customer. Others explained that they worked in close collaboration with their direct customers to develop solutions for the end customer, and that this therefore resulted in an open approach to communication between all parties.
**Suppliers' suppliers**
Strong or deep relationships with suppliers' suppliers were less common than with customers' customers within the sample. In the majority of cases, firms reported no contact at all. The reasons for this are described in the 'barriers' section below.
A minority of firms reported some interaction with their suppliers' suppliers. However, this was limited to somewhat formalised communication often in the form of official quality audits in order to comply with quality system and accreditation requirements. These interactions were sometimes described as being relatively frequent, and involved some dialogue pertaining to the continued improvement of product quality. However, the individuals involved with monitoring quality were not necessarily the same people responsible for making strategic purchase decisions, or with responsibility for owning the relationship with suppliers in an overall sense.
“We have a really strict auditing process in place, and I know members of the quality team visit lots of firms, including the raw ingredients providers. But that is quite separate from our department, we don’t get involved.” (UK-owned)
**Benefits of Building Strong Relationships with Customers' Customers & Suppliers' Suppliers**
Those firms who had done so reported certain benefits of building long-lasting and strong linkages with either their customers' customers or their suppliers' suppliers. While the specific benefits reported varied to some extent, it is possible to identify a number of universally recognised advantages as follows:
- **Even greater understanding of sector needs**: Firms explained that by meeting end customers directly (especially in person at their premises) they are better able to understand the details and subtleties of their needs. They noted that their direct customers were not always completely aware of their own capabilities, or how they might be applied as solutions to the end users' challenges. By spending time with end users, they are able to observe how they operate and identify potential improvements or enhancements. At a less tangible level, firms also welcomed the opportunity to speak directly to end users in order to gain a better general understanding of trends in the market or possible areas for future development.
- **Ability to provide a better service**: As well as gaining insight to assist new product or service development, closer contact with end customers was also said to help firms better understand their current performance and make necessary adjustments. Again, while feedback from direct customers was described as useful, those using the (final) product or service were considered in a better position to articulate the details and specifics of their experiences. Firms noted that by engaging directly with those who use products or services, they can improve customer perceptions and increase repeat purchase and advocacy. This benefits both themselves and their direct customers.
“We conduct joint visits to the end customer to develop new processes and systems. It’s really useful for us.” (Foreign-owned)
- Ability to strengthen relationships with direct, ‘core’ customers: Firms also noted that by interacting with end customers they were sometimes able to directly benefit their direct customers. For example, one manufacturing firm explained that they always tried to make contact with (potential) end users at trade shows and similar events. They described how they were able to identify potential clients and pass these on to their distributor/re-seller (even if these clients were not purchasing the firm’s own products). They noted that this increased their credibility among their clients and drove up loyalty.
“We actively work to find new customers for our customers, or ways of increasing sales to them. It’s a great way of cementing relationships.” (Foreign-owned)
- Ensuring quality meets expectations: As described above, the primary benefit relating to forging stronger relationships with suppliers' suppliers was the ability to monitor and influence the quality of components or raw materials used.
Barriers to Building Strong Relationships with Customers’ Customers & Suppliers’ Suppliers
While not strictly speaking a barrier, the most common reason given for not building stronger relationships with indirect suppliers and customers was a lack of perceived need. A number of firms were unable to see the benefits in doing so. They explained that within their supply chain, relationships were clearly defined and there were (often informal) procedures and protocol in place to ensure that all links in the chain provided high quality products and provided good service at the right price. They noted that firms within the chain worked hard to ensure that they represented the needs of their customers and the capabilities of their suppliers.
Firms often explained that every link in the supply chain (e.g. re-sellers, distributors, assembly plants, etc) provided a valuable service. They therefore felt it to be somewhat counter-intuitive to bypass them by going direct to the customer's customer or the supplier's supplier.
Some firms added that avoiding direct contact with their customers' customers protected them from exposure to complaints or conflict which may arise as a result. They explained that dealing with issues such as teething problems with new processes, final products performing below expected standards or wholesale failure of products was expensive and time-consuming. They also noted that they were able to protect their reputation by avoiding direct association with negative experiences. In other cases, firms accepted that forging direct relationships could potentially deliver benefits but were concerned about breaking the bond of mutual trust and respect between themselves and their direct customers or suppliers. Many firms are conscious of the need to extend a degree of courtesy to their customers and to abide by what might be described as an informal code of ethics. In these cases, firms often preferred to remain loyal to their direct partners as this enabled them to take advantage of the benefits this afforded them (i.e. better prices, terms, flexibility etc.).
“We really wouldn’t consider going to our customers’ customers directly. You just don’t do it...it would be going behind their backs and I don’t think they’d appreciate that.” (UK-owned)
Although slightly less common, some firms noted that they would ideally like to forge stronger relationships beyond their direct partners, but were hindered in their ability to do so by a lack of time and resources. For example, firms with a wide product range explained that forging relationships with all of their supply chains is virtually impossible. Therefore, some solely targeted suppliers and customers of their primary products and services, and did not attempt to do the same for other suppliers’ suppliers or customers’ customers.
SMEs in particular explained that they were sometimes unable to forge the kind of relationships with any of their supply chains due to these types of constraints. While they may have reasonably deep relationships with their direct customers (partly because they prioritise the required time to develop these), they were simply unable to do the same with their end-users.
One small firm described how they rarely visited their end-users in person. As a result, their understanding of their end-users’ needs were shallow and limited. They suspected that by being able to experience their processes first hand, they might be able to identify aspects which could be improved and optimised. Consequently, they would be able to increase sales, both to the specific customer in question and other, similar organisations.
“It would be great to get in front of users...they might have a problem which we can solve but haven’t thought to ask about.” (Foreign-owned) Annex A: Markets Selected
A.1 Most Recent Market
Firms were asked to give details of the overseas market that they had entered most recently, and were then asked about their motivations for entering this market and the time taken to make a profit there (as reported in Chapter 12). The table below gives details of the most recently entered markets, shown separately for users and non-users of UKTI.
Table A.1 Most Recent Market – By UKTI Usage
| Market | Total | UKTI User | Non-User | |-------------------------|-------|-----------|----------| | **Base: All exporting** | 855 | 286 | 569 | | USA | 8% | 6% | 9% | | France | 6% | 4% | 8% | | Ireland (Republic) | 6% | 2% | 8% | | Germany | 6% | 5% | 6% | | Netherlands | 4% | 3% | 4% | | Australia | 4% | 3% | 4% | | Russia | 3% | 5% | 2% | | China | 3% | 5% | 2% | | UAE | 3% | 2% | 3% | | Poland | 3% | 4% | 2% | | India | 3% | 2% | 3% | | South Africa | 2% | 4% | 2% | | Turkey | 2% | 2% | 2% | | Spain | 2% | 2% | 2% | | Brazil | 2% | 3% | 2% | | Italy | 2% | 2% | 2% | | Sweden | 2% | 2% | 2% | | South Korea | 2% | 3% | 1% | | Norway | 2% | 2% | 1% | | Switzerland | 1% | 2% | 1% | | Japan | 1% | 1% | 2% | | Nigeria | 1% | 2% | 1% | | New Zealand | 1% | 1% | 2% | | Czech Republic | 1% | 1% | 1% | | Belgium | 1% | 1% | 2% | | Singapore | 1% | 1% | 1% | | Denmark | 1% | 1% | 1% | | Saudi Arabia | 1% | 2% | 1% |
| Market | Total | UKTI User | Non-User | |-------------------------|-------|-----------|----------| | **Base: All exporting** | 855 | 286 | 569 | | Austria | 1% | 0% | 1% | | Canada | 1% | 1% | 1% | | North America | 1% | 2% | 1% | | Kuwait | 1% | 1% | 1% | | Hong Kong | 1% | 1% | 0% | | Israel | 1% | 0% | 1% | | Malaysia | 1% | 1% | 1% | | Portugal | 1% | 0% | 1% | | Kenya | 1% | 0% | 1% | | Egypt | 1% | 1% | 0% | | Argentina | 1% | 1% | 0% | | Hungary | 1% | 0% | 1% | | Finland | 1% | 0% | 1% | | Ghana | 1% | 1% | 1% | | Mexico | 1% | 1% | 0% | | Romania | 1% | 1% | 1% | | Chile | 1% | 1% | 0% | | Slovakia | 1% | 0% | 1% | | Mainland Europe | 0% | 1% | 0% | | Thailand | 0% | 0% | 1% | | South America | 0% | 1% | 0% | | Malta | 0% | 0% | 1% | | Kazakhstan | 0% | 1% | 0% | | Tanzania | 0% | 1% | 0% | | Indonesia | 0% | 0% | 0% | | Oman | 0% | 0% | 1% | | Angola | 0% | 1% | 0% | | DR Congo | 0% | 1% | 0% | A.2 Most Challenging Market
Firms were also asked to identify the most challenging overseas market that they had done business in, and were then asked about the barriers they had experienced there (as reported in Chapter 13). The table below gives details of the markets selected as being the ‘most challenging’, shown separately for users and non-users of UKTI.
Table A.2 Most Challenging Market – By UKTI Usage
| Market | Total | UKTI User | Non-User | |-------------------------|-------|-----------|----------| | Base: All exporting | 855 | 286 | 569 | | Russia | 8% | 11% | 6% | | USA | 7% | 4% | 8% | | China | 6% | 11% | 4% | | France | 6% | 4% | 6% | | Ireland (Republic) | 6% | 1% | 8% | | India | 4% | 6% | 3% | | UAE | 4% | 5% | 4% | | Germany | 4% | 2% | 5% | | Nigeria | 4% | 4% | 4% | | Australia | 3% | 3% | 3% | | Saudi Arabia | 3% | 4% | 2% | | Brazil | 3% | 3% | 2% | | Netherlands | 3% | 1% | 3% | | Turkey | 2% | 2% | 2% | | South Africa | 2% | 3% | 1% | | Italy | 2% | 2% | 2% | | Greece | 2% | 1% | 2% | | Spain | 1% | 1% | 1% | | Poland | 1% | 1% | 2% | | Switzerland | 1% | 1% | 1% | | Japan | 1% | 1% | 2% | | Canada | 1% | 2% | 1% | | Pakistan | 1% | 2% | 1% | | New Zealand | 1% | 1% | 1% | | Denmark | 1% | 0% | 1% |
| Market | Total | UKTI User | Non-User | |-------------------------|-------|-----------|----------| | Base: All exporting | 855 | 286 | 569 | | Norway | 1% | 1% | 1% | | Sweden | 1% | 0% | 1% | | Austria | 1% | 0% | 1% | | Hungary | 1% | 0% | 1% | | Belgium | 1% | 0% | 1% | | Singapore | 1% | 0% | 1% | | Mexico | 1% | 0% | 1% | | Ukraine | 1% | 1% | 0% | | Portugal | 1% | 0% | 1% | | Mainland Europe | 1% | 1% | 1% | | Egypt | 1% | 1% | 0% | | Ghana | 1% | 1% | 0% | | Malaysia | 1% | 1% | 0% | | Iran | 1% | 0% | 1% | | South America | 1% | 2% | 0% | | South Korea | 1% | 1% | 0% | | Morocco | 1% | 0% | 1% | | Israel | 1% | 0% | 1% | | Bangladesh | 0% | 1% | 0% | | Hong Kong | 0% | 1% | 0% | | Qatar | 0% | 0% | 1% | | Iraq | 0% | 0% | 1% | | Angola | 0% | 1% | 0% | | Venezuela | 0% | 1% | 0% | | Afghanistan | 0% | 1% | 0% | Annex B: Questionnaire OMB RESEARCH LIMITED UKTI – International Business Strategies, Barriers & Awareness Survey 2013 Questionnaire February-April 2013
QUOTAS (900 INTERVIEWS): • 200 interviews with firms 0-5 years old • 200 interviews with firms 6-10 years old • 500 interviews with firms more than 10 years old • All quotas to run from questionnaire (S7) • Plus boost of additional 50 interviews with 250+ employee firms (no age quota)
INTRO
ASK ALL Could I please speak to either the owner or someone responsible for your firm’s strategy in relation to overseas business?
Good morning/afternoon, my name is ... and I am calling on behalf of OMB Research, an independent market research agency. We have been commissioned by UK Trade & Investment and the Department for Business, Innovation & Skills (BIS) to conduct a survey of businesses on the topic of doing business overseas.
IF NECESSARY We are interested in talking to firms who are either involved in any form of overseas business activity or who are seriously considering doing business overseas in the next year. This overseas business activity could include selling directly to customers based overseas, selling overseas through agents or distributors, licensing, franchising or joint venturing overseas, or operating your own overseas office or site.
INTERVIEWER NOTE - YOU MAY TAKE REFERRALS TO ANOTHER SITE WITHIN THE UK.
INTERVIEWER NOTE – IF FIRM IS NOT CURRENTLY DOING BUSINESS OVERSEAS, BUT PLANNING DOING SO WITHIN THE NEXT YEAR CONTINUE WITH THE INTERVIEW ON THIS BASIS
READ OUT TO ALL This research will cover areas such as your current and planned overseas activities, including the way you go about doing business overseas and any issues you may have faced. It will take around 15-20 minutes, depending on your answers. It doesn’t matter how much or how little overseas business you do – we’re interested in speaking to a range of firms about their experiences.
AS NECESSARY: UKTI is responsible for helping UK firms do business overseas. They want to find out more about how firms are going about overseas business and any difficulties they have. This will help UKTI develop the type of help they offer to UK firms.
AS NECESSARY: We are able to offer all businesses taking part in this research an electronic link to a summary report of the research findings (which will be available later this year) Is it convenient to speak to you now or would you prefer to make an appointment for another time?
ADD IF NECESSARY
- The research is being conducted under the Code of Practice of the Market Research Society, which means that all of the answers you give are strictly confidential and anonymous. Participation in this survey is voluntary.
- The responses of all organisations taking part will be combined into a statistical report
- Your organisation was selected at random from a list of UK businesses held by a commercial list broker
- If you wish to check that OMB Research is a bona fide market research agency, you can contact the Market Research Society on 0500 396999, or call James Murray at OMB Research on 01732 220582 or Heather Booth di Giovanni at UK Trade & Investment on 020 7215 4989.
OFFER EMAIL/FAX REASSURANCE IF NECESSARY
ASK ALL S1 – Can I confirm that you are one of the people best qualified to talk about your company’s overseas business activity?
INTERVIEWER NOTE: IF KNOW ALREADY THAT YOU ARE SPEAKING TO THE CORRECT PERSON THEN CODE YES AUTOMATICALLY
REFERRALS CAN BE TAKEN TO ANY UK SITE WHEN THE CONTACT FEELS THAT THERE IS SOMEONE WITHIN THE COMPANY BETTER PLACED TO ANSWER QUESTIONS ON THE TOPIC AREAS OUTLINED
Yes .................................................................................. 1 No – take referral and being transferred .......................... 2 No – take referral and arrange call back ....................... 3 No – refused referral ....................................................... 4
CATI TO INSERT TIME MARKER
ASK ALL S11 – And can I confirm that your organisation is a business rather than a trade association or public sector body? READ OUT. SINGLE CODE
A business.............................................................................. 1 A trade association............................................................... 2 – CLOSE A public sector organisation such as a Government department, local council, etc........................................ 3 – CLOSE Other (SPECIFY).................................................................... 4 (Don’t know) ........................................................................... 5 OVERSEAS BUSINESS ACTIVITY
ASK ALL S2a – Which of the following overseas business activities has your firm been involved in, over the last 5 years? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
AS NECESSARY: Please only include overseas sites if you have some responsibility or control over them from the UK. Do not include sites or companies operated by your parent company or other group companies.
- Selling directly to overseas customers ........................................ 1
- Selling to overseas customers through agents or distributors..... 2
- Licensing or franchising overseas, or other contractual arrangements such as joint ventures ................................................................. 3
- Operating your own overseas site or office ................................. 4
- (None of these)............................................................................ 5
- (Don’t know) ................................................................................ 6 – CLOSE
IF NONE AT S2a (CODE 5) S2b – Are you seriously considering starting to conduct overseas business via any of these routes in the NEXT YEAR?
- Yes .............................................................................................. 1
- No ................................................................................................ 2 - CLOSE
- (Don’t know) ................................................................................ 3 - CLOSE
IF JUST CONSIDERING OVERSEAS BUSINESS (CODE 1 AT S2b) S2c – Which of the following overseas business activities are you planning to become involved in, in the next year? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
- Selling directly to overseas customers ........................................ 1
- Selling to overseas customers through agents or distributors..... 2
- Licensing or franchising overseas, or other contractual arrangements such as joint ventures ................................................................. 3
- Operating your own overseas site or office ................................. 4
- (None of these)............................................................................ 5 – CLOSE
- (Don’t know) ................................................................................ 6 – CLOSE
ASK IF EXPORT (CODES 1-4 AT S2a) S10a – And do you make any sales directly through your website when doing business overseas?
AS NECESSARY: By this I mean sales where the customer places an order on your website and you don’t have any other direct contact with them other than sending email confirmation, etc.
- Yes .............................................................................................. 1
- No ................................................................................................ 2
- (Don’t know) ................................................................................ 3 IF SELL THROUGH WEBSITE (CODE 1 AT S10a) & ONLY SELL DIRECT (CODE 1 AT S2a & NOT CODES 2-5 AT S2a)
S10b – And do you only sell to overseas customers directly through your website, or do you sometimes get orders in other ways (e.g. over the phone, face to face, responding to tenders, etc)?
Only sell through the website ...................................................... 1 Use other ways as well................................................................. 2 (Don't know) .............................................................................. 3
IF HAVE OVERSEAS SITE (CODE 4 AT S2a)
S5b – How many overseas sites do you have? READ OUT
One................................................................................... 1 2-5.................................................................................... 2 6-10 .................................................................................. 3 11-20 ................................................................................ 4 21-50 ................................................................................ 5 More than 50 ........................................................................ 6 (Don't know) ..................................................................... 7 (Refused)........................................................................... 8
OVERALL FILTER FOR S5c: IF HAVE OR PLANNING OVERSEAS SITE (CODE 4 AT S2a OR CODE 4 AT S2c)
IF HAVE JUST ONE OVERSEAS SITE (CODE 1 AT S5b)
S5c – Would you say that the MAIN purpose of this site is...? READ OUT – AIM FOR SINGLE CODE BUT MULTI ALLOWED
IF HAVE MORE THAN ONE OVERSEAS SITE (CODES 2-8 AT S5b)
S5c – Thinking about all of your overseas sites, do any of these have the following purposes? READ OUT – CODE ALL THAT APPLY
IF PLANNING OVERSEAS SITE (CODE 4 AT S2c)
S5c – < IF CODE 4 AT S2c & CODES 1, 2 OR 3 ALSO MENTIONED AT S2c You mentioned operating your own overseas office or site. > Would you say that the MAIN purpose of this site will be...? READ OUT – AIM FOR SINGLE CODE BUT MULTI ALLOWED
Manufacturing or assembly ......................... 1 Call centre ................................................................. 3 Distribution or sales office ......................... 4 Service delivery ..................................................... 6 Research, product or process development.... 7 (Don't know/None of these).............................. 8 – CLOSE IF ONLY CODE 4 AT S2a/S2c ((S2a=4 & S2a=Not 1, 2 OR 3) OR (S2a=5 & S2c=4 & S2c=Not 1, 2 or 3)) IF ONLY INTERNATIONALISATION MODE IS OVERSEAS MANUFACTURING/ CALL CENTRE/ R&D SITE ((S2a=4) & (S2a=NOT 1, 2 OR 3) & (S5c=1, 3 OR 7) & (S5c=NOT 4 OR 6))
A5a – Can I just check, have you made any sales at all to customers in overseas countries in the last year?
Yes ................................................................. 1 No ................................................................. 2 (Don’t know) ..................................................... 3
ASK ALL S6a – Moving on, have you bought any goods or services from overseas suppliers over the last 5 years?
AS NECESSARY • This includes having goods manufactured for you overseas. • If you import into the UK from other companies in your group \<IF S5c=1, 3 or 7: or from your own overseas site(s)>, then still answer ‘yes’.
Yes ................................................................. 1 No ................................................................. 2 (Don’t know) ..................................................... 3
IF CODE 1 AT S6a From now on, when I’m asking questions about your overseas business activity please DO NOT include importing \<IF S5c=1, 3 OR 7, other than through your own overseas site(s)>
ASK ALL S7 – How long ago was your business established in the UK? READ OUT AS NECESSARY
AS NECESSARY: This means when the business in its current form started trading
AS NECESSARY: If the business is a subsidiary this refers to the subsidiary in which you work
Within the last year ................................................................. 1 Over 1, up to 2 years ago ..................................................... 2 Over 2, up to 3 years ago ..................................................... 3 Over 3, up to 4 years ago ..................................................... 4 Over 4, up to 5 years ago ..................................................... 5 Over 5, up to 10 years ago ................................................... 6 Over 10, up to 20 years ago ............................................... 7 Over 20 years ago ............................................................ 8 (Not yet trading) ............................................................... 9 (Don’t know) ..................................................................... 10 - CLOSE (Refused) ........................................................................... 11 – CLOSE ASK IF ESTABLISHED 1-2 YEARS (CODES 1-2 AT S7) S7b – Can I just check, has your business actually started trading yet?
Yes ................................................................................... 1 No ................................................................................... 2 (Don’t know) ..................................................................... 3
ASK ALL H1b – Is the business UK or foreign-owned?
UK-owned ........................................................................... 1 Foreign-owned ................................................................. 2 (Joint UK and foreign-owned) ........................................... 3 (Don’t know) ..................................................................... 4
READ OUT IF FOREIGN OWNED (CODES 2-3 AT H1b) For the rest of this interview, please just answer about the firm where you work, and not your parent company or any other group companies. So when I ask about your overseas business, please just focus on the overseas activities of your UK firm.
ASK IF CODES 1-4 AT S2a UNLESS NOT YET TRADING OR ESTABLISHED \<1 YEAR (CODES 1 OR 9 AT S7 OR CODE 2 AT S7b) A4 – And how long ago did your company start conducting business overseas? READ OUT AS NECESSARY. CATI TO ONLY SHOW FEASIBLE CODES BASED ON ANSWER TO S7 IF IMPORTER (CODE 1 AT S6a & A5a IS NOT 2-3) AS NECESSARY: By this I mean when did you start selling overseas, so please do not include importing. IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company INTERVIEWER NOTE: IF RESPONDENT SAYS THEY’VE NOT YET STARTED DOING BUSINESS OVERSEAS THEN YOU NEED TO GO BACK TO S2a AND CHANGE TO ‘NONE OF THESE’ & THEN ASK S2b & S2c
Within the last year ........................................................... 1 Over 1, up to 2 years ago ................................................... 2 Over 2, up to 3 years ago ................................................... 3 Over 3, up to 4 years ago ................................................... 4 Over 4, up to 5 years ago ................................................... 5 Over 5, up to 10 years ago .................................................. 6 Over 10, up to 20 years ago ............................................... 7 Over 20 years ago ............................................................ 8 (Don’t know) ..................................................................... 10 (Refused) .......................................................................... 11 ASK IF EXPORTING MORE THAN 2 YEARS (A4=3-11) UNLESS CODES 2-3 AT A5a A15 – \<IF A4=3-4 Since this time / IF A4=5-11 In the last 5 years>, have you had overseas sales every year or have there been some years where you haven’t made any sales at all to overseas customers?
Overseas sales every year ................................................................. 1 Some years with no overseas sales ................................................... 2 (Don’t know) ....................................................................................... 3
ASK IF EXPORTING (CODES 1-4 AT S2a) BUT DO NOT ASK IF CODES 2-3 AT A5a OR CODE 9 AT S7 OR CODE 2 AT S7b) A5c – In the last financial year, approximately what percentage of your turnover was accounted for by overseas sales? READ OUT AS NECESSARY
IF CODE 4 AT S2a AS NECESSARY: Please include sales made by the overseas sites or subsidiaries that you control from the UK.
IF CODE 3 AT S2a AS NECESSARY: Please include any fees received from overseas licensing or franchising deals.
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
Up to 5% ......................................................................................... 1 6 - 10% ......................................................................................... 2 11 - 15% ......................................................................................... 3 16 – 25% ......................................................................................... 4 26 – 50% ......................................................................................... 5 51 – 75% ......................................................................................... 6 More than 75% ................................................................................ 7 (No overseas sales in last year) ......................................................... 10 (Don’t know) ................................................................................... 8 (Refused) ......................................................................................... 9
ASK IF EXPORTING (CODES 1-4 AT S2a) A5d – In 3 years time, do you think that the percentage of your turnover accounted for by overseas sales will be higher than it is now, lower or about the same?
Higher .............................................................................................. 1 Lower ................................................................................................. 2 About the same ................................................................................ 3 (Don’t know) ................................................................................... 4 (Refused) .......................................................................................... 5 ASK IF EXPORTING (CODES 1-4 AT S2a) G5 – Which of the following regions of the world have you done business in \<IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since you were established>? READ OUT. CODE ALL THAT APPLY
IF IMPORTER (CODE 1 AT S6a & A5a IS NOT 2-3): AS NECESSARY: Please do NOT include countries that you have only imported from
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just answer about the areas where your UK firm is doing business, but don’t include the activity of your parent company or any other group companies
Europe (other than the UK) .............................................. 1 North America ................................................................. 3 South America or Latin America ....................................... 4 The Middle East or Africa ............................................... 6 Asia Pacific (including Australia, New Zealand, etc) .......... 7 (Don’t know) .................................................................... 9
ASK IF CODES 1-4 AT S2a A1b – How many overseas countries have you done business in < IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since you were established >? READ OUT
IF IMPORTER (CODE 1 AT S6a & A5a IS NOT 2-3): AS NECESSARY: Please do NOT include countries that you have only imported from
One ................................................................................... 2 2-5 .................................................................................... 3 6-10 .................................................................................. 4 11-20 ................................................................................ 5 21-50 ................................................................................ 6 More than 50 .................................................................... 7 (Don’t know) .................................................................... 8 (Refused) .......................................................................... 9
IF CODE 2 AT A1b A2 – Which country was this? WRITE IN
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY) .............................................................. (Don’t know) - CLOSE
ASK IF CURRENTLY EXPORTING (S2a=1-4) G7 – Over the next 3 years do you expect the number of countries in which you do business to increase, decrease or stay the same?
Increase ............................................................................ 1 Decrease .......................................................................... 2 Stay the same .................................................................. 3 (Don’t know) .................................................................... 4 READ OUT TO ALL I'm now going to ask you about the extent to which you see there being opportunities for YOUR FIRM in some of the world's fast growing and emerging economies over the next 2 years.
ASK ALL G1 – For each of these countries please could you tell me whether you are already doing business there, you are very likely to, you are quite likely to, or you are unlikely to do business there in the next 2 years.
IF IMPORTER (CODE 1 AT S6a) AS NECESSARY: I'm interested in the likelihood of you selling to these countries, so please do not answer in relation to imports.
So firstly... RANDOMISE ORDER OF A-I
a) Russia b) Turkey c) South Africa d) The United Arab Emirates j) Saudi Arabia f) Brazil g) Mexico h) China i) India
AS NECESSARY Are you...?
Already doing business there ........................................... 1 Very likely ......................................................................... 2 Quite likely ........................................................................ 3 Or, unlikely to do business there in the next 2 years....... 4 (Don't know) .................................................................... 5
HIGH GROWTH MARKET ALLOCATION: • APPLIES TO ANY FIRMS UNLIKELY TO DO BUSINESS IN ONE OR MORE HIGH GROWTH MARKETS (CODE 1 AT ANY OF G1a-i) • FIRMS TO BE ALLOCATED ONE OF THE MARKETS THEY ARE UNLIKELY TO ENTER AT G1 (I.E. CODE 4) AT RANDOM
ASK IF 'UNLIKELY' (CODE 4) AT ANY OF G1a-j G11 – You indicated that you are unlikely to do business in <INSERT SELECTED MARKET> in the next two years. Is this mainly because...? READ OUT. SINGLE CODE
There is little or no demand for your products or services there .... 1 Or for some other reason? ...................................................... 2 (Don't know) .................................................................... 3
CATI TO INSERT TIME MARKER ASK ALL A17a – Moving on, is there anyone in the senior management team of your company who had significant experience of doing business overseas before they joined your firm?
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) .................................................................... 3
ASK ALL A21 – Would you say that your senior management team has a clear strategy for developing your firm’s overseas business?
Yes ................................................................................... 1 No ..................................................................................... 3 (Don’t know) ..................................................................... 4 (Not aiming to develop our overseas business) ............... 5
IF DOING BUSINESS IN MORE THAN ONE MARKET (A1b=3-9) A22 – Which overseas country have you started doing business in most recently? RECORD ONE COUNTRY ONLY – DO NOT ALLOW ‘DON’T KNOW’
IF NOT SURE ASK RESPONDENT TO JUST CHOOSE ONE OF THE COUNTRIES THAT THEY DO BUSINESS IN (E.G. THE ONE THEY KNOW MOST ABOUT)
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY) ..............................................................
MOST RECENT MARKET TEXT SUB • IF A1b=3-9 INSERT MARKET FROM A22 • IF A1b=2 INSERT MARKET FROM A2
ASK IF CURRENTLY EXPORTING (S2a=1-4) A23 – When you first considered doing business in <MOST RECENT MARKET>, was this mainly prompted by an enquiry from a potential customer or because you’d identified that there may be opportunities for your business there or because you already had contacts there? SINGLE CODE
INTERVIEWER NOTE: If the respondent mentions more than one of these reasons then probe for which of these was the main reason
INTERVIEWER NOTE: Sales through the firm’s website would count as ‘enquiries from customers’
Enquiry from customer ..................................................... 1 Identified that may be opportunities ................................. 2 Already had contacts there.............................................. 3 (Don’t know/Can’t remember) ........................................... 4 ASK IF CURRENTLY EXPORTING (S2a=1-4) A30a – Taking account of your costs and any other investment you had to make to start doing business there, have you made a profit from doing business in <MOST RECENT MARKET> yet?
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3 (Refused) .......................................................................... 4
ASK IF MADE PROFIT (A30a=1) A30b – Roughly how long did it take from when you started trying to develop your business in <MOST RECENT MARKET> to actually make a profit? READ OUT AS NECESSARY. SINGLE CODE
INTERVIEWER NOTE: If the respondent was just reacting to orders/enquiries from customers in <MOST RECENT MARKET>, then just ask how long it took from receiving the first order/enquiry to making a profit.
Immediate ......................................................................... 1 Within 6 months .................................................................. 2 7-12 months ....................................................................... 5 1-2 years ........................................................................... 6 2-3 years ........................................................................... 7 Longer .................................................................................. 8 (Don’t know) ..................................................................... 9 (Refused) .......................................................................... 10
ASK IF NOT YET MADE PROFIT (A30a=2) A30c – In total, how long do you think it will take from starting to try and develop your business in <MOST RECENT MARKET> to actually making a profit there? READ OUT AS NECESSARY. SINGLE CODE
Immediate ......................................................................... 1 Within 6 months .................................................................. 2 7-12 months ....................................................................... 5 1-2 years ........................................................................... 6 2-3 years ........................................................................... 7 Longer .................................................................................. 8 (Not expecting to make a profit there) .............................. 9 (Don’t know) ..................................................................... 10 (Refused) .......................................................................... 11 ASK IF BUSINESS OVER 1 YEAR OLD (CODES 2-8 AT S7) H11a – Now thinking about your business as a whole, \<IF S7=6-8 in the last five years / IF S7=2-5 since it was established> would you say that it has...? READ OUT. SINGLE CODE
AS NECESSARY: This is just your overall impression of the growth of the business taking account of factors like size, number of employees, turnover, etc.
Remained the same.................................................. 1 Become smaller.......................................................... 2 Grown moderately...................................................... 3 Grown substantially................................................... 4 (Don't know) .............................................................. 5 (Refused)..................................................................... 6
ASK ALL H10 – \<IF S7=1 OR 9 Now / IF S7=2-8 Still> thinking about your business as a whole, what growth objectives do you have for the business over the next five years? Do you plan to...? READ OUT
Remain the same...................................................... 1 Become smaller.......................................................... 2 Grow moderately...................................................... 3 Grow substantially................................................... 4 (Don't know) .............................................................. 5 (Refused)..................................................................... 6
ASK IF PLANNING TO GROW OR TO REMAIN SAME (CODES 1, 3 OR 4 AT H10) A26 – Would you say that your senior management team has a clear strategy for how your firm will \<IF H10=3-4 achieve its growth objectives / IF H10=1 maintain its current sales levels>?
Yes ................................................................................... 1 No ..................................................................................... 3 (Don't know) .............................................................. 4
ASK IF PLANNING TO GROW (CODES 3-4 AT H10) A27a – You mentioned that you are planning to grow over the next 5 years. Do you expect this growth to mainly come from...? READ OUT. SINGLE CODE.
Entering new overseas countries .............................................................. 1 Or, increasing sales to countries where you are already doing business . 2 (Both)................................................................................ 3 (Don't know) .............................................................. 4
ASK IF PLANNING TO GROW (CODES 3-4 AT H10) A27b – And do you expect this growth to mainly come from...? READ OUT. SINGLE CODE.
Selling to new customers .................................................. 1 Or, increasing sales to your existing customers............. 2 (Both)................................................................................ 3 (Don't know) .............................................................. 4 ASK IF PLANNING TO GROW (CODES 3-4 AT H10) A27c – And do you expect this growth to **mainly** come from...? READ OUT. SINGLE CODE.
- Introducing new products or services ........................................ 1
- Or, increasing sales of your existing products or services .......... 2
- (Both) ....................................................................................... 3
- (Don’t know) ............................................................................ 4
ASK IF PLANNING TO STAY SAME SIZE (CODE 1 AT H10) A28a – You mentioned that you expect your business to remain the same size over the next 5 years. To help maintain your current sales levels, will you be **mainly** focussing on...? READ OUT. SINGLE CODE.
- Entering new overseas countries .............................................. 1
- Or, selling to countries where you are already doing business .... 2
- (Both) ....................................................................................... 3
- (Don’t know) ............................................................................ 4
ASK IF PLANNING TO STAY SAME SIZE (CODE 1 AT H10) A28b – And will you be **mainly** focussing on...? READ OUT. SINGLE CODE.
- Selling to new customers ........................................................ 1
- Or, selling to existing customers ............................................. 2
- (Both) ....................................................................................... 3
- (Don’t know) ............................................................................ 4
ASK IF PLANNING TO STAY SAME SIZE (CODE 1 AT H10) A28c – And will you be **mainly** focussing on...? READ OUT. SINGLE CODE.
- Introducing new products or services ........................................ 1
- Or, selling your existing products or services .......................... 2
- (Both) ....................................................................................... 3
- (Don’t know) ............................................................................ 4
ASK ALL A9a – Thinking about your business overall, over the next 3 years do you think that you will...? READ OUT. SINGLE CODE.
- Develop any **new** products or services .................................. 1
- Make changes or modifications to any of your **existing** products or services ......................................................... 2
- Or do both of these .................................................................... 3
- (None of these) ........................................................................ 4
- (Don’t know) ............................................................................ 5 ASK IF PLANNING ANY PRODUCT/SERVICE DEVELOPMENT (CODES 1-3 AT A9a) A9h – And do you expect this product or service development activity to be aimed at UK customers, overseas customers or both? READ OUT. SINGLE CODE.
UK customers........................................................................................................1 Overseas customers ..........................................................................................2 Both ....................................................................................................................3 (Don't know) .................................................................................................4
IF WILL INTRODUCE OR MODIFY PRODUCTS/SERVICES (CODES 1-3 AT A9a) A9f – In your view, are some countries more important than others in terms of being a stimulus for your company's innovation and product or service development activity?
AS NECESSARY: For example, this might be because a country is at the forefront of developments in your sector, because the market has specific requirements, because you have important customers there, etc
Yes ..................................................................................................................1 No ....................................................................................................................2 (Don't know) .................................................................................................3
IF SOME COUNTRIES MORE IMPORTANT (CODE 1 AT A9f) A9g – And which countries are most important to you in this respect? CODE ALL THAT APPLY
INTERVIEWER NOTE: They don't need to be doing business in these countries, and they could include the UK.
CATI TO SHOW LIST OF MOST COMMON MARKETS (INCLUDING THE UK), PLUS: Other (SPECIFY) ............................................................................................ (None/Don't know)
CATI TO INSERT TIME MARKER OVERSEAS BUSINESS RISKS
READ OUT TO ALL I'd like to move on to talking about the risks involved in starting to do business in new overseas countries.
ASK ALL B1 – < IF CODES 5-8 AT S7 In the last 5 years / IF CODES 1-4 OR 9 Since you were established >, have you been put off from doing business in a particular country for any of the following reasons? READ OUT. CODE ALL THAT APPLY. RANDOMISE ORDER.
AS NECESSARY: For each one, please only answer ‘yes’ if you have decided not to do business in a particular country because of this risk.
INTERVIEWER NOTE: Pause after reading each option to let the respondent say yes or no.
The risk of not being paid in full or on time ................................................ 1 The risk to the safety and security of your staff ........................................... 2 The risks associated with political or economic instability in that country . 3 The risk of intellectual property theft (i.e. your products or technology being copied) ................................................................. 4 The risk of encountering bribery, corruption or organised crime ............... 5 The risk of not seeing a return on the investment you would need to make to enter that country ......................................................... 6 (None of these) ...................................................................................... 7 (Don't know) .......................................................................................... 8
ASK ALL B2 – Thinking about the types of risk I've just mentioned, overall how risky do you think it \<IF G1a=1 & G1f=1 & G1h=1 & G1i=1 is / OTHERS would be> for your firm to do business in each of the following countries? READ OUT.
ROTATE ORDER OF COUNTRIES
(a) Brazil (b) Russia (c) India (d) China (e) Mexico
ON EACH OF THE B2 SCREENS (AT TOP) READ OUT AS NECESSARY Would you say that doing business in this country is...?
AS NECESSARY: It doesn't matter if you don't have any experience of doing business in this country, I'm just interested in your perception of how risky it would be for your business.
Very risky ................................................................. 1 Fairly risky .............................................................. 2 Not particularly risky .............................................. 3 Not at all risky ......................................................... 4 (Don't know) ............................................................ 5 BARRIERS
IF DOING BUSINESS IN MORE THAN ONE MARKET (A1b=3-9) B4 – Thinking now about all the overseas countries that you have done business in < IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since you were established >, which of these was the most challenging country to do business in? RECORD ONE COUNTRY ONLY
INTERVIEWER NOTE: This must be a country that the firm has actually done business in.
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY) .............................................................. (None/Don’t know/All equally challenging) ......................
CATI TO ALLOCATE <MARKET> AS FOLLOWS: • FROM B4: IF IN MORE THAN ONE MARKET (A1b=3-9) AND MARKET PROVIDED AT B4 • FROM A22: IF IN MORE THAN ONE MARKET (A1b=3-9) & NONE/DON’T KNOW AT B4 • FROM A2: IF ONLY IN ONE MARKET (A1b=2)
READ OUT IF CURRENTLY EXPORTING (CODES 1-4 AT S2a) I’d like to ask you some questions now about your experience of doing business in <MARKET> \<IF A1b=3-9 & NONE/DON’T KNOW AT B4 as you indicated earlier that this is the country you’ve started doing business in most recently>.
ASK IF CURRENTLY EXPORTING (CODES 1-4 AT S2a) C4a – Thinking back to when you decided to do business in <MARKET>, had you received an approach or enquiry from a potential customer or partner there?
Yes ............................................................................................ 1 No .............................................................................................. 2 (Don’t know) .............................................................................. 3
ASK IF CURRENTLY EXPORTING (CODES 1-4 AT S2a) C4b – And when you started doing business there, was there anyone employed by your company who already had experience of <MARKET> or contacts there?
Yes ............................................................................................ 1 No .............................................................................................. 2 (Don’t know) .............................................................................. 3 ASK IF CURRENTLY EXPORTING (S2a=1-4)
E1 – I’m now going to read out a list of issues that you may have had to tackle when trying to develop your business in <MARKET>. For each one, please give me a score of 1 to 5 for the extent to which you feel that this has been a difficulty, where 1 means it has ‘not been at all difficult’ and 5 means it has been ‘extremely difficult’. So firstly... READ OUT. ROTATE LIST BUT ALWAYS ASK B, C & D IN ORDER
ON EACH OF THE E1 SCREENS (AT BOTTOM) AS NECESSARY To what extent has this been a difficulty in <MARKET> (where 1 means it has ‘not been at all difficult’ and 5 means it has been ‘extremely difficult’)
INTERVIEWER NOTE: If respondent says it is not relevant or doesn’t apply, then code as ‘1 – Not at all difficult’
(a) Obtaining basic information about doing business in <MARKET> (b) Identifying who to make contact with in the first instance or finding a suitable partner (c) Establishing an initial dialogue with prospective customers or business partners in <MARKET> (d) Building relationships with key influencers or decision-makers (i) Customers in <MARKET> preferring to do business with firms from <MARKET> (rather than with UK firms) (k) Finding the necessary management time to devote to doing business in <MARKET> (r) Dealing with legal or tax regulations or standards in <MARKET> (s) Negotiating the culture and language (t) Protecting your intellectual property (w) Ensuring you get paid and enforcing contracts (x) Dealing with customs procedures or paperwork
1 – Not at all difficult ......................................................... 1 2 ...................................................................................... 2 3 ...................................................................................... 3 4 ...................................................................................... 4 5 – Extremely difficult ...................................................... 5 (Don’t know) ................................................................. 6
CATI TO INSERT TIME MARKER READ OUT TO ALL I’d now like to ask you some questions about sources of information or advice that are available to help UK firms do business overseas.
ASK ALL F2 – Prior to this interview, had you heard of...? READ OUT (a) UK Trade & Investment or UKTI (b) The commercial services provided by British embassies and consulates overseas Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3
IF AWARE OF UKTI (CODE 1 AT F2a) F3a – And has your firm actually used any of UK Trade & Investment’s services? Yes ................................................................................... 1 No ..................................................................................... 2 (Tried to but got no help) .................................................. 4 (Don’t know) ..................................................................... 3
IF AWARE OF POSTS (CODE 1 AT F2b) F3b – And has your firm obtained any business information or advice from any British embassies or consulates overseas? AS NECESSARY: It doesn’t matter whether or not you had to pay for this, if you have received any information or advice then please answer yes. Yes ................................................................................... 1 No ..................................................................................... 2 (Tried to but got no help) .................................................. 4 (Don’t know) ..................................................................... 3
IF AWARE OF UKTI & NOT USED UKTI (CODES 2-4 AT F3a) F2c – Before today, were you aware that UK Trade & Investment provide assistance to help UK firms do business overseas? Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3
ASK ALL F6 – And have you ever visited the ‘Open to Export’ website? AS NECESSARY: The Open to Export website allows UK-based companies to share information, advice and support about export market opportunities and means of entry. Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3
CATI TO INSERT TIME MARKER USE OF OVERSEAS SUPPLIERS
READ OUT IF IMPORTED IN LAST 5 YEARS (CODE 1 AT S6a) You mentioned earlier that your company has bought goods or services from overseas suppliers \<IF S7=5-9 over the last 5 years>. I'd now like to ask a few questions about your firm's experiences as a customer of overseas businesses.
AS NECESSARY: It doesn't matter if this was on a very small scale, we're still interested in your views.
IF IMPORTED IN LAST 5 YEARS (CODE 1 AT S6a) J1 – Firstly, have you bought any of the following from overseas suppliers \<IF S7=5-9 in the last 5 years>? READ OUT – CODE ALL THAT APPLY
AS NECESSARY: Please include all goods and services you have obtained from overseas, even if it was from overseas companies that are associated with you (e.g. your parent company or other group companies).
- Raw materials ................................................................................. 1
- Components ................................................................................... 2
- Finished products ........................................................................... 3
- Business services (such as marketing, accounts, call centre, professional advice, etc) ................................................................. 4
- Research & development (R&D) .................................................... 5
- (Other (SPECIFY)) ......................................................................... 95
- (Don't know) ................................................................................... 97
IF IMPORTED IN LAST 5 YEARS (CODE 1 AT S6a) J2 – And were any of these goods or services provided by a company related to your business, such as a parent company, subsidiary, sister company, etc? IF YES, PROBE FOR WHETHER ALL OR SOME. SINGLE CODE
- Yes – all obtained from related companies .................................... 1
- Yes – some obtained from related companies ............................... 2
- No - all obtained from unrelated companies ................................. 3
- (Don't know) ................................................................................... 4
IF IMPORTED IN LAST 5 YEARS (CODE 1 AT S6a) J3 – Did you decide to use overseas suppliers for any of the following reasons...? READ OUT – CODE ALL THAT APPLY. RANDOMISE ORDER.
- Because there was no UK supplier of these products or services ........... 1
- To get better quality products or services .................................................... 3
- To get more competitive prices ................................................................. 5
- Or for some other reason (SPECIFY) .......................................................... 95
- (Don't know) ................................................................................................. 97 IF IMPORTED MORE THAN ONE TYPE OF GOOD/SERVICE (2 OR MORE OF CODES 1-6 SELECTED AT J1)
J4 – And which of the goods or services that you have obtained from overseas suppliers would it be most difficult to find a suitable UK based alternative for? Would it be the...? READ OUT – SINGLE CODE
CATI TO ONLY SHOW CODES SELECTED AT J1, PLUS THE DON'T KNOW & NONE OF THESE OPTIONS.
- Raw materials
- Components
- Finished products
- Business services (such as marketing, accounts, call centre, professional advice, etc)
- Research & development (R&D)
- Other goods/services (CATI TO INSERT TEXT FROM J1 CODE 6)
- (None of these / could source a suitable UK alternative for all of them)
- (Don't know)
IF IMPORTED IN LAST 5 YEARS (CODE 1 AT S6a)
J5 – Thinking about all of the goods and services that you buy into the business, approximately what proportion of your total purchases are made from overseas suppliers? Would you say that...? READ OUT. SINGLE CODE
AS NECESSARY: Please answer based on the cost of these purchases.
- Up to 10% of your purchases are from overseas suppliers
- 11-20%
- 21-50%
- Or over 50%
- (Don't know)
- (Refused)
IF IMPORTED IN LAST 5 YEARS (CODE 1 AT S6a)
J6 – In the last 3 years, has the proportion of your total purchases that come from overseas suppliers increased, decreased, or stayed the same?
AS NECESSARY: This question is asking whether the proportion of your purchases coming from overseas suppliers has changed, not whether the amount in £’s has changed.
- Increased
- Decreased
- Or stayed about the same
- (Don't know)
- (Refused) IF IMPORTED GOODS/SERVICES IN LAST 5 YEARS (CODE 1 AT S6A) J7 – And in the next 3 years, do you expect this proportion to...? READ OUT. SINGLE CODE.
AS NECESSARY: This question is about whether the proportion of your purchases coming from overseas suppliers will change, not whether the amount in £’s will change.
Increase............................................................................ 1 Decrease........................................................................... 2 Or stay about the same.................................................... 3 (Don’t know) ..................................................................... 4 (Refused)........................................................................... 5
CATI TO INSERT TIME MARKER READ OUT TO ALL Finally, I'd now like to ask you some questions about your business just to classify your answers for analysis purposes.
ASK ALL H2a – How many people are currently employed by your business in the UK? AS NECESSARY Please include both full and part-time staff.
INTERVIEWER NOTE – If the respondent owns the company and does not employ anyone else, please code as zero employees.
Write in number (0+): (Don’t know) – PROMPT WITH RANGES (Refused)
IF DON’T KNOW AT H2a H2b – If you had to estimate, approximately how many people are employed by your business in the UK? READ OUT AS NECESSARY
No employees .................................................................1 1-4 .................................................................................2 5-9 .................................................................................3 10-19 .............................................................................4 20-49 .............................................................................5 50-99 .............................................................................6 100-199 .........................................................................7 200-249 .........................................................................8 250-499 .........................................................................9 500 or more .....................................................................10 (Don’t know) .................................................................11 (Refused) .......................................................................12 ASK ALL H3b –< IF S7=NOT 1 & NOT 9 AND S7b=NOT 2 Can I just ask, what is the current annual turnover of your business? / IF S7=1 OR 9 OR S7b=2 What do you anticipate will be the turnover of your business in the first year of trading?> READ OUT AS NECESSARY
AS NECESSARY By this I mean your annual sales, income or receipts.
IF OVERSEAS SITE (CODE 4 AT S2a): AS NECESSARY: Please include sales from any overseas sites or subsidiaries that you control from the UK.
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
£0 .................................................................................... 1 £100,000 or less ............................................................... 2 £100,001 - £500,000 ....................................................... 3 £500,001 - £2million ....................................................... 4 £2million - £10million ..................................................... 5 £10million - £25million ................................................... 6 £25million - £50million ................................................... 7 £50million - £500million .................................................. 8 More than £500million .................................................... 9 (Don't know) ..................................................................... 10 (Refused)........................................................................ 11
ASK ALL H22a –< IF S7=NOT 1 & NOT 9 & S7b=NOT 2 Is your company currently making an annual profit or loss / IF S7=1 OR 9 OR S7b=2 Do you anticipate that your company will make a profit or loss in its first year of trading >?
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
Profit ................................................................. 1 Loss ........................................................................... 2 (Break even) ............................................................ 3 (Don't know) ............................................................ 4 (Refused)................................................................. 5
IF PROFIT (CODE 1) AT H22a H22b – Approximately what proportion of your < IF S7=NOT 1 & NOT 9 & S7b=NOT 2 annual turnover is / IF S7=1 OR S7=9 OR S7b=2 turnover in the first year of trading do you anticipate will be > accounted for by profits?
AS NECESSARY By this I mean what is your profit margin?
AS NECESSARY Please answer in relation to pre-tax profit
Write in (% - ALLOW ZERO) (Don't know) (Refused)
CATI TO CHECK NUMBER IS BETWEEN 0 AND 100 IF DON’T KNOW AT H22b H22c - If you had to estimate this proportion, into which of the following bands would you place it? READ OUT AS NECESSARY
Zero/nothing ................................................................. 1 Up to 10%........................................................................ 2 11% – 25%...................................................................... 3 26%-50%......................................................................... 4 51%-75%......................................................................... 5 More than 75% ............................................................... 6 (Don’t know) ................................................................. 7 (Refused)........................................................................ 8
ASK ALL UNLESS ESTABLISHED IN LAST TWO YEARS (I.E. NOT 1-2 OR 9 AT S7 & NOT CODE 2 AT S7b) H7a – Have you introduced any new products or services over the last three years?
Yes .............................................................................. 1 No .................................................................................. 2 (Don’t know) .................................................................. 3
ASK IF YES AT H7a H7b - And are these new products or services... READ OUT - SINGLE CODE ADD AS NECESSARY: By completely new I mean that, to the best of your knowledge, they have not been introduced by anyone before you READ OUT – SINGLE CODE
Just new to your business .................................................. 1 New to your industry or sector ............................................. 2 Or, are they completely new to the world ......................... 3 (Some are just new to the business and some are completely new) ...... 4 (Don’t know) .................................................................. 5
ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b H4a – Approximately how many of your UK employees are engaged either wholly or partly in R&D activity? READ OUT AS NECESSARY
AS NECESSARY: By R&D I mean ‘research and development’
Zero.............................................................................. 1 One............................................................................... 2 2-4 ............................................................................... 3 5-9 ............................................................................... 4 10-49 ........................................................................... 5 50 or more ...................................................................... 6 (Don’t know) .................................................................. 12 (Refused)........................................................................ 13 ASK IF H4a IS CODES 3-6
H4b – Can I just check, are any of these employees involved in activities that could be described as ‘the development of scientific or technical knowledge that is NOT commonly available’?
Yes ................................................................. 1 No ........................................................................ 2 (Don’t know) ....................................................... 3
ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b OR CODES 1-2 AT H4a
H5 – And approximately how many of your UK employees are engaged either wholly or partly in new product or service development? READ OUT AS NECESSARY
Zero ........................................................................ 1 One ........................................................................ 2 2-4 ........................................................................ 3 5-9 ........................................................................ 4 10-49 .................................................................... 5 50 or more .............................................................. 6 (Don’t know) .......................................................... 12 (Refused) ............................................................... 13
ASK ALL EXCEPT CODES 2, 3 OR 4 AT H7b OR (CODE 1 AT H4b & CODES 3-6 AT H5)
H6 – In the last year have you commissioned anyone external to your business to conduct any R&D or new product or service development activity for you?
Yes ........................................................................ 1 No ........................................................................ 2 (Don’t know) .......................................................... 3
ASK ALL
H8b – Have you either applied for or obtained any patents, trademarks, design rights or other legal protection, either in the UK or overseas, for any of your products or services?
Yes ........................................................................ 1 No ........................................................................ 2 (Don’t know) .......................................................... 3
IF IP PROTECTION (CODE 1 AT H8b)
H8e – And is this...? READ OUT. CODE ALL THAT APPLY
Patents ................................................................. 1 Trademarks ........................................................... 2 Design rights ......................................................... 3 Or other legal protection ........................................ 4 (Don’t know) .......................................................... 5 IF IP PROTECTION (CODE 1 AT H8b)
H8c – And do these relate to the UK, overseas countries or both? SINGLE CODE
AS NECESSARY: Please include all patents, trademarks, design rights and other legal protection
- UK ................................................................. 1
- Overseas .......................................................... 2
- Both ..................................................................... 3
- (Don't know) ..................................................... 4
IF OVERSEAS PATENTS (CODE 1 AT N8e & CODES 2-3 AT H8c)
H8d – Does your firm hold any ‘triadic patents’, by which I mean you hold a patent in the US, EU and Japan for the same product or innovation?
INTERVIEWER NOTE: ONLY CODE YES IF SAME PATENT HELD IN ALL THREE MARKETS
- Yes ..................................................................... 1
- No ..................................................................... 2
- (Don't know) ..................................................... 3
- (Refused) .......................................................... 4
Analysis
Innovative Firms
- Have more than one employee engaged in R&D activity (H4a) and more than one employee engaged in new product or service development (H5)
- Or, have employed someone external to conduct new product or service development in the last year (H6)
- Or, derive at least some turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years
Innovative Firms – Alternative (Tighter) Definition
- Have more than one employee engaged in R&D activity (H4a) and more than one employee engaged in new product or service development (H5) and at least some R&D employees are engaged in the ‘development of scientific or technical knowledge that is not commonly available’ (H4b)
- Or, have employed someone external to conduct new product or service development in the last year (H6)
- Or, derive at least some turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years and these products & services are either ‘new to the world’ or ‘new to the industry/sector’ (H7b)
IP Active Firms
- Hold/have applied for patents, trademarks, design rights or other legal protection for their products/services (H8b) ASK ALL H8f – Can I just check, have you ever heard of the UK government’s overseas Intellectual Property attaché network?
EXPLAIN AS NECESSARY: The UK Government has recently established a network of Intellectual Property attachés based in China, India, Brazil and South East Asia. This network will be used to strengthen advice and support on Intellectual Property Protection in these markets with a view to further developing trade for UK companies there.
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ........................................................................ 3
ASK ALL I4 – And during the last year, have you attended any business seminars, tradeshows or conferences?
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ........................................................................ 3
ASK ALL H9a – Moving on, do you have a current, written business plan?
Yes ................................................................................... 1 No ..................................................................................... 2 (In progress/currently writing business plan) .................... 5 (Don’t know) ........................................................................ 3 (Refused) ........................................................................... 4
IF HAVE OR WRITING PLAN (CODE 1 OR 5 AT H9a) H9c - \<IF H9a=1 Does / IF H9a=5 Will> the plan contain any targets relating to revenues from overseas sales?
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ........................................................................ 3 (Refused) ........................................................................... 4
ASK ALL G10a – Over the last 6 months, has your business had any difficulties in obtaining finance, either from within the company or from external sources?
INTERVIEWER NOTE: If respondent says it is not applicable or they haven’t tried to obtain finance, then code as ‘no’
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ........................................................................ 3 (Refused) ........................................................................... 4 IF DIFFICULTIES ACCESSING FINANCE (G10a=1)
G10e – Have these difficulties obtaining finance had any negative impact on the scale or scope of your <IF S2b=1 planned> overseas activities? SINGLE CODE.
Yes ................................................................................................................. 1 No .................................................................................................................. 3 (Don’t know) ................................................................................................. 4
CATI TO INSERT TIME MARKER
WRAP UP
ASK ALL
H14 – That’s the end of the interview, thank you very much for taking part. I just need to check a few things before you go. Would you be willing to take part in any future UK Trade & Investment research on this topic?
AS NECESSARY If you say ‘yes’ you can always decline at the time if it’s not convenient.
Yes ................................................................................................................. 1 No .................................................................................................................. 2 (Don’t know) ................................................................................................. 3
ASK ALL
H17d – Would you like us to email you some more information on the services that UKTI provide to help UK firms do business overseas? READ OUT
INTERVIEWER NOTE: YOU CAN OFFER THE UKTI WEBSITE AS WELL/INSTEAD (WWW.UKTI.GOV.UK)
Yes ................................................................................................................. 1 No .................................................................................................................. 2 (Don’t know) ................................................................................................. 3
ASK ALL
H17a - We will be producing a report of the results from this survey. Would you like us to email you an electronic link to this report when it’s published? READ OUT
ADD AS NECESSARY The report will be available later this year.
Yes ................................................................................................................. 1 No .................................................................................................................. 2 (Don’t know) ................................................................................................. 3 IF YES AT H17a OR H17d H17b - Can I take your e-mail address? AS NECESSARY: This will only be used to email you < IF YES AT H17d some information about UKTI services / IF YES AT H17d & H17a and / IF YES AT H17a a link to the report > and will not be passed on to anyone else.
INTERVIEWER NOTE: PLEASE MAKE SURE YOU RECORD THE EMAIL ADDRESS CORRECTLY, & READ IT BACK TO THE RESPONDENT TO CHECK SPELLINGS ETC
Yes (WRITE IN).................................................................1 No.....................................................................................2 (Don't know).................................................................3
CATI TO INSERT TIME MARKER
ASK ALL H15 – Finally as proof of this interview please could I just confirm your business postcode? CATI TO DISPLAY POSTCODE IF AVAILABLE – AMEND IF MISSING OR INCORRECT
..........................................................................................
ASK ALL H16 – And may I take a note of your name?
..........................................................................................
STANDARD THANK & CLOSE
Deleted Questions (previous waves)
- S5d, S5e, S8, S9a, S9b, S9c, A7, A8, A9b, A9c, A9d, A10, A11, A12, A17b, A18, A24, A25, A29, B1b, B1c, B3, B5, B7, B8a, B8b, B9, C1a, C1b, C1d, C4, E2, E3, E4, E5, F2j, F2k, F2l, F2m, F2n, F4a, F4b, F5, G4b, G10f, G12, H2c, H2d, H2e, H3c, H11b, H17c, H18a, H18b, H18c, H19a, H19b, H19c, H20a, H21, I1, I2h, I2i, I3b, I5
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bd46aa158711029a13de703b3af7ecc214822129 | Statistical bulletin
International Trade in Services: 2013
The UK's imports and exports of services analysed by product, industry and country.
Contact: Michael Hardie [email protected]
Release date: 30 January 2015
Next release: To be announced
Table of contents
1. Main findings
2. Your views matter
3. Overview
4. Summary
5. Section A: Total international trade in services (excluding travel, transport and banking) by continent and countries
6. Section B: Trade in services products: geographical analysis
7. Section C: Trade in Services by Products: Industry Analysis
8. Background notes
9. Main findings
- Total UK exports of services (excluding travel, transport and banking) in current prices continued to rise, increasing from £103,828 million in 2012 to £117,193 million in 2013, an increase of 12.9%.
- Total UK exports of services to Europe witnessed the largest increase in 2013 rising from £51,963 million in 2012 to £57,150 million, an increase of 10.0%. Exports to Germany contributed most towards the increase.
- The professional, scientific and technical activities sector continued to be the largest sector contributing 27.4% of total UK exports in 2013.
- Total UK imports of services (excluding travel, transport and banking) in current prices increased by 15.1% rising from £46,399 million in 2012 to £53,387 million in 2013.
- Imports of services to the UK from the Irish Republic showed the largest growth within Europe rising from £2,597 million in 2012 to £4,084 million in 2013.
- The information and communication services sector made the largest contribution to UK imports of services in 2013, contributing 25.5% of total UK imports.
2. Your views matter
The structure of this release has been modified in response to some feedback received from its users. We are constantly aiming to improve this release and its associated commentary. We would welcome any feedback you might have and would be particularly interested in knowing how you make use of these data to inform our work. Please contact us via email: [email protected] or telephone Michael Hardie on +44 (0)1633 455923
3. Overview
A detailed breakdown of annual trade in services estimates, analysing data by product, industry and country are provided in the 2013 International Trade in Services (ITIS) publication. These data are sourced from the Office for National Statistics International Trade in Services survey.
The ITIS survey is a key source of UK trade data although it is important to note the survey does not cover the whole of the UK economy. Data for the travel, transport and banking sectors of the economy are not covered by the ITIS survey as these data are obtained from other sources such as the International Passenger Survey and the Bank of England. Estimates for the overall level of trade in services, including these industries, are published in the Office for National Statistics annual Pink Book and monthly UK trade publications. Based on the 2013 estimates the ITIS data contributed approximately 56% and 41% respectively to the total trade in services export and import estimates for the whole of the UK. The 2013 estimates contained within this publication are the first set of ITIS results that have been collected and published according to the agreed international standards set out in the sixth edition of the International Monetary Fund (IMF) Balance of Payments Manual (BPM6). Implementing the recommendations from the revised BPM6 manual resulted in the ITIS questionnaire being thoroughly reviewed and updated. Changes to the survey included:
- six deleted questions - for example, ‘Reinsurance claims and premiums’ were removed from the questionnaire
- three split questions - for example, ‘Other on-site processing services’ became ‘Manufacturing services on goods owned by others’ and ‘Maintenance and repair services’
- 10 new questions - for example, ‘Manufacturing services on goods owned by others’. This question aims to collect data on fees charged by foreign businesses for the processing, assembly, labelling, and packing of goods overseas that are owned by a respondents business
- three merged questions - for example, ‘Advertising’ and ‘Market research and public opinion polling’ merged to become ‘Advertising, market research and public opinion polling services’
- rebranding of the ‘Royalties and licences’ section – This section was re-named ‘Intellectual Property’ and the questions within this section have all been revised and contain two new additional questions
- questionnaire layout - for example, renumbering of question codes and changes to sections for example, the ‘Communications’ section has been merged with ‘Computer and Information Services’ and ‘Information services’ to create one complete section titled ‘Telecommunications, Computer and Information Services’
- updated wording and guidance – descriptions surrounding what data should be reported against specific questions have been enhanced to clarify to users what information should be reported
As a result of updated wording and guidance data variations at service product level may partly be explained by this. Users should be mindful of this when analysing product level estimates over time.
A copy of the ITIS questionnaire is available on the Introduction to ITIS page on the ONS website.
4. Summary
Total exports of services (excluding travel, transport and banking) from the UK in current prices, increased from £103,828 million in 2012 to £117,193 million in 2013, an increase of 12.9%. Prior to this, UK exports increased by 9.2% on an annual basis (2001-2012), reaching a peak of £117,193 million in 2013.
Total imports of services (excluding travel, transport and banking) to the UK, in current prices increased from £46,399 million in 2012 to £53,387 million in 2013, an increase of 15.1%.
The ITIS estimates show the UK continued to be a net exporter of services in 2013, meaning more services were exported from the UK than imported. The UK trade balance for services stood at £63,806 million in 2013, an increase of 11.1% when compared to 2012.
**Figure 1: Total international trade in services (excluding travel, transport and banking)**
Source: Office for National Statistics
5. **Section A: Total international trade in services (excluding travel, transport and banking) by continent and countries**
This section shows key geographical findings for total UK international trade in services (excluding travel, transport and banking). The size of the arrows in figures 2 and 3 are proportionate to the size of the continental export and import markets for the UK.
For more detailed geographic information relating to total export and imports of services please refer to table A0 – Total trade in Services (excluding travel, transport and banking) analysed by continents and countries. Exports of services
Figure 2: UK international trade in services (excluding travel, transport and banking) exports by continent, 2013
UK exports of services to Europe increased from £51,963 million in 2012 to £57,150 million in 2013 and remained the largest area in receipt of UK exports. Switzerland surpassed the Irish Republic to become the main trading partner of the UK within Europe, with UK exports to Switzerland increasing from £6,248 million in 2012 to £7,712 million in 2013. UK exports of services to Germany also increased in 2013 rising from £6,018 million in 2012 to £7,490 million in 2013, an increase of 24.5%. This increase has resulted in Germany becoming the second largest country within Europe in receipt of UK service exports.
The Americas, mainly supported by the USA, remained the UK’s second largest area in receipt of UK exports. Exports to the USA increased in 2013 rising from £22,759 million in 2012 to £26,504 million in 2013, an increase of 16.5%.
Asia remained the third largest destination for UK exports of services with exports increasing from £16,284 million in 2012 to £19,660 million in 2013, an increase of 20.7% Saudi Arabia made the largest contribution to the overall exports total for Asia contributing 27.0%.
An interactive map can be found on the ONS website detailing the UK’s European import and exports of services. Imports of services
Figure 3: UK international trade in services (excluding travel, transport and banking) imports by continent, 2013
UK imports of services from Europe rose from £24,192 million in 2012 to £29,359 million in 2013 and remained the main import area. Within Europe, Germany remained the main origin for UK imports of services, increasing from £4,102 million in 2012 to £4,736 million in 2013. The Irish Republic was the second largest trading partner of the UK for imports of services increasing from £2,597 million in 2012 to £4,084 million in 2013. UK imports from the Irish Republic more than doubled between 2009 and 2013, with the most notable increase seen in the 2013.
The Americas remained the second largest area that the UK imported services from followed by Asia. There were no compositional changes of countries within these continents from which the UK imported services from.
An interactive map can be found on the ONS website detailing the UK’s European import and exports of services.
6. Section B: Trade in services products: geographical analysis
In this section UK trade in services exports and imports are broken down by product groups. Each group is analysed by continent, making comparisons between 2012 and 2013.
As a result of changes to international regulations the ITIS questionnaire used to collect trade in services data for 2013 was revised. This has improved coverage of ITIS data collection and should be considered when comparing product groupings over time.
The percentage contributions to total UK exports and imports of services of each of the product groupings contained within this section are: Table 1: Percentage contributions of product groups to total ITIS, 2013
| Product Group | Exports | Imports | |------------------------------------------------------------------------------|---------|---------| | Technical, trade related, operational leasing & other business services | 14.70% | 10.60% | | Professional, management consulting and R&D services | 24.80% | 29.20% | | Merchanting, other-trade related and services between related enterprises | 14.30% | 17.80% |
Source: Office for National Statistics
Technical, trade related, operational leasing and other business services group
The table below shows the service products used to compile the technical, trade related, operational leasing and other business services group across both 2012 and 2013.
Table 2: Service products used to compile the technical, trade related, operational leasing and other business services group across both 2012 and 2013
| 2012 | 2013 | |-------------------------------------------|-------------------------------------------| | Agricultural services | Agricultural, forestry and fishing | | Mining services | Mining and oil and gas extraction services| | Waste treatment and depollution | Waste treatment and depollution | | Other on site processing | Manufacturing services on goods owned by others | | | Maintenance and repair services | | Construction in the UK | Construction in the UK | | Construction outside the UK | Construction outside the UK | | Architectural services | Architectural services | | Engineering services | Engineering services | | Surveying services | Scientific and other technical services inc surveying | | Operational leasing services | Operational leasing services |
Source: Office for National Statistics
Exports
UK exports of technical, trade-related, operational leasing and other business services increased by £6,392 million in 2013 to £17,277 million. UK exports to Europe almost doubled in 2013 rising from £3,397 million in 2012 to £6,277 million in 2013. Prior to this, exports of services to Europe had been on a broad downward trend before a slight recovery in 2012. Within Europe, UK exports to the Netherlands showed the largest increase from £303 million in 2012 to £997 million in 2013, an increase of £694 million. This was followed by UK exports to both Germany and Norway which increased by £572 million and £377 million respectively.
UK exports to Asia have been on an upward trend since 2009 with the exception of 2011 which showed flat growth. UK exports to Asia increased from £3,140 million in 2012 to £4,566 million in 2013. Within Asia, UK exports to Saudi Arabia showed the largest growth rising from £699 million in 2012 to £1,315 million in 2013. This follows strong growth in recent years, with the 2012 estimate more than doubling in comparison to 2011.
UK exports to the Americas also experienced growth in 2013 rising from £2,573 million in 2012 to £4,237 million in 2013. Within the Americas, UK exports to the USA showed the largest increase rising to £2,773 million and accounted for over half the total export value to the Americas in 2013.
Imports
Imports to the UK of technical, trade-related, operational leasing and other business services has grown at a much more subdued rate since 2011 with imports to the UK rising to £5,675 million in 2013, an increase of £1,349 million. Imports to the UK from Europe increased from £2,194 million in 2012 to £2,961 million in 2013. Germany made the largest contribution to the overall UK imports total in 2013 with an estimated imports total of £570 million and has been increasing at a steady rate since 2011. France and the Netherlands also made large contributions to total UK imports in 2013, with estimates of £441 million and £321 million respectively.
Imports from Asia increased from £1,102 million in 2012 to £1,426 million in 2013, the second largest contribution to the total UK imports estimate in 2013. Imports from Asia were predominantly sourced from Singapore and the Rest of Asia, with an estimated £347 million and £554 million imported to the UK from these countries respectively. Imports from Saudi Arabia showed a marked increase in 2012 rising to £252 million before returning to pre 2012 levels in 2013.
Imports to the UK from the Americas grew by £324 million rising from £706 million in 2012 to £1,030 million in 2013. The USA was the dominant country within the Americas, which the UK imported these services from, with an overall imports total in 2013 of £692 million.
**Professional, management consulting and R&D services**
The table below shows the service products used to compile the professional, management consulting and R&D services group across both 2012 and 2013.
| 2012 | 2013 | |-------------------------------------------|-------------------------------------------| | Accountancy, auditing, bookkeeping and tax consulting services | Accountancy, auditing, bookkeeping and tax consulting services | | Advertising | Advertising, market research and public opinion polling | | Management consulting | | Exports
UK exports of professional, management consulting and R&D services continued on an upward trend with total UK exports rising to £29,109 million in 2013, an increase of £4,657 million.
Figure 6: Exports (excluding travel, transport and banking) of professional, management consulting and research and development services by continent, 2009 to 2013
Europe remained the largest export destination and showed growth of 21.4% rising from £13,702 million in 2012 to £16,629 million in 2013. Switzerland remained the largest export destination and showed the largest year on year increase rising from £2,220 million in 2012 to £3,464 million in 2013. Germany, the Irish Republic and the Netherlands also made large contributions to the overall UK exports total, all of which saw notable year on year increases. UK exports to Europe ‘unallocated’ experienced a decline in 2013 falling from £1,033 million in 2012 to £387 million in 2013. Europe ‘unallocated’ comprises of data where the respondent knows the continent services have been exported to but not specifically which country. UK exports to the Americas increased from £7,089 million in 2012 to £8,182 million in 2013, an increase of 15.4%. This is in contrast to 2012 when the Americas showed flat growth. The USA continued to be the largest trading partner in receipt of UK exports of these services and was also the country which experienced the largest growth within the Americas in 2013.
UK exports to Asia increased by 17.5% in 2013, rising from £2,821 million in 2012 to £3,315 million. UK exports to Japan and the Rest of Asia made the largest contribution to the overall UK exports total in 2013, experiencing growth of £109 million and £126 million respectively.
Imports
Imports of professional, management consulting and R&D services to the UK increased from £12,349 million in 2012 to £15,608 million in 2013.
Figure 7: Imports (excluding travel, transport and banking) of professional, management consulting and research and development services 2009 to 2013
Source: Office for National Statistics
Imports of these services to the UK were primarily sourced from Europe which increased from £6,800 million in 2012 to £8,536 million in 2013. Imports from Germany and the Irish Republic made the largest contribution to the overall UK imports total for Europe both of which experienced growth in 2013. The time series from 2009 onwards shows that UK imports of these services were driven by imports from Germany and France. In 2013 however, strong growth was experienced in UK imports from the Irish Republic resulting in Irish imports making the second largest contribution to the overall total for UK imports from Europe.
UK imports from the Americas continued to make the second largest contribution to the overall UK imports total. Imports to the UK from the Americas increased by £1,161 million in 2013, from £2,905 million in 2012 to £4,066 million in 2013. Imports of these services were primarily sourced from the USA which made the largest contribution to the overall UK imports total for the Americas, which rose to £3,671 million in 2013.
Merchanting, other trade related and services between related enterprises
The table below shows the service products used to compile the merchanting, other trade related and services between related enterprises group across both 2012 and 2013. Table 4: Service products used to compile the merchanting, other trade related and services between related enterprises group across both 2012 and 2013
| 2012 | 2013 | |-----------------------|-----------------------| | Merchanting | Merchanting | | Other trade related | Other trade related | | Services between related enterprises | Services between related enterprises |
Source: Office for National Statistics
Exports
UK exports of merchanting, other trade related and services between related enterprises showed a decline in 2013 falling from £21,308 million in 2012 to £16,763 million, a decrease of £4,545 million. The time series from 2009 to 2011 shows that UK exports of these services had been increasing at a steady rate before growth started to decline in 2011.
Figure 8: Exports (excluding travel, transport and banking) of merchanting, other trade related and services between related enterprises by continent, 2009 to 2013
Source: Office for National Statistics
UK exports to Europe continued to decline in 2013, falling from £11,579 million in 2012 to £8,872 million in 2013, a decrease of £2,707 million. Within Europe, UK exports to the Netherlands showed the largest decline falling from £2,189 million in 2012 to £1,189 million in 2013. Exports to Switzerland increased to £1,855 million in 2013, resulting in Switzerland making the largest contribution to the overall UK exports total. Despite showing a decline in 2013, the Netherlands continued to make a notable contribution to the overall UK exports total to Europe.
UK exports to the Americas also witnessed a decline in 2013, falling from £6,005 million in 2012 to £4,894 million in 2013, a decrease of £1,111 million. Apart from Brazil, the decline in exports of these services to the Americas was broad based, with the USA experiencing the largest decline. UK exports to Asia declined in 2013, falling from £2,463 million in 2012 to £1,950 million in 2013. Declines were seen across the whole of Asia with the exception of Singapore, Hong Kong and the Rest of Asia which combined increased by £169 million.
The worldwide decline of these services seen in 2013 can in part be attributed to the decline of UK exports of ‘services between related enterprises’ which decreased by £5,646 million. Over recent years the product ‘services between related enterprises’, had become the largest service product contributing to total UK exports. Implementing the recommendations made in the current BPM6 manual resulted in a proportion of the data collected under this service product being reported elsewhere on the ITIS questionnaire therefore contributing to part of the decline seen in 2013.
Imports
UK imports of merchanting, other trade related and services between related enterprises to the UK also saw a decline in 2013, falling from £9,902 million in 2012 to £9,490 million in 2013. The rate of decline seen in UK imports of these services is much more subdued in comparison to the decline experienced in UK exports of these services, which saw a sharp downturn in 2013.
Figure 9: Imports (excluding travel, transport and banking) of merchanting, other trade related and services between related enterprises by continent, 2009 to 2013
Source: Office for National Statistics
UK imports from Europe experienced marginal growth, rising from £5,407 million in 2012 to £5,502 million in 2013. The Netherlands made the largest contribution to the increase with imports rising to £973 million in 2013, an increase of £604 million. The rise in imports of these services from the Netherlands has resulted in the country making the largest contribution to the UK imports total of these services from Europe, superseding France which made the largest contribution in 2012.
UK imports from the Americas declined in 2013 falling from £2,409 million in 2012 to £2,206 million in 2013. This decline was primarily driven by a reduction in imports of these services from the USA to the UK, which fell by £290 million.
UK Imports from Asia continued to decline in 2013 falling by £299 million. Singapore showed the largest decline falling by £95 million to a total of £202 million in 2013. 7. Section C: Trade in Services by Products: Industry Analysis
This section illustrates UK trade in services exports and imports detailed by industry and product classification.
Exports
Figure 10: UK exports of products, by industry, 2013
The professional, scientific & technical activities sector remains the largest sector contributing to total UK exports followed by the information and communication sector, with shares of 27.4% and 21.6% respectively. UK exports from this sector experienced a small decline in 2013 of £633 million, falling from £32,724 million in 2012 to £32,091 million in 2013.
The breakdown of this sector by type of service product (Table C5 - 2013) shows that this sector primarily exported ‘business and professional’ type services, which accounted for £16,237 million of the sectors total services exports estimate. Exports of these services from this sector showed a decline of £6,789 million in 2013, which can partly be attributed to the revised layout of the ITIS questionnaire. Research and development services were included under ‘business and professional services’ up to 2012, however, from 2013, research and development estimates have a designated category of their own. Please refer to Table C5 – 2013 to see the revised service product layout.
The service product ‘services between related enterprises’ also showed a marked decline in 2013 falling by £3,302 million. This can also in part be attributed to the redesign of the ITIS questionnaire as values previously reported under this service type by respondents are now reported elsewhere on the questionnaire.
UK service exports from within the manufacturing sector expanded the most in 2013, rising by £3,356 million to a total service exports figure of £12,366 million. This is in contrast to the time series from 2009 which shows exports from the manufacturing sector have gradually been reducing. A large proportion of the increase was driven by exports of ‘manufacturing services on goods owned by others’ and ‘maintenance and repair services’ which had a combined exports figure of £2,558 million. These are new questions as of 2013. UK exports of ‘engineering services’ continued to make the largest contribution to the overall UK exports total for the manufacturing industry in 2013 with an estimated export total of £2,630 million. In 2013, the information and communication sector made the largest contribution to total UK imports of services closely followed by the professional, scientific & technical activities sector.
Imports of services to the UK by the information and communication sector increased by £330 million, rising from £13,276 million in 2012 to £13,606 million in 2013. The increase seen in 2013 resulted in the information and communication sector becoming marginally the largest sector responsible for importing services to the UK.
The breakdown of this sector by type of service product (Table C4) shows that telecommunication and computer services are primarily the main types of services imported to the UK by the information and communication sector. Combined, these have a total UK imports estimate of £6,507 million which equates to 47.8% of the total UK imports value for this sector.
Analysing sector level growths between 2012 and 2013 shows that the financial and insurance activities sector expanded the most in terms of importing services to the UK which grew by £2,255 million in 2013, followed by the wholesale and retail sector which increased by £1,610 million.
8. Background notes
9. Your views matter
We are constantly aiming to improve this release and its associated commentary. We would welcome any feedback you might have and would be particularly interested in knowing how you make use of these data to inform our work. Please contact us via email: [email protected] or telephone Michael Hardie on (+44) (0)1633 455923
2. Basic quality information
The Quality and Methodology Information (834.9 Kb Pdf) describes, in detail, the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them.
3. Relevance to users
Government and businesses use the International Trade in Services (ITIS) data for economic assessment. The Department of Business, Innovation and Skills (BIS) state that the ITIS survey is the only source of services and product detail for international service trade, and is essential for regional exports analyses. BIS also use the ITIS survey data to monitor the competitiveness of UK businesses and to gain a better understanding of the level of service exports.
The Scottish Government also show significant interest in the survey results, to supplement Scotland’s Global Connections Survey (GCS), whilst the Department of Culture Media and Sport (DCMS) use the ITIS data in one of their main outputs, The Creative Industries Statistical Release.
The British Film Institute (BFI) use the data to assess the performance of the UK film industry and for providing policy advice to the government and strategic advice to the industry. The data is used in the compilation of the International Trade Statistics yearbook.
UK ITIS figures are also extensively used for policy, analysis and negotiations by international organisations as well as a number of foreign embassies. More widely the ITIS estimates are utilised by commercial companies, academics and independent researchers.
4. Guidance on interpreting international trade in services statistics
ITIS collects data relating to the amounts spent on both the imports and exports of UK businesses and collects geographical information as to where the services have either been imported or exported.
Types of transactions covered
Product: The statistical output from the ITIS survey covers the value of transactions between the UK and residents in other countries in respect of 52 products. The 2013 ITIS questionnaire has recently been revised in accordance with new international regulations. A breakdown showing the service products collected in both 2012 and 2013 can be found in table 5.
Table 5: Question mappings 2012 -2013
| Questionnaire breakdown up to and including 2012 | Questionnaire breakdown 2013 onwards | |-------------------------------------------------|--------------------------------------| | 01. Agricultural Services | 01. Agricultural, forestry and fishing services | | 02. Mining Services | 02. Mining and oil gas extraction services | | 03. Waste treatment and depollution | 03. Waste treatment and depollution services | | 04. Other on-site processing services | 04. Manufacturing services on goods owned by others | | 05. Accountancy, auditing, bookkeeping and tax consulting services | 05. Maintenance and repair services | | 06. Advertising | 06. Accountancy, auditing, bookkeeping and tax consulting services | | 07. Management consulting | 07. Advertising, market research and public opinion polling services | | 08. Public relations services | 08. Business management and management consulting services | | 09. Recruitment and training | 09. Public relations services | | 10. Other business management services (see 7) | 10. Recruitment services | | 11. Legal services | 11. Legal services | | 12. Market research and public opinion polling (see 6) | 07. Advertising, market research and public opinion polling services | | 13. Operational leasing services | 12. Operating leasing services | | 14. Procurement | 13. Procurement services | | 15. Property management | 14. Property management services | | 16. Research & Development | 16. Provision of R&D services | |---------------------------|-------------------------------| | 17. Services between related enterprises | 17. Provision of product development and testing activities | | 18. Other business and professional services | 15. Other business and professional services | | 19. Postal and courier services | 21. Postal and courier services | | 20. Telecommunication services | 22. Telecommunication services | | 21. Computer services | 23. Computer services | | 22. News agency services | 25. News agency services | | 23. Publishing services | 24. Publishing services | | 24. Other information provision services | 26. Information services | | 25. Construction in the UK | 27. Construction in the UK | | 26. Construction outside the UK | 28. Construction outside the UK | | 27. Financial services | 29. Financial services | | 28. Auxiliary services | 36. Auxiliary services | | 29. Claims | 32. Freight insurance claims | | 30. Premiums | 33. Freight insurance premiums | | 31. Claims | 30. Life insurance claims | | 32. Premiums | 31. Life insurance premiums | | 33. Claims | Removed | | 34. Premiums | Removed | | 35. Claims | 34. Other direct insurance claims | | 36. Premiums | 35. Other direct insurance premiums | | No equivalent | 37. Pension service receipts | | No equivalent | 38. Pension service charges | | No equivalent | 39. Standardised guarantee service claims | | No equivalent | 40. Standardised guarantee service premiums | | 37. Merchanting | 41. Merchanting | | 38. Other trade-related services | 42. Other trade-related services | | 39. Audio-visual and related services | 43. Audio-visual and related services | | 40. Health services | 44. Health services | | 41. Training and educational services | 45. Training and educational services | | 42. Other personal, cultural and recreational services | 46. Heritage and recreational services | | 43. Use of franchise and similar rights fees | 18b. Charges or payments for the use of the above, but without transfer of ownership | | 44. Other royalties and license fees | 19b. Charges or payments for the use of the above, but without transfer of ownership | | 45. Purchases ans sales of franchises and similar rights | 20b. Charges or payments for the use of the above, but without transfer of ownership | | 46. Purchases ans sales of other royalties and licenses | 18a. Outright sales and purchases of the above, resulting in transfer of ownership | 19a. Outright sales and purchases of the above, resulting in transfer of ownership
20a. Outright sales and purchases of the above, resulting in transfer of ownership
42. Other personal, cultural and recreational services
43. Social, domestic and other personal services
44. Architectural
45. Architectural services
46. Engineering
47. Engineering services
48. Surveying (see 50)
49. Scientific and other technical services (including surveying)
50. Other technical services (see 49)
51. Other trade in services
52. Other trade in services
Source: Office for National Statistics
Industry: The industry analysis enables estimation for the total international transactions in services by economic classification for well-defined areas of the economy using Standard Industrial Classification (SIC) information. Data from 2009 in this publication have been published in SIC (2007) classification which is an internationally recognised standard industrial classification. This provides a framework for the collection, tabulation, presentation and analysis of data about economic activities. Prior to 2009, SIC 2003 classification would have been used.
Geographical: Both industry and product information are analysed geographically. The tables within this publication show the countries to which services are exported, and from which services are imported.
The geographical groupings used in the tables that follow are found in table 6.
**Table 6: Geographical groupings**
The geographical groupings used in the tables are as follows:
| Europe | The Americas | Asia | Australasia & Oceania | Africa | |-----------------|--------------|---------------|------------------------|-----------------| | SPECIFIED COUNTRIES | SPECIFIED COUNTRIES | SPECIFIED COUNTRIES | SPECIFIED COUNTRIES | SPECIFIED COUNTRIES | | Austria | Brazil | China | Australia | Nigeria | | Belgium | Canada | Hong Kong | New Zealand | South Africa | | Bulgaria | Mexico | India | | | | Channel Islands | USA | Indonesia | OTHER COUNTRIES | OTHER COUNTRIES | | Croatia | | Israel | American Oceania | Algeria | | Cyprus | | Japan | Antarctica | Angola | | Czech Republic | Anguilla | Malaysia | Australian Oceania | Benin | | Denmark | Antigua & Barbuda | Pakistan | Fiji | Botswana | | Estonia | Argentina | Philippines | Kiribati | British Indian Ocean | | Finland | Aruba | Saudi Arabia | Marshall Islands | Burkina Faso | | France | Bahamas | Singapore | Micronesia | Burundi | | Germany | Barbados | South Korea | Nauru | Cameroon | | Greece | Belize | Taiwan | New Zealand Oceania | Cape Verde | |-------------|--------------|--------------|---------------------|------------| | Hungary | Bermuda | Thailand | Northern Mariana Islands | Central African Republic | | Iceland | Bolivia | | Palau | Chad | | Irish Republic | British Virgin Islands | OTHER COUNTRIES | Papua New Guinea | Comoros | | Isle of Man | Cayman Islands | Abu Dhabi | Pitcairn | Congo | | Italy | Chile | Armenia | Polar regions | Cote d’Ivoire | | Latvia | Columbia | Azerbaijan | Solomon Islands | Djibouti | | Liechtenstein | Costa Rica | Bahrain | Tonga | Egypt | | Lithuania | Cuba | | Tuvalu | Equatorial Guinea | | Luxembourg | Dominica | Bangladesh | Vanuatu | Eritrea | | Malta | Dominican Republic | Bhutan | Samoa | Ethiopia | | Netherlands | Ecuador | Brunei | | Gabon | | Norway | El Salvador | Cambodia | | Gambia | | Poland | Falkland Islands | Dubai | Ghana | | | Portugal | Grenada | Georgia | | Guinea | | Romania | Guatemala | Iran | | Guinea Bissau | | Russia | Guyana | Iraq | | Kenya | | Slovakia | Haiti | Jordan | | Lesotho | | Slovenia | Honduras | Kazakhstan | | Liberia | | Spain | Jamaica | Kuwait | | Libya | | Sweden | Montserrat | Kyrgyzstan | | Madagascar | | Switzerland | Nicaragua | Laos | | Malawi | | Turkey | Netherlands Antilles | Lebanon | Mali | | | | Panama | Macao | | Mauritania | | OTHER COUNTRIES | Paraguay | Maldives | | Mauritius | | Albania | Peru | Mongolia | | Morocco | | Andorra | St Kitts & Nevis | Myanmar (Burma) | Mozambique | | Belarus | St Lucia | Nepal | | Namibia | | Bosnia-Hercegovina | St Maaten | North Korea | | Niger | | Gibraltar | St Vincent & The Grenadines | Oman | Rwanda | | Macedonia | Surinam | Palestinian Territory | Sao Tome & Principe | | Moldova | Trinidad & Tobago | Qatar | Senegal | | Montenegro | Turks & Caicos Islands | Sharjah | Seychelles & Dependencies | | San Marino | Uruguay | Sri Lanka | | Sierra Leone | | Serbia | US Virgin Islands | Syria | Somalia | | Ukraine | Venezuela | Tajikistan | | St Helena & Dependencies | | Vatican City State | West Indies | Turkmenistan | Sudan | Earnings from third country trade, for example, from arranging the sale of goods between two countries other than the UK and where the goods never physically enter the UK are included. This activity is known as merchanting. Earnings from commodity trading are also included. As with merchanting, the service element is the profit or loss.
**Types of transactions not covered**
The purpose of the ITIS survey is to record international transactions which impact on the UK’s Balance of Payments, hence companies are asked to exclude from their earnings trade expenses such as the cost of services purchased and consumed abroad. Trade in services exports or imports which are invoices for the export or import of goods are excluded as they are already counted in the estimates for trade in goods.
The ITIS survey currently selects for the whole of the economy, with a number of exceptions:-
- Travel
- Transport
- Banking and other Financial Institutions
- Higher Education
- Charities
- and most activities within the legal profession
5. **Coverage**
The figures for the European Union (EU) relate to the 28 member states of the EU from 2013 onwards.
Trade with EU Institutions is also included in the EU totals and excluded from the International Organisations totals.
Please note that all tables in this publication only include data collected via the ITIS and Annual Business Survey (ABS). Data relating to Travel and Banking are not included.
The Film and Television (FTV) Industries are included in the published data from 2009 onwards. For 2008, FTV figures were collected via a separate survey and data published in the *International transactions of the UK film and television industries Statistical Bulletin 2008* (148.1 Kb Pdf).
The ITIS survey is just one component of the Trade in Services (TIS) estimates. Data for TIS in this report are consistent with the UK Balance of Payments which can be found in *Pink Book*.
By analogy with trade in goods we refer to the type of service traded as a “product analysis” – the products being consistent with the fifth edition of the IMF’s *Balance of Payments Manual*. The second type of analysis is referred to as the “industry analysis” – covering well defined areas of the economy.
In the following section both types of tables, industry and product have been analysed on a geographical basis by showing the countries to which services are exported and from which they are imported. Both of these types of analyses are preceded by geographical analysis of imports and exports of total International Trade in Services.
The industry analysis allows us to estimate the total international transactions in services for well-defined areas of the economy. It also tells us the exporting or importing country in relation to the UK. 6. **Accuracy and errors**
The 2013 estimates contained within this publication have been collected in accordance with the latest *Balance of Payments Manual (BPM6)*. Implementing the new requirements led to a thorough review of the questionnaire and resulting in a revised layout.
The results of the Annual and Quarterly Surveys into International Trade in Services (ITIS) provide Trade in Services data which contribute to key components of the measurement of the UK’s Balance of Payments (BoP) and Gross Domestic Product (GDP). These results are published in detail in the *UK Balance of Payments Pink Book*.
The ITIS survey (which consists of a quarterly component addressed to the largest businesses and an annual component for the remainder) covers receipts from the provision of services to residents of other countries (exports) and payments to residents of other countries for services rendered (imports). Residents of other countries are companies, governments and individuals. Although companies classified to the financial auxiliaries sector are included in the ITIS survey, businesses classified to other financial areas are not included in the sample. This does not mean that financial services are not covered as these services can be imported by companies classified outside the financial sector.
**Sampling frame**
The sampling frame used by international trade in services is the Inter Departmental Business Register, which is compiled primarily from administrative information such as VAT details from HM Customs and Excise and PAYE from the Inland Revenue. The register holds business information including turnover, employment and SIC. The IDBR covers businesses in all parts of the economy, missing some very small businesses operating without VAT or PAYE schemes (self employed and those with low turnover and without employees) and some non-profit organisations. The Department for Business Innovation & Skills makes an estimate of the total number of unregistered businesses in its Business Population Estimates for the UK and Regions publication.
All the data on the IDBR are treated as RESTRICTED COMMERCIAL and are protected by the Code of Practice for Official Statistics and by specific legislation.
**Sample design**
This includes 9,000 businesses randomly selected from the IDBR. Selection is stratified by employment and SIC 2007. ITIS selects across the whole of the economy with a number of exceptions detailed at point 5 of this document. An additional 5,000 businesses are made up of a fixed panel of known traders and as such are not subject to weighting.
For the first time in 2007 data was used from the Annual Business Survey (ABS) to improve coverage of the ITIS survey. In total the ABS approaches some 65,000 companies. A matching exercise of samples and universes was undertaken to ensure no duplication. Following this quality assurance exercise, data from approximately 9,000 companies were used in the 2013 ITIS results. It should be noted that the ABS component only provides total import and export data. The country and product detail are estimated using like companies from the fixed panel of known traders. Like companies are those within the same SIC and employment strata.
The quarterly survey is a subset of the annual survey, so there is no overlap or duplication between the annual and quarterly surveys. The quarterly sample consists of the largest companies in terms of international trade in services, and the results are used throughout the year to forecast total annual ITIS.
Respondents are requested to provide figures for the current calendar year (1 January 2013 to 31 December 2013), although some respondents provide figures for their actual accounting year.
All values for ITIS are at current prices. Current prices, refers to prices as they were at the time of measurement and not adjusted for inflation.
The measurement of trade in services presents a difficult methodological problem, since the population is large and the occurrence (especially for imports) can be unpredictable and infrequent. Although the sample size of the ITIS survey was increased in 2002, given these measurement problems, it remains relatively modest and the quality of the estimates must be judged accordingly.
In addition to the imputation of detail for some categories where the data are incomplete, there remains a margin of uncertainty about the accuracy of reported data. The finer the level of detail sought, the greater the likelihood of misallocation. Enterprises reporting data are encouraged to make their best estimates but as country attribution may not be a crucial aspect of the management information from which details are extracted, a significant degree of approximation is likely to occur.
Given the conceptual and practical limitations described above, these estimates should be seen as a broad indication of the economic relationships between the UK and international economies. They will be more reliable and more meaningful in terms of broad geographical areas and major partner countries than for smaller partner countries.
Within this publication, to avoid disclosing data on individual companies the tables have been arranged to remove these disclosive items. This is done wherever possible by suppressing the item so that non-disclosing headings are preserved. However, in some cases it has been necessary to combine headings in order to mask the disclosive data. In addition, some totals or balances may not exactly agree with the calculations on the components. This is due to rounding.
Response rates
Table 7: Response Rates
| | 2013 Results | |--------------------------|--------------| | Sample size | 14,930 | | Forms with response | 13,161 | | Forms non response | 1,769 | | Overall response rate (%)| 88.2 |
Source: Office for National Statistics
In addition to the above sample, we also select approximately 9,000 businesses via the Annual Business Survey.
7. Imputation
Imputation techniques are used to estimate values for those members of the population where data are not available, either due to the business being outside the sample or a non-respondent. Previously information relating to the imputed proportions of final ITIS estimates was published as part of the statistical bulletin. The methodology used for calculating of these estimates is currently under review and we will look to publish these estimates again in future editions of this publication.
Non-response bias is a potential issue for all statistical surveys. Non-response bias occurs where the answers of respondents may have differed from the potential answers of non-responders. The risk of non-response bias is minimised by efforts to maximise response rates. Estimation techniques can attempt to correct for any bias that might be present. Despite this, it is not easy, on any survey, to quantify the extent to which non-response bias remains a problem. However, there is no evidence to suggest that non-response bias presents a particular issue for the ITIS surveys. 8. **Standard errors**
Sampling error is the error caused by observing a sample instead of the whole population. While each sample is designed to produce the 'best' estimate of the true population value, a number of equal sized samples covering the population would generally produce varying population estimates. Sampling error is affected by a number of factors including sample size.
Sample surveys are used instead of censuses, because the process would be too lengthy and costly to be viable. Standard errors are an estimate of the sampling error and provide a measure of the precision of the estimate. A low standard error indicates a precise estimate. To aid comparison, the standard error is also expressed as a percentage of the total value. This quantity is called the coefficient of variation and it allows the standard errors to be put into context.
In addition to sampling errors there is the potential for non-sampling error that cannot be easily quantified. For example, undetected deficiencies may occur in the survey register and errors may be made by the contributors when completing the survey questionnaires.
The methodology for calculating standard errors is currently under review and we will look to publish standard error estimates in future editions of this release.
9. **Coherence**
Comparison with Quarterly ITIS: In addition, the quarterly sample which is made up of approximately 1,100 survey contributors also feeds into ITIS results. The quarterly survey is a subset of the largest companies, and the results are also used throughout the year to forecast total annual ITIS.
Comparison with the FTV Survey Data: The FTV is now incorporated into Annual ITIS since 2009. The results from this survey will be included in tables presenting total ITIS; which are Tables AO, C0 and C1. Tables showing film industry data and television industry data by geographical area are published as Tables D1 and D2 in the Annual ITIS 2012 publication. These tables were shown as Tables 4 & 5 in the 2008 International transactions of the UK film and television industries bulletin.
Comparison with ABS: The ABS survey is made up of approximately 65,000 businesses. Following quality assurance exercises to avoid double counting, the ABS survey supplements coverage of the ITIS survey by approximately 9,000 companies.
10. **Notes to tables**
The tables show ITIS through a variety of formats. Some tables compare figures over several years but the majority provide the most recent geographic information by industry or product. The tables provide information in as much detail as possible without disclosing the details of any individual companies. Any disclosive data is replaced by the following symbol throughout the tables “..”. It is important to note that within the geographical tables, amounts are shown against the geographical area from which they were received, irrespective of where they were first earned.
European Free Trade Association (EFTA) comprises Iceland, Liechtenstein, Norway and Switzerland.
The sum of constituent items in tables may not always agree exactly with the totals shown due to rounding.
The following symbols have been used throughout:
.. Figures suppressed to avoid disclosure of information relating to individual enterprises.
- Nil or less than half the final digit shown.
n/a Data not available for this period. 11. National Statistics
The ONS is the executive office of the UK Statistics Authority, a non-ministerial department which reports directly to Parliament. ONS is the UK government's single largest statistical producer. It compiles information about the UK's society and economy, and provides the evidence-base for policy and decision-making, the allocation of resources, and public accountability. The Director General of ONS reports directly to the National Statistician who is the Authority's Chief Executive and the Head of the Government Statistical Service.
The UK Statistics Authority has reviewed this publication in their report: "Assessment of compliance with the Code of Practice for Official Statistics": Statistics of International Transactions, which was published on 8 December 2011. This review recommended that the Mergers and Acquisitions estimates be designated as National Statistics, subject to ONS carrying out certain requirements. ONS is working hard to meet the requirements set out in this assessment report.
12. Social media
Follow ONS on Twitter and receive up to date information about our statistics.
Like ONS on Facebook to receive our updates in your newsfeed and to post comments on our page.
13. The Government Statistical Service (GSS)
The GSS is a network of professional statisticians and their staff operating both within the Office for National Statistics and across more than 30 other government departments and agencies.
14. GSS Business Statistics
To find out about other official business statistics, and choose the right data for your needs, use the GSS Business Statistics Interactive User Guide. By selecting your topics of interest, the tool will pinpoint publications that should be of interest to you, and provide you with links to more detailed information and the relevant statistical releases. It also offers guidance on which statistics are appropriate for different uses.
15. Discussing ONS business statistics online
There is a Business and Trade Statistics community on the StatsUserNet website. StatsUserNet is the Royal Statistical Society's interactive site for users of official statistics. The community objectives are to promote dialogue and share information between users and producers of official business and trade statistics about the structure, content and performance of businesses within the UK. Anyone can join the discussions by registering via either of the links above.
16. Special events
ONS has published commentary, analysis and policy on 'Special Events' which may affect statistical outputs. For full details visit the Special Events page on the ONS website.
17. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: [email protected]
These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.
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8a1d9e3561179f1160cf4439e58df2016a773d70 | Statistical bulletin
International trade in services, UK: 2015
Product, industry and geographic breakdowns of imports and exports of services, excluding travel, transport and banking sectors.
Contact: Sami Hamroush [email protected]
Release date: 31 January 2017
Next release: To be announced
Table of contents
01. Main points
02. Your views matter
03. Overview
04. Summary
05. Total international trade in services (excluding travel, transport and banking) by continent and countries
06. Trade in services products: geographical analysis
07. Trade in Services: Industry Analysis
08. Quality and methodology
09. Guidance on interpreting international trade in services statistics
10. Accuracy
11. Notes to tables
12. Background notes
13. Main points
- Total UK exports of services (excluding travel, transport and banking) in current prices continued to rise in 2015, increasing from £119,703 million in 2014 to £123,231 million, an increase of 2.9%.
- Total UK exports of services to Asia saw the largest increase in 2015, rising from £19,703 million in 2014 to £21,452 million, an increase of 8.9%.
- The professional, scientific and technical industrial grouping witnessed the largest increase in UK exports in 2015, rising by £2,260 million to a total of £35,760 million.
- Total UK imports of services (excluding travel, transport and banking) in current prices rose by 7.4% in 2015, increasing from £54,455 million in 2014 to £58,508 million.
- Total UK imports of services from Europe experienced the largest increase in 2015, rising from £29,085 million in 2014 to £31,483 million, an increase of 8.2%.
- The information and communication industrial grouping continued to be the largest industry responsible for UK service imports in 2015.
2. Your views matter
We are constantly aiming to improve this release and its associated commentary. We would welcome any feedback you might have and would be particularly interested in knowing how you make use of these data to inform your work. For further information please contact us via email: [email protected] or telephone Sami Hamroush on +44 (0)1633 455087.
3. Overview
The 2015 International Trade in Services (ITIS) publication provides a detailed breakdown of annual trade in services estimates, analysing data by country, product and industry. These data are sourced from our International Trade in Services survey.
The ITIS survey is the main source of UK trade data although it is important to note that the survey does not cover the whole of the UK economy. The travel, transport and banking sectors of the economy are not covered by the ITIS survey, as these data are obtained from other sources such as the International Passenger Survey and the Bank of England. Estimates for the overall level of trade in services, including these industries, are published in our annual Pink Book and monthly UK trade publications. Based on the 2015 estimates, the ITIS data contributed approximately 55% and 43% respectively to the total trade in services export and import estimates for the whole of the UK. 4. Summary
Total exports of services (excluding travel, transport and banking) from the UK continued to follow an upward trend and increased from £119,703 million in 2014, to £123,231 million in 2015.
The rate of growth of UK service exports in 2015 increased marginally compared with 2014, from 2.1 percentage points to 2.9%.
Total imports of services (excluding travel, transport and banking) to the UK also followed an upward trend in 2015, rising from £54,455 million in 2014 to £58,508 million.
The rate of growth in UK service imports increased in 2015 to 7.4%, up from 2.0% in 2014.
The ITIS estimates show that in 2015, the UK continued to be a net exporter of services meaning more services were exported from the UK than imported. The UK trade balance stood at £64,722 million in 2015 and signifies the first year that the ITIS trade balance has shown an annual decline. This was caused by growth in UK service imports exceeding that of exports. 5. Total international trade in services (excluding travel, transport and banking) by continent and countries
This section presents geographical findings for total UK international trade in services (excluding travel, transport and banking).
For more detailed geographic information relating to total exports and imports of services please refer to the ITIS dataset Table AO – Total trade in services (excluding travel, transport and banking) analysed by continents and countries. UK exports of services
Figure 3: UK international trade in services (excluding travel, transport and banking), exports by continent, 2011 to 2015
Europe remained the largest destination for UK exports of services and continued to follow an upward trend in 2015, rising from £58,711 million in 2014 to £59,518 million. Germany surpassed the Netherlands in 2015 to become the main trading partner for the UK within Europe, with UK service exports to Germany increasing from £7,171 million in 2014 to £7,276 million. The Irish Republic was the second largest destination for overall UK service exports to Europe, having risen from £6,598 million in 2014 to £7,188 million. With the exception of 2014, UK exports to the Irish Republic have been increasing annually since 2010. Despite both Switzerland and the Netherlands experiencing declines in 2015, both countries were the third and fourth largest destinations for UK service exports to Europe, with exports of £6,863 million and £6,854 million respectively.
The Americas remained the second largest destination for UK exports of services in 2015 and continued the upward trend seen in recent years with a further increase in 2015, from £33,523 million in 2014 to £34,053 million. The USA was the largest destination for UK exports to the Americas, with exports of £27,991 million in 2015.
Asia remained the third largest destination for UK exports of services in 2015, which increased from £19,703 million in 2014 to £21,452 million. The rest of Asia and Saudi Arabia were the main destinations for UK exports of services in 2015, recording £4,634 million and £4,613 million respectively.
Notes:
1. All values are at current prices (see background notes for definition).
2. Geographical groupings can be found in the background notes. UK imports of services
Figure 4: UK international trade in services (excluding travel, transport and banking), imports by continent, 2011 to 2015
Source: Office for National Statistics
Notes:
1. All values are at current prices (see background notes for definition).
2. Geographical groupings can be found in the background notes.
Europe remained the main source for UK imports of services in 2015 and increased from £29,085 million in 2014 to £31,483 million in 2015. Switzerland made the largest contribution to the increase between 2014 and 2015, rising by £812 million to a total UK imports figure of £2,603 million in 2015. Despite UK service imports from Germany experiencing a small decline in 2015, Germany remained the largest source of UK service imports from Europe, with a total of £4,910 million. The Irish Republic and France were the second and third largest sources, with imports of £3,791 million and £3,568 million respectively.
UK imports of services from the Americas continued to follow an upward trend in 2015 and increased from £14,863 million in 2014 to £15,413 million in 2015. Within the Americas, the USA was the largest source of UK imports, which increased from £12,945 million in 2014 to £13,880 million.
Asia remained the third largest area from which UK imports of services originated, with imports primarily being sourced from India and Japan.
6. Trade in services products: geographical analysis
This section presents UK trade in services estimates by broad product types and provides an overview of the changes in the value of exports and imports for these types of services by continent between 2014 and 2015. The International Trade in Services (ITIS) statistical bulletin provides geographical breakdowns for 3 broad services product types: technical, trade related, operational leasing and other business services; professional, management consulting and research and development (R&D) services; and merchanting, other trade-related and services between related enterprises. The proportions each of these product types contributed to the total UK exports and imports of services in 2015 are presented in Table 1.
Table 1: Composition of trade in services by broad product type, 2015
| UK | Exports | Imports | |----|---------|---------| | Technical, trade related, operational leasing and other business services | 14.1% | 9.5% | | Professional, management consulting and R&D services | 25.9% | 27.4% | | Merchanting, other-trade related and services between related enterprises | 13.3% | 18.6% |
Source: Office for National Statistics
Technical, Trade related, operational leasing and other business services product group
Table 2 presents the service products used to compile the technical, trade related, operational leasing and other business services group up to 2012 and from 2013 onwards. Implementing the latest BPM6 recommendations resulted in a change to the grouping from 2013 onwards.
Table 2: Service products used to compile the technical, trade-related, operational leasing and other business services group, 2012 and 2013 onwards
| 2012 | 2013 onwards | |------|--------------| | Agricultural services | Agricultural, forestry and fishing | | Mining services | Mining and oil and gas extraction services | | Waste treatment and depollution | Waste treatment and depollution | | Other on site processing | Manufacturing services on goods owned by others | | | Maintenance and repair services | | Construction in the UK | Construction in the UK | | Construction outside the UK | Construction outside the UK | | Architectural services | Architectural services | | Engineering services | Engineering services | | Surveying services | Scientific and other technical services inc surveying | | Operational leasing services | Operational leasing services |
Source: Office for National Statistics
Notes:
1. Broad product groupings were changed in 2013 in line with the latest international guidance. UK exports of services
UK exports of technical, trade-related, operational leasing and other business services types of services declined in 2015 from £18,094 million in 2014 to £17,384 million. This was the first period of annual decline recorded within this broad product grouping since 2011.
Figure 5: Exports (excluding travel, transport and banking) of technical, trade-related, operational leasing and other business services, by continent, 2011 to 2015
Source: Office for National Statistics
Notes:
1. All values are at current prices (see background notes for definition).
2. Geographical groupings can be found in the background notes.
The decline in UK exports of technical, trade-related, operational leasing and other business services was experienced across all 5 continents in 2015. Asia experienced the largest decline in 2015 with UK exports of these types of services falling from £4,748 million in 2014 to £4,505 million. Within Asia, Singapore made the largest contribution to the decline, with UK exports of these types of services falling by £221 million in 2015 to a total of £600 million.
Despite also experiencing a decline, Europe remained the largest destination for UK exports of technical, trade-related, operational leasing and other business services in 2015, falling from £6,841 million in 2014 to £6,780 million. Within Europe, Norway saw the largest decline in 2015, with UK exports of these types of services falling from £1,028 million in 2014 to £502 million. Offsetting this decline was Italy, which saw UK exports of these types of services increase, rising from £224 million in 2014 to £931 million in 2015. Italy was also the country driving the growth in UK exports of these types of services to the EU. UK imports of services
UK imports of technical, trade-related, operational leasing and other business services types of services declined in 2015, falling from £6,383 million in 2014 to £5,533 million; the first period of annual decline within this broad product grouping since 2011.
Figure 6: Imports (excluding travel, transport and banking) of technical, trade-related, operational leasing and other business services, by continent, 2011 to 2015
Source: Office for National Statistics
Notes:
1. All values are at current prices (see background notes for definition).
2. Geographical groupings can be found in the background notes.
Asia experienced the largest decline in imports of technical, trade-related, operational leasing and other business services, falling by £474 million to £1,162 million between 2014 and 2015. The decline is mostly attributable to imports from Singapore, which fell from £735 million in 2014 to £297 million in 2015.
The Americas experienced the second largest decline, with UK imports of trade-related, operational leasing and other business services falling from £1,251 million in 2014 to £945 million in 2015. The rest of America and the USA experienced the largest declines in 2015, with falls of £251 million and £134 million respectively.
Despite experiencing a decline, Europe remained the largest source for UK imports of trade-related, operational leasing and other business services. Imports of these types of services fell from £3,292 million in 2014 to £3,003 million in 2015. The majority of the decline was seen within the EU; primarily Italy, which declined by £123 million in 2015. This is in contrast to UK exports of these types of services to Italy, which more than trebled in 2015. Professional, management consulting and research and development (R&D) services
Table 3 presents the service products used to compile the professional, management consulting and R&D services group up to 2012 and from 2013 onwards. Implementing the latest BPM6 recommendations resulted in a change to the grouping from 2013 onwards.
Table 3: Service products used to compile the professional, management consulting and R&D services group, 2012 and 2013 onwards
| 2012 | 2013 onwards | |---------------------------------------------------------------------|------------------------------------------------------------------------------| | Accountancy, auditing, bookkeeping and tax consulting services | Accountancy, auditing, bookkeeping and tax consulting services | | Advertising | Advertising, market research and public opinion polling | | Management consulting | Business management and management consulting services | | Public relations services | Public relations services | | Recruitment and training services | Recruitment services | | Other business management services | Legal Services | | Legal services | Procurement Services | | Market research and public opinion polling | Property management services | | Procurement | Provision of R&D services | | Property management | Provision of product development and testing activities | | Research and Development | Other business and professional services | | Other business and professional services | |
Source: Office for National Statistics
Notes:
1. Broad product groupings were changed in 2013 in line with the latest international guidance.
UK exports of services
UK exports of professional, management consulting and R&D services continued to grow in 2015, with UK exports rising from £31,063 million in 2014 to £31,919 million. Figure 7: Exports (excluding travel, transport and banking) of professional, management consulting and research and development services, by continent, 2011 to 2015
Source: Office for National Statistics
Notes:
1. All values are at current prices (see background notes for definition).
2. Geographical groupings can be found in the background notes.
Europe remained the prime destination for UK exports of professional, management consulting and R&D services and increased in 2015, from £17,291 million in 2014 to £17,707 million. The growth in exports of these types of services from within Europe was mainly due to the EU, primarily driven by France, which saw UK exports of these types of services increasing from £1,148 million in 2014 to £1,539 million in 2015. Italy and Spain also made notable contributions to the increase, rising by £272 million and £271 million respectively.
UK exports to the Americas of professional, management consulting and R&D services showed a small decline in 2015, falling from £8,916 million in 2014 to £8,813 million. The decline was primarily driven by the USA, which saw a fall of £117 million to £7,666 million. Despite this small decline, the Americas continued to be the second-largest area in 2015 where UK exports of professional, management consulting and R&D services were destined for.
UK exports of professional, management consulting and R&D services to Asia continued to follow an upward trend in 2015, rising from £3,675 million in 2014 to £3,731 million.
UK imports of services
UK imports of professional, management consulting and R&D services increased in 2015, from £14,610 million in 2014 to £16,009 million. Figure 8: Imports (excluding travel, transport and banking) of professional, management consulting and research and development services, by continent, 2011 to 2015
UK
Source: Office for National Statistics
Notes:
1. All values are at current prices (see background notes for definition).
2. Geographical groupings can be found in the background notes.
In 2015, Europe continued to be the largest region where UK imports of professional, management consulting and R&D services originated from and increased from £7,953 million in 2014 to £8,688 million. Sweden made the largest contribution to the increase, with UK imports of these types of services increasing from £296 million in 2014 to £479 million in 2015. The Irish Republic and France also made notable contributions to the increase, rising by £146 million and £138 million respectively.
The Americas accounted for most of the growth recorded in UK imports of professional, management consulting and R&D services, rising by £747 million to £4,908 million between 2014 and 2015. This increase was solely driven by the USA, with UK imports of these types of services increasing from £3,788 million in 2014 to £4,576 million in 2015.
Merchanting, other trade related and services between related enterprises
Table 4 presents the service products used to compile the merchanting, other trade-related and services between related enterprises group up to 2012 and from 2013 onwards. Implementing the latest BPM6 recommendations resulted in a change to the grouping from 2013 onwards. Table 4: Service products used to compile the merchanting, other trade-related and services between related enterprises group, 2012 and 2013 onwards
| UK | 2012 | 2013 onward | |----|------|-------------| | Merchanting | Merchanting | | | Other trade related | Other trade related | | | Services between related enterprises | Services between related enterprises | |
Source: Office for National Statistics
Notes:
1. Broad product groupings were changed in 2013 in line with the latest international guidance.
UK exports of services
Exports of merchanting, other trade-related and services between related enterprises increased in 2015 from £14,590 million in 2014 to £16,419 million, reversing the downward trend seen in recent years.
Figure 9: Exports (excluding travel, transport and banking) of merchanting, other trade-related and services between related enterprises by continent, 2011 to 2015
Source: Office for National Statistics
Notes:
1. All values are at current prices (see background notes for definition).
2. Geographical groupings can be found in the background notes. UK exports of merchanting, other trade-related and services between related enterprises to Europe showed the largest increase in 2015, rising from £7,885 million in 2014 to £8,561 million, remaining the dominant area in receipt of these types of services in 2015. The Irish Republic made the largest contribution to the increase and rose from £1,335 million in 2014 to £1,887 million in 2015. Other notable increases in exports of these types of services were experienced with France and Russia, where UK exports rose by £278 million and £254 million respectively. Partially offsetting these increases were UK exports to Switzerland and the Netherlands, where UK exports of merchanting, other trade-related and services between related enterprises fell by £403 million and £294 million respectively.
Asia made the second largest contribution to the overall increase in UK exports of merchanting, other trade-related and services between related enterprises services, increasing by £571 million to an overall exports total of £2,267 million in 2015. Singapore and China saw the largest increases, rising by £175 million and £149 million respectively.
The Americas continued to be the second-largest area where UK exports of merchanting, other trade-related and services between related enterprises services were destined for, with exports worth £4,680 million in 2015. The USA remained the largest destination within the Americas for these exports.
**UK imports of services**
With the exception of 2013 and in contrast to exports, UK imports of merchanting, other trade-related and services between related enterprises followed an upward trend in recent years, which continued in 2015, with UK imports of these services increasing from £10,355 million in 2014 to £10,865 million. UK imports of merchanting, other trade-related and services between related enterprises from Asia made the largest contribution to the overall increase in UK imports, rising from £1,584 million in 2014 to £2,160 million in 2015. Notable increases were experienced from Singapore, the Philippines and India.
Offsetting the increase in UK imports of merchanting, other trade-related and services between related enterprises was the Americas, with a decline of £561 million to £2,676 million between 2014 and 2015. This decline in UK imports of services was primarily driven by the USA, which fell from £2,838 million in 2014 to £2,488 million in 2015.
Europe remained the main area where UK imports of merchanting, other trade-related and services between related enterprises originated from and showed growth in 2015, rising from £5,154 million in 2014 to £5,471 million in 2015. Sweden made the largest contribution to the increase in 2015 and rose by £571 million to £771 million in 2015. Offsetting the increase in 2015 were imports from France and Germany, which fell by £186 million and £125 million respectively.
7. Trade in Services: Industry Analysis
This section provides an overview of UK trade in service exports and imports detailed by industry. UK exports of services
Figure 11: UK exports by industry, 2015
Source: Office for National Statistics
Notes:
1. All values are at current prices (see background notes for definition).
The 2015 estimates show that the professional, scientific and technical activities industries continued to make the largest contribution to the overall UK exports total and experienced a further increase in 2015 from £33,500 million in 2014 to £35,760 million. UK businesses within these industries exported a wide range of services in 2015; however, exports of legal services made the largest contribution, which increased from £4,552 million in 2014 to £4,918 million. Engineering services and services between related enterprises were the second and third largest service products exported by UK professional, scientific and technical activities industries in 2015, with exports of £4,598 million and £4,395 million respectively.
The construction industry experienced the largest decline in 2015 with service exports falling from £2,734 million in 2014 to £1,280 million. The UK exports total for the construction industry in 2015 signals the first period of annual decline, having previously followed an upward trend. UK imports of services
Figure 12: UK imports by industry, 2015
Source: Office for National Statistics
Notes:
1. All values are at current prices (see background notes for definition).
The information and communication industries continued to make the largest contribution to the overall UK imports of services total and continued to show growth in 2015 rising from £14,963 million in 2014 to £16,190 million. Unsurprisingly, the main service products imported by the UK’s information and communication industries were telecommunications and computer services.
The professional, scientific and technical industries experienced the largest growth in UK imports of services in 2015, rising by £1,766 million to £14,489 million. The increase was driven by rises in imports to the UK of services between related enterprises, and research and development services, which rose by £819 million and £747 million respectively.
The manufacturing industry also made a notable contribution to the growth seen in UK imports of services in 2015, increasing from £6,766 million in 2014 to £8,299 million.
8. Quality and methodology
The International trade in services Quality and Methodology Information document contains important information on: • the strengths and limitations of the data and how it compares with related data • users and uses of the data • how the output was created • the quality of the output including the accuracy of the data
9. Guidance on interpreting international trade in services statistics
International trade in services (ITIS) collects data relating to the amounts spent on both the imports and exports of UK businesses and collects geographical information as to where the services have either been imported from or exported to.
Types of transactions covered
Product: The statistical output from the ITIS survey covers the value of transactions between the UK and residents in other countries in respect of 52 products. The 2013 ITIS questionnaire has recently been revised in accordance with new international regulations. A breakdown showing the service products collected up to 2012 and from 2013 onwards can be found in Table 5. Table 5: International trade in services (ITIS) Questionnaire codes 2012 to 2013 onwards | Questionairre breakdown up to and including 2012 | Questionairre breakdown, 2013 onward | |-------------------------------------------------|--------------------------------------| | 01. Agricultural Services | 01. Agricultural, forestry and fishing services | | 02. Mining Services | 02. Mining and oil gas extraction services | | 03. Waste treatment and depollution | 03. Waste treatment and depollution services | | 04. Other on-site processing services | 04. Manufacturing services on goods owned by others | | 05. Accountancy, auditing, bookkeeping and tax consulting services | 05. Maintenance and repair services | | 06. Advertising | 06. Accountancy, auditing, bookkeeping and tax consulting services | | 07. Management consulting | 07. Advertising, market research and public opinion polling services | | 08. Public relations services | 08. Business management and management consulting services | | 09. Recruitment and training | 09. Public relations services | | 10. Other business management services (see 7) | 10. Recruitment services | | 11. Legal services | 11. Legal services | | 12. Market research and public opinion polling (see 6) | 07. Advertising, market research and public opinion polling services | | 13. Operational leasing services | 12. Operating leasing services | | 14. Procurement | 13. Procurement services | | 15. Property management | 14. Property management services | | 16. Research & Development | 15. Provision of R&D services | | 17. Services between related enterprises | 16. Provision of product development and testing activities | | 18. Other business and professional services | 17. Services between related enterprises | | 19. Postal and courier services | 18. Other business and professional services | | 20. Telecommunication services | 19. Postal and courier services | | 21. Computer services | 20. Telecommunication services | | 22. News agency services | 21. Computer services | | 23. Publishing services | 22. News agency services | | 24. Other information provision services | 23. Publishing services | | 25. Construction in the UK | 24. Other information provision services | | 26. Construction outside the UK | 25. Construction in the UK | | 27. Financial services | 26. Construction outside the UK | | 28. Auxiliary services | 27. Financial services | | 29. Claims | 28. Auxiliary services | | 30. Premiums | 29. Claims | | 31. Claims | 30. Premiums | | | 31. Claims | | | 32. Freight insurance claims | | | 33. Freight insurance premiums | | | 34. Life insurance claims | | 32. Premiums | 31. Life insurance premiums | | 33. Claims | Removed | | 34. Premiums | Removed | | 35. Claims | 34. Other direct insurance claims | | 36. Premiums | 35. Other direct insurance premiums | | No equivalent | 37. Pension service receipts | | No equivalent | 38. Pension service charges | | No equivalent | 39. Standardised guarantee service claims | | No equivalent | 40. Standardised guarantee service premiums | | 37. Merchanting | 41. Merchanting | | 38. Other trade-related services | 42. Other trade-related services | | 39. Audio-visual and related services | 43. Audio-visual and related services | | 40. Health services | 44. Health services | | 41. Training and educational services | 45. Training and educational services | | 42. Other personal, cultural and recreational services | 46. Heritage and recreational services | | 43. Use of franchise and similar rights fees | 18b. Charges or payments for the use of the above, but without transfer of ownership | | 44. Other royalties and license fees | 19b. Charges or payments for the use of the above, but without transfer of ownership | | 45. Purchases ans sales of franchises and similar rights | 20b. Charges or payments for the use of the above, but without transfer of ownership | | 46. Purchases ans sales of other royalties and licenses | 18a. Outright sales and purchases of the above, resulting in transfer of ownership | | | 19a. Outright sales and purchases of the above, resulting in transfer of ownership | | | 20a. Outright sales and purchases of the above, resulting in transfer of ownership | | 42. Other personal, cultural and recreational services | 47. Social, domestic and other personal services | | 47. Architectural | 48. Architectural services | | 48. Engineering | 49. Engineering services | | 49. Surveying (see 50) | 50. Scientific and other technical services (including surveying) | | 50. Other technical services (see 49) | | | 51. Other trade in services | 52. Other trade in services |
Source: Office for National Statistics Industry: The industry analysis enables estimation for the total international transactions in services by economic classification for well-defined areas of the economy using Standard Industrial Classification (SIC) information. Data from 2009 in this publication have been published in SIC (2007) Classification, which is an internationally recognised classification. This provides a framework for the collection, tabulation, presentation and analysis of data about economic activities. Prior to 2009, SIC (2003) Classification would have been used.
Geographical: Both industry and product information are analysed geographically. The tables within this publication show the countries to which services are exported and from which services are imported.
The geographical groupings used in the tables can be found in Table 6. Table 6: Geographical groupings | Europe | The Americas | Asia | Australasia & Oceania | Africa | |-------------------------|--------------|---------------|-----------------------|-------------------------| | SPECIFIED COUNTRIES | SPECIFIED COUNTRIES | SPECIFIED COUNTRIES | SPECIFIED COUNTRIES | SPECIFIED COUNTRIES | | Austria | Brazil | China | Australia | Nigeria | | Belgium | Canada | Hong Kong | New Zealand | South Africa | | Bulgaria | Mexico | India | | | | Channel Islands | USA | Indonesia | OTHER COUNTRIES | OTHER COUNTRIES | | Croatia | | Israel | | | | Cyprus | | Japan | | | | Czech Republic | Anguilla | Malaysia | | | | Denmark | Antigua & Barbuda | Pakistan | | | | Estonia | Argentina | Philippines | | | | Finland | Aruba | Saudi Arabia | Marshall Islands | Burkina Faso | | France | Bahamas | Singapore | Micronesia | Burundi | | Germany | Barbados | South Korea | Nauru | Cameroon | | Greece | Belize | Taiwan | New Zealand | Cape Verde | | Hungary | Bermuda | Thailand | Northern Mariana | Central African | | | | | Islands | Republic | | Iceland | Bolivia | | Palau | Chad | | Irish Republic | British Virgin Islands | OTHER COUNTRIES | Papua New Guinea | Comoros | | Isle of Man | Cayman Islands | Abu Dhabi | Pitcairn | Congo | | Italy | Chile | Afghanistan | Polar regions | Cote d’Ivoire | | Latvia | Columbia | Armenia | Solomon Islands | Djibouti | | Liechtenstein | Costa Rica | Azerbaijan | Tonga | Egypt | | Lithuania | Cuba | Bahrain | Tuvalu | Equatorial Guinea | | Luxembourg | Dominica | Bangladesh | Vanuatu | Eritrea | | Malta | Dominican Republic | Bhutan | Samoa | Ethiopia | | Netherlands | Ecuador | Brunei | | Gabon | | Norway | El Salvador | Cambodia | | Gambia | | Poland | Falkland Islands | Dubai | | Ghana | | Portugal | Grenada | Georgia | | Guinea | | Romania | Guatemala | Iran | | Guinea Bissau | | Russia | Guyana | Iraq | | Kenya | | Slovakia | Haiti | Jordan | | Lesotho | | Slovenia | Honduras | Kazakhstan | | Liberia | | Spain | Jamaica | Kuwait | | Libya | | Sweden | Montserrat | Kyrgyzstan | | Madagascar | Earnings from third country trade, that is, from arranging the sale of goods between 2 countries other than the UK and where the goods never physically enter the UK are included. This activity is known as merchanting. Earnings from commodity trading are also included. As with merchanting, the service element is the profit or loss.
**Types of transactions not covered**
The purpose of the ITIS survey is to record international transactions that impact on the UK’s Balance of Payments, hence companies are asked to exclude from their earnings trade expenses such as the cost of services purchased and consumed abroad. Trade in services exports or imports that are invoices for the export or import of goods are excluded as they are already counted in the estimates for trade in goods.
The ITIS survey currently selects for the whole of the economy, with a number of exceptions: • travel • transport • banking and other financial institutions • higher education • charities • most activities within the legal profession
Coverage
The figures for the European Union (EU) relate to the 28 member states of the EU8 from 2013 onwards. Trade with EU institutions is also included in the EU totals and excluded from the international organisations totals.
Please note that all tables in this publication only include data collected via the ITIS and Annual Business Survey surveys.
The film and television (FTV) industries are included in the published data from 2009 onwards. For 2008, FTV figures were collected via a separate survey and data published in the International transactions of the UK film and television industries Statistical Bulletin 2008.
The ITIS survey is just one component of trade in services (TIS) estimates. Data for TIS in this report are consistent with the UK Balance of Payments, which can be found in Pink Book Chapter 3.
By analogy with trade in goods we refer to the type of service traded as a “product analysis” – the products being consistent with the sixth edition of the Balance of Payments Manual. The second type of analysis is referred to as the “industry analysis” – covering well defined areas of the economy.
In the following section both types of tables, industry and product have been analysed on a geographical basis by showing the countries to which services are exported and from which they are imported. Both of these types of analyses are preceded by geographical analysis of imports and exports of total international trade in services.
The industry analysis allows us to estimate the total international transactions in services for well-defined areas of the economy. It also tells us the exporting or importing country in relation to the UK.
10. Accuracy
Sampling error is the error caused by observing a sample instead of the whole population. While each sample is designed to produce the “best” estimate of the true population value, a number of equal-sized samples covering the population would generally produce varying population estimates. Sampling error is affected by a number of factors including sample size.
Sample surveys are used instead of censuses, because the process would be too lengthy and costly to be viable. Standard errors are an estimate of the sampling error and provide a measure of the precision of the estimate. A low standard error indicates a precise estimate. To aid comparison, the standard error is also expressed as a percentage of the total value. This quantity is called the coefficient of variation and it allows the standard errors to be put into context. In addition to sampling errors there is the potential for non-sampling error that cannot be easily quantified. For example, undetected deficiencies may occur in the survey register and errors may be made by the contributors when completing the survey questionnaires.
The response rate for the 2015 annual survey is shown in Table 7.
**Table 7: Response rates**
| UK | 2015 Results | |----|--------------| | Sample size | 15,093 | | Forms with response | 13,330 | | Forms non response | 1,763 | | Overall response rate (%) | 88.3 |
Source: Office for National Statistics
In addition to this sample, we also select approximately 9,000 businesses via the Annual Business Survey and have included results from the quarterly ITIS survey collected for each of the quarters of 2016.
Non-response bias is a potential issue for all statistical surveys. Non-response bias occurs where the answers of respondents may have differed from the potential answers of non-responders. The risk of non-response bias is minimised by efforts to maximise response rates. Estimation techniques can attempt to correct for any bias that might be present. Despite this, it is not easy, on any survey, to quantify the extent to which non-response bias remains a problem. However, there is no evidence to suggest that non-response bias presents a particular issue for the ITIS survey.
Imputation methods are used to estimate values for all businesses in the sample that did not return data. Estimation methods are used to estimate values for all non-sampled businesses within the population in order to produce an overall estimate for the population.
The method used to calculate standard errors for ITIS statistics has been under review in recent years. ITIS standard errors for 2015 have been re-introduced in this edition of the publication. Table 8: Standard errors
| Industries | Exports | Imports | |----------------------------------|--------------------------|--------------------------| | | Estimate (£ million) | Standard error (£ million) | Relative Standard error (%) | Estimate (£ million) | Standard error (£ million) | Relative Standard error (%) | | Total ITIS | 123,231 | 1,681 | 1 | 58,508 | 905 | 2 | | Manufacturing | 12,190 | 565 | 5 | 8,300 | 336 | 4 | | Wholesale & Retail | 11,941 | 245 | 2 | 6,283 | 365 | 6 | | Information & Communication | 29,996 | 768 | 3 | 16,190 | 447 | 3 | | Professional, Scientific & Technical | 35,760 | 1,163 | 3 | 14,489 | 277 | 2 | | Administrative & Support Services | 6,798 | 330 | 5 | 2,947 | 432 | 15 | | Arts, Entertainment & Recreation | 3,053 | 25 | 1 | 1,118 | 9 | 1 |
Source: Office for National Statistics
11. Notes to tables
The tables present ITIS estimates through a variety of formats. Some tables compare figures over several years but the majority provide the most recent geographic information by industry or product. The tables provide information in as much detail as possible without disclosing the details of any individual companies. Any disclosive data is replaced by the following symbol throughout the tables “..”. It is important to note that within the geographical tables, amounts are shown against the geographical area from which they were received, irrespective of where they were first earned.
European Free Trade Association (EFTA) comprises of Iceland, Liechtenstein, Norway and Switzerland.
The sum of constituent items in tables may not always agree exactly with the totals shown due to rounding. The following symbols have been used throughout:
.. Figures suppressed to avoid disclosure of information relating to individual enterprises
– Nil or less than half the final digit shown
Values shown are in current prices, which refer to the price at which the services were either bought or sold in the market.
12. Background notes
13. Relevance to users
Government and businesses use the international trade in services (ITIS) data for economic assessment. The Department for Business, Energy and Industrial Strategy (BEIS) state that the ITIS survey is the only source of services and product detail for international service trade and is essential for regional exports analyses. BEIS also use the ITIS survey data to monitor the competitiveness of UK businesses and to gain a better understanding of the level of service exports.
The Scottish government also show significant interest in the survey results, to supplement Scotland’s Global Connections Survey (GCS), whilst the Department for Culture Media and Sport (DCMS) use the ITIS data in one of their main outputs, “The Creative Industries statistical bulletin”.
The British Film Institute use the data to assess the performance of the UK film industry and for providing policy advice to the government and strategic advice to the industry. The data is used in the compilation of the International Trade Statistics yearbook.
UK ITIS figures are also extensively used for policy, analysis and negotiations by international organisations as well as a number of foreign embassies. More widely the ITIS estimates are utilised by commercial companies, academics and independent researchers.
2. National Statistic
The UK Statistics Authority has reviewed this publication in their report: “Assessment of compliance with the Code of Practice for Official Statistics”: Statistics of International Transactions, which was published on 8 December 2011. This review recommended that ITIS estimates be designated as National Statistics on 3 May 2013.
3. Government Statistical Service (GSS) business statistics
To find out about other official business statistics and choose the right data for your needs, use the GSS Business Statistics Interactive User Guide. By selecting your topics of interest, the tool will pinpoint publications that should be of interest to you and provide you with links to more detailed information and the relevant statistical releases. It also offers guidance on which statistics are appropriate for different uses.
4. Discussing business statistics online
There is a Business and Trade Statistics community on the StatsUserNet website. StatsUserNet is the Royal Statistical Society’s interactive site for users of official statistics. The community objectives are to promote dialogue and share information between users and producers of official business and trade statistics about the structure, content and performance of businesses within the UK. Anyone can join the discussions by registering via either of the links.
5. Special events
We have recently published commentary, analysis and policy on “Special Events” which may affect statistical outputs. For full details go to the special events page on the ONS website.
6. Code of practice
Details of the policy governing the release of new data are available on the UK Statistics Authority website.
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05b84aace3f0c7878e3686619bd163d5876c7a36 | International Journey Time Benchmarking: Strategic Road Networks Analysis Report
## Version Control
| Version | Date | Initials | Nature of Change | |---------|------------|----------|-------------------------------------------------------| | 1.0 | 23/10/2017 | JG, DH | Initial Draft for Discussion | | 2.0 | 9/11/2017 | JG, DH | Full Draft for Review | | 2.1 | 14/11/2017 | JG, DH | Minor corrections following ORR comments | | 2.2 | 23/11/2017 | JG, DH | Amendments following DfT and HE comments | Acknowledgments
The Management Team responsible for the delivery of this work was as follows:
- Adam Spencer-Bickle (Office of Rail and Road)
- Jonah Aduan (Office of Rail and Road)
- James Gleave – Project Manager (Transport Futures)
- Derek Halden – Technical Lead (Loop Connections Ltd)
The Team would like to thank all those who have assisted with data assembly, feedback and other observations to assist in delivering this project.
# Table of Contents
Acknowledgments .................................................................................................................. 3
Introduction ........................................................................................................................... 5
Methodology .......................................................................................................................... 7
The Strategic Road Networks ................................................................................................. 19
Comparing the Highways England Delay Measure with the ORR Benchmarking Approach....21
Benchmarking Delays on the SRN ......................................................................................... 22
Benchmarking Travel times to Key Nodes ........................................................................... 27
Conclusions ............................................................................................................................ 31 Introduction
Given the importance road users attach to the reliability and speed of their journey times(^1), the Office of Rail and Road (ORR) seeks clarity about how delays on the Strategic Road Network (SRN) compare with delays on similar networks in other countries. This report reviews an analysis of the delays experienced on England’s SRN and how these delays compare with other countries. The work has been undertaken to assist ORR in delivering a robust evidence base on the performance of the network which is managed by Highways England.
The work has been approached by:
- Designing and developing the delay and congestion metrics to be used in the analysis taking account of the available data;
- Sourcing comparable data for 13 countries, including England;
- Analysing what this tells us about how delay and congestion in England benchmark with other countries.
This report, and the accompanying infographic document, constitutes this analysis. This work has been undertaken by Transport Futures Ltd. and Loop Connections Ltd.
Objectives and Scope
The primary objective of the work was to benchmark delays and congestion on the SRN in England with equivalent networks in 12 other countries across Europe. This included identifying suitable metrics for the purposes of the benchmarking covering traffic delays and economic effects.
These 12 nations were selected by ORR as part of a broader benchmarking exercise based on economic, demographic and road network characteristics. The countries included are:
- Austria
- Belgium
- Denmark
- France
- Finland
- Germany
- Italy
- The Netherlands
- Republic of Ireland
- Scotland
- Spain
- Wales
(^1) Office of Rail and Road (2017) *Measuring performance of England’s Strategic Roads: what users want.* URL: [http://orr.gov.uk/highways-monitor/publications/measuring-performance-of-englands-strategic-roads-what-users-want](http://orr.gov.uk/highways-monitor/publications/measuring-performance-of-englands-strategic-roads-what-users-want). Date Site Accessed: 31/10/2017 The concept of a delay to a journey includes two main components:
- The fastest achievable travel time if there is no delay; and
- The measured actual travel time achieved.
The total delay on a network is the difference between the travel time that could be achievable on the network and the actual time achieved, factored by the number of vehicles affected. The concept of congestion adds considerations of performance or expectation to the measures of delay introducing concepts such as traffic management, economic impact, experience, and other factors.
This report compares road delays using these metrics across the 13 countries and adds observations about congestion based on these comparisons. Methodology
The work has been approached in five main stages:
- Defining comparable SRNs for each country
- Traffic flow data assembly
- Traffic Speed data assembly
- Calculating delay and congestion
- Understanding the economic effects
This section describes the approach taken for each stage.
Defining Comparable Strategic Road Networks
For the purposes of this analysis, the SRN for England was defined as the network that is managed by Highways England. This network is shown in Figure 1.
The approaches used by other countries to defining and managing SRNs were reviewed. SRNs link the major population centres within each country, and connect economic gateways such as ports and airports. Trunk road links including motorways dominate these networks in most countries, but other regional roads also make connections to more isolated towns which in England would be trunk roads, so these are also included. All of the countries covered manage many of these routes at a national or federal level, but many links are also managed by regional or local governments.
The European Union has also defined a supra-national network of routes to connect economies across Europe: The Trans-European Road Network (TEN). All of the TEN links in the 13 countries are part of their SRNs.
In order to define comparable networks in each country to the Highways England network, broadly the same approach was undertaken as had been used to define the major road network (MRN) in England in a study for the Rees Jeffreys Road Fund but allowing for the fact that that network includes some roads that are not on the SRN, so judgement was applied in selecting links seeking to match where possible the logic for including links in the English SRN. The English SRN possibly included some single carriageways that had been retained in the SRN for
______________________________________________________________________
2 [http://www.reesjeffreys.co.uk/wp-content/uploads/2016/10/A-Major-Road-Network-for-England-David-Quarmby-and-Phil-Carey-Rees-Jeffreys-Road-Fund-October-2016.pdf](http://www.reesjeffreys.co.uk/wp-content/uploads/2016/10/A-Major-Road-Network-for-England-David-Quarmby-and-Phil-Carey-Rees-Jeffreys-Road-Fund-October-2016.pdf) historical reasons, but which were not essential for connecting major towns due to the presence of new motorways so the difficulty was in matching such roads. However overall the same network logic could be followed in all countries. This comprised:
- Selecting motorways and other similar major route categories designated for the purposes of strategic traffic in each country.
- Adding other roads to ensure that all towns of greater than 50,000 people, and peripheral towns or population clusters of more than 25,000 people were connected by the network.
- Adding other roads to ensure that ports with more than 2 million tonnes of freight, and the busiest airports by passenger traffic were connected to the network;
- Checking that the network offers choices of routes to provide resilience using a geographical inspection of alternative routes between major centres. The MRN defined in England using these criteria was found to closely resemble the Highways England SRN. So using this approach enables a consistent approach across Europe using data on population centres, road networks and transport hubs available for all of the 13 countries. Population by neighbourhood was sourced from Socio-Economic Data and Applications Centre (SEDAC)(^3) and plotted in GIS. This was overlaid with the road network from Open Street Map (OSM) to check that all clusters of population of more than 50,000 people, or 25,000 in peripheral areas were connected to the network. Major ports and airports by freight and passenger volume were then added to the maps using location data by volume for these facilities sourced from Eurostat. Nomenclature of Territorial Units for Statistics (NUTS3) boundaries were then added including population density data for each NUTS3 area.
Road links were then selected from OSM to define the SRN in each country as follows:
1. Selecting motorways and principal roads from the digital road network defined in OSM. This included a manual check that all links in the TEN were included.
2. Links to major ports and airports were then added.
3. Population clusters were identified from the maps of settlement data. In most cases the towns being connected were discrete settlements of over 50k (or 25k in peripheral areas) residents. However, where the maps showed cluster of towns of less than 25k all within a few miles of each other these locations were also connected.
4. Check the networks visually for coverage and resilience.
This resulting network for the countries (excluding Finland for clarity) is shown in Figure 2.
______________________________________________________________________
(^3) Center for International Earth Science Information Network - CIESIN - Columbia University, United Nations Food and Agriculture Programme - FAO, and Centro Internacional de Agricultura Tropical – CIAT (2005) *Gridded Population of the World, Version 3 (GPWv3): Population Count Grid*. Palisades, NY: NASA Socioeconomic Data and Applications Center (SEDAC). [http://dx.doi.org/10.7927/H4639MPP](http://dx.doi.org/10.7927/H4639MPP). Date Site Accessed: 22 August 2017. Figure 2 – Overview of the Strategic Road Network Used for Benchmarking Traffic Count Data Assembly
A review of available traffic count data for each country showed that it would not be possible to estimate traffic flows on each link of the SRN in each country from publicly available data. To estimate traffic flows at the locations where traffic delays were occurring, at a level of accuracy suitable for international benchmarking, estimated road capacities were used. There is an extensive literature on speed flow relationships on road networks which shows that averaged across entire networks two important thresholds can be identified: the points at which delays start to be observed by road type, and the maximum lane capacity by road type. The average flow where delays are observed is between these two thresholds.
Road categories and capacities from DfT Transport Appraisal Guidance(^4) were validated using a sample of traffic count data from the UK, Ireland, Finland and Germany. For these four countries automatic traffic counter (ATC) data was available for hourly segments throughout the day allowing the build-up of flow and delay throughout the day to be analysed.
The English data was available from MIDAS count sites across Highways England’s network so sites in congested locations were selected to identify how flows and delays built up towards capacity. Figure 3 illustrates the curves for Motorways in the four countries. Delays build up on single carriageway roads from much lower flow levels when overtaking opportunities start to become limited and all vehicles are delayed to the speed of the slowest vehicle. Single carriageway traffic flows per lane rise to similar levels as for dual carriageways and motorways but only at vehicle speeds well below that sought by drivers.
Based on analysis and inspection of the many curves for the various road categories it was decided to use average hourly flows in the analysis as shown in Table 1. In selecting these values two important points are of note. There was no evidence from the limited data that lane capacities per hour were significantly different in any country. This reflects the international literature for speed flow relationships used in traffic models which transfer well from country to country.
(^4) Department for Transport (2017). *WebTAG: TAG Data Book July 2017*. Department for Transport. Secondly, delays were evident on dual carriageways and motorways from 1500 vehicles per hour per lane upwards and there was no evidence of more than about 2500 vehicles per hour per lane being achieved. The curves demonstrate an average flattening of their tops at flows from 1900 vehicles per lane per hour. To represent a suitable value for average lane capacity at the point of delay somewhere between 1500 and 2500 vehicles per lane per hour an average of 2000 vehicles per lane per hour was chosen as a conservative average estimate. Some three and four lane motorways achieved the high end of this and some the low end so overall there was no reason to separate out 2 lane motorways from wider roads. For single carriageways 1000 vehicles per hour per lane was chosen, since at this level of flow delays to vehicles are building strongly even on roads with good overtaking opportunities.
Table 1 – Average hourly flows at the places in strategic road networks where delay is observed (per lane, by type of road)
| Type of Road | Average Hourly Flows Under Congested Conditions (per lane) | |--------------------------------------------------|----------------------------------------------------------| | Urban roads with speed limits of 50kph or less | 2000 | | Rural single carriageway roads | 1000 | | Dual carriageways and motorways | 2000 | In practice it is often junction capacity and road context rather than lane capacity that constrains maximum flows, and the delays experienced on the network.
For the purposes of benchmarking, the average values in Table 1 represent an acceptable level of accuracy for comparing average levels of delay. To achieve a higher level of accuracy the actual traffic flows would need to be estimated across all countries using real traffic flows at frequent intervals along every road which would demand a coverage of traffic counts well beyond that available. Using a common value of 2000 should deliver fairly robust benchmarking results for dual carriageways and motorways. Greater caution is needed when comparing single carriageways as their flow and delay characteristics are more variable.
**Journey Time Data Assembly**
There are many potential sources of link speed data, but the source most widely used by the public is journey times from Google Maps. Google’s Android system operates about half of the mobile phones in the UK and 90% of smartphones globally. These phones are precisely located and tracked on the road network when travellers have activated location services (roughly 85-90% of travellers). The Google data therefore represents by far the world’s largest source of data showing the journey times on the road network. Given the multiple occupancies of many road vehicles more than half of all vehicles on the strategic road network are being tracked by Google.
Google themselves process this data and share it openly for public use, principally for journey planning and route navigation. The data is made available in real time showing not just speeds but disruption and other delays on the network and supports navigation using Google’s mapping systems and many third party applications which use the Google API under Google terms and conditions. Journey times can be accessed on Google’s servers for any date and time, so the data can be sampled under Google’s terms and conditions for the purposes of calculating road delays. If the public use and trust these journey times it is appropriate that ORR, acting on behalf of the public, should benchmark congestion using data which the public already trusts. A license was purchased to access the Google data via their web-servers.
Data on journey times was repeatedly accessed through the Google Application Program Interface (API) until the journey times at 15 minute intervals had been obtained across the SRNs for the 13 countries. The sampling method used all journey times for 10th October 2017. Weekly expansion factors were derived from data for the full week commencing 8th October. 2017. The data was then expanded from weekly to annual values using comparable data for the second Tuesday of each month. These expansion factors allowed the 10th October journey times to be factored to annual averages.
To extract the data from Google, origin and destination points were identified at junctions on the SRN for each country using co-ordinates for these junctions defined using OSM networks. The SRN was then built up as a series of nodes and waypoints by road number. This process was not without challenges. Initial attempts to match co-ordinates resulted in a number of errors where diversions off the intended route were observed. However, these issues were overcome with manual checking of the routes built by Google in each country. Routing errors were resolved by amending waypoints as required to specify the network accurately using the standard Google waypoint input format. The route was then specified as a set of RouteIDs made up of LegIDs and BaseIDs consistent with the Google format for connecting nodes and waypoints.
Calculating the Delay and Congestion Metrics
To calculate delay, the free flow speeds were estimated as the best average travel time achieved in any 15 minute period on any Leg. To avoid confusing road delays with small variations in journey times (for example travel time of 10 minutes across a link at 2am, compared to 9 minutes at 3am), only delays to the free slow time of more than 15% of the minimum value were included. The minutes of delay on each LegID were then aggregated across the network based on estimated traffic flows on each Leg to calculate the total travel time delay for the defined network.
The total delay metric used by DfT on the English SRN is:
[ \\text{(The larger of (Journey Time – Free-flow journey time) or zero) } \\times \\text{ Expected Flow)/Total Vehicle km on the SRN (1)} ]
As discussed above, only limited data is available about traffic flows on the SRNs across Europe. The errors that would have been associated with estimating traffic flows across Europe
______________________________________________________________________
5 Note that the Journey Time on any link of the network is the lower of the measured travel time or the speed limit. Speed limit data for each LegID was extracted from Google. This data is based on automatic recognition of speed limit signs in Google Streetview and Google note that there can be errors in this data. To ensure that accurate speed limits were used, on legs where the average of the observed speeds between 1am and 4am exceeded the speed limit from Google for the LegID, the Google LegID speed limit was replaced with the national speed limit for that type of road in each country. would potentially be greater than any differences in congestion. To ensure a consistent approximation to the vehicle flows across the European Countries at the points in the network where delay was observed an average lane capacity at congested locations was used to estimate the volume of traffic delayed.(^6)
Where delays are observed, the actual flow on the road may be slightly above or below the estimated flow based on road capacity, but averaged across a large area, these lane capacity estimates offer a consistent way to ensure that delay could be benchmarked in a consistent way in all countries with acceptable accuracy.
Since the total traffic flow on the SRN is not known for countries other than England, equation (1) was modified to show the delay per mile of road to ensure a comparable metric for each country:
[ \\text{(The larger of (Journey Time – Free-flow journey time) or zero) } \\times \\text{ Estimated Road Capacity)/Miles of SRN (2)} ]
To ensure that the benchmarking delay metric accurately reflected the Highways England metric the congestion in England was also calculated using equation (1). The analysis was undertaken separately in each direction for each part of the SRN. Table 2 compares the Highways England calculation approach with the benchmarking calculation approach used in this work.
**Table 2 – Comparing The Highways England KPI approach and the ORR Approach**
| Highways England | ORR Approach | |------------------|--------------| | Expected flow is taken from MIDAS counting sites associating each site with a road link and where necessary combined data to obtain an average or sum of multiple sites to estimate the flow on each link. Expected Flow is calculated as a combination of flows measured in the given 15-minute and similar time periods. Time periods without observed data are infilled with data from time periods either side of the period required. Flows without data after this process are infilled with the monthly average values for the link by day and night. | Expected flow is taken from associating each LegID with an estimate of traffic from the best available data for that link or if none is available a default flow for the link type assuming that the link is running near capacity estimated from the capacity of that type of road as showing in Table 1. | | Road speeds are extracted from the Trafficmaster data on sampled days in each | Travel times were extracted from the Google database based on their “best-guess” of the |
(^6) Where there is no delay at a location, the traffic flow is not used since zero delay delivers a zero result from equation (1). Highways England
month are calculated for each 15 minute period as the sum over all 15 minute periods of (Delay) / sum over all 15 minute periods of ( [Expected Flow] * [Length of link] ). Using the Trafficmaster data journey times are calculated from data for cars only. These are car speeds from long term historical data capped at the recorded speed limit. The speed limit is used as the basis for free flow journey times.
Delay is presented per vehicle/mile and calculated as the total delay divided by the total vehicle miles from UK traffic count data.
ORR Approach
journey time on any link at any time of day. The representative daily delays for 10th October 2017 were calculated for each 15 minute period as the sum over all 15 minute periods of (Delay) / sum over all 15 minute periods of ( [Expected Flow] * [Length of link] ) To eliminate the effect of random variation during periods of no delay, delays of less than 15% to the travel time were ignored. Travel times were capped at the value which would be achieved when travelling at the speed limit.
Delay is presented per vehicle/mile by taking the total delay and dividing this by the estimated total vehicle miles on the strategic road network from DfT statistics for the Highways England network (91.9 billion vehicle miles in total).
As noted above, traffic flow data is not available for all of the SRN in each country so for the purposes of international benchmarking different delay metrics were needed. The three measures of delay used for the benchmarking are described in Table 3.
### Table 3 – Benchmarking Delay
| Delay Measure | Calculation Method | |---------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Delay by vehicle miles by road length | Travel times were extracted from Google based on their “best-guess” of the journey time. Tuesday 10th October was sampled at 15 minute interval periods and these results were annualised using weekly and monthly expansion factors. The time delays greater than 15% of the free flow time were factored by the number of lanes of congested traffic and the average flow per lane in congested traffic to estimate the total vehicle delay on the SRN. The delay metric was then presented as the number of hours of delay per mile per day. | | The average number of hours when traffic is delayed | Where traffic is delayed by more than 15% of the free flow journey time on a link, the length of the road link was factored by the number of 15 minute time periods affected, and summed across the country. The total was then divided by the total length of the network to calculate the average number of hours of delay on the SRN. | | Effects of delay on connections between the population and the largest cities, and the largest airports in each country | The travel time from each NUTS3 population centroid to the point on the SRN closest to strategic cities, ports and airports was calculated at 15 minute intervals as for the delay by vehicle miles and resident population measure. The population catchment for the free flow times was compared with the population catchment during peak hours of the day as follows:
- Population of NUTS3 area within 30, 60 and 120 minutes of each strategic destination
- Peak hour travel times were the average of journey times at 8am, 9am, 5pm and 6pm.
- Free flow journey times were the minimum journey times achieved. |
These measures of delay have been used to compare the SRN in England with traffic delays in the 12 other countries. The value of these delays to each country will depend on many factors such as effects on productivity based on the character of the local economy. It is beyond the scope of this work to benchmark the economies of the countries, but the above measures of delay could be combined with other economic indicators as part of a broad benchmarking study if required. The Strategic Road Networks
Figure 4 shows that England’s SRN has a higher proportion of rural single carriageways than other densely populated countries. Whereas long distance routes to towns on the periphery of countries like Italy, France and Spain are connected by dual carriageways, England still relies on single carriageways for parts of long distance routes. Only Finland, Scotland, Wales and Ireland rely more heavily than England on single carriageways to connect their main population settlements.
Road congestion is often seen as mainly an urban problem. The SRNs are defined as the routes between urban areas with built up areas, such as trunk roads passing through towns, accounting for less than 2% of the length of the SRNs in all countries.
Only Belgium and the Netherlands have more of their SRN passing through areas with population densities exceeding 500 people per square km as defined by the European NUTS3 geography population density classification. Figure 5 shows that England, the Netherlands, Italy and Belgium are the four countries with more than 30% of the SRN passing through areas with medium population densities of between 251 and 500 people per square km.
Figure 5 – Proportion of SRN by density of NUTS3 area through which routes pass Comparing the Highways England Delay Measure with the ORR Benchmarking Approach
Delays on the English SRN were calculated using the methodology described in Table 2. This method differs from the DfT approach in two important respects:
- The travel times are extracted from Google rather than from Trafficmaster as in the DfT approach.
- The vehicle flows where the delay occurs use average lane flows from Table 1 rather than the actual measured flows on each part of the network as in the DfT approach.
Table 4 summarises the key statistics from the calculation of the Highways England KPI using the ORR methodology
| Item | Value | |-----------------------------------------------------------|-------------| | Seconds of vehicle delay on the SRN | 841 billion | | Total vehicle miles on Highways England network | 91.9 billion| | Average delay per vehicle mile (seconds) | 9.15 |
An average level of delay of around 9 seconds per vehicle mile has been consistently reported annually for the English network(^8). The averaging approach used in this project for benchmarking delays using internationally available data delivers a value of 9.15 is consistent with this.
(^7) Department for Transport (2017) Road Traffic Statistics. URL: https://www.gov.uk/government/collections/road-traffic-statistics. Date Site Accessed: 23/10/2017
(^8) Department for Transport (2017) Travel Time Measure for the Strategic Road Network and Local A Roads: July 2016 to July 2017. URL: https://www.gov.uk/government/statistics/travel-time-measures-for-the-strategic-road-network-and-local-a-roads-july-2016-to-june-2017. Date Site Accessed: 2/10/2017 Benchmarking Delays on the SRN
There are 74 hours of vehicle delay per mile of English SRN per day. Only Germany has more hours of delay per vehicle mile on its SRN per day. Figure 6 shows that most countries have levels of delay less than half of the English level but Denmark, the Netherlands and Belgium also have higher than average levels.
Figure 6 – Hours of vehicle delay per mile of SRN per day
Figure 7 shows that the higher levels of delay in Germany are at least partly due to traffic congestion lasting for longer across more of the network in Germany than elsewhere. Nearly a quarter of available hours by length of SRN are delayed in Germany. This compares to 9-12% of hours by road length in England, Scotland, the Netherlands, Denmark and Wales. This also means that the delay of 74 hours per mile on the English SRN is twice as concentrated by network hours and length as the 88 hours per mile on the German SRN.
Further analysis gives some insight into why some countries have less delay than others.
Some countries use tolled roads to relieve the pressure on untolled roads and to offer vehicle users a choice of a premium network. Others like England largely use tolls more sparingly predominantly as part of funding for expensive assets such as estuarial crossings. Figure 8 compares the delay for untolled roads with the average for all roads. France, Italy and Ireland have higher levels of delay on the untolled routes with the effect being particularly marked for France, where there are 50 hours of delay per mile on the untolled network, more than twice the average of 22 for all roads. Tolled roads in these nations form a comparatively higher proportion of the strategic road network compared to other nations.
**Figure 8 – Hours of vehicle delay per mile on SRNs by tolled and untolled roads**
There are much greater delays per mile on single than dual carriageways and motorways, particularly in more densely populated countries. Although England may be more dependent on single carriageways for strategic network connections to towns and ports it has less delay per mile on these roads than the Netherlands, Denmark and Germany. Perhaps more significantly English dual carriageways and motorways have only 28 hours of delay per mile which is less
______________________________________________________________________
9 Note that Austria is not included in this comparison since the vignette applied to major Austrian roads by time of day does not allow toll roads to be classed separately than 30 in the Netherlands, 34 in Denmark and 77 in Germany. Despite some roads in Germany having no speed limit, there are few instances of higher average speeds on road links in Germany than elsewhere so this is not a factor in this higher level of delay.
*Figure 9 – Hours of Vehicle delay per Mile on SRNs for Single and Dual Carriageways*
The motorways around major cities have amongst the highest levels of delay. Many cities have circular or semi-circular motorways round them and Figure 10 compares the hours of delay per mile for these routes. Both the inner and outer orbital motorways for Madrid have been included in this analysis which perhaps contributes to the lower level of delay seen there. The outer orbital is more remote from the city. In contrast for Brussels, the semi-circular motorway is well within the urban fringe.
Rome’s orbital motorway forms a close boundary around the city and has 276 hours of delay per mile with delays affecting 22% of the routes hours by length. In contrast the M25 around London experiences delays for 20% of hours by network length accounting for 227 hours of vehicle delay per mile.
**Figure 10 – Hours of Vehicle delay per Mile on SRNs for Orbital Motorways** Benchmarking Travel times to Key Nodes
Reliable travel times to reach key destinations can be particularly important for economic competitiveness. Figure 11 shows one-hour population catchments in the peak and off-peak periods to Major Cities in England.
*Figure 11 – Peak and Off-Peak Catchments from City Nodes on the SRN in England* Making a similar comparison for the major cities in the 13 countries the effects of peak hour traffic on London can be seen to be particularly marked. London has the largest free flow catchment but this falls behind Paris, Brussels and Madrid in the peak period.
**Figure 12 – Peak and Off-Peak Catchments from City Nodes on the SRNs**
A similar picture is seen for the airports as key international gateways from each country. Comparing a selection of less central towns including ports like Dover and Rotterdam shows that delays on the road network are not distributed evenly in the 13 countries. Figure 14 – Peak and Off-Peak Catchments for Key Towns and Cities Conclusions
This analysis has shown that delay on SRNs in 13 countries varies from 1% of hours by length of network in Finland to 24% of hours by length of network in Germany.
Although England’s SRN experiences an average number of hours of delay by network length, this results in more hours of vehicle delay than all countries other than Germany. In Germany there are 88 hours of delay per mile of SRN compared to 74 hours of delay per mile in England, but the delays in England are far more concentrated geographically and temporarily than in Germany. The higher delays in England are partly related to the reliance on single carriageways, which typically experience higher delays, in England for some strategic roads. Towns of 20,000 people or more in most countries are largely served by dual carriageways.
There may also be some influence from the way the networks were defined, since the English SRN includes additional single carriageways which it is possible would not have been selected using the methodology described. Lower levels of delay are associated with less dependence on single carriageways for strategic links and the level of tolling on the network. In countries such as France and Italy with large tolled networks complementing the free networks the delays on the untolled SRN is more than three times the delay on the tolled network. For example, in France the 50 hours per day per mile for untolled toads compares with 13 hours per day per mile for tolled roads, and the equivalent figures for Italy are 35 for untolled roads and 15 for tolled roads.
The concentration of delays on the English network results in a greater peak to off-peak variance in journey times compared with other countries. It may be that there is less flexibility in England about the timing of economic activity leading to the more concentrated peaks.
The data collection for this work from public sources has shown how widely available consumer data can be used to benchmark the experience of users of the road network. There are many ways that the data assembled for this work could be further analysed to consider effects relating to economic links and connections. This analysis has considered these effects only from the perspective of the travel times to key nodes, but suggests that reductions in peak hour delays on the road network could enhance English competitiveness, particularly the labour market catchment for London.
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b8cd456cb397093319408a9a6f96b176ac1a824e | # Contents
Table of Contents
01. Foreword 2
02. Executive summary 3
- The Internet Safety Strategy green paper 3
- Our strategic response 4
- Working with industry to make online environments safer for all users 4
- How can technology improve online safety for all users 5
- Supporting children, parents and carers 5
- Responding to online harms 5
03. Introduction 7
- The challenge 7
- Our principles 7
- Online harms 8
- Our approach 8
- Digital Charter 9
- Evidence 9
- Consultation 9
04. Our strategic response 11
- Remodelling UKCCIS 11
- Government’s wider role 12
- Action across central government and the wider public sector 12
- Engaging internationally 12
05. Working with industry to make online environments safer for all users 14
1. Social media code of practice 15
2. Transparency 16
3. Financing & industry structures 16
4. Advertising and social media 17
5. General Data Protection Regulation 17
6. Online games 18
06. How can technology improve online safety for all users 20
1. Supporting the internet safety technology market 20
2. Encouraging technology firms to ‘think safety first’ 21
07. Additional measures for the safety of all users
08. The role that applications and app stores play
09. Safety values
10. Connected toys
11. Innovative delivery
12. Supporting children, parents and carers
Part 1 - Supporting children
1. RSE and PSHE education
2. Digital literacy
3. The wider role of the education system
4. Other ways to support children
Part 2 - Empowering parents and carers to help children
1. Support for parents
2. Technology solutions for parents
3. Digital skills
4. Troubled families
5. Looked after children, children in need and care leavers
6. Responding to online harms
Legislation
Police response to online hate crime
Online dating and networking sites
Prosecuting crimes committed online
Government strategies
Fraud and older people
Annex A – Research and the current landscape
Increasing time and presence online
The Internet offers a space for creativity, innovation and support
Increased Exposure to Risk
When risks result in harm
Internet usage and young people’s mental health Pornography affecting children online Commercial content and advertising targeted at children and adults Fake news and educating young people to distinguish between fact and fiction on the Internet Hate crime and the exposure to hate content for all internet users Cyberbullying amongst children and the adults’ experiences of trolling Online misogyny Sexting amongst young people Revenge pornography Adults and children providing personal information online Catfishing Annex B – Existing legislation and regulation
Criminal offences online
Equalities
Common framework for media standards
Statutory guidance for schools
Age verification for access to sites containing pornographic content
Keeping pace with technology changes
1. Foreword
As the Secretary of State responsible for digital, I have the privilege of working with a sector which is constantly evolving and playing an ever increasing role in all of our lives.
Since its inception, the Internet has been an amazing force for good. It has had an extraordinary impact on people around the globe. It has created lines of communication; driven innovation, growth and new business models; and, it has connected and given a voice to the previously disenfranchised. For the first time ever, anyone, anywhere, with a smartphone and an internet connection can grow their own business and connect with people from around the world.
The Internet has evolved in this way because it is open and free. It is right that the technology that underpins the Internet is developed by the brightest technicians and engineers, not governments. But as the Internet has developed, risks have emerged online and behaviours that would not be tolerated in the real world are increasingly condoned online. As our manifesto sets out, we will act to ensure people are protected online – working with the sector to develop solutions wherever possible, while not ruling out legislation where it is needed.
We recognise that the Internet is challenging our society and that government needs to react to new social norms. This green paper will promote debate on what we think acceptable behaviours are online, and consider how the government can create strong frameworks that get to the heart of the problems we face. This Government believes that citizens’ rights and wellbeing need to be protected online, just as they are in the offline world. We are committed to tackling online harms, by not only working with technology companies, but also focussing on how we can best support users.
As set out in our manifesto, this Government is committed to ensuring that Britain is the safest place in the world to be online. This is important as we want everyone to benefit from the opportunities presented by the digital age. This green paper takes forward a range of manifesto commitments including our promise to educate today’s young people in the harms of the Internet and how best to combat them; introduce an industry-wide levy which could in the future be underpinned with legislation; and protect the vulnerable and give people confidence to use the Internet without fear through initiatives like a code of practice for social media companies.
The question and challenge of our age is how to reduce the risks posed by the Internet, while embracing its opportunities. This green paper sets out our objectives on online safety and we will work together with a wide range of interested parties to achieve these. In developing this work we will work closely with government departments, charities, academics and the tech community to take the action needed to make online communities safer and empower users to manage risks and stay safe online.
This Internet Safety Strategy is just the first part of our work on the Digital Charter. The Charter will ensure that every individual and every business can seize the opportunities of digital technology.
The Rt Hon Karen Bradley MP Secretary of State for Digital, Culture, Media and Sport 2. Executive summary
This Government aims to establish Britain as the world’s most dynamic digital economy. We want to make Britain the best place in the world to setup and run a digital business, while simultaneously ensuring that Britain is the safest place in the world to be online. This means developing an approach to the Internet that benefits everyone. It means embracing and maximising the opportunities that the Internet provides, while at the same time tackling the risks that it poses for its users. It means working together with a wide range of stakeholders to develop safer online communities and empowering citizens to manage risks and stay safe online.
Our Internet Safety Strategy green paper marks another step towards developing a coordinated, strategic approach to online safety. We recognise the enormous and unparalleled opportunity that the Internet has presented; it has provided us with new and faster ways to communicate, learn, travel, have fun and do business. At the same time, the power of the Internet poses risks that we all have a responsibility to address.
Through this green paper we will set out a high level of ambition on how we must all play our role in tackling issues of online harms. The government will address online safety by bringing groups across society together – including the voluntary sector, technology firms, schools, and the people of Britain – to establish a coordinated approach.
We recognise that no technology can be inherently good or bad and we acknowledge the value of a free and open internet that protects freedom of expression and the platforms that promote it. We believe that in order to improve online safety, government will need to harness the technical understanding and expertise of industry partners if we are to deliver thriving, safe and innovative online platforms.
In delivering these objectives, our work will be underpinned by three key principles:
- What is unacceptable offline should be unacceptable online;
- All users should be empowered to manage online risks and stay safe;
- Technology companies have a responsibility to their users.
We have consulted a wide range of stakeholders including charities, internet safety organisations, academic researchers and technology companies while developing the objectives and initiatives in this green paper.
This is an important step towards developing a safer online environment and we will need to carefully consider all our policy options before we bring them forward. This is why we are consulting on various aspects of online safety as part of the green paper.
Over the next eight weeks we hope to have a public conversation about the options included in our Strategy. Some of our ideas are ambitious - and rightly so. Problems created by new technologies need a new, innovative policy response if we are to correct online harms without hampering or restricting growth and innovation in the digital economy.
The Internet Safety Strategy green paper will form part of the government’s Digital Charter. The Charter will deliver our manifesto commitment to establish a new framework that balances freedom with protection for users. Through the Charter, we will work with businesses, academics, charities and the wider public to build consensus on how technology should be used and how we act online.
The Internet Safety Strategy green paper
Our Internet Safety Strategy green paper is formed of five strands, summarised here and developed in more detail throughout the document. Our strategic response
Government needs to create the conditions and set the framework for a collaborative, strategic approach to safety. This chapter will set out how government action will support the delivery of the Strategy and its ambitions. While the Department for Digital, Culture, Media and Sport (DCMS) will take a leading role in this delivery, we will work with a wide range of partners across government, including the Home Office, the Department for Education, the Department for Health and the Ministry of Justice.
The Strategy acknowledges the pioneering role that the UK Child Council for Internet Safety (UKCCIS) has played in promoting and championing improvements to child online safety in the UK. We plan to build on and augment the work of the Council and widen its scope to all internet users. We propose a number of governance changes to improve its accountability, strategic direction and responsiveness to the rapidly changing online landscape. These will be discussed with the online safety community as part of the delivery of the Strategy.
Our work on online safety will complement relevant upcoming areas of work across government, including the Department of Health’s and Department for Education’s Children and Young People’s Mental Health green paper. The government’s approach to the most serious online crimes relating to extremism, terrorist use of the Internet and child sexual exploitation will continue to be led by the Home Office. While these issues fall outside the scope of this Strategy, appropriate links will be made where the Strategy offers additional solutions to these problems, for example through online safety education.
Finally, we recognise that while the Strategy focuses on online safety in Britain, the Internet is a global technology and we will need to work with other partners and international institutions to support and deliver our objectives.
Working with industry to make online environments safer for all users
We recognise the government alone cannot keep citizens safe from online harms. The initiatives in this Strategy will be delivered in close partnership with industry, drawing on their technology and engineering expertise, to put in place specific technical solutions to make their platforms safer.
Alongside setting stretching objectives for industry on tackling online harms, this Strategy consults on a variety of initiatives aimed at improving industry’s offer on safety, including manifesto commitments.
We are consulting on the social media code of practice provided for by the Digital Economy Act. The Act requires the code to address conduct that is bullying or insulting to users, or other behaviour that is likely to intimidate or humiliate. Through this code we hope to tackle some of the most pernicious, but legal, online behaviours, including trolling and abuse, that is often disproportionately targeted towards women.
We will also consider how the code can deliver the manifesto commitment for a reporting mechanism with a ‘comply or explain’ response.
To give effect to the manifesto’s commitment to introduce a ‘social media levy’, the consultation will ask a number of initial questions about implementation, to guide early policy development.
We will also ask questions about how government can work closely with industry to produce an annual internet safety transparency report. This could include common metrics which would enable benchmarking of reporting mechanisms. Finally, the green paper considers options for working with the online gaming industry to improve gaming safety.
**How can technology improve online safety for all users**
We know that technical solutions, developed by industry, can help keep users safe online. We recognise the benefit of current parental control filters. Technologies, including linguistics filters and artificial intelligence, have the potential to make a considerable difference to the safety of online communities. Government will consider what we can do to support and develop a world-class online safety industry in Britain, in line with our manifesto ambition to make Britain the best place in the world to start and run a digital business.
We will provide better information about how startups can deliver safety by design to raise their level of safety from the start, and will consider the role that individual technologies, including application (app) stores and operating systems can play in delivering safer services.
We will encourage app developers to ‘think safety first’, by working with established companies to share best practice and promote new and existing guidance on online safety to ensure that necessary safety features are built into apps and products from the very start. We will work with existing industry bodies and communities, for example Tech City UK, to improve our outreach to startup communities in order to disseminate and promote messages on online safety to developers.
Government also recognises the value of providing consistent messaging on online safety across platforms and operating systems. Building on the good work that Google and Apple have already done on their family classifications for apps, we will seek to work with them to improve this offer on safety, particularly in relation to children’s services and apps.
**Supporting children, parents and carers**
The Strategy outlines the crucial role that education will play in raising the level of users’ safety online, with a particular focus on children and parents. For children, we will consult on the role that online safety education will play in the new, compulsory subjects required by the Children and Social Work Act. Additionally, we will consider the role that peer to peer learning can play in delivering innovative education programmes to users.
Schools also play an important role in supporting children when they have suffered the impacts of online harms from cyberbullying and online abuse to sexting. Schools are increasingly expected to handle online issues that have taken place outside of schools hours. The Department for Digital, Culture, Media and Sport (DCMS), working closely with the Department for Education (DfE), will ensure support is in place for schools to handle these concerns, including signposting the range of materials that are available.
We will seek to support parents to address issues of online safety in the same way that they tackle other risks, like road safety, starting from birth. We know that there’s already a lot of advice available for parents and carers on online safety but it can be confusing or overwhelming. We will ask the new UK Council for Internet Safety (UKCIS) to streamline and target education and advice on online safety for parents.
**Responding to online harms**
While the primary aim of this Strategy is to build safer online environments and reduce the harm experienced online, we cannot expect that things will not sometimes still go wrong for some internet users. This green paper explains the support that is in place for users when something does go wrong online and details existing work across government which seeks to support users. The Home Secretary recently announced that an Online Hate Crime Hub would be established that will ensure that victims of online hate crime have their cases effectively and efficiently investigated. This will help the police to provide more tailored support to victims of online hate crime, through expert case management and detailed evidence collection. We hope that this will increase prosecutions and ensure that victims receive appropriate support and advice.
In addition, this Strategy clearly outlines the existing support for victims of online harms, including through the ending violence against women and girls (VAWG) strategy, the serious and organised crime strategy and the national cyber security strategy, the hate crime action plan and the support that government provides to older people who might be the victims of fraud online. 3. Introduction
The challenge
Technology is positively and rapidly transforming our economy and society. This pace of change has meant that society needs to catch up with the new challenges that it brings. In particular, there is growing public concern about online safety; this covers a diverse range of issues from online trolling and hate speech to location-sharing within social media platforms. Surveys show that for parents and carers, online safety concerns are becoming more prevalent than concerns about more traditional harms such as drinking or smoking. Many women have been subject to aggressive and sustained campaigns of abuse on social media. It is vital that collectively, we address these issues, so that the digital revolution continues to have the support of the British people, and that Britain can remain a world-leading digital economy.
The government wants Britain to be the safest place in the world to be online, as well as the best place in the world to start and grow a digital business. We are publishing this Strategy to set out how we plan to achieve this aim and to seek your views on how we should take forward our proposed online safety initiatives.
We firmly believe that to improve online safety, government needs to work with the technology sector to find solutions - from taking action against those who wish to use the Internet for criminal purposes, to tackling anti-social online behaviours and reducing access to harmful online content. Progress in these areas will take time, and we recognise that we won’t be able to eliminate all risk of harm. This means it will also be vitally important that the government ensures that internet users - particularly children - know how to spot danger, understand what action they can take to keep themselves safe online and how they can support others to stay safe.
Our principles
The government will address online safety by bringing groups across society together – including the voluntary sector, technology firms, schools, and the people of Britain – to establish a coordinated approach.
Our work on the Internet Safety Strategy is underpinned by three principles:
What is unacceptable offline should be unacceptable online One of the most common concerns about the Internet is that different rules apply there - acts that would be unthinkable in the physical world have become commonplace online. We reject this.
The government and police will protect citizens online in the same way that we do offline. Those who commit crimes online should understand that the law applies online, just as it does offline. And together we should establish that we expect standards of behaviour online to match those offline - it is no more acceptable to bully, insult and threaten on the Internet than it is in the street or the classroom.
All users should be empowered to manage online risks and stay safe We all need to work together to give our citizens the knowledge and tools they need to stay safe online, so they can make the most of the opportunities that the Internet presents.
Technology companies have a responsibility to their users Technology companies have a responsibility to promote online safety and protect the wellbeing and rights of all of their users. This means they have to be our partners as we work to prevent harmful behaviours and content.
**Online harms**
This Strategy seeks to address a wide range of harms, relating both to behaviours and content, which can be experienced online by users.
We know that too many people face online bullying, abuse and content that leads to anxiety, self-harm, eating disorders and even suicide. These harms are not new problems for society, but the Internet has increased the ease and frequency with which people can be exposed to these harmful messages.
We recognise that children in particular need to be supported to stay safe online. Our children are now introduced to technology at a young age. They are ‘digital natives’, and their natural comfort in using the Internet will be a great asset in a world where digital skills are ever-more essential. But we need to make sure they know how to use the Internet safely and responsibly. We want to help them build their digital literacy, to spot dangers, think critically about the content they are consuming, and to understand that actions have consequences online just as they do offline. We also want to make sure parents have the knowledge and confidence to understand how they can keep their children safe.
In addition, we are aware that adult users are concerned about harms such as online harassment and abuse. Certain groups within society are more likely to experience these types of issues. We need to tackle these problems to ensure that everybody can fully participate in life online without fear. To do this, we are looking at what support can be put in place for the vulnerable and those who are disproportionately likely to encounter harms online.
**Our approach**
Our work and the consultation questions set out in this document centre on four main priorities:
- Setting out the responsibilities of companies to their users;
- Encouraging better technological solutions and their widespread use;
- Supporting children, parents and carers to improve online safety;
- Directly tackling a range of online harms.
The government can best deliver these priorities and a safer online environment by working in partnership with others. Industry has to play a central role in helping us achieve this goal by improving online safety. Through safety by design, increased accountability and transparency, companies can take a leading role in supporting users.
We also recognise that no technology can be inherently good or bad. We value a free and open internet that protects freedom of expression and the platforms that promote it. What matters are the choices that we all make when we use these tools, the support and education that is provided, and the way these relate to the values we share as a society.
The government is uniquely positioned to highlight these issues and bring initiatives together to create a coherent strategy that is more than the sum of its parts – and to raise the bar in each individual area.
The government has made tackling online extremism a priority, and is also taking action on the most serious of crimes relating to terrorist use of the Internet, child sexual exploitation, cyber crime and online fraud. This vital work will continue to be led by the Home Office and will not be covered in this green paper. These serious crimes require specific work with law enforcement and the security services, and well-established programmes of work are already tackling them.
**Digital Charter**
This Internet Safety Strategy is part of the Digital Charter. We are developing the Digital Charter, working with companies, civil society and others to establish a new framework that balances freedom with protection for users, and offers opportunities alongside obligations for businesses and platforms.
The Digital Charter has two fundamental aims: making Britain the best place to develop and deploy new technology; and making Britain the safest place in the world to be online.
This Internet Safety Strategy is part of the latter of these two aims - making Britain the safest place in the world to be online. It is the first strand of our Digital Charter work. This Strategy builds on and supports the government’s broader work on cyber security, set out in the National Cyber Security Strategy published in November 2016. As the boundaries between technology and the physical world become increasingly blurred, cyber security and safety are now intrinsically linked. Cyber security measures and guidance help protect users from cyber risks, such as hacking and fraud, with a focus on making devices and platforms more secure. However, taking a robust approach to cyber security is not in itself sufficient in keeping users safe. The ambition of this Strategy is to detail what further steps need to be taken to keep individuals safe online.
**Evidence**
Alongside this Strategy, DCMS has published a literature review undertaken by Professor Sonia Livingstone, Professor Julia Davidson, Chair of the Evidence Group and Dr Joanne Bryce, on behalf of the UK’s Council for Child Internet Safety (UKCCIS) Evidence Group. The report provides up to date evidence of how young people are using the Internet, the dangers they face, and the gaps that exist in keeping them safe. These themes are explored in more detail in Annex A, along with details of the online harms which adults can also experience.
This literature review is valuable in highlighting the gaps in our current knowledge. It also shows the importance of maintaining an up-to-date evidence base, so that we understand the pace at which online safety needs change. DCMS will now commission a literature review focusing on the online safety of adults. We anticipate publishing this review next year.
We will then be in a position to understand where further online safety research is required and will work with other organisations to address these gaps.
**Consultation**
This Strategy has been informed by a wide range of stakeholders including children’s charities, internet safety organisations, academic researchers and technology companies. It also incorporates the views of a wide range of government departments and their partners.
This range of views has helped us decide which online safety proposals we should pursue. We are now seeking your views on these proposals, and how we should take them forward. Alongside this Strategy, we have published an online survey for adults to complete. This consultation represents important progress in our online safety work, and we want to seek as wide a range of views as possible. As we have developed this green paper, we have drawn on the excellent work of The Royal Foundation Taskforce for the Prevention of Cyberbullying, convened by The Duke of Cambridge. The Taskforce's groundbreaking approach clearly aligns with the Strategy’s intentions and will help inform our next steps. We look forward to the public launch of the Taskforce’s work which is expected in the last quarter of 2017. 4. Our strategic response
As well as the direct action to provide better technological solutions and more support for children and their parents, we also want to make sure we have the right institutions in place. This section sets out our proposed strategic response.
Remodelling UKCCIS
This Strategy sets out a wide range of actions which will require cooperation between many different stakeholders.
Since 2010, the UK Council for Child Internet Safety (UKCCIS) has brought together organisations drawn from across government, industry, law, academia and charity sectors that work in partnership to help keep children safe online. UKCCIS has over 200 associate members. It works to share responsibility for online safety across all sectors while ensuring their buy-in. By providing a platform for communication in this way, it demonstrates the shared working approach we are taking in the UK, across all nations and sectors which is seen as good practice by other countries.
Through its working groups, UKCCIS has published guidance on handling sexting incidents for schools, in parallel with the police issuing revised guidance for officers. It has also produced a guide for providers of social media, parents and users of social media and collated a large body of evidence on internet safety amongst other achievements.
We acknowledge the pioneering role that UKCCIS has played in promoting and championing improvements to child online safety in the UK. However, with a higher level of ambition not just for children but for all users, we want to make sure that the Council is aligned to the scope of this Strategy and able to hold government to account for our progress on online safety.
In order to do so, we will remodel UKCCIS to align with the Strategy so that it can take a leading role in this work. We propose:
- The Council will consider all users, not just children, and change its name to the UK Council for Internet Safety (UKCIS);
- A smaller, higher-profile executive board to set the Council’s strategic direction and annual priorities;
- Reconsidering the role which the working groups undertake to ensure that we have flexibility to quickly respond to new issues. The important roles undertaken by the Education and Technical Working Groups will continue and we propose to expand the work of the Evidence Working Group to include adults;
- Based on the outcome of the consultation, we may decide to have an independent panel or working group which could support the government with arrangements for the social media levy;
- UKCCIS undertake a review of available online safety information and identifying gaps in resources.
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1 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/609874/6_2939_SP_NCA_Sexting_In_Schools_FINAL_Update_Jan17.pdf 2 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517335/UKCCIS_Child_Safety_Online-Mar2016.pdf 3 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/490001/Social_Media_Guidance_UKCCIS_Final_18122015.pdf.pdf Government’s wider role
Action across central government and the wider public sector
DCMS is working closely with a wide range of partners in government to keep our citizens safe online, including the Home Office, Department for Education, Department for Health, HM Treasury, Cabinet Office, Ministry of Justice, the Government Equalities Office, and the National Cyber Security Centre.
In particular, in delivering this Strategy, DCMS will work closely with the Home Office, Department of Health and Department for Education. The upcoming Children and Young People’s Mental Health green paper, which will be published before the end of the year, will reference improving the evidence base relating to the impact of the Internet on mental health and considering the role that technology has in affecting children and young people’s mental health.
The Home Office is taking forward a wide programme of work to tackle illegal activity online, in partnership with the police, voluntary sector organisations such as the Internet Watch Foundation and industry, and at an international level through the WeProtect Global Alliance. It has established strong cooperation with the tech sector through the industry-led Global Internet Forum to Counter Terrorism, focusing on the threat from violent extremist content online.
The Internet Watch Foundation (IWF) is a not-for-profit organisation and self-regulatory body which is supported by the global internet industry and the European Commission. The IWF minimises the availability of online sexual abuse content, by predominantly focusing on the removal of child sexual abuse images and videos. The IWF offers a place for the public to report child sexual abuse images and video anonymously. They then have the images and videos removed.
While the Internet Safety Strategy does not cover illegal activities such as child sexual exploitation or violent extremist content, there will be clear benefits for these policies, derived from building users’ digital literacy online and making it easier to tackle unacceptable online behaviour.
The Committee on Standards in Public Life is undertaking a review of intimidation experienced by Parliamentary candidates. They are also considering the broader implications for other candidates for public office and other public office holders. The Committee will produce a report for the Prime Minister, including recommendations for action and identifying examples of good practice by the end of the year.
To ensure the balance is right between freedom of expression and the integrity of the criminal trial process, the Attorney General, in his role as guardian of the public interest, has launched a call for evidence to analyse the impact of social media commentary on court proceedings in order to inform an assessment of whether any further guidance is required.
Engaging internationally
This Strategy focuses on online safety in Britain, but recognises that solutions and changes to behavioural norms are also needed at a global level. We will be talking about the challenges of online safety with leading tech companies and like-minded democracies as we develop our thinking on the Digital Charter. We will campaign to build a more robust international response to online safety and continue to focus on raising awareness with international bodies and our partners.
We will work through our network of diplomatic missions, to establish new support for our work, including through international institutions such as the UN, EU, Commonwealth, OECD and the Council of Europe. This will include steps to build relationships, share best practice and practical solutions. This international effort will reinforce the leadership role that the UK has already established through the WeProtect Global Alliance.
We also believe that seeking a global leadership role on online safety will position Britain as a leader in technology that supports online safety. We will work closely with the Department for International Trade to ensure that the export potential for this technology is fully realised. 5. Working with industry to make online environments safer for all users
The government cannot keep citizens safe on its own, everyone has a role here: government, industry, parents, civil society and citizens. In particular, we need the technical understanding and expertise of the industry. This is why we will work in partnership with social media and other technology companies, working with them to provide safer online platforms for their users and providing support to do this where it is needed.
By working together and setting a clear level of ambition on safety, without prescribing exactly how companies should achieve this, we hope to build online safety without stifling creativity, innovation and growth in the Britain’s digital economy. We are clear that our support for a free and open Internet remains undimmed, and that we do not want to restrict access to the Internet. But we do want to see a much more consistent approach to safety across the industry.
We will work closely with the technology industry to develop a framework that helps achieve that consistency, shares best practice, and agrees what will be expected of companies to protect their users from abusive behaviour and content online.
The issuing of the social media code of practice, as required under the Digital Economy Act 2017, will be the first step in this process. Alongside this, we are currently reviewing the existing regulatory framework. As outlined in the Conservative manifesto, we will consider further steps that may be required to continue to develop and uphold a robust regulatory environment that both supports digital service providers and delivers improved protection to users, including - if necessary - a sanctions regime to ensure compliance.
The manifesto also committed to introduce an industry-wide levy for social media companies and communication service providers to support awareness and preventative activity to counter internet harms. To assist with the introduction of the levy, we are using this consultation to ask questions about how it could be best implemented.
We want all internet users to be equipped with the right skills and digital resilience to stay safe online. But we also want to reduce the problems that users are currently encountering, and because a shift in the way users respond to threats will take time to achieve, it is critical that the technology industry takes action now to make products and platforms as safe as possible.
Leading companies are already advancing their commitments in this area. For example, Facebook has announced new machine-learning algorithms designed to help spot people at risk of suicide. Jigsaw (part of Alphabet), has released a new tool called Perspective, an application programme interface (API) that gives any developer access to comment moderation tools.
Tumblr is a microblogging and social networking website founded in 2007, and acquired by Yahoo in 2013. Tumblr displays targeted messages to users in response to searches containing certain trigger words relating to suicide, depression, eating disorders, self-harm and domestic violence. These messages interrupt the user experience and provide links to expert sources of advice. Tumblr also has ‘safe mode’ which filters sensitive content. ‘Safe mode’ is the default setting for all users.
While these sorts of efforts are a step in the right direction, the industry needs to ensure that available tools are more consistently available across different platforms, and better publicised to users. And as their technology evolves, so must the solutions they have in place to protect their users.
There has been significant recent public concern about acts of harm and self-harm playing out online, from the live streaming of suicides to anonymous public cyberbullying and the use of adult dating sites and apps by children which have resulted in contact abuse. Leaked moderation guidelines have provoked much comment and debate, and shown the dilemmas that companies face when they try to tackle these issues.
The government wants to partner with industry to ensure these and other problems are taken seriously. We set out below the action that we intend to take.
1. **Social media code of practice**
This Government will work with the industry to secure a more coherent, joined-up approach to online safety across the range of major platforms. A key part of this will be issuing the voluntary code of practice, required by the Digital Economy Act 2017. We are consulting on what this will look like, with an aim of publishing the code of practice in 2018. The government will also consider the recommendations of the Committee on Standards in Public Life’s review on the intimidation of Parliamentary candidates, which in due course may make recommendations on how online abuse should be tackled.
The code of practice will seek to ensure that providers offer adequate online safety policies, as laid out in the Digital Economy Act 2017, introduce minimum standards and metrics and ensure regular review and monitoring. The Act requires that the code addresses conduct that involves bullying or insulting an individual online, or other behaviour likely to intimidate or humiliate the individual (section 103(3)). This will be an important way for us to tackle pervasive issues such as trolling. The code will not cover unlawful content which the legal framework already addresses. We intend that the code of practice will be developed following this consultation.
The Digital Economy Act 2017 requires that the code of practice include guidance about (section 103(5)):
- Maintaining arrangements to enable individuals to notify providers of the use of their platforms for the specified conduct;
- Maintaining processes for dealing with notifications;
- Ensuring relevant matters are clearly included in the terms and conditions for using platforms;
- Information given to the public about action providers take against their platforms being used for harmful conduct.
As part of this green paper, we are consulting on whether guidance should also be issued on:
- Information on standards for user content and conduct, including how community guidelines are developed, enforced and reviewed;
- Information about the prevention and identification of abuse and misuse of services, including persistent abusers across a range of harms;
- Reporting mechanism for inappropriate, bullying or harmful content, with clear policies and performance metrics on take-down, including considering the manifesto commitment for content removal on a ‘comply or explain’ basis;
- Information about how to identify illegal content and contact, and report it to the relevant authorities in a local jurisdiction; and,
- Privacy and controls - policies, practices and communications.
Signing up and adhering to the code of practice provides an opportunity for industry to voluntarily demonstrate their commitment to improving online safety for the benefit and protection of all their users. This may require technical innovation or adjustments in the form of sharpening reporting mechanisms and privacy settings. We will also encourage better communication between industry and consumers, including on guidelines and terms and conditions.
This consultation asks questions about how you think social media providers are currently performing in terms of online safety and how you think we should take forward work on the code of practice. 2. Transparency
Social media companies are already undertaking significant steps to keep their platforms and sites safe for users through education, technological solutions and cooperation with civil society.
But not all users are aware of the tools available to them, or of the things they need to do to keep themselves safe on these platforms. One way of assessing both the problem and user awareness is through analysing the levels of reporting of abuse and inappropriate behaviour.
In this consultation, we have included questions on the possibility of working with industry to produce an annual internet safety transparency report. This could include common metrics which would enable benchmarking of reporting mechanisms. We believe this information would be valuable in understanding harmful content and conduct online and will help to underpin any future policy interventions in this area. In developing any such transparency report, we would avoid initiatives that might place disproportionate, additional burdens on either companies or users, that might discourage users from reporting, or that might lead to unnecessary delays in how companies respond to reports.
Depending on the outcome of our consultation, an annual internet safety transparency report could be used to show:
- the volume of content reported to companies, the proportion of content that has been taken down from the service, and the handling of users’ complaints;
- categories of complaints received by platforms (including by groups and categories including under 18s, women, LGB&T, and on religious grounds) and volume of content taken down;
- information about how each site approaches moderation and any changes in policy and resourcing.
Regular annual reporting will help to set baselines against which to benchmark companies’ progress, and encourage the sharing of best practice between companies.
3. Financing & industry structures
Some companies have already invested heavily to improve the online safety of their users, including through supporting end-user and civil society groups. However, we believe that more needs to be done and that it is right that all companies should be involved and encouraged to play their part. This is the reason we will introduce a levy, to help us combat online harms.
We have included in our consultation, questions about how to develop and deliver this. The objective of the levy will be to support greater public awareness of online safety and enable preventative measures to counter internet harms. These include both new initiatives proposed in this Strategy and existing programmes. As we develop plans for the levy’s delivery, we will seek to ensure that it is proportionate and does not stifle growth or innovation, particularly for smaller companies and start-ups. And we will make sure it does not disincentivise tech companies investing in the UK.
Initially, we will look to secure contributions on a voluntary basis through agreements with industry, and we will seek industry involvement in the distribution of the resource. We will not seek to do this from scratch - we will consider existing safety initiatives that industry already delivers as part of our policy development. We may then seek to underpin this levy in legislation, to ensure the continued and reliable operation of the levy.
The levy will not be a new tax on social media. Instead, it will be a way of improving online safety that helps businesses grow in a sustainable way while serving the wider public good.
The manifesto likened this levy to the one that is set out in the Gambling Act 2005. While the Secretary of State has the power in legislation to bring forward a gambling levy, in practice the sector provides voluntary contributions and support. The majority of these voluntary payments go to GambleAware, a leading charity in Britain committed to minimising gambling-related harm.
GambleAware funds education, prevention and treatment services and commissions research to broaden public understanding of gambling-related harm. The charity aims to broaden public understanding of gambling-related harm and help those that do develop problems, get the support and help that they need quickly and effectively. In 2015/16, GambleAware distributed £8.1 million: 15% was spent on research, 74% on education and treatment, and 11% on overheads.4
The idea related to the potential levies on gambling and social media will be similar as both ask industry to contribute funding to counter harms caused through their platforms and businesses. This could also be compared to industry funded charities like the Drinkaware Trust.
4. Advertising and social media
It is the user base of social media platforms that underpins their business model and allows them to generate revenue from advertising. While social media companies often do not make money directly from sales to users, they generate revenues by providing access to their user base for third parties or by advertising sales. The high levels of digital engagement in the UK, coupled with its economic strength, make this a key market globally.
In 2016, advertising provided over 95% of Facebook’s revenue. While the USA and Canada prove to be the most profitable countries per user, Europe comes in second place, with the UK providing above average revenue compared to other European countries.5 For 2016, eMarketer estimates the UK to have represented $1.8 billion of advertising revenue for Facebook alone.6 A report by analysts OC&C suggests that collectively Facebook and Google’s share of UK online ads is due to rise to 71% by 2020.
Recently, it has become clear that advertisers have become aware of how online safety issues and experiences on online platforms can reflect badly on advertising space that they have purchased. For example, Vodafone recently published new rules intended to prevent its advertising from appearing within outlets focused on creating and sharing hate speech and fake news. The government will explore, in an open and consultative way, how higher expectations of online safety from advertisers can be translated into a greater focus on safety from platforms.
5. General Data Protection Regulation
The government introduced a Data Protection Bill to Parliament in September 2017, which will include measures to protect children and provide individuals with increased control over how their personal data is processed. This, along with other measures in the Bill, will provide everyone with the confidence that their data will be managed securely and safely.
The government published a call for views in April 2017, on the various derogations (exemptions) in the General Data Protection Regulation (GDPR). On 7 August, government published the responses and the Statement of Intent for implementation of the Data Protection Bill. Under the plans, individuals will have more control over their data.
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4 https://about.gambleaware.org/about/ 5 http://www.telegraph.co.uk/technology/2016/11/03/how-much-money-does-facebook-make-from-you/ 6 http://www.campaignlive.co.uk/article/facebook-ad-revenue-rockets-57-26bn/1422945 There are three key changes, specific to the protection of data belonging to individuals, with additional protections offered for children. They are:
- A new requirement that privacy notices - which set out how an organisation plans to use the personal data it collects - be written in a clear, plain way that is understandable to the user, even if they are a child.
- A strengthened "right to be forgotten": individuals will be able to ask for their personal data to be erased. This will include provision to allow people to require social media platforms to delete information they posted during their childhood. In certain circumstances, individuals will also have the ability to ask social media companies to delete any or all of their posts.
- Parents or guardians will be required to give consent to information services (which include social media) where a child is under the age of 13. We will also make it simple for consent to be withdrawn.
6. Online games
More than half of all 8-11s (56%) and 12-15s (58%) play games online, making this an important focus for child safety in addition to social media. There are risks in terms of age-inappropriate content, which might depict violent or sexualised scenes. There may also be risks of harassment and abuse as players interact with each other, which mirrors types of behaviour in online communities in general, including social media.
The government will work closely with online platforms, game publishers and developers, and with agencies such as the VSC Rating Board to continue to improve online safety in games. Part of our work with industry will consider how to increase diversity and inclusion in gaming communities, and how to promote good practice in community management and technical player protection measures.
A major element of child protection for video games is ensuring that products are labelled to show their age-appropriateness and these age classifications can link to parental controls where they are available. Here, we benefit from the long-established, pan-European 'Pegi' age ratings for video games which are administered in the UK by the VSC Rating Board.
In the UK, games supplied as physical products (on discs and cartridges for example) must by law carry the appropriate Pegi 12, 16 or 18 ratings if they are unsuitable for children. It is an offence to sell or rent these products to anyone not old enough. On video games consoles, controls can be set by parents or carers to block access to games with certain Pegi age ratings, to block internet access and also to set limits on the amount of time children can play each day.
The market for online games, and those games available as apps for mobile or tablet devices, is global. Protections focus on self-regulation by games developers, publishers and platform providers and we welcome their collaborations in recent years. Administered in collaboration by a number of the world’s games rating authorities, the International Age Rating Coalition (IARC) for example is a key initiative in this area and ensures games and apps available through many online and mobile storefronts (such as Google Play and Microsoft Windows) have Pegi age ratings. Microsoft, Sony and Nintendo also require Pegi ratings for games content that can be downloaded from the stores on their consoles.
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7 Ofcom (2016), Children and parents: media use and attitudes report. https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0034/93976/Children-Parents-Media-Use-Attitudes-Report-2016.pdf 8 VSC Rating Board - http://videostandards.org.uk/Home/ 9 https://www.globalratings.com/ The industry initiative, AskAboutGames,(^\\text{10}) which is supported by trade body Ukie and the VSC Rating Board, aims to help educate parents and players about how to play video games safely and responsibly, about age ratings and the parental controls available across consoles and devices.
We will work with industry and others on:
- further promoting awareness and understanding of Pegi age ratings, parental controls and advice on safe gaming;
- considering what evidence there is of existing issues - including sexism - and also opportunities and thinking about issues that may emerge, particularly as new types of games (such as Augmented Reality) develop;
- developing understanding of the various safeguards, techniques and protocols that games companies use to manage their consumers’ online game experience with a view to highlighting best practice;
- sharing guidance and best practice for games businesses to help them ensure their consumers - particularly children - can have a safe and enjoyable online gaming experience;
- exploring how the principles behind our social media code of practice should apply to the interactive elements of the games industry, with particular respect to reporting and take down of offensive user generated content.
(^{10}) [http://www.askaboutgames.com/](http://www.askaboutgames.com/) 6. How can technology improve online safety for all users
Increasingly, the best solutions for keeping users safe online are technological ones. The growing effectiveness and accuracy of tools based on artificial intelligence, for example, are making a real difference. This Strategy aims to put in place the right support for this technological innovation to flourish in Britain. This will not be about heavy-handed government intervention; instead, we will look at overcoming barriers to safety-conscious and responsible companies bringing their products to market, and seeking to create the demand to support long-term UK growth for safety products.
Microsoft PhotoDNA is a technological response to tackling child exploitation images that have been identified by trusted sources. PhotoDNA Cloud Service hashes and converts images into numerical values which are matched against databases of hashes from known illegal images. This hashing and matching process makes it possible to distinguish and flag harmful images from the billions that are uploaded daily. While child sexual abuse imagery will not be addressed through this Strategy, we will work closely with technology companies to promote the development of analogous technological solutions.
Instagram recently announced a new artificial intelligence system to reduce the number of comments that violate Instagram’s Community Guidelines. The new filter, DeepText, connects how words are used together to differentiate between an innocent use of a word and where, when put with other particular words, it can have a negative or harmful meaning.
As part of our consultation, we are keen to gather views on how we can encourage manufacturers, developers, retailers and consumers to give consistent consideration to safety. We want to embed the principle of ‘think safety first’ into the development of new technology. To achieve this, we intend to explore the following areas:
1. Supporting the internet safety technology market
As set out in our Digital Strategy, this Government wants to foster an innovation-friendly regulatory environment, to ensure that regulation across sectors is open to the benefits of new and disruptive digital innovations which help to improve online safety. We will work with business and partners across government to understand whether there are existing barriers to entry for companies looking to bring online safety products to market and look to address these problems.
The UKCCIS Technical Working Group first met in October 2016. The overall aim of the group is to provide a focal point and centre of excellence within UKCCIS for technical issues as related to online child safety. The group has identified issues that need further consideration including smart TVs, privacy and collection of data and virtual, mixed and augmented reality issues.
We will build on the work of the fledgling UKCCIS Technical Working Group to enhance the reach of their work and help turn their recommendations for better safety design features into reality by creating a Technical Network. This will bring together a specialised group of engineers and innovative tech businesses who will work together to develop and share new ideas and where businesses can communicate and challenge each other. This will look at areas such as artificial intelligence and the Internet of Things (IoT) and how they can be made safer for all users. 2. Encouraging technology firms to ‘think safety first’
This Government made clear in our Digital Strategy, our ambition to make Britain the best place in the world to start a digital business. But start-ups developing new products have told us they lack the capacity and expertise needed to build safety into their products from the start. To address this, DCMS will work with industry bodies like TechCity UK to support start-ups at the very earliest stages of their development so that they know what good online safety looks like. Along with sharing of industry best practice, this will help them to build online safety features into their products from the very start.
This work will sit alongside discussions already underway as part of DCMS’s ‘Secure by Default’ review. As part of the review, a report will be published which will include high level recommendations that will seek to improve the cyber security of consumer internet-connected devices and the connected services.
DCMS will also work with established companies who are developing new products or updates, to ensure that internet safety, cyber security and data protection are all part of the design process.
We will work with the industry to develop guidance explaining the safety principles that apps should aim to achieve, without prescribing specific technical measures.
This will emphasize the business benefits of getting online safety right, including simple reporting mechanisms and quick response times to complaints. For example, there has been a pattern that a lack of reporting on new apps can lead to them being used to send inappropriate or harassing content. Including reporting from the start would greatly improve customer experience and save the business from future complaints and need for app redevelopment. This work will be informed by lessons learned about online safety by larger, more established apps.
As part of this offer to start-ups and smaller companies, DCMS will also produce easy to follow guidelines about where companies can seek support if something does go wrong.
3. Additional measures for the safety of all users
We would like to encourage social media companies to tailor their products so that they provide consistent protections to children and young people. For example, by offering walled garden versions of their platforms, companies can give children the freedom to explore with less chance of harm. Many of the key companies have already developed excellent online products and tools.
In 2017, the LEGO Group launched their social themed app, LEGO® Life. The app is designed for younger children, particularly those from ages 8 -12, and it aims to inspire children to build and share their creations in a high-safety, high-trust environment. LEGO® Life applies the principle of safety-by-design, as well as introducing children to some of the more positive features found in other social platforms, demonstrating how social media sites can enrich their lives through sharing with family and friends.
The app is now available in 18 countries around the world and has over 3.2 million downloads. In addition to this, in 2018 the LEGO Group will launch a Parental App, Hub and Dashboard, taking a further step in securing the peace of mind of parents as well as providing them with more opportunities to share in the creative experience with their children.
One major concern is that a high proportion of children using the Internet, and their parents and carers, are not aware of the tools on offer that can keep them safe. We would like companies who already offer these features to promote these more effectively, both to their younger users, and to their parents and carers, so that there is much greater awareness of what tools are available for staying safe online, how easy they are to use, and the benefits of using them.
The Youtube Kids app was launched in the UK in 2015 to offer a safer Youtube experience. Adults are able to tailor the viewing experience, for example a timer can be set to limit how much time a child spends on the app.
iPlayer Kids provides a similar platform for BBC children’s content. The app has a variety of safety features including a lock that stops children leaving the app and filtered, age-appropriate content.
Online safety is an issue for everyone, not just children. As part of this consultation, we are keen to understand what specific safety features you would like to see manufacturers or online companies introduce.
4. The role that applications and app stores play
With over two million apps available through the major app stores, we want to ensure that online safety is built into these platforms. This will involve app platforms developing safety standards for the apps sold on their platforms, including more information about safety features and how users can enable them.
Both the Google Play Store and Apple’s App Store already promote safety features, particularly for apps designed for children.
All apps in the Google Play Designed for Families programme must be relevant for children under 13 and must meet certain criteria, including in relation to ads, interactive elements, age-appropriate content and privacy. Apps that are primarily aimed at children must participate in the Designed for Families programme and are then featured in the Family section of the Google Play store.
The App Store Kids Category highlights apps that are suitable for children. Apps must be designed for younger users and must not include links out of the app, in-app purchasing or other distractions to children. Apps must not include behaviour advertising or advertising that is age-inappropriate.
Despite the schemes already on offer, details on safety features within apps are inconsistent. To encourage ‘think safety first’ (ie building in safety features from the start of the design process) and improve consumer understanding, we are keen for app store providers to make safety considerations and features in apps clearer and more uniform in app descriptions. We will work with the app stores on the most effective way to implement the government’s commitment to introduce new protections for minors from age-inappropriate content in app stores.
While we welcome age ratings on all apps, games and other online platforms, where there are age requirements within the app’s terms and condition, we would also like these to be made clear to consumers.
We are interested in how a voluntary cross-industry approach, including app stores and social media platforms, could improve online safety.
5. Safety values
We are considering whether our ‘think safety first’ work should be underpinned by the development of a voluntary ‘baseline’, setting out a series of basic principles which we would want to see applied across all app stores. This would help set clear expectations for the industry, and by helping consumers make informed choices, the business value of developing strong online safety would be clearer to start-ups.
The baseline could cover key areas such as:
- What safety functions details should be included in upfront descriptions of an app on stores;
- Clear information to users on what metrics need to be considered when app producers / app stores assign a rating to a product;
- Information on how to report safety concerns relating to a specific app, and the feedback process users can expect after reporting concerns;
- Buyers being given material information about products they are being offered. Apps, connected toys, and other products including a basic explanation of how they operate, what they connect with and what happens to data that is collected as a result;
- Key information which should be included in terms and conditions.
App stores may also be able to play a part in the promotion of safety conscious apps through the ‘featured’ section of their store. This would give the apps with proper safety features better publicity and encourage both consumers and developers to consider the business value of safety features.
In 2015, the UK Council for Child Internet Safety (UKCCIS) published a practical guide for providers of social media and interactive services. The guide has examples of good practice from leading technology companies, and advice from charities and other online child safety experts. Its purpose is to encourage businesses to think about “safety by design” to help make their platforms safer for children and young people under 18.
As part of our work on the Strategy, DCMS will consider how to tailor and promote this UKCCIS guidance for app stores.
6. Connected toys
The UK is already an international leader in research and development and adoption of the Internet of Things (IoT). Government action includes the three year IoT UK Programme. The benefits of IoT to citizens, including children and young people, could be huge. However, connected devices such as toys and home electronics also bring new challenges, for example, in relation to children’s privacy.
Earlier this year, the connected My Friend Cayla doll was banned in Germany over fears that it has a concealed transmitting device. The move was taken by the Federal Network Agency (Bundesnetzagentur) which enforces bans on surveillance devices and German parents have been urged to disable the interactive toy.
DCMS are leading a review which is looking at the security of consumer internet-connected devices and the connected services linked to the devices. Following the publication of the review’s report, we will consider where the lessons from this review might help inform further work on connected toys and scope other aspects that should be considered, including privacy requirements.
7. Innovative delivery
We know that any Strategy from government that sounds like it is instructing people how to behave runs the risk of missing the mark. This is why, we will look at more innovative delivery models to reach users. Where DCMS’s arm’s length bodies and partner organisations interact with internet users, we will explore how they can deliver messages about safety online. 7. Supporting children, parents and carers
We believe society needs to equip everyone to be safe online. As part of this, we want children and young people to be confident in using the Internet and accessing the benefits it can bring. As children are now using the Internet earlier than ever before, we need to start building digital literacy skills from a young age. These skills should continue to be built throughout a child’s life, so all children can understand and successfully manage online harms when these occur. Ultimately we hope that fostering good online safety skills from a young age will help individuals develop into responsible adult users of the Internet.
Although schools clearly play a key role in educating children about online safety, we also want to ensure online safety information is disseminated through other means so that children receive consistent, regular reminders about how to stay safe online, and understand how to think critically about the content they consume and engage with. This consultation asks questions about how we can best ensure this happens. The measures put forward in this section cover children in England, as education is a devolved issue. They form our response to the manifesto commitment, to ensure that all children learn about the risks of the Internet, including cyberbullying. We hope a similar emphasis will be placed on teaching children online safety across Britain.
Parents and carers have a critical role in protecting their children online. We want them to teach their children about online safety, just as they help them tackle other challenges in the offline world like road safety. But this does not happen when parents are uncomfortable with the technology their children are using, and intimidated by the fact that their children know more about it than they do. This Strategy looks at how we can support parents and carers to give them the knowledge and confidence they need.
Part 1 - Supporting children
1. RSE and PSHE education
Today’s is the first generation of children who are learning about relationships and sex in an online world. Many of the experiences that are fundamental to growing up, like building friendships, testing parental boundaries and exploring sexuality, are complicated by growing up online.
The risks are not new. Problems like pornography and bullying have challenged previous generations. But the Internet has amplified the risks. It is right that we take a fundamentally new approach to preparing our children to tackle these risks.
Public Health England’s ‘Rise Above’ campaign which launched in 2015 aims to delay and prevent risky behaviours and by tackling multiple issues builds emotional resilience in young people aged 11 to 16. It aims to equip them with the skills and knowledge they need to make better health decisions, and deal with the pressures of growing up. The campaign covers a range of topics from core risk behaviours such as drinking and smoking to sexual health and mental health issues including online stress, cyberbullying and the impact of social media on relationships and body image.
The changes introduced in the Children and Social Work Act 2017 represent a step change to education on these issues. For the first time it will be compulsory for primary-aged children at school in England to be taught Relationships Education, and for all secondary-school children to be taught Relationships and Sex Education (RSE). In addition, the Department for Education (DfE) will carefully consider whether to also make Personal, Social, Health and Economic (PSHE) education compulsory in all schools.
DCMS and DfE will ensure new compulsory subjects in England address the challenges experienced by young people online and are seeking views to work out how best to do so. DfE will support schools to ensure that content is pitched at the right level for each school year and builds knowledge as children grow up. Engagement and consultation will help us to get the detail right, but we expect it will start with the basics, including building friendships online in the early years of primary school, through to cyberbullying and contact advice; and then online pornography and sexting education at age-appropriate points as children get older.
DCMS and DfE will generate the ‘online safety’ aspects of these subjects; and conduct thorough and wide-ranging engagement and consultation, including with parents and carers as well as children and young people. This will include: subject content, school practice and quality of delivery in order to determine the content of regulations and statutory guidance. We will work with partners, including: social media and technology companies, subject experts, law enforcement, English schools and teaching bodies to ensure these subjects are up-to-date with how children and young people access content online and the risks they face. Recognising that these can be challenging topics for schools and teachers to deliver successfully, DfE will also consider how best to support schools in the delivery of these new subject(s).
DfE set out in their policy statement in March this year, that mandatory Relationships Education, RSE and - subject to the outcome of a thorough consideration as set out above - PSHE - will come into force in September 2019. Schools in England will be required to publish their policies on Relationships Education and RSE to ensure parents understand what their children will be taught at school in these subjects. DfE will consider how best to ensure relevant guidance remains up to date with technology and trends, and will update the guidance regularly.
Teachers will play a vital role in delivering the online aspects of the Relationships Education, RSE and, potentially, PSHE and we need to make sure they feel equipped with the right knowledge and skills. DfE will ensure schools in England can deliver the new compulsory subjects to a high quality.
2. Digital literacy
Digital literacy is already part of the new computing curriculum and will be part of the new compulsory subjects of Relationships Education, RSE and - potentially - PSHE. Maintained schools already teach children basic e-safety information such as recognising inappropriate content and contact; and how to report concerns. Digital literacy helps give children the tools they need to make smart choices online.
We want to tackle the growing trend that online behaviours fail to meet the standards that we expect from our children in the ‘real world’.
Digital literacy is also about being able to critically interpret content encountered online, for example being able to recognise commercial content and advertising. It needs to include an understanding of how search engine results are generated, and being able to question sources of information and news. We want to ensure that schools develop children’s critical thinking skills so that young people are better able to recognise intentionally misleading information. In the long-term, giving our young people the tools they need to assess material online will be the single most effective antidote to fake news.
In developing digital literacy, children should learn digital citizenship: understanding what behaviours are acceptable online and how to contribute to a positive online environment where everyone feels able to participate. As well as digital resilience: building the personal emotional resources needed to understand online risks, knowing what to do to seek help, learning from experience and recovering when things go wrong. DCMS and DfE expect that digital literacy, including online citizenship, will form a part of compulsory Relationships Education, RSE and/or a possible compulsory PSHE subject. The engagement process and consultation on introducing these subjects will help us to determine how this topic will be covered, working closely with established stakeholders such as the PSHE Association.
The PSHE Association has integrated digital literacy (including skills and attributes that contribute to digital literacy and online safety) into their curriculum framework for PSHE education and the teaching resources they develop. The Association is also developing a comprehensive training offer from early 2018 to help teachers cover the range of online issues through their PSHE programmes.
We will ensure that any new digital literacy teaching builds upon existing lessons. The new computing curriculum (covering ages 5-16) is compulsory in maintained schools in England and can be used as a benchmark in Free Schools and Academies. It was developed by industry experts and includes digital literacy. Children in maintained primary and secondary schools are taught how to use technology safely, respectfully and responsibly; how to keep personal information private; how to recognise unacceptable behaviour; and how to report concerns about content and contact. The e-safety content of the computing curriculum was developed with input from organisations such as the NSPCC and the UK Safer Internet Centre.
Pupils are also taught offline citizenship at key stages 3 and 4 as part of the national curriculum (covering all maintained schools, and those academies and free schools that opt to use this). While the online world is not explicitly approached, citizenship aims to teach pupils the knowledge they need to think critically and to develop the skills to research and to interrogate evidence, including teaching on ‘the diverse national, religious and ethnic identities and the UK and the need for mutual respect and understanding’. The current citizenship curriculum therefore complements the aims of this Strategy to develop young people’s digital resilience and sense of digital citizenship.
DfE continually monitor the impact of all curriculum reforms through uptake of qualifications, attainment of pupils, progression rates and stakeholder feedback.
‘Internet Legends’ is Google’s programme to educate primary school children in the UK on online safety. The aim is to empower children with skills they need to stay safe and act responsibly online. The programme was designed in partnership with Parent Zone and with support from Childnet, Oxford Internet Institute and Internet Matters. The programme has reached over 20,000 children to date.11
As part of this consultation, we are asking for your views on how the technology industry can best support children’s digital literacy.
3. The wider role of the education system
Early years
As children are using the Internet from a very young age, we need to ensure that they do so safely. We will ensure online safety guidance is received by parents and carers with children at the Early Years stage. We will consider how this can be shared with settings via key early years stakeholders. Any changes in this area will have a wide reach and ensure that children from families who aren’t confident technology users, still receive the support they need.
11 https://www.google.co.uk/intl/en/safetycenter/families/legends/ Schools
The role of schools in assisting children with online safety is not restricted to formal education. Schools play a critical role supporting children when they have suffered online harms. This can include responding to incidents of cyberbullying (both in and outside of school hours) and intervening following the unwanted sharing of sexually explicit images around classmates. This presents additional challenges for schools and teachers, particularly in relation to their legal responsibilities. Together, DCMS and DfE will continue to ensure support for schools, including signposting the range of materials that are available.
Keeping Children Safe in Education (KCSIE) is the statutory guidance to which all schools and colleges (in England) must have regard when carrying out their duties to safeguard and promote the welfare of children; it was last updated in September 2016. For the first time, it included a section covering online safety in schools. According to KCSIE guidance, schools and colleges should have appropriate filtering and monitoring systems in place to safeguard children from harmful and inappropriate online material.
The UK Safer Internet Centre has published guidance as to what “appropriate” might look like and sets out the need for a whole school approach to online safety, including a clear policy on the use of mobile technology in the school or college. DfE will continue to use statutory safeguarding guidance to reinforce the responsibilities of schools and colleges with regards to online safety. DfE will be consulting on revising this guidance in Autumn 2017.
By law, every school must have measures in place to prevent all forms of bullying. Pupils should feel that they can report bullying which may have occurred outside school including cyberbullying. DfE will work on how to support schools to be clear about their responsibilities on cyberbullying.
Many schools are already successfully keeping their children safe online and responding to incidents of online harm. Organisations like UKCCIS, Childnet and Internet Matters have helpful resources for schools to use in doing so. Some schools have full handling plans in place to deal online harms, and we want to see these best practices become standard. Schools also present a platform to provide messages to parents and other responsible adults on online safety. More information about how government will support adults to help children is outlined in the following section.
South West Grid for Learning (SWGfL) is a charity that works in the field of online safety, with a specialism in supporting those working with children, particularly schools. SWGfL provide tools such as 360 Degree Safe, an online safety self-review tool which is currently supporting over 11,500 schools to evaluate their online safety provision and strategy. Similarly, their tool Online Compass is designed to show any group that works with young people (for example, sports clubs and libraries) what needs to be done to make their use of technology safer.
The UKCCIS Education Working Group will be shortly launching a detailed framework for teachers to identify the key learning that pupils should have received at various ages in order to be a good digital citizen. The planned second phase of this work includes developing accompanying resources such as teacher’s activities, and an assessment criteria which will underpin the framework. The framework will outline ‘what’ needs to be done by teachers in the area of online safety and the accompanying materials will outline the ‘how’. This will also support development of Relationships Education, RSE and, if relevant, PSHE. DfE will continue to use the UKCCIS Education Working Group to provide support to schools on online safeguarding.
UK Safer Internet Centre (UKSIC) The UK Safer Internet Centre is a partnership of three leading charities – Childnet, the Internet Watch Foundation (IWF), and South West Grid for Learning (SWGfL) - with a shared mission to make the Internet a better and safer place for children and young people.
The partnership was appointed by the European Commission as the Safer Internet Centre for the UK in January 2011 and is one of the 31 Safer Internet Centres of the Insafe network.
The UKSIC delivers five main activities:
1. Education, training and awareness: increasing the UK’s resilience through innovative tools, services, resources, campaigns and training
2. Helpline: supporting the children’s workforce
3. Hotline: disrupting the distribution of child sexual abuse content
4. Youth participation: giving youth a voice and inspiring active digital citizenship and peer education
5. Leadership and collaboration: creating a UK and global eco-system that embeds online safety
For more information visit www.saferinternet.org.uk and the websites of the partners: Childnet, Internet Watch Foundation and SWGfL.
Safer Internet Day
Safer Internet Day celebrates the safe and positive use of digital technology for children and young people. It is celebrated globally in February each year and over one hundred countries took part in 2017. The UKSIC co-ordinate the event in the UK. Over 1,600 organisations supported Safer Internet Day 2017 and the day collectively reached 42% of UK children and 23% of UK parents.
4. Other ways to support children
As part of this consultation, we want to hear how you think we could further support children in understanding and handling online risks.
DCMS’s recent Digital Strategy highlighted the innovative initiatives that are taking place outside of formal education including the 5,000 Code Clubs that use volunteers and top quality online material to give young people the opportunity to learn how to code. The majority of Code Clubs are run from local libraries. The government will ensure that online safety resources are available to these Code Clubs.
As a resource for children, the BBC’s online services provide a safe, trusted space where they can learn, create and have fun in one place. It makes a substantial impact in children’s digital literacy and resilience, with the brand and creative track record to do so.
CBBC’s Dixi, for example, has won the BAFTA for Best Interactive for the way it has engaged children on online safety issues within an innovative online drama format. Now on its fourth series, it has made a significant impact on its audience: 85% of its audience consider it a fun way to learn about being safe online; and two thirds have updated their privacy settings on Twitter and Facebook as a result.
The BBC will be building on its brand, reach and creativity to engage children online further. It has launched Stay Safe, an online portal for digital safety and citizenship, and has announced additional investment of £34 million across three years to 2019/20 into BBC Children’s that will fund an enhanced online offer.
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12 CBeebies is the most well-loved brand among 0-6 year olds (Ipsos Mori Brand Tracker). It’s the 3rd most popular website for children after Google and Microsoft (Ofcom, Children’s Media Use and Attitudes 2016, top web properties accessed by children aged 6-14 from desktop and laptop computers) 13 BAFTA 2014 for first series 14 Safer Internet Day 2015 Evaluation, Populus/UKCCIS We will engage with the BBC as they support and promote child online safety and digital literacy through BBC Children's Stay Safe initiative, helping UK children become among the most digitally literate and resilient in the world.
Peer to peer support
Children and young people are increasingly using the Internet to provide each other with peer support and social media can be an excellent resource in assisting children in accessing communities and support.
Peer to peer support can play a vital role in helping children to help themselves with online safety. Messages about online safety delivered from government, parents and carers or teachers run the risk of being ignored by children and teenagers as unconvincing, or failing to appreciate why and how young people use the Internet the way that they do. In contrast, support from peer groups is likely to be more persuasive.
In developing this Strategy we have considered existing initiatives, like Childnet’s Digital Leaders scheme which aims to empower children and young people to champion digital resilience within their schools and to educate their peers, parents and teachers about staying safe online.
The Childnet Digital Leaders Programme is a pupil-powered online safety programme that helps schools put young people at the heart of their whole-school approach and ensures internet safety learning is fun and effective. With interactive training and an exciting online community, the programme empowers young people to be Digital Leaders so they can educate their peers, parents and teachers about staying safe online. The programme is delivered by Childnet as part of its work in the UK Safer Internet Centre.
Feedback includes:
“I think the programme is so useful for being able to get young people involved in spreading the word about internet safety. It has taught me new ideas that I have never thought of as well as allowing me to teach my friends and peers about this too so we become a safer community overall.” Pupil
“The programme has enabled and inspired the children to create their own resources and posters etc, which have been displayed around the school site raising the profile of online safety.” Teacher
Other initiatives include the Diana Award Anti-Bullying Campaign, funded by DfE and supported by Facebook and Vodafone, which has trained over 22,000 young people to be Anti-Bullying Ambassadors; young people who are responsible for leading on Anti-Bullying campaigns and promoting online and offline safety to their peers. The Diana Award has also established a National Youth Board, a group of young people from across the country who meet to share ideas on how to tackle bullying and provide support on online issues. In addition, they will be developing a dedicated anti-cyberbullying toolkit with support from top social media providers including Facebook and Snapchat.
The Childnet Film Competition is an annual national competition established in 2010 that invites young people aged 7-16 years to create short films to inspire their peers to use technology safely, responsibly and positively. Harnessing the positive power of digital creativity, the project gives young people an opportunity to take the lead in educating and empowering young people in their school and across the UK. The competition is delivered by Childnet as part of its work in the UK Safer Internet Centre.
Over 120 entries were received from children and young people right across the UK, and the six winning entries were showcased at a private screening at the BFI in London attended by industry guests and all of the young filmmakers. The films are all BBFC-rated and shown on the big screen. DfE are launching a pilot of how to safely put in place peer support schemes for children and young people’s mental health and wellbeing as part of pastoral support in 100 schools and colleges as well as in ten youth and community groups. DfE will work with a contractor to deliver the pilot, which will be accompanied by an independent evaluation. The pilot will run into 2018/19.
We believe there will be significant value in DCMS encouraging and supporting peer to peer support programmes like these that are focused specifically on online safety. This consultation asks which children you think would most benefit from such a programme.
Ditch the Label were the first digital anti-bullying charity, providing digital interventions and support for thousands of young people every week. It has revolutionised the way teens access support which feels natural and authentic to them.
In addition to hundreds of support guides which tackle bullying and the surrounding issues, they have Community which brings young people together in a safe space to discuss any concerns they may have. They are also able to support teens 1:1 through their website.
Civil society
We are keen to explore how we can work with civil society to get young people the guidance they need to stay safe online. We are exploring how to engage with the National Citizen Service graduate network, which is expected to comprise of 400,000 young people by the end of 2017. We will work with Scouts and Girl Guiding UK, particularly through their mixed programmes and open access youth services to reach young people.
The Scout Association have partnered with Vodafone to make sure that young people are not only using technology to enhance their lives, but are doing so safely. Last year they released an e-safety game called ‘Stay Safe’ which helps young people to understand how to stay safe online through a number of interactive activities. They additionally partnered with Vodafone to create two new badges, the Digital Citizen and Digital Maker badge. These badges aim to empower Scouts to develop their digital skills and teach them how to balance their digital and “real-world” time, ensuring they have time away from screens.
Girl Guiding has agreed to work with government to help girls and young women stay safe online. This includes: sharing research, for example the annual Girls’ Attitudes Survey conducted by Girl Guiding; peer to peer education programmes; and joining resources to spread safety messages and useful tools for both parents and children.
The 2017 Girls’ Attitudes Survey which surveyed over 1900 girls and young women aged 7–21, found over a third of girls as young as eleven say that comparing their lives to others is one of the greatest worries they have about spending time online. While less than half (47%) of those questioned feel that their parents realise the pressures they face on social media.15
Such civil society groups have a good track record on reaching children from lower socio-economic backgrounds and ‘hard to reach’ families who can be particularly vulnerable to online harms. To support the delivery of key internet safety messages, the government will ensure that appropriate materials are available for these groups to use.
Libraries
15 https://www.girlguiding.org.uk/social-action-advocacy-and-campaigns/research/girls-attitudes-survey/ The 3,000 libraries in England offer many ways of engaging both children and parents and carers, locally and nationally. There are several ways in which libraries could deliver messages about online safety. We will encourage them to:
- Embed online safety aspects into existing library projects and events;
- Run family learning sessions to help adults to support their children online;
- Display online safety material and signpost resources for library staff, parents and children.
Public libraries support Safer Internet Day, often delivering workshops and drop in sessions to help their communities feel more confident about being online. The UK Internet Safer Centre creates Education Packs and complementary Safer Internet Day TV films tailored for 5-7s, 7-11s, 11-14s, 14-18s and parents and carers.
**Sports clubs**
We know that sports programmes have the potential to strengthen social networks and community identity. We also know that there is a link between active lifestyles and healthier, happier people. Being active matters and sports clubs are one way children and young people can lead active lives.
The Child Protection in Sport Unit (CPSU) is a partnership between the NSPCC, Sport England, Sport Northern Ireland and Sport Wales. CPSU works with UK Sports Councils, National Governing Bodies (NGBs), County Sports Partnerships (CSPs) and other organisations, as well as in partnership with over 200 sports bodies in England, Wales and Northern Ireland through multi-agency safeguarding in sport partnerships in each home country.
CPSU provides guidance and training on how to set and manage policies and procedures for electronic communications, club websites and use of social media. The government will work with CPSU and others on how we can enable children and young people to have positive and safe interactions in online communities around sport.
**Part 2 - Empowering parents and carers to help children**
This Strategy is also concerned with how parents, carers and teachers can be empowered to talk to children about online safety.
The majority (84%) of parents of 5-15 year olds have approached the subject of online safety with their children. Parents are now more worried about their children sexting than they are about them drinking or smoking.16
Help and advice already exists for parents and carers, but this offer is piecemeal and varies between organisations. The government wants to see consistent advice for parents which is easily accessible and well-publicised. We will task UKCCIS with reviewing the online safety materials which are currently available, identifying any gaps in resources. We will seek their advice on how we can ensure parents and carers know what is available and can easily access the support they need.
Government supported material for parents includes the work of Thinkuknow, an education programme from the National Crime Agency’s CEOP Command established in 2006. The NCA’s Thinkuknow education programme provides educational resources for use with children and young people helping them to identify the risks they may face both online and off. Thinkuknow produces up-to-date social media guides for parents and carers. These include – “Should I be worried”, “How to set parental controls” and “How to make a report to the site/app”.
16 [https://www.pshe-association.org.uk/news/parents-call-education-address-sexting-children](https://www.pshe-association.org.uk/news/parents-call-education-address-sexting-children) The Children’s Commissioner for England will be exploring whether the access of children in care to digital networks is restricted by their care status or safeguarding concerns of the adults caring for them, and what can be done to broaden access safely and fairly. The Commissioner is also working with partners and care leavers to explore creating a safe digital platform to connect children in care councils across the country. Both the Commissioner and DCMS will be feeding into DfE’s fostering stocktake which is reviewing the fostering system to improve outcomes for looked after children.
Following the publication of the Children’s Commissioner’s report on Growing Up Digital in January 2017, the Commissioner for England has continued to play an active role in looking at how we prepare children for life online and continues to challenge policy makers to put children’s digital rights and resilience at the heart of the new citizenship curriculum.
Most recently, the Children’s Commissioner has launched a ‘Digital 5 a day’ campaign which is designed to help parents and children manage their time online. The campaign aims to encourage parents to talk to their children about: who they connect with online; the importance of balancing physical activity with time online; using creative internet tools; giving to others to make the Internet a positive environment and being mindful about the amount of time spent online and how it can affect mental wellbeing.
The Commissioner has challenged social media companies to be clearer with children about their rights and privacy. As part of this, the Commissioner is working with TES to produce simplified versions of the terms and conditions for Instagram, Facebook, WhatsApp, YouTube and Snapchat so that teachers can help their pupils understand how the web works and what they agree to when they join social media sites and install apps.
We recognise the importance of external challenge and will work with the Children’s Commissioner and other leading bodies to deliver this Strategy.
1. Support for parents
We know that new parents and carers are particularly receptive to parenting advice. Equipping new parents to deal with online safety issues should help prevent future online harms. DCMS will ensure that targeted information about young children and technology is available to new parents. This information will be sent to parents through a number of different routes, for example National Childbirth Trust courses, Bounty packs, Sure Start children’s centres and other early years settings, Bookstart, Mumsnet, Netmums, Facebook groups for local communities of parents, pharmacies, nurseries and parenting apps.
This information will focus on the technology and parenting issues that are relevant to this young age group, including the impact of screen time on a child’s cognitive development and information that parents may want to think about before sharing photos of their child, like whether the app has location-sharing enabled, and privacy considerations. We are keen to seek parents’ views on the topics which they would most like support on.
By starting with the technology issues that we know parents are already concerned about, we hope to start an informed conversation with them about child safety from the cradle, meaning they feel better equipped to handle future challenges like their child’s use of social media, cyberbullying, harassment and online pornography.
Parent Zone provide information to parents and schools on issues related to the Internet. They
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17 https://www.childrenscommissioner.gov.uk/publication/growing-up-digital/ 18 https://www.childrenscommissioner.gov.uk/2017/08/06/digital-5-a-day/ produce a Digital Parenting Magazine, in partnership with Vodafone, and distributed 1.5 million copies of the last edition. Parent Zone also provide online advice which schools can share with parents via their own website, as well as offering other resources and training through their Digital Schools programme. Their parent guides cover a diverse range of issues including live streaming, virtual reality and connected toys.
2. Technology solutions for parents
A burgeoning market for online safety technology tools for parents already exists and this Strategy aims to provide more information about the available options to parents. UK technology companies, including Internet Service Providers and mobile network operators, have traditionally been at the vanguard of technical development to deliver tools to help parents manage their children’s online activities.
Smaller firms and start-ups have also now entered the safety market and there are technological solutions available that allow parents to play a more active role in protecting their children online. These range from apps which monitor children’s social media accounts and switch off their devices remotely, to software content filters that alert parents if a child is at risk of cyberbullying or other risks.
Amazon’s Fire Kids Edition tablet offers easy-to-use parental controls that encourage learning before play. Parents can limit access to games, cartoons and videos while leaving unlimited time for reading—or can block access to content until after educational goals have been met. It has a child-safe camera which allows parents to view photos and videos taken by their child, and there are no ads or in-app purchases. Parents can control when the tablet shuts down, and set up multiple profiles so that each child’s experience can be personalised.
In addition to this, Amazon offers Fire for Kids Unlimited. It’s a subscription service which provides age-appropriate content for 3 - 5, 6 - 8 and 9 - 12 year olds, including books, videos, educational apps and games. Amazon’s free Parent Dashboard lets parents discover the content their children are enjoying and Discussion Cards help start conversations and connections with their children about those titles.
It is not the intention of this Strategy to direct or instruct parents to use certain tools, instead DCMS will work with and through trusted partners to raise the level of awareness around the most innovative products that are available. We will also seek to encourage wider consideration of different age-groups across digital products. This will fit alongside the work to raise parents’ awareness of the safety features that exist already on social media platforms and work to help Britain develop a world class online safety industry.
On the Net Aware website, the NSPCC and O2 have produced a guide for parents about the social media that kids use. The site provides an explanation of how each social media company works and the safety features that they offer. We will consult with the NSPCC, O2 and other industry partners to develop our approach to promoting technology firms.
3. Digital skills
For parents to properly tackle online safety issues, it is crucial that they have the right digital skills to start the conversation with their children.
Technology companies’ role Not all parents may feel equipped to understand, support and deal with the challenges of their children’s use of the Internet and connected devices. Ofcom research indicates that even parents who consider themselves digitally savvy can struggle with managing their children’s screen time as they grow older.
The current industry-led self-regulatory approach on parental control filters works well, as it encourages parents to think about online safety, but applies filters where they are not engaged. Internet Service Providers (ISPs) are best placed to know what their customers want, and to deliver flexible parental control tools that keep up-to-date with rapid changes in technology. A mandatory approach to filters risks replacing current, user-friendly tools (filtering across a variety of categories of content, but built on a common set of core categories) with a more inflexible ‘top down’ regulatory system.
The control filters offered by the ‘big four’ ISPs (Sky, Virgin Media, TalkTalk and BT), cover the vast majority of UK subscribers. ISPs have transparent mechanisms in place for anonymous reporting of any ‘over-blocking’, and allow customers to ‘white-list’ sites.
Staying up to date on new apps and technology trends can prove challenging, and the more social media companies engage in educating and offering tools for parents, the better opportunities for parents to take responsibility for mediating their children’s internet use.
The government will work with social media companies and organisations such as Internet Matters to ensure safety messages are built into online platforms, so that parents can stay up-to-date more easily. This work will form part of the UK Council for Internet Safety’s initiative to streamline and signpost information that is available to parents and schools. Government will ensure that safety initiatives from elsewhere in the Strategy, including the code of practice and the outputs of work with app stores is publicised through these information channels.
The major technology companies have started to come together to tackle issues of online safety at an industry level. The creation of Internet Matters is a good example of this cooperation. Founded by BT, Sky, TalkTalk and Virgin Media in 2014, and joined by Google and the BBC in 2016, it is an online initiative to help parents keep their children safe online, addressing risks that include cyberbullying, sexting and online pornography. It is also supported by a number of organisations including Facebook, EE, and Dixons Carphone.
Over 2.0 million people visited www.internetmatters.org between April 2016 and March 2017 and the organisation reaches an average of 7 million people per month through social media channels.
4. Troubled families
The Department for Communities and Local Government’s (DCLG) Troubled Families programme supports families who are facing multiple problems. For example, families may be in poor health, the children may not attend school regularly and the adults may be out of work. The programme is currently working with more than 185,000 families.
As part of the Troubled Families programme, key workers visit families to support them towards making sustained and significant progress to address their problems. DCMS will work with the government’s Troubled Families programme’s existing channels to ensure frontline professionals have access to best practice advice on online safety risks so they can support families in understanding online safety.
5. Looked after children, children in need and care leavers
Those children who are more vulnerable to harms in the real world are also more vulnerable online. We will ensure that particular action is taken to support these individuals. We will also consider what more can be done to support foster carers, children’s residential care workers and local authorities with responsibility for looked after children to support positive online interactions. This could include producing guidance/ materials on online safety for those responsible for children and young people in these groups. 8. Responding to online harms
While the work set out in this green paper will go some way in reducing the harm experienced online, and prevent harm escalating into more serious illegal activity online, we must also be prepared to respond when this does happen. Significant work is already happening across government to tackle harms online, including through implementing and enforcing existing legislation and working with industry and partners as part of crime-specific Strategies.
Legislation
Any behaviour or action that is illegal when committed offline is also illegal if committed online. Where behaviour does break the law, current legislation, some of which was passed before the digital age, has shown itself to be flexible and capable of catching and punishing offenders whether their crimes are committed by digital means or otherwise. For example, the Protection from Harassment Act 1997 includes the offences of stalking, harassment and of putting people in fear of violence, and applies to offences committed online, as well as offline.
In addition, the legislation that captures online abuse and harassment includes:
- Malicious Communications Act 1988
- Computer Misuse Act 1990
- Protection from Harassment Act 1997
- The Criminal Justice and Public Order Act 1994
- Section 15 Sexual Offences Act 2003 (for grooming)
- Breach of the Peace (common law offence)
- Communications Act 2003.
Police response to online hate crime
As part of this Strategy, the Home Office are creating a new national police online hate crime hub. The hub will act as a single point through which all reports of online hate crime are channeled. Specially trained officers will liaise with the victim and use their knowledge of online hate crime to collect relevant evidence that will be needed by the CPS to bring a prosecution. Evidence and any preliminary investigative work to identify the perpetrator will then be allocated to the relevant police force where the alleged offence took place to take forward the investigation. The hub will provide local forces with guidance or specialist knowledge. This will provide victims with a better service and will make it more likely that prosecutions can be brought.
The hub will improve the police response to online hate crime and improve the response to victims. It will:
- Assess whether the circumstances relate to a crime or non-crime incident;
- Combine duplicate reports;
- Seek to identify the perpetrator;
- Refer appropriate cases to internet hosts for action;
- Feed any intelligence into the National Intelligence Model;
- Produce an evidence package for local recording and response where there is a positive line of enquiry;
- Update the complainant with progress and explain where there is no enforcement action possible;
- Advise local police colleagues on effective responses. The national hub will be established under the National Police Chiefs Council. It will begin operating by the end of the year. Initial funding for the hub is £200,000 a year. This will be found from the current Home Office hate crime budget.
**Online dating and networking sites**
The rise in popularity of applications and social media services that enable users to meet online has created new opportunities to make social connections, including those romantic or sexual in nature. Companies such as Tinder and Grindr offer services to UK users that enable location-based meet-ups. While some services are strictly oriented towards adults through their terms and conditions, these are not always enforced even where users identify themselves as young people in their profiles, or their communications with other users. We know that children can and do seek out information about sexuality online and use the Internet as a means to experiment and to initiate contact with others. However, sexual communication with a child under the age of sixteen is illegal, and there are serious risks to young people presented when they engage in this kind of behaviour and are then prompted to meet new contacts in person.
While it is right that we continue to work with police to prevent child sexual exploitation and to bring offenders to justice, there is a role for companies providing adult-oriented services, in particular those that monetise their users, to ensure that their user-base is over the age of consent and to prevent solicitation and contact between adults and children. There is also a role for users in identifying and flagging users to review teams and being encouraged to do so, in order to prevent children putting themselves at risk.
We would like to work with companies offering adult-oriented dating services to review processes and procedures, and to develop new protective messaging to help their user community prevent young people being put at unnecessary risk, and to ensure they remain in line with the law. We will consider whether there is a role for companies to provide appropriate messaging, and to take a stronger role in terminating accounts belonging to young people.
**Prosecuting crimes committed online**
The Crown Prosecution Service (CPS) plays an important role in providing legal guidance that sets out how prosecutors should make charging decisions and handle specific types of cases in court. In August 2017, following consultation with community groups and criminal justice partners, they produced revised statements and legal guidance, covering the different strands of hate crime: racist and religious; disability; and homophobic, biphobic and transphobic. The CPS is continuing to work with communities to make reporting hate crimes as easy as possible.
Get Safe Online (www.getsafeonline.org) is an independent organisation, funded by industry and government, to ensure that high-quality advice is available to users. Often, even basic research, such as checking social media sites or using search facilities, can help check whether a person is actually who they say they are.
**Government strategies**
There are a number of existing strategies which seek to protect internet users from online harm and the Internet Safety Strategy will support these efforts.
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19 [http://www.cps.gov.uk/victims_witnesses/hate_crime/index.html#a04/](http://www.cps.gov.uk/victims_witnesses/hate_crime/index.html#a04/) These strategies include:
- **The Ending Violence Against Women and Girls (VAWG) Strategy**, published in March 2017, emphasises the importance of protecting people from these crimes online and offline, as well as addressing offending specifically facilitated by the Internet. The Strategy commits to working with law enforcement and online safety forums to ensure the risk posed by online VAWG is understood, and that all victims have the confidence to report these crimes. We are clear that civil orders, as well as legislation, apply equally online as offline, and we have committed to introduce new Stalking Protection Civil Orders, which will have the power to place restrictions on stalkers’ online, as well as offline behaviours.
- **The Serious and Organised Crime Strategy** was published in 2013, to coincide with the launch of the National Crime Agency (NCA), a powerful new agency with the funding and clout to lead the fight against serious and organised crime, including cyber crime. The Strategy is built on the successful framework we use to counter terrorism, to Pursue, Prevent, Protect and Prepare. Strong partnerships are at the heart of the Strategy - we are working closely with our partners in government and law enforcement to turn the full force of the state against those behind the most serious crime, including cyber crime and online child sexual exploitation. Through the Serious and Organised Crime Strategy Review we will set out a strategic approach to reduce the risk to the UK from serious and organised crime, suited to the scale and nature of the evolving threat and building on progress made under the 2013 strategy. The new strategy will test the definition of serious and organised crime (SOC) and provide a framework to guide activity and investment by HMG and the wider public sector. It will support the development of an integrated and cohesive SOC community, setting out clear roles and responsibilities and governance arrangements to drive accountability and evaluation.
- We have boosted the capabilities of the **NCA’s National Cyber Crime Unit** by increasing their ability to investigate the most serious cyber crime, and improved the response to online child sexual exploitation through the launch in 2015 of the Joint Operations Team, a collaborative venture between the NCA and GCHQ, to target the most sophisticated online offenders. The NCA has led and will continue to lead operations against dark net criminals. This includes joint operations with industry and international law enforcement partners across the globe to disrupt cyber criminals, attack their infrastructure and protect UK businesses and citizens. The WePROTECT Global Alliance, in which HMG has played a leading role, published their strategy in 2015 on eradicating online child sexual exploitation.
- **The National Cyber Security Strategy 2016**: The 2015 National Security Strategy reaffirmed cyber as a top tier one risk to UK interest – highlighting cyber threats as one of the key challenges to drive the UK security priorities for the coming decade. The National Cyber Security Strategy published in November 2016 defines our vision and ambition for the future: a UK that is secure and resilient to cyber threats: prosperous and confident in the digital world. It is supported by £1.9 billion of transformational funding to provide the UK with the next generation of cyber security. Our overall cyber crime strategic objective is to reduce the impact of cyber crime on the UK and its interests by deterring cyber criminals from targeting the UK and relentlessly pursuing those who persist in attacking us.
- **The Hate Crime Action Plan**, launched in July 2016, focuses on five key areas:
1. Preventing hate crime by challenging beliefs and attitudes;
2. Responding to hate crime within our communities;
3. Increasing the reporting of hate crime;
4. Improving support for victims of hate crime; and
5. Building our understanding of hate crime. We already have a strong legislative framework to tackle hate crime. The action plan includes new actions to ensure the legislation is used effectively to support victims and deal with perpetrators.
Under the hate crime action plan the government committed to funding community demonstration projects to tackle hate crime. We are pleased that so far nine community projects have benefitted from £300,000 for innovative schemes to help tackle hate crime across all five strands of hate crime (race, religion, sexual orientation, disability and transgender identity). The second year of the scheme was launched on the 31 July 2017.
The hate crime action plan also commits to providing funding for physical protective security measures to places of worship that have been or are vulnerable to hate crime attacks. The scheme is currently in its second year.
The Home Secretary has announced a further £1 million will be available this financial year to fund security measures in vulnerable places of worship. This is running separately to the current places of worship scheme, and was launched on the 30 June 2017.
Case Study – using technology to capture evidence of cyber harassment A cyber harassment project known as Operation Capture, led by Bedfordshire Police and the National Centre for Cyberstalking Research, with funding through the Police Innovation Fund, has developed a new Cyberharassment Mobile Application (CybHAPP) and a technology-driven online risk assessment tool (DRASH) for officers investigating online harassment and stalking. The app will enable automated and instantaneous transfer of cyber evidence, ensuring the integrity of evidence to increase the likelihood of a successful prosecution, while reducing the burden on digital forensics, as well as the reliance on victims to secure their own evidence. The app also generates metrics that show the times or days when activity peaks – which can help victims gain a degree of control and could also help shed light on offender behaviour. The app will be trialled with victims of cyber stalking and harassment from early 2018.
Fraud and older people
While fewer older people use the Internet (37% of those 65+ have never used the Internet, compared to 0.4% of those 25–34), the proportion of older people in the population is rising, which will increase the exposure of those aged 65+ to online crime and harms. While older people are currently less likely to be victims of crime, they can face barriers in seeking support as victims, and can take longer to recover.
The Home Office is leading an Action Plan for Older People to strengthen our approach to protecting vulnerable older people from abuse, exploitation and crime.
The Action Plan has four main aims:
1. Improving awareness of abuse and exploitation so that early signs are challenged and identification and reporting of abuse increases;
2. Address root causes of social isolation and ‘informal’ (i.e. family member) carer burnout;
3. ‘Design out’ opportunities for people to financially abuse older people; and
4. Improve the criminal justice and victim care response to older people so that offenders are brought to justice and older people are better able to recover from abuse.
Work to address financial abuse of older people, including online, is primarily being delivered and driven through the Joint Fraud Taskforce, and voluntary participation by the banking sector, working closely with government, Trading Standards and victim support. This includes roll-out of new banking protocols to protect vulnerable victims from fraud in-branch, development of new minimum standards for banks dealing with victims of fraud, and piloting new initiatives, in conjunction with the Behavioural Insights Team, which will protect vulnerable people from financial abuse and fraud. The second phase of the ‘Take Five’ communications campaign will re-launch in October 2017 as a new joint Home Office and UK Finance led campaign, jointly funded by the Office for Security and Counter-Terrorism and private sector partners in the UK financial sector. The campaign equips the public to more confidently challenge fraudulent approaches, including via email or online. Take Five’s partnerships activity will focus on the over 65s, leveraging the combined brand powers of HMG and UK Finance alongside influential public, private and third sector partners to deliver protective messages. Annex A – Research and the current landscape
The majority of unpleasant behaviours online, like bullying, are not new and it is not digital technology itself that creates the problem. Rather, the Internet is the medium by which these behaviours are perpetrated and accelerated, providing significantly wider access to victims as well as new and innovative ways of attack. Children and adults can both be victims and the harms can be significant.
More than four in ten adults users say they have seen something that has upset or offended them on social media in the past 12 months.(^{20})
The nature of online posting means that bullying and trolling content has the potential to have a lasting impact on victims: it can be seen by a larger number of people and 24 hour access to the Internet means that it’s an ever present threat. Online perpetrators are also getting savvier about their interactions with one another, leaving little evidence, or using anonymous apps or group chats to target individuals meaning that it is becoming increasingly difficult to take action against the perpetrators.
There is a growing body of evidence that suggests online harms can have detrimental effects on users and, in some cases, can have a long-term impact. This Strategy is grounded in the assumption that the risks that users encounter online do not inevitably translate into harm.
Studies that clearly demonstrate a causal relationship between online exposure and harm are scarce. For areas such as mental health impacts and cyberbullying which have “offline counterparts” more research has been conducted whereas the insights into relatively new phenomena such as hate content online and sexting are limited. In fact, evidence has suggested that 1-2 hours a day of digital screen time could have a positive effect on children and young people’s wellbeing.(^{21})
**Increasing time and presence online**
Today, adults and children are spending more time than ever on the Internet.
Ofcom estimates that the average weekly time spent online for all adults in 2016 was 22.9 hours,(^{22}) 1.3 hours more than 2013. 5-15 year olds spend 15 hours a week online; increasing their exposure to risks. Even 3-4 year olds who go online are spending 8 hours per week doing so.(^{23})
The ways in which individuals access the Internet is also changing. Adults are now less likely to go online via a computer (62% in 2016 vs. 71% in 2015) and they are proportionally more likely to use a smartphone than a computer to go online (66% in 2016 vs. 62% in 2015).(^{24}) Also more children are increasingly using mobile devices such as tablets or smartphones to access the Internet which could lead to a lack of supervision and increased privacy. In addition, we know that there is a growing trend for even very young children to spend time online.
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(^{20}) Adults’ media use and attitudes, Ofcom report (2017) [https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf](https://www.ofcom.org.uk/__data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf)
(^{21}) A Large-Scale Test of the Goldilocks Hypothesis: Quantifying the Relations Between Digital-Screen Use and the Mental Well-Being of Adolescents, Andrew K. Przybylski and Netta Weinstein, Psychological Science, 2017, Vol. 28 (2) 204–215
(^{22}) Adults’ media use and attitudes, Ofcom (2017) [https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf](https://www.ofcom.org.uk/__data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf)
(^{23}) Children and parents: media use and attitudes, Ofcom (2016) [https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0034/93976/Children-Parents-Media-Use-Attitudes-Report-2016.pdf](https://www.ofcom.org.uk/__data/assets/pdf_file/0034/93976/Children-Parents-Media-Use-Attitudes-Report-2016.pdf) Ofcom\\textsuperscript{24} has found that record numbers of older people are also embracing social media, with half of internet users aged 65-74 having a social media profile. However, older adults still spend less time online compared to younger users - those aged 16-24 spend 35.2 hours online per week, but those aged over 75 only spend 7.4 hours.
\\textbf{The Internet offers a space for creativity, innovation and support}
It is important that we recognise the benefits that the Internet can bring to users of all ages in allowing them to be creative, share ideas and build relationships. Adults underline that they see social media as an important way of sharing information among friends, family or their local community and that social media also exposes them to different opinions and viewpoints.\\textsuperscript{25} In the recent years, there has been an increase in the number of people who say they are confident in being creative online.\\textsuperscript{25} A UK-study also found that training older people to use social media improves cognitive capacity, increases a sense of self-competence and could have a beneficial overall impact on mental health and physical wellbeing.\\textsuperscript{26}
In particular for today’s children, technology has brought opportunities that previous generations never had and continuing innovation means that the benefits of being online continue to grow. The majority of evidence points to this positive impact, particularly the role that the Internet plays in teenagers’ lives: in 2015, 99% of 13-18 year old respondents have seen people posting things online that are supportive, kind or positive, with 46% saying they see this all or most of the time.\\textsuperscript{27} The Internet also fosters self-expression, connects children to their peers and provides opportunities to respect and celebrate differences. The majority of teens report that they can be themselves online. However, this figure is lower for girls rather than boys (74% of girls and 82% of boys).\\textsuperscript{27}
“These [internet] companies give the chance to people around the world to socialize with each other and find out new things about multicultural things. Also this helps people discover new abilities or talents like making and editing videos for YouTube.”\\textsuperscript{28}
\\textbf{Increased Exposure to Risk}
As the Internet becomes increasingly integral to all of our lives, it is important to understand how online activities may have negative consequences on wellbeing and safety.
Users say that the Internet allows them to be more critical rather than being more supportive of one another.\\textsuperscript{29} The research also shows that four-in-ten internet users are victims of online harassment with varying degrees of severity. Young adults and women were found to be more likely than any other groups to experience online harassment.
In the past year, almost one fifth of 12-15 year olds encountered something online that they ‘found worrying or nasty in some way.’\\textsuperscript{30} Also half of UK adult internet users say they have concerns about what is on the Internet. These concerns relate mainly to offensive/ illegal content (38%), risks to
\\textsuperscript{24} Rise of the Social Seniors revealed, Ofcom (2017) https://www.ofcom.org.uk/about-ofcom/latest/features-and-news/rise-social-seniors \\textsuperscript{25} Adults’ media use and attitudes, Ofcom (2017) https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf \\textsuperscript{26} Training elderly in social media improves well-being and combats isolation, University of Exeter (2014) http://www.exeter.ac.uk/news/featurednews/title_426286_en.html \\textsuperscript{27} Creating a better internet for all: Young people’s experiences of online empowerment + online hate, UK Safer Internet Centre (2016), http://childnetic.s3.amazonaws.com/files/SID2016/Creating%20a%20Better%20Internet%20for%20All.pdf \\textsuperscript{28} Internet Safety Strategy, Perspectives from Young People, Childnet and UK Safer Internet Centre \\textsuperscript{29} Online Harassment, Pew Research Center (2014) http://www.pewinternet.org/2014/10/22/online-harassment/ \\textsuperscript{30} Children and parents: media use and attitudes, Ofcom (2016) https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0034/93976/Children-Parents-Media-Use-Attitudes-Report-2016.pdf others/ society (22%) and concerns about security/ fraud (20%). Other concerns include personal privacy (9%) and advertising (7%).
Children are likely to be particularly vulnerable and thus have a higher risk of experiencing harm. When they are online, children can face bullying, abuse and content that promotes self-harm, suicide and eating disorders. These are not new problems, but as it has transformed our lives, the Internet has increased the ease and frequency with which people can be exposed to these harms.
Although most social media platforms have reporting features, it can take time to get content removed and unfamiliarity with the available safety features may prevent some from using the technology at all.
Upsetting content can vary but children mostly find this type of content on video-sharing sites or on social networking sites. This is concerning as children are often left to navigate these platforms on their own.
In the case of children and young people, the online risks can be summarized in three different categories: Conduct (vulnerable to interactive situations e.g. cyberbullying), Contact (participation in interactive situations e.g. sexting) and Content (exposure to mass-distributed or targeted content e.g. hate speech or pornography).
Table 1 - An overview of the classification for online risks
| Category | Content | Contact | Conduct | |----------|---------|---------|---------| | Aggressive | Violent/ gory content | Harassment, stalking | Bullying, hostile peer activity | | Sexual | Pornographic content | ‘Grooming’, sexual abuse on meeting strangers | Sexual harassment, ‘sexting’ | | Values | Racist/ hateful content | Ideological persuasion | Potentially harmful user-generated content | | Commercial | Advertising, embedded marketing | Personal data exploitation and misuse | Gambling, copyright infringement |
Source: EU Kids Online (Livingstone, Haddon, Görzig, & Olafsson), 2010
Adults can be affected by these online risks too. Particular groups of adults may be more at risk than others. For example, Ofcom’s recent report into adults’ media use and attitudes found that internet users aged 16-24 are more likely to say they have been trolled online (5% vs. 1%).
When risks result in harm
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31 Adults’ media use and attitudes, Ofcom (2017) https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf 32 Net Children Go Mobile - The UK Report. A comparative report with findings from the UK 2010 survey by EU Kids Online, Livingstone et al. (2014). https://www.lse.ac.uk/media/lse/research/EUKidsOnline/EU%20Kids%20III/Reports/NCGMUKReportfinal.pdf 33 Risks and safety on the internet: The UK report. Full findings from the EU Kids Online survey of UK 9-16 year olds and their parents, Livingstone et al. (2010) http://eprints.lse.ac.uk/33730/1/EU_Kids_Online_Report_April2014.pdf 34 Adults’ media use and attitudes, Ofcom (2017) https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf It is not inevitable that risks result in harm, and there is no particular set of characteristics that make a user more vulnerable online; but, it is important to understand which risks can lead to the highest probability of harm for particular groups.
The emerging research in this field highlights both opportunities and risks that come with online activity. Conclusive evidence covering prevalence and the impact of online risk for both adults and children are scarce. This is mainly due to the difficulties in defining the exact nature of the risks in changing online environments. The evidence we have suggests there is potential for both positive and negative outcomes from interacting online. The below text highlights some areas of risk which have been frequently discussed. The themes covered are not an extensive list of all risks that users face online but should give an illustrative overview of the evidence and policy challenges.
**Internet usage and young people’s mental health**
Internet use may exert both positive and negative effects on young people at risk of self-harm or suicide. We know from the experiences of people who have used the Internet to seek help and advice, and who have experienced suicidal ideation, that it can be a useful source of information, guidance and peer support.
It can also be a stressful environment where people may be exploited, experience bullying and harmful content and often their distress can go unnoticed. Common themes of suicidal ideation emerge as cyberbullying, online abuse and emotional and behavioural difficulties. Research funded through the Cross-Government Suicide Prevention Strategy showed that three quarters of 21 year olds surveyed who had attempted suicide reported some sort of suicide-related internet use. However, many of these people had used the Internet to seek help.
Many studies have tried to explore the connection between excessive time spent online by children and a negative impact on their social and emotional development, as a predictor of higher risk of poor mental health. However, whether increased internet use has a causal effect is not clear.
Internet forums may provide a support network for socially isolated young people but they could also be potentially harmful for vulnerable adolescents.
17% of 11-16s reported seeing self-harm material online in 2013 (only 6% in 2010) and 4% said they had seen websites where people discuss ways of committing suicide in 2013.
The upcoming Children and Young People’s Mental Health green paper, which will be published before the end of the year, will reference improving the evidence base relating to the impact of the Internet on mental health and considering the role that technology has in affecting children and young people’s mental health.
**Pornography affecting children online**
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35 Digital Futures, Samaritans (2015) [http://www.samaritans.org/digitalfutures](http://www.samaritans.org/digitalfutures)
36 Children’s online activities, risks and safety - A literature review by the UKCCIS Evidence Group, Livingstone et al. (2017). [https://www.gov.uk/government/groups/uk-council-for-child-internet-safety-ukccis](https://www.gov.uk/government/groups/uk-council-for-child-internet-safety-ukccis)
37 Priorities for suicide prevention: balancing the risks and opportunities of internet use, University of Bristol (2016). [http://www.bristol.ac.uk/news/2016/november/suicide-internet.html](http://www.bristol.ac.uk/news/2016/november/suicide-internet.html)
38 Children's mental ill-health by time spent on social networking sites, UK, 2013 to 2014, ONS (2017). [https://www.ons.gov.uk/peoplepopulationandcommunity/wellbeing/adhocs/006721childrensmentalillhealthbytimespentonsocialnetworkingsitesuk2013to2014](https://www.ons.gov.uk/peoplepopulationandcommunity/wellbeing/adhocs/006721childrensmentalillhealthbytimespentonsocialnetworkingsitesuk2013to2014)
39 Net Children Go Mobile - The UK Report. A comparative report with findings from the UK 2010 survey by EU Kids Online, Livingstone et al. (2014). [https://www.lse.ac.uk/media@lse/research/EUKidsOnline/EU%20Kids%20III/Reports/NCGMUKReportfinal.pdf](https://www.lse.ac.uk/media@lse/research/EUKidsOnline/EU%20Kids%20III/Reports/NCGMUKReportfinal.pdf) Children and adolescents can access pornographic content (material designed primarily to cause sexual arousal and stimulation) intentionally and unintentionally and are doing so, particularly as they become older. A 2016 UK study conducted by Martellozzo et al. on behalf of the NSPCC and the Office of the Children’s Commissioner for England found that at the age of 11, the majority of children had not seen online pornography, whereas sixty five per cent of 15-16 year olds reported having seen pornography.(^{40})
Evidence suggests that pornography is a great concern to children online(^{41}) and appears to influence them in negative ways. Pornography use by children could be, for example, associated with more permissive and unrealistic sexual attitudes, stronger gender-stereotypical sexual beliefs and maladaptive attitudes about relationships.
A study in the UK and four other European countries found that of 4,564 young people aged 14-17, boys who regularly watched online pornography were significantly more likely to hold negative gender attitudes.(^{42})
In other areas research is less conclusive. Pornography use among adolescents may relate to more sexual aggression,(^{43}) in terms of perpetration and victimisation.(^{44}) However, the evidence in this area is conflicting with some studies finding no link at all between pornography and sexual aggression, and others finding that people with already above average levels of sexual aggression had levels of aggression approximately four times higher after watching porn regularly compared to counterparts who do not watch porn regularly. Therefore while there is evidence of harm, the exact nature and long-term effects are uncertain.
A survey showed that of those children that view pornographic material online just over half of boys (53%) believed that the pornography they had seen was realistic compared to 39% of girls. A number of girls said they were worried about how porn would make boys see girls and the possible impact on attitudes to sex and relationships.(^{45})
The Digital Economy Act 2017 has introduced requirements for online pornography provided on a commercial basis to be inaccessible to under-18s. Pornographic content will need to be placed behind robust age verification barriers to stop children from viewing sexualised content. We believe that every child has a right to develop at a time that suits them, and this legislation will help protect children from potentially harmful content on online porn sites. DCMS will be taking this work forward alongside the implementation of this Strategy, with the ambition that age verification is in place during 2018.
The age verification measures will create a regulatory framework that disrupts the business of sites that refuse to comply, backed by civil sanctions. The regulator will be able to: notify payment providers and other service providers that the websites they are doing business with are in breach of UK law; and, direct internet service providers to block non-compliant websites.
(^{40}) ‘I wasn’t sure if it was normal to watch it’ - A quantitative and qualitative examination of the impact of online pornography on the values, attitudes, beliefs and behaviours of children and young people, Martellozzo, E., Monaghan, A., Adler, J.R., Davidson, J., Leyva, R. and Horvath. (2016). https://www.nspcc.org.uk/globalassets/documents/research-reports/mdx-nspcc-occ-pornography-report.pdf
(^{41}) In their own words: What bothers children online?. Sonia Livingstone, Lucyna Kirwil, Cristina Ponte and Elisabeth Staksrud, with the EU Kids Online network (2013). http://www.lse.ac.uk/media@lse/research/EUKidsOnline/EU%20Kids%20III/Reports/Intheirownwords020213.pdf
(^{42}) Pornography, sexual coercion and abuse and sexting in young people’s intimate relationships: A European study, Stanley, N et al. (2016). http://journals.sagepub.com/doi/10.1177/0886260516633204
(^{43}) ‘Sexual aggression’ is defined here as a collective term that can refer to any sexual contact against a person’s will.
(^{44}) Basically ... porn is everywhere: a rapid evidence assessment on the effects that access and exposure to pornography has on children and young people., Horvath et al. (2013). http://eprints.mdx.ac.uk/10692/1/BasicallyporniseverywhereReport.pdf
(^{45}) ‘I wasn’t sure if it was normal to watch it’ - A quantitative and qualitative examination of the impact of online pornography on the values, attitudes, beliefs and behaviours of children and young people, Martellozzo et al. (2016). Report for: Childrens Commissioner and NSPCC. https://www.nspcc.org.uk/globalassets/documents/research-reports/mdx-nspcc-occ-pornography-report.pdf This is a major step forward for protecting children from harmful online material that should reduce the chance of young children stumbling across pornography online.\\textsuperscript{46} We know that a determined child will still seek ways to access pornographic content and that this requires more than a singular approach. Therefore this work sits alongside other initiatives such as parental filters and this Government will consider the issue of pornography in developing the regulations and guidance on Relationships and Sex Education, which the Children and Social Work Act (2017) requires us to make compulsory in all secondary schools in England.
**Commercial content and advertising targeted at children and adults**
Children are exposed to targeted advertising online through various products such as banners, sponsored Google search results or YouTube videos. Online gaming is very popular among children and also offers a big platform for online advertisers that target children, with most older children being aware of advertising that encourages them to ‘pay-to-win’.
However, evidence suggests that children, in particular younger ones, lack a critical awareness when it comes to advertising online, but their understanding is increasing in the last few years.\\textsuperscript{47} A minority of 8-15s can identify sponsored links in search engine results.
55% of 12-15s who go online are aware of personalised advertising, in that they are aware that other people might see adverts online that are different to those they see, up from 45% in 2015.\\textsuperscript{47} More than half of internet users aged 12-15 (57%) are aware that the vloggers might be being paid by the company to say favourable things, this is a ten percentage point increase from 2015.\\textsuperscript{47}
Researchers such as Agnes Nairn and Juliet B. Schor\\textsuperscript{48,49} have written about the risk that young children do not process profile targeting on a critical level. Young children are therefore often susceptible to advertisements as they are unable to discern the messages in them or, in the case of advergames, that they are a form of advertising at all.\\textsuperscript{50}
Ofcom’s report on Adults’ media use and attitudes report demonstrates that adult users may also not be aware of commercial content. While the majority of internet users stated that they were confident that they could recognise advertising online, only half of search engine users recognised adverts on Google. Internet users aged 55-64 (12%), 65-74 (15%) and 75+ (18%) are more likely than other age groups to say they are ‘not confident’ identifying advertising online. 28% of adults who use video-sharing sites don’t realise that vloggers might be paid to endorse products and only 44% of adults are aware that the main source of funding for YouTube is advertising.\\textsuperscript{51}
**Fake news and educating young people to distinguish between fact and fiction on the Internet**
\\textsuperscript{46} ‘I wasn’t sure if it was normal to watch it’ - A quantitative and qualitative examination of the impact of online pornography on the values, attitudes, beliefs and behaviours of children and young people, Martellozzo et al. (2016). Report for: Childrens Commissioner and NSPCC https://www.nspcc.org.uk/globalassets/documents/research-reports/mdx-nspcc-occ-pornography-report.pdf
\\textsuperscript{47} Children and parents: media use and attitudes, Ofcom (2016) - report 2016 https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0034/93976/Children-Parents-Media-Use-Attitudes-Report-2016.pdf
\\textsuperscript{48} “Consumer Kids”. The influence of the commercial world on our children, Nairn, A (2009). Education Review – journal of NUT. Autumn, http://www.longwood.edu/staff/miskecm/400marketingarticle.pdf
\\textsuperscript{49} Born to Buy: The Commercialized Child and the New Consumer Culture, Juliet Schor (2004).
\\textsuperscript{50} Children, Advertising and the Internet, LSE Media Policy Project Blog (2015). http://blogs.lse.ac.uk/mediapolicyproject/topic-guides/children-advertising-and-the-internet/
\\textsuperscript{51} Adults’ media use and attitudes, Ofcom (2017) https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf It is important for children and young people to be aware that not everything they see and read online is real. Being able to distinguish between factual and fabricated content is a critical skill. In an age where children and young people predominantly get their news from social media outlets it is important that they are given the skills to critically evaluate the content they are consuming.
In a 2016 Ofcom survey, more than one in four of the children surveyed (across the full age range surveyed, 8 - 15) agreed that “if Google lists information then the results can be trusted”. Further qualitative research revealed that some children had a limited understanding of the source of search results, assuming an authoritative human fact checker was involved in their selection. UK adults’ critical awareness was also shown to be lacking in a Channel 4 “fake news” survey in 2017. The survey found that only 4% of respondents were able to identify all three true new stories in a selection of six they were presented with, and 49% of respondents thought at least one of the three fake news stories was true.
That is why we will be working with DfE to ensure that children’s critical thinking skills are enhanced as part of increased digital literacy training so that young people are better able to recognise “fake news” and intentionally misleading information on the Internet.
Hate crime and the exposure to hate content for all internet users
In 2015/16, 15,442 hate crimes were prosecuted - the highest number ever. This type of crime is increasingly conducted online and there are indications that individuals’ exposure to hate content online has risen in recent years.
Hate crime occurs where an offence has been committed by reason of the victim’s race, religion, disability, sexual orientation or transgender identity. Hate crime committed via social media can also involve harassment and stalking behaviour or the distribution of written or visual material. There are a number of legislative means to prosecute hate crime; racially or religiously aggravated offences (sections 28-32 of the Crime and Disorder Act 1998), offences stirring up hatred on the grounds of race, religion or sexual orientation (Parts 3 and 3A of the Public Order Act 1986) and enhanced sentencing (sections 145 and 146 Criminal Justice Act 2003). The appropriate legislative means to be used to prosecute cases would depend on the specifics of each case. Further details of existing legislation and regulations can be found in Annex B.
The Internet has enabled people to offend, insult or abuse individuals more generally, outside of a specific hate crime context (commonly referred to as ‘trolling’).
The Crown Prosecution Service has revised its guidelines on social media to incorporate new and emerging crimes being committed online. Advice was added to the guidelines about the use of false online profiles and websites with false and damaging information. The revised guidelines include sections on:
- Hate Crime;
- Violence against Women and Girls, including potential cyber enabled VAWG offences, such as “baiting”, humiliating peers online by labelling them sexually promiscuous;
- False or offensive social media profiles;
- Vulnerable and intimidated witnesses;
- Reporting and preventing abuse on social media.
There is no conclusive evidence on the rate of exposure for adults to hate content online and the harm caused. Further research into the prevalence of hate content and its impact on individuals would address these evidence gaps.
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52 Children and parents: media use and attitudes, Ofcom (2016) https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0034/93976/Children-Parents-Media-Use-Attitudes-Report-2016.pdf 53 Channel 4, http://www.channel4.com/info/press/news/c4-study-reveals-only-4-surveyed-can-identify-true-or-fake-news (2017) 54 Hate Crime Report, CPS (2016) http://www.cps.gov.uk/publications/docs/cps_hate_crime_report_2016.pdf More is known about children’s exposure to hate content online and research shows that the number of children affected seems to be rising. A survey in 2013 showed that 23% of 11-16s had seen hate messages online(^{55}) whereas in 2010 only 12% of 11-16 years olds reported that they have been exposed to hate content. A more recent survey showed that 64% of children and young people aged 13-17 have seen people posting images or videos that are offensive to a particular targeted group.(^{56})
In 2016 one in three 12-15s who go online (34%) say they have seen hate speech online in the last 12 months.(^{57})
Further research must be conducted to better understand the impacts of online abuse, the motivations behind such behaviour and how we can best challenge it.
**Cyberbullying amongst children and the adults’ experiences of trolling**
Evidence indicates that cyberbullying is becoming an increasingly common phenomenon for young people and it is different to ‘offline’ bullying in that it happens mostly outside of schools.(^{58}) Cyberbullying can be a 24/7 issue that can lead to the victim feeling under surveillance.
Reporting to social media companies is low amongst those who recognise they have been cyberbullied. Children, particularly those who had no direct experience of reporting issues, had little confidence in social media companies to resolve cyberbullying. But, satisfaction amongst those who have reported is much higher. This disparity between perceptions and actual experience of reporting indicates there is more social media companies could do to raise awareness and improve clarity of reporting mechanisms. This might help improve perceptions and the likelihood of young people reporting issues in the future.(^{59})
The Childline bullying report 2015-16 highlights that bullying is one of the most common reasons why children contact Childline, accounting for 9% of all counselling sessions (25,740 sessions in 2015/16). A total of 4,541 counselling sessions were delivered about cyberbullying in 2015/16, an increase of 13% from the previous year.
Research shows that young people do not always recognise cyberbullying. Around two-thirds of those who had experienced something negative online did not define their experiences as cyberbullying meaning it might be an even bigger problem than current evidence suggests.(^{59})
Cyberbullying can also pose a threat to adolescents’ health and wellbeing.(^{60}) As with more traditional forms of bullying, it can cause psychological, emotional and physical distress. Research into the impacts of cyberbullying suggests the prevalence of depression, loss of confidence, isolation, relationship problems, self-harming and suicide amongst victims.(^{61,62})
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(^{55}) Net Children Go Mobile - The UK Report. A comparative report with findings from the UK 2010 survey by EU Kids Online, Livingstone et al. (2014).
(^{56}) Power of image: A report into the influence of images and videos in young people’s digital lives, UK Safer Internet Centre (2017). [www.saferinternet.org.uk/safer-internet-day/2017/power-of-image-report](https://www.saferinternet.org.uk/safer-internet-day/2017/power-of-image-report)
(^{57}) Children and parents: media use and attitudes, Ofcom (2016). [https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0034/93976/Children-Parents-Media-Use-Attitudes-Report-2016.pdf](https://www.ofcom.org.uk/__data/assets/pdf_file/0034/93976/Children-Parents-Media-Use-Attitudes-Report-2016.pdf)
(^{58}) Bullying: Evidence from the Longitudinal Study of Young People in England 2, wave 2, DfE (2015). [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570241/Bullying_evidence_from_the_longitudinal_study_of_young_people_in_England_2\_\_wave_2_brief.pdf](https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570241/Bullying_evidence_from_the_longitudinal_study_of_young_people_in_England_2__wave_2_brief.pdf)
(^{59}) Cyberbullying: Research into the industry guidelines and attitudes of 12-15 year olds. Family Kids & Youth. (2017). Report for The Royal Foundation of the Duke and Duchess of Cambridge and Prince Harry.
(^{60}) Children’s online activities, risks and safety - A literature review by the UKCCIS Evidence Group, Livingstone et al. (2017). [https://www.gov.uk/government/groups/uk-council-for-child-internet-safety-ukccis](https://www.gov.uk/government/groups/uk-council-for-child-internet-safety-ukccis)
(^{61}) Current perspectives: the impact of cyberbullying on adolescent health, Nixon, C. L. (2014). [https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4126576/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4126576/) In September 2016, DfE announced £1.6 million of funding over two years, for four anti-bullying organisations to support schools tackle bullying, including cyberbullying. Internet Matters led a project to support reporting of cyberbullying to schools. There are a range of online platforms which can support schools. One example is Tootoot, an online tool which can be used by young people, parents and carers to report bullying incidents to schools, and include evidence such as pictures or screenshots from social media.
Adults also often experience cyberbullying which can take different forms such as harassment or trolling. The word ‘trolling’ alludes to the method of catching fish by casting a baited line in the water and waiting for a fish to bite. Similarly, a troll online tries to catch an unsuspecting victim to demean and humiliate. Not much large-scale research has been done on the prevalence of trolling and its impact on victims but anecdotal evidence paints the picture of the many people that face abuse online in the UK each year. The new research being undertaken by a remodeled UKCCIS will consider this and build our understanding of this issue, informing our future approach to the problem.
There is much anecdotal evidence that online abuse and hate crime can silence the voices of women, BAME, faith, disabled and LGB&T communities, who feel that they have to remove themselves from certain platforms and discussions in order to stay safe.
Media coverage shows that this is a particular issue for female public figures, activists and campaigners who are targeted specifically for giving their opinions. Those who do not conform to stereotypical norms or what is deemed as acceptable in their appearance are also frequently targeted. Changing Faces is a charity that campaigns on behalf of people with a disfigurement who can disproportionately suffer abuse online.
The Microsoft Digital Civility Challenge Microsoft is challenging people around the world to embrace “digital civility” and to treat each other with respect and dignity online.
In an attempt to put empathy more front and centre in digital dialogues, Microsoft have created a Digital Civility Index and Digital Civility Challenge. The challenge calls on people to commit daily to four ideals and to share their pledge on social media, using the hashtags #Challenge4Civility and #Im4DigitalCivility. Specifically, they are encouraging people to:
- ‘Live the Golden Rule’ by acting with empathy, compassion and kindness in every interaction, and treating everyone they connect with online with dignity and respect.
- Respect differences and honour diverse perspectives, and when disagreements surface to engage thoughtfully, and avoid name-calling and personal attacks.
- Pause before replying to things people disagree with, and not posting or sending anything that could hurt someone else, damage reputations or threaten people’s safety.
- Stand up for themselves and others by supporting those who are targets of online abuse or cruelty, reporting activity that threatens anyone’s safety, and preserving evidence of inappropriate or unsafe behaviour.
Online misogyny
Online misogyny can range from distasteful comments or jokes, to grossly offensive or targeted bullying, to death and rape threats. This abusive behaviour can also form part of a wider pattern of stalking or abuse, with victims being pursued both on and offline.
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62 Hate Crime and Bullying in the Age of Social Media, Williams & Pearson (2016). https://orca-mwe.cf.ac.uk/88865/1/Cyber-Hate-and-Bullying-Post-Conference-Report_English_pdf.pdf 63 https://www.changingfaces.org.uk/about-us While online abuse is aimed at both men and women, the nature of abuse can be acutely gendered. Online abuse of women and girls more often targets their specific gender identity, and commonly includes threats of rape and violence. Abuse and threats in these cases are often couched in stereotypes and misogynistic terms, whereby abusers consider their actions justified if women and girls act outside of prescribed gender roles. This can leave women and girls feeling vulnerable and isolated, and undermines their contributions in the online world.
Being the victim of online abuse can be a frightening and humiliating experience for its targets. But for every direct victim, there are a greater number of people who are indirectly affected – those who see the abuse, and fear that if they speak up, they may be next. Online misogyny normalises the silencing of women and the use of rape threats to close down dissent: it is particularly visible in trolling campaigns against women of achievement. There have been a number of cases of MPs and journalists removing themselves from social media having received threats and abuse when they speak openly about equality and women’s rights. The cumulative impact of online misogyny undermines women’s and girls’ digital contributions, silencing their voices and reducing their visibility: half of the girls and young women surveyed by Girl Guides think that sexism is worse online than offline with many saying fear of abuse makes them feel less free to share their views.
The nature of the online world allows perpetrators to remain anonymous, at a distance, and often act with impunity. Abusive partners and ex-partners can now use a range of online behaviours and tools in addition to the more “traditional” forms of domestic and intimate partner abuse. This includes monitoring or checking their partner’s phone and internet use, financial abuse by blocking access to accounts, as well as stalking and using location trackers on mobile and tablet devices to monitor someone’s movements. Domestic abuse, sexual violence and stalking and harassment are all addressed through the Violence Against Women and Girls Strategy, and while outside the scope of this green paper, government departments are working closely together and with partners to understand and address the interactions between violence against women and girls and harmful activity online that falls short of a criminal offence.
In 2016, the Government Equalities Office established a cross-government officials group on online misogyny, in partnership with the Home Office, to map out current action and to understand opportunities for action across government.
**Women’s Aid and Facebook’s guide to help women stay safe online**
Women’s Aid, a leading national domestic abuse charity, and Facebook have worked together to launch a new guide to empower women to stay safe online.
The guide by Women’s Aid and Facebook provides advice to help women and girls understand the risks and tools needed to protect themselves and stay safe on social media. The guide has a lot of helpful tips – from how to report something that is abusive, to stopping an intimate, private or sexual image from being shared online. It aims to help women take greater control of their own safety on Facebook, whilst staying connected to the people and causes they care about.
The guide is specifically designed to provide information and advice to survivors of domestic abuse. Whilst the online world should be open and safe for everyone to use, many women experience domestic abuse online. Though many survivors are already experts at managing their own risk and safety, Women’s Aid and Facebook have brought together some specific steps they can take to protect themselves online.
**Sexting amongst young people**
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64 Girls Attitudes Survey, Girl Guides (2016) [https://www.girlguiding.org.uk/globalassets/docs-and-resources/research-and-campaigns/girls-attitudes-survey-2016.pdf](https://www.girlguiding.org.uk/globalassets/docs-and-resources/research-and-campaigns/girls-attitudes-survey-2016.pdf)
65 [https://www.womensaid.org.uk/keeping-women-safe-online/](https://www.womensaid.org.uk/keeping-women-safe-online/) Definitions of sexting vary greatly and there is little detailed research on its prevalence and effect either on adults or on teenagers. Sexting can include the sending of sexually suggestive images via mobile phones or over the Internet, though younger people also perceive sexting as sharing explicit text messages.
Research suggests that many children and young people who engage in the behaviour do so in the context of consensual romantic relationships.
A study examining the behaviour in the context of the romantic relationships of 724 children and young people aged 14-17 found that 38% of the sample had sent sexual images to a partner during or after their relationship, and 49% had received them. The proportion of the sample sending and receiving sexts increased with age (26% aged 14 compared with 48% aged 16). Girls were more likely to send sexts than boys (44% compared with 32% respectively), but they were equally likely to receive them.
The sample commonly reported motivations are to flirt and in response to partner requests in relationships and many children and young people report that this is a positive experience.
There is evidence that some girls and boys experience pressure and coercion to engage in this behaviour within their relationships. Key concerns about sexting relate to non-consensual forwarding to peers or images being posted online, and the associated social and emotional consequences, including distress, humiliation and reputational damage, as well as online and offline peer harassment and unwanted sexual advances. Where children send sexual images of an under-18, even where this is self-generated, this is a criminal offence, for children and adults.
The government wants all young people to develop healthy, respectful relationships. GEO and the Home Office jointly funded £3.85 million to launch the second phase of the This is Abuse campaign, called ‘Disrespect NoBody,’ in February 2016. The campaign encourages young people to rethink their understanding of abuse within relationships, which includes issues like sexting.
Advice on sexting The UKCCIS Education Group have produced advice for schools and colleges on responding to incidents of ‘sexting.’ The advice aims to support them in tackling the range of issues which these incidents present including responding to disclosures, handling devices and imagery, risk assessing situations and involving other agencies.
The advice also contains information about preventative education, working with parents and reporting imagery to providers. This advice is non-statutory and should be read alongside the Department for Education’s Keeping Children Safe in Education statutory guidance and non-statutory Searching, Screening and Confiscation advice for schools.
In tandem with this, the National Police Chiefs Council produced guidance dealing with sexting that seeks to enable law enforcement professionals to respond in a proportionate way to reports of under 18’s possessing, sharing or generating indecent imagery of themselves or other children.
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66 Images across Europe: The sending and receiving of sexual images and associations with interpersonal violence in young people’s relationships. Wood, M et al. (2015). Children & Youth Services Review, 59, 149-60. doi:10.1016/j.childyouth.2015.11.005 67 Children’s online activities, risks and safety - A literature review by the UKCCIS Evidence Group, Livingstone et al. (2017). https://www.gov.uk/government/groups/ukcouncil-for-child-internet-safety-ukccis 68 A qualitative study of children, young people and ‘sexting’, Ringrose, J et al. (2012). London: NSPCC. http://eprints.lse.ac.uk/44216/ 69 The association between adolescent sexting, psychosocial difficulties, and risk behavior: Integrative review, Van Ouytsel, J et al. (2015). The Journal of School Nursing, 31(1), 54-69. doi:10.1177/1059840514541964. 70 Children’s online activities, risks and safety - A literature review by the UKCCIS Evidence Group, Livingstone et al. (2017). https://www.gov.uk/government/groups/ukcouncil-for-child-internet-safety-ukccis Revenge pornography
Adults can also experience issues with sexting and the sharing of explicit images, and in 2015 ‘revenge porn’ was made a specific criminal offence. A helpline dedicated to supporting victims of revenge porn was given additional government funding in April 2017. Since its launch the helpline has taken over 6,000 calls. 75% of those seeking advice and support are female.71
So-called revenge porn is the sharing of private sexual photographs or film without consent and with the intent of causing distress to the person depicted. Explicit or compromising images are posted online, sometimes on fake social media accounts, or shared with family and friends via mobile devices to embarrass and shame the victim; or otherwise the threat to do so is used with as much power.
Analysis conducted by the BBC found that there were 1,160 reported incidents of revenge pornography from April 2015 to December 2015 in England and Wales. 30% of those offences involving young people under 19 and Facebook was used by perpetrators in 68% of cases where social media was mentioned in reports, followed by Instagram (12%) and Snapchat (5%).72
Evidence suggests that the majority of cases involve a female victim, with the original image(s) posted by someone known to them but then shared by multiple other internet users either intentionally to add to a stranger’s distress or unknowingly, thinking that the images are pornography. Some images are shared without the victim knowing they existed to begin with.
The End Revenge Porn campaign found that out of the victims they interviewed:
- 90% of victims were women
- 93% of victims said they suffered "significant emotional distress"
- 82% claimed "significant impairment in social, occupational, or other important areas of functioning" due to being a victim
- 51% had suicidal thoughts due to being a victim
- 42% sought psychological services.73
There is anecdotal evidence that while legitimate pornographic websites quickly remove content considered to be abusive, and those hosted within the UK are bound by UK law to remove them, there are a number of websites that have grown a reputation for, or even exist with the sole purpose of, posting images of revenge pornography knowing it is distressing to the victims. These same sites sometimes publicly posting refusals to remove material when requested.
Adults and children providing personal information online
There is much evidence to suggest that many individuals do not feel in control of personal data they disclose online and that they are concerned about privacy and data protection when participating in the digital economy.74 ‘Privacy’ is often cited as important, and sometimes as the most important factor, for individuals engaging in online activities.75
______________________________________________________________________
71 https://www.gov.uk/government/news/revenge-porn-helpline-given-further-funding 72 Revenge pornography victims as young as 11, investigation finds, BBC’s own analysis (2016), http://www.bbc.co.uk/news/uk-england-36054273 73 Research from Cyber Civil Rights Initiative. https://cyberbullying.org/revenge-porn-research-laws-help-victims 74 Research and analysis to quantify the benefits arising from personal data rights under the GDPR - Report for DCMS, London Economics (2017). https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/635701/PersonalDataRights_LE\_-_for_Data_Protection_Bill_-_1_.pdf 75 Digital Footprints: A question of trust, Communications Consumer Panel (2016). http://www.communicationsconsumerpanel.org.uk/downloads/communications_consumer_panel_digital_footprints-cover_report.pdf The Communications Consumer Panel’s 2016 research found that most people understand that personal information is collected, stored, and used by public and private sector organisations. However, fewer are aware of how such technologies work or how their personal data is used.
Consideration of data or privacy concerns vary amongst adults. Ofcom’s report suggests that almost nine in ten (89%) internet users describe themselves as confident online, but one in four internet users (24%) don’t use reliable checks before entering their personal details online and one-third (33%) of internet users who buy things online don’t check that the site looks secure. This can leave users open to fraud and cyber crime.
Children’s digital literacy increases fairly steadily from age eight to young adulthood. While children come to understand the digital environment better with age and experience, it is by no means clear that a critical understanding of the digital environment results in cautious behaviour regarding personal data protection. Indeed, the data show how uneven children’s digital literacy is. For instance, while more than three quarters of 12 to 15-year-olds are cautious about their privacy and data sharing when visiting new websites, the majority (58%) believe information online can be easily removed if they no longer wish to share it with other people.
Government is committed to updating and strengthening data protection laws through a new Data Protection Bill, introduced into Parliament in autumn 2017. It aims to provide everyone with the confidence that their data will be managed securely and safely. Under the plans, individuals will have more control over their data by having the right to be forgotten and to ask for their personal data to be erased.
**Catfishing**
Catfishing is when an individual (or individuals) use the Internet to create a false identity or identities to form a romantic relationship, but without committing a criminal offence. While individuals have always been able to enter romantic relationships using deception, the Internet has provided a new mechanism for doing so, through creating entirely false identities and conducting relationships entirely online. Catfish may form close relationships with individuals, some lasting many years, without revealing their true identity.
Where a deceptive online relationship is used for financial gain, this is a criminal offence, and is outside the scope of this Strategy. Tackling fraud is the responsibility of the Home Office and law enforcement agencies, and is being addressed separately through the Joint Fraud Taskforce as well as the Serious Organised Crime and National Cyber Security Strategies.
More than half of online dating users say they have come across a fake profile and the number of people defrauded in the UK by online dating reached a record high in 2016 (Which 2016).
______________________________________________________________________
76 Adults’ media use and attitudes, Ofcom (2017). [https://www.ofcom.org.uk/\_\_data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf](https://www.ofcom.org.uk/__data/assets/pdf_file/0020/102755/adults-media-use-attitudes-2017.pdf)
77 Digital literacy can be understood as the ability of individuals to use skills, knowledge and understanding in order to make full use of the opportunities offered by the new media environment as well as safeguard themselves from associated risks (see Digital Media Literacies: rethinking media education in the age of the Internet, Buckingham (2007)). [http://te831us.wiki.educ.msu.edu/file/view/Buckingham.DigitalLiteracy.pdf](http://te831us.wiki.educ.msu.edu/file/view/Buckingham.DigitalLiteracy.pdf)
78 Children’s online activities, risks and safety - A literature review by the UKCCIS Evidence Group, Livingstone et al. (2017). [https://www.gov.uk/government/groups/uk-council-for-child-internet-safety-ukccis](https://www.gov.uk/government/groups/uk-council-for-child-internet-safety-ukccis) Annex B – Existing legislation and regulation
As set out in our principles, we believe that behaviours online should mirror those in the offline world. We are clear that there is already legislation and regulation in place which means that we can take action when inappropriate behaviours occur.
The current law in England and Wales includes a number of criminal offences and rights to civil actions which may be relevant in cases of misuse of the Internet or social media. Material published on the Internet, or by mobile phone, etc, is subject to the same restrictions as material published elsewhere: in other words, what is illegal offline is illegal online.
Self-regulation also allows a broad range of interested parties to participate and can be an effective way of coming up with innovative and effective solutions to issues which, due to the nature of the Internet, are often global. However, government is prepared, where necessary and effective, to take legislative action in order to deliver our objectives as is the case on age verification legislation for access to sites containing pornographic content.
Criminal offences online
The government is absolutely clear that abusive and threatening behaviour online is totally unacceptable. An action which is illegal offline is also illegal online. The law does not differentiate between criminal offences committed on social media or anywhere else – it is the action that is illegal.
A number of criminal offences may be committed by those abusing others on social media, including offences under the Protection from Harassment Act 1997; the Malicious Communications Act 1988; and the Communications Act 2003.
Section 1 of the Malicious Communications Act 1988 makes it an offence to send material to another person which conveys an indecent or grossly offensive message, a threat or information which is false and known or believed to be false by the sender. The offence can also be committed by sending an article or electronic communication which is, in whole or part, of an indecent or grossly offensive nature. In order to be guilty of the offence the sender’s purpose (or one of them) in sending the item must be to cause distress or anxiety to the recipient or to any other person to whom the sender intends that the item or its contents or nature should be communicated.
Changes to the law in the Criminal Justice and Courts Act 2015 increased the maximum penalty for the offence in section 1 of the Malicious Communications Act 1988 to two years imprisonment, and removed the requirement that prosecutions should be brought within six months of the offence being committed.
The Protection from Harassment Act 1997 creates an offence of harassment (section 2) e.g. it is an offence for a person to pursue a course of conduct which amounts to harassment of another and which he knows or ought to know amounts to harassment of the other. Online harassment is not separately criminalised but may be considered as part of the general criminal offence of harassment. The Act also creates an offence of stalking (section 2A). Harassment is generally understood to involve improper, oppressive and unreasonable conduct that is targeted at an individual and calculated to alarm them or cause them distress. The conduct might be verbal or non-verbal and it does not have to be the same type of action on each occasion. Critically the individual elements of a course of conduct need not in themselves be criminal. However when a series of events are seen in combination, they may form a course of conduct which could amount to a criminal offence. A ‘course of conduct’ in relation to a single person must involve conduct on at least two occasions. Section 127(1) of the Communications Act 2003 creates a specific offence of sending (or causing to be sent) grossly offensive, indecent, obscene or menacing messages over a public electronic communications network. Section 127(2) creates a separate offence of causing annoyance, inconvenience or needless anxiety to another either by sending or causing to be sent, by means of a public electronic communications network, a false message or by persistently using the network. Amendments were made to the Act by the Criminal Justice and Courts Act 2015 which extended the time within which prosecutions under section 127 of the Communications Act 2003 may be brought, to up to three years from commission of the offence, as long as this was also within six months of the prosecutor having knowledge of sufficient evidence to justify proceedings.
Public protection and investigating whether an offence has taken place are matters for the police. Where an individual is concerned they are at risk of an offence being committed against them or they believe an offence may have been committed, they should always contact the police. It is then for the police to investigate any reports that an offence has taken place and for the police or the Crown Prosecution Service to decide whether to prosecute, depending on the circumstances of the case.
The Crown Prosecution Service has published guidelines on prosecuting cases involving communications sent via social media: http://www.cps.gov.uk/legal/a_to_c/communications_sent_via_social_media/.
The government is committed to preventing these crimes and to giving all online users the protection and support they need. Our laws in this area are rightly robust, strict and respected across the world and it is vital that victims of crime see strong and certain justice delivered to their offender.
**Equalities**
The Equality Act 2010 legally protects people from discrimination in the workplace and in wider society.
Discrimination law is based on protection for people against discrimination because of particular characteristics (described as “protected characteristics”). These are, in the Equality Act: age, disability, gender reassignment, pregnancy and maternity, marriage and civil partnership, race, religion or belief, sex and sexual orientation.
A strong evidence base has built up over time that people with these protected characteristics have faced serious discrimination affecting their employment prospects and access to goods and services, like housing, health services and education, leading to disadvantage for themselves and their dependents.
**Common framework for media standards**
The government set out its concerns relating to consumer confidence and safety in accessing audiovisual content in the 2013 paper ‘Connectivity, Content and Consumers’. The paper is available online at: https://www.gov.uk/government/publications/connectivity-content-and-consumers-britains-digital-platform-for-growth
Industry and regulators worked together on a voluntary basis to ensure a common framework for media standards. This framework aims to support a more consistent approach across different media and ensure consumers understand what content has been regulated.
Ofcom has been leading the work to develop the framework, focusing on linear broadcast and on demand television as well as ‘TV-like’ content in the Internet television space where that is currently regulated by Ofcom. Statutory guidance for schools
Keeping Children Safe in Education (KCSIE) is the statutory guidance to which all schools and colleges must have regard, when carrying out their duties to safeguard and promote the welfare of children. Working Together to Safeguard Children is statutory guidance for all schools that sets out inter-agency working to safeguard and promote the welfare of children. The guidance is available online: https://www.gov.uk/government/publications/working-together-to-safeguard-children--2
Age verification for access to sites containing pornographic content
Part 3 of the Digital Economy Act 2017 requires a person making available pornographic material on the Internet to persons in the UK on a commercial basis to do so in a way that ensures that the material is not normally accessible by persons under the age of 18. It also allows the regulator to act against those providing extreme pornographic material, regardless of whether age verification is in place. It provides powers for the age-verification regulator to notify payment providers and ancillary service providers of non-compliant persons, and to direct internet service providers to block access to non-compliant sites. Government intends to commence the requirement in 2018.
The Digital Economy Act 2017 also amended the definition of ‘specially restricted material’ in section 368E (5) of the 2003 Communications Act, which provides that On Demand Programme Service must not contain any ‘specially restricted material’ unless the material is made available in a manner which secures that persons under the age of 18 will not normally see or hear it. The definition now includes pornographic video works which have received an 18 certificate (“18 sex works”) or other pornographic material which would receive an 18 certificate had it been submitted for classification.
Keeping pace with technology changes
As and when new technology has outstripped legislative capacity, we have taken steps to address the gaps identified and we will continue to do so.
For example, S65 of the Coroners and Justice Act 2009 was introduced to provide a definition of images to include data capable of conversion into moving or still images. Further, S69 of the Criminal Justice and Immigration Act 2008 amended the Protection of Children Act 1978 to extend the definition of ‘photograph’ to include derivatives of photographs, such as other forms of data. These derivatives include computer traced images, for example, computer traced images of photographs taken on a mobile phone or images manipulated from photographs using computer software.
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5c0f72a1b983be0c29d8520629016254ea924332 | As we approach the General Election, the countdown to 7 May is dominating the political news agenda, in stark contrast to the rather quiet local elections of last year. However, 2014 saw a huge shift at the Local Government Association (LGA), with the balance of power of the organisation shifting to Labour, and David Sparks taking over as chairman.
While Cllr Sparks prepared to lead the LGA at a cross-party level, Oldham leader Jim McMahon was campaigning to become leader of the Labour Group – with an agenda for change at the association. Even before he got the job, he had set the cat among the pigeons in Smith Square, with plans for an independent review of the association.
‘Any good organisation has to hold a mirror to itself and the peer review did that. It was about just testing whether it was fit for purpose,’ he says. ‘The real challenge is what we do with it.’
With the coming election, and its unpredictable outcome, he says it is imperative that the LGA is ‘agile and nimble’ or it could run into problems.
While the review – which was rebranded as a ‘peer review’ – was published earlier this month, the LGA has already started to implement some changes it highlighted, but Cllr McMahon has already moved on.
‘Although the peer review was important, my priority hasn’t been inside the LGA at all, it has been being the voice of Labour local government,’ Cllr McMahon sits on the Labour National Executive Committee and attends shadow cabinet meetings on behalf of local government and has been involved in the manifesto process for the party.
Unsurprisingly, he is utterly supportive of Labour and the manifesto. More surprisingly, he says he is confident there will be a Labour majority at the election.
‘I do believe the Labour manifesto is localist in spirit. And I do believe we have got some very significant people who support the idea of devolution and who recognise that to deliver a progressive country, we can only do that by empowering people. We can’t do that by command and control,’ he says.
He also says of Labour leader Ed Miliband: ‘He used the term winning power to give it away. It is a world away from the early part of the last Labour government, which was highly centralist. But then local government has changed too.
‘We want ministers of all colours to see local government as delivering change, not as a blocker to it,’ says Cllr McMahon. ‘We have been trying hard to make sure devolution is understood, that it isn’t confused – deliberately or not – with public sector reform.’
While there are elements of decentralisation that could make things more efficient, he is wary of the issues becoming blurred. ‘Devolution is not an answer to the cuts,’ he warns. ‘You have still got to have fair funding.’
‘What our centralising friends will say is what do you do when a council fails? You can laugh it off and say “you show me a council that’s failed and I’ll show you a minister that’s failed” but the truth is that we have got to deal with those questions if we are going to have any credibility.’
‘Any good organisation has to hold a mirror to itself and the peer review did that. It was about just testing whether it was fit for purpose. The real challenge is what we do with it’
It is one of the huge dilemmas faced by the LGA. How does it tackle councils outside membership? How does it challenge local authorities which can just walk away? Yet, as he points out, the LGA ‘does get a significant chunk of money for improvement’ so it has to make sure it helps the sector improve.
‘There will always be a need for more robust action at some point. The challenge, I think, for local government is, are we willing to do that ourselves or are we happy for someone to do that for us. I think the truth is the jury is still out. There are very different views on who should do that.’
His own view is that there needs to be a clear framework for improvement and for intervention, so everyone knows where they stand. So far, intervention has been piecemeal – and ultimately the Government will not be able to step in if too many places fall down at the same time.
Some of the answers will lie in the consultation on sector-led improvement, which was sparked by the peer review. The results of the consultation are imminent. It is not the only dilemma the LGA faces. It is a cross-party national organisation trying to represent different types of authority, in different places, of different colours and with different needs.
‘It is interesting that we support localism, and it’s about authorities making decisions that are right for them, but we are trying to create national solutions. It’s a bit counter intuitive really,’ Cllr McMahon explains.
The peer review may have held a mirror up, but the Labour group leader suggests the LGA knows it has to keep modernising as the agenda for local government changes.
‘There might be differences of opinion on what we modernise to, but that’s the next step.’
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f1225d49a20468817925a0a87e8cfc566e3c92db | In 2008, exports of all services by the UK film and television industries increased to £2,836 million. This represents a 23 per cent increase on the figure of £2,303 million recorded in 2007. Imports have also increased by 13 per cent, from £1,956 million in 2007 to £2,215 million in 2008. As a result, the net surplus has increased from £347 million in 2007 to £621 million in 2008. \*
Further key findings:
- The film industry showed a net surplus of £494 million in 2008 in trade in services compared to £232 million in 2007.
- The television industry showed a net surplus of £198 million in 2008 in trade in services. This represents an increase on the figure recorded in 2007 of £62 million.
- Net earnings for ‘other services’ have reduced significantly from £53 million in 2007 to a deficit of £72 million in 2008.
The chart above and table below show the changes since 2002 in total international transactions of the UK film and television industries.
| Total international transactions of the film and television industries * | £million | |---------------------------------------------------------------|---------| | | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | | Exports of services | 1766 | 1751 | 2181 | 2495 | 2511 | 2303 | 2836 | | Imports of services | 1938 | 1917 | 2131 | 2128 | 1966 | 1956 | 2215 | | Balance | -173 | -166 | 50 | 367 | 545 | 347 | 621 |
- See background notes Film Industry
Exports (receipts) of the UK film industry totalled £1,341 million in 2008, a 28 per cent increase from the 2007 figure of £1,050 million (Table 1). These figures include production services and royalties but exclude ‘other services’ such as management fees, merchandising and agency fees. Imports (payments) were £846 million in 2008, a 3 per cent increase from £818 million in 2007. These movements have resulted in the positive balance of the film industry increasing from £232 million in 2007 to £494 million in 2008.
Of the total exports for 2008, £792 million came from royalties (receipts). This represents an increase of 23 per cent from £646 million in 2007 and is the highest value reported since ONS records began (Table 2). Import royalties (payments) decreased for a third successive year, from a high of £704 million in 2005 to £510 million in 2008. Exports and imports for the production of film have both increased to £549 million and £336 million respectively. The export and import figures for film production are both the highest ever recorded by this survey.
Table 3 shows the transactions broken down by the category of the company. Imports by UK subsidiaries of major US film companies were £385 million in 2008 compared to £455 million in 2007, a 15 percent decrease. Imports by other companies increased from £363 million to £461 million in 2008, some 27 per cent.
Table 4 provides a geographical analysis of the international production and royalties transactions by the film industry. The USA was the primary destination for exports in 2008 with values increasing to £736 million, equivalent to 55 per cent of total film industry exports. This represents a 22 per cent increase from £603 million in 2007. Imports from the USA decreased for the fourth successive year to £111 million in 2008, down from a peak of £616m in 2004, reflecting changing structures and locations of companies providing services to this industry. In 2008, £432 million of film industry exports and £384 million of imports were to and from Europe respectively. Television industry
The television industry consists of terrestrial broadcasters and satellite and cable companies, where these are concerned with television functions other than simply transmitting channels via direct broadcast or cable. Exports were £1,101 million in 2008, up from to £855 million in 2007, an increase of 29 per cent. Imports also increased to £903 million in 2008 from £793 million in 2007, a 14 per cent change (Table 1). These movements of exports and imports produced a positive balance for international transactions by the television industry of £198 million, compared with a surplus of £62 million in 2007.
Table 5 provides a geographical analysis of the television industry’s international transactions. As in the past four years, the largest share of exports (57 per cent) was to Europe, amounting to £624 million in 2008, an increase from £485 million in 2007. Exports to the USA also increased, from £192 million in 2007 to £211 million in 2008. The television industry imports from the USA were £555 million in 2008, comprising 62 per cent of total imports. This represents an increase on the 2007 figure of £474 million. Imports from Europe also increased slightly, from £261 million in 2007 to £273 million in 2008.
Other transactions in services
‘Other services’ include management fees, merchandising and agency fees. Exports of ‘other services’ by the film and television industries were £394 million in 2008, relatively unchanged from 2007 (£398 million) although lower than in 2005 (£788 million) and 2006 (£603 million). Imports have increased from £346 million in 2007 to £466 million in 2008, the highest value recorded by this survey (Table 6).
Table 7 shows that exports for TV activities have increased by 23 per cent from £241 million in 2007 to £297 million in 2008. In contrast, exports of motion picture video distribution have fallen from £134 million in 2007 to £68 million in 2008. Discontinuation of the UK film and television survey
The ONS survey covering the international transactions of the UK film and television industries and its associated Statistical Bulletin have been discontinued. This 2008 release is therefore the last in this series.
In future, data on the international transactions of these industries will be collected through the main International Trade in Services (ITIS) survey. Tables showing the exports and imports of the film and television industries by country will be published in the annual ITIS publication.
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=14407&Pos=&ColRank=1&Rank=422
The decision to discontinue this survey was taken following a review and subsequent public consultation. Further information is available at the following links:
http://www.statistics.gov.uk/STATBASE/Product.asp?vlnk=12628 http://www.ons.gov.uk/about/consultations/proposed-changed-to-the-annual-survey-into-film-and-television--ftv-/index.html
Background Notes
Basic quality information
1. Link to Summary Quality Report: A Summary Quality Report for Film and Television Industries can be found at http://www.ons.gov.uk/about-statistics/methodology-and-quality/quality/qual-info-economic-social-and-bus-stats/quality-reports-for-business-statistics/index.html. This report describes, in detail, the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them.
Relevance to users
2. Source of data: Apart from a fixed panel of the largest companies, businesses are randomly sampled from the businesses classified to standard industrial classification (SIC) 92110, 92120 and 92202 on the Inter Departmental Business Register (IDBR) and stratified by employment. Companies are asked to provide figures for the current calendar year where possible, although some companies provide figures for their actual accounting year. The tables
3. These tables show the International Transactions of the film and television industry through a variety of formats. Many tables compare figures over several years, while other tables provide the most recent geographic and industry information. The tables provide information in as much detail as possible, without disclosing the details of individual companies. Any disclosive data is replaced by the following symbol throughout the tables “..”. It is important to note that within the geographical tables, amounts are shown against the geographical area from which they were received, irrespective of where they were first earned.
Types of transactions covered
Production
4. The statistics on film and television companies cover the value of transactions between the UK and residents in other countries in respect of the production of films of any width and also recordings on tape, disc or any other media. Performances in cinemas or on television are also covered. Performances in cinemas or on television include the outright sale or purchase of films as well as receipts or payments for rentals.
Production of films includes international receipts and payments for activities such as film processing, printing, editing, as well as amounts for work done on location. The returns from film companies include their international transactions on behalf of another producer, distributor or agent in the UK.
Receipts for production work in the UK comprise funds from abroad or from amounts held in the UK on behalf of residents in other countries, and sums applied to the repayment of loans raised in the UK (exports). Amounts for film production, including location work abroad, remitted from the UK or from amounts held abroad on behalf of UK residents, are included as debits (imports). A resident is any individual, enterprise or other organisation ordinarily domiciled in the UK. UK branches and UK subsidiaries of foreign enterprises are regarded as UK resident.
Royalties
5. These include items such as rights to use franchises, copyrights, licenses, patents and trademarks. Other
6. The statistics also include transactions by the film and television industries for “other international service transactions”. These include items such as management fees, merchandising and agency fees, which are included in the headline figures and shown separately within the tables.
Transactions not covered
7. Not all of the international transactions of the film and television industries that affect the UK’s Balance of Payments are included in these statistics. Excluded are the profits of UK subsidiaries and branches attributable to the parent companies in other countries and also those profits due to the UK from subsidiaries and branches of UK companies operating in other countries. However, these amounts are included under “Investment Income” in the Balance of Payments.
The figures reported by companies in this survey include some imports and exports of exposed cinematographic film, which has also been recorded in the overseas visible trade accounts. However, the trade account figures for exposed cinematographic film include a number of elements not covered by this survey. Examples of these are film flown in for processing and immediate return to the location abroad, and films imported and prints exported for and after processing by specialist laboratories on behalf of international customers. It is not possible to state the exact extent of the overlap but the survey results probably include about half of the export figure in the overseas trade account and a higher proportion of the import figure.
Accuracy
Response Rates
8. A total of 800 film and television companies were approached for the film and television survey of 2008. A total of 699 forms were returned, giving a response rate of 87 per cent. Standard errors
9. Because the sample is selected randomly from the IDBR, it is possible to give an indication of the possible error in the estimates due to the sampling process. These errors have been estimated for 2008 as follows:
| (£ million) | estimate | standard deviation | |------------------|----------|--------------------| | Exports of services | 2,836 | 137 | | Imports of services | 2,215 | 117 |
It is normally assumed that 95 per cent of values will lie within approximately two standard deviations of the estimate. In other words, there is a 95 per cent confidence that the true value of exports lies between £2,562 million and £3,110 million. Similarly the value of imports should lie between £1,981 million and £2,449 million.
Notes to tables
10. European Free Trade Association (EFTA) comprises Iceland, Liechtenstein, Norway and Switzerland.
The sum of constituent items in tables may not always agree exactly with the totals shown due to rounding.
The following symbols have been used throughout:
.. Figures suppressed to avoid disclosure of information relating to individual enterprises.
- Nil or less than half the final digit shown.
Publication policy
Further information
11. The complete series of First Releases are available to download free of charge at http://www.statistics.gov.uk.
12. Details of the policy governing the release of new data are available from the media office.
13. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. © Crown copyright 2009.
Issued by: Office for National Statistics, Government Buildings, Cardiff Road, Newport NP10 8XG
Media contact: Tel Media Relations Office 0845 6041858 Emergency on-call 07867 906553 E-mail [email protected]
Statistical contact: Tel Richard Tonkin 01633 456082 E-mail [email protected]
Website: www.ons.gov.uk | | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | |----------------------|------|------|------|------|------|------|------| | **Exports**<sup>1</sup> | | | | | | | | | Film companies<sup>2</sup> | 657 | 633 | 842 | 967 | 913 | 1050 | 1341 | | Television companies | 684 | 677 | 664 | 740 | 995 | 855 | 1101 | | Total | 1341 | 1310 | 1506 | 1707 | 1908 | 1904 | 2442 | | **Imports**<sup>3</sup> | | | | | | | | | Film companies<sup>2</sup> | 470 | 538 | 753 | 804 | 784 | 818 | 846 | | Television companies | 1237 | 1142 | 1100 | 1071 | 884 | 793 | 903 | | Total | 1707 | 1680 | 1853 | 1875 | 1668 | 1611 | 1749 | | **Exports less imports** | | | | | | | | | Film companies<sup>2</sup> | 187 | 95 | 89 | 163 | 128 | 232 | 494 | | Television companies | -553 | -465 | -436 | -332 | 112 | 62 | 198 | | Total | -366 | -370 | -347 | -168 | 240 | 294 | 693 |
1. Sums receivable from residents in other countries, excluding "other services"
2. Includes transactions by film companies in respect of rights restricted to television
3. Sums payable to residents in other countries, excluding "other services" Table 2 International transactions of the Film Industry 2002 - 2008: Analysis by type of transaction
| | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | |------------------|-------|-------|-------|-------|-------|-------|-------| | **Exports** | | | | | | | | | Royalties | 434 | 400 | 399 | 660 | 582 | 646 | 792 | | Production of films | 222 | 233 | 444 | 307 | 330 | 403 | 549 | | Total | 657 | 633 | 842 | 967 | 913 | 1050 | 1341 | | **Imports** | | | | | | | | | Royalties | 403 | 430 | 616 | 704 | 698 | 573 | 510 | | Production of films | 67 | 108 | 136 | 100 | 86 | 245 | 336 | | Total | 470 | 538 | 753 | 804 | 784 | 818 | 846 |
1. Sums receivable from residents in other countries, excluding "other services"
2. Sums payable to residents in other countries, excluding "other services"
Table 3 International Transactions of the Film Industry 2002 - 2008: Analysis by type of transaction and category of company
| | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | |------------------|-------|-------|-------|-------|-------|-------|-------| | **Exports** | | | | | | | | | UK subsidiaries of major US film companies | 345 | 340 | 492 | .. | 427 | 644 | .. | | Other | 312 | 293 | 350 | .. | 486 | 405 | .. | | Total | 657 | 633 | 842 | 967 | 913 | 1050 | 1341 | | **Imports** | | | | | | | | | UK subsidiaries of major US film companies | 231 | 298 | 501 | 359 | 272 | 455 | 385 | | Other | 239 | 240 | 252 | 445 | 512 | 363 | 461 | | Total | 470 | 538 | 753 | 804 | 784 | 818 | 846 |
.. Denotes disclosive data
1. Sums receivable from residents in other countries, excluding "other services"
2. Sums payable to residents in other countries, excluding "other services" | Geographical Area | Exports | Imports | Net | |-------------------|---------|---------|-----| | **EUROPEAN UNION** | | | | | Austria | - | - | - | | Belgium | 7 | 10 | -3 | | Bulgaria | - | - | - | | Denmark | - | - | - | | Finland | 6 | 2 | 4 | | France | 24 | 22 | 2 | | Germany | 46 | 14 | 32 | | Greece | 27 | 11 | 16 | | Irish Republic | 10 | 3 | 6 | | Italy | - | - | - | | Luxembourg | - | - | - | | Netherlands | 43 | 166 | -123| | Portugal | 9 | 8 | 1 | | Spain | 56 | 20 | 36 | | Sweden | 8 | 13 | -5 | | EU Institutions | - | - | - | | Czech Republic | - | - | - | | Estonia | - | - | - | | Hungary | - | - | - | | Latvia | - | - | - | | Lithuania | - | - | - | | Romania | - | - | - | | Poland | - | - | - | | Slovakia | - | - | - | | Slovenia | - | - | - | | Cyprus | 1 | - | 1 | | Malta | - | - | - | | **Total European Union** | 345 | 297 | 49 | | **Total European Free Trade Association** | 11 | 2 | 9 | | **Other European Countries** | | | | | Russia | - | - | - | | The Channel Islands | 25 | 83 | -58 | | The Isle of Man | 1 | - | 1 | | Turkey | - | - | - | | Rest of Europe | - | - | - | | Europe Unallocated | - | - | 27 | | **Total Europe** | 432 | 384 | 48 | | **The Americas** | | | | | Brazil | - | - | - | | Canada | 3 | 1 | 2 | | Mexico | - | - | - | | USA | 736 | 111 | 625 | | Rest of America | - | - | 2 | | America Unallocated | - | - | 1 | | **Total America** | - | - | 629 | | **Asia** | | | | | China | 22 | 12 | 10 | | Hong Kong | - | - | - | | India | - | - | - | | Indonesia | - | - | - | | Israel | - | - | - | | Japan | 5 | 1 | 4 | | Malaysia | - | - | - | | Pakistan | - | - | - | | Philippines | - | - | - | | Saudi Arabia | - | - | - | | Singapore | - | - | - | | South Korea | - | - | -1 | | Taiwan | - | - | -1 | | Thailand | - | - | -2 | | Rest of Asia | 31 | 26 | 5 | | Asia Unallocated | - | - | 3 | | **Total Asia** | 90 | 46 | 44 | | **Australia and Oceania** | | | | | Australia | - | - | - | | New Zealand | - | - | 2 | | Rest of Australia and Oceania | - | - | - | | Oceania Unallocated | - | - | - | | **Total Australia and Oceania** | - | - | - | | **Africa** | | | | | South Africa | - | - | 7 | | Rest of Africa | - | - | - | | Nigeria | - | - | - | | Africa Unallocated | - | - | - | | **Total Africa** | - | - | - | | **Rest of World Unallocated** | - | - | - | | International Organisations | - | - | - | | **WORLD TOTAL** | 1341 | 846 | 494 |
3. Denotes disclosive data
4. Sums receivable from residents in other countries, excluding “other services”
5. Sums payable to residents in other countries, excluding “other services” | Geographical Area | £ million | £ million | £ million | |-------------------|-----------|-----------|-----------| | **EUROPEAN UNION and European Free Trade Association** | | | | | Austria | 2 | 1 | - | | Belgium | 12 | 1 | 11 | | Bulgaria | - | - | 2 | | Denmark | - | - | 38 | | Finland | - | - | 9 | | France | 63 | 13 | 50 | | Germany | 43 | 14 | 29 | | Greece | 43 | - | 42 | | Irish Republic | 16 | 21 | -5 | | Italy | 23 | 6 | 17 | | Luxembourg | - | - | 1 | | Netherlands | 30 | 14 | 15 | | Portugal | 23 | - | 23 | | Spain | 32 | 6 | 26 | | Sweden | - | - | 27 | | EU Institutions | - | - | - | | Czech Republic | - | - | 2 | | Estonia | - | - | 1 | | Hungary | - | - | 10 | | Latvia | - | - | - | | Lithuania | - | - | 1 | | Poland | 31 | 3 | 28 | | Romania | - | - | 9 | | Slovakia | - | - | 2 | | Slovenia | 2 | - | 2 | | Cyprus | 1 | - | 1 | | Malta | 2 | - | 2 | | Iceland | - | - | 1 | | Liechtenstein | - | - | - | | Norway | - | - | 13 | | Switzerland | - | - | -48 | | **Total European Union and European Free Trade As** | 566 | 255 | 311 | | **Other European Countries** | | | | | Russia | 14 | 1 | 13 | | The Channel Islands | - | - | 11 | | The Isle of Man | - | - | - | | Turkey | 6 | 2 | 4 | | Rest of Europe | 9 | - | 9 | | Europe Unallocated | - | - | 3 | | **Total Europe** | 624 | 273 | 351 | | **The Americas** | | | | | Brazil | 4 | 1 | 3 | | Canada | 35 | 5 | 30 | | Mexico | 1 | - | 1 | | USA | 211 | 555 | -346 | | Rest of America | - | - | -3 | | America Unallocated | - | - | 11 | | **Total America** | 266 | 570 | -304 | | **Asia** | | | | | China | 2 | 2 | - | | Hong Kong | 2 | 1 | 1 | | India | 8 | 18 | -10 | | Indonesia | - | - | 1 | | Israel | 4 | 2 | 2 | | Japan | 19 | 1 | 17 | | Malaysia | 6 | - | 6 | | Pakistan | - | - | - | | Philippines | - | - | 1 | | Saudi Arabia | - | - | 7 | | Singapore | - | - | -3 | | South Korea | - | - | 3 | | Taiwan | - | - | 1 | | Thailand | - | - | 2 | | Rest of Asia | 63 | 1 | 62 | | Asia Unallocated | - | - | 3 | | **Total Asia** | 125 | 31 | 93 | | **Australia and Oceania** | | | | | Australia | 39 | 22 | 17 | | New Zealand | - | - | 7 | | Rest of Australia and Oceania | - | - | - | | Oceania Unallocated | - | - | - | | **Total Australia and Oceania** | 50 | 24 | 26 | | **Africa** | | | | | South Africa | 31 | 3 | 27 | | Rest of Africa | - | - | 3 | | Nigeria | - | - | - | | Africa Unallocated | - | - | 1 | | **Total Africa** | 36 | 5 | 31 | | **Rest of World Unallocated** | - | - | - | | International Organisations | - | - | - | | **WORLD TOTAL** | 1101 | 903 | 198 |
.. Denotes disclosive data
1. Sums receivable from residents in other countries, excluding “other services”
2. Sums payable to residents in other countries, excluding “other services”
### Table 6 Other International Service Transactions by the Film and Television Industries 2002 - 2008
| | £million | |----------|----------| | | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | | Exports¹ | 425 | 441 | 675 | 788 | 603 | 398 | 394 | | Imports² | 231 | 238 | 278 | 253 | 299 | 346 | 466 | | Net | 194 | 203 | 397 | 535 | 305 | 53 | -72 |
See background notes for definition of “Other services”
1. Sums receivable from residents in other countries
2. Sums payable to residents in other countries
### Table 7 Other International Service Transactions by the Film and Television Industries 2007 - 2008: by industry
| | £million | |----------------------|----------| | | 2007 | 2008 | | Exports¹ | Imports² | Exports¹ | Imports² | | Motion Picture Video Production | 24 | 13 | 30 | 9 | | Motion Picture Video Distribution | 134 | .. | 68 | .. | | TV Activities | 241 | .. | 297 | .. | | Total | 398 | 346 | 394 | 466 |
.. Denotes disclosive data
1. Sums receivable from residents in other countries
2. Sums payable to residents in other countries
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3049b165ea09309aad620c0a247f40b2d8df6c14 | | Type of Voucher | Nature | Income | |----------------|--------------|------------------------------------------------------------------------| | Printed | Principal | UK dividends and interest | | | | Issued by the original payer in respect of a single holding of an investment | | | | Verification **NOT** required | | Printed | Principal | **Schedule D pension and annuities** | | | | Issued by the original payer to the individual recipient of the income | | | | Verification **REQUIRED** | | **R185 series**| | | | R185 | Principal | UK interest, annual payments, royalties | | | | Issued and should be signed by the person making the payment and deducting the tax. | | | | Verification **REQUIRED** | | R185 | Principal | Payments from discretionary trusts | | | | Issued by the trustee (s) of a discretionary trust | | | | Verification **NOT** required | | R185 (estate income) | Consolidated | Estate income | | | | Issued by the executor or administrator of the estate of a deceased person | | | | Verification **NOT** required | | R189 series | Subsidiary | Description | |-------------|------------|-------------| | R189K | Subsidiary | UK Company dividends | | | | Issued by UK banks and finance houses (including a UK branch of an overseas bank) holding securities for clients as part of a block holding | | | | Verification **NOT** required | | | | Occasionally issued in error by an overseas bank or finance house, when you should treat the voucher as R189M, and | | | | Verification **REQUIRED** | | R189L | Subsidiary | UK interest | | | | Issued by UK banks and finance houses (including a UK branch of an overseas bank) holding securities for clients as part of a block holding | | | | Verification **NOT** required | | | | Occasionally issued in error by an overseas bank or finance house, when you should treat the voucher as R189N, and | | | | Verification **REQUIRED** | | R189N | Subsidiary | UK interest | | | | Issued by overseas banks & finance houses holding securities for clients as part of a block holding. To validate form R189N its issuer must send the block voucher it has received, usually from a UK issuer, to CAR Personal Tax International. | | | | Verification **REQUIRED** | | Foreign | P Certificate | Subsidiary | UK Dividends and interest ONLY | |---------|---------------|------------|--------------------------------| | | | | Issued by Swiss banks to Swiss residents only. Some banks issue their own vouchers in substantially the same wording. The original block vouchers are not produced to Personal Tax International, so it is advisable to check the figures on the voucher with Extel to confirm that it has been completed correctly. Verification **NOT** required | | 5081 | Subsidiary | | UK dividends and interest ONLY | | | | | Issued by French banks and Agents De Change. Some banks issue their own vouchers in substantially the same wording. The original block vouchers are not produced to Personal Tax International, so it is advisable to check the figures on the voucher with Extel to confirm that it has been completed correctly. Verification **NOT** required | | German Bank | Consolidated | | German banks issue this dual language certificate as either a subsidiary or a consolidated voucher. The original block vouchers are not produced to Personal Tax International, so it is advisable to check the figures on the voucher with Extel to confirm that it has been completed correctly. Verification **NOT** required | | Own print | Consolidated | UK and foreign dividends and interest together | |-----------|-------------|-----------------------------------------------| | Own print | Subsidiary | UK or foreign dividends or interest separately | | | | A single income type version of the above, bearing similar references. |
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dc0b4367ba04fb2b6ae10410a926dead4ed8132a | Delivering our Vision HMRC Business Plan update 2013-14
Helping our customers to get it right first time Maximising revenue flows and improving compliance Making sustainable cost reductions to achieve best value for money Contents
5 Foreword by Lin Homer, Chief Executive 6 How are we doing? Our 2012-13 performance 8 Meeting our Spending Review commitments and managing risks to our performance 10 Customer experience – improving accessibility, accuracy and timeliness 12 Tackling tax avoidance 13 Tax evasion, organised crime and fraud 15 Individual taxpayers 17 Benefits and payments customers 19 Business customers 21 Our people Our purpose is to collect the taxes that fund the UK’s public services, and to provide targeted financial support to families and individuals. We aim to do so efficiently, professionally and fairly, making complying with the tax system as simple as possible, while relentlessly pursuing those who do not comply, in order to reduce the tax gap. Foreword
Last year, HMRC published a three-year Business Plan, which set our direction and challenges for 2012-15. This is an update to that Business Plan. It sets out our activities this year and, following the 2013 Spending Review, it also sets out some of our longer-term ambitions, ahead of a more comprehensive Business Plan to be published in 2014.
The core of our purpose is to collect the taxes that fund the UK’s public services, and to provide targeted financial support to families and individuals. We aim to do so efficiently, professionally and fairly, making complying with the tax system as simple as possible, while relentlessly pursuing those who do not comply, in order to reduce the tax gap.
I am proud to be able to say that we are making great progress against this purpose. As you will see from the performance highlights on page six, last year we delivered strongly against our three strategic objectives: producing additional revenue of £20.7 billion – almost £2 billion more than our target; bringing PAYE up to date and exceeding our call answering and post targets; and producing more than £245 million in efficiency savings.
Future years will continue to be challenging. The Chancellor’s recent Spending Review announcement set out what Ministers expect of us in 2015-16. It committed us to bringing in an extra £1 billion in additional revenue and to making a five per cent reduction to our budget. In addition, as a result of a £200 million three-year digital investment programme, we will become an increasingly digital organisation, providing real-time online tax accounts to millions of taxpayers. Given the momentum we have already established, I am confident that we can meet these stretching objectives.
But HMRC will have to become a very different organisation: we will be slimmer, with fewer employees in fewer locations; even more professional, with a greater emphasis on data analytics, IT, tax and operational skills.
Our 2013-14 activities are steps in that journey. We will continue to invest in improvements that help compliant customers. We aim to maintain contact centre performance at 90 per cent, while piloting a new service for customers who need extra help.
Real Time Information for PAYE has started very well, with more than a million payroll schemes submitted in the first month of the roll-out. This huge programme impacts every employer in the country, and remains one of our biggest challenges this year, as we continue to support the introduction of Universal Credit.
We will also increasingly work in real time with larger businesses to reduce risk and increase revenues, and deliver more support to smaller businesses to cut error and fraud. We will reduce opportunities for tax avoidance, by delivering well-designed processes, policy and legislation aimed both at tax avoiders and scheme promoters. We will also increase our focus on tackling debt and tax credits error and fraud.
We will also continue to tackle offshore evasion, with a raft of new campaigns and taskforces. And we will make new technology work harder for us, exploiting its potential to track down those who cheat their taxes.
This will require us to invest in our own skills and capacity. Last year, we promoted more than 3,000 staff; this year, we will expand training for our tax and operational professionals, and implement a new performance management system that will further drive excellence among HMRC’s staff in the running of a fair, efficient and effective tax system.
Lin Homer Chief Executive and Permanent Secretary How are we doing? Our 2012-13 performance
£475.6 billion Record amount of tax revenue we brought in – more than £1 bn above what we collected in 2011-12
£20.7 bn Record compliance yield – almost £2 billion above our target for the year
100 legal wins Using a legal argument to successfully defend about £300 million in VAT claims in 2012-13
£2 bn Revenue brought in using our state-of-the-art fraud-busting tool Connect, which won project of the year at the 2012 National Outsourcing Association Awards
17.9 million PAYE legacy open cases we finished clearing from our old computer system. We are now up to date with PAYE
£342 million – first payment made after the UK-Swiss Tax Agreement came into force in January 2013
90+ per cent The highest proportion of customer calls we have ever answered in the last half of the year
We answered 75 per cent of calls across the entire year
£1 bn Estimated revenue over five years, after we agreed to share tax information with the Isle of Man, Jersey and Guernsey
85% Post we turned around within 15 working days – the best performance ever recorded by HMRC
15.4 The number of days it took on average to process tax credits and Child Benefit UK new claims and changes of circumstances against a target of 22 days: our highest customer service level to date 64,476 The number of full-time equivalent staff we employed at March 2013
1,700 The number of our people who started tax training for the first time, so we can increase revenue collected and provide a better service for customers
5,463 The number of our people moved to new or different compliance roles to help meet our commitments to bring in extra revenue
£16m What we expect to save in IT costs over four years in a new agreement signed with Microsoft in December 2012
200 People joined our graduate level Tax Professional Development Programme, including 120 externally recruited graduates
5,589 Days we gave to volunteering in our local communities
£1.8 million Raised for good causes through fundraising for BBC Children in Need, Lifeboat Fund, Charity for Civil Servants and other good causes via payroll giving
8,800 Leaders and managers are benefiting from leader-led master classes on the new performance management system for the Civil Service
27m Fewer sheets of paper were bought last year because we printed less Meeting our Spending Review commitments and managing risks to our performance
HMRC agreed ambitious and stretching objectives in the 2010 Spending Review, which were stretched even further in the 2013 Spending Review. Achieving these objectives requires a major transformation of what we do and how we do it. Our change programme brings together a portfolio of projects that drive this transformation, including in technology, process and people initiatives.
Our ambition
HMRC’s core objectives remain to maximise tax revenues, improve our customers’ experience and sustainably reduce our costs. Over the next three years, we will become even more cost-efficient, as we deliver more for the UK with less resource; we will secure more revenue from our compliance activities; and we will become better at serving customers by meeting or beating our customer service targets.
By 2016, we will have become a more digital organisation. This will enable most individuals and businesses to deal with their taxes online in real time, as well as equipping HMRC with the technology and data analytics systems that will help us more effectively to target those who break the rules.
The change programme projects identified in 2010 are steps in the journey to achieving that ambition, and they include:
- making it cheaper and easier for our customers to pay their tax and claim their benefits and credits
- reinvesting £917 million of the savings we make to tackle avoidance, evasion and criminal attack. This year we aim to bring in an additional £5 billion in revenues
- implementing the largest change to PAYE in 70 years with the introduction of Real Time Information (RTI)
- creating a ‘one-click’ online registration process for new businesses, by moving notification of liability for VAT and main direct taxes to online channels by December 2013
- expanding digital services for customers, in line with the government’s digital strategy, by introducing a new online PAYE service for individuals to report changes that impact on their tax codes, with a pilot service launching in October 2013
- introducing a new ‘Tax for my Business’ personalised homepage, to help small and medium enterprises deal with their tax affairs; a live pilot service for 1,000 customers will start in October 2013 and will be rolled-out to a wider group of businesses over the following six months.
We will continue to support the Government to move towards a more competitive, simpler and fairer tax system, through working closely with HM Treasury and the Office of Tax Simplification to design and deliver tax policy. We will strengthen our policy capability and use our knowledge of the tax policymaking process to propose new ways of improving customer service, the administration of the tax system and reforms to reduce opportunities for avoidance and evasion. We will use our continuous improvement capability, known as PaceSetter, to improve our work and our processes.
The Chancellor’s Autumn Statement, published in December 2012, gave HMRC an additional £77 million to tackle tax evasion and avoidance.
In 2013-14 we will:
- deliver specific Autumn Statement additional revenues of £686 million
- further develop Connect, the HMRC data matching and risking tool, by upgrading software, expanding the number of users, improving accuracy of the data used by the tool and improving system resilience and capacity • recruit and deploy an additional 100 investigators to the Affluent Unit, that makes sure the better off comply with the tax rules, to further tackle avoidance and evasion • trial the debt collection agency (DCA) approach for tax credits debts, by releasing around £300 million of debt for DCAs to collect on our behalf. This builds on the model we have used over the last two years as part of the Spending Review programme • create a new centre of excellence to develop a comprehensive strategy for tackling offshore evasion • increase our ability to tackle aggressive avoidance schemes, including long-running cases involving partnership losses • start a programme of digitisation, funded by the three-year, £200 million digital investment announced in the 2013 Spending Review.
Managing risks to our performance
Our business planning involves looking ahead to identify issues that could pose a significant risk to our performance – and then deciding how best we can minimise their impact.
Our current departmental risks include: • employee relations – there is a risk of a significant deterioration in industrial relations, sustained industrial action and unrest • health and safety – HMRC fails in its duty of care • information security – HMRC suffers one or more data losses • people skills and technical capability – not having the right staff in the right place with the right skills • data management and quality – HMRC fails to apply good standards • people engagement – HMRC’s ability to maximise performance is compromised by low staff engagement • transforming HMRC – HMRC fails to deliver the changes required to meet our Spending Review commitments • cyber threats – HMRC will be unable to protect against cyber threats • transforming PAYE – HMRC fails to meet the aims of PAYE improvement and welfare reform • tax policy – HMRC is unable to meet tax policy developments • revenues raised – HMRC will not deliver the Spending Review proposition • HMRC Universal Credit programme – HMRC will be unable to manage large-scale migration from tax credits to Universal Credit • business continuity capability – HMRC fails to cope with a major event that reduces operational capability for more than three business days • understanding customer behaviour – HMRC fails to adequately keep track of how customers deal with us • reputation management – HMRC does not embed and effectively use communications and stakeholder management proactively to manage its reputation and to respond appropriately to a crisis situation • workload capacity and resource management – HMRC does not have an effective approach to forecasting demand and balancing capacity with workload • supplier stability – there is a risk relating to our management and relationship with key suppliers • RTI Programme and employer awareness – HMRC fails to raise appropriate awareness among employers to report PAYE in real time. Customer experience — improving accessibility, accuracy and timeliness
Our key priorities are to improve customer experience and to tackle avoidance, evasion, organised crime and fraud. We will do this while improving our systems and our efficiency to deliver these objectives at lower cost to the Exchequer. We know that our customers care most about our accuracy, the ease of accessing our services and dealing with us quickly and efficiently. They also want us to be straightforward and cost-effective to deal with.
What we have done
Customer experience
Our goal is to improve our customers’ experience of interacting with us. We are committed to achieving an increase in customer experience scores to 75.8 per cent (an increase of 4.6 percentage points compared to March 2011). Results of the quarterly survey to March 2013\* show a rise of 1.8 per cent from 71.2 per cent to 73 per cent. Within this, the agents’ experience score of 68.5 per cent exceeds the target of 66.5 per cent for March 2015. This improvement is due to our hard work in reducing call waiting times and implementing the Agent Strategy.
Customer service standards
Accessibility
During the course of 2012, we decided to advance the target to achieve 90 per cent of call attempts answered, originally due for 2014-15. As a result, we have made a significant difference to our performance as the year progressed. In the last six months of 2012-13, we answered 91.8 per cent of calls to our contact centres compared to just 65.5 per cent in the first half. We plan to invest a further £25 million in improving accessibility to our contact centres and continue with flexible working in 2013-14 to maintain our performance and achieve a 90 per cent average of calls answered.
We are building a better understanding of the needs of our customers and as a result of working with them, we have agreed a new target for 2013-14 of responding to 80 per cent of calls within five minutes.
This is based on research that tells us customers consider five minutes an acceptable time to wait before being answered.
Timeliness
There has been substantial progress in the turnaround times for post, answering 85 per cent of customer correspondence within 15 days, which exceeds our target of 80 per cent. We also exceeded our 40 day turnaround target of 95 per cent; achieving 97 per cent.
Our timeliness target for UK tax credits claims and change of circumstances was also exceeded. We achieved 15.5 calendar days against a target of 22 calendar days.
Accuracy
Our customers expect us to be accurate in our work and we measure this across a number of areas that we know our customers care about, such as tax credits claims and Self Assessment. We have achieved our targets in this area, achieving above 96 per cent over the year.
We also achieved our post accuracy target of 90 per cent; 91.7 per cent and 91.8 per cent in 15 and 40 days respectively.
Research tells us that when our customers think about accuracy, they include a wide range of aspects of our service, such as ease of finding information and timely completion of work, which falls under our ‘quality of service’. We are now carrying out research with customers to find out how we can understand the customer view of quality and use this to help us improve further.
\*The quarterly customer survey covers the vast majority of our customers: individuals; financial agents; small and medium enterprises (SMEs).
We use the overall annual rolling score as our formal measurement of how straightforward customers find us to deal with. Customer cost reduction
By March 2013, we had reduced the costs to all customers by £2.65 million, although there has been an increase in business customer costs of just over £26 million\*. This is due to changes in Government policy, including:
- £9 million costs from Machine Games Duty
- £80 million costs from restrictions to Pensions Tax Relief to raise £4 billion a year
- £20 million costs from the Bank Levy to raise more than £2.5 billion.
Areas where we have reduced business customer costs come from the introduction of improved digital services such as Corporation Tax and VAT e-filing and payment and VAT e-invoicing. Our digital service for customers is a high priority area for the coming year and beyond, where we are looking to make further cost reductions for customers and for HMRC. We will start investing the extra £200 million over the next three years to help make us an increasingly digital business.
What we plan to do
Over the next 12 months, we will continue building on the good progress we have made to provide our customers with the level of service they expect from us. We will do this by concentrating on areas including our contact centres, our digital offering, our end-to-end processes and how we resolve customer issues more quickly and efficiently.
We aim to reduce ongoing costs for all compliant customers – individuals and businesses – by 2015. The Chancellor also strengthened this commitment for business customers by introducing a target to reduce annual tax administration costs to business by £250 million by April 2015. Our current forecasts show that we are on track to meet this target.
In some cases, increases in customer costs are in areas where customers have requested or supported the changes being made. During 2013, we will be introducing a change to the ‘Patent Box’ regime that will increase costs for business customers, but will reduce their Corporation Tax to ten per cent on profits attributable to the patents – giving our business customers an incentive to retain and develop new patented products. This change forms part of the Government’s growth agenda.
\*Increases of £121.24m; reductions of £94.9m. Tackling tax avoidance will continue to be one of our highest priorities, as we pursue those who bend the tax rules to their own advantage. Through our anti-avoidance strategy we will focus on making sure we have the right policies and legislation in place to reduce the ability of tax avoiders to exploit legal loopholes for their own gain.
**Delivery in 2013-14**
The introduction of a General Anti-Abuse Rule (GAAR) this year will give more protection against artificial and abusive tax avoidance schemes. Where avoidance does occur, we will identify it early using DOTAS (Disclosure of Tax Avoidance Schemes) and other intelligence. We tailor our approach according to the characteristics of different taxpayer groups – based on a robust assessment of the tax at risk. Increasingly, we challenge not only taxpayers who try to avoid tax, but also the behaviour of promoters who offer tax avoidance schemes.
We will consult widely on proposals for new information and penalty powers, targeting high-risk promoters. We will develop better performance measures to demonstrate the effectiveness of our strategic approach. We will make the most of opportunities to inform the public about the nature of tax avoidance and what we are doing to tackle it.
We resolve avoidance issues in accordance with our litigation and settlement strategy and take action in the courts when necessary. We have an excellent record of success in litigation and win the large majority of cases. They include:
**Bristol and West v HMRC**
Bristol and West, owned by the Bank of Ireland, tried to avoid paying around £30 million tax on a £91 million gain. The company transferred a swap contract to another Bank of Ireland subsidiary in a flawed attempt to exploit what it thought was a loophole in the tax rules.
The bank’s theory was that the £30 million tax would disappear on the cancellation of the original contract and its replacement with a new one. It entered into a swap transaction for commercial hedging reasons, but decided to transfer the swap to another Bank of Ireland subsidiary to exploit a perceived weakness in rules on the taxation of swaps in the Finance Act 2002. The First-Tier Tribunal upheld HMRC’s view that there is in fact no loophole to exploit.
**Andrew Chappell v HMRC**
The First-Tier Tribunal ruling in this case protected £156 million in tax from a marketed avoidance scheme which had 305 users. Users of the scheme entered into a series of complicated financial transactions intended to exploit the tax rules on stock lending. But the tribunal found that the arrangements involved little more than signing pieces of paper and making entries in accounts.
**Vaccine Research Limited Partnership v HMRC**
A Jersey-registered limited partnership claimed to be trading in the UK, creating and exploiting intellectual property from research into vaccines for diseases such as HIV, flu and hepatitis B. Eighty-three investors in the partnership used £28 million of their own cash and £86 million in bank loans. The partnership claimed a first-year trading loss of nearly £193 million, creating £77 million in tax relief. This would have given the partners an almost £50 million return on their personal investments. However, in reality only £14 million had been spent on research and development into vaccines. As a result, the tribunal agreed that individual partners were entitled to tax relief of no more than £14 million of the losses.
**How we will measure success**
We are improving the data available to us by introducing a comprehensive avoidance-handling process and developing measures that will enable us to evaluate the effectiveness of our anti-avoidance strategy. This includes tracking the number of customers using avoidance schemes, the amount of tax at risk, yield from its compliance work to tackle avoidance and the amount of resource used. We expect these measures to be in place by 1 April 2014. We also plan to formally evaluate our overall strategy. Tax evasion, organised crime and fraud
Tax evasion accounts for 14 per cent of the tax gap\* while organised crime – smuggling and attacks on repayment systems – costs the Exchequer around £5 billion a year, which is 16 per cent of the tax gap.
We aim to level the tax playing field, by supporting the vast majority of businesses and individuals who meet their tax obligations and making sure that there is nowhere to hide for those who deliberately fail to comply.
Our approach to evasion is to identify and target risks, against which we then deploy an escalating range of activities, depending on the severity of the evasion and the willingness of the taxpayer to stop evading and pay what they owe.
It includes:
- using publicity to deter evasion: highlighting the consequences of being caught, publicising the results of campaigns and criminal convictions and encouraging evaders to come forward to get their affairs in order
- deploying taskforces aimed at particular trades and professions in various regions to investigate where we have detected evasion risks
- tackling affluent individuals who have hidden assets in the UK or offshore using specialist teams
- subjecting persistent evaders to ongoing monitoring and publicly naming deliberate defaulters where more than £25,000 of additional tax would have been lost without our intervention
- deploying specialist criminal investigators to fight criminal attacks, including alcohol, tobacco and Missing Trader Intra-Community (MTIC) frauds and protecting the UK from cyber attacks.
Together, these initiatives demonstrate our commitment to the vast majority of taxpayers who pay what they owe, that we are closing in on tax evaders and criminals.
Delivery in 2013-14
Identifying fraud
We will improve the way in which we identify risks to better target our compliance activity and will invest in skilled staff and technology to make this possible.
Deterring evasion through publicity and campaigns
We will maximise deterrence through effective avoidance and evasion marketing and change the way we communicate with our customers to make them more compliant.
We will use campaigns to address serious risks across selected customer groups so we can change their behaviour.
We are publicising our successes in documents such as ‘Levelling the Tax Playing Field’ to reassure the compliant majority that we are cracking down on those who don’t pay what they owe.
Targeted taskforces
In addition to the 40 taskforces carried out since 2010, we will launch up to 30 more in both 2013-14 and 2014-15. They include fraudulent VAT repayments in London, restaurants in Northern Ireland and the holiday industry in East Anglia.
Offshore evasion
This year, we will create a new centre of excellence to tackle offshore tax evasion. Our new offshore evasion strategy, ‘No Safe Havens’, aims to reduce the opportunities to evade offshore, increase the likelihood of evaders (and those who help them) being caught, and make sure that those who try to cheat the system face tough sanctions.
\*The tax gap is the difference between the amount of tax that should in theory be collected, against what is actually collected. We have already delivered agreements with the USA and with other jurisdictions, including the Isle of Man, Guernsey and Jersey, to automatically share tax information. We will build on the success of the Liechtenstein Disclosure Facility and the historic agreement with Switzerland to encourage those who have hidden money overseas to come forward and settle their affairs. At the same time we will challenge those who choose not to comply with targeted action.
Monitoring persistent evaders
We will change the longer-term behaviour of known rule-breakers by managing their relationship with HMRC more closely through our Managing Serious Defaulters (MSD) programme, and by publishing the names of people who deliberately don’t pay what they owe. We will notify serious defaulters when they are entered into the MSD programme and tell them what their obligations are. While they are in the programme, we will closely monitor them to make sure they meet all their tax obligations. If they fail to meet and maintain those obligations, we will use our inspection and information powers to undertake further compliance activity. Publishing the details of deliberate defaulters will encourage them and others to make full and prompt disclosures and cooperate with HMRC. Details are published only once all appeal routes against the related tax and penalties are exhausted.
Tackling organised crime
We will ensure our staff continue to have the skills and capabilities needed, supported by improved risk analysis, to deliver an effective and sustained deterrence against fraud.
We will work closely with other public sector bodies, law enforcement agencies and overseas authorities to clamp down on criminality and maximise the recovery of stolen tax, as well as increase the number of prosecutions to tackle mass market evasion.
Managing debt
We recognise that some customers have genuine difficulty in paying us. We will support them through temporary difficulties by allowing them time to pay where appropriate. For the debts that remain, we will introduce more innovative collection approaches based on analysing customer data and how they deal with us.
We will continue to take fast, firm, effective action against those who fail to engage with us, and seek to make sure debts are repaid by using our debt collection agency partners and recovering smaller debts through the PAYE system.
We will also work with other government departments to improve the collection of debt across central government.
How we measure success
A key measure of success is the additional tax revenue we bring in through our compliance and enforcement activity. We plan to deliver £5.8 billion additional compliance revenues above baseline in 2013-14. Our compliance revenues are made up of:
- cash collected – the total amount of tax that we collect from activity to tackle those individuals and businesses that have not paid the tax due
- revenue protected – the amount of revenue protected by activities including: seizing illicit goods, preventing errors, deterring future non-compliance and addressing loopholes.
Helping customers meet their tax commitments
£1.6 billion
The total value of ‘time to pay’ arrangements made by HMRC with businesses and individual customers experiencing genuine difficulty paying the tax they owe. The number of these arrangements is currently 665,000. Individual taxpayers
We will improve customer service for the vast majority of people while tackling avoidance, evasion, organised crime and fraud. We will also adapt our approach according to the needs of all our customers, who are individual taxpayers, benefits and payment customers and businesses. In total, we deal with 60 million people through PAYE, National Insurance, Self Assessment and other specialist taxes such as Inheritance Tax.
Delivery in 2013-14
We will provide an improved service and, in doing so, prepare for the future by increasing our focus on digital ways of working and reducing costs for the customer and to our processes.
We will make it easier for our compliant customers by looking at how they deal with us to shape our policies and processes, supported by new technology, contact centre investment and user-friendly guidance. This will make it easier for our customers to manage their affairs, and harder for them to get it wrong.
Because customers will need to contact us less, we will reduce our own costs, enabling us to reinvest these savings into bringing in the money that keeps the country’s vital public services running.
Designing the way we do things around the customer
We will continue changing our products, processes and services to make sure our customers have what they need to get their taxes and entitlements right first time, minimising the need for us to get involved.
When customers do need to contact us, we will maintain our service of answering an average of 90 per cent of call attempts (and answering 80 per cent of calls in five minutes). We will reply to at least 80 per cent of our customer letters within 15 days and 95 per cent in 40 days, while maintaining a quality target of at least 90 per cent throughout the year.
We will work harder to learn lessons from complaints and the way we handle them – responding to customers’ concerns and changing our processes.
And, for those who need extra help, we will provide tailored services that meet their needs, including trialling face-to-face support at convenient locations for them.
Reducing costs – both for customers and HMRC
By helping our customers get things right first time, we will minimise errors and the need for them to contact us, reducing their costs and ours. For those who need help, we will make it cheaper to contact us, moving from 0845 to 03 phone numbers that are far less expensive to call from mobile phones.
We will reduce our post-handling costs by starting to scan the correspondence we receive and by processing it electronically, and we will put our telephony contract out to tender, bringing us more modern telephony services and infrastructure at better value for money.
Avoidance and non-compliance
We will tackle the avoidance of tax and National Insurance contributions through the use of employee benefit trusts, and by employment intermediaries – for example, those who try to put payroll offshore. We will work more closely and offer more support for specialist agents and intermediaries to help a larger percentage of our customers become compliant.
We will work closely with other government departments – for example, collecting student loan repayments on behalf of the Department for Business Innovation and Skills (£1.6 billion collected in 2012-13). Responding faster to customer letters
At least 80 per cent of our customers will get a reply to their letters within 15 days and 95 per cent in 40 days. We will maintain a quality target of at least 90 per cent throughout the year.
80%
Transforming the PAYE system
With the backlogs of previous years now cleared, we will operate PAYE in the most efficient way, working three years in a single annual tax cycle (reconciling 2012-13, updating 2013-14, and preparing tax codes for 2014-15). We will continue to reduce the number of PAYE work management items, preparing for the future through using more automation and trialling new ways of handling these items.
In 2013-14, we will move more than 1.5 million PAYE schemes and 48 million employments to Real Time Information (RTI), improving the operation of PAYE for employers, employees and HMRC, by making the system quicker, easier and more accurate.
More online
We will make it ever-easier for our customers to do business with us online – improving our online information, forms and guidance, and expanding the services we offer online as part of an extra £200 million investment in our digital services over the next three years. In 2013-14, we will open up an online facility for some of our 39 million PAYE customers to report changes to their benefits in kind.
We will build on our successful campaigns to encourage even more Self Assessment customers to file online and on time, avoiding late filing penalties.
Our approach remains: ‘We want the returns, not the penalties.’
Measuring success
We will introduce new performance measures to guide our work in improving the customer experience. They will focus on quality, accuracy, accessibility and our ability to resolve everything for the customer the first time they contact us.
We will use a number of measures to set standards mid-year, once benchmark data becomes available. They include:
- analysing how well our processes work from start to finish
- how often we resolve customer issues the first time they make contact with us
- how many complaints are upheld against us
- the quality of our work, based on what customers are saying about us
- reducing customer costs when they deal with us
- the quality and ease of using our digital services. Benefits and payments customers
We support 4.8 million families and 7.9 million children through the administration of tax credits and pay Child Benefit for 13.7 million children. Child Tax Credit helps people bringing up children and Working Tax Credit helps those working on low pay, whether or not they have children.
Delivery in 2013-14
Our priorities for 2013-14 are to tackle the level of tax credits error and fraud and to manage our tax credits debt balance, as well as to continue to improve our customers’ experience of dealing with us.
To achieve this, we are looking at innovative and cost-effective solutions, for example through testing the effectiveness of using a private sector supplier to deliver additional tax credits compliance checks; through improving our risk capabilities; making best use of our data and tools, and by increasing the number of penalties and prosecutions for fraud to deter the minority of our customers who deliberately make incorrect claims.
We want to help customers get it right first time, and will increase our validation of customer information to reduce the number of overpayments and underpayments, and amount of fraud and debt.
Preparing for Universal Credit delivery
The Department for Work and Pensions (DWP) Universal Credit Pathfinder will test our processes for closing tax credits claims, including the way we recover debt and the impact on our customers. We are working closely with DWP on the timing and volumes of customer moves from tax credits to Universal Credit, which will help us make decisions around the transfer of sites and people from HMRC to DWP, as part of the delivery of Universal Credit.
Timeliness, accuracy, and ease of contacting HMRC
We know that our customers want to get the money they are entitled to on time, and have clear and straightforward help when they need it. We want to build on the strong progress we’ve made, continue to improve our customer service and our customers’ experience by better understanding their needs and better communicating what we need from them.
We will continue to reduce the need for customers to contact us unnecessarily. For those customers who do contact us, we will look to learn from their experiences. This includes learning from our customer complaints and appeals to reduce the number of complaints, disputes and appeals we receive and improve our processes and service.
How we will measure success
We will measure our success against the following targets:
- achieve and sustain timeliness of 22 days for tax credits and Child Benefit UK new claims and changes of circumstances
- achieve 97 per cent accuracy for new claims, renewals and changes of circumstances
- deal with customer disputes and appeals in under 42 days
- achieve customer satisfaction scores of 77 per cent by March 2014. Improving our online services
We will make it easier for new businesses by creating a ‘one-click’ online registration process for notification of liability for VAT and main direct taxes by December 2013. Business customers
We work with large business and 4.8 million small and medium-sized businesses in the UK to make sure we collect the tax due and tackle avoidance, error and fraud, through constantly improving our knowledge of business customers and our levels of customer service.
Delivery in 2013-14
Maximising revenue
Our strategy is to match resource to risk, with our most experienced and highly-trained tax professionals managing relationships with our largest business customers. We make a significant contribution to the Department’s revenue targets from the largest 808 firms. We are currently forecasting we will meet our 2013-14 target of £5.1 billion.
Funding for a Large Business Risk Taskforce was included in the Chancellor’s 2012 Autumn Statement. It is expected to identify additional risks over the next three years, producing additional revenue of £100 million this year, and £2 billion in total by the end of 2017-18. As we work increasingly in real time with customers the way we collect tax is changing – helping customers to get their tax right before returns are filed, rather than trying to put things right afterwards.
Real time working can provide earlier certainty for taxpayers on a range of complex and commercial issues. It also allows us to detect avoidance more quickly.
We are reviewing how we measure the impact of these changes on our revenue targets, efficiency and the customer experience.
Improving customer experience
We will continue to deliver against the commitments made at Budget 2012 in ‘Making tax easier, quicker and simpler for small business’ – particularly through the introduction of new digital services for business. We’re implementing a simpler income tax process for small unincorporated businesses, and delivering VAT registration transformation which automates a substantial part of the service’s business and transfers the VAT registration process online.
We will contribute to reducing customer demand and contact by making the best use of digital technologies, and supporting the wider digital agenda more generally. We introduced the Patent Box regime in April 2013, which will apply a reduced rate of Corporation Tax to profits from patents and certain other forms of qualifying intellectual property. This will give companies the incentive to invest in research, development and innovation in the UK. We will take part in European Union negotiations to ensure that the international trade environment continues to encourage UK growth. We will give businesses operating across international borders certainty, by liaising with treaty partners to relieve the risk of double taxation, where businesses are taxed twice in two different countries on the same profits. We will continue to work closely with the Department for Business, Innovation & Skills, Cabinet Office and HM Treasury in support of the Government’s wider agenda for business, particularly to support growth and enterprise. Large Business Risk Taskforce
The Taskforce is expected to identify additional risks over the next three years, that will produce additional revenue of £100 million this year. Funding for the Taskforce was included in the 2012 Chancellor’s Autumn Statement
£100 million
We will continue to assure the delivery of the large business, small and medium-sized enterprises (SME) and agent strategies so that they bring in the revenues and deliver the customer service improvements agreed as part of our Spending Review, and to commission, maintain and apply a robust body of relevant external research to support those improvements.
How we will measure success
Our primary measures of success are:
- the additional £5.1 billion tax revenue we aim to collect from the largest 808 businesses, and product and process yield
- delivery of business cost reductions against our target to reduce by £250 million by March 2015, as part of a wider improvement in business customer experience
- progress towards achievement of our customer experience targets for SMEs, agents and large business. Our people
To make sure that we are able to collectively deliver the challenges outlined in this plan, we will continue to work towards creating an inclusive ‘One HMRC’ environment which is enjoyable to work in and motivates and develops our people.
We want to further strengthen our leadership, improve professionalism and create the foundation for a sustainable organisation that delivers for the customer (in terms of their experience when dealing with us) and for the Government (in terms of our revenue targets). We will strengthen our people’s connection to HMRC so they feel engaged and proud to work for us and play their part in delivering the Department’s commitments.
We will deliver this in the context of Civil Service reform, which clearly articulates the case for change, including the need to develop a more agile Civil Service with flatter management structures, less bureaucracy and improved services at reduced cost.
Delivery in 2013-14
We will ensure that HR is integrated into the HMRC business strategy and planning teams to support our Executive Committee in developing the HMRC strategic direction and business plans. Our work in 2013-14 will be themed around four main areas:
Leadership and management
We will continue enhancing the capability of our leaders and managers by explaining what we expect from them and investing in their development. The new Civil Service Competency Framework will be used to define what core skills, accountabilities and behaviours are required, so we can create leaders who will drive business performance for the whole organisation and support our people in reaching their potential. Increased leadership capability will ensure we deliver against our business objectives and provide the service our customers need.
Skills and professions
As part of Civil Service reform we will develop and start delivering a five-year capabilities plan to identify what skills we have, what is missing and how gaps will be filled. We will also start to increase management capability in our digital service, how we continuously improve as an organisation, programme management and in our commercial transactions.
We will work across HMRC to increase the professionalism and effectiveness of our people by clearly defining the skills and capabilities that we need and providing the development framework, career paths and a learning strategy to support this, with particular focus on our core professions of tax and operational delivery.
Building a sustainable organisation
It is crucial that HMRC is a flexible organisation that is able to adapt to key customer and revenue objectives in 2013-14 and beyond. For example, the Government’s recent Spending Review announcement will mean reducing our workforce to 52,000 full-time equivalent staff by the end of March 2016. As the Department evolves, our priority will be to ensure that we have the right people in the right places, doing the right work. We want staff to be proud that they work for HMRC and we will continue working towards that goal so they feel the organisation is truly supporting the customers and communities they serve.
Improving HR
In 2013-14 we will continue to build HR’s professionalism, reputation, expertise and closeness to the operational business to ensure that we continue to improve our HR service and enable the delivery of HMRC operational objectives. Building a sustainable organisation
We need to make sure that HMRC has the right people in the right places, doing the right work, in order to deliver our key customer and revenue objectives in 2013-14 and beyond.
1,700 people started tax training
How we measure success
In 2013-14 we will measure our performance across four key themes:
• leadership and management • skills and professions • building a sustainable organisation • improving HR.
We will measure improvements in leadership capability and change management, with the aim of achieving the Civil Service average of 35.5 per cent from our current 2012 score of 24 per cent. We will also measure progress in staff engagement, which stands at 46 per cent in HMRC, compared to the Civil Service average of 57 per cent.
We will closely monitor and evaluate our approach to diversity, so we can better reflect the communities we serve, and make sure we have the right people in the right roles at the right time with the right skills to deliver our operational business targets.
It is important that as the size and shape of the Civil Service undergoes reform, we can demonstrate clearly how changes to our workforce has a positive impact on business performance.
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e7c4fc0fdf5fa053876d2405d2c4b8592f39cb95 | How we resolve Tax Disputes The Tax Assurance Commissioner's annual report 2012-13
# Contents
Foreword by Edward Troup, Tax Assurance Commissioner, HMRC 2
Statement on behalf of HMRC’s Audit and Risk Committee 3
Chapter 1: Introduction and background 4 Background 4 Package of changes 4 How we delivered the changes 5 Overview of governance processes 6
Chapter 2: HMRC governance of dispute resolution 7 Why do tax disputes arise? 7 Governance and management oversight 8 Business area boards 8
Chapter 3: Tax Disputes Resolution Board and Commissioners 10 Tax Disputes Resolution Board 10 HMRC Commissioners 10
Chapter 4: Setting HMRC’s approach to issues affecting multiple taxpayers 12 Contentious Issues Panels 12 Anti-Avoidance Board 12
Chapter 5: Significant litigation in 2012-13 13
Chapter 6: Review of governance processes in settled cases 14 Review of Settled Cases 14 Overview of findings and lessons learned 15 Work programme for 2013-14 15
Annexes:
1. Overview of tax disputes 16
2. Overview of outcomes at review and appeal 2011-12 19
3. Governance case studies 21
4. TDRB and Commissioner referrals in 2012-13 25
5. Issues considered by CIPs and AAB in 2012-13 27
6. Examples of significant litigation from 2012-13 29 This report, my first as HMRC’s Tax Assurance Commissioner, outlines the department’s performance in resolving disputes with taxpayers for the period from my appointment in August 2012 to March 2013.
HMRC’s role is to collect the tax due by law from all taxpayers, large or small, under the rules set out by Parliament and to challenge effectively any case where we think the right amount of tax is not being paid.
The overwhelming majority of taxpayers pay the correct amount of tax and pay it on time. But they need to be confident that we take action against those who do not do so and that we apply the rules even-handedly to all taxpayers. My role is to provide confidence in our even-handedness to the public and to Parliament and to demonstrate that when we settle disputes we do so in accordance with the law.
I do not engage with any specific taxpayer on their tax affairs, but I oversee our decision-making processes. With two other Commissioners, I act as the final point of approval for settlements in the largest and most sensitive cases.
Since my arrival, I have found a great deal that gives me confidence. We have the processes in place to ensure that the right decisions on tax liabilities are made and I have seen how we do make good decisions in practice. Over the past months, I have been impressed by the level of expertise and discipline in the way our 17,000 tax professionals work, and their very visible commitment to ensuring that the law is applied as Parliament intended.
My direct involvement in the oversight of large settlements, my scrutiny of the processes for resolving disputes of all sizes and my engagement with HMRC’s teams across the country allows me to provide assurance that we do consistently achieve the correct tax outcomes for the Exchequer under the law.
There is, of course, plenty of room for improvement. For example, more needs to be done to ensure that the overall governance framework for tax decisions is well understood, particularly in the more specialist areas of the department; I want our review of settled cases to have a broader range this year and for lessons to continue to be effectively learned; and I want to make sure that, while the confidentiality of taxpayers’ affairs is maintained, there is a better public understanding of how we resolve tax disputes. This report is a first step in that wider process of enhancing transparency.
I would also like to highlight the commitment and professionalism of staff across HMRC for whose support, both in the work they do and in contributing to this report, I am very grateful.
I would welcome feedback on the content of this report and will be happy to consider how it can be improved in future years.
Edward Troup Tax Assurance Commissioner and Second Permanent Secretary Statement on behalf of Audit and Risk Committee
The Audit and Risk Committee is chaired by John Whiting (Non-Executive Board Member). Other Members are Paul Smith (Non-Executive), Leslie Ferrar (Non-Executive) and Colin Cobain (Non-Executive). Lin Homer (Chief Executive), Simon Bowles (Chief Finance Officer), and representatives from the National Audit Office and the Head of Internal Audit are standing invitees.
The Audit and Risk Committee has taken a close interest in the development and implementation of changes to HMRC’s governance and assurance processes for tax disputes. We have received regular updates, enabling us to provide oversight to the work that Lin Homer and Edward Troup have been carrying out in this important area. The main emphasis of the work carried out by HMRC to date has been in establishing appropriate processes. We agree with this approach.
The Committee has also agreed the programme and approach for the work carried out by HMRC’s Internal Audit team to review the processes used in settled cases and has received reports on the findings.
We have seen this report in draft during its preparation. It is not our function to audit the report, but we have had the opportunity to comment on the drafts and challenge the information presented. We believe that the report is a fair report on and representation of HMRC’s governance and assurance of tax disputes following the changes introduced during 2012-13.
John Whiting Chair, HMRC Audit and Risk Committee Chapter 1: Introduction and background
In February 2012 we made a number of changes to further strengthen our governance arrangements in relation to settling large tax disputes. As part of a package of changes we undertook to publish an annual report on our governance of settled cases. This is the first of those reports.
The Audit and Risk Committee has endorsed the scope and content of this report and a statement from the chair of the Committee can be found on page 3.
Background
The National Audit Office (NAO) reported in 2011 on our handling of tax disputes with large businesses and commended the strength of the governance arrangements in place. But it noted five cases in which the normal governance processes had not been followed and one case in which an error had been made in calculating liabilities. The PAC followed up these issues in hearings during late 2011 and in its report in December 2011 made a number of critical findings and recommendations for change in HMRC’s handling of large tax disputes.
We acknowledged the error made in one case but we did not – and do not – accept that large tax disputes had been resolved on an inappropriate basis. A further report by the NAO in June 2012, following an in-depth review of the five cases highlighted in its earlier report, found that those cases had all led to reasonable outcomes for the Exchequer. However, we accepted that there was a need to restore public confidence in the way in which we handle tax disputes.
On 27 February 2012, we announced a package of changes designed to address concerns and provide greater assurance by improving the transparency of our processes and strengthening our governance of decisions in the largest and most sensitive cases.
This first report describes those changes and sets out the governance and assurance framework that underpins how we now handle tax disputes.
Package of changes
We are a non-Ministerial department, where the Commissioners are responsible for the collection and management of revenue.
Day-to-day operational decisions relating to the collection of taxes are made by tax professional staff with the appropriate training and management oversight, depending on the size and scale of the work involved. The most significant decisions are made by the Commissioners themselves. Decisions made at different levels within the Department have always been taken in the context of appropriate governance and oversight that is proportionate to the size, and potential impact, of the issue being considered. That governance ranges from line management oversight for straightforward, low-value decisions, through to boards of senior officials and, now, at least three Commissioners being involved in sensitive or particularly high-value decisions.
These arrangements have always been subject to a high level of scrutiny by the National Audit Office and Parliamentary committees, such as the Public Accounts Committee and Treasury Select Committee, with taxpayers being able to take appeals against decisions they disagree with to the independent tribunal and courts.
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1 The High Court held in UK Uncut Legal Action Ltd v Commissioners for HMRC (May 2013) that, although HMRC made errors in settling one dispute, there were significant and substantial reasons for HMRC’s decision in relation to it and that the decision was lawful. Against this background, the changes we made were:
- The introduction of the new post of Tax Assurance Commissioner, whose role is to ensure that Parliament and the public can have confidence in HMRC’s work, with an explicit challenge role to assess whether a proposed settlement secures the right tax efficiently and in so doing treats taxpayers even-handedly. The Tax Assurance Commissioner does not engage with specific taxpayers on their liabilities, nor manage case-workers.
- Changes to the decision-making model for our largest and most sensitive cases (using the Tax Disputes Resolution Board and ensuring decisions on whether to settle or not are made by three Commissioners).
- A systematic review programme of the processes that we follow in settled cases, looking at a sample of cases from across the spectrum of our risk work.
- An enhanced role for our Audit and Risk Committee, including considering the reports from our review of settled cases programme and recommending follow-up action to improve compliance with those processes.
- Publishing a new code of governance on settling tax disputes, to improve transparency about our processes.
- An annual published report on our tax settlement work, signed off by the Audit and Risk Committee.
How we delivered the changes
Following Edward Troup’s appointment as Tax Assurance Commissioner, we established our Tax Disputes Resolution Board (TDRB) in September 2012. The work of the TDRB and the overall HMRC dispute resolution process is outlined below and in Chapters 2 and 3.
On 1 November 2012, we published the Code of Governance for resolving tax disputes setting out our decision-making processes. This followed informal consultation on an earlier draft over the summer and reflected comments from internal and external stakeholders.
In Autumn 2012, our Internal Audit directorate carried out a pilot, reviewing governance processes in around 200 settled cases to ensure that the proposed format of the review would work in different business areas. The findings are set out in Chapter 6, along with information about the proposed programme of reviews in 2013-14.
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2 A pilot was carried out in 2012-13 testing the proposed methodology. The full programme will start in 2013-14.
3 www.hmrc.gov.uk/adr/resolve-dispute.pdf
4 The responsibilities of the Tax Assurance Commissioner are detailed in the Code of Governance (page 4). Overview of governance processes
Case governance
The TDRB considers proposals to settle tax disputes in cases where the total tax under consideration across all issues is more than £100 million or cases which are particularly sensitive, where the decision could have a significant impact on HMRC policy, strategy or operations. Tax under consideration is a theoretical estimate of what the tax liabilities might be if the taxpayer fully accepted alternative tax positions across all identified tax risks. It does not take into account the strength of HMRC’s or the taxpayer’s arguments concerning these alternative tax positions and does not therefore represent an estimate of the actual expected tax liabilities. Rather, it is a helpful way for HMRC to quantify the maximum potential tax at stake, which is then used to set the appropriate level of case governance.
The TDRB makes recommendations to three HMRC Commissioners as decision-makers. The TDRB and Commissioners also consider a sample of cases where the total tax under consideration is in the range of £10 million to £100 million. Further information on the TDRB and Commissioners is in Chapter 3.
Beneath the TDRB we have established a range of governance boards, which make decisions on settling smaller cases and are responsible for ensuring sample cases are referred to TDRB and Commissioners. Further detail on these boards can be found in Chapter 2.
Issues governance
To ensure that we take a consistent approach to different taxpayers, our Contentious Issues Panels and Anti-Avoidance Board set the handling strategy for issues affecting a number of taxpayers. These arrangements have been refreshed to make sure they fit as part of the new arrangements for case governance outlined above. Further details on these boards are in Chapter 4. Chapter 2: HMRC governance of dispute resolution
Our governance and assurance processes for resolving tax disputes are set out in the Code of Governance published on 1 November 2012.
The overall aim is to have processes in place that:
- ensure that tax collection runs smoothly
- allow our tax professionals to carry out their work with appropriate regard for their expertise
- provide assurance to HMRC’s many stakeholders that disputes are resolved appropriately and fairly.
As the code makes clear, the skills and expertise of our 17,000 tax professionals underpin all our work on resolving tax disputes. We support our staff in developing and maintaining those skills through our training programmes, our range of accredited tax qualifications, continuous professional development, tax talent management and by offering career opportunities that allow them to continue to develop their tax professionalism.
Why do tax disputes arise?
Differences of view (or ‘disputes’) between a tax authority and taxpayers on the correct amount of tax due – or the timing of payment – are a normal feature of tax administration across the world and arise in cases of all sizes.
There is a wide range of triggers for disputes, covering the simplest penalty cases through to the most complex technical points. Most tax disputes are resolved by agreement once the facts have been established and the points at issue discussed, including in cases where there is a formal appeal against the view we have taken. Resolving disputes by agreement, rather than by litigation, is our preferred approach and tax law facilitates this. This approach means legal and administrative costs can be minimised and earlier certainty achieved. Only a small minority of disputes need to be resolved by litigation, either in a tribunal or a higher court, when it has not been possible to reach agreement.
HMRC’s strategic objectives are to maximise revenue collected, improve customer service and reduce costs. In line with those objectives, we resolve tax disputes on the basis set out in our Litigation and Settlement Strategy (LSS)(^5). The LSS makes clear that we will only resolve a tax dispute on a basis that is consistent with the law, whether by agreement with the customer or through litigation. We aim to resolve disputes through collaborative working wherever possible and reach agreement without litigation as that is the quickest and most efficient approach(^6).
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(^5) The LSS applies to cases resolved using civil rather than criminal procedures
(^6) More information on the LSS is available here [www.hmrc.gov.uk/practitioners/LSS.pdf](http://www.hmrc.gov.uk/practitioners/LSS.pdf) Where we cannot agree with the taxpayer then, as part of the formal appeals process, the taxpayer can ask us to carry out a review of the decision in question, or make an appeal to the First-Tier Tribunal. In 2011-12 we carried out approximately 56,000 reviews, and around 4,300 appeals to the First-Tier Tribunal were closed, either at a formal hearing by the Tribunal or without a hearing.
Annex 1 provides further detail on why disputes arise and how we seek to resolve them. We also respond to the recommendations made by the NAO in their June 2012 report Settling large tax disputes.
Annex 2 provides a breakdown of the number of tax disputes resolved formally by review or at a tribunal hearing in 2011-12 (the latest year for which detailed figures are available).
**Governance and management oversight**
Our smallest and least complex disputes are handled by our case workers using extensive technical guidance, overseen by line management and subject to appropriate quality assurance arrangements. Reviews are carried out by officers independent of the original decision-maker. Where complex issues arise, such as a technical uncertainty, or multiple interdependent issues are under consideration, case workers have access to specialist technical advice and, when necessary, legal advice. Under the LSS, all relevant staff should be consulted on the handling of these complex disputes including, where appropriate, our legal advisers, and decisions should be made by consensus. This partnership ensures that our approach to a specific case is thoroughly tested.
**Business area boards**
Each business area within HMRC has a senior decision-making board, with members drawn from across the Department, to consider proposals to resolve disputes in cases with significant amounts of tax under consideration or which raise novel or sensitive issues. The three senior decision-making boards sit below the TDRB, covering our Enforcement and Compliance, Personal Tax and Business Tax lines of business.
The Enforcement and Compliance Disputes Resolution Board (E&C DRB) was set up on very similar principles to the TDRB. It covers all cases in E&C where the tax under consideration, across all risks, is between £10 million and £100 million. This range represents the significant tax disputes in E&C and is the ‘population’ from which sample cases for TDRB are drawn. The Board was developed from the Managing Complex Risk Programme (MCRP) Board and the E&C DRB now oversees this programme.
E&C DRB is chaired by the deputy director for the large and complex teams within Enforcement and Compliance and includes representatives from across HMRC. The E&C DRB works closely with the TDRB to ensure a consistent approach is taken to risks and to cases that may come within the TDRB’s remit as sensitive.
The E&C DRB has met monthly since its first meeting in January 2013. Six cases reached the Board between January and April, with two identified as sample cases to progress through to TDRB and Commissioners.
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7 The First-Tier (Tax) Tribunal is independent of HMRC and hears most appeals against decisions of HMRC in relation to tax (www.justice.gov.uk/tribunals/tax)
8 The monetary limits of this remit (ie cases over £10 million) focuses on the total tax under consideration across all the disputed points in the case. For example, a case with six disputed points totalling £15 million will be referred to the E&C DRB to take decisions on individual disputed points that each might be less than £10 million.
9 The MCRP is the risk resolution programme within our Local Compliance Large & Complex business area for high-profile, complex and highest risk customers. It uses a clearly defined issue resolution process, in line with the Litigation and Settlement Strategy (LSS), through senior level engagement and partnership working across directorates to achieve quick resolution of issues and quick decisions. In Personal Tax, all cases where the tax under consideration is more than £10 million, or which are particularly sensitive, go to the Specialist Personal Tax Senior Management Board, sitting with at least one other senior colleague from a different business area. There were no cases of more than £10 million in 2012-13 and the number of cases of that size or considered sensitive that the Board expect to see in 2013-14 is estimated to be between six and 12. This small number means that we currently expect all Personal Tax cases above £10 million to be referred on to the TDRB and Commissioners as sample cases, ensuring that they are seeing examples from across the Department.
In Business Tax, the Large Case Management Board (LCMB) was established in April 2013 with representatives from across HMRC. The LCMB takes decisions, and provides advice, on high value and significant tax disputes between £25 million and £100 million.
Transfer pricing issues are decided within the transfer pricing governance structure. Transfer Pricing (TP) Panels decide on cases where the tax under consideration in a transfer pricing dispute is between £5 and £25 million. The Transfer Pricing Board decides cases between £25 million and £100 million and makes recommendations on cases within the remit of TDRB. In 2012-13 150 cases were considered for settlement under the TP governance process.
The work of these three governance boards in the business areas underpins the Tax Disputes Resolution Board and the Commissioners, ensuring that decisions on the largest and most sensitive tax disputes are subject to appropriate cross-HMRC governance.
Three governance boards in the business areas underpin the Tax Disputes Resolution Board and the Commissioners, ensuring that decisions on the largest and most sensitive tax disputes are subject to appropriate cross-HMRC governance.
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10 Where the case also involves risks that are separate from the transfer pricing issue, then, depending on the total amount of tax under consideration, the case may also go to the relevant line of business case board. Chapter 3: Tax Disputes Resolution Board and Commissioners
The Tax Disputes Resolution Board (TDRB) considers proposals for resolving the point or points in dispute in a case and recommends to the HMRC Commissioners the appropriate basis for resolving the largest and most sensitive tax disputes.
Commissioners now make decisions in sensitive cases and those with more than £100 million tax under consideration (a reduction from the previous £250 million threshold). The new decision-making model draws on best practice established by the High Risk Corporates Programme Board, which has been incorporated into the TDRB.
Tax Disputes Resolution Board
The Tax Disputes Resolution Board brings together senior HMRC officials from a range of business areas, including the Solicitor’s Office. Its membership and terms of reference are set out in the Code of Governance. It considers tax disputes when a decision point is reached in:
- a case which is sensitive, or where an individual risk is sensitive(^1)(^2)
- a sample of cases where the tax under consideration in the case as a whole is at least £10 million but less than £100 million.
The TDRB recommendation to the Commissioners will focus on whether there is an appropriate basis for settling the dispute by agreement or whether HMRC should continue to press for a different outcome, if necessary in litigation.
The TDRB may also consider cases in which novel or unusual features are present and may either decide the basis for resolving disputed points or refer them to the Commissioners with a recommendation (see Annex 3). The Board also acts as the governance board for cases in the High Risk Corporates Programme.
The TDRB is an internal governance process supported by a secretariat. Case teams complete detailed submissions presenting both HMRC’s and the taxpayer’s arguments. The secretariat has a key role in ensuring that the papers represent the arguments in a balanced way. A standard template is used to set out the facts and arguments on the disputed point, key case papers are included and case workers are present at the Board to deal with queries and hear the debate.
The TDRB meets monthly and held its first meeting in September 2012. Seven meetings took place in 2012-13, with 31 cases considered. Additional meetings can be convened to deal with peaks in the volume of cases or if a case needs urgent consideration, but there have been none in this period.
TDRB decisions and recommendations are reached by consensus. If consensus cannot be reached, the point is referred to the Commissioners with the points of divergence clearly laid out, or the case may be referred back to the case workers for further work.
HMRC Commissioners
Decisions are made by three HMRC Commissioners, and have to be unanimous. The Commissioners meet to consider recommendations and referrals from the TDRB, working from material presented in standard templates with appropriate supporting material, and supported by the secretariat of the TDRB, with further explanation from case workers in person.
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(^1) The monetary limits of this remit (ie cases over £100 million) focuses on the total tax under consideration across all the disputed points in the case. For example, a case with eight disputed points totalling £125 million will be referred to the TDRB to take decisions on individual disputed points that each might be less than £100 million.
(^2) Sensitive cases or individual risks are those where a decision to resolve a dispute might have a significant and far-reaching impact on HMRC policy, strategy or operations. They are likely in consequence to prompt significant national publicity. Of 22 tax dispute cases referred to Commissioners in 2012-13, 11 were accepted for settlement, five were rejected and six settled with conditions.
Each meeting is made up of three Commissioners, chaired by the Tax Assurance Commissioner, who draws on the tax, financial and operational expertise within the pool of Commissioners.
In 2012-13, 22 TDRB referrals were considered by the Commissioners. The four Commissioners who took part were Edward Troup (Tax Assurance Commissioner), Jim Harra (Director General, Business Tax), Simon Bowles (Chief Finance Officer) and Jennie Granger (Director General, Enforcement and Compliance).
Of the 22 referrals, the Commissioners agreed that in 11, worth £1,368 million, the taxpayer was now proposing an acceptable basis for resolving the disputes. Commissioners rejected the taxpayer’s proposals in five cases worth £398 million, and in another six cases, worth £285 million, Commissioners accepted the proposals, but with additional conditions attached. Annex 4 provides aggregate information about the cases considered by TDRB and Commissioners.
Sample cases The TDRB and Commissioners consider a sample of smaller cases where tax under consideration is in the range £10 million to £100 million. The three boards for the business areas are responsible for ensuring TDRB receives sample cases. (As noted above, all these boards include at least one representative from a different business area.) Taxpayers in sample cases are made aware that there is a further governance stage to be completed before there is a final decision on HMRC’s position. We are working to ensure that cases of the relevant size or sensitivity that may need to go to TDRB are identified as early as possible so that we can provide clarity on the process that will apply and minimise any potential delay to reaching a final decision on our position.
Since the TDRB was set up, attention has focused on establishing the pool of cases across HMRC from which the sample is drawn and on developing processes to identify the cases that will move from their line of business governance to the TDRB and Commissioners as sample cases.
As the first tranche of sample cases were identified late in 2012-13, few of them have yet reached a decision point requiring TDRB and Commissioners to consider them. One sample case was considered, however, and we expect others to be ready for referral to TDRB and Commissioners during 2013-14. Chapter 4: Setting HMRC’s approach to issues affecting multiple taxpayers
This chapter describes the process for deciding our position on a disputed tax point that arises in multiple cases (an “issue” that is relevant to more than one case).
Setting a framework for handling an issue consistently across the range of cases in which the point is in dispute is an important element of our work, and helps to ensure that we administer the tax system in an even-handed way.
The Business Tax and Personal Tax Contentious Issues Panels (BT and PT CIPs) and the Anti-Avoidance Board are the bodies established by HMRC to consider issues and agree HMRC’s approach to them.
Contentious Issues Panels
The BT and PT CIPs are governance groups with members drawn from across the Department who decide our strategy for handling major contentious issues. A major contentious issue is one that involves a point of law or practice which might have a significant and far-reaching impact on our policy, strategy or operations, affects multiple cases, impacts on different parts of HMRC, or may result in major litigation.
By having these panels set the handling strategy for such issues, we ensure that cases are handled in a coordinated and consistent manner across HMRC. Where a CIP cannot reach a unanimous decision, it may commission further work by the issue owner(s), or refer the issue to the Commissioners for a view.
During 2012-13 the PT CIP considered six issues and the BT CIP considered 16.
Anti-Avoidance Board
The Anti-Avoidance Board (AAB), made up of representatives from all business areas involved in tackling tax avoidance, approves and monitors strategies to handle tax avoidance issues, and makes strategic decisions about HMRC’s anti-avoidance work. This ensures that throughout the life of an avoidance issue, proper consideration is given to:
- the level of risk posed by the issue
- the appropriate means of counteraction
- the allocation of resource.
Over the course of 2012-13, the AAB considered 130 issues.
Once a handling framework has been set for an issue, whether by a CIP or the AAB, a disputed point in a case that involves that issue should be resolved on the basis of the agreed approach. Whether or not the agreed approach has been followed is one of the factors tested in the Internal Audit reviews of process in settled cases.
Examples of issues considered by CIPs and AAB in 2012-13 can be found in Annex 5.
In 2012-13, the Anti-Avoidance Board considered 130 issues and the Contentious Issues Panels considered 22 issues. Chapter 5: Significant litigation in 2012-13
As our Litigation and Settlement Strategy makes clear, we aim wherever possible to resolve tax disputes by agreement, provided a satisfactory outcome within the law can be reached. Litigation can be time-consuming, costly and always has an element of risk. There are various options that are available before litigation.
Where taxpayers do not agree with our decision, they can ask for an internal review of the decision. An officer who was not involved in the original decision then looks again at the facts, legal position and process of the decision. The review officer decides whether to uphold, vary, or cancel the decision, in accordance with the LSS.
In line with the Government’s dispute resolution commitment, taxpayers can also consider whether alternative dispute resolution (ADR) techniques will aid in reaching an agreed resolution in line with the LSS, instead of proceeding to tribunal. ADR can be useful in some cases which are very fact-heavy where views have become entrenched. We have recently trialled the use of ADR in two pilots and we are now building on their successes as part of business as usual13.
ADR is designed to overcome deadlocks in dispute resolution by establishing or re-establishing constructive dialogue. It uses an intensive, mediated, process to remove personality from a dispute, examine and agree facts, or tease out what facts are not agreed, why that is and what is needed to achieve agreement. The focus is neutral and involves collaborative engagement. It also examines the assumptions that underlie each side’s view of how the law applies to those facts so that mutual understanding can be achieved.
Subject to governance processes, ADR can also bring decision-makers from both sides to the table, so that opportunities for misunderstandings are minimised. Where resolution has been reached, this has been on the basis that a shared understanding of the facts and how the law applies has been achieved. Where the dispute remains unresolved, there is usually a better appreciation of the arguments and underlying reasons for the dispute, which makes litigation better focused.
Although resolving disputes by agreement is our preferred approach, we will take cases to litigation if an outcome consistent with the LSS cannot be achieved any other way. Around 4,300 appeals to the Tribunal were closed in 2011-12 (the latest year for which figures are available). The majority of these were individual disputes about the facts in a specific case or the application of penalties, without wider impact or precedent value. However, each year there are also cases heard where the outcome could have significant implications for HMRC and taxpayers in general.
For example, in 2012-13, there were 18 cases heard in the Court of Appeal/Court of Session and four in the Supreme Court to which HMRC was a party. 14 of these confirmed HMRC’s view of the law, including significant decisions on the scope of legal professional privilege14 and the relief that can be given when trustees make decisions with unforeseen tax consequences15. In six cases, the decision went against HMRC’s arguments and two judgments have not yet been issued. The tribunals and courts also issued decisions on 33 avoidance cases with 27 going in HMRC’s favour, protecting more than £1 billion of tax.
In 2012-13, litigation decisions across all cases decided in HMRC’s favour protected tax of around £10 billion16. Annex 6 highlights some of the significant judgments in litigation given in 2012-13. We do not comment on the figures of tax at issue in these cases as the figures are not always in the public domain.
13 Figures for the SMEi pilot can be found www.hmrc.gov.uk/news/adr-public-eval-report.pdf 14 R (on the application of Prudential plc and another) v Special Commissioner of Income Tax and another. 15 Futter/Pitt v The Commissioners for Her Majesty’s Revenue and Customs. 16 Judgments in HMRC’s favour protected in the region of £10.89 billion. Judgments against HMRC totalled £663 million, but many of these are under appeal and we are confident of success. Chapter 6: Review of governance processes in settled cases
In addition to the changes described in earlier chapters, we have committed to carry out a programme of reviews of the governance processes used in a sample of settled cases from across HMRC.
A pilot was carried out in the second half of 2012-13 with the full programme starting in 2013-14. This review programme looking at process is in addition to quality assurance programmes in business areas.
Review of Settled Cases
Internal Audit examines case files for the programme of reviews of settled cases.
The review programme will be an annual programme in which the emphasis may shift from year to year, with the aim of ensuring coverage over time of all areas of HMRC in which tax disputes arise. The 2012-13 pilot and 2013-14 full programme focus on the business areas where most tax disputes arise: Enforcement and Compliance and Business Tax, with some cases from Personal Tax.
The reviews focus on checking that the appropriate processes have been followed when working a tax dispute – for example, whether appropriate advice was taken from internal stakeholders, where necessary; whether governance processes were followed; whether the outcome of the dispute was recorded appropriately. Reviews do not re-open the points in dispute: they are intended to identify areas in which process improvements could be made for the future. Where cases are not found to be satisfactory, this does not necessarily indicate that there was any loss of tax, rather that there are improvements that could be made in the way governance processes were followed. The Tax Assurance Commissioner oversees the review programme and the findings are reported to our Audit and Risk Committee, who may recommend follow-up action.
In 2012-13 we established the methodology for the programme of reviews and tested it in a pilot programme, where 213 settled cases from 2011-12 were reviewed, drawn from Local Compliance and Specialist Investigations in Enforcement and Compliance and the Large Business Service in Business Tax.
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17 For example, every year as part of Measuring High Quality (MHQ) programme, Local Compliance review more than 2,000 randomly-selected compliance checks from across all of the tax regimes within LC. The MHQ review measures the quality of the cases against 15 MHQ questions, providing recommendations about areas of improvement.
Each year the Large Business Service produces a quality assurance plan involving a number of quality reviews to be carried out across the business. The findings and recommendations of these reviews feed into process changes. Overview of findings and lessons learned
The pilot programme tested the processes followed in the cases against a set of common governance criteria, reflecting what governance processes were required at the time the case was settled. The pilot was intended to check the methodology ahead of a full programme of reviews that will be carried out annually from 2013-14.
The overarching finding of the pilot was that the methodology was sound, although some slight changes have been made for the 2013-14 programme to make some of the criteria clearer.
The pilot found that in the majority of cases (195 out of 213) there was satisfactory adherence to governance processes. There were 18 cases where we had not followed all the processes relevant to the case, and these broadly related to two areas:
1. process involved in the application of penalties
2. processes for recording yield and the future impact on revenue.
Internal Audit were satisfied that these issues were the result of changes being made to systems and processes at the time; this was a transitional period for both penalties and the approach to recording yield.
Business areas are taking action to address concerns identified both within the Internal Audit pilot and in their line of business based assurance work. This includes:
- developing improved guidance on the operation of penalty processes, including the streamlining of the penalty authorisation process and development of support tools.
- There has also been face-to-face training for all caseworkers and managers on penalties
- developing improved guidance on the recording of yield, with feedback processes established so staff can raise issues, suggest improvements and identify gaps as they use the new yield system
- an ongoing programme of workshops/surgeries to assist caseworkers on penalties, settlements and emerging issues
- placing an increased emphasis on improving audit trails.
As a result of these changes, and the transitional period involved, Internal Audit did not consider there to be any underlying causes for concern that required any specific recommendations.
Work programme for 2013-14
The agreed programme of work for 2013-14 will cover more areas of the business than the pilot and aims to review approximately 400 cases. The review will report throughout the year, so that business areas can respond to any lessons as soon as possible. This reporting will also provide an overview across the areas to identify if there are any common areas of concern, for which action needs to be taken as soon as possible. Annex 1: Overview of tax disputes
Why do tax disputes arise?
Differences of view might arise because the law is complex or because the way the law applies in a particular set of circumstances is not straightforward.
HMRC might believe that a taxpayer has failed to assess their liabilities correctly or meet a deadline for payment; or has carelessly provided inaccurate information; or has deliberately misled us. We might take the view that a taxpayer is trying to avoid tax by using the law in a way that was never intended. Or we might take a different view from a taxpayer on the way the law is meant to work in their situation.
These differences of view between HMRC and a taxpayer or their agent might arise in a number of ways. For example, we might receive a claim for a tax relief or a tax repayment which we do not believe is due. We might impose a penalty for a late payment or return which a taxpayer or agent believes is not justified. We might be aware that a particular individual or business has used a notified avoidance scheme. Most typically, however, a dispute will arise because our risk assessment identifies one or more points that we believe need to be challenged.
Risk-based working
Compliance activity within HMRC is based on risk. By that, we mean the risk of a taxpayer failing to meet their tax obligations. We work within a common set of risk priorities, prioritising our highest risks. This can be by reference to taxpayer behaviour, by threats to regimes or by the size and complexity of the risk involved. Focusing on areas of most significant risk across different taxpayer groups, we carry out targeted and appropriate interventions, from education and local support through to full enquiries that can result in substantial financial or custodial penalties.
Our approach to all of our taxpayers is to treat everyone even-handedly in line with tax law, as set out in our Litigation and Settlement Strategy; and to ensure we are consistent in the way we deal with them so that they pay the tax they owe and receive the reliefs to which they are entitled.
Our approach to the 2,000 largest businesses, to ensure they pay the correct amount of tax, is to invest in a close working relationship with them so that we have in-depth knowledge of their business model, business and tax issues, appetite for risk in tax planning and internal governance. Our Customer Relationship Managers (CRMs) are experienced tax professionals who lead teams of our most highly-skilled specialists to man mark these complex and high-risk taxpayers.
We encourage these businesses to have an open and transparent working relationship with us, identifying and resolving issues as soon as they arise, if possible. This is the most cost-effective way to increase revenue flows, while supporting business growth and improving the taxpayer experience.
We seek to work issues in real-time with all large businesses, no matter what their tax strategy. This not only provides earlier certainty for the taxpayer, but also allows HMRC to detect avoidance more quickly.
For large businesses who are low risk – judged by their internal systems and controls and attitude towards avoidance – fewer audits take place. Our focus on the biggest risks means we use our resources better and work the most significant cases more intensively, resulting in increased yield.
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18 HMRC segments its customers into seven categories, ranging from ‘willing and able’ to ‘rule breakers’. These segments relate to the behaviours exhibited by customers in relation to their tax liabilities.
19 Defined as those with a turnover of £600 million or above, or assets of £2 billion or more. Centralised risk assessment
We also use sophisticated IT systems to cross-match more than a billion pieces of data to identify cases where it appears that collection of tax is at risk, including matching our data against third-party information. We use this kind of data matching to identify individual cases to follow up and as the basis for targeting certain taxpayer groups with campaigns aimed at recovering tax and making them more compliant.
Complaints and tax disputes
Interactions between a taxpayer and HMRC can lead to a taxpayer complaining about HMRC service, perhaps where they feel they have been treated unfairly.
Separately, a taxpayer may disagree with or dispute HMRC’s decision or view about their tax position.
Complaints
If taxpayers are unhappy with HMRC’s service, they can make a complaint. Examples might include unreasonable delays, mistakes, and unfair treatment. HMRC will try to resolve the complaint with them.
If the taxpayer remains unhappy, the complaint can be reviewed by a second complaint handler. If the taxpayer is still not satisfied, they can send their complaint to the Adjudicator’s Office and ask them to look into it. The Adjudicator is an independent referee, and the service is free.
Disputed decisions
If taxpayers think our decision about tax (for example, in an assessment) is wrong, they can either ask for a review of our decision or appeal to an independent tribunal. If the taxpayer asks for a review they can still appeal to a tribunal if they disagree with the outcome of the review.
We seek to resolve disputes at the earliest possible stage and reviews offer a good opportunity for the taxpayer to present any new evidence or arguments and for HMRC to re-examine the case.
Reviews are carried out by review officers within HMRC who were not involved in the original decision. The review officer looks again at the facts, legal position and process of the decision and decides whether to uphold, vary, or cancel the decision, in accordance with the Litigation and Settlement Strategy.
Appeals are heard by the tax chamber of the First-Tier Tribunal. The tribunal is independent of HMRC and can re-examine decisions on the basis of the facts or the law.
If the taxpayer disagrees with the tribunal’s decision, they can appeal the decision to the Upper Tribunal. Decisions of the Upper Tribunal can be appealed on to the Court of Appeal (Court of Session in Scotland), and ultimately the Supreme Court.
Many appeals are settled by agreement without the time and inconvenience of a tribunal hearing. However, there will always be cases when the parties cannot agree and the tribunal will be asked to decide.
Resolving tax disputes
The basis on which we will resolve a tax dispute is set out in our Litigation and Settlement Strategy. We will only agree to settle a dispute by agreement if that gives an outcome consistent with the law. Some disputed points can only be settled in one of two ways – for example, an item of income might be taxable or not taxable or an item of expenditure might or might not be deductible from taxable income. There are many examples of this kind of binary question in tax case law.
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20 National campaigns are programmes of work that address a specific area of strategic risk for HMRC. Campaigns provide opportunities that make it easier to be compliant – offering an incentive to self-correct and encourage voluntary disclosure to provide HMRC with the information needed to improve processes and deal more efficiently with customers in future. Other disputed points might give rise to a range of possible answers; for example, a valuation question, the appropriate amount of an expense to be deducted where an apportionment can be made, or where there is more than one possible acceptable technical analysis of a series of linked transactions. So resolving disputes can often be complex and requires technical skill and judgement to be exercised. Where there is a range of possible outcomes, the guiding principle is that HMRC will only settle a dispute by agreement if we believe that the outcome is one we might reasonably expect to obtain in litigation.
The National Audit Office report of June 2012 explained that when there are multiple complex issues in dispute between the Department and a taxpayer, interdependency is inevitably created between them, so that the best outcome for the Exchequer may be achieved by conceding HMRC’s stance on an issue if that means our position on other issues is accepted. The NAO recommended that HMRC should set out more clearly the extent to which it is acceptable to settle individual issues in the context of a wider settlement.
The LSS requires each dispute with a taxpayer to be resolved on its merits: this is a key principle which discourages the practice of engaging in multiple disputes in the hope that HMRC will always concede a proportion of them. The LSS also makes clear that a dispute should only be taken to litigation if litigation would be cost-effective. We accept that there might exceptionally be complex cases in which litigation on a particular dispute, even if HMRC would expect to succeed, would not be cost-effective if pursuing the issue to litigation would prejudice cost effective resolution of other disputes in the case. Usually the factors to be considered in deciding how to proceed on a disputed issue, including the read-across to other cases, precedent value and the impact on taxpayer behaviour (in the immediate case and more widely), will mean that the right decision is that litigation would be cost-effective. Any decision not to litigate but to concede such an issue in order to resolve a multi-issue case would therefore be rare in practice and should be taken through the relevant formal case governance procedures. The commentary to the LSS is being amended to bring this out more clearly.
The NAO made four other recommendations in its June 2012 report which HMRC accepts.
- The LSS commentary will be amended to cover the specific position of disputes in relation to Controlled Foreign Companies.
- Lawyers will be consulted on proposals for settlement in all significant tax disputes that are in litigation.
- Case teams are present at meetings of the TDRB and Commissioners, so hear first hand the considerations that are taken into account.
- The Code of Governance makes clear that taxpayers and their advisers should be made aware of any further governance steps to be completed before proposals for resolving tax disputes are discussed.
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21 Recommendation – The Department should update the Litigation and Settlement Strategy, or the guidance accompanying it, to make clear how cases involving controlled foreign companies are compatible with the Litigation and Settlement Strategy.
22 Recommendation – The Department should ensure that lawyers are always consulted before finalising settlements on issues that are in litigation.
23 Recommendation – The Department should explain more clearly to its specialist staff how settlements are reached, including, where appropriate, the rationale for the settlement terms on individual issues.
24 Recommendation – The Department should ensure that it makes clear to taxpayers that settlements agreed in principle should not be considered final until they have been through all relevant approval processes. Annex 2: Overview of dispute outcomes at review and appeal 2011-12\*
Total number of reviews of HMRC decisions – 56,228
Percentages may not sum to 100 due to rounding
| Non-penalty cases | 2011-12 | |-------------------|---------| | Upheld: review complete | 4,487 | 68% | | Deemed upheld: time limit expired | 12 | 0% | | Varied | 504 | 8% | | HMRC decision cancelled | 1,611 | 24% | | **Total** | **6,614** | |
| VAT penalty cases | 2011-12 | |-------------------|---------| | Upheld: review complete | 9,785 | 32% | | Deemed upheld: time limit expired | 1 | 0% | | Varied | 2,242 | 7% | | HMRC decision cancelled | 18,317 | 60% | | **Total** | **30,345** | |
| Other penalty cases | 2011-12 | |---------------------|---------| | Upheld: review complete | 14,020 | 73% | | Deemed upheld: time limit expired | 237 | 1% | | Varied | 341 | 2% | | HMRC decision cancelled | 4,671 | 24% | | **Total** | **19,269** | |
Approximately 30,600 requests for reviews were made by companies, 21,700 by individuals and 2,300 by partnerships.
- This is the latest year for which detailed figures are available. Total number of appeals decided with or without a hearing - 4,354
Some cases can be resolved without a hearing if they are withdrawn or settled or because they are closed in line with the decision in a lead case. Figures below represent the outcome for those cases that go to a hearing.
Outcome of Tribunal hearings:
| Outcome | 2011-12 | |--------------------------------|---------| | In HMRC’s favour | 855 | 61% | | Partially in HMRC’s favour | 97 | 7% | | In taxpayer’s favour | 443 | 32% | | **Total** | **1,395**| |
Further details have been published and are available on the HMRC website at: www.hmrc.gov.uk/complaints-appeals/reviews-appeals-2011-12.pdf Annex 3: Governance case studies
These case studies are drawn from experience in actual cases to illustrate HMRC’s processes but are not a description of the position of any specific taxpayer.
Case studies
Scenario 1 HMRC had seven separate tax disputes with a Large Business taxpayer. In four of the disputes, HMRC was challenging the taxpayer’s use of avoidance schemes to reduce its taxable profits – for example, by artificially inflating the value of a tax relief or by making arrangements which purported to shield income or gains from tax. Three of the disputes were technical: HMRC was not arguing that the taxpayer was seeking to avoid tax, but did not agree with the customer’s view of how the law applied to the specific facts in their case.
The total tax under consideration across all seven disputes amounted to £170 million. The disputes related to different taxable periods and had begun at different times, but work on all the disputes was brought together in a single project.
The Customer Relationship Manager for the taxpayer led the work on the case, bringing together a team to work on each dispute including technical tax specialists, anti-avoidance specialists, advisory accountants and solicitors. The CRM made sure that the customer knew that proposals to resolve the disputes would need to be considered by the TDRB and Commissioners.
For each dispute, the team completed the fact-finding stage of their investigation and considered the taxpayer’s tax analysis of the transactions. They worked together to debate and agree HMRC’s position on the issues and met the taxpayer and their agents to check understanding of the facts and test the strength of the arguments on both sides. For the two most difficult and complex disputes, which related to areas of the law not previously tested in litigation, the team took advice from the Solicitor’s Office and Leading Counsel on the strength of HMRC’s position and chances of success in litigation.
HMRC’s approach to the four disputes about avoidance schemes was determined by the strategy set for the schemes by the Anti-Avoidance Board (AAB). The AAB agreed that users of the schemes should be challenged and that HMRC should not accept that the schemes produced the tax advantage they sought.
At the end of the process of fact-finding and testing understanding of the arguments, all of the disputes in the case were still unresolved and a decision point was reached. To resolve the position, the taxpayer made a proposal to HMRC:
1. they would concede their arguments on all four avoidance disputes, although they thought they might well succeed in litigation on two of them
2. on the three technical disputes, they were prepared to concede the point in two of them, in recognition that the arguments were finely balanced, but believed HMRC should concede the other because they had advice from Leading Counsel that their arguments were much the stronger.
The proposal now needed to be considered by the TDRB and Commissioners. For each of the disputes, the TDRB had a paper setting out the facts; the arguments on both sides; views on the strengths of the arguments and the nature of any legal advice received; and the fit with the LSS. For six out of seven disputes, the taxpayer proposed to accept HMRC’s view. The contentious point was in relation to the technical dispute which HMRC was asked to concede.
HMRC’s analysis of the technical dispute was that the position was more balanced than the taxpayer suggested. Legal advice suggested that HMRC’s position was not strong, but sufficiently robust that the courts might find either way. Since the issue was finely-balanced, a decision to concede our arguments was compatible with the LSS. The CRM considered that the offer was a good one and recommended acceptance. The TDRB considered the case at a full meeting of all its members. It reviewed the papers in advance and the CRM attended to answer questions. TDRB saw merit in accepting the taxpayer’s offer, but was concerned about the implications of a decision to concede the technical dispute for our position in other cases. The TDRB asked the case team to evaluate the wider implications more fully and to consider whether the issue should be referred to the Contentious Issues Panel to set a strategy to be applied in all the cases where it arose.
Further work by the case team showed that conceding the technical dispute in question could have major implications for other cases where the same point arose and might potentially lead to a significant loss of tax. The handling strategy set by the Contentious Issues Panel was that HMRC should not concede.
In the light of that further work, when the case was referred back to them, the TDRB recommended to the Commissioners that the taxpayer’s proposal should be rejected. At their meeting, the Commissioners agreed with the recommendation, on the basis of the briefing papers, the record of the TDRB discussion and discussion with the CRM.
This outcome means that HMRC will continue to press the taxpayer to accept HMRC’s view on all the disputes and if agreement cannot be reached on that basis, will press ahead with litigation.
Scenario 2 In another case, the taxpayer approached HMRC to agree how the new “patent box” tax relief applied to their business. From April 2013, the patent box legislation allows a lower corporation tax rate of 10% to be applied to income derived from the use of UK or European patents. As the legislation is new, the taxpayer wanted to work with HMRC in real time (that is, before putting in their tax return) to agree a basis for claiming the relief that HMRC would find acceptable.
The taxpayer’s case as a whole fell within the remit of the TDRB because of the amount of tax under consideration. The patent box issue was also an early example of applying the new legislation and so presented novel features.
The taxpayer owned a large number of patents which were used in various parts of its complex organisation and the new patent box regime presented a potentially substantial benefit. If the taxpayer were able to quantify that benefit as far as possible, it would allow the group to take this into account in planning its future research programme. The taxpayer’s agents came forward with broad early proposals for calculating the amounts eligible for the new tax relief, which suggested a range of possible outcomes.
The HMRC team was led by the Customer Relationship Manager and included the policy and technical advisers on the patent box, transfer pricing specialists and the relevant trade sector adviser.
The HMRC team was able to challenge some of the taxpayer’s initial assumptions and asked for further detailed work to be carried out. There followed several months of information-gathering and discussion during which HMRC ensured that it clearly understood the factual position, particularly how the taxpayer used patents in its business, and how it saw the legislation applying to its business. This included applying transfer pricing principles.
The team also reviewed publicly-available information, including relevant academic and technical research papers and patent databases, and benefited from extensive and detailed discussions with the taxpayer’s own experts regarding the structure of the business and how their many patents were used.
Following this in-depth exploration, the customer put forward a revised proposal. The case team believed that the proposal took account of the relevant variables and uncertainties and that it should be accepted. The proposal was initially considered by the Transfer Pricing Board and agreed to be reasonable. The case team then referred the proposal to the TDRB and from there to the Commissioners. The supporting papers described the comparators that had been considered to establish an appropriate methodology for the calculation, evaluated their relevance and set out the conclusions the case team had drawn from their research. After testing the findings in discussion with the Customer Relationship Manager, the TDRB agreed to recommend acceptance of the proposal. The Commissioners were also satisfied that the evidence and arguments supported acceptance.
Since this work took place in advance of the company filing its return, the agreement meant that the company would use the agreed methodology in their return to calculate the income eligible for the reduced patent box rate and that HMRC would be unlikely to challenge it unless new information emerged or there had been a material factual change.
Scenario 3 A large UK-based company had four open tax disputes with HMRC. Two disputes related to the company’s use of marketed avoidance schemes designed to produce a tax advantage that was not intended; in another, HMRC was challenging the company’s use of offshore structures to reduce its UK PAYE liabilities and the fourth was a technical dispute about whether an item of expenditure qualified for capital allowances. The disputes had arisen in three different tax periods and the overall amount of tax in dispute was £140 million.
The four disputes had been open for some time and HMRC agreed with the taxpayer to work them together on a project-managed basis, with the aim of reaching decision points on the disputes as quickly as possible. The CRM led the case team for HMRC, working with technical specialists on avoidance, capital allowances and employment issues.
The facts underlying the issues had been established and agreed. Similarly the arguments supporting each side’s position had been set out and discussed. The case team consulted lawyers on the offshore and capital allowances issues. Lawyers had also been consulted on one of the avoidance schemes in relation to a different case.
The Anti-Avoidance Board had considered both marketed avoidance schemes and decided that HMRC should not concede that the schemes succeeded in producing the tax advantage sought. HMRC also believed it had strong arguments to counter the offshore avoidance arrangements. On the technical issue, however, the legal advice was that the arguments were finely balanced and HMRC did not have a strong case.
The amount of tax in dispute in the case brought it within the remit of the TDRB and Commissioners and the CRM made sure the taxpayer understood the governance steps required.
The taxpayer made a proposal to HMRC to bring the disputes to a conclusion. They felt strongly that HMRC should concede the technical dispute, where they were sure they had the better of the arguments. They also suggested HMRC should concede its arguments on one of the marketed avoidance schemes. They were willing to accept that HMRC had the better arguments on the other two issues.
In their submission to the TDRB, the case team set out the arguments on both sides on the issues where HMRC was asked to concede its position. They acknowledged that HMRC’s arguments on the capital allowances point had weaknesses, given the way the relevant legislation was framed. But all HMRC stakeholders were firmly of the view that the avoidance scheme should not be accepted as effective, in line with the steer from AAB. The team recommended that the customer’s proposal should be rejected.
TDRB considered the proposal and the case team’s recommendation. They agreed that it was unacceptable to concede HMRC’s argument on the avoidance scheme. If the taxpayer remained unwilling to accept that the scheme did not work, the issue would have to proceed to litigation. The Commissioners took the same view. In the following weeks, the case team held further discussions with the taxpayer to ensure HMRC’s arguments and readiness to go to litigation on the avoidance scheme were clearly understood.
After a period of reflection, the taxpayer came forward with a revised proposal, under which they would concede their position on all three avoidance issues. They continued to believe that HMRC’s arguments on the technical issue would fail if the matter were litigated.
The case team took the case to the TDRB for a further discussion. As before, the case team noted the weakness of HMRC’s arguments on the technical issue and recommended that HMRC should accept the customer’s view. TDRB tested the arguments in discussion with the CRM and technical specialist and concluded that HMRC’s position was weak and, in line with the LSS, should be conceded. They agreed to recommend acceptance of the taxpayer’s proposal to the Commissioners.
The Commissioners considered the TDRB’s recommendation. They reluctantly accepted that, as the legislation stood, HMRC could not win the argument on the capital allowances claim and that the point should be conceded. They asked for the issue to be referred to the relevant policy team to consider whether the legislation should be strengthened.
Novel or unusual and sensitive cases
The TDRB remit provides for cases with unusual or novel features to be referred to TDRB. It also states that all sensitive cases or risks should go to the TDRB and Commissioners. These categories of cases are by their nature hard to define and decisions on whether a case exhibits an unusual or novel feature, or is sensitive, are for HMRC. The categories were included in the remit to ensure that this governance process applied to all appropriate cases, irrespective of size. The definitions below are to provide a broader view of what could fall within these categories but they are not binding, nor restrictive.
- A case may be referred to the TDRB if it has an unusual or novel feature.
This category of case was included in the remit to ensure that cases with unforeseen characteristics could be taken to the TDRB and Commissioners as necessary, even where they are not sensitive or the tax under consideration is not over £100 million. It was intended to cover scenarios where the proposals for resolution contain unusual or novel features that should be considered by the TDRB or Commissioners before a decision is taken. This would take into account, for example, the wider impact of any settlement, whether the correct amount of tax has been reached and what behaviours the settlement could engender, in that taxpayer and others.
- A case or risk may be referred to the TDRB if it is sensitive.
A sensitive case or risk is where a decision to resolve a dispute might have a significant and far-reaching impact on HMRC policy, strategy or operations. They are likely in consequence to prompt significant national publicity.
This means that cases or risks that do not fall within the quantitative limits of the TDRB and Commissioners will be required to go to them for decision if the impact of that decision could be significantly wider than the resolution of the case itself.
Where a case is considered sensitive, all of the issues within it that are being considered for resolution will need to go to TDRB and Commissioners, irrespective of their individual size or complexity. Annex 4: TDRB and Commissioner referrals in 2012-13
| 31 referrals to Tax Dispute Resolution Board from September 2012 to March 2013 | |---------------------------------------------------------------| | **Sent on to Commissioners** | | Taxpayer proposal endorsed and referred onward to the Commissioners | 16 referrals | | No consensus reached and referred onwards with no recommendation | 1 referral | | TDRB recommended rejection of the taxpayer proposal and referred onward to the Commissioners | 5 referrals | | **Not sent on to Commissioners** | | Taxpayer proposal accepted by the TDRB Board and no referral required | 2 referrals | | TDRB remitted to the case team for further work before re-referral | 7 referrals | | **Type of referral** | | £100 million plus cases | 25 referrals | | HRCP case | 1 referral | | Novel and unusual (2 cases) | 2 referrals | | Sensitive (1 case)\* | 2 referrals | | Sample case L&C | 1 referral |
- This was one case that was referred to the TDRB twice.
### Commissioners’ Decisions
22 referrals under the new Commissioner arrangements from October 2012 to March 2013 (note the October Commissioners’ meeting followed the September TDRB)
| Type of referral | Number of referrals | |-------------------------------------------------------|---------------------| | Taxpayer proposal accepted | 11 referrals | | Taxpayer proposal accepted with conditions | 6 referrals | | Taxpayer proposal rejected | 5 referrals |
#### Type of referral
| Type of referral | Number of referrals | |-------------------------------------------------------|---------------------| | £100 million plus cases | 19 referrals | | Sensitive case (1 case) | 2 referrals | | Sample case (from Enforcement & Compliance) | 1 referral |
#### Tax at issue in the cases (the amount of tax relating to decisions reached)
| Type of referral | Amount (£ million) | |-------------------------------------------------------|--------------------| | Total | £2,055 million | | In proposals accepted | £1,368 million | | In proposals accepted with conditions | £289 million | | In proposals rejected | £398 million |
The Commissioners decide whether a proposal for resolving a tax dispute is acceptable: the figures quoted here are for the value of the tax at issue in the disputes on which decisions were made. Any additional tax revenue to be accounted for as a result of the decision forms part of the amounts reported by the business area responsible for the case. These figures do not represent additional tax collected over and above business area figures. Annex 5: Issues considered by CIPs and AAB in 2012-13
Anti-Avoidance Board During 2012-13, AAB considered handling strategies for 130 avoidance issues.
AAB sets the parameters within which cases may be settled. This ensures that cases are settled in accordance with the Litigation and Settlement Strategy and that taxpayers are treated even-handedly.
For example, AAB considered schemes used by companies to create a tax deductible loss (unrelated to any economic or commercial loss) by changing the currency of their accounts. AAB agreed parameters for settlement to result in a tax outcome reflecting a true and fair view of the economic loss based on recognised accounting principles.
AAB also approved the launch of operational projects for newly-identified avoidance schemes, such as those aiming to exploit allowances for the cost of business premises renovation. In January 2013 AAB, having considered the amount of tax potentially at risk from these schemes and the strength of the legal position, approved a project which put in place operational teams with specialist support to address this issue by challenging the users of the schemes on a consistent basis.
Contentious Issues Panels BT CIP has decided HMRC’s strategy for handling and agreed the approach for resolving 16 major contentious issues in accordance with the Litigation and Settlement Strategy. PT CIP has considered six issues.
For example, the Large Business Service (LBS) asked BT CIP to consider a sector specific request for a uniform approach to the classification of new capital expenditure for the purposes of claiming capital allowances. The issue involved very significant amounts of capital expenditure and affected the whole of the sector. BT CIP reviewed the work carried out by LBS to establish the position and the proposals that they had developed with the industry. The CIP tested the explanations and methodology and went on to suggest alterations to the approach to ensure HMRC’s approach was LSS compliant.
Published offers From time to time, HMRC formally publishes its position on disputed issues and invites taxpayers and their agents to resolve disputes in their specific cases on the published basis. We do this where the disputed point arises in significant numbers of cases, as a means of handling large numbers of cases as efficiently as possible and ensuring transparency about our position. It is of course open to any taxpayer to pursue appeals in their own case to Tribunal rather than agree to settle on the basis published by HMRC.
In 2012-13, HMRC published two invitations to settle disputed points in this way.
- HMRC identified significant avoidance occurring through the artificial creation of trading losses. BT CIP reviewed the stock of cases and recent developments in tax law. It authorised the overall approach in which HMRC would be prepared to settle most cases by allowing tax relief for the actual amount invested, discounting amounts generated through financial engineering. The settlement opportunity was announced in December 2012 in general terms and AAB then agreed the specific handling strategies for the various types of schemes involved publishing further details in January 2013. The Employee Benefit Trust (EBT) Settlement Opportunity was first launched in April 2011, linking in with the introduction of the disguised remuneration legislation. Letters were sent to users of EBT schemes and their agents/promoters, with a deadline of 31 December 2011. There was some interest in settling cases on the proposed basis but the overall take up was disappointing. This prompted a new approach from April 2012.
Through extensive external communication and greater engagement between the team and agents/promoters, we published a series of Frequently Asked Questions to explain the policy and technical view that HMRC would take. We wrote directly to users following anecdotal evidence that many had simply been advised to ignore our earlier proposal.
Our overriding aim was to explain HMRC’s approach and emphasise the benefit to employers of achieving certainty of the tax position. The Personal Tax Contentious Issues Panel played a key role in operational and policy leads agreeing the HMRC position across all relevant heads of tax, so offering taxpayers consistency and certainty.
The team has prompted greater take up of the EBT settlement opportunity, securing nearly 500 settlements so far with almost £650 million of yield across a wide range of users from small and medium enterprises to LBS taxpayers. The settlement opportunity will continue to provide the means by which a large number of EBT avoidance cases are finalised over the next few years as negotiations continue in other working cases. Annex 6: Examples of significant litigation from 2012-13\*
| Supreme Court | Case | Outcome | Detail | |---------------|------|---------|--------| | | Aimia Coalition Loyalty UK Ltd v Her Majesty’s Revenue and Customs | Ongoing | Whether the company running Nectar loyalty points scheme was entitled to input tax. | | | Futter/Pitt and another v The Commissioners for Her Majesty’s Revenue and Customs | HMRC win on Hastings-Bass; mistake redefined | Extent to which the Courts give relief for decisions made by trustees that had unforeseen tax consequences; so-called rule in Hastings-Bass; ‘mistake’. | | | R (on the application of Prudential Plc and another) v Special Commissioner of Income Tax and another | HMRC win | Whether legal professional privilege applies to tax advice provided by accountants. | | | WHA Ltd and Viscount v HMRC – Supreme Court Appeal 2009/0074 | HMRC win | Issue relating to the VAT status of car repairs. The Court judged that in cases involving a construct of contractual relationships, the matter must be assessed as a whole to determine the economic reality. |
- Table correct at 20th June 2013
### Court of Appeal / Court of Session
| Case | Outcome | Detail | |----------------------------------------------------------------------|---------|----------------------------------------------------------------------------------------------------------------------------------------| | Anson v Her Majesty’s Revenue and Customs | HMRC win | Court of Appeal confirmed there was no entitlement to double tax relief under terms of UK/US Double Taxation Conventions 1975 & 2001. Appellant is seeking permission to appeal to Supreme Court. | | BAA Ltd v Her Majesty’s Revenue and Customs | HMRC win | Whether input tax deductible on expenditure on professional services relating to the take-over of the business. Court agreed with HMRC that input tax not deductible. | | The Brampton Property Group (and others(^{25})) v Alan O. King (An Officer Appointed By The Commissioners For Her Majesty’s Revenue and Customs) | HMRC win | Judicial review challenge to HMRC’s refusal of a late group relief claim. | | Cheshire Office Park Ltd v Her Majesty’s Revenue and Customs HMRC | HMRC loss | Appeal against refusal to refund NICs. Issue was whether car allowances paid to company employees and included in gross pay for NICs purposes could be disregarded from earnings as ‘relevant motoring expenditure’. | | Daniel v Her Majesty’s Revenue and Customs | HMRC win | Taxpayer sought to challenge direction by the FTT Judge that decided the residence appeal should precede any judicial review proceedings. Case is ongoing in FTT re substantive hearing. | | Eastenders Cash & Carry Plc & others v Her Majesty’s Revenue and Customs | HMRC loss | Whether HMRC could lawfully detain goods if the HMRC officer reasonably suspected they were liable to forfeiture. Court said it could not. HMRC is now appealing to the Supreme Court. |
(^{25}) City and Country Properties Limited, Daejan Retail Properties Limited, Daejan Commercial Properties Limited, Daejan (FHNV 1998) Limited, Daejan (FH 1998) Limited and Inputstoc Limited | Case | Outcome | Detail | |----------------------------------------------------------------------|-------------|----------------------------------------------------------------------------------------------------------------------------------------| | FCE Bank Plc v Her Majesty’s Revenue and Customs | HMRC loss | Interpretation of Double Taxation Convention non-discrimination provision. Permission to appeal to Supreme Court refused. | | First Stop Wholesale Ltd v Her Majesty’s Revenue and Customs | HMRC win | Whether HMRC has to give reasons for detaining goods and what type of reasons need to be given when seizing goods. No formal requirement to give reasons for the detention and no particular formality required for the notice of seizure. The reasons were clear to the owner from all the circumstances of the case. | | Helena Partnership Ltd v Her Majesty’s Revenue and Customs | HMRC win | Issue as to charitable status of housing associations. Appellant refused permission to appeal to Supreme Court. | | ITV Services Ltd v The Commissioners of Her Majesty’s Revenue and Customs | (judgment awaited) | Dispute as to whether actors should pay NICs under Categorisation Regulations following ‘concession’ that musicians are not covered by Regulations. | | MJP Media Services Ltd v Her Majesty’s Revenue and Customs | HMRC win | The Loan Relationships partial debt release scheme failed. Court of Appeal confirmed that FTT had made no errors of law. | | First Nationwide Plc v Her Majesty’s Revenue and Customs | HMRC loss | Anti-avoidance litigation relating to manufactured overseas dividends. HMRC lost in March 2012 and did not appeal to the Supreme Court. | | Case | Outcome | Detail | |----------------------------------------------------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | POWA (Jersey) Limited v Her Majesty’s Revenue and Customs | HMRC win | The Commissioners denied a claim for input tax on the basis that the Appellant’s trades were connected to MTIC fraud. The appeal was dismissed by the First-Tier Tribunal and also by the Upper-Tier Tribunal. The Appellant renewed its application for permission to appeal to the Court of Appeal, but permission was denied. | | Howard Schofield v The Commissioners for HM Revenue and Customs | HMRC win | Lead case involving 220 known users of an avoidance scheme creating capital gains tax losses. Appellant’s application for permission to appeal to the Supreme Court was refused. | | Secret Hotels2 v Her Majesty’s Revenue and Customs | HMRC win | Court confirmed HMRCs decision that the company should be accounting for VAT on its margin in accordance with the rules for tour operators. Secret Hotels have been granted leave to appeal to the Supreme Court. | | Simpson and Marwick v Her Majesty’s Revenue and Customs | HMRC win | Court found that the Upper Tribunal had been wrong to hold that HMRC had directed the appellant to issue a VAT-only invoice. The Court found no support in Elida Gibbs for the construction of s36 of the VAT Act 1994 adopted by the Upper Tribunal and upheld the literal construction advanced by HMRC. Also found that the effect of section 36 was not disproportionate. | | R (on the application of Totel Limited) v HMRC and another | HMRC loss | When the First-Tier Tribunal was created in 2009, a right of appeal against a hardship decision by the Tribunal was removed. The Court of Appeal held that the removal of that right was outside the scope of the power at s124 of the Finance Act 2008. | | Vehicle Control Services Ltd v Her Majesty’s Revenue and Customs | HMRC loss | Court held that the company’s income from penalty charges for contravening parking provisions in car parks was outside the scope of VAT. |
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1bcadbdd5c216a9c819117f6b464ec011702c383 | | **Title of data processing activity / system** | Transaction Monitoring (TxM) | |---------------------------------------------|-----------------------------| | **DPIA co-ordinator** (the person completing this template) | Service Owner Transaction Monitoring | | **DPIA Owner** (e.g. project leader, asset or process owner) | Transaction Monitoring Team | | **Business Area** | CDIO Customer Compliance Group Vertical | | **DPIA reference number** (allocated by your SIBP team – save this in the doc file name) | 024 | | **DPIA Version control:** For instance v. 1.0, 1.1, 2.0 etc. | 3.1 This published version has been edited where appropriate when inclusion of those details would be likely to prejudice the purposes of transaction monitoring and/or undermine HMRC’s security | | **Date DPIA was last reviewed** | 18/03/2019 | | **Please indicate all that apply with inserting a ‘X’ in the box** | This is (double click to check or uncheck boxes): | | | □ A new Programme, Project, system or data processing activity | | | □ An existing system or data processing activity | | | □ Sharing personal information with a third party | | | □ Other. [Please insert here]. | | **Please provide some context to the service/system/process the DPIA relates to** | Transaction Monitoring (TxM) records customer activity across HMRC customer facing services. It then processes activity in order to detect suspicious behaviours which might indicate fraud or crime. | | **Screening questions (Q1-12)** | **Notes for completion** – The screening process only needs to be completed once. If you answer yes to one or more of these questions, you must consider carrying out a full DPIA (Q13-26 of this template) for the Programme / project or data processing activity. | | 1. Does the processing activity or system involve any personal data? | **Personal data** means any information relating to an identified or identifiable individual, e.g. National insurance number or name/address, email address etc. Full DPIAs may be required for systems or activities which will be or have been specifically designed to process personal data and for data sharing agreements with third parties. DPIAs should be commenced as early as possible in the design process, preferably at a pre Change Framework stage. They are not necessary for systems which contain no personal data other than for administrative purposes, or for routine processing activities e.g. the collection of staff information to organise a conference, or for disclosure of personal data to an agent following the receipt of a form 64-8. | | | TxM captures comprehensive data for every customer and every submission to HMRC. This may include names, addresses, bank account details, tax identifiers, geolocations, IP addresses, device identification features, contact details, tax submissions, variations, changes of circumstances etc. It is specifically designed to capture and analyse a wide range of personal data in order to detect and prevent unauthorised access and crime. | Y | | 2. Does the processing activity involve new technology, IT systems or change requests to existing systems? | A full DPIA (Q13-26 of this form) is required if the processing involves new technologies (e.g. Smart technologies) or the novel application of existing technologies (including AI). In HMRC new departmental IT systems including large scale personal data systems and national databases, must have a full DPIA. The risk may be higher if the data processing activity involves using data in innovative ways, e.g. pre-population. Consider whether a DPIA is required for new data storage solutions, e.g. digitisation of personal data held on paper, or migration of large volumes of data between systems or to the cloud. In all cases consider whether the volume, sensitivity and range of personal data increases the data protection risk and justifies a DPIA. | |---|---| | TxM replaced a Legacy system 4 years ago. Sections 2-6 are completed accordingly. | Y | | 3. Is the processing activity related to a strategic or policy led initiative? | For instance new requirements from the UK Government or Cabinet Office may have data protection implications, especially if they require a new system or process involving personal data. The risks are likely to be higher if the initiative requires the innovative use of personal data or new technological or organisational solutions. | | The activity is related to the National Cyber Security Strategy and is in line with National Cyber Security Centre good practice guides GPG53, (the good practice guide for Transaction Monitoring) and GPG43 (requirements for secure delivery of online public services). Collection of TxM data is mandated in API channels via Statutory Instrument (The Delivery of Tax Information through Software (Ancillary Metadata) Regulations 2019). | Y | | 4. Does the processing activity involve the collection of new categories of personal data for an existing or new process? | This may apply to a new processing activity involving the collection of new categories of data, or to an existing process which is being adapted. If you answer yes, the volume of personal data, sensitivity and range of data items being processed and the duration of the data processing activity will partly determine the level of risk and whether a DPIA is necessary. The data protection risk may also be increased if it involves new data and new technology. | | These classes of data have been collected for over 10 years. HMRC’s Privacy Notice informs customers about how their personal information is used. | Y | | 5. Could the processing activity be considered intrusive or require contact with individuals | If any consultation has been carried out it will provide supporting evidence. Consider whether the medium (post, email, SMS, telephone etc.) might be considered intrusive. DPIAs are recommended for ‘invisible processing’ of personal data – that is data which has not been obtained direct from the data subject and where providing the privacy notice information (required by GDPR Article 14) would prove impossible or involve disproportionate effort. | | **in ways that they might find intrusive?** | Consider potential reputational risks to HMRC, e.g. if public concern is raised over the processing activity, or the impact on a particular group of vulnerable data subjects. Consider whether the volume, sensitivity, range of personal data and the duration of the activity increases the data protection risk and justifies a DPIA. | |---|---| | **Customers are made aware of their transactions being monitored by means of a published fair processing notice. Notifying customers of the specifics of Transaction Monitoring and how we use it would undermine the primary purpose of the system, which is to detect and prevent crime. TxM are not required to seek consent from customers. The TxM team have no contact with customers.** | Y | | **6. Is the personal data being disclosed to external organisations or people (not suppliers)?** | Formal Data Sharing Agreements and Memoranda of Understanding (MoU) involving external exchange of personal data with other Public Sector Bodies or other government departments must have a DPIA. And DPIAs should be considered for any data sharing activities with third parties, especially if the potential impact to individuals would be high if there was a data breach. The focus of this question is on data shares other than suppliers running HMRCs systems. Specify if there is a contract or data sharing agreement. Consider whether the volume, sensitivity, range of personal data and the duration of the activity increases the data protection risk and justifies a DPIA. Some very limited personal data may be disclosed to 3rd parties as part of the processing such as sharing IP addresses with National Cyber Security Centre to detect fraud. TxM may share confirmed fraud flags with other government departments, the Police and the National Cyber Security Centre. Y | | **7. Does the processing activity use systematic and extensive profiling or automated decision-making to make significant decisions about people?** | Automated processing, including ‘profiling’ is when decisions are made about individuals’ solely by automated means. For a processing activity to be classified as automated profiling, including ‘profiling’, there must be no human intervention in the decision making process (e.g. no appeals process) and the decision will have a serious negative impact on the individual. Profiling means evaluating a data subject by any form of automated process to analyse or predict aspects such as performance at work, economic situation, health, behaviour, location or movements. Profiling can be of a particular group or demographic. Where appropriate a customer privacy notice should explain the activity and a DPIA should be carried out if this is not possible. DPIAs must be carried out if profiling or special category data is used to decide on access to services, or if profiling is carried out on a large scale, or on vulnerable data subjects (including children). TxM builds profiles of customer activity. These profiles generate alerts which inform a human being, who will make a decision. TxM may influence how transactions are processed by routing them for review by risk specialists. HMRC has a published privacy notice and this DPIA, although no special categories of data are included N | | **8. Does the activity involve** | The purpose limitation principle specifies that data must be collected for a specified, explicit and legitimate | | **re-purposing personal data or combining it with another dataset for another use?** | purpose. Consider whether any re-purposing or matching of data has a **lawful basis for processing** in accordance with HMRCs functions. When HMRC obtains information for one of our functions under the Commissioners for Revenue and Customs Act 2005, that information may be used for any of our other functions. You can find details about HMRC’s legal basis for processing information on the **GDPR Knowledge Hub**. Also consider whether personal data shared with and used by third parties is compatible with the original purpose or purposes for processing. A DPIA is required for the re-use of publicly available personal data. A DPIA is not necessary for anonymised data. | |---|---| | **TxM** is designed to capture and analyse a wide range of personal data in order to detect and prevent unauthorised access and crime. This may involve the repurposing of data, and combining it with other data. HMRC’s lawful basis for processing the data is Article 6(1)(e) - public interest, i.e. protecting the public purse and confidential customer data. | **Y** | | **9. Does the activity involve the systematic monitoring of public areas on a large scale?** | This would include all forms of tracking and profiling on the internet, e.g. data aggregation, cookies and mobile apps, also **CCTV** in public places. Consult your **SIBP team** for further advice if the activity involves systematic monitoring. | | **TxM** monitors, tracks and records traffic for every HMRC customer across all HMRC channels and services. | **Y** | | **10. Does the activity involve processing on a large scale of special categories of data, or of personal data relating to vulnerable subjects or criminal convictions?** | A full DPIA must be carried out if **special category data** (data about an individual’s race, ethnic origin, politics, religion, trade union membership, genetics, biometrics, health, sex life, or sexual orientation) is used for profiling activities (see Q7) or if we plan to process special category data or **criminal data** on a large scale. A full DPIA must be carried out if any biometric or genetic data is processed on a large scale. A full DPIA is recommended if the processing involves **vulnerable** individuals including **children**. Consider whether the volume, sensitivity, range of personal data and the duration of the activity increases the data protection risk and justifies a DPIA. | | In the case of a change to sexual orientation, HMRC services update their records outside of the TxM process. There is a residual risk that where someone undergoes gender reassignment, records may be kept showing their previous gender in the customer’s history in internal TxM. No special category data is used for profiling purposes in internal or external TxM. | **Y** | | The amount of data held in TxM makes it possible for personal data relating to vulnerable subjects to be used in processing. | | | **TxM** holds no data on criminal convictions. | | | **TxM** holds data about confirmed fraud attempts and fraud risk. | | | **11. Does the activity involve** | Refer to the **list of countries** outside the EEA evaluated by the European Commission as having an adequate level of | | **transferring personal data to a non EEA country?** | data protection (see definition of Adequacy). Offshoring may apply to web apps and online cloud based services depending on where the data is processed and stored. All Offshoring must comply with the HMRC Offshoring policy regardless of where it is being transferred to. See also ICO guidance: international transfers. | |---|---| | **TxM Device Profiling features use a 3rd party in order to develop a reliable device identification. 3rd Party data centres are located in the USA – Portland, and Seattle. Data may also be stored in Satellite data centres in Miami, and Amsterdam in the Netherlands. The 3rd Party is US-EU Privacy Shield certified.** | **Y** | | **Range of Data offshored:** Device Fingerprint (Browser Specification, OS version, Installed Apps, User Agent String etc), Client IP Address (as presented to HMRC), Customer ID (TxM Specific Customer ID used for internal correlation in TxM). | **Volume:** Every time a user logs into HMRC web-based systems, some or all of the above range of data may be transmitted to the supplier. **Duration:** Where fraud is confirmed against a device profile, the supplier retains records for 5 years from the date last seen. In all other cases the 3rd party retain device profile information for 2 years. **Sensitivity:** Data shared with 3rd party is of limited sensitivity as the only personal data contained is IP address. A unique HMRC customer ID is shared but this is only used for internal correlation within TxM and not used for any other service. All other data relates to the characteristics of the computer in use by the customer. The 3rd party may not share HMRC data with any other 3rd party except in cases where fraud against HMRC is confirmed. Where fraud is confirmed the 3rd party may share a fraud flag with other 3rd parties for the prevention and detection of crime. | | **12. Based on your answers to questions 1 to 11, on balance is the processing activity likely to result in a high risk to the rights and freedoms of individuals?** | Processing activities likely to result in a high risk to the rights and freedoms of individuals must have a full DPIA (Q13-26 of this template), particularly if misuse of the personal data may endanger an individual’s physical health or safety. The data protection risks to the rights and freedoms of individuals are determined by your answers to Q1-11 (above). If more than one of the above criteria applies to an activity, the risk may be cumulatively higher and this will be a prioritising factor to carry out a DPIA. Always consider whether the volume, sensitivity, range of personal data and the duration of the activity increases the data protection risk and justifies a DPIA. Do a full DPIA if there are any known high data protection risks (e.g. non-compliance with data retention policies). If it is not clear whether there is a high risk or not, consult your SIBP team and if it is still unclear carry out a full DPIA. If you think a DPIA already exists for a similar processing activity with a similar high risk, consult your SIBP team for advice. **If you consider that a full DPIA is not required, provide your justification below in enough detail to enable external bodies, such as the Information Commissioner’s Office, to fully understand why the Data Protection and privacy risks are not sufficiently high to warrant one.** | | **TxM may collect, record and retain information regarding every customer interaction and transaction with HMRC Services. The data collected includes large volumes of personal data from all HMRC digital channels.** | **Y** | | **DPIA screening approved by [name].** This should be the DPIA owner (e.g. project leader, asset or process owner in the business). Seek the advice of your SIBP team if the screening decision for a full DPIA is unclear. | **Date** | \*\* ONLY COMPLETE QUESTIONS 13 TO 26 OF THIS TEMPLATE IF THE SCREENING QUESTIONS 1-12 INDICATE THAT A FULL DPIA IS REQUIRED \*\* IF THE FULL FORM IS COMPLETED IT MUST BE REVIEWED AND MAINTAINED FOR THE DURATION OF THE PROCESSING ACTIVITY
| Q13-17. Overview of the Data Processing system or activity including the data flows | Notes for completion | |---|---| | 13. Provide a brief overview of the data processing system or activity and why it is needed. | a). Include an overview of the purpose of the processing activity, including what HMRC function it supports. The purpose relates to the expected benefits for HMRC, including any intended outcomes for individuals. | | | b). Include an overview of the context the processing activity to demonstrate the relevant internal and external factors which may affect expectations or impact, e.g. any issues of current public concern. | | | c). Include an overview of the nature of the processing activity, particularly how the data is sourced, collected, stored, used, who has access to it, and who it is shared with. | | | d). Include an overview of the scope of the processing activity, particularly the sensitivity of the personal data, the extent and frequency of processing, the duration of the processing and geographical area covered. Include a summary of the volume and variety of the personal data. Data categories could include: | | | • Name, address, date of birth, email, telephone recordings, IP address or other online identifiers | | | • NINO or other type of reference number | | | • Banking transactions, tax, tax benefit information | | | • Sick Absence Records, health data, religion, ethnicity | | | • Workplace related such as performance data |
TxM may collect, record and retain information regarding every customer interaction and transaction with HMRC Services
Sources Internet and software based direct interaction to HMRC services Telephone based direct contact to HMRC services Paper based direct contact to HMRC services Data may include
- Name, address, date of birth, email, telephone number, IP address or other online identifiers, telephone number
- All classes of tax identifier
- Banking transactions, tax and benefit information
- Risk information and fraud indicators from HMRC business areas and 3rd parties
Data may include any information submitted via any channel for all classes of customer.
Information is captured and recorded 24/7/365. Information is recorded and retained for 6 years +1 (6 years plus current year)
The purpose of Transaction Monitoring is to identify suspicious or anomalous activity which could indicate unauthorised access, compromise of customer accounts, or fraudulent submissions to HMRC.
| 14. Who is the controller for the information to be processed? Please indicate all that apply with inserting a ‘X’ in the box | A data controller is any natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data. All government departments are controllers in their own right. A data processor is responsible for processing personal data on behalf of a controller. | | --- | --- | | The Data Controller is (double click to check or uncheck boxes): | | | ☒ HMRC only | | | ☐ Another organisation only – [insert name of organisation] | | | ☐ Other organisations only – [insert names of all of the other organisations] | | | ☐ HMRC and a joint controller [insert name of other organisation(s)] | | | ☐ Not yet known – [insert here why not known] | |
| 15. List all the main recipients of the data, their role in the processing activity and their relationship to each other. | Consider where the data flows from and to. Data recipients may include: data subjects’, HMRC business areas, other government departments and third parties such as software developers, banks, suppliers, delivery partners or agents. Include details of data processors and specify whether there is a contract or data sharing agreement. Information about who we share the data with should be in the customer privacy notice if there is one. If HMRC is a joint data controller you should note here who does what, including which party will be responsible for the measures designed to treat risks. Attach a flow diagram to illustrate the relationships if this is more helpful (recommended where there are complex flows involving many parties). | | --- | --- | | Inside HMRC we share TxM data with: | | | Risk Intelligence teams – To detect and prevent fraud against HMRC systems | | Fraud Investigation Teams – To investigate and prosecute fraud against HMRC.
Summary data may be shared with wider HMRC on a limited basis, to provide service specific information about customer usage of digital services.
We may share TxM data with other government departments, the Police and the National Cyber Security Centre for the purposes of prevention and detection of crime.
16. Describe the infrastructure and assets on which the data processing activity relies.
| Consider IT systems, hardware, software, operating systems, business applications, people, paper, where the data is stored and transmission channels used. |
TxM is hosted in dedicated HMRC secure data environments. These services are built managed and maintained by HMRC. TxM service security is regularly tested and assured by independent 3rd parties. We security vet all personnel who manage TxM including HMRC staff and any 3rd party contractors.
All communication channels to and from TxM are encrypted with SSL/TLS or VPNs. Connections are limited to known sources and devices. TxM Data is encrypted at rest.
17. Approximately how many individuals are affected by the activity?
| Consider HMRC staff and external customers. If not known, use best approximation or a description, e.g. ‘all taxpayers’, ‘all HMRC staff’, ‘under 1000’ etc. |
Approximately 10000 HMRC staff have access to TxM.
All HMRC customers will be impacted by information stored in TxM.
Q18-23. Applying the Data Protection Principles
| Notes for completion |
18. What is the lawful purpose for the data system or processing activity?
| Refer to the Lawful basis for processing, explained by GDPR Article 6. HMRC carries out most functions in the public interest or to comply with a legal or contractual obligation. HMRC will rarely rely on consent. Details of HMRCs lawful basis can be found on the GDPR Knowledge Hub. Provide any further details of HMRCs legislative or legal basis for the data processing activity (i.e. the basis for processing under Commissioners for Revenue and Customs Act 2005 or any other enabling legislation). Consider any data sharing agreement in place which specifies the basis for sharing. Describe any other reason why the processing activity is being carried out. If necessary seek advice from your SIBP team about processing activities relating to special category data and/or criminal offence data or processing for law enforcement purposes (DPA 2018 Pt3). This | Please indicate the lawful basis for processing by inserting an 'X' in any boxes that apply (double click)
- Personal data is processed for the performance of a task carried out in the public interest or in the exercise of official authority vested in HMRC
- Personal data is processed to comply with a legal obligation to which HMRC is subject
- We are processing personal data for the performance of a contract
- We are processing personal data with customer consent
- We are processing personal data for law enforcement purposes
- Other.
HMRC processes TxM data in performance of its Public task (Article 6(1)(e) of the GDPR)
HMRC require third party software developers to provide additional metadata for the furtherance of our Public task. The collection and supply of this data is mandated by Statutory Instrument. (The Delivery of Tax Information through Software (Ancillary Metadata) Regulations 2019).
19. Describe any measures to ensure data processing is limited to what is necessary and proportionate for the lawful purpose
| Consider whether the processing actually achieves your purpose, or whether there is another less intrusive way to achieve the same outcome. The processing activity should be compatible with the purpose for which the data was first collected (purpose limitation). Are there measures to prevent function creep? The processing activity should be designed to use only those categories of data which are necessary to achieve the policy/delivery/operational aim. How will you ensure data minimisation? Can the data be anonymised, either partly or wholly and still achieve the policy/delivery/operational aim? Consider whether there is a contract or data sharing agreement which specifies how data can be used. What measures do you take to ensure processors (third parties) comply? |
TxM data is collected in performance of HMRCs public task, and for the detection and prevention of crime. All users with access to TxM data are vetted and access is limited by task. All users are required to have a business reason for access, which has to be confirmed by line management before access is granted. Where data from TxM is shared with external services, it is limited to the minimum dataset required to complete the function. The creation of accounts and the privilege and access on accounts is managed by a separate operation teams. There is a separation of duties between the people who create accounts and the people who use the accounts. All access to TxM data is audited and monitored by HMRC.
Existing security measures provide for authentication of customers before they establish access to their records. Authentication alone does not provide sufficient protection to prevent unauthorised access to customer accounts.
Despite authentication customer credentials can be stolen and abused by online criminals. A customer’s own computer and system can also be targeted by online criminals, who use viruses and malware to take control of computers, impersonate legitimate customers and unlawfully obtain funds from HMRC.
As a result authentication alone does not provide sufficient protection to prevent unauthorised access to customer accounts.
HMRC therefore needs to monitor digital channels using TxM. This enables HMRC to establish normal behaviours for customers and detect abnormal or suspicious activities. Early warning signs are then used by HMRC to detect and prevent fraud and protect customer accounts and personal information.
TxM data is used to identify suspicious behaviours and activities which could indicate fraud. Where such activities are detected, TxM influences the processing of transactions to ensure they are reviewed by HMRC Preventative Risking staff. Where risking staff confirm an alerted activity is fraud, they take action to protect the customer account, notify the customer as appropriate, and suspend any repayments fraudulently claimed. TxM relies on metadata surrounding transactions in order to detect anomalous behaviours. Without this data TxM would not be able to perform its primary function.
The metadata set required to be collected by software developers has been selected after careful consideration by HMRC of the data set required in order to establish a reasonably accurate behaviour pattern for a Making Tax Digital (MTD) customer or group of MTD customers and allow HMRC to effectively monitor and protect access to MTD customers’ data.
The TxM metadata set represents the minimum amount of data HMRC needs to carry out TxM.
There is no other less invasive way of achieving the same objective and outcome of protecting the confidentiality of its customers’ data within the structure of the Making Tax Digital programme.
HMRC has considered the use of digital certificates instead of transaction monitoring, but concluded they are insufficient for securing the safety of customers’ data. Digital certificates are primarily used for non-repudiation or authentication purposes, which are able to identify a client account or machine, but do not indicate whether a client account or machine has potentially been compromised.
The processing is proportionate because there is no alternative approach to TxM which could reasonably and reliably achieve the same primary purposes.
| 20. Describe any measures to ensure the data is kept accurate, up to date and secure | Consider the confidentiality, integrity and availability of the data. Measures may include: | | • Security and confidentiality: authentication, password control, encryption, data separation, network security, maintenance / patching, pseudonymisation, staff vetting, administrative and user controls, security risk assessment, physical access controls, paper document security, SIBP team consultation and whether accreditation has been given (and by whom) for the sensitivity of data being processed | | • Integrity and data quality: how the data will be kept up to date and accurate including how it can be checked or verified, e.g. via auditable logging. Specific considerations include data validation rules and processes for data rectification. An example might include: providing a self-service facility which allows the customer to update (certain) information themselves, particularly for online services | | • Availability: Business Continuity arrangements, data backup, third party assurance | | Consider relationships with & assurance of third parties. Consider any additional measures in place for more | Data is received and processed in real time. As soon as data is received, it is replicated 7 times and the system regularly compares the 7 copies to ensure accuracy and integrity is maintained. TxM backs up data on an hourly basis to an offline back up storage in the UK. If the TxM service/ any of its communication channels are unavailable, all data feeds cache data until TxM is available again. This data is then consumed into the system.
TxM is subject to penetration testing of all of their systems and connections to other systems on a 6 monthly cycle. Penetration testing uses trusted experts in information security risk, to try to access TxM through unauthorised routes. This tests our security measures and ensures we stay up to date. All development work is reviewed by internal peer review. This helps reduce the risk that a single programmer could develop malicious code and add it to our systems. There is secure deployment pipeline. This helps prevent developers from directly adding software to our production systems without authority.
TxM audits all HMRC user activity across the system.
| 21. Are effective data retention schedules planned/implemented for the system or activity, including for third parties? | |---| | Personal data must only be retained for as long as it is needed. Manual or automatic data disposition processes can be applied. Assurance activities must ensure that retention policies and schedules are up to date and adhered to by all parties. Details of data retention policies must be included in the Privacy Notice if there is one. HMRC has published its Records Management and Retention and disposal policy on GOV.UK and business areas maintain retention schedules. Consider how data disposition activities work for the processing activity and how data is securely destroyed. Your SIBP team can provide further advice. |
Data Retention is 6 years + current year in accordance with the HMRC records management and retention and disposal policy, in line with the legal requirement for retention of tax records.
| 22. Describe how the rights of the data subject have or will be designed into the system or activity, including how requests from data subjects will be handled. | |---| | Consider how you will support the data subjects’ rights. The individual rights of data subjects’ include: right of access, right of rectification, right of erasure, right of portability and the right to object to processing. HMRC must be transparent about the use of powers. Consider how customers and staff will be made aware of what is happening to their data at the point of collection, including any relationships with processors (e.g. via a privacy notice or guidance). HMRC has existing procedures to respond to Subject Access Requests within one month of receipt. Consideration should be given to how data can be extracted for SARs requests. Be aware of cross government exchanges of information and identify responsibilities for who takes the lead in answering SARs. |
TxM data is collected as part of HMRC’s public task.(Article 6(1)(e) of the GDPR)
Data subjects are able to make requests via the normal HMRC channels. However, exemptions from data subject rights will apply where their application would be likely to prejudice the prevention or detection of crime, the apprehension or prosecution of offenders, or the assessment or collection of a tax or duty or an imposition of a similar nature as per Schedule 2 of the data Protection Act 2018. Disclosure of TxM data would undermine the primary purpose. 23. If personal data is being transferred to a non EEA country, what safeguards have been considered or implemented?
| Provide the names of third countries or international organisations that personal data are transferred to. How do you safeguard international transfers? Consider the confidentiality, integrity and availability of the data. Consider any specific safeguards for third parties. Refer to the [HMRC Offshoring policy](https://www.gov.uk/government/publications/hmrc-offshoring-policy) and [ICO guidance](https://www.ico.org.uk/). If there is a Privacy Notice it should say whether data will be transferred to a third country, including what safeguards are in place for international transfers. |
TxM Device Profiling features use a 3rd party in order to develop a reliable device identification. 3rd Party data centres are located in the USA – Portland, and Seattle. Data may also be stored in Satellite data centres in Miami, and Amsterdam in the Netherlands. The 3rd Party is US-EU Privacy Shield certified.
**Range of Data offshored:** Device Fingerprint (Browser Specification, OS version, Installed Apps, User Agent String etc), Client IP Address (as presented to HMRC), Customer ID (TxM Specific Customer ID used for internal correlation in TxM).
**Volume:** Every time a user logs into HMRC web based systems some or all of the above range of data may be transmitted to the supplier.
**Duration:** Where fraud is confirmed against a device profile, the supplier retains records for 5 years from the date last seen. In all other cases the 3rd party retain device profile information for 2 years.
**Sensitivity:** Data shared with 3rd party is of limited sensitivity as the only personal data contained is IP address. A unique HMRC customer ID is shared but this is only used for internal correlation within TxM and not used for any other service. All other data relates to the characteristics of the computer in use by the customer. The 3rd party may not share HMRC data with any other 3rd party except in cases where fraud against HMRC is confirmed. Where fraud is confirmed the 3rd party may share a fraud flag with other 3rd parties for the prevention and detection of crime.
| Consultation | Notes for completion | |--------------|----------------------| | 24. Describe the approach to consultation and the main outcomes if already carried out. | Decide who should be consulted internally and externally, how the consultation will be carried out, and for what purpose. If this is part of a Programme or project it should be part of the overall plan. Internal consultation may be appropriate to identify and mitigate the risks. Stakeholders might include: data subjects’, business areas, governance groups, Solicitors Office, other government departments, subject matter experts, digital security managers, risk managers, data processors and your SIBP team. External consultation will not always be necessary. |
TxM is an established HMRC system.
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57c0be02e5644ece6265aaba200c54f4438423b3 | General Approval for third party liability insurance arrangements
1. This general approval applies to operators of railway assets who hold licences, Statements of National Regulatory Provisions (SNRPs), or licence exemptions with an obligation to establish and maintain certain insurance arrangements approved by the Office of Rail Regulation (ORR).
2. The obligation arises under sections 7 and 8 of the Railways Act 1993 (the Act), and regulation 11 of the Railway (Licensing of Railway Undertakings) Regulations 2005 (the Regulations).
3. ORR approves the insurance arrangements of relevant operators to the extent that: a. Total cover, including self-insurance, of not less than £155M per incident is provided in respect of all liabilities to third parties. Policies are not required to cover: • Liabilities covered under other statutory or standard classes of insurance, such as motor insurance or employer’s liability insurance; or • Liability in respect of damage to goods carried for hire or reward, except as provided for in this general approval or under the provisions of COTIF or other relevant international law. b. Where an aggregate limit of indemnity applies, this limit will be reinstated at least once if the limit is exhausted. c. Any exclusions of damage to property in the care, custody and control of the operator shall not apply to accompanied personal luggage. d. Cover is on an 'occurrence' basis. e. Cover is on a 'costs exclusive' basis. f. The operator shall include as an insured any other party, to the extent that that party is required to be insured or indemnified in any underlying contract or agreement with the operator. g. The operator will provide cover for any difference between its contractors' or sub-contractors' cover and that required by this general approval. h. The operator has a reasonable expectation of being able to meet any excess or deductible that applies to its insurance policies.
i. Each policy shall require 30 days’ notice to be given to ORR by the insurer of any lapse or cancellation of or material change to the policy.
j. Insurance policies are taken out with regulated insurers of good repute.
k. Insurance cover will apply at all times that operations are undertaken.
4. This general approval is subject to the following conditions:
a. The operator will arrange for ORR to receive confirmation that adequate insurance is in place, as soon as reasonably practicable, after cover is commenced, renewed or materially altered.
b. The operator will maintain for a minimum of seven years appropriate records setting out its particular arrangements, the rationale for those arrangements and how the arrangements meet the terms of this general approval.
c. The operator will submit these records to ORR for review upon request.
d. The operator will modify the arrangements covered by this general approval within 60 days, if reasonably required to do so by ORR.
e. ORR can amend or revoke this general approval at any time.
5. Failure to comply with the terms of this general approval could leave an operator liable to enforcement proceedings under sections 55 to 57 of the Act and regulation 8 of the Regulations.
6. For further information about this approval, please contact:
The Licensing Team Office of Rail Regulation One Kemble Street London WC2B 4AN Email: [email protected]
7. Terms defined in ORR’s Licensing Guidance shall have the same meaning in this general approval.
8. This general approval has effect from 1 March 2007.
Date: 23 February 2007
Signed by authority of the Office of Rail Regulation
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666e3dad42707d83f0786011f05ddbfda1772667 | UK Modern Slavery Act Transparency in Supply Chains: Reporting by Local Authorities
Olga Martin-Ortega and Anna Gorna with Lucrezia Corradi and Fatimazahra Dehbi
Research Series Report No. 4. September 2020
## Contents
Introduction .................................................................................................................. 1
Mandatory (Formal) Requirements .............................................................................. 3
1. Unfinished Statements .......................................................................................... 4
2. Accessibility .......................................................................................................... 4
3. Annual Review ...................................................................................................... 5
4. Confusion Over Financial Years .......................................................................... 6
5. Historical Record .................................................................................................. 6
6. Responsibility for Drafting and Owning the Statement ........................................ 6
7. Signatures ............................................................................................................. 7
Substantive Content .................................................................................................... 8
1. The organisation’s structure, its business and its supply chain ............................ 8
2. Organisational Policies .......................................................................................... 9
3. Due diligence, risk assessment and response, including effectiveness ............... 10
a) Assessment and prioritisation of risks ............................................................... 11
b) Engaging with suppliers .................................................................................... 13
c) Monitoring and remediation of human rights violations ............................... 15
d) Collaboration .................................................................................................... 16
e) Measurement of effectiveness ......................................................................... 18
4. Training on modern slavery and human trafficking ............................................. 19
Conclusions .................................................................................................................. 21
About the Authors ....................................................................................................... 23
BHRE Resources for Public Buyers ............................................................................ 24
Annex I: Modern Slavery Statements: Council Submission .................................... 25
Annex II: Transparency in Supply Chains Reporting: Aide Memoire (Updated 2020) .... 28
Endnotes ...................................................................................................................... 32 Introduction
This is a fourth report in the BHRE Research Series, and the second to address transparency reporting by local authorities on their efforts to combat modern slavery and human trafficking in their supply chains. The first research report, *UK Modern Slavery Act Transparency in Supply Chains: Reporting by Local Authorities*, qualitatively analysed statements produced by local authorities since the Transparency in Supply Chains Provision (TISC) of the UK Modern Slavery Act (2015) (Section 54), entered into force on 29th October 2015. Our first research report on local authorities covered the reporting periods corresponding to two financial years: 2015/2016 and 2016/2017. The current report analyses the efforts of local authorities to respond to the new responsibilities towards their supply chain and their progress in transparency the past years. This research report covers the MSA reporting periods corresponding to the financial years 2017/2018, 2018/2019 and, the most recent, 2019/2020. The number of Councils which have published a modern slavery statement (or at least attempted to) has increased exponentially in these years – with 132 local authorities identified as having some form of statement out of 404 in the entirety of the UK, whether individual or jointly written.¹
As it is well known by now, the TISC provision of the MSA requires commercial entities to annually report on all actions taken to identify, prevent and mitigate modern slavery in their supply chains. The aim of the provision is to encourage commercial entities to investigate their supply chain and the effects of their activities upon others, and to communicate this knowledge internally and externally. Only commercial entities with a total annual turnover over £36 million have been required to publish their annual Slavery and Human Trafficking Statement (the Statement). In principle, local authorities do not fall within the category of entities obliged to report under the MSA. Nevertheless, local authorities have demonstrated ethical leadership by voluntarily publishing statements, as our first research report showed. This will all change soon when the government implements its commitments following its response to the transparency in supply chain consultation in September 2020. On 22nd September the UK Home Office announced that the government is introducing new measures to strengthen the MSA by, among others, requiring public bodies which have a budget of £36 million or more, including local authorities in England and Wales, to regularly report on the steps they have taken to prevent modern slavery in their supply chains.²
______________________________________________________________________
¹ O. Martin-Ortega, A. Gorna and R. Islam (2018), *UK Modern Slavery Act Transparency in Supply Chains: Reporting by Local Authorities*, BHRE Research Series, Report no. 2. Since BHRE’s first research report on local authorities there has been significant developments both in private and public sectors with regards to transparency in supply chain initiatives and modern slavery reporting. Particularly in the public sector, where more public institutions are taking their responsibilities to purchase responsibly and not contribute to human exploitation seriously. The UK Government produced its first Modern Slavery Statement in May 2020 and we have seen a significant increase in reporting among other public sector entities. Equally, more local authorities across the UK have produced MS statements, as this report analyses.
The Local Government Association (LGA) has led this process of engagement of local authorities with their own supply chains in order to identify, prevent and mitigate modern slavery. The LGA has developed a comprehensive portal on Modern Slavery in Supply Chain- Council Transparency Statements on their website and has produced, among other important resources, a Councillor Guide to Tackling Modern Slavery and a Transparency in Supply Chains Statements Aide Memoire (with the authors, Olga Martin-Ortega and Anna Gorna). They, too, continue to review and publish their own Statement annually, and increase their efforts to map supply chains and develop MS due diligence.
Our first BHRE research report on local authorities focused in the detailed analysis of the 35 statements published by the deadline for publication of the second financial year. At the time of writing, as mentioned 132 local authorities have been identified as having published statements for this financial year. This second BHRE local authorities’ research report instead focuses on the trends in quality and overall progress since the last report, rather than changes occurring on annual basis. This is why distinctions between reporting years are no longer explicitly and continuously pointed out in this report. Governmental changes to the composition of councils in the past years has also resulted in a merging and reduction in number of local authorities, which would make it difficult for us to exclusively compare annual reports.
As this report highlights, local authorities have made impressive progress in assuming their responsibility to combat on modern slavery in their supply chains and be transparent about it. This is not an easy task, especially during a time in which resources are scarce and there are many competing priorities when considering more sustainable and responsible ways to procure goods and services. Local
______________________________________________________________________
2 See our reports on universities: O. Martin-Ortega and P. Krupinska (2018), UK Modern Slavery Act 2015 Transparency in Supply Chains: The Second Year of Reporting by Universities, BHRE Research Series, Report no. 3 and O. Martin-Ortega and R. Islam (2017), UK Modern Slavery Act 2015 Transparency in Supply Chains: The First Year of Reporting by Universities, BHRE Research Series, Report no. 1. authorities continue to lead the public sector, together with universities, in committing and developing tools to prevent, identify and mitigate human rights abuses in their supply chains. This research report aims to underline local authorities’ experiences, as communicated in their statements, focusing on best practices and identifying developments in order to encourage continued improvement for the coming years in which many councils will not only have an ethical but a legal responsibility to produce their MS statements.
Whilst the first two years of reporting on transparency in supply chains demonstrated a great effort by local authorities to come to terms with new responsibilities and procedures, we should alert against this becoming a routine tick-box exercise. Some of the practices we have recorded in our analysis of the reports corresponding to financial years 2017/2018, 2018/2019 and 2019/2020 are certainly underwhelming. However, there are still recurring issues with the quality and finish of MS statements produced by local authorities. These issues appear to be consistent in both the private and public sectors, however, we are calling on local authorities to continue their efforts to learn and build their experience to overcome them. In some cases, it is simple mistakes that take away from the message and integrity of the statement, and create an impression of little attention being given.
This second Research Report reflects generally on the quality of statements, analyses compliance with the formal requirements of the law and analyses the substantive content local authorities disclose in their statements to highlight good practice and point out where we think changes are needed.
In Annex I we have included an updated Aide Memoire to support local authorities in their sustained journey towards being part of the solution to modern slavery in supply chains, rather than one more element in the long chain that perpetuates the abuse of those who produce the products they purchase and provide the services they contract.
**Mandatory (Formal) Requirements**
It is mandatory for entities to publish their MS statement on their website with a link in a prominent place on their homepage or in a relevant and obvious dropdown menu. Statements must also be approved at the highest level of governance of the institution and signed by one of the most senior members of the organisation. As in previous years, many Councils still fall short when following these formal requirements.
1. Unfinished Statements
In our review of the past three years we found a number of statements which read as unfinished drafts; a 'delete as appropriate' exercise. In some cases, Councils chose to upload statements in the drafting or approval phases, and given that it can take a long time to gather full approval, it can be seen as an attempt to further transparency. However, not only does it not give a good impression to have unfinished drafts available, it may confuse residents, suppliers and the general public as to the level of commitment and the extent of progress. We have encountered several published drafts and one statement in particular contained an unfinished final paragraph, giving the option of “[will be/have been]”, which leaves the statement lacking in authority. This example also suggests the potential use of a template. In previous BHRE reports we have discouraged the use of templates, and we continue to do so. The use of templates has certain merits, for example can make comparisons between statements easier, however, we consider that adhering to a preestablished form does not allow for the reflection on own processes and practices that is needed if the exercise of identifying, preventing and mitigating modern slavery risks in supply chains is going to be a substantive one.
Statements need to be published annually on the financial year which has ended. When a statement contains the wrong date, as analysed below, it is difficult to check whether this is because of an oversight during the drafting processes or because the Council has merely republished the previous year statement whilst announcing it was a new one (see historical record section below for further discussion).
2. Accessibility
According to s.54, statements ought to be easily accessible on the webpages of the reporting organisations. Yet, very few Councils maintain the statement on their homepage. Reiterating the reasoning from our first Research Report, local authorities are reminded that they have to ensure that the statement is easily accessible not only for government officials or academics but also for the members of the public.
s.54(5) MSA 2015: “… include a link to the slavery and human trafficking statement in a prominent place on that website’s homepage.” [Emphasis added.]
The majority of the statements collated during the research process were identified either via the search function inbuilt on the Councils’ websites, or by using the Google search engine. As in the earlier years of reporting, statements were also included in the “About us” section, or the Council Decisions/Meetings sections of the websites. In cases where statements could not be located, we referred to the TISC Report database as a last resort – surprisingly, several statements were only found there.
It is a testament to how difficult a statement may be to find where it is far easier to search using a search engine, than by accessing Council websites directly. In several cases we could only find statements as part of minutes of Council meetings or buried away in sections of local authorities’ websites. This not only contravenes the requirements of the MSA and Home Office Transparency in Supply Chains Guidance (hereinafter government Guidance), which are clear in establishing a mandatory requirement of publication in a visible place on the home page of the website, but also defeats the purpose of the reporting exercise. Transparency is essential for all stakeholders involved in the combatting of modern slavery. Local authorities are accountable to their constituents, and if these cannot access such a key document, Councils are failing in their transparency responsibilities. As we advised in our first Research Report, the best place to link a statement is on the bottom of the homepage. This is in fact directly prescribed by s.54(7)(b).
3. Annual Review
It has been observed that some Councils have limited the review of their statements to replacing dates and indicating it is valid for another year. This is inadequate in light of the requirements of s.54 which indicates that a statement is primarily intended to show the steps undertaken by an organisation during the financial year to ensure that trafficking is not taking place in its own business and its supply chains.
Modern Slavery Act (2015) Section 54(4): A slavery and human trafficking statement for a financial year is— (a) a statement of the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place— (i) in any of its supply chains, and (ii) in any part of its own business, or (b) a statement that the organisation has taken no such steps.
Whilst not all sections of a statement in relation to its substantive content need to be rewritten every year if there have been no changes in the organisation’s structure, business or policies, they ought to describe actions undertaken in the past year and reflect on their effect. Where no such steps have been undertaken in a financial year, this fact ought to be adequately stated in the statement instead, as per s.54(4)(b).
If those in charge of drafting the modern slavery statement find the entirety of it unchanged, the local authority needs to reflect on whether there have not been any new steps undertaken in the past year or whether there are not enough adequate procedures to record such steps. Perhaps, the statement is not detailed enough and is not able to reflect the actions that have, in fact, been developed or are planned. If there really has been no change and no action taken, then the statement should reflect this, and the Council should consider what needs to change in the coming years.
Statements must be reviewed annually. Yet, a number of councils have failed to update their statements from 2018/2019, 2017/18, or even from the first reporting period of 2015/2016. Few local authorities even indicated ‘review by dates’ which have clearly not been met.
4. Confusion Over Financial Years
As it is clear by now, statements should report on actions taken during the past financial year and must be produced annually. Statements should not cover more than one financial year at the time, as they are not intended as a ‘strategy’ or intentions statement but a ‘reflection’ on undertaken activities.
Statements are to be retrospective and are to discuss activities undertaken in the financial year on which they are reporting. Thus, the 2019/2020 statement should have been published as this financial year came to a close. At the time of writing, however, some Councils have already published the 2020/2021 statements.
Statements published for a financial year that has not ended cannot reflect on and assess the measures undertaken during that specific year. For clarity in reporting practices Councils are encouraged to carefully review they are reflecting the right dates.
5. Historical Record
Most reporting entities tend to replace old statements when they publish the new one. However, we suggest that local authorities maintain a historical record of their past statements on their website to facilitate comparisons and reflections on the progress they have made. Only few Councils maintain all their previous statements, such as Nottingham City Council, Derbyshire County Council and Sunderland City Council. This is a good practice which increases transparency and shows local authorities are not avoiding public scrutiny.
6. Responsibility for Drafting and Owning the Statement
Ideally, a statement would be written collaboratively by representatives from different departments. A holistic statement that shows understanding of the systems in place can only be achieved through a collaboration among different actors, including HR, legal, safeguarding, procurement staff, etc. The City of London Council, for instance, has an interdepartmental Working Group which includes: City of London Police, the Barbican, City Procurement, Department for Community and Children’s Services, Community Safety and Corporate Strategy and Performance Team. The Council indicates that it will invite representatives from other relevant departments, such as HR and Licensing, moving forward.\\textsuperscript{xii}
Statements should generally be authored by the Councils themselves. The purpose being that members and employees of a Council know its business, supply chains and activities best. We do not think delegating the writing process to an external organisation is a good practice.\\textsuperscript{xiii} A MS Statement is to be written by the Council about the Council. Equally, a s.54 statement by public authorities should consider their activities as a public body rather than just focusing on their private commercial activities.\\textsuperscript{xiv}
7. Signatures
Statements analysed in this report continue to lack appropriate signatures. Given the likely robust approval process carried out by Councils before a statement is published, the lack of a signature makes it fall short of the expectations established by the MSA, which is especially unfortunate where a statement is overall highly detailed and fulfils other expectations. A signature elevates the authenticity of a statement and approves the details contained therein. Still, no guidance has been published as to whom is the appropriate person to sign a Council statement. We maintain our earlier suggestion that ideally the statement would be co-signed by the Leader of the Council and the Chief Executive, or equivalent position, such as the Chief Operating Officer. A Director or a senior enough Portfolio Holder, for example a cabinet member councillor, could also be considered a relevant person, especially in smaller district councils. In any event, the approval process has to demonstrate that the statement has been discussed and approved at the highest level of governance of the institution and reflects an overall commitment from those in positions of authority. The rationale being that modern slavery awareness and the commitment to combat abuse remain at the core of each organisation.
Signed statements continue to display the signatures of the Chief Executive and/or Leader of the Council and Portfolio Holder (of various departments, such as Communities, HR or Equalities). Due to the unique structure of the City of London, a signature from a Town Clerk, a deceptively insignificant sounding title which is in reality a central position combined with the position of the Chief Executive, of course satisfies the requirement. Conversely, a signature from a Town Solicitor may not be adequate.\\textsuperscript{xv} Local authorities should always contemplate if the person signing the statement is truly representative of the Council as a whole. Some unchanged, unsigned statements still state that they have been approved without specifying by whom, while others indicate that this approval has been granted by the Broad, the Council itself, a specific post holder or by the Management Team without providing any names. Or, conversely, a statement is signed by a named person without providing their post.\\textsuperscript{xvi} We recommend that the post and the name of the approving person are present in the statement in order to not only follow best practice, but also clearly send a message of commitment to transparency and accountability.
**Substantive Content**
Section 54(5) provides a non-exhaustive list of information that may be included in statements. As in our previous Research Report for our analysis we have grouped some of these criteria and present our findings under following headings:
1. The organization’s structure, its business and its supply chain;
2. Organisational policies;
3. Due diligence, risk assessment and response, including effectiveness of such response; and
4. Training on modern slavery and human trafficking
______________________________________________________________________
Modern Slavery Act (2015)
Section 54(5): An organisation’s slavery and human trafficking statement may include information about—
(a) the organisation’s structure, its business and its supply chains;
(b) its policies in relation to slavery and human trafficking;
(c) its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
(d) the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
(e) its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate;
(f) the training about slavery and human trafficking available to its staff.
______________________________________________________________________
1. The organisation’s structure, its business and its supply chain
Most Councils describe their jurisdiction and population, and on too many occasions provide information which is not of particular relevance to the section. Others, fail to provide any significant information at all, as we highlighted in our previous Research Report. But there are also examples of good practice, such as East Lindsey District Council, which continued to include of a detailed breakdown of the Council’s organisational structure. Its statement specifically highlights positions within the Council structure and responsibilities of the post holders on the different aspects of the modern slavery statement production and modern slavery monitoring.xvii
East Riding of Yorkshire Council has broken down their approximate £270m annual spend on the services they provide.xviii This is a good start, and the information provided is useful. This may be further enhanced by focusing on procurement spend and looking at services and goods that are most prominent. This is a first step into mapping supply chains and assessing risk, as discussed further in the due diligence section below.
Good knowledge and an understanding of supply chains and the structure of commercial relations in terms of suppliers, contractors and subcontractors remains a fundamental part of effective reporting. As is the ability to trace the origin of products, materials and services purchased. In the case of local authorities this allows for understanding of the level of risks within each of the sectors from which they procure products or provide the services contracted. The government Guidance highlights that a greater level of detail when reporting on the organisation’s structure, business and supply chain is likely to be more helpful. However, too much technical or legal information should be avoided, for the statement should remain accessible to the public.
The government Guidance suggests focusing on “sector(s) the business operates in” or relationships with suppliers and others, including trade unions and other bodies representing workers”. Most importantly, Councils should address in their statements the following: “the make-up and complexity of the supply chains” and “the countries it sources its goods or services from including high risk countries where modern forms of slavery are prevalent”. Improving our understanding of supply chains and risk areas is essential, and without a strong base of knowledge on what we buy and where it comes from it is very difficult to proceed to assessing risks and determining what needs to be done to respond to them.
Too many Councils continue to declare that supply chains are local and imply that having UK based suppliers is somehow equivalent to having no modern slavery risks. All supply chains are interconnected in a way or another, and even if we purchase as local as possible, we know that UK supply chains are not free of abuse. This is why all organisations need to develop policies, processes and mechanisms to address the risks of violations and assume their responsibility for their own role in the supply chain.
2. Organisational Policies
Reporting on policies remains the same as in the previous years. The same policies are mentioned across all statements, including Anti-Slavery Policies, Recruitment Policies, Whistleblowing Policies, Equality and Diversity Policies, Employee Codes of Conduct, Safeguarding Policies and Procurement Strategies. This section of the statement is one of the sections which needs less updating during the annual review unless new policies have been approved or updated during the year.
As the government Guidance suggests, organisations need not have a standalone policy in place - but may develop one or explain how current policies and practices are relevant to the cause. Most Councils still don’t have specific modern slavery policies and even if statements tend to contain long lists of policies, reporting authorities still fail to link the relevance of those to combatting modern slavery and human trafficking. Councils should consider expanding in this section on how policies are implemented, or, where it was indicated that policies were to be reviewed, how that was done and what conclusions were reached. As s.54 suggests that companies may report on “b) […] policies in relation to slavery and human trafficking”, Councils should make a conscious effort to include how their policies are linked to modern slavery prevention.
Making generalised commitments against slavery, and proclaiming rejection over abusive practices in general is not within the letter and spirit of s. 54 MSA. As we found in one case, reproducing s.54 into the statement, as the only content, accompanied with a signature, is not an adequate representation of any Council’s efforts against modern slavery.\\textsuperscript{xx}
Many Councils report having signed to the recent Cooperative Party’s Charter Against Modern Slavery. The list can be found on the Cooperative Party’s website. This is a third-party initiative. The Charter contains a series of commitments that the signatories fulfil and uphold. The impact of adhering to the Charter and action on its commitments will be apparent in the coming years. Whilst good practice, Councils are encouraged to not treat this as an end goal, and still focus on having robust policies and strategies and publish serious and sound statements which contain evidence of their activities implementing either this Charter or any other public commitments which they have adhered to. Commitments without action will not be sufficient. A good start has been conducted by Sunderland Council, for instance, which has already set out a detailed table of actions and progress in implementing the Charter.\\textsuperscript{xx}
3. Due diligence, risk assessment and response, including effectiveness
Due diligence processes inherently require an ongoing assessment of modern-slavery risks, their monitoring, engagement with the relevant actors to address both the risks and the actual instances of violations identified, and putting in place measures to prevent the risks from materialising, mitigating them and remediating the actual violations and abuses when they do occur.
In our first Research Report, we highlighted how Councils were only just beginning to learn how to approach writing a MS statement and developing their understanding of what modern slavery was, what due diligence measures could be instilled, and what risks existed within supply chains. All reporting organisations and those assessing statements too were faced with a fast-developing area. In the five years since MSA entered into force, standards have risen, as has an awareness of the wide range of due diligence measures needed to ensure MS risk are identified and mitigated. We now expect local authorities to have kept up with these developments.
Statements need to reflect a thorough understanding of the organisation’s operations (as described above) and how due diligence can be carried out within that framework. With the information and knowledge readily available, Councils are encouraged to reach for it and utilise it. In order to demonstrate that organisations have strong due diligence processes in place they need to provide specific examples of actions undertaken or decisions made.
This section analyses how local authorities have reported on their efforts to exercise due diligence to mitigate and prevent instances of modern slavery and human trafficking by addressing the following elements:
a) Assessment and prioritisation of risks; b) Engaging with suppliers; c) Remediation of human rights violations; d) Partnerships and collaborations; and e) Measurement of effectiveness.
a) Assessment and prioritisation of risks
The first step within the due diligence process is to identify potential risks within the supply chain and prioritise action over them. Risks should be considered according to country risks, sector risks, transaction risks and business partnership risks. Little details are provided in Council statements to the processes local authorities use to assess modern slavery risks and prioritise which ones should be addressed first.
Dedicating time to learning of high-risk areas within the UK and outside of the UK (which may appear down the supply chain), will place Councils in a better position for developing effective due diligence. A good understanding of geographical and sector risks is essential to identify such risks in supply chains. Only then will local authorities be able to create and develop effective due diligence procedures to address modern slavery. All Councils should have by now made efforts to understand the risks faced by public buyers, and have a better awareness of the risk they face in their own supply chains.
Councils indicating one or two areas where risks have been identified is welcome progress. Conversely, merely stating that a risk assessment had been carried out, without indicating the process or conclusions reached, is not sufficient. As has been pointed out before, merely stating that the Council operates within the UK or has only local or UK based suppliers, is not a satisfactory assessment of risks. UK operations are not risk free, modern slavery is all around us and understanding how to spot these invisible abuses is part of the due diligence measures that need to be taken.
It is unlikely that local authorities will be able to map all supply chains and identify all risks at once as they continue to be faced with the pressing challenge of managing diminishing resources to address increasing local needs. This is why prioritisation is key. Councils should focus on the risks which they can address faster and most effectively by engaging with suppliers and collaborating with other councils or external organisations to maximise resources and capabilities. Equally, decisions need to be taken as to which sectors are more exposed to leverage, for examples those that depend directly of their relationship with the Council, such as adult social care or children’s services, and which would require a much longer-term strategy to impact.
Examples of Councils that report on efforts to assess risks are very encouraging. In its draft MS statement, Lewisham Borough Council highlights ICT hardware, a known risk area, as a concern within their supply chain. The Council then lists a series of mitigating measures regarding use of shared services and joint procurement agreements. It too makes reference to signing of the Cooperative Party Charter against Modern Slavery, discussed above. The City of London sets out a clear picture of high-risk areas in its statement. It further describes how those risks are monitored and mitigated. Cited measures reflect good practice. They range from meeting a corporate responsibility code for textile suppliers (for the City of London police, led by Metropolitan Police); requiring construction contractors to present their due diligence procedures and developing a mutual action plan; to the most robust one of all – the requirement that contractors for contracts involving electrical equipment produce a map of their supply chain. The City’s IT managed service provider is also, according to the statement, mapping the supply chain on IT hardware used to support the services delivered by the City.
City of London Statement 2018/2019:
61. The highest risks of people falling victim to modern slavery in our UK-based supply chain include construction workers, those undertaking service contracts in relatively low paid industries such as cleaning, catering, security, agriculture and the care industry. Although not necessarily defined in the same way, the City Corporation recognises that those industries that operate as part of the gig economy
62. The highest risks of modern slavery further up our globalised supply chain, especially forced and child labour, are associated with the production and manufacture of electronic equipment, textiles, agricultural commodities and construction materials. Conflict minerals including gold, tin, tantalum and tungsten, found in computer equipment and vehicles are also of significant concern.
b) Engaging with suppliers
This section looks at various due diligence measures adopted by local authorities and ways in which they engage their suppliers.
There is a noticeable increase in the use of the Standard Selection Questionnaire (SSQ) provided by the Crown Commercial Service, or at least some variation thereof. Whilst using questionnaires to gather information on supplier’s compliance with their MSA 2015 obligations is a good practice, and sends a powerful message of commitment by local authorities, it is important to remember that this kind of self-certification has its limitations. The SSQ does not allow to compile detailed enough information to ensure that abuses are not present in supply chains, or whether suppliers are themselves exercising due diligence in their own supply chains.
The SSQ operates on a on the basis of self-certification. As in previous years, Councils continue to request that suppliers self-certify that no modern slavery is taking place in their supply chains. Overall, it is a low effort due diligence measure, and as emphasised in or first Research Report, it is likely to be ineffective due to the lack of proper checks and monitoring. Moreover, if questions to suppliers are limited to whether they comply with their MSA s.54 obligations, smaller businesses will not be questioned on their efforts to combat modern slavery as they do not meet the £36 million reporting threshold.
City of London Council again shows good practice relating to small and medium enterprises (SMEs). The Council is a founder of the ‘Heart of the City’, a business-led charity which runs a responsible business programme designed for SMEs. The Council’s statement describes the aims of the programme as intending to coach business leaders on how to make a positive difference and supporting those businesses in tackling complex issues, such as modern slavery. This appears to be an innovative approach that remembers smaller businesses that would otherwise not engage with modern slavery prevention through s.54 reporting.\\textsuperscript{xxiv}
\\textit{Standard Selection Questionnaire by CCS}
| Section 7 | Modern Slavery Act 2015: Requirements under Modern Slavery Act 2015 | |-----------|---------------------------------------------------------------------| | 7.1 | Are you a relevant commercial organisation as defined by section 54 (“Transparency in supply chains etc.”) of the Modern Slavery Act 2015 (“the Act”)? | | 7.2 | If you have answered yes to question 7.1 are you compliant with the annual reporting requirements contained within Section 54 of the Act 2015? |
Further good practice is demonstrated by Neath Port Talbot, which is one of few Councils that indicates it will require suppliers to explain abnormally low tender quotes, and to explain their impacts on workers. This aims to ensure that employment is both considered during the procurement process, and that the Council does not contribute to unethical employment.\\textsuperscript{xxv}
Local authorities’ statements tend to focus on recruitment processes when describing due diligence. Several Councils have indicated a commitment to ensure that their employees are vetted and that appropriate employment checks are carried out. These checks are of course important, but exclusive focus on direct employees leaves many individuals out of the risk assessment process. Limiting efforts to check the legality and welfare of those working for the council, directly through employment or indirectly through subcontracts or in the supply chain, means local authorities are not aware of the working conditions those who produce goods and provide services for them are facing. Risks are particularly high when organisations recruit personnel through third party agents and our on-going research into other sectors has highlighted that the recruitment process requires due diligence measures. Councils provide scant descriptions on how employees might be vetted or how third-party recruitment agencies are chosen and monitored.\\textsuperscript{xxvi}
Our previous Research Report highlighted and encouraged the use of contract clauses to establish legal responsibilities for suppliers and rights for Councils regarding engaging to identify, prevent and mitigate modern slavery. In the statements analysed for this report, we are pleased to see local authorities reporting on the use of such contract clauses. Basingstoke and Deane Council states that it may impose specialist safeguarding clauses in contracts where it is deemed relevant.\\textsuperscript{xxvii} Essex County Council reports, as in previous years, that standard contract terms have been incorporated with clauses on supplier’s obligations regarding modern slavery. It would have been an example of best practice to further clarify the phrasing of said clauses.\\textsuperscript{xxviii} Flintshire County Council statements says that a review of terms and conditions will be carried out with the option of including sanctions or a termination clause if modern slavery is suspected. As we have expressed before, automatic termination of contracts is not always the best course of action, specially to protect victims and those vulnerable to abuse. Working with high risk suppliers is the only way local authorities will be able to exercise their leverage and play a part in transforming abusive supply chains and protecting vulnerable workers.
c) Monitoring and remediation of human rights violations
Local authorities cannot on their own monitor the lower tiers of their supply chain. Organisations such as Electronics Watch, which some Councils have affiliated to (see below) provide access to independent worker-driven monitoring and remediation for workers who suffer abuse in the production of the goods purchased by public bodies. Electronics Watch partners with local organisations, monitoring partners which are located near workers' communities and already have a relationships of trust with workers. This allows them to meet workers in conditions which allow them to report more freely what their real working conditions are and minimise their fear of reprisals. This facilitates that workers report problems to these local organisations, which they may not discuss with social auditors sent in by brands or retailers, which they may never have met before.
Remedial action includes protecting the victim, resolving the violation, and addressing the perpetrator. Some Councils still conflate their responsibilities under s.52 MSA with the requirements and expectations established by s.54 MSA. The former requires a public authority which has reasonable grounds to believe that a person may be a victim of slavery or human trafficking to notify it. Given the nature of local authorities’ competences there is a persisting focus on safeguarding of children, vulnerable adults and victims in statements. Yet, whilst those can be included in a modern slavery statement, section 54 has a specific focus on the supply chains. Therefore, a further effort needs to be developed to understand how to participate in remediation of violations further down the supply chain, this is, to address the violations which relate to supply chains and the risks that local authorities’ activities pose to those who produce the goods they purchase and provide the services they contract to develop their functions. Action plans referring to remediation of abuse which was exacerbated by procurement from a supply chain with modern slavery are lacking. However, this is something which very few organisations even in the private sector have considered as part of their responsibilities, so Councils cannot be faulted for lacking in this area. This is one of weakest elements of the law and one that requires special attention in the coming years. In order to participate in remediation for specific violations, collaboration is, again, essential.
A number of local authorities, such as Swindon Borough Council, indicate that any suspected case of modern slavery will be reported to a relevant police authority. This, of course, is an expectation for all Councils. Whilst protection and law enforcement agencies are the relevant authorities and the ones that should be tasked with protecting victims and providing redress, it is important that local authorities get involved in remediation too. Here we provide some examples of ways in which Councils have considered how to contribute to redress for the abuse suffered by modern slavery victims. Generally, any pledges to remediation are condensed into generic commitments for support to victims. Many Councils rely on the National Referral Mechanism (NRM) which is an identification and support process for victims of trafficking in the UK. Salford City Council is on the right track as it recognises that long term support may be needed, and considers providing assistance on access to welfare benefits, housing, health and social care, legal advice and employment. Likewise, East Riding of Yorkshire Council’s statement refers back to their Modern Slavery Policy which commits appropriate support to victims. Ceredigion County Council describes the generic step process for victims’ support. From referring potential victims to the NRM, notifying the Home Office and referring child victims to Independent Child Trafficking Advocates, the Council also supports victims through their housing and homelessness service. Further support is provided to the local Police if a victim is identified. Croydon Council highlights the support victims can receive through the NRM process, i.e. safe houses, and legal, psychological and administrative support. Wirral Council notes that victim-focus is an important part of anti-modern slavery activities, especially given the repeat victimization of vulnerable persons.
d) Collaboration
Collaboration between organisations is crucial for mitigating and preventing modern slavery in supply chains as collaborations and partnerships promote knowledge and best practice sharing, and can also be utilised for a more efficient resource management. Local authorities are at the forefront of these collaborative efforts and showcase very important partnerships to address modern slavery, albeit mostly focused on direct employees and residents of the Council rather than those in their supply chains. Below we highlight both the external collaborations and collaborations among local authorities which have been reported by local authorities and suggest some which could be explored. Collaboration with public bodies, unions and civil society
The main forms of these collaborations include those with the police, community and safety partnerships, and non-governmental organisations. Collaborative work with civil society organisations and consultants is usually for the purpose of delivering or developing training. Reaching out to bodies such as Labour Abuse Authority, the Home Office, Trading Standards and the Police is important and expected. However, too many Councils generally refer to ‘partnerships’ with such bodies without specific details or include reference to specific projects or agreements in place. Therefore, we encourage them to ensure that the relevance of the partnership to modern slavery is described.
Wirral Community Safety Partnership encompasses the Wirral Council, Police Crime Commissioner’s Office, Merseyside Police, Wirral Clinical Commissioning Group, Merseyside Fire and Rescue Service, National Probation Service, Merseyside Community Rehabilitation Company and Merseytravel. It is unclear how involved those organisations are in the partnership and whether they are all of equal standing. The statement does not provide further details on how these bodies contribute to actions against modern slavery and what collaborations are taking place within the partnership. What can be noted, is that Wirral Council and the Wirral Partnership have jointly written their statement. There is also an overarching aim to coordinate partners to prevent and report modern slavery, especially in order to avoid both duplication and oversight. The statement indicates that voluntary, community, and faith groups will be engaged in identification, referral and support of MS victims.
Sandwell Council chairs the Sandwell Anti-Slavery Strategic Partnership, which actually includes procurement employees as representatives within the partnerships. The Council also chairs the Sandwell Housing Operational Partnership (SHOP) established by West Midlands Police which links agencies involved with vulnerable individuals and the private rented sector housing tenure. It was established following the recognition that many victims of exploitation are accommodated within privately rented housing.
Notably, many whistleblowing policies often allow for ‘partner’ reporting. However, all remain silent as to who amounts to a partner in this context. Local authorities are encouraged to clarify whether collaboration members and partners could be covered by those policies.
Several Councils mention their collaboration with Electronics Watch, an independent monitoring organisation which supports public sector buyers in their responsible procurement of electronics. During this financial year two London boroughs have affiliated to Electronics Watch, Lewisham and Tower Hamlets.\\textsuperscript{xii} Electronics Watch allows local authorities to maximise their leverage and prevent and remediate violations of human and labour rights in the supply chain of the electronics products they purchase.
A surprising absence is the reference to collaboration with unions. Freedom of association is one of the fundamental labour rights and the denial of such right is generally a sign of potential risks of modern slavery in supply chains. Public sector unions are good sources of knowledge and understanding of the risks in global supply chains and the specific problems in local workplaces.\\textsuperscript{xiii} Engagement with trade unions both within the local authority and in the supply chain is essential for due diligence.\\textsuperscript{xiii} They too can provide useful resources such as training.
\\textbf{Collaboration among local authorities}
Equally important are collaborations among local authorities. Those types of collaborations can promote increased scrutiny and regional coordination.
Tameside Council is part of the Greater-Manchester Combined Authority (GMCA) (made up of 10 Greater Manchester Councils); the GMCA has delivered conferences on modern slavery and human trafficking to highlight how to prevent abuse and neglect, detect and report incidents and provide support to victims.\\textsuperscript{xiii} Similarly, the Derby & Derbyshire Modern Slavery Partnership is made up by Derbyshire Council and Derby City Council.\\textsuperscript{xiv}
Nottingham City Council states that its “Community Protection service is actively working with other Councils across Nottinghamshire to develop a response plan should any large-scale occurrence of modern slavery be discovered within the County, and is working with an external partner to establish a clear support route for victims of modern slavery within the region.”\\textsuperscript{xiv}
Another collaboration identified was the LGSS, which is not discouraged, but as mentioned above, no partnership should write a statement on behalf of a Council, let alone a single one on behalf of three.
e) Measurement of effectiveness
Councils haven’t been successful in strengthening their effectiveness reporting which would have been particularly expected form Councils that published modern slavery statements over the past years. The government Guidance encourages organisations to report on the effectiveness of their measures by providing information on existing or additional Key Performance Indicators (KPIs) related to anti-slavery actions. KPIs should allow for the tracking of progress in short, medium and long term and allow for substantive measurement of effectiveness. of processes and practices. Yet, very few KPIs are being used. xlvi
Cardiff Council set out in their ‘What the Council will do’ section in the 2019/2020 statement that they will develop KPIs. The same commitment was maintained in the new 2020/2021 statement, albeit expanded upon. The comparison is as follows:
| Cardiff Council KPIs | 2019-2020xlvii | 2020-2021xlviii | |----------------------|----------------|-----------------| | The number of staff trained | The number of staff completing modern slavery training | | A review of the system for supply chain verification | Continue development of the process for the evaluation of existing suppliers through the formal Risk Assessment process: ‘Tackling Modern Slavery in Supply Chains’ | | Development of the process for the evaluation of existing suppliers | Reporting on the completion of supplier modern slavery Self-assessment Questionnaire |
The following are KPIs set out by Elmbridge Council from the 2018/2019 statement:xlix
1. All contractors considered for any opportunities confirming their adherence to Modern Day Slavery Act (2015)
2. Employees made aware of Modern Day Slavery Act 2015 and training provided as identified
3. All employees completed mandatory Safeguarding Training
4. Number of cases reported on its whistleblowing system and resulting action
The same KPIs are included in their 2020/2021 Draft. The Council is encouraged to review this and assess the effectiveness of the KPIs before they publish the 2020/2021 statement officially.
As noted in our previous Research Report, Nottingham City Council indicated it was in the process of reviewing their KPI’s – both in their 2015/2016 and the 2016/2017 statements. However, any mention of KPIs has been removed from their 2017/2018 and 2018/2019 statements.¹
4. Training on modern slavery and human trafficking
Training is important for raising awareness, building capacity, but also developing employees' understanding of the relation between MS and supply chains and the impact of business operations. Training as implemented by local authorities often amounts to awareness raising, which improves the chances of identifying potential victims. By focusing solely on signs of modern slavery, however, awareness training is missing the supply chain aspect, and missing an opportunity for staff to better understand the risks which can be addressed through engagement with suppliers and public procurement decisions.
How training is delivered is very important. Disseminating resources is not equivalent to training. Simply rising the matter to employees, or bringing the governmental website to their attention is not enough. Neither would be emails on the matter, akin to newsletters. Availability of training also does not necessarily mean it is being used and whether it is mandatory remains a question.
Cardiff Council, in their 2020/2021, describe the contents of the training, including addressing the purchasing practices and how those influence supply chain conditions, how to assess the risk of MS, signs of MS, action to be taken to report concerns, and steps to take if MS is suspected. This appears to be a very detailed and holistic training. Although, the Council did not reflect on the effects of training between this statement and their previous one – the content concerning training was identical in both statements.
Lewisham Council reports to have engaged in Train the Trainer sessions offered by the ADASS (the Human Trafficking and Modern Slavery Multi-Agency Awareness Raising Train the Trainer by the Association of Directors of Adult Social Services in England). These who had undertaken the training have already begun disseminating training to social care staff in the 2017/2018 period. As the statement has not been updated, it is unclear how the training progressed in the 2018/2019 and 2019/2020 periods.
Nottingham City Council committed to 27 training session for employees and NGO’s between April 2017 and March 2019. It had estimated in its statement that it would be disseminated to 823 staff, plus voluntary persons. A further 523 staff undertook an e-learning module from November 2018. Providing a number of persons who undertook training builds a better picture of how far it reaches. It would be even more useful if the Council could provide the percentage of all employees who have undertaken the training. This would also advance their effectiveness assessment.
Although Croydon Councils describes that it is working on training being offered to the Third Sector this does not fulfil the requirements of this section. The question is what training is offered to its own employees. Perhaps it should consider working with those non-governmental non-profit organisations instead, as plenty carry knowledge and practical experience on MS.
Councils have to ensure that training described in this section is relevant to MS. So Equality and Diversity training, unless clearly linked to MS, does not appear relevant. That is why describing the contents of the training is so important – so that readers are able to understand how it contributes to the fight against MS.
Furthermore, training needs to be geared towards specific employees. As the government Guidance points out, training for personnel that may encounter victims personally would be drastically different from the training that would need to be provided to procurement employees. Noticeably, awareness training may not be particularly useful to procurement personnel. Given local authorities’ limited resources, some may need to prioritise which employees are trained first.
Councils should use this section to answer questions about the type and content of the training. How is the training dissemination – in person or as an e-learning module? Is training mandatory or voluntary? How often is the training repeated – on an annual basis, every few months, every few years? How long is the training? Who is it for? What are the contents? Is it developed by the Council or a third party?
Intense activity of training and consultancy in the private sector has been noted, and which has generally served as an awareness raising exercise can also, to some extent, be an outsourcing of responsibility to consultants. Local authorities should certainly avoid that.
Conclusions
Councils have demonstrated great ethical leadership by voluntarily choosing to publish statements under the transparency in supply chains act. This will no longer be voluntary, all local authorities above the annual turnover will have to report. Those on smaller budgets and turnover should continue to do so. Councils as public bodies should be willing and eager to disseminate their approach and good practices. Accountability and transparency are part of public service.
As this report has highlighted there is still a gap between the detail in the produced statements and the detail expected of them. Standout statements contain detail that allows for a picture to be built but it is clear that some of the Councils could make better use of the Government guidance and other resources produced for Councils on modern slavery and public procurement.
There remains a concern that very few Councils are writing their own statements. Whilst the detail in statements has gone up, and whilst it is accepted that many councils may have similar approaches, it is undeniably clear that identical phrasings, layouts and structures give away the same origin of the statements.
Councils also continue to display some naïveté regarding the possibility that modern slavery is present in their supply chain and that they may at some point in the future be the cause, or at least the exacerbating force, for abuse, trafficking and modern slavery. Admitting to the possibility of that happening is not equivalent to admitting guilt, or even admitting that there are issues. Ignoring a potential problem and refusing to prepare for it, will not make it go away. Without contingency plans and preparation, the fallout from an issue, once it does arise, will be much greater.
Nevertheless, there has been a massive increase in the number of Councils reporting in general as well as the amount of detail provided in many of the new statements. It is maintained that the level of organisational commitment from local authorities to understand and engage in anti-modern slavery is commendable and so is their willingness to collaborate both with other local authorities and with external parties. It is hoped that Councils will continue developing and improving their due diligence measures in the first instance, and improving their modern slavery statements in the second, now that they will have a legal responsibility to publish such statements. Collaboration among themselves and with external organisations will be key.
Modern slavery in supply chains is not an easy issue to address, and Councils have many competing priorities with increasingly reduced resources. COVID-19 has placed local authorities at the forefront of the fight for the lives, health and opportunities of their residents. And they have risen to the challenge. We are sure they too will rise to the challenge of keeping the fight against modern slavery in their agenda. About the Authors
Dr. Olga Martin-Ortega is Professor of International Law at the School of Law, University of Greenwich (UK) and leads the BHRE. She has been researching business and human rights for over fifteen years. She has also undertaken extensive research in the areas of post-conflict reconstruction, transitional justice and international criminal law.
Professor Martin-Ortega is a member of the Board of Trustees of Electronics Watch and a member of the Board of Directors of the London Universities Purchasing Consortium. She is also a member of the Steering Committee of the International Learning Lab on Procurement and Human Rights and leads its Electronics Hub. She has conducted numerous trainings for public authorities on their legal obligations under the UK Modern Slavery Act and performing human rights due diligence on their supply chain in the framework of the Higher Education Procurement Academy (HEPA).
Anna Gorna currently consults the BHRE on projects related to modern slavery reporting, fair recruitment in public procurement and human rights due diligence. She graduated with a degree in Law from the University of Greenwich in 2017, worked as an intern at the BHRE in 2018. In 2019 she worked at LUPC on responsible public procurement and developing the joint LUPC-BHRE project Equiano. She is currently preparing for work at the Bar.
Lucrezia Corradi is a Research Assistant at the BHRE. She has worked on modern slavery reporting by public buyers, fair recruitment practices and international labour standards. She graduated from the University of Greenwich in 2018 with a degree in Politics and International Relations.
Fatimazahra Dehbi is a Research Assistant at the BHRE. She has worked on modern slavery reporting, business, human rights and the environment, and human rights in the digital age. She graduated from the University of Greenwich in 2019 with a degree in Law.
For more information, visit www.bhre.org
We acknowledge the support of the Greenwich Work Experience Programme in the development of this research. Special thanks to Guy Head for his invaluable support to our work on the roles and responsibilities of local authorities. All omissions and mistakes remain the authors’ responsibility.
Photo Credit: © Lisa Kristine (We are extremely grateful to Lisa Kristine for allowing the use of the cover photo) BHRE Resources for Public Buyers
Guidance
- Olga Martin-Ortega and Andy Davies (2019), *Modern Slavery Statement Checker. Points to check for when reviewing a supplier’s modern slavery statement*, CIPs Knowledge.
- Olga Martin-Ortega, Anna Gorna and Patrycja Krupinska (2018), *Preparing a Slavery and Human Trafficking Statement: Guidance for Higher Education*, BHRE Research Series. Policy Paper 6 (BHRE and HEPA), October 2018 (updated November 2019).
- Olga Martin-Ortega and Andy Davies (2017), *Protecting Human Rights in the Supply Chain. A Guide for Public Procurement Practitioners* (CIPS).
- LUPC-BHRE (2018), *Protecting Human Rights in the Supply Chain. Free E-Learning suite*.
Research Reports and Policy Briefs
- Olga Martin-Ortega and Patrycja Krupinska (2018), *UK Modern Slavery Act 2015 Transparency in Supply Chains: The Second Year of Reporting by Universities*, BHRE Research Series, Report no. 3. June 2018.
- Olga Martin-Ortega, Anna Gorna and Rahima Islam (2018), *UK Modern Slavery Act Transparency in Supply Chains: Reporting by Local Authorities*, BHRE Research Series, Report no. 2. March 2018.
- Olga Martin-Ortega and Rahima Islam (2017), *UK Modern Slavery Act 2015 Transparency in Supply Chains: The First Year of Reporting by Universities*, BHRE Research Series, Report 1. Annex I: Modern Slavery Statements: Council Submission
The following Councils have a published at least one MS statement which is available either on their website or via TISC.
- Ashfield District Council
- Basingstoke and Deane Borough Council
- Bassetlaw District Council
- Belfast City Council
- Birmingham City Council
- Blaby District Council
- Blackburn with Darwen Borough Council
- Bracknell Forest Council
- Breckland District Council
- Brentwood Borough Council
- Broxtowe Borough Council
- Buckinghamshire Council
- Caerphilly County Borough Council
- Calderdale Metropolitan Borough Council
- Cambridgeshire County Council (LGSS)
- Cannock Chase District Council
- Cardiff Council
- Castle Point Borough Council
- Ceredigion County Council
- Charnwood Borough Council
- Chelmsford City Council
- Cheshire East Council
- Cheshire West and Chester Council
- Chesterfield Borough Council
- City of Bradford Metropolitan District Council
- City of Lincoln Council
- City of London
- City of York Council
- Colchester Borough Council
- Corby Borough Council
- Cornwall Council
- Coventry City Council
- Cumbria County Council
- Dartford Borough Council
- Derby City Council
- Derbyshire County Council
- Doncaster Metropolitan Borough Council
- Dudley Metropolitan Borough Council
- Dumfries and Galloway Council
- Durham County Council
- East Lindsey District Council
- East Northamptonshire Council
- East Riding of Yorkshire Council
- East Suffolk Council
- Eastbourne Borough Council
- Eastleigh Borough Council
- Elmbridge Borough Council
- Epping Forest District Council
- Essex County Council
- Exeter City Council
- Flintshire County Council
- Gedling Borough Council
- Graveshame Borough Council
- Gwynedd Council
- Halton Borough Council • Harlow Council • Hastings Borough Council • Herefordshire Council • Isle of Wight Council • Leeds City Council • Leicestershire County Council • Lewes District Council • London Borough of Barking and Dagenham • London Borough of Camden • London Borough of Croydon • London Borough of Hackney • London Borough of Hounslow • London Borough of Islington • London Borough of Lewisham • London Borough of Southwark • London Borough of Sutton • Manchester City Council • Mid Suffolk District Council (works with Babergh District Council) • Milton Keynes • Neath Port Talbot Council • Newark and Sherwood District Council • Newcastle-Under-Lyme District Council • North East Lincolnshire Council • North Hertfordshire District Council • North Somerset Council • North West Leicestershire District Council • North Yorkshire County Council • Northampton Borough Council (LGSS) • Northamptonshire County Council (LGSS) • Northumberland County Council • Nottingham City Council • Nottinghamshire County Council • Oldham Metropolitan Borough Council • Oxford City Council • Peterborough City Council • Portsmouth City Council • Powys County Council • Preston City Council • Reading Borough Council • Rotherham Metropolitan Borough Council • Royal Borough of Greenwich • Salford City Council • Sandwell Metropolitan Borough Council • Sevenoaks District Council • Shropshire Council • Solihull Metropolitan Borough Council • South Cambridgeshire District Council • South Derbyshire District Council • South Gloucestershire Council • South Kesteven District Council • South Norfolk District Council • South Tyneside Council • Southend-on-Sea Borough Council • St Albans City and District Council • Stevenage Borough Council • Stockport Metropolitan Borough Council • Stoke-on-Trent City Council • Sunderland City Council • Swindon Borough Council • Tameside Metropolitan Borough Council • Tamworth Borough Council • Telford & Wrekin Council • Tendring District Council • Torbay Council • Warrington Borough Council • Warwickshire County Council • West Lancashire Borough Council • West Lindsey District Council • West Suffolk Council • Wirral Council • Wolverhampton City Council • Worcestershire County Council • Wyre Forest District Council
The following Councils were not included in the report for the following reasons:
• Babergh District Council – the document linked on the LGA website is a policy not a statement • London Borough of Newham – LGA link and Google search engine link to the statement are broken • Canterbury City Council – the document linked on the LGA website is a policy not a statement • Aylesbury Vale District Council, Chiltern District Council, South Buckinghamshire Council, Wycombe District Council – no longer exist and have been replaced with Buckinghamshire Council • Forest Heath District Council and St Edmundsbury Borough Council – no longer exist and have been replaced with West Suffolk Council • Suffolk Coastal and Waveney District Council – no longer exits and have been replaced with East Suffolk Council
Many thanks to the LGA for maintaining a list of Councils with MS statement.
## Annex II: Transparency in Supply Chains Reporting: Aide Memoire (Updated 2020)
### MANDATORY (FORMAL) REQUIREMENTS
| DO | DON’T | |----|-------| | **Publication and Accessibility** | | | Report annually on the past financial year within six months of your organisation’s financial year-end | Report either in advance of the end of a financial year or after six months of your organisation’s financial year | | Improve the statement year on year - it is a live document | Reproduce your old statement with minor word changes or merely altered dates | | Keep a record of old statements accessible to the public (providing URL links etc). This allows for progress to be monitored | Delete old statements, only have the current statement publicly available | | Publish the statement in a prominent place on your website, eg bottom of homepage or obvious drop-down menu | Publish it in a place difficult to find or password protected | | **Formulation and Approval Process** | | | Ensure the statement is approved at the highest level and signed by a senior member of the organisation (chief executive/leader of the council); providing their post and name, signature and approval date | Leave the statement unsigned/dated or in draft format; simply state it has been approved without specifying | | Ensure the statement is a genuine reflection of your business, practices, and culture | Use templates without making the statement your own | | Formulate the statement as a collaboration between departments, with procurement teams leading and others participating eg human resources, legal and safeguarding teams | Leave it to one department or person to write the statement without input and contribution of others | | Provide relevant information in your statement with sufficient detail | Use the statement to showcase non-Modern Slavery and human rights related activities and overwhelm the reader with excessive details, ie too much legal or technical information | | **SUBSTANTIVE CONTENT OF STATEMENTS** | **DO** | **DON’T** | |-------------------------------------|--------|----------| | **Organisational Policies** | | | | Showcase your Modern Slavery policy if you have it and explain the link between your existing policies and Modern Slavery | List or reproduce all of your organisational policies | | | Amend existing policies to include references to Modern Slavery or create a standalone Modern Slavery policy | Refer to policies that have no relation to Modern Slavery | | | If approving a standalone Modern Slavery policy, clearly set out the obligations on staff, suppliers, business partners and agents, as well as procedures to be followed | Create a Modern Slavery policy composed of a collection of empty statements with no clear impact on your council’s work and behaviour eg. merely referring to a zero tolerance approach is not enough | | | Clearly state who is responsible for the implementation of the relevant policies, how implementation will be monitored and how it should be reported on | Publish a policy without a responsible department/person and an enforcement, reporting and review mechanism | | | Circulate policies in your organisation and relevant parties to make it known to all and explain how this is done in the statement | Have policies your staff, constituents and customers, business partners, suppliers and other stakeholders don’t know about and wouldn’t be able to find unaided | | | **Due Diligence: Identifying and Prioritising Risks** | | | | Show you understand the risks of abuse your organisation and practices pose: | Reproduce the risks found in other statements or templates without assessing how they relate to your own practice and suppliers | | | • towards your own staff | | | | • related to recruitment practices (including use of agencies) | | | | • related to sub-contracting | | | | • related to the products/services you procure | | | | • in your supply chains. | | | | Consider risks associated by country; sector; transaction; and business partnerships as set out in Tackling Modern Slavery in Government Supply Chains Guide for Commercial & Procurement Professionals | State that procuring solely from the UK means your supply chains are at a low or no risk of Modern Slavery. Modern Slavery is occurring every day in public sector supply chains in the UK | | | Highlight your high-risk areas, whether product or service based, in your supply chain | Merely list all products or services procured | | | Prioritise risks and focus on high-risk supply chain mapping | Try to map all of the supply chain at once | | | Understand that risks may change | Reproduce the same risks year on year in your statement | | | **MANDATORY (FORMAL) REQUIREMENTS** | **DO** | **DON’T** | |-------------------------------------|--------|----------| | **Due Diligence: Preventing, Mitigating and Remedying Abuses** | Ensure that you have functioning and responsible procurement and contract management due diligence procedures to minimise risks of modern slavery taking place within domestic and global supply chains. For example: | Do not make vague and generalised declarations stating that you take all appropriate measures without providing details | | | • referrals, site visits and spot checks | | | | • contractual provisions and contract monitoring and management | | | | • asking for suppliers to provide their own due diligence of their sub-contractors and supply chains | | | | • use online modern slavery risk identification and management tool such as the government’s Modern Slavery Assessment Tool (MSAT) | | | | Seek assurances from suppliers during the tendering process. Ask the questions up front and probe responses, where appropriate | Solely rely on a checklist and allow this to become a tick box exercise | | | Pre-procurement specification, questionnaires and checklists can be found in Tackling Modern Slavery in Government Supply Chains | | | | Introduce Modern Slavery related clauses into contracts and terms and conditions and use them to engage with suppliers meaningfully, making your expectations clear | Simply inform suppliers of your policies or ask them for theirs and seek vague anti-slavery assurances | | | Work with suppliers to create action plans, take corrective measures, and if suppliers refuse to cooperate, consider measures against them | Immediately terminate the business relationship | | | When contracting services robustly question recruitment processes | Use minimal vetting techniques, or state that you use ‘reputable recruitment agencies’ which you have not assessed | | | Report on planned monitoring and auditing measures for your own sites and sites of your suppliers | Outsource the responsibility to your suppliers, merely assuming they will carry out adequate monitoring | | | When using third party audits engage in the process and create action plans | Rely on the audit without a follow-up | | | Identify and report violations, and address how you will mitigate them | Hide or dismiss violations or rely on suppliers to resolve them when they take place lower down in your supply chain | | MANDATORY (FORMAL) REQUIREMENTS | |----------------------------------| | **DO** | **DON’T** | | Establish Modern Slavery working groups internally in which relevant departments are involved to address instances where you have identified risks or actual abuse | Make due diligence the responsibility of one sole individual or department in the institution – it is an organisation wide process. | | Review these procedures annually and continuously seek to innovate and improve on these over time | Be complacent that current due diligence practices will always mitigate the risk of Modern Slavery in your supply chains - unscrupulous suppliers will always be looking for new ways to exploit the situation |
**Collaborating with External Partners**
| **DO** | **DON’T** | |----------------------------------|------------------------------------------------| | Provide details of your collaboration with external partners, including the measures taken | Sign up to partnerships or collaborations, expecting for them to resolve the problem for you | | Collaborate within your sector and share good practice | Treat the statement as a competition or a trade secret | | Seek to collaborate with organisations working in different sectors that can help you manage modern slavery risks – for example Electronics Watch4who provides intelligence, collaboration and support about working conditions in factories that assemble IC. | Think you can combat Modern Slavery on your own, pooling resources and intelligence will often be required. |
**Measuring Effectiveness and Planning for the Future**
| **DO** | **DON’T** | |----------------------------------|------------------------------------------------| | Report on how you will measure effectiveness and who is responsible for this measurement | State the procedures have been reviewed without indicating the assessment and impact they had | | Provide information on existing Key Performance Indicators (KPIs) | Make vague and general commitments for the coming years | | Ensure KPIs are Modern Slavery related, including responsible procurement KPIs | List commitments which are not directly relevant | | Track progress at short, medium and long term, and allow for substantive measurement | Fail to assess and report on the effectiveness of measures undertaken | | Review your aims, goals and KPIs annually, with distinct future goals | Reproduce the same KPIs year on year without measuring their effectiveness | | Be honest, if you’ve not had much success it’s fine to be upfront about this whilst striving to improve in the future | Be afraid of publishing a lack of progress or hide setbacks | | Training and Capacitation | DO | DON’T | |---------------------------|----|-------| | Provide Modern Slavery specific training which is relevant to your organisation | Cite training unrelated to Modern Slavery in your statement or provide training which is not relevant to your work | | Provide training to all staff, including refreshers and new courses | Reduce Modern Slavery training to induction processes for new staff | | Provide targeted Modern Slavery supply chain and contract management training for relevant staff, especially to procurement teams, contract managers, trading standards, compliance, legal and finance teams | Use a one fits all approach | | Use external and internal training | Outsource all training responsibilities to consultants | Endnotes
1 Most statements were identified through individual Council websites. In addition, the research process also relied upon the Modern Slavery Registry hosted by the Business and Human Rights Resource Centre and the list compiled by the Local Governments Authority (LGA) as well as the database compiled by the TISC Report. Despite upmost care having been put into identifying statements, some are not readily available and easily identifiable.
2 See Home Office, Transparency in supply chains consultation, Government response (22 September 2020).
3 We understand that those changes are still being implemented and administrative adjustments take time – however, we have sought to use statements published by new entities, forgoing obsolete councils, even if those still maintain a website and have previously published statements.
4 Lewisham Borough Council Statement 2018/2019 is a officially labelled as a ‘Draft’. The statement which can only be found under the Council Meetings section, had been approved in February 2019, according to the decision log. It is only available in that section of the website and has a ‘Draft’ watermark on it. On one hand, the attached statement has seemingly been approved but on the other, it is still a draft. At the end of the day, the decision as to whether it should be considered a finalised statement is down to the reader.
5 Ashfield Council 2018/2019 Statement – which has since been replaced on the Council website with the updated 2019/2020 Statement, and the issue corrected.
6 For example, Charnwood Borough Council Statement 2019/2020 states that it is a statement for the financial year ending in 2018. This does not match its indicated financial year in the title, beginning in 2019 and ending in 2020. It would be logical to assume that the statement had not been updated from last year’s version, if one even existed or that a template was used. As the Council does not have a historical record of statements on their website, a problem discussed below, this cannot be double checked.
7 As mentioned above Lewisham Borough Council statement 2018/2019 is only available in the Council Meetings sections. In fact, it could only be found via a search engine. For the purposes of this report, the Lewisham Council statement was taken into account – as the intention of this research project is to identify progress and good practices. Conversely, a 2020/2021 Elmbridge Council statement, also only found amongst documents from a March 2020 Cabinet meeting, has not been taken into account, as it isn’t clear whether the statement had been approved, and it appears to be future dated.
8 Uttlesford Council, states on its website it has a modern slavery statement which should be accessed by following a link – which does not exist. A ‘Read our’ phrase appears on the webpage, but is neither finished, nor is it hyperlinked.
9 See, Belfast City Council – September 2019 review; City of London Statement 2018/2019 – new statement due to be published in July 2019.
10 In some cases it may be simply due to mislabelling and they do discuss the 2019/2020 activities.
11 We were only able to review the old statements due to having had downloaded them for the records before they were taken down. BHRE holds a large database of old statements from local authorities and universities.
12 City of London Statement 2018/2019
13 For example, three Councils (Cambridgeshire County Council, Northamptonshire County Council and Northampton Borough Council) had their Statement written by the public sector business support services organisation LGSS. LGSS addresses the statement in its own name on behalf of the Councils and provides no reflection or detail about the business of the individual councils. It is unclear if LGSS is responsible for all business of all three Councils. If not, then it is hardly adequately positioned to prepare a statement on their behalf. Though Councils are not precluded from collaborating and entering partnerships for combating modern slavery and human trafficking, those are better described in the statement rather than used to author a statement.
14 Thus, the Dumfries and Galloway Council Statement linked on its website for Enterprising DG, which appeared to be a commercial company, was a surprise. The statement itself remained silent on the relationship between Enterprising DG and the Council, despite the Council website stating this is their own statement about actions undertaken by them. Further research revealed that enterprising DG is a commercial arm of the Dumfries and Galloway Council.
15 For example, as in the Belfast City Council statement.
16 For instance, Charnwood Borough Council Statement 2019/2020 (since removed) was signed by a Cabinet Lead Member for Equalities – a position which was only identified by searching for the councillor’s name on the website, and which might not be possible once the member ceases to be a councillor. See also: Charnwood Borough Council Statement 2020/2021.
17 East Lindsey District Council Statement 2018/2019
18 East Riding of Yorkshire Council Statement 2017/2022
19 Colchester Council’s Transparency Statement 2018/2019 is an example of insufficient quality.
20 Sunderland Council 2018/2019 Statement
21 Neath Port Talbot Council (Statement 2019/2020) indicates that high risk suppliers will be investigated as and when required on an ongoing basis but did not identify any specific risk areas. Similarly, whilst Cardiff Council listed high risk areas such as agriculture, leisure, hospitality, catering, clothing, construction and manufacturing, they did not specify which were most relevant to their own supply chain. Although an educated guess can be made as to which areas are most relevant to a public body, the Councils should still make that assessment themselves.
22 Lewisham Borough Council Statement 2018/2019. The mitigating measures listed include using the ICT Shared Service provided by the London Borough of Brent. According to our research, this covers staffing, infrastructure and joint procurement. Other measures adopted by the Council include use of the Crown Commercial Service (CSS) framework agreement to procure ICT hardware.
City of London Statement 2018/2019
Neath Port Talbot Council (Statement 2019/2020)
Leeds City Council (Statement 2019/2020 – available only via TISC Report) mentions ‘Instinct’ which it describes as an internal reporting system for MS that has been in operation for 3.5 years. Where MS is identified it is then reported to relevant bodies and ‘appropriate action’ is taken, according to the statement. The Council, however, fails to identify any further detail. The questions that remain are whether this is a system concerned with safeguarding and MS within the community of Leeds or is it concerned with the Leeds Council supply chain. There is no indication as to what is a ‘relevant body’, what incidents have been identified, or what amounts to ‘appropriate action’.
Basingstoke and Deane Council Statement (No Date). However, it does not clarify what those clauses may be or the type of situations where it may be deemed necessary.
Essex County Council Statement 2019/2020
Flintshire County Council Statement 2019/2020
The Electronics Watch worker-driven monitoring methodology is guided by workers’ rights and priorities. It provides public buyers with an effective tool for public buyers to detect and remedy labour rights and safety breaches in their global supply chains.
Swindon Borough Council Statement 2016/2017 – available only via TISC
Salford City Council Statement 2019
East Riding of Yorkshire Council Statement 2017/2022. However, apart from housing support, it provides no other details on the type of assistance that would be provided.
Ceredigion County Council 2019/2020
Ceredigion County Council 2019/2020, Croydon Borough Council 2018/2019
For instance, Elbridge Borough Council (Statement 2018/2019) is a member of the Elbridge Community and Safety Partnership (ECSP) along with other agencies. Operational arms of the ECSP include the Joint Action Group (JAG) and the Community Harm and Risk Management Meeting CHARM, and deal with long- and short-term operational issues. However, the Council fails to describe any modern slavery projects undertaken as part of that partnership.
Wirral Modern Slavery Strategy 2018-2021
Sandwell Council Statement 2019/2020
Electronics Watch list of affiliates includes several European local authorities. Other organisations in the UK which have joined the organisation are Universities and universities purchasing consortia.
The trade union Unison has produced a Guide to Ethical Procurement in UK Local Authorities (2018) which contains useful information on ethical procurement initiatives and good practice case studies.
See for example the International Trade Union Confederation report Towards mandatory due diligence in global supply chains.
Tameside Metropolitan Borough Council Statement 2020/2021 – available only via TISC
Derbyshire County Council Statement 2019/2020
Nottingham City Council, The Council should consider expanding this further in the future, as this exact same paragraph has been copied into each of its statements since the 2016/2017 period.
In their 2017/2018 Statement, Sunderland Council indicated they were in the process of reviewing their KPIs. However, by the following year in their 2018/2019 Statement, KPIs are not even mentioned – however, that may be down to what appears to be a missing page, or pages, in the statement.
Cardiff Council Statement 2019/2020 – since deleted
Cardiff Council Statement 2020/2021
Elbridge Borough Council Statement 2018/2019
See: Nottingham City Council – all statements
Cardiff Council Statement 2020/2021
Lewisham Borough Council Statement 2018/2019
Nottingham City Council 2019
Croydon Borough Council 2018/2019
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57432a30467c9deff911874508e447cae5b9a3fe | Lord Deramore's Primary School City of York Council Internal Audit Report 2015/16
Business Unit: Primary Schools. Head Teacher: Mrs Powley Date Issued: 6th May 2016 Status: Final Reference: 15625/002
| Actions | P1 | P2 | P3 | |---------|----|----|----| | Overall Audit Opinion | High Assurance | Summary and Overall Conclusions
Introduction The audit was carried out in November 2015 as part of the Internal Audit plan for Children’s Services, Education and Skills for 2015/16. Schools are audited in accordance with a detailed risk assessment.
Objectives and Scope of the Audit The purpose of this audit was to provide advice to the Governors, Head Teacher and the Authority’s Section 151 Officer about the financial management procedures and assurance that internal controls of the school are operating effectively to manage key risks, both financial and otherwise.
The audit covered the following areas in accordance with the specification issued on 5th October 2015:
- Governance and Financial Management
- System Reconciliation
- Banking Arrangements
- Contracts, Purchasing and Authorisation
- Income
- Capital and Property
- Extended Schools Provision
- Human Resources
- Payroll and Staff Costs
- School Meals
- Pupil Numbers
- School Fund
- Data Protection and Information technology
- Insurance and Risk Management
- Inventories
- Safeguarding
Key Findings Systems within the school are operating well. The school has faced challenges this year with the implementation of the new CYC finance system and significant effort has been put into working around these to ensure that the finances are well managed even when it was not possible to undertake all the standard financial procedures.
In addition to the individual school audit, themed audits for schools are being undertaken in 2015-16 and the school should look to implement any additional actions that come out of those audits. The finding in this report related to the governing document for the school fund.
Overall Conclusions It was found that the arrangements for managing risk were very good. An effective control environment appears to be in operation. Our overall opinion of the controls within the system at the time of the audit was that they provided High Assurance.
## 1 School Fund
| Issue/Control Weakness | Risk | |------------------------|------| | There isn't a governing document for the school fund | The aims of the school fund may not be set out and reviewed regularly |
### Findings
The school does not have a governing document clearly setting out the objectives of the school fund.
### Recommendation
The school should adopt a governing document for the school fund and review it on a regular basis.
### Agreed Action 1.1
The School Fund Constitution document was reviewed and presented to the Finance Committee and approved on Wednesday 27th April 2016.
| Priority | Responsible Officer | Timescale | |----------|---------------------|-----------| | 3 | Head Teacher | Complete | Audit Opinions and Priorities for Actions
Audit Opinions
Audit work is based on sampling transactions to test the operation of systems. It cannot guarantee the elimination of fraud or error. Our opinion is based on the risks we identify at the time of the audit.
Our overall audit opinion is based on 5 grades of opinion, as set out below.
| Opinion | Assessment of internal control | |--------------------|------------------------------------------------------------------------------------------------| | High Assurance | Overall, very good management of risk. An effective control environment appears to be in operation. | | Substantial Assurance | Overall, good management of risk with few weaknesses identified. An effective control environment is in operation but there is scope for further improvement in the areas identified. | | Reasonable Assurance | Overall, satisfactory management of risk with a number of weaknesses identified. An acceptable control environment is in operation but there are a number of improvements that could be made. | | Limited Assurance | Overall, poor management of risk with significant control weaknesses in key areas and major improvements required before an effective control environment will be in operation. | | No Assurance | Overall, there is a fundamental failure in control and risks are not being effectively managed. A number of key areas require substantial improvement to protect the system from error and abuse. |
Priorities for Actions
| Priority | Description | |----------|-----------------------------------------------------------------------------| | Priority 1 | A fundamental system weakness, which presents unacceptable risk to the system objectives and requires urgent attention by management. | | Priority 2 | A significant system weakness, whose impact or frequency presents risks to the system objectives, which needs to be addressed by management. | | Priority 3 | The system objectives are not exposed to significant risk, but the issue merits attention by management. | Where information resulting from audit work is made public or is provided to a third party by the client or by Veritau then this must be done on the understanding that any third party will rely on the information at its own risk. Veritau will not owe a duty of care or assume any responsibility towards anyone other than the client in relation to the information supplied. Equally, no third party may assert any rights or bring any claims against Veritau in connection with the information. Where information is provided to a named third party, the third party will keep the information confidential.
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03fbf3e0f7d27ee80a0b304ef2c7cf14fe649aba | Cabinet Office
Annual Report and Accounts 2013-14 (For the year ended 31 March 2014)
Accounts presented to the House of Commons pursuant to Section 6 (4) of the Government Resources and Accounts Act 2000
Annual Report presented to the House of Commons by Command of Her Majesty
Ordered by the House of Commons to be printed on 30 June 2014 This is part of a series of departmental publications which, along with the Main Estimates 2014-15 and the document Public Expenditure: Statistical Analyses 2014, present the Government’s outturn for 2013-14 and planned expenditure for 2014-15.
## Contents
| Section | Page | |------------------------------------------------------------------------|------| | **STRATEGIC REPORT** | | | Introduction by Richard Heaton, Permanent Secretary for the Cabinet Office | | | First Parliamentary Counsel and Accounting Officer | 7 | | Who we are and what we do | 8 | | Spending summary | 9 | | How we create value | 10 | | Strategic Review by Rt Hon. Francis Maude MP, Minister for the Cabinet Office | 11 | | Highlights of the year in chronological order | 13 | | Sustainable Development | 15 | | Our Performance | 21 | | Coalition Priorities | 22 | | Performance on Business Plan commitments | 28 | | Financial Review | 32 | | **GOVERNANCE** | | | Performance Report by Lord Browne, the Lead Non-Executive Director | 58 | | Our Ministers | 60 | | Governance Statement | 63 | | Remuneration Report | 84 | | Directors’ Report | | | Corporate Information | 96 | | Statement of Accounting Officer’s responsibilities | 107 | | Statement of the disclosure of relevant audit information | 108 | | **FINANCIAL STATEMENTS** | | | The Certificate and Report of the Comptroller and Auditor General to the House of Commons | 110 | | Statement of Parliamentary Supply | 112 | | Notes to the Statement of Parliamentary Supply | 113 | | Consolidated Accounts | 119 | | Notes to the Consolidated Accounts | 123 | This page is intentionally left blank. Strategic Report This page is intentionally left blank. Introduction by Richard Heaton Permanent Secretary for the Cabinet Office
As Permanent Secretary, I am proud of the achievements of teams and individuals across the Department this year. Their flexibility, and their ability to lead on a challenging set of priorities, has produced substantial results. The Minister for the Cabinet Office’s Strategic Review on page 11, describes in more detail the strategic context in which the Cabinet Office has operated this year.
The annual report and accounts is an opportunity to look back at some of the year’s highlights, as well as to set out formally our financial position. Much of what we have done this year has been new or transformative. We have found different ways to help the government tackle public policy problems, and save money. We launched the Centre for Social Action, which has committed £36 million for volunteering projects to tackle persistent social problems. November saw the appointment of a second new shared services centre, bringing commercial expertise as well as government co-ownership to the efficient delivery of vital back-office functions. The National Citizen Service has been successfully nurtured under Cabinet Office management, and is now administered by an independent not-for-profit enterprise. And the Behavioural Insights Team is now a partnership with the innovation charity Nesta.
There is also a range of other business we have discharged professionally and safely: keeping the nation safe, stimulating economic growth, cutting regulation, taking legislation through Parliament, and supporting effective government. We have done that through a skilled and talented workforce, from career civil servants to those spending a chapter of their careers with us. I would like to thank all of those colleagues for their commitment.
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer Who we are
We are privileged to be tasked with some of the most important issues facing the country: from making government more efficient to supporting the voluntary sector through challenging times; from tackling the growing menace of cybercrime to overseeing UK honours and awards.
Cabinet Office supports the Prime Minister and Deputy Prime Minister, and ensures the effective running of government. We are also the corporate headquarters for government, in partnership with HM Treasury, and we take the lead in certain critical policy areas.
A ministerial department, the Cabinet Office is supported by 18 agencies and public bodies. Every day we work together to assist government function better, deliver exceptional public services and help the UK become a stronger and fairer society.
Organisational Structure
Our organisational structure is updated and published on the following link: Cabinet Office Organogram
What we do
- We support collective government and help to ensure the effective development, coordination and implementation of policy.
- We support the National Security Council and the Joint Intelligence Organisation, coordinating the Government’s response to crises and managing the UK’s cyber security.
- We promote efficiency and reform across government through innovation, better procurement and project management, and by transforming the delivery of services.
- We promote the release of government data and make the way government works more transparent.
- We lead for Government on Civil Service reform, improving its capability and effectiveness.
- We promote social action and the National Citizen Service, and grow the social investment market.
- We lead on political and constitutional reform. Departments report financial information quarterly through the Government Interrogating Spending Tool (GIST). On the GIST you will be able to see a breakdown of government spend as per HM Treasury's financial reporting system. Within major departments you will also be able to link to the Cabinet Office's Quarterly Data Summary information, which focuses on the expenditure that is most relevant for that department and is collected in a way that makes data comparable across government. The data can be found here: [www.gist.cabinetoffice.gov.uk/](http://www.gist.cabinetoffice.gov.uk/)
Below is the Spending Data for 2013-14. These totals tie to the totals in Financial Highlights within the Financial Review which explains the numbers in more detail.
### SPEND BY BUDGET TYPE
| TOTAL | £millions\* | |-------|------------| | Departmental Expenditure Limit (DEL) | 441.6 | | Annually Managed Expenditure (AME) | (4.5) | | Other outside DEL /AME\* | (48.3) | | **Total Spend** | **388.8** |
Of which:
### SPEND BY TYPE OF INTERNAL OPERATION
| TOTAL | £millions | |-------|-----------| | Running the estate | 54.4 | | Running IT | 26.2 | | Corporate services | 16.6 | | Policy and policy implementation | 339.9 | | Other * | (48.3) | | **Total Spend** | **388.8** |
### SPEND BY TYPE OF EXPENDITURE
| TOTAL | £millions | |-------|-----------| | Procurement costs | 133.3 | | People costs | 169.0 | | Grants | 134.8 | | Other * | (48.3) | | **Total Spend** | **388.8** |
\*Other outside DEL/AME represents income from Associates How we create value
The Cabinet Office saved the Government £14.3 billion for 2013-14. This is in addition to the £10 billion saved for 2012-13, with £5.5 billion for 2011-12 and £3.75 billion for the first ten months of this Government, all measured against a 2009-10 baseline. These savings are a combination of recurring and non-recurring items.
Increased spend with small and medium sized enterprises (SMEs)
Government spend with SMEs increased from £3 billion in 2009-10 to £4.5 billion in 2012-13. We have also more than halved the length of the average procurement process since 2012 - from 208 working days to 102 working days.
Over 19,000 opportunities have now been published on our on-line tool the Contracts Finder to help SMEs spot opportunities more easily.
G-Cloud
Cumulative G-Cloud spend surpassed the £100 million mark – 56% of it with SMEs.
Major Projects Leadership Academy (MPLA)
The second MPLA cohort graduated in February 2014.
Property
By the end of 2013-14, we had vacated over 1,000 leasehold properties and raised more than £1 billion for the taxpayer since 2010 by selling over 770 buildings and land we no longer need. This means that the government office estate is 17% smaller than it was in 2010.
Mutuals
Nearly 100 mutuals are now live and trading, up from just eight in 2010. Together they now deliver around £1.5 billion of public services.
Staff survey
We published the benchmark results of the Civil Service staff survey. The survey shows that 89% of staff are interested in their work; 88% say that they are trusted to carry out their job effectively; and 80% say their team works together to find ways to improve the service they provide.
Payroll
Civil Service employment has now reduced by 17% since the general election, helping to save the taxpayer £2.4 billion last year alone. The Civil Service is now at its smallest since the Second World War, representing a significant increase in efficiency and productivity.
Public bodies
Over 180 public bodies have now been abolished, with total number of public bodies reduced by 280. This means that 95% of proposed abolitions and mergers are now complete, and we achieved our public commitment to deliver 90% of abolitions and mergers by March 2014. To date, the Government has reduced the administrative cost of public bodies by over £1 billion and remains on track to achieve cumulative net reductions of at least £2.6 billion by 2014-15.
By the next general election, a third of public bodies in the Government’s reform programme will have been closed down, and there will be over 300 fewer than at the 2010 Election making this the largest reform of public bodies in a generation. The Cabinet Office has made good progress in 2013-14, continuing its work to eliminate waste and inefficient spending, reform the civil service, build a bigger society, drive greater transparency and protect national security. I am grateful to civil servants in this department and across the country for the work they have done.
The Government faced a substantial financial challenge in 2010. This department has played an important role in changing the way the Civil Service works to help reduce public expenditure and protect our frontline services.
The Efficiency and Reform Group (ERG) has delivered significant savings year after year. The Group has operated tight control over common activities such as property, ICT, and procurement in central government and reduce costs. For 2013-14, ERG supported departments to deliver a £14.3 billion of savings, against a 2009-10 baseline. Alongside our work on major projects, digital transformation, and fraud, error and debt, this department is helping to change the way the Civil Service works.
This year was another important milestone for the efficiency and reform agenda as the Crown Commercial Service (CCS) was launched. CCS brings together the government’s central commercial capability to manage common goods and service on behalf of departments. Government is acting as a single customer, helping us drive the best value for taxpayers through its collective buying power.
In other areas, the department has continued to drive innovative changes to public service delivery. The mutuals programme, for example, has seen the creation of almost 100 trading staff-owned mutuals, with responsibility for over £1.5 billion worth of services. The Government Digital Service (GDS) is changing the way citizens interact with public services, by consolidating more websites on GOV.UK and developing 25 new digital exemplar services. On transparency, the Cabinet Office has helped to release thousands of data sets on data.gov.uk and in June 2013, G8 governments came together under the UK presidency to agree a landmark Open Data Charter.
The Civil Service Reform programme is seeking to create a new culture - one that is more efficient and focused on service delivery. Our Civil Service Reform One Year On report gives an honest appraisal of what we have achieved. There is still much more to do and the Cabinet Office will continue to play an important part in building capability and strengthening cross-Whitehall functional leadership.
Along with HM Treasury, the Cabinet Office is a strong and effective corporate centre at the heart of the Civil Service. It supports the Prime Minister and Deputy Prime Minister on key policy areas, and helping to protect our national security. The Secretariats facilitate collective decision-making across government. 2013-14 has been a busy year, with many important milestones. We have continued to support the Government’s priorities to reduce the deficit, drive growth, build a fairer society and protect our security. I am proud of the work this department does and am confident that we can build on the progress made over the last four years in the last year of this Parliament.
A detailed account of the strategic risks and our mitigation strategy can be found in the Governance Statement.
Rt Hon. Francis Maude Minister for the Cabinet Office, Paymaster General Highlights of the year in chronological order
10 April – We signed a deal that will significantly reduce what government pays for energy. The new 20-year contract with Air Products is expected to deliver £84 million in savings over its lifetime, through an innovative fixed agreement that will provide stability in what the public sector pays for energy.
15 April – We appointed members to the Open Standards Board to help government identify the standards that will allow cheaper and more flexible ways of buying and using its IT.
15 April – A new Civil Service Fast Track Apprenticeship Scheme opened for applications, giving talented and ambitious young people the opportunity to work at the heart of government.
17 April – We launched the Centre for Social Action, which committed £36 million to finding and supporting the most effective volunteering projects to tackle persistent social problems.
26 April – We signed an innovative deal to create the first business based on government intellectual property. The new company, AXELOS Limited, will own and trade on the ‘Best Management Practice’ portfolio of professional standards developed by the Civil Service, and is expected to boost returns for taxpayers by £500 million over ten years.
29 April – The 24th and final ministerial department website moved across to the single domain GOV.UK.
24 May – The performance of the Government’s most expensive and important projects was revealed for the first time through the Major Projects Authority’s annual report, which will help overturn Whitehall secrecy and further improve project delivery.
6 June – The UK hosted the inaugural G8 conference on social impact investing, where the Prime Minister reinforced the UK’s commitment and leadership in growing the global social investment market.
10 July – We published a review of the first year of the Civil Service Reform Plan, including a traffic-light assessment showing where progress is on track, where more effort is needed and further actions.
17 July – We launched the Civil Service High Potential Stream, which targets ambitious individuals who consistently and significantly outperform their peers. Many will go on to become part of the Civil Service Top 200, and some could rise to become the permanent secretaries of tomorrow.
29 July – We launched the Government Interrogating Spending Tool (GIST) which is a powerful new online tool that gives taxpayers an unprecedented view of how their money is spent. The tool is the first of its kind in the world, and it increases accountability and transparency by opening the Government’s books.
20 Aug – We announced that measures introduced since the last general election had last year cut fraud and error that hits the public purse by £6.5 billion against a 2009-10 baseline. 15 Oct – We launched the new Government Communication Service to improve professionalism, standards, career development and value for money. The new approach will see departments’ teams supported by an additional central resource of expertise for specific, short-term projects or emerging priorities and breaking news issues.
1 Nov – We helped organise the Open Government Partnership annual summit. We used the summit to help drive forward our transparency agenda, and on the first day of the summit published the UK’s second National Action Plan.
1 Nov – We announced that Shared Services Connected Limited (SSCL) will run the second of two new Independent Shared Services Centres. The company will harness commercial expertise to deliver government back-office functions more efficiently.
12 Nov – We launched the Digital Services Framework for building digital public services, with more than a third of the companies on the new procurement framework never before having done business with government.
4 Dec – We published pipelines of future government business opportunities worth more than £177 billion. This gives firms of all sizes the confidence and time to invest in the relevant skills, labour and capabilities to win contracts. The 19 sectors in the latest update cover more industries than ever before.
31 Dec – The cost of the Civil Service pay bill spend on trade union facility time fell by around two thirds since November 2011.
15 Jan – The European Parliament agreed a revised package of EU Procurement Directives; it includes a number of UK wins on things we lobbied for in Brussels – including support for small and medium-sized enterprises and mutuals.
24 Jan – We published ‘red lines’ for government IT contracts to ensure maximum taxpayer value. This means that no IT contract worth more than £100 million will be allowed (unless there is an exceptional reason for permitting it) and that new hosting contracts will not last for more than two years.
4 Feb – The Cabinet Office’s Behavioural Insights Team joined with the innovation charity National Endowment for Science, Technology and the Arts (Nesta) to create a new associate company to apply insights from behavioural sciences and to help the Government save millions of pounds for the taxpayer by tackling public policy problems.
10 Feb – We published a unit cost database bringing together more than 600 service cost estimates. This enables civil society organisations to bid in to government with ideas for where they could provide more innovative and effective approaches to tackling social problems. The UK has more Social Impact Bonds (SIBs) than the rest of the world put together, and is supported by a dedicated Centre for SIBs in the Cabinet Office.
13 Feb – We published results from the 2013 Civil Service People Survey, showing results of the fifth annual survey of civil servants’ opinions about what it is like to work in government departments and agencies.
14 March – The UK and Israel signed a new memorandum of understanding on digital government which will create opportunities for future generations. Sustainable Development
Overview
Sustainable development means encouraging economic growth while protecting the environment and improving our quality of life – all without affecting the ability of future generations to do the same. Sustainable development recognises that the three ‘pillars’ of the economy, society and the environment are interconnected.
The Cabinet Office strives to embed the principles of sustainable development in all of its operations and activities. The Department is working to reduce its energy consumption and associated carbon emissions and costs, as well as to mitigate its wider environmental impacts, with the aim of becoming an exemplar in this field. The important work on protecting national security and improving social mobility undertaken by the Department continues to contribute to a secure and sustainable future for all.
The Cabinet Office has implemented a number of projects to help the Department deliver the carbon reduction targets announced under the Greening Government Commitments. The Department continues to drive down its waste arisings, and is working in partnership with the Department for Environment, Food and Rural Affairs (Defra) and the Waste and Resources Action Programme to make further savings in this area. As well as these measures, the Cabinet Office is also working to incorporate sustainability considerations into its wider policy- and decision-making process.
Initiatives
This work is further supported by Big Society Capital (BSC), the world’s first ever social investment institution. BSC was established by the Cabinet Office and launched as an independent organisation in April 2012. Its aim is to grow the social investment market. BSC invests in bodies that provide finance and other support to social sector organisations – making it easier for social entrepreneurs to access the capital they need and to become sustainable. BSC has up to £600 million in capital to invest: £400 million from England’s share of unclaimed assets and £200 million invested by four large retail banks.
Two years into its operation, BSC has just published its second annual report, available at: Social Investment from Ambition to Capital
Nearly £150 million in investment has been committed so far to a wide range of organisations. BSC has recently published its strategy, which sets out its vision for the future social investment market and what it will do to work towards this vision, in partnership with others. The strategy is available at: Big Society Capital - Our strategy for the next three years
The Implementation Unit in the Cabinet Office has supported Defra to embed sustainable development into the departmental business planning process, a key step in delivering the Government’s commitment to mainstreaming sustainable development. Sustainable development is now included within the guidance for departmental business plans as a mandatory component of all plans. Details of each department’s business plan can be found at: Business Plans: track progress in implementing our policies
The Cabinet Office leads on the cross-government transparency agenda. Transparency is not just about access to data. People need to be able to use that data, share it, and combine it with other data for use in their own applications. Used in this way, open data can create value by providing an opportunity for businesses to take the data and produce goods and services from it. Information on government transparency can be found at: Improving the transparency and accountability of government and its services The resulting data is published at: http://data.gov.uk/
The Cabinet Office sits on the cross-government Sustainable Development Practitioners’ Forum and the Sustainable Development Group, both chaired by Defra.
Wider work
The Cabinet Office is working on a number of key programmes which will also have a significant contribution to make towards mainstreaming sustainability. These work streams include:
- growing the social investment market – comprehensive information available at: Growing the social investment market
- the work of the Office for Civil Society: Civil Society update series including Promoting social action: encouraging and enabling people to play a more active part in society
- the launch of National Citizen Service: Take part- National Citizen Service
- leading on the transparency agenda, including regularly publishing progress reports showing performance across government against the key performance areas; these reports are available at: Procurement and contracting transparency progress reports
- making public services digital by default to improve their accessibility and openness, primarily through the launch of the GOV.UK website.
Social and environmental impacts
The Cabinet Office continues to look at options for assessing and managing social and environmental impacts and opportunities in its policy development and decision-making. The Department has a number of levers at its disposal to help ensure that this is happening domestically and across government as a whole. These include:
- the Department’s role in delivering the Government’s priorities for Civil Service reform in line with the recently published plan, available at: The Civil Service Reform Plan
- the inclusion of relevant information in the transparency reporting undertaken by departments.
In its policy, programme and project development processes, the Cabinet Office makes use of both the HM Treasury Green Book and the Regulatory Impact Assessment toolkit. Both of these documents contain detailed information on how to assess and mitigate negative outcomes which impact on sustainability. Wherever relevant, the Cabinet Office makes use of Defra’s national rural proofing guidance which can be found at: Rural proofing guidance to ensure that the needs and interests of rural people, communities and businesses are properly considered in the development and implementation of all policies and programmes. The Cabinet Office will be working over the coming year to identify further opportunities to build on existing processes, in order to ensure that sustainability is factored into its policy, programme and project management activities.
Delivery of the Greening Government Commitments
The Department has been successful in driving down its carbon footprint: this has fallen by 38.9% from its 2009-10 baseline, through a combination of improved housekeeping, investment in energy reduction measures and the implementation of an ambitious and extensive estate rationalisation and efficiency project. As the Department continues to drive forward with these measures, we anticipate a steady improvement in our performance over the lifetime of the project. The Cabinet Office now also has good-quality management information systems in place, allowing it to report accurately for the first time on the number of domestic flights taken by its staff.
The Department’s annual waste arisings continue to fall and are now 63.7% below 2009-10. This has primarily come about as a result of better streaming and waste separation at the processing plant. The Department has signed up to the ‘Closed Loop’ paper contract, along with other contractual arrangements, thereby potentially yielding further environmental benefits.
The Cabinet Office has made a reduction in its water consumption of 12.2% against the 2009-10 baseline. These savings have arisen primarily as a result of the Department’s estate rationalisation programme. The Cabinet Office has a headline consumption per full-time equivalent (FTE) member of staff of 15.5m³. This is significantly higher than is desirable, and the organisation will work to drive this down at both departmental and building level. It is in part because various buildings are currently under refurbishment and are therefore not fully utilised.
Sustainable procurement
The Cabinet Office continues to work to deliver the aspiration that 25% of contracts by value should be awarded to small and medium-sized enterprises (SMEs). In the period to December 2013, the proportion of the Department’s procurement expenditure with SMEs was 26.3%, against its annual target of 20%. This includes spend undertaken both directly, with SME prime contractors, and indirectly, through larger prime suppliers’ supply chains. In order to support this endeavour further, the Cabinet Office, including its agency, the Crown Commercial Service, has delivered the following:
- over 80% of contracts for the Mutuals Support Programme awarded to SMEs
- development of a new contracting model for facilities management services designed to be more accessible for SMEs
- roll-out of the Solutions Exchange online tool, enabling suppliers to engage with government about potential business, and to pitch their ideas
- introduction of simpler terms and conditions for lower-value contracts.
Food procurement
The Cabinet Office has been engaging with its key catering suppliers to encourage the procurement of food which meets British production standards. Approximately 92% of all meat and poultry supplied on the Department’s central London contract was produced to Farm Assured standard (or equivalent); 100% of fish supplied was from sustainable sources certified by bodies such as the Marine Stewardship Council. All the Department’s meat, poultry and milk comes from UK producers.
The Department’s total facilities management supplier provides healthy options within the standard daily menus, along with a diverse salad and deli bar.
Details of the Cabinet Office’s food procurement is available at: Cabinet Office food sustainability
People
The Cabinet Office has a network of Green Champions to promote sustainability issues within the Department and on its estate. The membership of the network comprises staff from the Department and tenants on the Cabinet Office estate. They work to improve the sustainability of the Department by raising staff awareness of sustainability issues and by encouraging staff to take responsibility for reducing their environmental impact. The Green Champions act as a forum to develop constructive ideas for improving all aspects of the Cabinet Office’s operations, from the way in which its estate is managed through to its corporate policies and processes.
The Civil Service has a long tradition of supporting staff to volunteer, with many civil servants giving their time in aid of a variety of charities and community groups. The Cabinet Office recently launched its second Charity of the Year Partnership with Samaritans. The Department offers up to five days’ special leave for each member of staff to undertake volunteering. Staff can organise their own volunteering activity or can visit www.do- Biodiversity
The Cabinet Office operates a mainly office-based estate and, as such, has not had to undertake any major work on biodiversity. The Department works to ensure that, whenever relevant, biodiversity considerations are taken into account in the event of a change of circumstances. These considerations have been embedded in the Department’s environmental policy.
Sustainable construction
The Cabinet Office seeks to apply the Building Research Establishment Environmental Assessment Method (BREEAM) on all relevant refurbishment projects. The Department has not completed any such projects in the last financial year. The ongoing refurbishment at 10–12 Downing Street has received a BREEAM in-use rating of ‘very good’. More information is available at: http://www.breeam.org/
The Cabinet Office will work to ensure that this good performance continues, by embedding the standards in all relevant projects. The Cabinet Office endeavours to recycle all construction waste, where possible, and this is monitored internally to ensure continuing compliance with this standard.
Adapting to climate change
The risks posed by climate change are too great to ignore. It is essential that policies and future plans consider these potential impacts from the very start. The Cabinet Office has an important role to play in ensuring national adaptation to the risks and opportunities presented by climate change. To this end, the Department has taken a number of steps to ensure that these considerations are reflected in its relevant planning, policies and strategies. For example:
- Some of the major impacts of climate change have been identified as key threats in the National Risk Register (NRR) of Civil Emergencies. However, The NRR and the National Risk Assessment cover only emergency events and do not include longer-term trends, such as technological advances or climate change in the broader sense. The document is available at: National Risk Register of Civil Emergencies
- The security implications of climate change have been embedded in the National Security Strategy, available at: The National Security Strategy - a strong Britain in an age of uncertainty
- The Cabinet works closely with Defra on the National Adaptation Programme, details of which are available at: Adapting to climate change: national adaptation programme
## Sustainable Development data tables
### Greening Government Commitments and resource use
| Reduce greenhouse gas emissions by 25% from a 2009-10 baseline from the whole estate and domestic business-related transport | |---|---|---| | Baseline emissions (tonnes of CO₂e) | 2013-14 emissions (tonnes of CO₂e) | % change | | 11,733 | 7,272 | 38.1% reduction |
| Cut domestic business travel flights by 20% by 2015 from a 2009-10 baseline | |---|---|---| | Baseline flights | 2013-14 flights | % change | | 2,306 | 2,390 | 3.6% increase |
| Reduce the amount of waste we generate by 25% from a 2009-10 baseline | |---|---|---| | Baseline waste arisings (tonnes) | 2013-14 waste arisings (tonnes) | % change | | 1,226 | 444 | 63.8% reduction |
| Cut our paper use by 10% in 2011-12 from a 2009-10 baseline | |---|---|---| | Baseline paper usage (reams of A4e) | 2013-14 paper usage (reams of A4e) | % change | | 56,396 | 20,171 | 64.2% reduction |
| Reduce water consumption from a 2009–10 baseline | |---|---|---| | Baseline water consumption (m³) | 2013-14 water consumption (m³) | % change | | 52,388 | 45,123 | 13.9% reduction |
| Report on percentage of offices meeting best/good/poor practice water-use benchmarks | |---|---|---|---| | Benchmark | Poor (≥6 m³ per FTE) | Good (4m³ to 6m³ per FTE) | Best (≤4m³ per FTE) | | % of offices | 92% | 0% | 8% |
### Carbon and energy
| Utility | 2013-14 Consumption (kWh) | 2013-14 Emissions (tonnes of CO₂e) | 2013-14 Expenditure (£k) | 2012-13 Consumption (kWh) | 2012-13 Emissions (tonnes of CO₂e) | 2012-13 Expenditure (£k) | |---------------------------------|---------------------------|-----------------------------------|--------------------------|---------------------------|-----------------------------------|--------------------------| | Gas | 3,131,616 | 576 | 98 | 4,136,459 | 759 | 148 | | Electricity | 11,191,391 | 5,412 | 1,234 | 12,130,313 | 6,364 | 840 | | Whitehall District Heating System | 2,723,958 | 724 | 445 | 4,070,368 | 987 | 584 |
### Travel
| Category | 2013–14 Mileage | 2013–14 Emissions (tonnes of CO₂e) | 2013–14 Expenditure (£k) | 2012–13 Mileage | 2012–13 Emissions (tonnes of CO₂e) | 2012–13 Expenditure (£k) | |---------------------------------|-----------------|-----------------------------------|--------------------------|-----------------|-----------------------------------|--------------------------| | Air travel – domestic | 495,915 | 138 | 267 | 493,685 | 143 | 249 | | Air travel – short haul | 529,529 | 147 | 173 | 618,668 | 196 | 202 | | Air travel – long haul | 3,299,691 | 918 | 1,264 | 3,082,116 | 1,119 | 984 | | UK rail travel | 3,682,169 | 290 | 935 | 3,194,782 | 290 | 1,263 | | Taxi travel | 61,103 | 14 | 108 | 51,179 | 12 | 102 | | Hire car | 105,596 | 32 | 21 | 47,323 | 16 | 23 | | Operational vehicles | 40,141 | 12 | - | 54,783 | 17 | - |
### Greenhouse gas emissions summary
| Scope | 2013-14 Emissions (tonnes of CO₂e) | 2012-13 Emissions (tonnes of CO₂e) | |--------------------------------|-----------------------------------|-----------------------------------| | Scope 1 | 638 | 776 | | Scope 2 | 5,709 | 7,351 | | Scope 3 | 891 | 1,776 | | Carbon Reduction Commitment data | CERs surrendered | CER balance | | Certified Emission Reductions (CERs) purchased | 1,753 | 6,777 | | | | |
### Waste
| Category | Arisings (tonnes) | Percentage of total arising | Disposal cost (£k) | |-------------------|-------------------|----------------------------|--------------------| | Landfill | 24 | 5% | N/K | | Recycled | 247 | 56% | N/K | | Energy from waste | 143 | 32% | N/K | | Waste to compost | 30 | 7% | N/K | | TOTAL | 444 | 100% | 64 |
### Water consumption
| Total consumption (m³) | Consumption (m³)/FTE | Total expenditure (£k) | |------------------------|----------------------|------------------------| | 45,123 | 15.5 | 95 |
### Paper Consumption
| Paper Size | Units Purchased (reams) | |------------|-------------------------| | A3 | 111 | | A4 | 19,949 | | Total A4e | 20,171 | Performance
How we have delivered against our Coalition Government priorities
The Cabinet Office works to ensure the successful and efficient delivery of the Government’s agenda and to help departments achieve their objectives. Alongside this, and as part of these more general responsibilities, the Cabinet Office leads on a number of specific Coalition Government priorities. Below is a diagram showing the relationship between the Cabinet Office’s strategic objectives and the structural reform priorities that derive from the Coalition Government’s Programme for Government.
All the strategic objectives contribute to the central priority of promoting UK growth; primary relationships between individual objectives and structural reform priorities are shown by arrows. The Cabinet Office publishes its commitments on No. 10’s Transparency website No 10 Transparency.
GOV.UK also provides news and updates on progress of work undertaken by the Cabinet Office, including details of announcements of achievements on the Cabinet Office Website.
Progress on the key actions during 2013-14 are summarised below.
Coalition Priorities
Drive efficiency and effectiveness in government
The Cabinet Office continues its strong progress to improve efficiency and effectiveness across Whitehall. This work is taking place across a broad front, ranging from reducing inefficient and wasteful spending on major projects, through transforming public services by reforming procurement processes, to the Government’s digital infrastructure, aimed at ensuring that services are readily accessible and provide a greater choice for the user. The Cabinet Office is coordinating action to reform the Civil Service, in order to improve the Service’s capability and strengthen its performance.
Actions during 2013-14
- The Efficiency and Reform Group (ERG) worked across government to tackle waste and inefficiency and to realise savings of £14.3 billion in 2013-14 against a 2009-10 baseline.
- The commitment to secure the Deregulation Bill in the third session of Parliament was achieved in 2013-14 and the Bill received Royal Assent on 14 May. It will help the Government in its drive to remove the burden of unnecessary bureaucracy on businesses.
- GOV.UK was launched in October 2012 as central government’s single domain website, bringing published government information from various separate websites under one domain. As a result of building GOV.UK government departments have saved over £60 million in 2013-14. Difficulties in resourcing and the complexity of some sites meant that the commitment to move more than 250 departmental, agency and arm’s length bodies to GOV.UK was missed. This was resolved and by March 2014 160 sites had moved to GOV.UK; it is on track for completion by July 2014.
- Developing a new organisation for debt management across government by March 2014 was delayed due to additional work required; it will now be commissioned during 2014-15. Increase transparency in the public sector
The Cabinet Office leads work on increasing transparency in the public sector by getting data out of departments and engaging with users of that data to explain its potential and to understand their needs. In so doing, it helps the public to hold government to account and enables users of public services to choose between suppliers in a better way.
Actions during 2013-14
- The Cabinet Office delivered a strong legacy from its G8 Presidency by securing a G8 Open Data Charter. It sets out five strategic principles that all G8 members and the EU have signed up to and will act upon. The UK’s G8 Open Data Charter action plan was published on 31 October 2013.
- As chair of the Open Government Partnership (OGP), the Cabinet Office organised a vibrant and inspirational OGP summit in London at the end of October that was attended by over 1,500 participants from around the world, including senior representatives from government and civil society. Ambitious new commitments to open government were secured from 37 attending countries. Three more countries adopted the Open Data Charter (Ireland, the Philippines and Panama).
- The Cabinet Office worked across government, in partnership with civil society organisations, to produce an updated Open Government Partnership UK National Action Plan, setting out 21 stretching and ambitious commitments to make government more transparent and accountable. This was launched by the Prime Minister and included a world-leading commitment to creating a publicly accessible registry of the beneficial owners of companies. This was an important example of open policy-making in action, with policy being discussed, developed and agreed between government and citizens. The Cabinet Office developed and published the world’s first National Information Infrastructure. This contains the data held by government that is likely to have the broadest and most significant economic and social impact if it is made available and accessible outside government.
- The Cabinet Office refreshed and redeveloped data.gov.uk to provide additional functionality to the data catalogue and to enhance online engagement tools and usability. There are now over 13,000 datasets published through data.gov.uk, exceeding our action to increase the number available by 20%.
13,962 datasets were published on data.gov.uk in April 2014 327 external applications use government data published on data.gov.uk Reform of the political and constitutional system
Since 2010, the Cabinet Office has been taking forward the Government’s political and constitutional reform agenda, which is already resulting in greater democratic accountability, transparency and economic growth. This work includes a number of activities, including the introduction of a new system of individual electoral registration. The Cabinet Office is also leading work to reform lobbying and make campaigning more transparent, by bringing before Parliament the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill. At the same time, the Cabinet Office is playing a key role, together with the Scotland Office and the Scottish Government, in preparing for a legal, fair and decisive referendum on Scottish independence. The Cabinet Office is also working with departments to implement measures to promote local growth.
Actions during 2013-14
- The Cabinet Office fulfilled the commitment to carry out an end-to-end test of digital services and a dry run of automatic confirmation of all electoral registers, showing that the vast majority of current electors (78%) will have to do nothing to stay registered to vote.
- The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill received Royal Assent in January 2014. It will bring greater transparency to politics, fairness to political campaigning and accuracy to trade union membership records.
- The Department published a response to the Political and Constitutional Reform Committee’s Report on the Recall of MPs White Paper and draft Bill in July 2013 and is preparing for a Bill in the fourth Parliamentary session.
- Since Wave 2 City Deals were launched in October 2012, the Government has launched ‘Growth Deals’ in response to the report by Lord Heseltine No Stone Unturned. These deals will be concluded in summer 2014. To date, all Wave 2 City Deals identified for agreement by the end of March have been concluded.
- In December 2013, the Government decided not to pursue the establishment of a House Business Committee, but remains open to the possibility of revisiting at a later date.
Build the Big Society
The Cabinet Office is leading work across government to support civil society in three ways: 1) to make it easier to set up and run a charity or voluntary organisation, 2) to get more resources into the charitable or voluntary sector and 3) to make it easier for the sector to work with the state. To achieve these objectives, the Cabinet Office is taking forward a number of programmes. These include the National Citizen Service, which encourages 16–17-year-olds to be more engaged in their communities; a range of social action initiatives and funding programmes to encourage people to give more of their time and money; and support for the development of social finance and enterprises to solve social problems and boost economic growth.
Last year, 44% of adults took part in formal volunteering at least once.
By October 2013, 372 community organisers have been trained. Actions during 2013-14
- The Cabinet Office achieved its commitment to launch a second round of the Social Incubator Fund. In March 2014, it was announced that match-funding had been provided to six new start-up incubators. The Department will help incubators to support new social ventures, expand their businesses and generate new employment.
- The Cabinet Office held a successful G8 event on social investment in October 2013, helping to promote the UK as a global hub for social investment.
- The Department launched the Centre for Social Action, which in April 2013 committed £36 million to find and support the most effective volunteering projects to tackle persistent social problems.
- Following a successful Olympics, a commitment to support 10,000 community events during 2013-14 was achieved.
Promote social mobility
The Cabinet Office works across government to support the Deputy Prime Minister in his activities to improve social mobility and create a fairer, more open and more mobile society. The Government’s social mobility strategy entitled Opening Doors, Breaking Barriers: A strategy for social mobility sets out the Government’s vision for a socially mobile country, and how it can become a reality.
Actions during 2013-14
- The Cabinet Office launched the Opening Doors campaign in November 2013 to call on companies, large and small, to sign up and open their doors to young people from all walks of life.
- The Department worked to promote the social mobility Business Compact. This encourages businesses to ensure that young people have fair and open access to employment opportunities through mentoring, talks and other career and skills-based activities; that they have fair access to work experience and internship opportunities; and that recruitment takes place openly and fairly.
- The Department worked in partnership with the Social Mobility Foundation to deliver the Civil Service Whitehall Internship Scheme. This has the aim of offering year 12 students valuable experience of life in government on two-week internships, and of providing skills and experiences that can assist in future employment.
- With the Department for Work and Pensions, the Cabinet Office delivered the Civil Service Fast Stream Summer Diversity Internship Programme. This will give talented school leavers who are looking for an alternative to the graduate route into employment an opportunity to earn while they learn in challenging roles at the heart of government.
- The Department published the latest set of social mobility indicators, providing information on the progress and effectiveness of the social mobility strategy.
- The first cohort of 100 apprentices joined the Civil Service.
Promote UK growth
The Cabinet Office works to promote UK growth through a number of avenues: leading the drive to improve government efficiency and effectiveness; reforming government procurement; transforming public services; introducing new commercial models across the public sector; getting out of surplus state-owned property; being a world leader in social investment; and exploiting open data. Work to advance these areas is ongoing.
Actions during 2013-14
- The Cabinet Office, together with the Department for Business, Innovation and Skills (BIS), achieved the commitment for the Red Tape Challenge to identify 3,000 regulations to be removed or substantially reduced during the lifetime of this Parliament. Stripping away unnecessary bureaucracy will remove those burdensome or over-complicated regulations that hamper businesses and stifle their ability to grow.
- Work continued on empowering communities to grow social capital by training a new generation of community organisers and supporting the creation of neighbourhood groups, especially in the most deprived areas.
- The Department reduced inefficient and wasteful spending on major projects through an enhanced Major Projects Authority (MPA). It published the MPA’s annual report, together with the status of the projects that make up the Government Major Projects Portfolio.
- There are now nearly a hundred mutuals live and trading. Together they deliver around £1.5 billion of public services.
Maintain a secure and resilient UK and help to shape a stable world
The Cabinet Office’s aim is to serve the Government’s national security priorities, including: supporting the effective operation of the National Security Council; preparing for and managing the coordination of the Government’s response to crises; planning and managing a transformative cyber security programme for the UK; and developing a better framework for the management of national security and intelligence material in courts.
Actions during 2013-14
- A new, simplified classification of documents across Whitehall was announced on 17 October 2013, to come into effect on 2 April 2014. The intention was to reduce the number of classifications from six to just three. That will improve the way government does business and make it easier for government to work with external partners.
- The major Be Cyberstreetwise campaign was launched. This aims to educate and change the way in which people view online safety; and to provide the public and businesses with the skills and knowledge they need to take control of their cyber security. The National Risk Register, published in 2013, is internationally recognised as a world-leading document (UN Hyogo Framework Peer Review 2013).
In February 2014, the Department established CERT-UK, a new computer emergency response organisation for national cyber incident management, to integrate the capabilities of the Cyber-Security Information Sharing Partnership, the Cyber Security Operations Centre and the Computer Security Incident Reporting Team.
In May 2013, the Cabinet Office delivered the successful Second International London Somalia Conference, co-hosted by the Prime Minister and the President of Somalia, with the participation of 54 country and organisational heads.
The Department secured pledges for Somalia from the international community of over $300 million.
It kicked off technical-level engagement between international financial institutions and new Somali institutions.
It enabled an EU–Somalia conference in September 2013 to agree specific, detailed priorities for stabilisation and development needs up to 2016, as well as donor funding of Euro 1.8 billion.
The Cabinet Office developed a G8 initiative on stopping payment of ransoms in terrorist kidnaps.
At all times, provide effective and professional support for government business
We have at all times supported the Government’s business effectively and professionally, including through the advice and support we provide to the Prime Minister, the Deputy Prime Minister and Cabinet; through our leading role in supporting the development, coordination and implementation of domestic, economic, security, European and global policies; and through our support for ministers in delivering their legislative programme and other parliamentary business. Performance on Business Plan commitments 2013-14
2013-14 achievements
- 91 actions in total
- 58 completed
- 25 currently in progress
- 3 to be commenced
- 5 overdue
Actions achieved:
2.2.i. Publish report on the work of the Mutuals Taskforce, the first annual report on the wider mutuals programme and a ‘one-year on’ report Achieved: Jul 2013
2.2.ii. Support public sector spin-outs including 50 mutuals in local authority control and further spin-outs in central government Achieved: Feb 2014
2.2.iii. Launch a new commercial entity for the provision of shared services, as part of the Next Generation Shared Services strategy and in line with the Civil Service Reform Plan Achieved: Nov 2013
2.2.iv. Commence three procurements with the aim of transforming the business models of Government services Achieved: Mar 2014
2.3.i. Appoint National Advisor for What Works, to support the development of What Works Centres across £200 billion of public spending Achieved: Jul 2013
2.3.ii. Publish Open Public Services 2014, the annual account of progress and next steps in reforming public services Achieved: March 2014
2.4.ii. Strengthen reporting lines from departmental Commercial Directors/Heads of Procurement to the Chief Procurement Officer Achieved: Jun 2013
2.5.ii. Develop and launch the Government Construction Pipeline website Achieved: Dec 2013
2.6.ii. Launch a new agile commissioning framework to create a more diverse IT and digital market through disaggregation, increased competition and making it easier for the best suppliers to bid Achieved: Nov 2013
2.6.iii. Publish guidelines for Government’s use of ‘open standard’ software, to allow a wider range of suppliers to build and improve digital services in a more cost effective way for Government, and first set of open standards, measured by number of departments that have agreed to, or have an implementation plan for, each ‘mandated’ open standard Achieved: Sep 2013
2.6.iv. Publish a ‘one year on’ report on the progress of the digital strategies including an approach to assisted digital Achieved: Dec 2013
2.6.vi. Establish a recruitment hub to assist departments to acquire high level and specialist digital skills in line with the Government Digital Strategy and the Civil Service Reform Plan Achieved: Jun 2013
2.7.i. Publish an action plan to deliver the aspiration that, by the end of this Parliament, at least half of all new appointees to the boards of public bodies are women Achieved: Dec 2013 2.9.ii. Publish a one-year on report on progress against the Civil Service Reform Plan, including next steps to deliver the Civil Service Reform agenda Achieved: Jul 2013
2.9.iii. First cohort of 100 apprentices to join the Civil Service Achieved: Sep 2013
2.9.iv. Review the guidance on civil servants giving evidence to Select Committees (Osmotherly rules) as part of wider work to sharpen accountability Achieved: Jul 2013
2.9.v. Publish 2013-14 Permanent Secretary objectives Achieved: Dec 2013
2.10.i. Publish the annual report of Lord Browne of Madingley, the Government lead non-executive, on progress on improving governance across Whitehall and on building leadership and management through non-executives and Departmental Boards Achieved: Jun 2013
2.11.i. Secure a place in the third legislative session for a Deregulation Bill and prepare the draft Bill to be published for pre-legislative scrutiny Achieved: Jul 2013
2.11.ii. Lead, with BIS, the Red Tape Challenge work of all Departments to collectively identify, by 31 December 2013, 3,000 regulations to be removed or substantially reduced during the lifetime of this Parliament Achieved: Dec 2013
2.12.i. Implement a new digital case management system for spending controls to improve collaboration and performance across Cabinet Office, HM Treasury and departments Achieved: Jun 2013
2.13.i. Work with departments, interested groups and the public to improve the quality and usefulness of published Quarterly Data Summary (QDS) expenditure data Achieved: Aug 2013
2.13.iv. Work with Internal Audit and the National Audit Office to quality assure QDS data Achieved: Mar 2014
2.13.v. Establish a network for management information professionals Achieved: Nov 2013
2.14.i. Publish MPA annual report and Red, Amber or Green (RAG) status of the Government Major Projects Portfolio (GMPP) projects Achieved: May 2013
2.14.ii. Establish an enhanced Major Projects Authority, working with Infrastructure UK, drawing on recommendations made in Lord Browne’s Review Achieved: Mar 2014
2.17.i. Reduce the running costs on the central government estate by £600 million per annum Achieved: Mar 2014
2.17.ii. Generate proceeds from the sale of freehold properties of £1.25 billion Achieved: Mar 2014
2.8.i. Complete 90% of all abolitions and mergers of quangos. Achieved: Mar 2014
3.1.i. Secure a G8 Open Data charter Achieved: Jul 2013
3.1.ii. Draft, in conjunction with civil society organisations, consult on and publish an updated Open Government Partnership (OGP) UK National Action Plan Achieved: Oct 2013
3.1.iii. Work with other steering committee members to deepen the OGP, secure a robust independent reporting mechanism, and deliver the October OGP plenary event in London Achieved: Oct 2013
3.1.iv. Maintain Britain’s global position as a leader on open data including by securing a future for the Post Code Address File that better meets the needs of start-up data businesses and work with the Department for Business, Innovation and Skills on a response to the Shakespeare Review Achieved: Oct 2013
3.2.i. Amend Freedom of Information Code of Practice as required by new legislation to extend the “right to data” to public authorities Achieved: Jul 2013
3.2.ii. Increase the number of datasets available via data.gov.uk by 20% Achieved: Nov 2013
3.2.iii. Extend current transparency arrangements to cover senior officials’ travel Achieved: Jan 2014
3.3.i. Work with departments to implement reforms to Trade Union Facility Time arrangements, including monitoring of participation in trade union activities and duties Achieved: Nov 2013
3.3.ii. Publish quarterly updates of cross-government Facility Time data Achieved: Aug 2013
4.1.i. Publish response to the Political and Constitutional Reform Committee’s Report on the Recall of MPs White Paper and draft Bill Achieved: Jun 2013
4.2.i. Establish House Business Committee by third year of Parliament Achieved: Dec 2013
4.2.ii. Respond to the Joint Committee’s report on Parliamentary Privilege Achieved: Dec 2013
4.3.i. Carry out end to end test of digital service and dry run of automatic confirmation of all electoral registers Achieved: Sep 2013
4.3.ii. Pursue detailed agreement on limiting donations and reforming party funding Achieved: Jul 2013
4.4.i. Introduce legislation that provides for a statutory register for lobbyists Achieved: Jul 2013
4.4.ii. Work with departments to finalise preparations to take forward Local Growth Deals in advance of negotiations commencing in April 2014 Achieved: Dec 2013
5.1.iii. Launch new Social Action Centre and first campaign Achieved: Sep 2013
5.1.iv. Support 10,000 Join In community events Achieved: Oct 2013
5.2.i. Support the Big Lottery Fund to complete awards from the Advice Services Transition Fund, the £65m package to help not-for-profit local advice providers across England transform and adapt Achieved: Jun 2013
5.2.ii. Deliver a nationwide programme of commercial skills master-classes for the voluntary, community and social enterprise (VCSE) sector, in partnership with VCSE and commercial organisations Achieved: Apr 2014
5.3.i. Launch a new independent management body (IMB) to give the National Citizen Service independent leadership, profile and sector support Achieved: Jul 2013
5.3.ii. Provide up to 50,000 places on the National Citizen Service during 2013 Achieved: Dec 2013
5.3.iii. IMB becomes fully operational and assumes operational control Achieved: Dec 2013
5.4.i. Hold a G8 event on social investment Achieved: Jun 2013 5.4.ii. Launch 2nd round of Social Incubator Fund and complete awards Achieved: Mar 2014
6.1.ii. Establish and hold the first Social Mobility ‘Opening Doors’ awards Achieved: Nov 2013
6.1.iii. Create open and fair opportunities for internships across Whitehall, expanding and building on the Whitehall Internship Programme and working with the Department for Work and Pensions (DWP) to deliver a successful Fast Stream Diversity Summer Internship Programme in 2013 Achieved: Sep 2013
Actions Overdue
2.4.i. Transfer all common goods and services spend to centralised arrangements Scheduled start date: Started Scheduled end date: Dec 2013
Although this action was not completed by the set deadline the transfer to a centralised arrangement has now been planned and agreed. The first phase of transition is underway and will take place in stages across 2014-15.
2.13.iii. Develop an automated collection tool for QDS data Scheduled start date: Started Scheduled end date: Mar 2014
Work to resolve resource challenges has delayed final completion of this commitment.
2.16.i. Develop and commission a new organisation for debt management across government Scheduled start date: Started Scheduled end date: Mar 2014
Work is continuing on preparing a revised timescale for commissioning a new organisation during 2014-15.
6.1.i. Develop and expand the Social Mobility Business Compact, embedding and sharing best practice between employers and mainstreaming the Compact with businesses and Departments. Scheduled start date: Started Scheduled end date: Dec 2013
Responsibility for this action covering the Social Mobility Business Compact transferred from Cabinet Office to the Department for Business, Innovation and Skills on 29 November 2013. Financial Review 2013-14
Parliament gives statutory authority for the use of resources and funds through the Supply Estimates in order that the Cabinet Office may meet its expenditure and, in turn, the Department is accountable to Parliament for the use of those resources and funds as reported in the Statement of Parliamentary Supply.
This financial review sets out the following:
Financial Highlights
Performance against Parliamentary Control Totals & non-voted budget
Comparison of 2013-14 outturn against Estimate and against prior year for:
- Net Resource Outturn, Net Capital Outturn, Net Cash Requirement
- Resource Departmental Expenditure Limit (RDEL)
- Resource Annually Managed Expenditure (RAME)
- Capital Departmental Expenditure Limit (CDEL)
Public Expenditure Data
Commentary upon outturn data and future spending plans
- Table 1 – Total departmental spending
- Table 2 – Outturn year 2013-14
- Table 3 – Capital employed
- Table 4 – Administration budget
- Table 5 – Staff numbers
- Tables 6, 7 & 8 Country and regional analysis
Accounting Officer approval to the Strategic Report Financial Highlights
Total Managed Expenditure (TME) - a measure defined by the Treasury to cover all public expenditure (not just central government departments) comprising AME and DEL.
Annually Managed Expenditure (AME) is less predictable and controllable than expenditure in DEL. It includes provisions for early departures, dilapidations, onerous contracts, revaluation of assets and depreciation on donated assets. Total AME is the sum of resource and capital AME less depreciation in AME.
Departmental Expenditure Limit (DEL) - includes expenditure which is generally controlled within departments and is managed with fixed multi-year limits set via a spending review conducted by the Treasury. DEL budget is split into resource administration, resource programme and capital. Total DEL is the sum of the resource budget DEL and capital budget DEL less depreciation in DEL.
Resource DEL Administration controls administration expenditure other than the costs of direct frontline services.
Resource DEL Programme controls expenditure directly associated with frontline activities.
Capital DEL controls spending on investments, assets and capital grants. Performance against Parliamentary Control Totals & non-voted budget
Net Resource Outturn, Net Capital Outturn and Net Cash Requirement
| £000 | Outturn 2013-14 | Estimate 2013-14 | Saving 2013-14 | % | Outturn 2012-13 | |---------------|-----------------|------------------|----------------|-----|-----------------| | Net Resource Outturn | 415,795 | 458,789 | 42,994 | 9.4 | 378,337 | | of which: | | | | | | | Resource DEL | 419,875 | 453,689 | 33,814 | 7.4 | 413,816 | | Resource AME | (4,080) | 5,100 | 9,180 | 180.0 | (35,479) | | Net Capital Outturn | 42,873 | 47,703 | 4,830 | 10.1 | 15,054 | | Net Cash Requirement | 471,621 | 517,545 | 45,924 | 8.9 | 440,913 |
Net Resource Outturn
Net resource outturn for this period was £415.795 million, a saving of £42.994 million (9.4%) attributable to underspends in resource DEL and resource AME. Compared to prior year, outturn has increased by £37.458 million. See next section for explanations.
Net Capital Outturn
Net capital outturn for this period was £42.873 million, a saving of £4.830 million (10.1%). Compared to prior year, outturn has increased by £27.819 million. See next section for explanations.
Net Cash Requirement Outturn
The Cabinet Office required cash amounting to £471.621 million to finance its activities; £45.924 million (8.9%) less than the sum approved by Parliament. The saving is attributable to underspends in net resource and capital outturn (adjusted to remove non-cash items) and small movements in working capital. Compared to prior year, the net cash requirement has increased by £30.708 million due to increases in net resource and capital outturn offset by a reduction in movements in working capital, both described above. See Note SOPS 4 Reconciliation of Net Resource Outturn to Net Cash Requirement. Resource DEL (RDEL)
| £000 | Outturn 2013-14 | Estimate 2013-14 | Saving 2013-14 | % | Outturn 2012-13 | |---------------------------|-----------------|------------------|----------------|-------|-----------------| | Administration voted | 153,325 | 184,809 | 31,484 | 17.0 | 193,137 | | Programme voted | 264,724 | 266,880 | 2,156 | 0.8 | 218,848 | | Programme non voted: UK MEPs | 1,826 | 2,000 | 174 | 8.7 | 1,831 | | Resource DEL | 419,875 | 453,689 | 33,814 | 7.4 | 413,816 |
of which:
- Policy ring-fence Boundary Review: 382
- Policy ring-fence Individual Electoral Registration: 14,896
- Ring-fenced depreciation, amortisation, impairment and provision for doubtful debt: 13,670
- Non ring-fenced expenditure: 390,927
Resource DEL outturn for 2013-14 was £419.875 million, a saving of £33.814 million (7.4%) against the budget of £453.689 million approved by Parliament. Compared to prior year, outturn has increased by £6.059 million. Resource DEL is broken down by Operating Segment in Note SOPS 2.1 to the Accounts.
Saving in Administration spend against budget of £31.484 million is attributable to the following:
- Transactional Shared Services: £1.1 million underspend For the period 1 April to 31 October 2013, Cabinet Office was responsible for overseeing the former DWP Shared Services operation. During that period, a number of staff vacancies arose which remained unfilled due to the expected transition of the operation to the private sector. These unfilled vacancies account for the bulk of the lower than expected costs. See Note 7.1.
- Corporate Services Group Royal Mail Statutory Pension Scheme (RMSPS): £3.5 million underspend The budgets for the first 3 years were set by the Department for Business, Innovation and Skills (BIS) in 2011. At the time, the potential costs of managing the scheme were uncertain and it was not possible to accurately predict what the costs of the scheme would be for future years. The budget for 2013-14 was set at £8.5 million. The actual cost of running the scheme in 2013-14 was £5 million. The underspend was in part due to the number of staff required to deliver the scheme being considerably lower than estimated in 2011, because BIS had only recruited a core team before the scheme was handed over to Cabinet Office. In addition to this, running costs were also lower than had been estimated because RMSPS has moved past the set up stage and are into business as usual. See Note 5. Corporate Services Group Transfer of shares in AXELOS Limited: £28.2 million underspend
The Cabinet Office transferred its 51 ‘B’ Ordinary shares in AXELOS Limited to AXELOS’ immediate parent, Capita Business Services Limited (CBSL) in return for consideration of £38.2 million of which £10 million was settled at the point of sale and the balance of payment was deferred over 36 months commencing January 2014. Cabinet Office budgeted for the cash receipt of £10 million and recognised in its accounts the total consideration of £38.2 million; hence creating an underspend of £28.2 million. See Note 7.
Ring-fenced Depreciation, amortisation and impairment: total underspend of £3.330 million
The ring-fenced depreciation and amortisation is £3.330 million less than originally planned; of which £1.497 million administration and £1.833 million programme. Impairment losses related to major construction works carried out on Cabinet Office properties, determined by independent professional valuations as at 31 March 2014, were low compared to cover for uncertainty assumed for the 2013-14 Supplementary Estimate.
Impairment losses for information technology assets, through the application of published indices, or through shorter than anticipated useful lives, were low compared to the cover for uncertainty assumed for the 2013-14 Supplementary Estimate.
Year on year decrease in Administration spend of £39.812 million is attributable to the transfer of shares in AXELOS Limited and also to the following:
There have been a number of changes to the workload which was undertaken by Constitution Group in 2013-14 compared to the previous financial year. The overall financial impact on the change in workload has been a reduction in costs of £1.1 million. The reduction in costs can be largely explained by the Parliament’s decision at the end of January 2013 to stop the review of constituencies with immediate effect. This meant much lower costs in 2013-14: Staff numbers quickly reduced to just 5 by the summer of 2013 and then to 3.2 by November 2013.
The cancellation also meant that there was no further work on the Communications Strategy as all elements of the review came to an end, apart from some final and essential “close down” activities. In addition to this costs were also committed in 2012-13 (but not in 2013-14) for the cost of staffing the McKay Commission which was set up in February 2012 to consider the consequences of devolution for the House of Commons. The decrease in staff numbers would have been higher had it not been for the Scottish Referendum where increased number were required in order to deliver Ministerial policies and priorities; £1 million.
An increase in income within Efficiency & Reform Group is due to ISSC2 of £7.5 million and Single Oracle Platform of £2.5 million which are new to 2013-14. Rationalisation of the Cabinet Office Estate led to reduced costs 2013-14 within Corporate Services Group of around £3 million.
Year on year increase in voted Programme spend of £45.876 million is attributable to the following:
Electoral Registration Transformation Programme and Individual Electoral Registration: year on year increase in programme spend of £15 million
Individual Electoral Registration (IER) in Great Britain will modernise the way people register to vote, help to tackle electoral fraud and improve confidence in the electoral register. In 2012-13 the Electoral Registration Transformation Programme (ERTP) was in the early phase of policy and delivery planning to implement IER and in 2013-14 ERTP moved into the first stages of implementation. This led to an increase in staffing and consequently an increase in pay costs of around £2 million as the deliverables to manage across all projects increased. In 2013-14, IT costs increased by £2 million as the programme moved into development and delivery of the IER digital service. Each Local Authority has an electoral management system (EMS) used for storing and processing data in support of electoral registration. In 2013-14 the four EMS suppliers were contracted to deliver the changes to local authority Electoral Management Systems. The increase in ICT expenditure also relates to a contract, which was awarded to provide a highly secure and reliable hosting platform and data transfer mechanism to support the steady state running of the service.
In 2013-14 the Cabinet Office provided local authorities with grant funding to support the transition to IER. Specifically these covered costs linked to change management in the preparation for IER. Additional funding was provided where the national funding allocation did not meet local unique circumstances: authorities were allowed to apply for additional funds if justified. In 2013-14, the Cabinet Office provided funding to all authorities in Great Britain and 5 national organisations to support the cost of activities for maximising registration as part of the transition to IER. See Note 6.1.
National Security: year on year decrease in programme spend of £15 million
As part of the Licence Fee settlement between the BBC Trust and DCMS it was agreed that BBC Monitoring services, in line with the revised funding arrangements for BBC World Service and S4C, would be funded directly from the licence fee rather than a grant from the Cabinet Office; a saving of £17.476 million.
CERT UK has recently been set up and delivers a key component of the UK’s cyber security strategy in facilitating the sharing of information on cyber threats in order to make UK businesses more secure in cyberspace. The partnership includes the introduction of a secure virtual ‘collaboration environment’ where government and industry partners can exchange information on threats and vulnerabilities in real time. Costs amounted to £2.333 million in 2013-14. See Note 6.1.
Government Digital Service: year on year increase in programme spend of £15.6 million
The Government Digital Service (GDS) programme of work increased in size and cost between 2012-13 and 2013-14. The increases reflect the additional activities which GDS took forward during the course of the latter financial year. This most notably related to continuing to develop and improve GOV.UK (setting up GOV.UK was the main programme cost in 2012-13), to rationalise and bring over 300 ALB websites to GOV.UK and taking forward a number of exemplar projects with other Government Departments on transactional services which were aimed at improving the level of customer satisfaction, increasing the uptake of online services, saving money from reduced service and IT delivery contracts; and building capability within each department. See Notes 4 and 6.1.
Government Innovation Group: year on year increase in programme spend of £26 million
The Government Innovation Group (GIG) moved forward at speed with a number of programmes coming to an end, a range of new ones starting and some of the existing programmes developing at pace. The Social Action Fund did not run in 2013-14 but social action momentum was maintained by a number of new initiatives introduced by the Centre for Social Action. The overall increase of £26 million in GIG programme expenditure during 2013-14 would not have been delivered without a contribution of over £16 million to BIG Lottery in respect of the Advice Services fund that was not made in 2012-13. The Advice Services fund aims to help the not-for-profit advice sector to adapt to changes in the way it is funded. Other significant increases in expenditure included the flag ship National Citizen Service (NCS) programme. The programme enables young people to take part in social action projects and build skills for life and work. The programme’s success resulted in the number places available to young people increasing from 26,000 in 2012-13 to 42,000 in 2013-14. The programme incurred further additional expenditure by setting up a new independent Trust to lead and manage the NCS programme. See Note 6.1. Ring-fenced Depreciation, amortisation and impairment: year on year increase of £2.381 million; of which £1.941 million administration and £0.440 million programme
Whilst lower than the cover for uncertainty assumed for the 2013-14 Supplementary Estimate, the outturn reflects reductions in values related to some building overhaul works in Cabinet Office buildings, as determined by independent professional valuations. The relatively small increase compared to 2012-13 reflects reduced useful lives for some relatively long-standing information technology assets.
Resource AME (RAME)
| £000 | Note to the Accounts | Outturn 2013-14 | Estimate 2013-14 | Saving/ (Excess) 2013-14 | % | Outturn 2012-13 | |------|----------------------|-----------------|------------------|-------------------------|---|-----------------| | Resource AME | SOPS2.1 | (4,080) | 5,100 | 9,180 | 180.0 | (35,479) | | of which: | | | | | | | | New provisions and borrowing costs | Note 6 | (2,769) | - | 2,769 | 100.0 | (549) | | Depreciation on donated assets | - | 99 | 200 | 101 | 50.5 | 454 | | Impairment on donated assets | - | 354 | - | (354) | (100.0) | - | | Devaluation of PPE assets | Note 6 | (137) | 6,631 | 6,768 | 102.0 | 812 | | Impairment of loans | Note 6 | 109 | 378 | 269 | 71.16 | 159 | | Write off bad debts | - | (292) | 300 | 592 | 197.2 | (290) | | Investment properties gain on changes in fair value | Note 6 | (23) | - | 23 | 100.0 | (32,003) | | Utilisation of provisions | Note 24 | (1,421) | (2,409) | (988) | (41.0) | (4,062) |
Resource AME budget for 2013-14 was £5.100 million, and actual outturn was £4.080 million negative, a saving of £9.180 million (180%) against the budget approved by Parliament. In 2012-13 an outturn was recorded of £35.479 million negative.
Devaluation of PPE assets: underspend against budget of £6.768 million
The values of properties at 31 March 2014, as reported by professional valuations, were higher than those that were assumed for the 2013-14 Supplementary Estimate. The Estimate included cover in case of decreases in asset values compared to those reported in 2013.
Provisions: underspend against budget of £2.769 million
The majority of the underspend relates to amounts written back under Early Departures (£0.091m), Specific Dilapidations (£1.191m) and Onerous Contracts (£2.019m), totalling £3.301m. During 2013-14 £1,191,410 was written back of the specific dilapidations in respect of Hercules House due to the early surrender of the lease. On onerous contracts, there was a write back of £2,018,858 being no longer required; £1,660,175 of which related to County Farm. This was due to the change in expectation regarding the timing of the demolition of the buildings on site. The remaining £358,683 written back relates to Birch House, Willow House and Kings Court which generated increased revenues and incurred fewer costs. Investment properties gains on changes in fair value: year on year change of £31.980 million
During 2012-13 Sunningdale Park and Admiralty Arch became investment properties and gains resulted from changing the basis of fair value estimates from ‘existing use value in use’ to ‘market value’.
Capital DEL (CDEL)
| £000 | Outturn 2013-14 | Estimate 2013-14 | Saving 2013-14 | % | Outturn 2012-13 | |---------------------------|-----------------|------------------|----------------|-----|----------------| | Capital grants | 15,804 | 19,000 | 3,196 | 16.8| (57) | | Non-current assets | 26,520 | 28,137 | 1,617 | 5.7 | 14,687 | | Financial assets | 549 | 566 | 17 | 3.0 | 424 | | Capital DEL | 42,873 | 47,703 | 4,830 | 10.1| 15,054 |
of which:
| Policy ring-fence Individual Electoral Registration | 6,567 | 11,000 | 4,433 | 40.3 | 2,290 | | Non ring-fenced expenditure | 36,306| 36,703 | 397 | 1.1 | 12,764 |
Capital DEL budget for 2013-14 was £47.703 million, and actual outturn was £42.873 million, a saving of £4.830 million (10.1%) against the budget approved by Parliament. Compared with prior year, there has been an increase in Capital DEL expenditure of £27.819 million. Capital DEL is broken down by Operating Segment in Note SOPS 2.2 to the Accounts.
Political and Constitutional Reform - Individual Electoral Registration: underspend against budget of £4.433 million, year on year increase of £4.277 million
The reason overall for the underspend can be attributed to the contingency budget incorporated into the digital budget to offset potential risks associated with various development activities scheduled to take place in financial year 2013-14.
The capital budget was set in late 2010 – well ahead of the IT development and testing. Given the history of cost over-run within Government Programmes, a healthy provision (contingency) for cost increases due to the financial risk profile of a number of development activities where put in place as per HM Treasury guidelines for good practice. The fact that capital budgetary spend has been surrendered for use elsewhere, is a mark that to date, the programme’s capital costs have been carefully managed and have come in below budget.
Capital spend in 2012-13 and 2013-14 relates to the delivery of the IT and Digital services which will support this business change and the steady state running of the new service. Firstly, this includes the making of digital and non-digital applications. Secondly, this includes the verification of applications using data provided by applicants against data held by the Department for Work and Pensions. Thirdly, it involves the secure transfer of data across the system. Lastly, it involves the delivery of changes to local authority Electoral Management Systems required to interface with the new service and to handle the additional data requirements. Efficiency and Reform: underspend against budget of £2.583 million
There was an underspend on the Government Digital Service (GDS) capital budget for a variety of reasons. Budgets were managed meticulously to ensure that spend was closely monitored with value for money decisions being made on all expenditure under capital projects. In practice this led to projects coming in under budget. Work on the Private facing IDAP hub originally planned for 2013-14 has been carried into the next financial year. A number of costs relating to the Cloudstore and the Performance Platforms being diagnosed as resource and not capital costs which resulted in reduced spent under the latter category. See Note SOPS2.2.
Government Innovation Group: year on year increase of £11.598 million
An increase of £3 million relates to the Endowment Match Challenge where the supplier was much more successful raising funds to be matched in 2013-14 compared to 2012-13. In the prior year, an amount of £8 million capital income was received representing loan repayments from the Futurebuilders Fund. See Note SOPS2.2.
Corporate Services Group: year on year increase of £10.653 million
In 2013-14 investment in the Cabinet Office’s London estate was greater than in 2012-13, in particular seeing the completion of several phases of ongoing building modernisation works at 70 Whitehall under plans agreed prior to 2010. This work is contributing to the overall estate strategy of increasing the capacity of core freehold buildings (for example by providing more modern open plan space) and disposing of non-core leasehold buildings. In 2013-14 the leased Hercules House and 67 Tufton Street were handed back to landlords and more teams consolidated at 70 Whitehall. In addition, 2013-14 saw investment in enhancing crisis management facilities operated by the Cabinet Office. See Note SOPS2.2.
PUBLIC EXPENDITURE DATA
The aim of the published expenditure data tables is to present spending plans and comparable outturn data and to provide an explanation of the Cabinet Office’s budgetary spending.
These tables analyse spending in terms of the main spending control aggregates: the Departmental Expenditure Limit (DEL), showing resource DEL (RDEL) and capital DEL (CDEL) consumption and departmental Annually Managed Expenditure (AME).
Budgets are negotiated with HM Treasury by means of Spending Reviews (SR) and the most recent are the Spending Review 2010 (SR2010) covering financial years 2011-12, 2012-13, 2013-14 and 2014-15 and Spending Round 2013 covering financial year 2015-16. Table 1 Cabinet Office total departmental spending 2007-08 to 2015-16
| £000 | 2007-08 Outturn | 2008-09 Outturn | 2009-10 Outturn | 2010-11 Outturn | 2011-12 Outturn | 2012-13 Outturn | 2013-14 Outturn | 2014-15 Plans | 2015-16 Plans | |------|----------------|----------------|----------------|----------------|----------------|----------------|----------------|---------------|---------------| | **Resource DEL** | | | | | | | | | | | Support to the Cabinet, the PM & the Deputy PM | - | - | - | - | 65,978 | 61,096 | 57,691 | 83,497 | 42,646 | | Political & Constitutional Reform | 9,047 | 9,499 | 9,499 | 6,414 | 10,830 | 9,958 | 20,629 | 70,092 | 25,445 | | National Security | - | - | - | - | 52,011 | 44,472 | 29,076 | 20,100 | 12,824 | | Efficiency and Reform | 130,325 | 179,155 | 207,716 | 178,910 | 252,992 | 210,665 | 93,015 | 48,081 | 9,321 | | Government Innovation Group | - | - | - | - | 5,285 | 170,092 | 225,508 | 194,865 | | | Transactional Shared Services | - | - | - | - | - | 565 | - | - | - | | Hosted Functions | 2,726 | 2,748 | 2,620 | 2,175 | 1,286 | 1,340 | 1,152 | 1,150 | 767 | | Corporate Services Group | 225,014 | 249,827 | 193,485 | 208,460 | 62,546 | 77,727 | 36,535 | 67,020 | 62,328 | | Civil Service Capability | - | - | - | - | - | - | 7,392 | 7,392 | | | Pensions | - | - | - | - | - | - | 6,000 | 6,000 | | | eNDPBs (NET) | - | - | - | - | 1,313 | 1,442 | 1,794 | 1,887 | 1,803 | | Consolidated Fund Standing Services (CFSS) | 15,929 | 6,941 | 100,023 | 104,397 | 1,849 | 1,831 | 1,826 | 121,100 | - | | **Total Resource DEL** | 383,041 | 448,170 | 513,343 | 500,356 | 448,805 | 413,816 | 412,375 | 651,827 | 363,391 | | Of which: | | | | | | | | | | | Staff costs | 129,665 | 138,090 | 146,484 | 150,867 | 163,777 | 138,680 | 170,212 | 131,000 | 99,473 | | Purchase of goods and services | 202,349 | 212,894 | 270,502 | 252,216 | 217,245 | 231,323 | 291,022 | 396,620 | 126,590 | | Income from sales of goods and services | -89,724 | -96,443 | -88,423 | -73,576 | -127,805 | -91,190 | -183,910 | -100,539 | -100,029 | | Current grants to local government (net) | 1,744 | 1,677 | 1,915 | 613 | 92 | 962 | 8,363 | 37,476 | 18,000 | | Current grants to persons and non-profit bodies (net) | 122,105 | 136,470 | 154,100 | 136,142 | 177,105 | 103,908 | 109,921 | 160,684 | 191,000 | | Subsidies to private sector companies | - | - | - | - | 6,282 | - | - | - | - | | Rentals | 12,488 | 15,605 | 11,737 | 20,122 | 17,863 | 31,581 | 12,857 | 13,091 | 13,091 | | Depreciation | 9,451 | 35,516 | 10,514 | 10,565 | 8,122 | 11,241 | 13,253 | 15,000 | 15,266 | | Other resource | -5,037 | 4,361 | 6,514 | 3,407 | -13,876 | -12,689 | -9,343 | -1,505 | - | | **Resource AME** | | | | | | | | | | | Corporate Services Group (AME) | -2,039 | -1,152 | 6,049 | 67 | 5,119 | -35,479 | -4,080 | 4,942 | 5,000 | | **Total Resource AME** | -2,039 | -1,152 | 6,049 | 67 | 5,119 | -35,479 | -4,080 | 4,942 | 5,000 | | Of which: | 2013-14 Numbers | 2014-15 Numbers | 2015-16 Numbers | 2016-17 Numbers | 2017-18 Numbers | 2018-19 Numbers | 2019-20 Numbers | 2020-21 Numbers | 2021-22 Numbers | |-------------------------------|----------------|----------------|----------------|----------------|----------------|----------------|----------------|----------------|----------------| | Staff costs | | | | | | | | | | | Rentals | | | | | | | | | | | Depreciation 1 | | | | | | | | | | | Take up of provisions | 568 | 1,600 | 1,635 | 757 | 13,022 | -840 | -3,057 | - | - | | Release of provision | -2,720 | -3,875 | -2,432 | -2,543 | -9,445 | -4,062 | -1,424 | -1,312 | - | | Other resource | 113 | 1,123 | 1 | 958 | -47 | -31,565 | 83 | - | - | | **Total Resource Budget** | 381,002 | 447,018 | 519,392 | 500,423 | 453,924 | 378,337 | 408,295 | 656,769 | 368,391 | | Of which: | | | | | | | | | | | Depreciation 1 | 9,451 | 35,516 | 17,359 | 11,460 | 11,460 | 9,709 | 13,570 | 21,254 | 20,266 | | **Capital DEL** | | | | | | | | | | | Support to the Cabinet, the PM & the Deputy PM | | | | | | | | | | | Political & Constitutional Reform | | | | | | | | | | | National Security | | | | | | | | | | | Efficiency and Reform | 16,963 | 30,608 | 94,053 | 75,742 | 12,335 | 4,431 | 4,547 | - | - | | Government Innovation Group | | | | | | | | | | | Corporate Services Group | 17,307 | 10,666 | 9,852 | 11,505 | 5,334 | 6,575 | 17,228 | 8,500 | 14,600 | | **Total Capital DEL** | 34,270 | 41,274 | 103,905 | 87,247 | 17,441 | 15,054 | 42,873 | 20,500 | 14,600 | | Of which: | | | | | | | | | | | Capital support for local government (net) | 5,268 | 13,293 | 12,191 | 7,102 | -20 | 4,914 | - | - | - | | Capital grants to persons & non-profit bodies (net) | 16,813 | 22,871 | 53,631 | 38,206 | -8,084 | -3 | - | - | - | | Capital grants to private sector companies (net) | | | | | | | | | | | Purchase of assets | 18,986 | 10,648 | 15,486 | 13,507 | 8,552 | 14,887 | 26,528 | 10,500 | 14,600 | | Income from sales of assets | -64 | -10 | -5,479 | -134 | -44,261 | -2 | - | - | - | | Net lending to the private sector and abroad | -22 | -28 | 642 | 224 | 58 | 424 | 549 | - | - | | Other capital | -6,711 | -5,500 | 5,000 | 5,000 | -1,875 | 44,145 | - | - | - | | **Total Capital Budget** | 34,270 | 41,274 | 103,905 | 87,247 | 17,441 | 15,054 | 42,873 | 20,500 | 14,600 | | **Total departmental spending** | 405,821 | 452,776 | 560,938 | 576,210 | 461,656 | 381,162 | 437,598 | 656,015 | 362,725 | | Of which: | | | | | | | | | | | Total DEL | 407,860 | 453,928 | 606,734 | 577,038 | 458,124 | 417,629 | 441,995 | 657,327 | 362,725 | | Total AME | -2,039 | -1,152 | -796 | -828 | 3,532 | -36,467 | -4,397 | -1,312 | - |
1 Includes impairments 2 Total departmental spending is the sum of the resource budget and the capital budget less depreciation. Similarly, total DEL is the sum of the resource budget DEL and capital budget DEL less depreciation in DEL, and total AME is the sum of resource budget AME and capital budget AME less depreciation in AME 3 2013-14 numbers are provisional outturn; see table 2 for reconciliation to the account Table 2 Cabinet Office outturn year 2013-14
| £000 | 2013-14 Original Plans | 2013-14 Final Plans | 2013-14 Provisional Outturn | 2013-14 Final Outturn | |------|------------------------|---------------------|-----------------------------|-----------------------| | | Resource | Capital | Resource | Capital | Resource | Capital | Resource | Capital | | Spending in Departmental Expenditure Limits (DEL) | | | | | | | | | | Voted expenditure | 436,761 | 34,500 | 451,689 | 47,703 | 410,549 | 42,873 | 418,049 | 42,873 | | Of which: | | | | | | | | | | Support to the Cabinet, the PM & the Deputy PM | 70,161 | - | 59,417 | 1,500 | 57,691 | 1,476 | 57,691 | 1,476 | | Political & Constitutional Reform | 9,571 | 11,000 | 19,986 | 11,000 | 20,629 | 6,567 | 20,629 | 6,567 | | National Security | 26,638 | - | 28,246 | 600 | 29,076 | 975 | 29,076 | 975 | | Efficiency and Reform | 44,736 | 450 | 88,731 | 7,130 | 93,015 | 4,547 | 100,515 | 4,547 | | Hosted Functions | 1,341 | - | 1,250 | - | 1,152 | - | 1,152 | - | | Government Innovation Group | 179,906 | 15,238 | 169,369 | 11,929 | 170,092 | 12,080 | 170,092 | 12,080 | | Corporate Services Group | 101,630 | 7,812 | 81,094 | 15,544 | 36,535 | 17,228 | 36,535 | 17,228 | | Transactional Shared Services | 1,673 | - | 1,709 | - | 565 | - | 565 | - | | eNDPBs (NET) | 1,105 | - | 1,887 | - | 1,794 | - | 1,794 | - | | Non-voted expenditure | 2,000 | - | 2,000 | - | 1,826 | - | 1,826 | - | | Of which: | | | | | | | | | | Consolidated Fund Standing Services (CFSS) | 2,000 | - | 2,000 | - | 1,826 | - | 1,826 | - | | Total Spending in DEL | 438,761 | 34,500 | 453,689 | 47,703 | 412,375 | 42,873 | 419,875 | 42,873 |
Spending in Annually Managed Expenditure (AME)
| £000 | 2013-14 Voted expenditure | 2013-14 Non-voted expenditure | |------|---------------------------|-------------------------------| | | Resource | Capital | Resource | Capital | Resource | Capital | | Voted expenditure | 4,866 | - | 5,100 | - | -4,080 | - | | Of which: | | | | | | | | Corporate Services Group (AME) | 4,866 | - | 5,100 | - | -4,080 | - | | Total Spending in AME | 4,866 | - | 5,100 | - | -4,080 | - |
Total
| £000 | 2013-14 Total | 2013-14 Of which: | |------|---------------|-------------------| | | Resource | Capital | Resource | Capital | Resource | Capital | | Total | 443,627 | 34,500 | 458,789 | 47,703 | 408,295 | 42,873 | 415,795 | 42,873 | | Of which: | | | | | | | | | | Voted expenditure | 441,627 | 34,500 | 456,789 | 47,703 | 406,469 | 42,873 | 413,969 | 42,873 | | Non-voted expenditure | 2,000 | - | 2,000 | - | 1,826 | - | 1,826 | - |
† Figures for Adjusted Plans have been adjusted for machinery of government changes effected during 2013 to reflect the Final Plans structure where applicable
† Total Resource DEL reported in the Accounts at Note SOPS2 is £419.875 million which is £7.5 million higher than the provisional outturn reported on HM Treasury’s public expenditure database of £412.375 million. The increase in resource programme outturn within Efficiency and Reform of £7.5 million represents a late audit adjustment. Table 3 Cabinet Office Capital Employed
| £000 | 2009-10 Outturn | 2010-11 Outturn | 2011-12 Outturn | 2012-13 Outturn | 2013-14 Outturn | 2014-15 Plans | 2015-16 Plans | |------|----------------|----------------|----------------|----------------|----------------|---------------|---------------| | Assets and Liabilities on the Statement of Financial Position at year end | | Non-current assets | | Property, plant and equipment of which: | | Land and buildings | 136,182 | 147,661 | 125,060 | 99,817 | 111,651 | 129,705 | 137,393 | | Dwellings | 23,905 | 24,709 | 24,771 | 32,396 | 30,362 | 29,138 | 27,915 | | Information technology | 4,410 | 4,656 | 4,583 | 1,837 | 3,278 | 2,323 | 1,367 | | Plant and machinery | 2,078 | 1,720 | 1,530 | 938 | 356 | 15 | - | | Furniture and fittings | 176 | 313 | 535 | 523 | 1,837 | 1,712 | 1,585 | | Art and antiques | 10,252 | 12,231 | 10,584 | 9,733 | 9,883 | 9,884 | 9,884 | | Assets under construction (AUC) | 4,545 | 8,093 | 8,794 | 16,849 | 20,868 | 10,500 | 14,600 | | Total Property, plant and equipment | 181,548 | 199,383 | 175,857 | 162,093 | 178,235 | 183,277 | 192,744 | | Investment properties | - | - | - | 62,265 | 2,288 | 2,288 | 2,288 | | Intangible assets | 1,851 | 3,832 | 4,406 | 6,190 | 4,600 | 3,290 | 1,980 | | Sub total | 183,399 | 203,215 | 180,263 | 230,548 | 185,123 | 188,855 | 197,012 | | Investment in associates | - | - | - | 5,882 | 53,695 | 62,898 | 73,055 | | Other financial assets | 1,006 | 1,228 | 1,403 | 1,404 | 2,128 | 2,628 | 3,128 | | Other non-current assets | 2,077 | 411 | 354 | - | 16,450 | 7,050 | - | | Total non-current assets | 186,482 | 204,854 | 182,020 | 237,834 | 257,396 | 261,431 | 273,195 | | Current assets | | Assets held for sale | - | - | 44,145 | - | 60,000 | - | - | | Returning Officers’ expenses | - | - | - | - | 1,505 | - | - | | Deferred consideration | - | - | - | - | 9,400 | 9,400 | 7,050 | | Other current assets | 40,402 | 131,056 | 99,275 | 62,276 | 64,370 | 64,370 | 64,370 | | Total current assets | 40,402 | 131,056 | 143,420 | 62,276 | 135,275 | 73,770 | 71,420 | | Current Liabilities | | Returning Officers’ expenses | - | - | - | - | (1,505) | - | - | | Trade and other payables | (52,003) | (177,395) | (169,779) | (95,600) | (98,979) | (98,979) | (98,979) | | Provisions | - | - | (4,288) | (1,884) | (4,693) | (1,000) | (1,000) | | Total current liabilities | (52,003) | (177,395) | (174,067) | (97,484) | (105,177) | (99,979) | (99,979) | | Non-current liabilities | | Provisions | (3,941) | (6,240) | (13,036) | (10,829) | (3,830) | (2,830) | (1,830) | | Total capital employed | 170,940 | 152,275 | 138,337 | 191,797 | 283,664 | 232,392 | 242,806 | | of which: | | Core Department | 170,940 | 152,275 | 138,501 | 191,864 | 283,889 | 232,617 | 243,031 | | eNDPB | - | - | - | - | - | - | - | Table 4 Cabinet Office Administration budget 2007-08 to 2015-16
| £000 | 2007-08 Outturn | 2008-09 Outturn | 2009-10 Outturn | 2010-11 Outturn | 2011-12 Outturn | 2012-13 Outturn | 2013-14 Outturn | 2014-15 Plans | 2015-16 Plans | |------|----------------|----------------|----------------|----------------|----------------|----------------|----------------|---------------|---------------| | **Resource DEL** | | | | | | | | | | | Support to the Cabinet, the PM & the Deputy PM | - | - | - | - | 63,500 | 56,277 | 53,789 | 55,970 | 42,646 | | Political & Constitutional Reform | 5,365 | 5,633 | 5,633 | 4,163 | 3,699 | 3,740 | 4,012 | 4,132 | 7,445 | | National Security | - | - | - | - | 17,523 | 15,597 | 15,276 | 13,810 | 12,824 | | Efficiency and Reform | 4,875 | 33,445 | 31,867 | 24,647 | 48,992 | 39,331 | 26,987 | 17,300 | 10,054 | | Government Innovation Group | - | - | - | - | - | - | 6,509 | 4,638 | 2,865 | | Transactional Shared Services | - | - | - | - | - | - | 565 | - | - | | Hosted Functions | 2,726 | 2,748 | 2,620 | 2,175 | 1,144 | 1,360 | 1,102 | 1,150 | 767 | | Corporate Services Group | 149,866 | 170,479 | 153,157 | 170,529 | 50,568 | 75,389 | 35,791 | 67,020 | 62,328 | | Civil Service Capability | - | - | - | - | - | - | - | 6,572 | 6,572 | | Pensions | - | - | - | - | - | - | - | 6,000 | 6,000 | | eNDPBs (NET) | - | - | - | - | 1,313 | 1,442 | 1,794 | 1,887 | 1,803 | | **Total administration budget** | 162,832 | 212,305 | 193,277 | 201,514 | 186,739 | 193,136 | 145,825 | 178,479 | 153,304 | | Of which: | | | | | | | | | | | Staff costs | 110,008 | 126,277 | 137,961 | 145,583 | 125,653 | 105,924 | 115,822 | 97,280 | 94,473 | | Purchase of goods and services | 100,459 | 136,013 | 117,020 | 97,902 | 111,803 | 140,054 | 192,379 | 149,702 | 126,003 | | Income from sales of goods and services | -68,530 | -75,120 | -84,490 | -72,070 | -62,061 | -83,432 | -178,094 | -97,089 | -95,529 | | Current grants to local government (net) | - | - | - | -1 | - | - | - | - | - | | Current grants to persons and non-profit bodies (net) | - | - | - | - | - | - | -1 | - | - | | Rentals | 12,465 | 15,605 | 11,737 | 20,122 | 17,505 | 31,743 | 12,314 | 13,091 | 13,091 | | Depreciation | 8,106 | 9,235 | 10,380 | 10,015 | 5,688 | 8,563 | 10,157 | 15,000 | 15,266 | | Other resource | 324 | 295 | 669 | -37 | -11,849 | -9,716 | -6,752 | 495 | - | Table 5a Staff numbers for the Cabinet Office
| | 2011-12 | 2012-13 | 2013-14 | 2014-15 | |----------------------|---------|---------|---------|---------| | CS FTEs | 2,216 | 1,663 | 1,668 | 1,690 | | Casuals (incl. short-term / fix term appointments) | 138 | 244 | 425 | 258 | | Special advisers | 47 | 48 | 56 | 56 | | **Total Cabinet Office** | **2,401** | **1,955** | **2,149** | **2,004** |
Table 5b Staff numbers for the Cabinet Office
| Grade | Pay Band | Full-time equivalents (FTEs) | |------------------------|------------------------|-----------------------------| | Permanent Secretary | £141,800 - £277,300 | 5 | | SCS 3 | £103,000 - £208,100 | 21 | | SCS 2 | £84,000 - £162,500 | 41 | | SCS 1 | £60,000 - £117,800 | 165 | | **Total** | | **232** |
\*Total includes 40 SCS-equivalent graded staff in the Office of Parliamentary Counsel Table 6 Total identifiable expenditure on services by country and region 2008-09 to 2012-13
| £ million | National Statistics | |-----------|---------------------| | Cabinet Office | 2008-09 | 2009-10 | 2010-11 | 2011-12 | 2012-13 | | North East | 17 | 23 | 23 | 14 | 7 | | North West | 47 | 64 | 62 | 38 | 18 | | Yorkshire and the Humber | 35 | 48 | 46 | 29 | 14 | | East Midlands | 30 | 41 | 40 | 25 | 12 | | West Midlands | 37 | 50 | 49 | 30 | 15 | | East | 39 | 53 | 51 | 32 | 16 | | London | 53 | 73 | 71 | 45 | 23 | | South East | 57 | 78 | 76 | 47 | 23 | | South West | 35 | 48 | 46 | 29 | 14 | | Total England | 350 | 477 | 465 | 289 | 142 | | Scotland | 20 | 17 | 18 | 11 | 4 | | Wales | 21 | 31 | 29 | 17 | 8 | | Northern Ireland | 7 | 6 | 6 | 4 | 1 | | UK identifiable expenditure | 397 | 530 | 518 | 321 | 155 | | Outside UK | - | - | - | - | - | | Total identifiable expenditure | 397 | 530 | 518 | 321 | 155 | | Non-identifiable expenditure | 43 | 51 | 42 | 153 | 185 | | Total expenditure on services | 440 | 581 | 561 | 474 | 340 |
Table 7 Total identifiable expenditure on services by country and region per head 2008-09 to 2012-13
| £ per head | National Statistics | |------------|---------------------| | Cabinet Office (excluding Civil Superannuation) | 2008-09 | 2009-10 | 2010-11 | 2011-12 | 2012-13 | | North East | 7 | 9 | 9 | 5 | 3 | | North West | 7 | 9 | 9 | 5 | 3 | | Yorkshire and the Humber | 7 | 9 | 9 | 5 | 3 | | East Midlands | 7 | 9 | 9 | 5 | 3 | | West Midlands | 7 | 9 | 9 | 5 | 3 | | East | 7 | 9 | 9 | 5 | 3 | | London | 7 | 9 | 9 | 6 | 3 | | South East | 7 | 9 | 9 | 5 | 3 | | South West | 7 | 9 | 9 | 5 | 3 | | England | 7 | 9 | 9 | 5 | 3 | | Scotland | 4 | 3 | 3 | 2 | 1 | | Wales | 7 | 10 | 10 | 6 | 3 | | Northern Ireland | 4 | 3 | 3 | 2 | 1 | | UK identifiable expenditure per head | 6 | 9 | 8 | 5 | 2 | Table 8 Cabinet Office Expenditure on services by sub-function 2012-13
Data in this table are National Statistics
| Sub-function | North East | North West | Yorkshire and the Humber | East Midlands | West Midlands | East | London | South East | South West | England | Scotland | Wales | Northern Ireland | Outside UK | Not Identifiable | Grand Total | |--------------|------------|------------|--------------------------|---------------|---------------|------|--------|------------|------------|---------|-----------|-------|-------------------|------------|------------------|-------------| | 1. General public services | 5 | 12 | 9 | 8 | 10 | 10 | 15 | 15 | 9 | 94 | -1 | 5 | 0 | - | 185 | 283 | | 1.1 Executive and legislative organs, financial and | 0 | 1 | 1 | 1 | 1 | 1 | 2 | 2 | 1 | 12 | 1 | 1 | 0 | - | - | 14 | | 1.6 General public services n.e.c. | 2 | 5 | 4 | 3 | 4 | 4 | 6 | 6 | 4 | 36 | 4 | 2 | 1 | - | - | 43 | | Total general public services | 7 | 18 | 14 | 12 | 15 | 16 | 23 | 23 | 14 | 142 | 4 | 8 | 1 | - | 185 | 340 | | 3.6 Public order and safety n.e.c. | 2 | 5 | 4 | 3 | 4 | 4 | 6 | 6 | 4 | 36 | 4 | 2 | 1 | - | - | 43 | | Total public order and safety | 2 | 5 | 4 | 3 | 4 | 4 | 6 | 6 | 4 | 36 | 4 | 2 | 1 | - | - | 43 | | TOTAL CABINET OFFICE EXPENDITURE ON SERVICES | 7 | 18 | 14 | 12 | 15 | 16 | 23 | 23 | 14 | 142 | 4 | 8 | 1 | - | 185 | 340 | Commentary on Public Expenditure Data Tables
Tables 1 and 2 Total Departmental Spending and Outturn year 2013-14
Resource DEL (RDEL)
The 2010 Spending Review Settlement provides for a real reduction in non-ring fenced RDEL of 35% on the Cabinet Office 2011-12 baseline after excluding all changes in departmental responsibilities.
The 2013 Spending Round Settlement provides for a real reduction in non-ring fenced RDEL of 10% on the Cabinet Office 2014-15 baseline.
Staff costs
There is a decrease in future years pay costs in response to the Government’s deficit reduction plans.
The year on year increase in 2013-14 in wages and salaries permanent staff costs is due to increased responsibilities within the Efficiency & Reform Group (ERG) and Government Innovation Group (GIG) which led to the creation of new teams.
Efficiency & Reform Group
Within ERG there have been numerous new projects/teams, including Crown Hosting, Debt Market Integrator, Shared Services Centre 2, Single Operating Platform, Civil Service HR, ERG HR Team, Commercial Reform Team and the Complex Transactions Team.
Also within ERG, the Government Digital Service (GDS) staff numbers and associated costs increased to take into account the additional activities which GDS took forward during the course of the latter financial year. This most notably related to continuing to develop and improve GOV.UK (setting up GOV.UK was the main staff cost in 2012-13), to rationalise and bring over 300 ALB websites to GOV.UK and taking forward a number of exemplar projects with other Government Departments on transactional services which were aimed at improving the level of customer satisfaction, increasing the uptake of online services, saving money from reduced service and IT delivery contracts; and building capability within each department.
Government Innovation Group
Within the Government Innovation Group new teams have been created during 2013-14, such as the Data Sharing Public Sector Partnership & Contestable Policy.
Outturn may be reconciled to staff costs at Note 4 to the Accounts by adding the salaries and pensions of the UK Members of the European Parliament and by adding utilisation of early departures costs (whereby cash disbursement is a charge against RDEL and release of the provision is a benefit to RAME): both are reported in Note SOPS3.
Purchase of goods and services and income from sales of goods and services
Political and Constitutional Reform – Consolidated Fund Standing Services
SR2010 settlement includes funding for the boundary review and in 2014-15 funding for the introduction of Individual Electoral Registration and funding for elections to the European Parliament. In 2009-10 the 2009 European Parliamentary elections were budgeted at £95.3 million, in 2010-11 the 2010 UK Parliamentary Elections for England and Wales were budgeted at £102.2 million and in 2014-15 the 2014 European Parliamentary elections are budgeted at £119.1 million. Current grants and subsidies
SR2010 settlement includes funding for the voluntary sector and for the Electoral Registration Transformation Programme. See Note 6 to the Accounts which describes the purpose of the grant programmes.
Government Innovation Group
The Government Innovation Group is charged with implementing the Government’s commitment to the Big Society and the settlement provides for the Community First Fund, support for volunteering, capacity building, community organisers and support for mutuals. The pilot phase of the National Citizen Service was implemented during 2011-12 and 2012-13. Key programmes have included National Citizen Service, Strategic Partners Programme, Social Action, Community Organisers, Community First, Structural Support and Technical Assistance and Advice Services Fund.
Funding includes £100 million in 2013-14 and £140 million in 2014-15 for the National Citizen Service programme and £16.8 million in 2014-15 for “Help for Not-for-Profit organisations in the Third Sector”. In 2015-16 SR2013 provides £140 million for the National Citizen Service and £56 million for other civil society programmes.
Rentals
Rentals include offices at 1 Horse Guards Road and a PFI service charge in respect of Sunningdale Park. See Note 5 to the Accounts.
During 2012-13 the Cabinet Office paid lease surrender premiums totalling £16.350 million to secure early exit from leasehold properties at 1 Palace Street and 67 Tufton Street in order to realise future value for money savings. The Cabinet Office assumed responsibility for the lease of 1 Palace Street from the Department for International Development who moved to cheaper premises at 22-26 Whitehall which were gifted to them by the Cabinet Office. By incurring a charge of £13.650 million, the Cabinet Office secured early exit from the lease in December 2013 with the prospect of achieving overall savings of £62.5 million which include the avoidance of future rental payments to September 2020.
Depreciation and impairment
Depreciation is a ring-fenced budget and may not be re-deployed. It includes depreciation and impairment caused by loss or damage to assets resulting from normal business operations, abandonment of assets under construction or over-specification of assets. Depreciation arises mainly on owned buildings and amortisation mainly on websites. See Notes 5 and 6 to the Accounts.
Other resource
This includes income from royalties and dividends. See Note 7 to the Accounts.
Resource AME (RAME)
Resource AME comprises the take up of new provisions and the release of provisions at the point of cash utilisation for both dilapidations on leasehold properties and onerous contract on vacant leasehold properties, staff early departures, depreciation on donated assets and impairments against property assets and loans and investment properties gains/loss on changes in fair value.
Other resource
During 2012-13 Admiralty Arch became vacant and was recognised as an investment property at fair value of £60 million resulting in a gain on change in fair value of £32.003 million. See Note 9 to the Accounts. Capital DEL (CDEL)
The 2010 Spending Review Settlement provides for a real reduction of 28% on the Department’s 2011-12 baseline. The Public Expenditure Committee agreed the following should be funded within this capital settlement: Cabinet Office Estate Rationalisation, Constitutional Reform – Individual Electoral Registration, Social Action and Community First.
Spending Round 2013 allows £14.6 million for the upkeep of estates and crisis facilities and future ICT.
Capital grants
Government Innovation Group
Expenditure from 2007-08 to 2010-11 represents capital grants mainly to Futurebuilders England Limited to deliver the Futurebuilders programme which came to an end on 31 March 2011. During 2012-13 Futurebuilders England Limited returned capital income of £8 million to the Cabinet Office representing the repayment of loans by investees; see Notes 6 and 25 to the Accounts. Since 2011-12 capital grants have been made to Community First Endowment Match Challenge programme and in 2013-14 amounted to £10.880 million. See Note 6 to the Accounts.
Political and Constitutional Reform
During 2013-14 £4.917 million capital expenditure was incurred on Individual Electoral Registration. SR2010 provided the Constitutional Reform Group the opportunity to set out its plans to bring forward the introduction of Individual Electoral Registration. Individual Electoral Register will require each member of the household to register, and be responsible for, their own entry on the register which will subsequently be checked against other sources of public data to ensure that the electoral register is trusted and secure. Individual Electoral Registration should furthermore improve accuracy of the register, allow people to register in different ways and will allow the government to take steps to address the completeness of the register.
Purchase of assets
Corporate Services Group
In 2013-14 spend on capital relates to investment in the Cabinet Office’s London estate. See previous section on outturn for a further explanation. See Notes 8 and 10 to the Accounts.
Other capital and income from sale of assets
In 2012-13 the Minister for the Cabinet Office transferred all rights and obligations under the freehold and associated agreements for 22/26 Whitehall, London SW1A 2WH to The Secretary of State for International Development (DFID). The fair value of property at the date of transfer was £44.145 million on the assumption that the property was sold as part of the continuing enterprise in occupation with vacant possession. See Note 20 to the Accounts. Table 3 Capital Employed for the Cabinet Office
Property, plant and equipment
Overall carrying values increased from March 2013 to March 2014 by £16 million of which £25 million in additions, £6 million impairment, £2 million revaluations and £5 million depreciation. A relatively small upwards valuation of non-current assets in 2013-14 of just under £2 million overall (around 1% of the total carrying value) is predominantly the result of independent professional valuations of freehold land and buildings. See outturn in previous section, and Note 8.1 to the Accounts.
Forecasts assume that depreciation in 2014-15 and 2015-16 will remain at similar levels to 2013-14. Capital additions in 2014-15 and in 2015-16 reflect the capital requirement approved by Parliament in the Main Estimate 2014-15 and the capital budget within the Spending Round 2013, respectively.
Investments in associates
This represents the Cabinet Office’s share of its associates net assets based on their forecast profits. The Department holds the following equity shareholdings; see Note 17 to the Accounts:
| Associate | Equity shareholding % | |----------------------------------|-----------------------| | MyCSP Limited | 35 | | Shared Services Connected Limited| 25 | | AXELOS Limited | 49 | | Behavioural Insights Team Limited| 35 |
Other financial assets
Additional loans are expected to be made to Bridges Social Entrepreneurs Fund LP which invests in social enterprises. See Note 19 to the Accounts.
Assets held for sale
Admiralty Arch is expected to be sold on a long-leasehold during 2013-14. See Notes 9 and 20 to the Accounts.
Returning Officers’ Expenses
Claims from Returning Officers relating to UK Parliamentary By-elections and 2014 European Parliamentary Elections are expected to be settled by 31 March 2015 and claims relating to 2015 UK General Election by 31 March 2016. See Notes 21, 22 and 23 to the Accounts.
Deferred consideration
Cabinet Office transferred its 51 ‘B’ Ordinary shares in AXELOS Limited to AXELOS’ immediate parent, Capita Business Services Limited (CBSL) in return for consideration of £38.2 million. CBSL has deferred payment of £25.850 million to be settled in 33 equal monthly instalments between April 2014 and December 2016. See Note 21 to the Accounts.
Non-current liabilities provisions
There are no new significant provisions anticipated for 2014-15 or 2015-16. Existing provisions will be utilised as shown within the analysis of expected timing of cash flows as set out at Note 24 to the Accounts.
It is assumed that all other balances will remain at levels similar to 2013-14. Table 4 Administration budget
Administration budgets help drive economy and efficiency and are controlled to ensure that as much money as practicable is available for front-line services and programmes.
The 2010 Spending Review Settlement provides for a real reduction of 33% in the administration budget excluding depreciation over the four years on the 2010-11 baseline.
The 2013 Spending Round Settlement provides for a real reduction of 10% in the administration budget excluding depreciation on the 2014-15 baseline.
The decrease of £14.775 million in 2011-12 outturn administration costs compared to 2010-11 is largely due to efficiency savings across the Department, a reduction in the general workforce which took place during 2010-11 and a reclassification from administration to programme of the expenditure of the Civil Service Capabilities and Public Services Reform Groups upon their transfer into the Efficiency and Reform Group.
2013-14 outturn includes income of £38.2 million upon sale of shares in Axelos Limited to Capita Business Services Limited; see previous section on outturn.
In 2014-15 two new operating segments have been created for Civil Service Capability and Pensions. Civil Service Capability includes Civil Service Human Resources and Civil Service Reform. Civil Service Human Resources aims to alter the way in which the Civil Service delivers HR services cross-government. Civil Service Reform will equip a smaller Civil Service to meet future challenges. Pensions includes the Royal Mail Statutory Pension Scheme, and also the Principal Civil Service Pension Scheme (PCSPS) whose costs are met through income from a charge on Civil Superannuation employer pension contributions and directly from employers who participate in the PCSPS.
Table 5 Staff numbers
These tables show the actual number of staff as at 31 March in each year up to 2013-14 and projected staffing for 2014-15. Staff are categorised as permanent, casual and special adviser. By contrast, Note 4 to the Accounts shows headcount expressed as the average number of whole-time equivalent persons employed and includes ministers, temporary staff and commissioners.
Civil Service Full Time Equivalent
In 2012-13 there were significant number of leavers who had previously worked for National School of Government and Central Office of Information. In 2013-14, overall there is a little change compared to 2012-13. 27 staff working in the Civil Service HR unit and 6 staff working in the Functional Leadership team transferred from the Department for Communities and Local Government with these functions into the Cabinet Office. During the course of the year, 6 staff working in the SWIRL Unit, part of the Efficiency and Reform Group, and 15 staff in the Behavioural Insights Team, part of the Government Innovation Group, transferred out of the Cabinet Office to the Private Sector under TUPE arrangements. Projected staff numbers for 2014-15 are based on current business planning assumptions.
Casuals
In 2013-14 an increasing number of projects took place around GOV.UK, the rationalisation of 300 arm’s length body websites to GOV.UK and as part of the wider transformation programme which is aimed at delivering public services online or by other digital means. A number of these projects were carried out by interim staff, particularly where the length of the project was 12 months or less, or where specialist skills were required. This work necessitated an increase in the number of casual staff. Given the short term nature of the projects involved and the specialist skills required the use of casual staff represented the most cost effective solution to their successful delivery. Tables 6 to 8 Country and Regional Analysis tables
The Country and Regional Analysis table is an analysis of public expenditure by country, region and function. Data in this release are National Statistics for all years. This is purely a statistical exercise and plays no part in resource allocation.
Most public spending is planned to benefit categories of individuals and enterprises irrespective of location. The regional analyses presented show where the individuals and enterprises that benefited from public spending were located. It does not mean that all such spending was planned to benefit a particular region, because only a minority of public spending is planned on a regional basis. Public expenditure is planned and controlled on a departmental basis.
The tables present statistical analyses of public expenditure by country, region and function and present the spending attributed to the English regions alongside the spending attributed to Scotland, Wales and Northern Ireland.
Tables 6, 7 and 8 show analyses of the Department’s spending by country and region, and by function. The data presented in these tables are consistent with the country and regional analyses (CRA) published by HM Treasury in the November 2013 release.
The figures were largely taken from the Online System for Central Accounting and Reporting (OSCAR) during the summer of 2013 and the regional distributions were completed by the following autumn (taking on board any revisions to departmental totals). Please note that totals may not sum due to rounding.
The analyses are set within the overall framework of Total Expenditure on Services (TES). TES broadly represents the current and capital expenditure of the public sector, with some differences from the national accounts measure Total Managed Expenditure.
The tables show the central government and public corporation elements of TES. They include current and capital spending by the Department and its NDPBs, and public corporations’ capital expenditure, but do not include capital finance to public corporations. They do not include payments to local authorities or local authorities own expenditure.
TES is a cash equivalent measure of public spending. The tables do not include depreciation, cost of capital charges, or movements in provisions that are in departmental budgets. They do include pay, procurement, capital expenditure, and grants and subsidies to individuals and private sector enterprises. Further information on TES can be found in Appendix E of PESA 2013.
The data feature both identifiable and non-identifiable spending:
1. Identifiable expenditure on services – which is capable of being analysed as being for the benefit of individual countries and regions.
2. Expenditure that is incurred for the benefit of the UK as a whole and cannot be disseminated by individual country or region is considered to be non-identifiable.
Across government, most expenditure is not planned or allocated on a regional basis. Social security payments, for example, are paid to eligible individuals irrespective of where they live. Expenditure on other programmes is allocated by looking at how all the projects across the Department’s area of responsibility, usually England, compare. So the analyses show the regional outcome of spending decisions that on the whole have not been made primarily on a regional basis. The functional analyses of spending in Table 8 are based on the United Nations Classification of the Functions of Government (COFOG), the international standard. The presentations of spending by function are consistent with those used in Chapter A of the CRA November 2013 release. These are not the same as the strategic priorities shown elsewhere in the report.
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
24 June 2014 This page is intentionally left blank. Governance The role of government is changing. It is increasingly becoming a commissioning body, buying and managing a range of complex services and commercial relationships, with a greater focus on value for money. As a result, it needs a Civil Service with new and enhanced skills. The Cabinet Office is at the forefront of the change programme required to deliver this shift.
Board effectiveness
The Board met seven times during the 2013-14 financial year. Board membership has remained stable, with the departure of just one minister.
The evidence from the latest Cabinet Office board effectiveness evaluation, incorporating a peer review by Sara Weller (lead non-executive at the Department for Communities and Local Government), demonstrated that most Board members believe the Board is operating more effectively, compared to 12 months ago.
Following recommendations made in last year’s Board evaluation, the flow of information between Board members and the Department’s management has improved, and the Board agendas are now becoming more focused.
The quality of Board meetings has also been improved by greater engagement between the Board chair and non-executives outside formal Board meetings. Rona Fairhead chairs the Department’s highly effective Audit and Risk Committee, and non-executives continue to contribute to committees such as the Senior Pay and Talent Committee.
Strategic clarity
Compared to other government departments, the Cabinet Office has a remit of unusual breadth and depth, which changes regularly to reflect the evolution of government and Civil Service priorities. It is therefore essential for the Department continually to clarify its strategic purpose.
Commercial sense
A number of the recommendations in my review of major project leadership, ‘Getting a Grip’ (March 2013), have been implemented. The appointment of a new Chief Executive, John Manzoni, will bring fresh impetus to these important reforms. The Cabinet Office has also launched a fully integrated Crown Commercial Service (CCS), which centralises responsibility for procurement, and which will improve supplier management as a result. Talented people
The Board’s Senior Pay and Talent Committee has provided good strategic input into the performance and talent management of senior civil servants (SCS). Succession plans have improved, particularly at Director General level, where 93% of roles have succession plans in place. There should, however, be more discussion of the Department’s wider talent management strategy, covering both people and departmental capability. This could happen in the Board itself or in a sub-committee chaired by a non-executive.
Results focus
The Board has maintained its focus on the link between strategy and results. An example was the analysis of risk, resources and capabilities submitted to the Board to inform its discussions about the creation of the CCS. This enabled the Board to satisfy itself that these key issues had been properly considered by the departmental management team.
Management information
The improvements I highlighted last year have continued, with management information now better reflecting the Board’s need to review the progress of key programmes and strategic goals.
The Cabinet Office has also maintained its focus on improving management information across government, by reviewing the data being collected, developing a plan to streamline Quarterly Data Summaries (QDS) and producing a ‘Board Reporting’ booklet to disseminate best practice across government.
Lord Browne of Madingley Government Lead Non-Executive Director and Lead Non-Executive Director for the Cabinet Office Our Ministers
The Rt Hon. David Cameron MP First Lord of the Treasury, Minister for the Civil Service, Prime Minister (remunerated by HMT)
The Rt Hon. Nick Clegg MP Deputy Prime Minister and Lord President of the Council
The Rt Hon. Francis Maude MP Minister for the Cabinet Office, Paymaster General
The Rt Hon. Oliver Letwin MP Minister for Government Policy
The Rt Hon. David Laws MP\* Minister of State jointly with the Department for Education (remunerated by the Department for Education)
Nick Hurd MP Minister for Civil Society Parliamentary Under-Secretary of State
The Rt Hon. Grant Shapps MP\*\* Minister without Portfolio (Minister of State) and Co-Chairman of the Conservative Party (Not remunerated)
Jo Johnson MP Assistant Whip and Parliamentary Secretary From 25 April 2013 (Not remunerated)
The Rt Hon. Lord Hill of Oareford CBE Leader of the House of Lords and Chancellor of the Duchy of Lancaster
The Rt Hon. Kenneth Clarke QC MP Minister without Portfolio (Minister of State)
The Rt Hon. John Hayes MP Minister without Portfolio (Minister of State)
The Rt Hon. Andrew Lansley CBE MP Leader of the House of Commons and Lord Privy Seal
The Rt Hon. Greg Clark MP Minister of State (Cities and Constitution) from 7 October 2013
Chloe Smith MP Minister for Political and Constitutional Reform and Parliamentary Secretary until 6 October 2013 Permanent Secretary
Richard Heaton is our Permanent Secretary and is the head of the Department, responsible for the leadership and governance of the Cabinet Office. The Permanent Secretary is also the Cabinet Office’s Accounting Officer.
Richard also holds the post of First Parliamentary Counsel, whose role it is to oversee the Government in Parliament Group, which includes Parliamentary Counsel and the business managers in each House of Parliament. The Group works with teams across government to prepare and deliver the government’s legislative programme.
Richard Heaton, Permanent Secretary for the Cabinet Office
Richard Heaton has been Permanent Secretary for the Cabinet Office since August 2012. He has also been First Parliamentary Counsel since February 2012.
Richard started his career as a barrister and joined the Home Office as a legal adviser in 1991. He then worked in legal teams across government, focusing particularly on criminal law, the constitution, and human rights law. His recent legal and non-legal posts have been:
- Director of Legal Services at the Department for Constitutional Affairs (now Ministry of Justice)
- Head of Law and Governance at the Department for Work and Pensions
- Director General for Pensions and Ageing Society, Department for Work and Pensions
Cabinet Secretary
Sir Jeremy Heywood is the Cabinet Secretary and the Prime Minister’s and Deputy Prime Minister’s most senior policy adviser and he acts as Secretary to the Cabinet, responsible to all ministers.
Sir Jeremy Heywood, Cabinet Secretary
Sir Jeremy Heywood was appointed Cabinet Secretary in December 2011. Prior to that, Sir Jeremy was Permanent Secretary to two successive Prime Ministers at 10 Downing Street. He also spent over three years as a managing director including as co-head of the UK Investment Banking Division at Morgan Stanley. Before joining Morgan Stanley, Sir Jeremy occupied a range of senior civil service roles, including as Principal Private Secretary to the Prime Minister (1999–2003).
Prior to that, he had a variety of senior roles at HM Treasury including:
- Head of Securities and Markets Policy
- Head of Corporate and Management Change
He also served as Principal Private Secretary to Chancellors Norman Lamont and Kenneth Clarke and had a spell at the International Monetary Fund in Washington DC. His first job in the Civil Service was as an economic adviser to the Health and Safety Executive. Head of the Civil Service
Sir Bob Kerslake, Head of the Civil Service
Sir Bob Kerslake is Head of the Civil Service (HoCS) in which capacity he reports directly to the Prime Minister and works closely with the Cabinet Secretary and the Minister for the Cabinet Office. He is responsible for providing professional and corporate leadership to the Civil Service and enhancing the immediate and longer term capability of the Civil Service with strong governance and accountability.
Sir Bob has dual roles and perform his HoCS role alongside his existing departmental responsibilities as Permanent Secretary for the Department for Communities and Local Government (DCLG).
His remuneration, including an allowance of £20,000 per annum for his role as HoCS and a benefit–in-kind of £75,000 arising from the use of a car shared with the Cabinet Secretary, is disclosed within the Remuneration Report in DCLG Annual Report and Accounts, since DCLG are liable for all pay related costs. Governance Statement
Our new governance structure
Historically, the Executive Management Committee (EMC) – the top team of managers running the Department – has looked at the whole range of issues – large and small – affecting the Cabinet Office. As the scope and complexity of the Cabinet Office work continues to grow, there is now a need to re-focus the way we manage the Department at a tactical and strategic level.
The changes made:
- The new core EMC group will focus on the decisions that need to be made at a strategic level. This group is chaired by Richard Heaton, and other members are Sue Gray, Stephen Kelly, Oly Robbins, Paul Maltby, Helen Stephenson, Will Cavendish, Bruce Mann, Mel Steel, Stefan Czerniawski, Alex Aiken, Hugh Powell, Melanie Dawes and Chris Martin.
- There are a number of sub-committees (led by EMC members or other senior leaders) with delegated authority to make decisions in particular areas. If these decisions are of strategic importance to the Cabinet Office, they will be referred to the EMC.
- There are four sub-committees – two of which are new. These are:
- the new People and Performance Committee – focusing on pay, talent and performance decisions below SCS
- the new Environment and The Way We Work Committee – focused on improving the tools we use, our working environment and the communications/engagement decisions
- the Resourcing Panel – this reviews additional headcount and retention requirements across the Cabinet Office
- the Investment and Programme Review Committee – advising on financial investment decisions and associated risks.
- The EMC and its sub-committees work in conjunction with a number of other boards and committees with a key role across the Department, including the Cabinet Office Board, the Approvals Board, and the Senior Pay and Talent Committee (SPTC). The new governance arrangements Introduction
The Cabinet Office’s Governance Statement sets out the governance structures, and the internal control and risk management procedures that have operated within the Cabinet Office during the financial year 2013-14 and up to the date of approval of the Annual Report and Accounts, and is in accordance with the HM Treasury guidance.
Ministerial responsibilities
Ministers lead departments and are responsible for (and accountable to Parliament for) the actions and policies of their departments. Boards, within the strategic framework set by the minister, support the head of the Department by advising ministers and taking ownership of the Department’s performance. Ministers and board members are responsible for corporate governance, which defines the rights and responsibilities of different stakeholders, determines rules and procedures for making decisions, and includes the process through which the Department’s objectives are set and monitored.
‘Machinery of government’ transfers of function into the Cabinet Office
During the financial year 2013-14 the following changes in ministerial responsibilities resulted from machinery of government transfers of function.
Royal Mail Statutory Pension Scheme
With effect from 1 April 2012 and under the provisions of the Postal Services Act 2011, the Government assumed responsibility for both the Royal Mail Pension Plan deficit and the majority of the plan’s liabilities. This was achieved through the establishment in the Department for Business, Innovation and Skills (BIS) of a new unfunded pension scheme - the Royal Mail Statutory Pension Scheme (RMSPS).
Concerns about the size of the RMSPS management and the resilience of a small management team led to a review of where the scheme would best sit within government. The review concluded that the future of the scheme and its membership would be best served by moving the scheme to the Cabinet Office, to be run alongside the Principal Civil Service Pension Scheme (PCSPS).
Consequently, from 1 April 2013, the Cabinet Office assumed responsibility for the scheme’s management and administration.
Youth policy
On 3 July 2013, a ‘machinery of government’ change was announced, whereby cross-cutting responsibilities for youth policy transferred from the Department for Education to the Cabinet Office, which now leads for the government on: cross-government youth strategy and policy coordination; management of the statutory duty on Local Authorities for youth provision in their areas; and strategic relationship management with young people and youth sector organisations on policy development.
Other changes – transactional shared services
As a result of various investigations and recommendations relating to the sharing of back-office functions across government, there was an initiative to set up a second Independent Shared Service Centre (ISSC2). The business case demonstrated that the best value-for-money delivery model for ISSC2 would be an associate partnership between government and the private sector. Following the publication of the Next Generation Shared Services Strategy in December 2012, the Department for Work and Pensions (DWP) Shared Services was identified as a founding member of the ISSC2 programme. As a first step towards this, the accountability for the current DWP Shared Service Centre (SSC) transferred on 1 April 2013 to the Cabinet Office until 31 October, after which date the service was delivered by Shared Services Connected Limited, an associate company.
**Associates**
**Shared Services Connected Limited (SSCL)**
On 1 November The Minister for the Cabinet Office announced that Steria Limited had been appointed as the private sector partner in a new associate company, Shared Services Connected Limited (SSCL), to run the second of two new Independent Shared Services Centres. The associate will harness commercial expertise to deliver government back-office functions more efficiently. The project is a key example of driving innovation in government commercial models – which are key parts of the Civil Service Reform Plan. The new company, SSCL, was initially formed from a consolidation of some existing shared service centres in DWP, the Department for the Environment, Food and Rural Affairs (Defra) and the Environment Agency. Some services from UK Shared Business Services Ltd (UK SBS) are expected to join by 2015. SSCL will deliver payroll, human resources, finance and procurement services to the existing customers of these centres, with further government departments, agencies and public bodies expected to join in due course.
**AXELOS Limited**
An innovative deal to create the first associate business based on government intellectual property was announced on 23 April by the Minister for the Cabinet Office. The new company owns and trades on the ‘Best Management Practice’ portfolio of professional standards developed by the Civil Service.
**Behavioural Insights Team Limited**
On 4 February 2014, the Cabinet Office’s Behavioural Insights Team joined with innovation charity National Endowment for Science, Technology and the Arts (Nesta) to create a new associate company that will apply insights from behavioural sciences and help the Government save millions of pounds for the taxpayer by tackling public policy problems. The Cabinet Office Board - our Board members
Members of the Cabinet Office Board during the year were:
Chair
The Rt Hon. Francis Maude MP Minister for the Cabinet Office, Paymaster General
Ministers
Nick Hurd MP Minister for Civil Society and Parliamentary Under-Secretary of State
Chloe Smith MP Minister for Political and Constitutional Reform and Parliamentary Secretary until 6 October 2013
Executive Membership
Sir Jeremy Heywood KCB, CVO Cabinet Secretary
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
Melanie Dawes CB Director General of Economic & Domestic Affairs Secretariat
Phillip Rycroft CB Director General, Deputy Prime Minister’s Office
Bruce Mann Finance Director, Board Secretary
Sue Gray Director General Propriety and Ethics and Head of Private Office Group
Non-Executive Membership
Details of the non-executive directors may be found within the section ‘Our Non-Executive Directors’. The Cabinet Office Board - responsibilities
The Cabinet Office Board is responsible for:
- **Planning and Performance** – agreeing the Departmental Plan, especially the Department’s strategic aims and objectives and the allocation of human and financial resources to achieving them, and their public expression in the Business plan; monitoring and steering performance against the Plan; scrutinising the performance of sponsored bodies; and setting the Department’s standards and values.
- **Strategy and Learning** – setting the vision/mission and ensuring that all activities contribute towards it, either directly or through establishment of a credible ‘licence to operate’; long-term capability and horizon scanning, ensuring that strategic decisions are based on a collective understanding of policy issues; using expertise and outside perspectives to hold the Department to account for its interaction with the ‘real world’.
- **Resources and Change** – signing off large projects or programmes, or scrutinising those above the Department’s financial delegation prior to submission to the Treasury; drawing on advice from the Audit and Risk Committee, ensuring sound financial management including the operation of delegations and internal controls; ensuring that organisational design supports the attainment of strategic objectives; evaluation of the Board and its members, and succession planning.
- **Capability** – ensuring that the Department has the capability to deliver and to plan to meet current and future needs.
- **Risk** – drawing on advice from the Audit and Risk Committee, setting the Department’s risk appetite and ensuring that effective and proportionate controls are in place to manage risk. Work of the Cabinet Office Board
The Cabinet Office Board forms the collective strategic and operational leadership of the Department, bringing together its Ministerial and Civil Service leaders with senior non-executives from outside government.
A Board effectiveness evaluation, led by Lord Browne, was conducted on his behalf by Internal Audit and discussed at the Board meeting in April 2013. The evaluation found that the Board’s composition gave it great strength and provided a forum and culture in which challenge was encouraged and valued: the contribution of Non-Executive Board Members was highly regarded. The Audit and Risk Committee was working well, and risk management processes were considered to be effective. The evaluation concluded that there had been a marked improvement in the operation of, and support to, the Board, including better agenda setting, performance reporting and minutes. Further improvements were needed in Board papers, in raising Non-Executive Board Members’ awareness of the Department’s arm’s length bodies, and in providing Non-Executive Board Members both with updates on key matters between Board meetings and with more opportunities for engagement.
In response to the evaluation findings, the template for Board papers was revised and updates on the activities of Arm’s length bodies were provided to Board members. The Board discussed the Department’s plans for the creation of a new Arm’s length body, the Crown Commercial Service, which will merge the Government Procurement Service (an existing Arm’s length body), the Department’s commercial function, and common goods and services procurement and commercial management into one organisation. Notes celebrating departmental successes and including information about the Department’s plans are now circulated to Non-Executive Board Members weekly, providing an overview of the work of the entire Cabinet Office. Lord Browne continues to be involved in developing agendas for each meeting, enabling the Board to focus its discussions on areas where the Non-Executive Board Members can add value.
The Board also agreed that Non-Executive Board Members were welcome to identify issues or areas in which they were willing to be involved. Dame Barbara Stocking joined the Challenge Group for the Triennial Review of the Big Lottery Fund, a Cabinet Office-sponsored Arm’s length body. The review was published on the 11th June 2014.
Rona Fairhead and Ian Davis joined a small group of Non-Executive Board Members in a discussion on functional leadership. The Minister for the Cabinet Office also held regular meetings with the Non-Executive Board Members.
In response to a request from Non-Executive Board Members, the Board reviewed the criteria used in deciding which elements of service delivery might provide opportunities for the design and implementation of alternative delivery models such as mutualisation. A discussion on public service reform identified digital capability as a key issue, so the Board held a follow-up meeting to review progress on the 25 digital exemplar projects. The Board also discussed Lord Browne’s review of the Major Projects Authority and the Government’s response.
Board effectiveness evaluations are conducted annually and the next evaluation was conducted in the first half of 2014.
During the year, the Board’s agenda included regular updates from the Chair of the Audit and Risk Committee, and the Board discussed risks associated with people issues. The Audit and Risk Committee also reviewed the Electoral Registration Transformation Programme, at the Board’s request, in advance of a further Board discussion.
A regular horizon-scanning slot provided an opportunity for Board members to be updated on recent developments and the priorities of key Board members and stakeholders. The Department’s performance was discussed through the year. The Board discussed the Quarterly Data Summary (QDS) Board Pack and agreed that selected highlights of the QDS should be introduced into the performance report. The Board also discussed plans for the Spending Round and the Department’s Business plan.
As part of its programme of scrutinising new projects with a value of more than £5 million, the Board considered plans for the establishment of a new independent management body for the National Citizen Service.
The Board reviewed the Permanent Secretary’s plans to identify and address areas of potential departmental improvement and Non-Executive Board Members provided valuable external challenge and input, suggesting a greater focus on people, skills and talent, IT, governance and relationships with departments. As well as reviewing progress on delivering efficiency savings, the Board also discussed Civil Service reform, the reform of public bodies and cyber security.
### Board attendance
The Board met seven times this year. The Corporate Governance Code requires that Board members’ attendances are published in the Cabinet Office Annual Report and Accounts. Board meetings were attended by all members except for the following:
| Meeting | Apologies | |---------------|--------------------------------| | 26 April 2013 | Rona Fairhead, Jeremy Heywood | | 21 June 2013 | Rona Fairhead, Philip Rycroft | | 19 July 2013 | Nick Hurd MP, Chloe Smith MP, Dame Barbara Stocking, Jeremy Heywood | | 4 October 2013| Nick Hurd MP, Dame Barbara Stocking, Rona Fairhead | | 17 December 2013 | None | | 24 January 2014 | Melanie Dawes | | 28 March 2014 | Nick Hurd MP, Lord Browne, Ian Davis, Melanie Dawes, Philip Rycroft | Public Interest
Board Members
The Cabinet Office maintains a register of Cabinet Office Board members’ interests, with details of company directorships and other significant interests held by Board members. Copies of the register are available on request. Copies are laid in the House of Commons library from time to time.
House of Commons
The register of House of Commons members’ financial interests can be found at: http://www.publications.parliament.uk/register of HOC members’ interest
House of Lords
The register of House of Lords members’ interests can be found at: http://www.parliament.uk/register-of-lords-interests
Senior management remuneration is disclosed within the Remuneration Report.
Compliance with the Corporate Governance Code
Departments are expected to apply the principles set out in Corporate Governance in Central Government Departments: Code of good practice 2011, unless good governance can be achieved by other means. They are also required to identify and explain areas where they have departed from the Code. The Cabinet Office is fully compliant with the principles of the Code.
Cabinet Office Audit and Risk Committee
Purpose
The Cabinet Office Audit and Risk Committee (COARC) is a Board committee, supporting the Cabinet Office Board and Principal Accounting Officer by providing an independent view of the Department’s risk control and corporate governance arrangements, and assessing the comprehensiveness, reliability and integrity of those assurances.
COARC was chaired by Barbara Stocking until 22 April 2013, after which date Rona Fairhead resumed the role of Chair. The Corporate Governance Code requires COARC members’ attendances to be published in the Cabinet Office Annual Report and Accounts.
Work of the Audit and Risk Committee
The Cabinet Office Audit and Risk Committee’s remit covers the Cabinet Office: Civil Superannuation, the Royal Mail Statutory Pension Scheme and Returning Officers’ Expenses for England and Wales. Separate Accounts are published for each of these, and each is audited separately, but all four have the same Principal Accounting Officer.
During the year the Committee’s work was divided between audit and assurance work, and risk review.
Its audit and assurance work included reviewing all the sets of accounts mentioned above, and providing assurance to the Accounting Officer that the accounts could properly be signed by him.
Following the qualification of the Cabinet Office: Civil Superannuation Accounts 2011-12 on the basis that some service and salary documentary evidence (required to validate the accuracy of some pension awards) could not be made available within the statutory timescales for publishing the accounts, the Committee reviewed the situation on an ongoing basis, receiving regular reports from management on the development and implementation of a Records Improvement Action Plan. The 2012-13 financial statements were certified with an unqualified audit opinion, without modification, and the accounts for 2012-13 were laid before Parliament in accordance with HM Treasury requirements.
The Committee’s risk work programme included reviews of a number of the Department’s strategic and operational risks, but it also undertook rigorous scrutiny of new activities that the Department is undertaking to ensure that there was a good understanding of potential risks, and that suitable mitigations were in place. An example of this was its review of the plans for the vesting of the Independent ISSC2 operation, seeking and receiving assurance that the lessons learnt from the MyCivil Service Pension programme had been applied to the ISSC2 transformation programme.
As a result of that work, the Committee asked for an audit and risk sub-committee, chaired by Christine Daws, to provide independent oversight of the operation of ISSC2, pending clarification of the longer-term role of such a sub-committee, reporting back to the Audit and Risk Committee on a regular basis. The Sub-committee provided advice and scrutiny of the proposal, especially on associated risks and how they could be mitigated. Shared Services Connected Limited was vested at the end of October.
The Chair of the Audit and Risk Committee, and the Chair of the sub-Committee, both have regular dialogue and meetings with the Head of Internal Audit and the Deputy Finance Director to discuss key areas of governance in relation to the Committee’s agenda. The Committee also regularly reviews the internal audit work programme.
### COARC Meeting Attendance
COARC met six times this year. Its meetings were attended by all members except for the following:
| Meeting | Apologies | |--------------------|--------------------------------| | 22 April 2013 | None | | 19 June 2013 | None | | 9 July 2013 | Dame Barbara Stocking DBE, Non-Executive Board Member | | 25 September 2013 | Ian Davis, Non-Executive Board Member | | 15 November 2013 | None | | 13 February 2014 | None |
A sub-committee of COARC, the Shared Services Audit Committee, was established in July 2013 to advise COARC and, through it, the Board and Principal Accounting Officer in connection with Independent Shared Service Centres 1 and 2, including their vesting, contract novation, risks, internal controls and assurance processes. The Shared Services Audit Committee is chaired by Christine Daws, who was also appointed an independent member of the Audit and Risk Committee in January 2014. Our Management Team – The Executive Management Committee
Chair: Richard Heaton Permanent Secretary
Will Cavendish Executive Director, Implementation Group
Alex Aiken Executive Director, Government Communications
Stefan Czerniawski Head of Corporate Strategy
Sue Gray Head of Propriety and Ethics Team and Director of Private Offices Group
Melanie Dawes Director General, Economic and Domestic Affairs Secretariat
Stephen Kelly Chief Operating Officer, UK Government
Paul Maltby Director, Government Innovation Group
Bruce Mann Finance Director (Secretary to the Executive Management Committee)
Helen Stephenson Director, Government Innovation Group
Melanie Steel Director of Human Resources
Chris Martin Director General, Prime Minister’s Office
Philip Rycroft Director General, Deputy Prime Minister’s Office
Hugh Powell, Director General, Foreign Policy
[No photo available]
Oliver Robbins, Director General, Civil Service Our Non-Executive Directors
Lord Browne of Madingley Government Lead-Non Executive Director and Lead Non-Executive Director for the Cabinet Office
Lord Browne of Madingley, FRS FREng holds degrees from Cambridge University and Stanford University, and numerous honorary degrees and fellowships.
He joined BP in 1966, became a member of the board in 1991 and was Group Chief Executive from 1995 until 2007. He has served on the boards of Intel, DaimlerChrysler AG, Goldman Sachs and SmithKline Beecham.
He is presently a Partner of Riverstone Holdings LLC, the Chairman of the Trustees of both Tate and the Queen Elizabeth Prize for Engineering and Chairman of the International Advisory Board of the Blavatnik School of Government at Oxford University. He is a member of a variety of other advisory boards.
Rona Fairhead CBE Non-Executive Board Member and Chair of the Audit and Risk Committee
Rona Fairhead is Chairman of HSBC North America Holdings Inc. and has been an independent non-executive Director of HSBC Holdings plc since December 2004. She is Chairman of the Financial Services Vulnerabilities Committee and a member of its Nomination Committee.
Rona is also currently a non-executive director of The Economist Group and PepsiCo Inc. She was recently appointed a British Business Ambassador by the Prime Minister and is actively involved with Cambridge University, the Teach First charity and Women2Win.
Formerly she was Chairman and Chief Executive Officer (CEO) of the Financial Times Group, a director of Pearson plc and Chairman of Interactive Data Corporation. In her earlier career she held senior executive positions in Bombardier Aerospace and ICI plc.
Dame Barbara Stocking DBE Non-Executive Board Member and Member of the Audit and Risk Committee
Dame Barbara Stocking has been President of Murray Edwards College, Cambridge, since July 2013. For the previous 12 years, Dame Barbara was Chief Executive of Oxfam GB, a major international non-governmental organisation whose mission is ‘to work with others to overcome poverty and suffering’.
In her earlier career, Dame Barbara was a member of the top management team of the NHS, as Regional Director for the South East of England and then as the founding Director of the NHS Modernisation Agency. Dame Barbara was awarded a CBE for services to health in 2000, and in 2008 was made a DBE for humanitarian services.
Ian Davis Non-Executive Board Member and Member of the Audit and Risk Committee
Ian Davis is the Chairman of Rolls-Royce plc. He is also an independent Non-Executive Director of BP plc, Johnson & Johnson Inc. and Majid Al Futtaim Holding. In the social sector he is a Non-Executive Director of Teach for All and the Big Society Trust.
He is also an adviser to Apax LLP and is Senior Partner Emeritus of McKinsey & Company. He was a partner at McKinsey for 31 years until 2010 and served as Chairman and Managing Director between 2003 and 2009. Independent Non-Executive Membership
The role of the Non-Executive Members of the Board is set out in ‘Enhanced Departmental Boards: Protocol’ published on the Cabinet Office website.
The Non-Executive Board Members (NEBM) exercise their role through influence and advice, supporting as well as challenging the executive. They advise on performance (including agreeing key performance indicators), operational issues (including the operational/delivery implications of policy proposals) and effective management of the Department. They also provide support, guidance and challenge on the progress and implementation of the operational business plan, and in relation to recruiting, appraising and ensuring appropriate succession planning of senior executives. They form the committee responsible for audit and risk. To share best practice and to ensure that departments learn from the successes and failures of comparable organisations, they regularly meet with other non-executives across government.
Executive committees
Executive Management Committee
The Executive Management Committee (EMC) is responsible for the executive management of the Department within the strategic framework established by ministers and the Cabinet Office Board. The EMC is responsible for supporting the Cabinet Office Board by considering detailed issues concerning the management of the Department, including:
- planning
- budgeting
- performance
- people
- corporate services.
The EMC is chaired by Richard Heaton, Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer.
Investment and Programme Review Committee
The Investment and Programme Review Committee (IPRC) supports the Accounting Officer in ensuring the effective design, control, accountability, value for money and evaluation of major Cabinet Office investments, programmes and projects. Constituted in November 2013, the IPRC reviews the Department’s significant investments, main programmes and projects with a view to improving their governance, effectiveness, value for money and deliverability.
To assure the Accounting Officer that strategic risks are being handled appropriately, the IPRC may suggest that the Accounting Officer should refer projects to the Cabinet Office Audit and Risk Committee or the Cabinet Office Board for strategic advice, before advising on approval decisions.
The IPRC was initially chaired by Richard Heaton. Following a review of executive governance arrangements (see below), it will be chaired by Bill Crothers, Director General, Commercial and the Government’s Chief Procurement Officer.
Changes to Executive Governance Arrangements
At the end of the financial year, Richard Heaton conducted a review of executive governance arrangements, including the establishment of two new sub-committees of the Executive Management Committee. The two new sub-committees are The Performance and Pay Committee, which Richard Heaton chairs, and the Environment and The Way We Work Committee, which is chaired by Paul Maltby, joint Director of the Government Innovation Group. Bill Crothers, Director General, Commercial, and the Government’s Chief Procurement Officer, became the Chair of the IPRC at the same point.
The new arrangements came into effect in April 2014. Review of Effectiveness
Work of Internal Audit
The Department’s internal audit service is provided under a Service Level Agreement by the joint shared internal audit service- the Cross Departmental Audit Services (XDIAS). XDIAS provides internal audit and assurance services to eight central government departments and a range of arm’s length bodies. XDIAS activity for the year included work to provide assurance in the following areas of risk:
- Planning and resource allocation
- Totemic policies and programmes
- Generating and reporting of savings
- Requirements on and relationships with Other Government Departments
- Civil contingencies
- Elections
- Regularity and Propriety and value for money
Internal Audit opinion
XDIAS works in accordance with Government Internal Audit Standards. Its work is informed by its analysis of the risks to which the Department is exposed and the annual audit plan is based on that analysis. The plans are discussed and endorsed by COARC and then agreed with the Accounting Officer. The Head of Internal Audit (HIA) annually provides an independent opinion on the adequacy and effectiveness of the Department’s governance, risk and control arrangements. The HIA’s opinion for 2013-14 is that a partial assurance opinion can be placed on the Department’s arrangements for governance, risk and control arrangements.
The Internal Audit opinion did not identify any control weaknesses requiring disclosure in this Governance statement. But it did identify that the Cabinet Office should be cognisant of the potential need to continue to upgrade management controls and keep governance arrangements under review, in response to the increasing levels of risk to which it is exposed, for example due to its role as a provider of services.
NAO Assurance Reports
Over the period 2013-14 the National Audit Office looked at many aspects of Cabinet Office business:
- Next Generation Shared Services Strategy
- Managing debt owed to central government
- Progress on public bodies reform
- Major Projects Authority Annual Report 2012-13 and government project assurance
- Government whistleblowing policies
- Departmental Overview: The performance of the Cabinet Office 2012-13
- Memorandum on the role of major contractors in the delivery of public services
- Memorandum on Managing government suppliers Risk Management
Risk Assurance
HM Treasury mandate that internal audit must give a year end assurance on the effectiveness of a department’s Governance, Risk and Control arrangements. This Internal Audit assurance is one of the key sources of evidence underpinning the Accounting Officer’s Governance Statement.
The Internal Audit assurance is based on internal audit work performed over the course of the year, combined with knowledge of the governance, risk and control framework gained through attendance at meetings and discussions with senior management.
Key Strategic Risks
A strategic risk register for the Cabinet Office was completed in 12-13. These risks are reviewed on a rolling basis, and a number of them were reviewed by COARC in 13-14.
Risk
Resourcing is a key strategic risk. The IA reviews of Flexible Resourcing, Recruitment and Training all found a lack of formalised risk management.
Mitigation
High level of engagement of senior staff with resourcing through the annual resource planning process and the in-year Resourcing Panel. This brings Senior Officials insights on risk to bear in decision-making. 2013-14 saw the submission to the Resourcing Panel of the first Workforce Planning quarterly review, improved engagement by Management Unit leadership with workforce planning and better Management Information from the workforce Resource Management system.
Group-level Risks
There has been sound assurance over the quality of Group-level risk management in the Cabinet Office. This comprises review and challenge of the Corporate Management Responsibilities Statements on risk management and provision of detailed guidance on risk management processes on Cabweb. Risks can be escalated through the monthly meeting with the Finance Director and regular liaison of Finance with risk managers.
The Risk Managers Network met twice in 2013-14 and will be moving to quarterly. The Network is intended to drive up the quality and consistency of Group–level risk management. However, we noted continuing inconsistency in risk management across the Cabinet Office.
Project-level Key Risks
Risk 1
There was no formal risk management process in the Election Administration Unit but a good implicit awareness of risk around the Funding review. More formal risk mitigation planning would provide assurance that major risks are being countered.
Risk 2
On Cities Deals the IA follow up review showed that there is now a comprehensive risk management process in place, with good risk mitigation planning in place and regular update/reporting activity. However, the risks for the transition to Local Growth Deals, including the effect on conclusion and ongoing monitoring of Cities Deals, need to be assessed.
Risk 3
Professional Head of Intelligence Analysis Programme Risks should be fully captured and monitored as part of the Joint Intelligence Operations (JIO) Risk Register. Risk 4
There is no formal risk management process in Departmental Engagement Units but a good implicit awareness of risk. Risk was seen as focussed on ensuring the right staff - in terms of grade and capability – were delivering engagement activities and that they sound relationship management was in place. Assurance would be strengthened by a more formal approach in each team, which would provide focus on risk mitigation planning.
Risk 5
With regard to civil contingencies strong controls for the management of near and long term disruptive challenges are in place along with incident response mechanisms. Whilst the assessment of individual risks follows a robust method, it was unclear whether a comparative assessment is undertaken to ensure the application of the methodology provides a fair representation of national long and medium term risks. In addition, opportunities to assess risks with an impact greater than 5 years, aggregated or concurrent risks are limited by the current methodology.
Assurance over Risk
During the year the Audit and Risk Committee reviewed the three types of risks faced by the Department – strategic risks, risks to programmes and projects, and day-to-day operational risks in business units – and chose to review some of the strategic risks and risks arising from major programmes and projects and measures in hand to manage them. These reviews included risks around development and deployment of human resources, operating with integrity, the Electoral Registration Transformation Programme, Next Generation Shared Services and progress in implementing data improvement plans with MyCSP, with risk appetite considered as part of each discussion. The Cabinet Office Board reviewed risks associated with major programmes and the position on the management of major strategic risks at each of its meetings.
All Groups within the Cabinet Office are required to have in place a structured approach to managing risks. This includes maintaining risk registers and risk escalation, mitigation and communication processes. Guidance and example templates for risk registers are published on the Department’s intranet. At regular intervals, assurance is sought from each Group that risk management requirements are being complied with; this is supported by internal reviews of processes and practice.
During the year guidance and an updated risk register template were issued to require all Groups to include two mandatory risks, Business Continuity and Resources, in their Group level risk registers. Compliance with this new requirement is being monitored centrally. One review of these risks and concluded that the risks were being well managed across the organisation.
The Risk Managers’ Network is now well established and members have decided to increase the frequency of the meetings from two each year to four to further enhance networking opportunities and information exchange between Risk Managers. A regular feature of the meetings is a practical exercise and discussion on common issues.
Risk management of Shared Services
There have been a significant number of changes in Accounting Officer responsibility within the Cabinet Office during 2013-14, requiring new governance arrangements to be put in place (for example the Shared Services Sub-Committee, referred to above).
The Internal Audit opinion identified that the Cabinet Office took some time to develop and implement these arrangements, but that these are now working effectively.
ISSC1
On the 19 October 2013 the contract between the Department for Transport (DFT) and arvato was novated to the Cabinet Office. ISSC2
Until 1 April 2013, DWP had Accounting Officer responsibility for the Shared Service centre operations.
During the period 1 April to 31 October 2013, the former DWP shared services operation was managed by the Cabinet Office. During this time there were no material changes to the operations.
From 1 November 2013 to 31 March 2014, the framework contract was let by the Cabinet Office which assumed Accounting Officer responsibility for the Framework contract. Individual customers retain their own accounting officer responsibility at the call-off contract level. The Founding Organisations also signed a transition service agreement which provides services back to SSCL, for which they are accountable.
As a result of these changes, the responsibilities of the Cabinet Office Accounting Officer have changed significantly.
The Accounting Officer has outlined his responsibilities in a letter to departments assuring them that the Cabinet Office as the framework authority:
- carries out its duties and obligations under the Framework Agreement in accordance with the Agreement’s terms, and that it has exercised, and continues to exercise, reasonable skill, care and diligence in the performance of those duties and obligations;
- monitors the compliance of SSCL and arvato with their obligations under the Framework Agreement and notifies the customer of any issues that may have an adverse material impact on the Call-Off Agreement;
- has sufficient, appropriately skilled and experienced resources to enable the Department to comply with its obligations under the Framework Agreement.
To manage these responsibilities the Crown Oversight Function was created, reporting to Rannia Leontaridi in the Efficiency and Reform Group. The Crown Oversight Function will manage the following aspects of the relationship between the Cabinet Office, customers and SSCL:
- day-to-day contract management of SSCL and arvato at Framework level
- customer and SSCL and arvato change management requests
- tracking and developing the benefits delivered by SSCL and arvato.
- operational benchmark setting of all finance and HR transactional shared services
Within the Crown Oversight Function, a governance structure (including a risk management process) has been put in place to support effective management of the Framework Agreement with arvato.
Customer departments receive formal assurance letter at the end of each financial year, setting out how the Cabinet Office has met its responsibilities.
Risk management – ISSC1
During 2013-14, arvato, the Cabinet Office, and customer departments managed and mitigated the following two key risks:
- risk to service continuity, employee relationships and key performance indicators during handover from DfT to arvato
**Mitigation:** DfT and arvato jointly managed the transition of the Shared Service Centre to arvato. They jointly developed an agreed transition plan, which was robustly managed by both parties
- risk to service continuity during SAP migration
**Mitigation:** infrastructure build and implementation managed via appropriate governance structures. Robust change control and risk and issue management processes put in place; clear acceptance criteria. Risk Management – ISSC2
During the creation and operation of SSCL, the Cabinet Office, SSCL and customer departments managed and mitigated the following two key risks:
- During the period when the Cabinet Office had Accounting Officer responsibility but DWP was still managing the staff and operations, there was a risk that disgruntled staff might exploit the weaknesses in the IT security that had not been resolved, with consequences for service continuity and/or information assurance.
**Mitigation:** A rigorous due diligence process by the Cabinet Office prior to the transfer of Accounting Officer responsibility meant that there was a good understanding of the IT issues and the potential for exploitation. Prior to the transfer to SSCL, the Shared Services senior management team in DWP monitored the position, and neither disruption to services nor any malicious activity was experienced.
- During the period from 1 November 2013 to 31 March 2014, the IT security issues were largely addressed and the resultant risk diminished. But instead, there arose a new risk to service continuity and/or a risk of malicious activity: during this period, staff and operations moved from DWP, the Environment Agency and Defra (the Founding Organisations) to SSCL. There was a period of uncertainty for staff over their future roles and locations, and therefore potential for disgruntlement.
**Mitigation:** This was mitigated through careful management of the handover process by both the Founding Organisations and SSCL, including ongoing engagement and consultation with the recognised trade unions. There was a stabilisation period, with specific criteria to be fulfilled, and close management monitoring and oversight. In addition, it was contractually agreed that no changes would be made to existing operations for the first six months, and that no sites would close for 12 months, so as to minimise the impact on staff. Neither disruption to services nor any malicious activity was experienced.
ISSC1 Assurance Summary
The Cabinet Office Shared Services Audit Committee met on 14 May and considered evidence from:
- arvato management
- Ernst & Young (in relation to independent review of arvato’s control processes)
- XDIAS
It concluded that reasonable assurance can be given at a Framework Level, taking into account the following factors:
- During its time in DfT, no significant control weaknesses was identified by DfT management or Internal Audit in the shared services operation or environment
- No outstanding audit issues existed at the point of handover.
- No audit issues have been identified by arvato management since then.
- No significant control weaknesses have been identified by Ernst & Young in its review work
- No issues have been identified by the National Audit Office (NAO) in its financial audit work to date
ISSC2 assurance summary
The Cabinet Office Shared Services Audit Committee met on 14 May and considered evidence from:
- SSCL management Grant Thornton’s ISAE 3402 ‘lite’ report XDIAS.
It concluded that reasonable assurance can be given at a Framework Level, taking account of the following factors:
- The outstanding audit issues existing at the point of handover continue to be closely monitored and mitigated.
- No audit issues have been identified by SSCL management since that time.
- No significant audit issues have been raised by customers via the governance forums.
- No significant control weaknesses have been identified by Grant Thornton in its review work.
- No issues have been identified by the National Audit Office in its financial audit work to date.
Risk management in the Finance Shared Services Division in the Department for Communities and Local Government
The Cabinet Office continues to receive financial services from the Elections Claim Unit of the Department for Communities and Local Government (DCLG) under a shared services arrangement. An annual letter of assurance from DCLG confirms that risk management is reviewed regularly and that appropriate systems of internal controls are applied to ensure the integrity of Cabinet Office data which DCLG is processing on behalf of the Cabinet Office.
The Accounting Officer receives a letter of assurance from the DCLG’s Accounting Officer, covering the services which DCLG provides to the Cabinet Office. The letter of assurance for 2013-14 states that: ‘My review is informed by internal and external audit opinions and by other ad-hoc reviews (both internal and external). No issues have been raised by the Audit and Risk Committee in relation to the services provided and no Significant Control Issues have been identified.’
It also confirms that, ‘specifically for services provided to [the Cabinet Office] by [the Finance Shared Services Division], all key controls are in place’.
Fraud, error and debt
The Cabinet Office’s fraud policy, available to all staff via the intranet, requires staff at all times to act honestly, with integrity, and to safeguard the public resources for which they are responsible. The Cabinet Office views fraud and negligence very seriously and will take appropriate disciplinary and legal action against anyone found guilty of either. Cases of suspected or actual fraud are reported to the Audit and Risk Committee.
The Cabinet Office contributes fully to the intra-governmental fraud information and intelligence capability. The Counter Fraud Champion and two Alert System Co-ordinators continue to work with a department wide network of contacts to facilitate the quick and comprehensive identification and dissemination of appropriate information.
In March 2013, the Cabinet Office participated in the National Fraud Initiative run by the Audit Commission. Payroll and supplier data was matched with similar data from a wide range of organisations across the public sector. A small number of duplicate payments were identified and have been recovered.
Cabinet Office officials are contributing to the Grants Efficiency Programme, the Best Practice Network and have helped develop guidance and a toolkit for use by grant-makers across government.
An exercise to check for duplicate payments to suppliers has been commissioned to cover the years 2011-12 to 2013-14. The organisation carrying out the exercise receives no fee if it does not identify and recover any such duplicates; if duplicates are identified, the fee is taken from the recoveries. Information risk, information handling and protective security
The Cabinet Office holds personal data primarily relating to: its own employees; staff in other departments who are members of ISSC2; members of the Royal Mail Statutory Pension Scheme; members of the Principal Civil Service Pensions Scheme; those who have been nominated for honours, gallantry awards, appointments etc.; Civil Service Internships; and those members of the public who have participated in various Cabinet Office sponsored initiatives.
The Department has continued to monitor and assess its information risks in order to identify and address any weaknesses and ensure continuous improvements of its systems.
The Department has completed its latest rolling programme of audits assessing compliance against the mandatory requirements contained in the Security Policy Framework. The Report supported work currently being undertaken to strengthen the Department’s Business Continuity arrangements and identified a small number of other instances where further work might be beneficial in order to emphasise the Department’s compliance with the Security Policy Framework (SPF). Work has continued on implementing some outstanding recommendations from earlier audits.
The Department has continued to operate two Security Working Groups (SWGs). The first monitors the work of ISSC2, and the second that of MyCSP. The purpose of the SWGs is to ensure that controls deployed are appropriate for the data sensitivity, risks are identified and work continues to fully adhere to the SPF.
Two losses of Personal Information have been notified to the Information Commissioner’s Office. Further detail can be found at the section ‘Reporting of personal data-related incidents’ within the Directors’ Report.
Other major work undertaken during the year included the implementation of the new Government Security Classification scheme.
A major information/publicity campaign was undertaken along with a programme of staff training/briefing, and the scheme was successfully launched on 2 April 2014.
The security of the data held on the Department’s corporate IT network (Flex) continued to be maintained in line with relevant security accreditation. Non-corporate IT systems continued to comply with the service-wide security requirements through restrictions on the movement and transmission of data.
Arm’s length bodies
The Accounting Officer takes assurance from the Governance Statements produced by the Civil Service Commission and the Government Procurement Service. Both are subjected to the Department’s normal financial control procedures and practices as well as to scrutiny by both internal and external audit. There were no concerns.
Oversight of Local Responsibilities
The Cabinet Office makes a number of direct grant awards, principally to organisations in the voluntary, community and social enterprise sector, and funds a number of grant schemes delivered through partners such as the Big Lottery Fund, which is an executive non-departmental public body of the Department for Culture, Media and Sport, for which the Minister for the Cabinet Office has some responsibility (as set out at Note 30 to the Accounts).
Grants are distributed on the basis of the Coalition Government’s stated priorities, in particular around the building of the Big Society. This includes delivery of commitments such as the National Citizen Service.
For direct awards, the Cabinet Office issues each grant recipient with a formal grant offer letter and associated terms and conditions of grant. Payment of grants is done in instalments based on the grant recipient fulfilling the terms and conditions of grant payment and on satisfactory progress in achieving the outcomes of the grant award. Regular but proportionate monitoring of progress is undertaken by named policy officials, in conjunction with Cabinet Office finance teams. Spend across all grant programmes is monitored on a monthly basis through the established Cabinet Office financial reporting and scrutiny processes.
Some direct grants are awarded on the basis of competition between potential recipients, to ensure that there is value for money and that the objectives of the Government can be appropriately delivered. In some limited cases grant awards are made without a competitive process, where the recipients’ objectives and programme of work already align with the Government’s objectives for grant funding.
For a number of larger grant programmes, the Cabinet Office works through a delivery partner, rather than administering the grant in-house. This is achieved in two key ways. The Cabinet Office has, in some cases, tendered through open competition for a delivery partner. Following competition, a grant administrator is appointed and runs the scheme under contract to the Cabinet Office. Through the contracting arrangements, the Cabinet Office monitors the performance and progress of the grant administrator in carrying out its functions in relation to grant competitions and awards, organisation verification, grant set-up and payments and grant monitoring. A management fee is payable for these services, and the Cabinet Office passes on grant funding, which the grant administrator distributes to the successful grant recipients.
In other cases, the Cabinet Office works through the Big Lottery Fund to deliver funds as part of the sponsorship role that the Cabinet Office holds in relation to the Big Lottery Fund as a Non-Departmental Public Body (NDPB). The Cabinet Office and the Big Lottery Fund work jointly to develop the fund and the Big Lottery Fund fulfils the grant administration role, as set out in agreed schedules of work. Funds are paid to the Big Lottery Fund by way of grant funding to the NDPB to cover costs and grant awards. The Cabinet Office takes assurance from the fact that Big Lottery Fund has the duty to ensure that there is propriety and regularity in the handling of all public funds, in accordance with the Non-Departmental Public Bodies’ Accounting Officers’ memorandum (issued by the Treasury and published in Managing Public Money) and with the Financial Directions issued to the Big Lottery Fund from time to time by the Secretary of State for Culture, Media and Sport under section 26(3) of the National Lottery etc. Act 1993.
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
24 June 2014 Remuneration Report
Remuneration of Ministers and Board Members
Remuneration Policy
The remuneration of senior civil servants is set by the Prime Minister, following independent advice from the Review Body on Senior Salaries.
The Government announced in May 2010 a two year pay freeze for public sector workers earning more than £21,000. As such Senior Civil Servants entered a two-year pay freeze from 1 April 2011 and exited it in April 2013. The Government also announced in May 2010 that future non-consolidated awards will be restricted to the top 25% of Senior Civil Servants and non-consolidated awards paid in 2013-14 were in line with this policy.
Performance-related non-consolidated awards are paid one year in arrears so the pay reported and paid in 2013-14 was earned in the financial year of 2012-13.
The performance management system for senior civil servants is common across all government departments. Pay awards are made in two parts: non-consolidated variable payments, which are used to reward members of staff who demonstrate exceptional performance, and base pay progression, to reward growth in competence. The size of awards is based on recommendations from the Review Body on Senior Salaries, and in 2013-14 non-consolidated awards paid to the senior civil servants disclosed in this report ranged from £10,000 to £15,000.
The Review Body also advises the Prime Minister from time to time on the pay and pensions of Members of Parliament and on their allowances; on peers’ allowances; and on the pay, pensions and allowances of ministers and others whose pay is determined by the Ministerial and Other Salaries Act 1975. In reaching its recommendations, the Review Body is to have regard to the following considerations:
- the need to recruit, retain 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
- government policies for improving the public services, including the requirement for departments to meet the output targets for the delivery of departmental services
- the funds available to departments as set out in the Government’s departmental expenditure limits
- the Government’s inflation target.
The Review Body takes account of the evidence it receives about wider economic considerations and the affordability of its recommendations. Further information about the work of the Review Body can be found at www.ome.uk.com Service Contracts
The Constitutional Reform and Governance Act 2010 requires Civil Service appointments to be made on merit on the basis of fair and open competition. The Recruitment Principles issued by the Civil Service Commission specify the circumstances under which appointments may be made otherwise.
Unless otherwise stated below, the officials covered by this report hold appointments which are open ended. Early termination, other than for misconduct, would result in the individual receiving compensation, as set out in the Civil Service Compensation Scheme.
Further information about the work of the Civil Service Commission can be found at www.civilservicecommission.org.uk
Audited Information
The following tables detailing salary and pension entitlements of ministers and senior management have been audited.
Remuneration (Including Salary) And Pension Entitlements
The following sections provide details of the remuneration and pension interests of the ministers and board members of the Department.
## Remuneration (Salary, Benefits in Kind and Pensions)
### Single total figure of remuneration
| Ministers | Salary (to nearest £) | Benefits in kind (to nearest £100) | Pension benefits (to nearest £1,000) | Total (to nearest £1,000) | |-----------|-----------------------|------------------------------------|--------------------------------------|--------------------------| | | 2013-14 | 2012-13 | 2013-14 | 2012-13 | 2013-14 | 2012-13 | 2013-14 | 2012-13 | | The Rt Hon. Nick Clegg MP | 68,169 | 68,827 | – | – | 21,000 | 22,000 | 89,000 | 91,000 | | Deputy Prime Minister and Lord President of the Council | | | | | | | | | | The Rt Hon. Francis Maude MP | 32,344 | 33,002 | – | – | 15,000 | 10,000 | 47,000 | 43,000 | | Minister for the Cabinet Office and Paymaster General | | | | | | | | | | The Rt Hon. Oliver Letwin MP | 32,344 | 33,002 | – | – | – | – | 32,000 | 33,000 | | Minister for Government Policy | | | | | | | | | | Nick Hurd MP | 23,039 | 23,697 | – | – | 8,000 | 9,000 | 31,000 | 33,000 | | Minister for Civil Society and Parliamentary Under-Secretary of State | | | | | | | | | | Chloe Smith MP | 17,651 | 11,849 | – | – | 5,000 | 4,000 | 23,000 | 16,000 | | Minister for Political and Constitutional Reform and Parliamentary Secretary | | | | | | | | until 6 October 2013 | | The Rt Hon. Greg Clark MP | 13,477 | – | – | – | 5,000 | 5,000 | 18,000 | 5,000 | | Minister of State (Cities and Constitution) | | | | | | | | from 7 October 2013 | | The Rt Hon. Lord Hill of Oareford CBE | 137,404 | 24,986 | 900 | – | 37,000 | 34,000 | 175,000 | 59,000 | | Leader of the House of Lords and Chancellor of the Duchy of Lancaster | | | | | | | | | | The Rt Hon. Andrew Lansley CBE MP | 32,344 | 16,501 | – | – | 9,000 | 3,000 | 41,000 | 20,000 | | Leader of the House of Commons and Lord Privy Seal | | | | | | | | | | The Rt Hon. Kenneth Clarke QC MP | 32,344 | 18,426 | – | – | – | – | 32,000 | 18,000 | | Minister without Portfolio (Minister of State) | | | | | | | | | | The Rt Hon. John Hayes MP | 32,344 | – | – | – | 12,000 | 12,000 | 44,000 | 12,000 | | Minister without Portfolio (Minister of State) | | | | | | | | |
When a minister is transferred to another department the existing host department pays the salary at the current rate of pay up to the end of the month of departure, and the new host department pays in the month following, at the appropriate salary, along with any arrears.
1. The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to a transfer of pension rights.
2. Figure quoted is for the period 1 April 2013 to 6 October 2013 includes £5,760 compensation in lieu of notice. The full year equivalent is £23,039. Ministers who have not attained the age of 65, and are not appointed to a relevant Ministerial or other paid office within three weeks, are eligible for a severance payment of one quarter of the annual ministerial salary being paid.
3. Figure quoted is for the period 7 October 2013 to 31 March 2014. The full-year equivalent is £32,344. Salaries for the ministers joining the Department for the first time are paid from the date of their appointment.
4. Figure quoted includes Lords Office Holders’ Allowance of £36,366 (2012-13: £8,047).
## Remuneration (Salary, Benefits in Kind and Pensions)
### Single total figure of remuneration
| Board Members | Salary (£000) | Bonus payments (£000) | Benefits in kind (to nearest £100) | Pension benefits (to nearest £1,000) | Total (£000) | |---------------|--------------|-----------------------|------------------------------------|--------------------------------------|-------------| | | 2013-14 | 2012-13 | 2013-14 | 2012-13 | 2013-14 | 2012-13 | | Sir Jeremy Heywood KCB, CVO Cabinet Secretary | 190 -195 | 185 -190 | – | – | 75,600² | 83,900 | 21,000 | 229,000 | 285-290 | 500-505 | | Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer | 160 -165 | 155 -160 | – | – | – | 300 | 31,000 | 64,000 | 190-195 | 220-225 | | Philip Rycroft CB Director General, Deputy Prime Minister's Office | 140 -145 | 115 -120 | – | – | 17,300 | 11,800 | – | – | 155-160 | 130-135 | | Sue Gray Director General Propriety and Ethics and Head of Private Office Group | 105 -110³ | 105 -110³ | – | – | – | 200 | 2,000 | 200,000 | 115-120 | 310-315 | | Melanie Dawes Director General, Economic and Domestic Affairs Secretariat | 125 -130 | 125 -130 | 10 - 15 | – | – | 300 | – | 37,000 | 140-145 | 165-170 | | Bruce Mann Finance Director, Board Secretary | 105 -110 | 105 -110 | 10 - 15 | – | – | (4,000) | 5,000 | 100-105 | 125-130 |
Disclosures above represent the salary paid in respect of their role as Board Members, and may not be the same as the periods employed by the Department. When a Board Member is transferred to another department the existing host department pays the salary at the current rate of pay up to the end of the month of departure and the new host department pays them in the month following at the appropriate salary, along with any arrears.
1 The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation or any increase or decreases due to a transfer of pension rights.
2 The Permanent Secretary had the private use of an allocated car in the circumstances permitted by the Civil Service Management Code. The car is a shared resource between the Cabinet Secretary and the Head of the Civil Service (footnote 4). Ministers and civil servants in the Cabinet Office and No 10 also use the car on a regular basis. The Cabinet Secretary uses the car predominantly for home to office journeys.
3 Private Secretary Allowance of £6,042 was paid in addition (2012-13:£6,042)
4 In his capacity as Head of the Civil Service, Sir Bob Kerslake receives an allowance of £20,000 per annum and has the shared use of a car predominantly for home to office journeys and journeys between the Cabinet Office, Parliament and Eland House which gives rise to a benefit-in-kind of £75,000 in 2013-14 (2012-13: £82,900). His full remuneration for his roles as Permanent Secretary to the Department for Communities and Local Government (DCLG) and as Head of the Civil Service is disclosed within DCLG’s Annual Report and Accounts. Salary
'Salary' includes gross salary; overtime; reserved rights to London weighting or London allowances; recruitment and retention allowances; private office allowances and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by the Department and thus recorded in these accounts. In respect of ministers in the House of Commons, departments bear only the cost of the additional Ministerial remuneration; the salary for their services as an MP (£65,738 from 1 April 2010, £66,396 from 1 April 2013) and various allowances to which they are entitled are borne centrally. However, the arrangement for ministers in the House of Lords is different in that they do not receive a salary but rather an additional remuneration, which cannot be quantified separately from their Ministerial salaries. This total remuneration, as well as the allowances to which they are entitled, is paid by the Department and is therefore shown in full in the figures above.
Benefits in Kind
The monetary value of benefits in kind covers any benefits provided by the Department and treated by HM Revenue and Customs as a taxable emolument.
Bonuses
Bonuses are based on performance levels attained and are made as part of the appraisal process. Bonuses reported in the accounts are those paid in year relating to prior year’s performance. Bonuses are not accrued or provided for at 31 March since the appraisal process is not complete until summer. This is consistent with accounting treatment in previous financial years. The bonuses reported in 2013-14 relate to performance in 2012-13 and the comparative bonuses reported for 2012-13 relate to the performance in 2011-12. Pay Multiples
| Band of highest-paid director’s Total Remuneration (£000) | 2013-14 | 2012-13 | |----------------------------------------------------------|---------|---------| | Median Total Remuneration | £42,300 | £44,743 | | Ratio | 6.33 | 6.12 |
Reporting bodies are required to disclose the relationship between the remuneration of the banded highest-paid director in their organisation and the median remuneration of the organisation’s workforce. The median is the mid-point of the remuneration of the organisation’s workforce.
The banded remuneration of the highest-paid director in the Cabinet Office in the financial year 2013-14 was £265 – 270,000 (2012-13 : £270 – 275,000). This was 6.33 times (2012-13 : 6.12) the median remuneration of the workforce, which was £42,300 (2012-13 : £44,743).
In 2013-14, no (2012-13 : none) employees received remuneration in excess of the highest-paid director. Remuneration ranged from £17,000 to £270,000 (2012-13: £17,000 to £275,000).
Total remuneration of the highest-paid director includes salary, non-consolidated performance-related pay and benefits in kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.
The pay multiples (ratio) is calculated by taking the highest paid director and remuneration of the full-time equivalent staff of the Cabinet Office at the reporting period end date on an annualised basis. The purpose of this calculation is to allow some comparability over time and across the public sector and private sector, where similar disclosures of Chief Executive remuneration and pay multiples are made. However, the comparison should be treated with caution, given the different services provided, workforce skills, geographical locations and organisational structures. A balance is therefore considered in analysing and supporting narrative to give sufficient explanation and justification to ensure that users can understand the intricacies of the Cabinet Office’s pay policy. Staff costs Note 4 discloses termination benefits and fees paid to agencies for temporary staff. These have not been included in the computation of pay multiples.
There has been an increase in the ratio of the year on year variance from 6.12 in 2012-13 to 6.33 in 2013-14 of top to median staff remuneration of the workforce. This is mainly attributable to the following:
- the highest-paid director received a minor salary increment and his benefits in kind were lower compared with the previous year, which contributed to the decrease in the total remuneration figure
- an increase in headcount which drove the median salary slightly towards the lower band. Fees Paid to Non-Executive Board Members
Non-Executive Board Members (NEBM) have been offered a fee of £15,000 a year in line with the Bank of England Non-Executive Directors of Court. The role of Lead NEBM and the role of chair of the audit committee will each attract an additional £5,000 a year. Individuals may waive all or part of their fee. The estimated annual time commitment is likely to be around 12-15 days, including a strategy away-day. Board members may claim their fees as and when preferred and therefore fees paid and fee entitlement may differ in the table below. Claimed fees are included within wages and salaries costs at Note 4 to the Accounts.
| Non-Executive Board Members | 2013-14 | 2012-13 | |-----------------------------|---------|---------| | | Fee Entitlement | Fees Paid | Fees Paid | | Lord Browne of Madingley | 20,000 | Waived | Waived | | Lead Non-Executive Board Member for the Cabinet Office and Government Lead Non-Executive Board Member | | Ian Davis | 15,000 | Waived | Waived | | Non-Executive Board Member and Member of Audit and Risk Committee | | Rona Fairhead CBE | 20,000 | Waived | Waived | | Non-Executive Board Member and Chair of Audit and Risk Committee | | Dame Barbara Stocking DBE | 15,000 | 15,000 | 18,750 | | Non-Executive Board Member, Member of Audit and Risk Committee |
Lord Browne of Madingley, as a lead non-executive board member of the Cabinet Office and Government Lead Non-Executive Board Member has agreed that he will not be paid a fee in respect of this appointment. Ian Davis and Dame Barbara Stocking DBE are non-executive board members and members of the Audit and Risk Committee. They are each entitled to a fee of £15,000 per annum. Ian has waived his entire fee. Rona Fairhead is non-executive board member and Chair of the Audit and Risk Committee. She is entitled to a fee of £20,000 per annum. Rona has waived her entire fee.
## Pension Benefits
| Ministers | Accrued Pension at age 65 as at 31/03/2014 | Real increase in pension at age 65 | CETV at 31/03/2014¹ | CETV at 31/03/2013² | Real increase in CETV | |-----------|------------------------------------------|-----------------------------------|---------------------|---------------------|----------------------| | The Rt Hon. Nick Clegg MP Deputy Prime Minister and Lord President of the Council | 5-10 | 0-2.5 | 61 | 43 | 10 | | The Rt Hon. Francis Maude MP Minister for the Cabinet Office and Paymaster General | 5-10 | 0-2.5 | 175 | 152 | 12 | | The Rt Hon. Oliver Letwin MP Minister for Government Policy | – | – | – | – | – | | Nick Hurd MP Minister for Civil Society and and Parliamentary Under-Secretary of State | 0-5 | 0-2.5 | 34 | 25 | 5 | | Chloe Smith MP Minister for Political and Constitutional Reform and Parliamentary Secretary until 6 October 2013 | 0-5 | 0-2.5 | 16 | 13 | 1 | | The Rt Hon. Greg Clark MP Minister of State (Cities and Constitution) from 7 October 2013 | 0-5 | 0-2.5 | 40 | 36 | 2 | | The Rt Hon. Lord Hill of Oareford, CBE Leader of the House of Lords and Chancellor of the Duchy of Lancaster | 5-10 | 0-2.5 | 117 | 78 | 22 | | The Rt Hon. Andrew Lansley CBE MP Leader of the House of Commons and Lord Privy Seal | 0-5 | 0-2.5 | 63 | 50 | 7 | | The Rt Hon. Kenneth Clarke QC MP³ Minister without Portfolio (Minister of State) | – | – | – | – | – | | The Rt Hon. John Hayes MP Minister without Portfolio (Minister of State) | 0-5 | 0-2.5 | 57 | 43 | 8 |
¹ The end date for calculations is 31 March 2014 unless the Minister left the Department during the year ² The start date for calculations is 31 March 2013 unless the Minister was appointed to the Department during the year ³ Minister no longer has benefits in the Parliamentary Contributory Pension Fund. Following his time as Lord Chancellor his benefits were transferred to the Consolidated Fund who will pay his benefits when he retires Ministerial Pensions
Pension benefits for ministers are provided by the Parliamentary Contributory Pension Fund (PCPF). The scheme is made under statute (the regulations are set out in Statutory Instrument SI 1993 No. 3253, as amended).
Those ministers who are Members of Parliament may also accrue an MP’s pension under the PCPF (details of which are not included in this report). The accrual rate has been 1/40th since 15 July 2002 (or 5 July 2001, for those that chose to backdate the change), but ministers, in common with all other members of the PCPF, can opt for a 1/50th accrual rate and a lower rate of member contribution. An additional 1/60th accrual rate option (backdated to 1 April 2008) was introduced from 1 January 2010.
Benefits for ministers are payable at the same time as MPs’ benefits become payable under the PCPF or, for those who are not MPs, on retirement from Ministerial office from age 65. Pensions are re-valued annually in line with Pensions-Increase legislation. From 1 April 2013 members paid contributions of between 7.9% and 16.7%, depending on their level of seniority and chosen accrual rate. The contribution rates will increase from April 2014.
The accrued pension quoted is the pension that the Minister is entitled to receive on reaching the age 65, or on ceasing to be an active member of the scheme if they are already 65.
In line with reforms to other public service pension schemes, it is intended to reform the Ministerial Pension Scheme in 2015.
Cash Equivalent Transfer Value
This 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 Cash Equivalent Transfer Value (CETV) is a payment made by a pension scheme or an arrangement to secure pension benefits in another pension scheme or an arrangement when the member leaves a scheme and chooses to transfer the pension benefits accrued in the former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total Ministerial service, not just their current appointment as a Minister. CETVs are calculated in accordance with the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax, which may be due when pension benefits are taken.
Real Increase in the value of the CETV
This is the element of the increase in accrued pension funded by the Exchequer. It excludes increases due to inflation and contributions paid by the Minister. It is worked out using common market valuation factors for the start and end of the period.
## Pension Benefits
| Board Members | Accrued pension at pension age as at 31/3/14 and related lump sum | Real increase in pension and related lump sum at pension age | CETV at 31/03/14 | CETV at 31/03/13 | Real increase in CETV | Employer contribution to partnership pension account | |---------------|---------------------------------------------------------------|----------------------------------------------------------|-----------------|-----------------|---------------------|------------------------------------------------------| | Sir Jeremy Heywood KCB, CVO Cabinet Secretary | 65-70 plus lump sum of 195-200 | 0-2.5 plus lump sum of 5-7.5 | 1,206 | 1,104 | 11 | – | | Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer | 40-45 plus lump sum of 120-125 | 0-2.5 plus lump sum of 5-7.5 | 666 | 603 | 20 | – | | Phillip Rycroft CB¹ Director General, Deputy Prime Minister’s Office | 35-40 plus lump sum of 105-110 | 0 - (2.5) plus lump sum of 0 - (2.5) | 661 | 630 | (4) | – | | Sue Gray Director General Propriety and Ethics and Head of Private Office Group | 50-55 plus lump sum of 155-160 | 0-2.5 plus lump sum of 0-2.5 | 1,077 | 1,010 | 1 | – | | Melanie Dawes Director General, Economic and Domestic Affairs Secretariat | 35-40 plus lump sum of 115-120 | 0-2.5 plus lump sum of 0-2.5 | 631 | 592 | (2) | – | | Bruce Mann Finance Director, Board Secretary | 45-50 plus lump sum of 140-145 | 0-2.5 plus lump sum of 0-2.5 | 994 | 937 | (4) | – |
¹All pension figures are preserved Civil Service Pensions
Pension benefits are provided through the Civil Service pension arrangements. From 30 July 2007, civil servants may be in one of four defined benefit schemes in; either a final salary scheme (classic, premium or classic plus); or a whole career scheme (nuvos). These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus and nuvos are increased annually in line with Pensions-Increase legislation. Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a ‘money purchase’ stakeholder pension with an employer contribution (partnership pension account).
Employee contributions are salary related and range between from 1.5% and 6.25% of pensionable earnings for classic, and between 3.5% and 8.25% for premium, classic plus and nuvos. Increases to employee contributions will apply from 1 April 2014. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum, equivalent to three years initial 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. classic plus is essentially a hybrid, with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos a member builds up a pension based on his/her pensionable earnings during the period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of the pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions-Increase legislation. In all cases members may opt to give up (commute) pension for a lump sum, up to the limits set by the Finance Act 2004.
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 from a panel of three providers. The employee does not have to contribute, but if he/she does 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).
The accrued pension quoted is the pension that the member is entitled to receive when on reaching pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, and 65 for members of nuvos.
Further details about the Civil Service pension arrangements can be found at www.civilservice.gov.uk/pensions
Cash Equivalent Transfer Values
A 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 an arrangement to secure pension benefits in another pension scheme or an 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 his/her total membership of the pension scheme, not just service in a senior capacity to which disclosure applies.
The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued by the member as a result of buying additional pension benefits out of their own pocket. CETVs are worked out in accordance with the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.
**Real Increase in CETV**
This reflects the increase in CETV that is funded by the employer. It does not include 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.
**Compensation for Loss of Office**
There were no cases of compensation for loss of office during the reporting year.
______________________________________________________________________
**Richard Heaton CB**\
Permanent Secretary for the Cabinet Office,\
First Parliamentary Counsel and\
Accounting Officer
24 June 2014 Directors’ Report
This Directors’ Report covers corporate information, the Statement of the Accounting Officer’s Responsibilities and the Statement of the Disclosure of Relevant Audit Information.
Corporate Information
Monitoring spending on consultancy and temporary staff
Measures to control spending were introduced after the freeze on consultancy and interim managers and other temporary staff announced by the Chancellor of the Exchequer in May 2010. These measures have had a significant impact on the Cabinet Office’s use of external resources since 2009-10, despite variations in classification and the Cabinet Office gaining extra business functions from other departments following the formation of the Coalition Government.
Expenditure by the Cabinet Office in 2013-14 on consultancy has fallen by some 67% compared with 2009-10 although there was an increase of just under 50% on the previous year. Similarly, expenditure on temporary staff increased. Both these increases are mainly attributable to the need to buy in specialist skills necessary to support the Mutualisation Programme (including the ISSC2 project), the Commercial Reform Programme, the Public Service Network programme and the Government Digital Strategy. The Cabinet Office utilised consultants as a more cost-effective option than taking on further permanent staff.
Reporting of high-paid off-payroll appointments
Table 1: For all off-payroll engagements as of 31 March 2014, for more than £220 per day and that last for longer than six months
This table excludes Government Digital Services and the Public Services Network as their figures are in the process of being verified.
| Main department | ALB 1 | ALB 2 | |-----------------|-------|-------| | No. of existing engagements as of 31 March 2014 | 17 | | | Of which... | | | | No. that have existed for less than one year at time of reporting. | 7 | | | No. that have existed for between one and two years at time of reporting. | 6 | | | No. that have existed for between two and three years at time of reporting. | 2 | | | No. that have existed for between three and four years at time of reporting. | 2 | | | No. that have existed for four or more years at time of reporting. | 0 | |
1. Excludes Government Digital Service, Public Services Network and Crown Commercial Service
2. All existing off-payroll engagements identified above have been subject to a risk based assessment as to whether assurance is required that the individual is paying the right amount of tax and that assurance has been sought. Table 2: For all new off-payroll engagements, or those that reached six months in duration, between 1 April 2013 and 31 March 2014, for more than £220 per day and that last for longer than six months.
This table excludes Government Digital Services and the Public Services Network as their figures are in the process of being verified.
| Main department | ALB 1 | ALB 2 | |-----------------|-------|-------| | No. of new engagements, or those that reached six months in duration, between 1 April 2013 and 31 March 2014 | 13 | | | No. of the above which include contractual clauses giving the Department the right to request assurance in relation to income tax and National Insurance obligations | 11 | | | No. for whom assurance has been requested | 12 | | | Of which... | | | | No. for whom assurance has been received | 4 | | | No. for whom assurance has not been received | 8 | | | No. that have been terminated as a result of assurance not being received | 0 | |
1. Excludes Government Digital Service, Public Services Network and Crown Commercial Service.
2. For remaining 2 engagements, inclusion of contractual clauses is being verified.
3. Assurance is in the process of being submitted.
Number of Senior Civil Servants by pay band - full-time employees as of 31 March 2014
| Pay Band | Number | |----------|--------| | Permanent Secretaries | 6.00 | | Senior Civil Service Pay Band 1 | 145.15 | | Senior Civil Service Pay Band 2 | 29.00 | | Senior Civil Service Pay Band 3 | 13.10 | | Parliamentary Counsel | 7.80 | | Deputy Parliamentary Counsel | 12.40 | | Assistant Parliamentary Counsel | 7.81 | | Senior Assistant Parliamentary Counsel | 12.49 | | Total | 233.75 |
Senior civil servant headcount figure as of 31 March 2014
| Pay Band | Number | |----------|--------| | Permanent Secretaries | 6 | | Senior Civil Service Pay Band 1 | 146 | | Senior Civil Service Pay Band 2 | 29 | | Senior Civil Service Pay Band 3 | 14 | | Parliamentary Counsel | 8 | | Deputy Parliamentary Counsel | 13 | | Assistant Parliamentary Counsel | 9 | | Senior Assistant Parliamentary Counsel | 13 | | Total | 238 | Recruitment Practice
All Civil Service recruitment within the Cabinet Office is carried out in accordance with relevant employment legislation and the Recruitment Principles issued by the Civil Service Commission.
For the year 2012-13, the number of vacancies filled was 340. In 2013-14, the number of vacancies filled was 480. This was due to a high requirement for expertise to be brought in from government departments, other parts of the public sector and, in some cases, the private sector to work on departmental priorities. The Cabinet Office resourcing model aims for a relatively high ratio of staff on loan from other departments. Staff bring expertise into the Cabinet Office, develop their skills and return to their home departments with the benefit of experience of working in central government. Vacancies arise as staff return to their departments.
| Number of vacancies filled | Senior civil servant or equivalent | Non-senior civil servant | Total | |----------------------------|-----------------------------------|--------------------------|-------| | | 2012-13 | 2013-14 | 2012-13 | 2013-14 | 2012-13 | 2013-14 | | Internal | 27 | 37 | 229 | 240 | 256 | 277 | | External | 14 | 20 | 70 | 183 | 84 | 203 | | Total | 41 | 57 | 299 | 423 | 340 | 480 |
The Department continued to offer young people the opportunity to enhance their employability through the Apprenticeships programme, through intern and work-experience opportunities. In 2013-14, five apprentices and eight Fast-track apprentices joined the Department; and 35 opportunities for undergraduate and graduate internships were filled. In addition, five work-experience opportunities were successfully filled as part of the social mobility-oriented Whitehall Internship Programme.
Public Appointments and re-appointments
As at 31 March 2014, the Cabinet Office sponsored nine non-departmental public bodies (NDPBs), two executive NDPBs and seven advisory NDPBs. In addition, the Cabinet Office oversees the public appointments for the Charity Commission and the UK Statistics Authority, both of which are Non-Ministerial Government Departments.
Between 1 April 2013 and 31 March 2014, 18 appointments were made, of which 15 were new. During the period April to September 2013, 40% of the new appointments were given to women. Of these, seven appointments were to the Charity Commission for England and Wales, four to the House of Lords Appointments Commission, two to the UK Statistics Authority, and one each to the Committee on Standards in Public Life and the Civil Service Commission. Re-appointments were made to the Boundary Commission for England and Wales and the Charity Commission for England and Wales.
For comparison, in 2012-13 there were 11 new appointments, including to the Big Lottery Fund and the Committee on Standards in Public Life. Re-appointments were made to the Senior Salaries Review Body, the Committee on Standards in Public Life and the Charity Commission for England and Wales.
Employee Consultation
The Cabinet Office recognises the importance of sustaining good employee relations to achieve its objectives, and consultation with employees and their representatives is central to that work.
Regular communication and consultation continues to take place with all staff through a variety of channels, including the intranet, staff bulletins and team briefings. More formal consultation exercises also take place with staff and unions on matters such as organisational change and changes to staff terms and conditions. The Department formally recognises the FDA union, the Public and Commercial Services Union and Prospect. It has a partnership agreement with the trade unions and senior managers meet regularly to discuss a shared agenda. There are also regular meetings to negotiate pay awards and other informal meetings to discuss trade union concerns at both the corporate and the local level.
The Cabinet Office Employee Relations Strategy embeds monthly trade union/human resources (HR) meetings and quarterly meetings with the HR Director.
There are also staff networks which represent particular groups of employees, including women, people with disabilities, staff with dyslexia, lesbian, gay, bisexual or transgender employees, and carers.
The Cabinet Office runs an annual people survey which captures employees’ views on a number of issues. The results of the survey are used to measure levels of engagement at the local and the corporate level.
Sickness and Absence
The sickness absence figure for the rolling 12 months to 31 March 2014 stands at 2.3 average working days lost, including the Government Procurement Service (GPS) or 1.8 excluding (GPS).
Diversity and inclusion policy
The Cabinet Office is committed to:
- eliminating discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Equality Act 2010
- advancing equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it
- fostering good relations between persons who share a relevant protected characteristic and persons who do not share it
The Cabinet Office aims to be an organisation where everyone is:
- treated with fairness and respect
- able to contribute and develop
- confident about how to ensure that the work they do supports equality of outcomes for everyone in society.
The Cabinet Office’s people management policies and practices reflect the Cabinet Office and Civil Service Management Codes. They build on the legal obligations under national and European law.
However, diversity for the Cabinet Office entails more than just those elements covered by legislation and enshrines the true diversity of thought, skills, background and experience. It does not tolerate any form of unfair discriminatory behaviour, harassment, bullying or victimisation, and will do all it can to ensure that any such allegations are dealt with sensitively and fairly.
During 2012, the Cabinet Office introduced three equality objectives in line with the requirement of the Public Sector Equality Duty. Equality data about the workforce population can be found on the Cabinet Office website, together with updates on progress, at: Public Sector Equality Duty
Employment, training and advancement of disabled persons
The Cabinet Office supports the employment, training and advancement of disabled persons. This is done in several ways. First, the Cabinet Office takes part in the ‘Two Ticks’ scheme, which encourages candidates with a disability to apply. If a candidate declares a disability and meets the minimum standards required for the job, he or she is offered an interview.
The Cabinet Office uses management information to monitor how the policies and procedures affect staff, and takes necessary action to mitigate any negative effects that may occur. The Cabinet Office is also a corporate member of the Business Disability Forum, which helps to measure and improve on performance for disabled employees and stakeholders.
Pensions
Present and past employees of the Cabinet Office are covered by the provisions of the Principal Civil Service Pension Scheme. The scheme allows employees to make pension provision for retirement if they wish. Information on Civil Service pension scheme options is available on the Civil Service website at: www.civilservice.gov.uk/pensions
The financial status of the scheme is reported in the Cabinet Office Civil Superannuation Accounts, published on the Civil Service website. The accounting policy adopted for pension costs is set out at Note 1.10 to the Accounts. Details of senior management pension entitlements are set out in the Remuneration Report.
Capabilities learning and development
The Cabinet Office has fully embraced building capability within the four priority areas as identified by the Capabilities Plan 2013 – digital; commercial; programme and project management; and leadership and management of change. A Senior Capabilities Working Group has been established, and Capability Champions have been appointed to identify corporate solutions to closing the capability gaps identified.
Each business unit has a plan to build capability and activity, and this is monitored on a quarterly basis.
At the end of February 2014, each business unit had in place on average four key actions to address capability gaps.
In addition, the Cabinet Office has identified departmental specific capabilities, and people are supported in their personal development.
Health and safety
The Cabinet Office accepts its responsibilities under the provisions of the Health and Safety at Work etc. Act 1974 and other associated legislation. The Department undertakes, so far as is reasonably practicable, to meet its legal obligations regarding the safety and health of its staff and others who may be affected by the Department’s activities.
In the financial year 2013-14, 11 accidents were reported by staff, of which one was reported to the Health and Safety Executive as required under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995.
Policy on social and community issues
Internally, as part of its corporate social responsibility agenda, the Cabinet Office actively promotes awareness of social and community issues, and is committed to promoting inclusion and equality through its human resource and other policies. A major contributor to this is the encouragement of volunteering, whether individually or in groups, including providing special leave for this purpose. Information is made easily available through the Cabinet Office intranet.
Health and well-being is also embedded within the Cabinet Office People Strategy. A fitness centre is available in some buildings, and, it is hoped, there will also be opportunities to attend well-being seminars as part of an annual Better Cabinet Office event later in the year.
Externally, the Cabinet Office includes the Office for Civil Society (OCS), which works across government to translate the vision for a Big Society into practical policies, provides support to voluntary and community sector organisations, and is responsible for delivering a number of key Big Society programmes, as well as the Civil Society Compact. Many programmes within the OCS play a hugely important role in encouraging social action. These include the Centre for Social Action, the Government’s commitment to the volunteering legacy of the London 2012 Olympic and Paralympic Games, and the Community Organisers programme, to name just a few.
The OCS is leading on work to change the Civil Service into a ‘civic service’. This project aims to provide civil servants with opportunities to use their skills to support civil society organisations, and to utilise social action as a means of learning and professional development for civil servants. This ambition to work more closely with the civil society sector was set out in the Civil Service Reform Plan, and the Cabinet Office is working with other departments to help implement it. In line with this, the Cabinet Office has developed a successful Charity of the Year initiative, which is run by staff from across the Department. This partnership successfully supported the British Heart Foundation in 2013-14, and in 2014-15 will be working with the Samaritans, which was selected through a staff vote.
**Estates management strategy**
The Cabinet Office owns five freehold properties in London: the interconnected 70 Whitehall and 10–12 Downing Street, Admiralty Arch, Admiralty House and 36 Whitehall. In addition, the Cabinet Office is responsible for the freehold of the Civil Service Club building in Great Scotland Yard. Outside London, it owns the freehold of the Emergency Planning College at Easingwold, Yorkshire, and of the site on which the Hannington radio mast sits. Both of these were inherited from the Home Office on earlier ‘machinery of government’ changes. The Cabinet Office is also responsible for the Sunningdale Park site, which is the subject of a private finance initiative contract.
The Cabinet Office takes a proactive approach to the management of its estate, in order to provide the necessary accommodation to meet current and future business needs. The strategy is to consolidate as far as possible in the interconnected 70 Whitehall and 10–12 Downing Street (by investing, where possible, to increase their capacity and provide modernised, more flexible accommodation) and to co-locate with HM Treasury at 1 Horse Guards Road. Leasehold properties will be disposed of, and the Cabinet Office is working with the Government Property Unit to achieve the re-use of the non-core freehold buildings that will no longer be required by the Cabinet Office. Following open planning and modernisation of the infrastructure, 36 Whitehall, which is currently vacant, will be re-used by the Government as office space. Parts of the Sunningdale Park site are now categorised as an investment property, since it is no longer owner occupied and is being held for capital appreciation; see Note 9 to the Accounts. Admiralty Arch is classified as an asset held for sale; see Note 20 to the Accounts.
**Payment of suppliers**
Terms of contract are usually payment within 30 days of receipt of a valid invoice. During the year, the Department paid 98.6% of invoices within 30 days (2012-13: 99.0%).
On 8 October 2008, the then Prime Minister committed government organisations to speeding up the payments process, paying suppliers wherever possible within ten days. This commitment is a target rather than a change to standard terms and conditions and is not contractual. During the year, the Cabinet Office paid 93.4% of invoices within ten days (2012-13: 94.5%).
During 2010-11 the then Prime Minister further committed government organisations to speeding up the payments process, to pay suppliers, wherever possible, within five days. This is a target rather than a change to the standard terms and conditions and is not contractual. During the year, the Cabinet Office paid 78.9% of invoices within five days (2012-13: 79.0%). The amount owed to trade creditors at 31 March, compared with the amount invoiced by suppliers during the year, expressed as number of days, was 12 days (2012-13: 54 days). The significant variance which is expressed as number of days is due to the sum of £18.35 million, mainly made up of invoices for Next Generation HR and Corporate Services ICT costs which were received and unpaid at the end of March 2013. The Department paid out £131,950 on account of late payment of invoices for the year to 31 March 2014 (2012-13: £120,914).
Better regulation
During 2013-14 the Cabinet Office was responsible for three regulatory changes that are in scope of the ‘one-in, two out’ (OITO) rule. All of these measures were confirmed by the independent Regulatory Policy Committee (RPC) as having no cost to business, and on that basis the Cabinet Office has maintained a zero balance for ‘one in, one out’ and ‘one in, two out’. Details of the new Cabinet Office regulation subject to OITO are published on the GOV.UK website at: Cabinet Office Statement of New Regulation
Statements of new regulation for all departments are published at: One-in, two-out: statement of new regulation
The RPC provides an external and independent challenge to the evidence and analysis presented in impact assessments supporting the development of new regulatory measures proposed by the Government.
During the year, the Cabinet Office published four consultations in its own right, and collaborated with other departments on six further consultations. All Cabinet Office consultations are available on the GOV.UK website.
Cabinet Office consultations
- Extending Charity Commission’s powers to tackle abuse in charities – Cabinet Office
- Draft identity assurance principles – Cabinet Office
- OGP UK 2011 national action plan: self assessment report – Cabinet Office
- Open Government Partnership: UK National Action Plan 2013 – Cabinet Office
Collaborative consultations
- Deregulation Bill: amendment to Clause 47 – Cabinet Office and Ministry of Justice
- Big Lottery Fund triennial review: call for evidence – Cabinet Office and Big Lottery Fund
- Making public sector procurement more accessible to SMEs – Cabinet Office, Department for Business, Innovation and Skills, Department for Communities and Local Government, Department for Education, Department of Health and Home Office
- Cyber security organisational standards: call for evidence – Cabinet Office and Department for Business, Innovation and Skills
- EU directive on network and information security: call for evidence – Cabinet Office, Department for Business, Innovation and Skills and Shareholder Executive
- Rail and maritime Red Tape Challenge – Cabinet Office and Department for Transport Correspondence, complaints and parliamentary questions
The information in this section is taken from the Efficiency and Reform Group (ERG) Service Desk call record system. Each call the Service Desk receives is logged, and agents record relevant detail so that the customer’s call can be managed efficiently. This also provides an audit trail, enabling each agent to handle any open calls. The ERG Service Desk is renowned for its exceptional customer service, and over 90% of calls are handled within agreed Service Level Agreements.
For this year’s reporting period, the Cabinet Office received 12 complaints in total. There follows a breakdown of the business units receiving complaints.
| Cabinet Office | Number of Complaints | |---------------------------------|----------------------| | Scheme Management | 3 | | Executive/My Civil Service | | | Pension | | | Fast Stream – Civil Service | 1 | | Resourcing | | | Civil Service Learning | 1 | | Office for Civil Society | 3 | | Propriety and Ethics | 2 | | Best Management Practice | 1 | | Individual | 1 |
Breakdown of complaints by stage reached:
- Stage 1 – 10 complaints
- Stage 2 – 1 complaint
- Stage 3 – 1 complaint
Complaints from the Parliamentary and Health Service Ombudsman
The Parliamentary and Health Service Ombudsman received ten complaints about the Cabinet Office in 2013 and did not accept any complaints for investigation, as set out in the table below.
| Cabinet Office | Total | |----------------|-------| | Complaints received | 10 | | Complaints resolved through intervention | 0 | | Complains accepted for investigation | 0 | | Investigations upheld | 0 | | Investigations partly upheld | 0 | | Investigations not upheld | 0 |
Freedom of Information requests
Statistics on Freedom of Information implementation in central government are published quarterly by the Ministry of Justice here: Government FOI statistics Parliamentary questions
The Government has committed itself to providing departmental parliamentary question statistics to the Procedure Committee of the House of Commons on a sessional basis. Cabinet Office statistics for the 2013-14 sessions are available on the Committee’s website at:
www.parliament.uk/business/committees/committees-a-z/commons-select/procedure-committee/
Cabinet Office ministerial cases performance against 15-day target: January–December 2013
| Month | Total | |------------------------------|-------| | Total no. of MP/peer letters handled (inc. transfer, NRN and outgoing) | 14,009 | | No. of MP/peer letters received | 3,072 | | No. of MP/peer letters transferred to Other Government Departments | 303 | | No. of MP/peer letters where no response was needed | 144 | | No. of MP/peer letters where a response was needed | 2,500 | | No. replied to within 15 working day target | 1,801 | | % in time | 72% |
Note: Information taken from the date letters were received
Transparency
The Cabinet Office published its first Dataset Inventory in October 2013, identifying over 80 new datasets, including hitherto unpublished data on major projects, social investment, government procurement and Civil Service reform. Some 37 key datasets were also identified as part of the National Information Infrastructure.
A key achievement this year was the publication of data from the first Annual Report of the Major Projects Authority (MPA). Data of the Government Major Projects Portfolio (GMPP) included progress and future priorities. In addition, each government department has published detailed information about its GMPP. This includes the MPA red/amber/green rating, key project data including financial information (whole life cost, annual budget and forecast spend) and timetable. This data will be updated every 12 months.
Other key information published as open data for the first time in 2013-14 included data on the Government Construction Pipeline, which includes some 1,047 projects and programmes, and more than £109 billion of investment to 2020 and beyond. Also, detailed results of the confirmation process which will be the first step in transition to individual electoral registration. The test involved the matching of all 380 registers, with around 46 million people, against Department for Work and Pensions data.
As part of our commitment to embed open data skills into the business, we ran an Open Data Discovery course for staff in March, run by the Open Data Institute. We are following this up with a programme of regular open data training in 2014-15.
Approval has also now been obtained to establish a Cabinet Office Transparency Board as part of our Open Data Strategy for 2014. The Board will fulfil the senior leadership role necessary for transparency and open data across the Cabinet Office and our arm’s length bodies. Its role will be to:
- define what is out of scope for publication and ring-fence data that should not be published
- monitor progress against our departmental commitments and hold data owners accountable for meeting them
- identify data owners and work with them to disseminate good practice in opening up our data and publishing it in ways that encourage re-use by others
- mainstream transparency and open data principles within the Department’s core values and behaviours
- embed a culture of transparency and open data across the Cabinet Office and our arm’s length bodies.
Advertising and publicity costs
The Cabinet Office spent approximately £3.85 million on publicity production costs and advertising media in the financial year 2013-14. Reporting of personal data-related incidents
The table below gives a summary of protected personal data-related incidents reported to the Information Commissioner’s Office (ICO) in 2013-14.
| Date of incident | Nature of incident | Nature of data involved | Number of people potentially affected | Notification steps | |------------------|--------------------|-------------------------|---------------------------------------|--------------------| | 16 January 2014 | A staff member had their bag stolen. The bag contained a paper copy of the ‘Director’s Talent Grid’. The Grid lists the name, gender, department and talent assessment rating of directors (at SCS2) level in all departments. An explanation of the rating’s definitions was not lost. | Personal information | 615 | The ICO was notified and internal investigation and review were undertaken. | | 24 February 2014 | The payslips of 32 pensioners of the Royal Mail Statutory Pension Scheme were erroneously put into the envelopes of other members by the pension administrator’s supplier during the payslip print run. | Personal information | 32 | All payslips have been recovered and sent to the right member. Letters of apology have been issued to all concerned. No complaints or media interest. | Statement of Accounting Officer’s responsibilities
Under the Government Resources and Accounts Act 2000 (the GRAA), HM Treasury has directed the Cabinet Office to prepare, for each financial year, consolidated resource accounts detailing the resources acquired, held or disposed of, and the use of resources, during the year by the Department inclusive of its executive agencies and its sponsored non-departmental public body designated by order made under the Government Resources and Accounts Act 2000 (Estimates and Accounts) Order 2013 (S.I. 2013/488) & Government Resources and Accounts Act 2000 (Estimates and Accounts) (Amendment) Order 2013 (S.I. 2013/3187) (together known as the ‘departmental group’, consisting of the Department and sponsored bodies listed at Note 30 to the accounts). The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the Department and the departmental group and of the net resource outturn, the application of resources, changes in taxpayers’ equity and cash flows of the departmental group for the financial year.
In preparing the accounts, the Accounting Officer of the Department is required to comply with the requirements of the ‘Government Financial Reporting Manual’ and in particular to:
- observe the Accounts Direction issued by the Treasury, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
- ensure that the Department has in place appropriate and reliable systems and procedures to carry out the consolidation process
- make judgements and estimates on a reasonable basis, including those judgements involved in consolidating the accounting information provided by non-departmental public bodies
- state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the accounts
- prepare the accounts on a going concern basis.
HM Treasury has appointed the Permanent Head of the Department as Accounting Officer of the Cabinet Office. The Accounting Officer of the Cabinet Office has also appointed Clare Salters, Chief Executive, of its sponsored non-departmental public body, Civil Service Commission, as Accounting Officer of that body. Under her terms of appointment, the Accounting Officer of the Civil Service Commission is accountable for the use, including the regularity and propriety, of the grants received and the other income and expenditure of the sponsored body. This appointment does not detract from the Head of Department’s overall responsibility as Accounting Officer for the Department’s accounts.
The Accounting Officer of the Department is responsible for ensuring that appropriate systems and controls are in place to ensure that any grants that the Department makes to its sponsored bodies are applied for the purposes intended and that such expenditure and the other income and expenditure of the sponsored bodies are properly accounted for, for the purposes of consolidation within the resource accounts.
The responsibilities of an Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, for keeping proper records and for safeguarding the assets of the Department or non-departmental public body for which the Accounting Officer is responsible, are set out in ‘Managing Public Money’ published by HM Treasury. Statement on the Disclosure of Relevant Audit Information
The Cabinet Office Accounts have been prepared on a statutory basis in accordance with the requirements of HM Treasury and are designed to comply with generic Accounts Directions issued to departments by HM Treasury under section 5 (2) of the Government Resources and Accounts Act 2000.
The financial statements are audited by the Comptroller and Auditor General, who is appointed under statute and reports to Parliament on the audit examination. Auditors’ remuneration and expenses are disclosed at Notes 5 and 6 to the Accounts. During the reporting year no payment was made to the auditors for non-audit work (2012-13: £Nil).
I hereby confirm that so far as I am aware, there is no relevant audit information of which the Cabinet Office’s auditors are unaware and that I have taken all reasonable steps to ensure that I am aware of any relevant audit information and to establish that the Cabinet Office’s auditors are aware of that information.
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
24 June 2014 Financial Statements The Certificate and Report of the Comptroller and Auditor General to the House of Commons
I certify that I have audited the financial statements of the Cabinet Office and of its Departmental Group for the year ended 31 March 2014 under the Government Resources and Accounts Act 2000. The Departmental Group consists of the Department and the bodies designated for inclusion under the Government Resources and Accounts Act 2000 (Estimates and Accounts) Order 2013. The financial statements comprise: the Departmental Group’s Statements of Comprehensive Net Expenditure, Financial Position, Cash Flows, Changes in Taxpayers’ Equity; and the related notes. I have also audited the Statement of Parliamentary Supply and the related notes. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration Report that is described in that report as having been audited.
Respective responsibilities of the Accounting Officer and auditor As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Accounting Officer is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. My responsibility is to audit, certify and report on the financial statements in accordance with the Government Resources and Accounts Act 2000. I conducted my audit in accordance with International Standards on Auditing (UK and Ireland). Those standards require me and my staff to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Departmental Group’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Accounting Officer; and the overall presentation of the financial statements. In addition I read all the financial and non-financial information in the Annual Report and Accounts to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by me in the course of performing the audit. If I become aware of any apparent material misstatements or inconsistencies I consider the implications for my certificate.
I am required to obtain evidence sufficient to give reasonable assurance that the Statement of Parliamentary Supply properly presents the outturn against voted Parliamentary control totals and that those totals have not been exceeded. The voted Parliamentary control totals are Departmental Expenditure Limits (Resource and Capital), Annually Managed Expenditure (Resource and Capital), Non-Budget (Resource) and Net Cash Requirement. I am also required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.
Opinion on regularity In my opinion, in all material respects:
- the Statement of Parliamentary Supply properly presents the outturn against voted Parliamentary control totals for the year ended 31 March 2014 and shows that those totals have not been exceeded; and the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.
Opinion on financial statements In my opinion:
- the financial statements give a true and fair view of the state of the Departmental Group’s affairs as at 31 March 2014 and of the Departmental Group’s net operating cost for the year then ended; and
- the financial statements have been properly prepared in accordance with the Government Resources and Accounts Act 2000 and HM Treasury directions issued thereunder.
Opinion on other matters In my opinion:
- the part of the Remuneration Report to be audited has been properly prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000; and
- the information given in the Strategic Report and Governance section for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which I report by exception I have nothing to report in respect of the following matters which I report to you if, in my opinion:
- adequate accounting records have not been kept or returns adequate for my audit have not been received from branches not visited by my staff; or
- the financial statements and the part of the Remuneration Report to be audited are not in agreement with the accounting records and returns; or
- I have not received all of the information and explanations I require for my audit; or
- the Governance Statement does not reflect compliance with HM Treasury’s guidance.
Report I have no observations to make on these financial statements.
Sir Amyas C E Morse Comptroller and Auditor General National Audit Office 157-197 Buckingham Palace Road Victoria, London, SW1W 9SP 25 June 2014 Statement of Parliamentary Supply
In addition to the primary statements prepared under IFRS, the Government Financial Reporting Manual (FReM) requires the Cabinet Office to prepare a Statement of Parliamentary Supply and supporting notes to show resource outturn against the Supply Estimate presented to Parliament, in respect of each budgetary control limit.
Summary of Resource and Capital Outturn 2013-14
| £000 | 2013-14 | 2012-13 Restated | |------|---------|------------------| | | Note | Voted | Non-Voted | Total | Voted | Non-Voted | Total | Voted outturn compared with Estimate: saving / (excess) | Total | | | | | | | | | | | | | Departmental Expenditure Limit | SOPS2.1 | 451,689 | 2,000 | 453,689 | 418,049 | 1,826 | 419,875 | 33,640 | 413,816 | | Capital | SOPS2.2 | 47,703 | - | 47,703 | 42,873 | - | 42,873 | 4,830 | 15,054 | | Annually Managed Expenditure | SOPS2.1 | 5,100 | - | 5,100 | (4,080) | - | (4,080) | 9,180 | (35,479) | | Capital | - | - | - | - | - | - | - | - | - | | Total Budget | 504,492 | 2,000 | 506,492 | 456,842 | 1,826 | 458,668 | 47,650 | 393,391 | | Non-Budget | - | - | - | - | - | - | - | - | - | | Total | 504,492 | 2,000 | 506,492 | 456,842 | 1,826 | 458,668 | 47,650 | 393,391 |
Net Cash Requirement 2013-14
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Note | Estimate | Outturn | Outturn compared with Estimate: saving / (excess) | Outturn | | | | | | | | | SOPS4 | - | 517,545 | 471,621 | 45,924 | 440,914 |
Administration Costs 2013-14
| £000 | 2013-14 | 2012-13 Restated | |------|---------|------------------| | | Note | Estimate | Outturn | Outturn compared with Estimate: saving / (excess) | Outturn | | | | | | | | | SOPS2.1 | - | 184,809 | 153,325 | 31,484 | 193,137 |
Figures in the areas outlined in bold are voted totals or other totals subject to Parliamentary control. In addition, although not a separate voted limit, any breach of the administration budget will also result in an excess vote.
Explanations of variances between Estimate and outturn are given in the Financial Review section.
Notes SOPS1 to SOPS4 form part of these accounts. Notes to the Accounts (Statement of Parliamentary Supply) for the period ended 31 March 2014
SOPS1. Statement of accounting policies
The Statement of Parliamentary Supply and supporting notes have been prepared in accordance with the 2013-14 Government Financial Reporting Manual (FReM) issued by HM Treasury. The Statement of Parliamentary Supply accounting policies contained in the FReM are consistent with the requirements set out in the 2013-14 Consolidated Budgeting Guidance and Supply Estimates Guidance Manual.
SOPS1.1 Accounting convention
The Statement of Parliamentary Supply and related notes are presented consistently with Treasury budget control and Supply Estimates. The aggregates across government are measured using National Accounts, prepared in accordance with the internationally agreed framework 'European System of Accounts' (ESA95). ESA95 is in turn consistent with the System of National Accounts (SNA93), which is prepared under the auspices of the United Nations.
The budgeting system and the consequential presentation of Supply Estimates and the Statement of Parliamentary Supply and related notes, have different objectives to IFRS-based accounts. The system supports the achievement of macro-economic stability by ensuring that public expenditure is controlled, with relevant Parliamentary authority, in support of the Government's fiscal framework. The system provides incentives to departments to manage spending well so as to provide high-quality public services that offer value for money to the taxpayer.
The Government's objectives for fiscal policy are set out in the Charter for Budget Responsibility. These are to:
- ensure sustainable public finances that support confidence in the economy, promote intergenerational fairness, and ensure the effectiveness of wider government policy; and
- support and improve the effectiveness of monetary policy in stabilising economic fluctuations.
SOPS1.2 Comparison with IFRS-based accounts
Many transactions are treated in the same way in National Accounts and IFRS-based accounts, but there are a number of differences as detailed below. The accounting treatment under IFRS is set out at Note 1 Statement of Accounting Policies accompanying the Accounts. A reconciliation of the Department’s outturn as recorded in the SoPS compared to the IFRS-based Statement of Comprehensive Net Expenditure (SoCNE) is provided in SOPS Note 3.1.
SOPS1.21 Capital Grants
Grant income, expenditure and Grant-in-Kind used for capital purposes are treated as capital (CDEL) items in the Statement of Parliamentary Supply to reflect the creation of assets in the wider economy. Under IFRS, as applied by the FReM, there is no distinction between capital grants and other grants, and they score as an item of expenditure and income in the Consolidated SoCNE. Accounting treatment is set out in Accounting Policy Note 1.12 accompanying the Accounts.
SOPS1.22 Investments in Associates
The Department recognises in accounts an investment equal to its share of its associates’ net assets as at 31 March. The initial investment and eventual disposal are scored as a charge and benefit to Capital DEL respectively but in other respects, accounting and budgeting treatment are mis-aligned. The share of opening net assets recognised in the Statement of Financial Position (SoFP) and in the SoCNE is classified to Capital DEL non-budget and non-voted and therefore has no impact on control totals. Dividends received which reduce the investment score to administration in Resource DEL. The share of profit or loss for the year and of any impairment in value are outside the scope of budgets. Accounting treatment is set out in Accounting Policy Note 1.23 accompanying the Accounts.
**SOPS1.23 Private Finance Initiative (PFI) Transactions**
The accounting treatment applied to PFI transactions is set out in Accounting Policy Note 1.21 accompanying the Accounts; and the transactions are recognised in the SoPS as follows.
Non-current asset additions under a PFI contract are recognised as capital expenditure (CDEL). PFI expenditure on service charges and finance lease interest charges is recognised as resource expenditure (RDEL).
Where the Department contributes assets to a PFI operator, a prepayment for their fair value is recognised as capital expenditure (CDEL). Amortisation of the prepayment is recognised over the life of the contract as resource expenditure (RDEL).
Where, at the end of a PFI contract, a property reverts to the Department, the difference between the expected fair value of the residual element on reversion and any agreed payment on reversion is built up over the life of the contract through recognising part of the unitary charge each year as capital expenditure (CDEL).
**SOPS1.24 Provisions – Administration and Programme expenditure**
Provisions recognised in IFRS-based accounts are not recognised as expenditure for national accounts purposes until the actual payment of cash (or accrual liability) is recognised. To meet the requirements of both resource accounting and national accounts, additional data entries are made in the SoPS across AME and DEL control totals, which do not affect the SoCNE. As the Administration control total is a sub-category of DEL, Administration and Programme expenditure reported in the SoPS differ from that reported in the IFRS-based accounts; see SOPS Note 3.2.
**SOPS1.25 Consolidated Fund Standing Services**
Budgets include payments from the Consolidated Fund in relation to the salaries and pension costs of the UK Members of the European Parliament (MEPs). These are included in the Estimates but do not form part of the net cash requirement since they are paid directly from the Consolidated Fund as a standing service. The MEP salaries are not included in accounts, since the Cabinet Office does not benefit directly from MEPs’ services and cannot re-deploy the funds.
Election expenses are included in budgets and accounts but not in Estimates since they are classified as Consolidated Fund Standing Services which are funded directly from the Consolidated Fund at Treasury and therefore do not form part of Supply net cash requirement.
**SOPS1.26 Grant-in-aid to eNDPBs**
Grant-in-aid to eNDPBs is included in the accounts as resource expenditure and in Estimates as part of net cash requirement but is excluded from budgets which instead include the resource and capital expenditure incurred by the eNDPB. Accounting treatment is set out in Accounting Policy Note 1.12 accompanying the Accounts.
## SOPS2. Net Outturn
### SOPS2.1 Analysis of net resource outturn by section
| £000 | Outturn | Estimate | 2013-14 | 2012-13 Restated | |------|---------|----------|---------|-----------------| | | Administration | Programme | Total | Net Total compared to Estimate | Net Total compared to Estimate, adjusted for virements | Prior-year outturn | | | Gross | Income | Net | Gross | Income | Net | Net Total | Net Total | | | A: Support to the Cabinet, the PM & the Deputy PM | 62,684 | (8,895) | 53,789 | 3,902 | - | 3,902 | 57,691 | 59,417 | 1,726 | 1,726 | 60,679 | | B: Political & Constitutional Reform | 4,155 | (143) | 4,012 | 16,617 | - | 16,617 | 20,629 | 19,986 | (643) | 351 | 9,958 | | C: National Security | 16,569 | (1,293) | 15,276 | 14,707 | (907) | 13,800 | 28,246 | 26,264 | (830) | - | 44,472 | | D: Efficiency & Reform | 79,206 | (44,719) | 34,487 | 71,378 | (5,350) | 66,028 | 100,515 | 88,731 | (11,784) | - | 86,285 | | E: Government Innovation Group | 8,233 | (1,724) | 6,509 | 164,500 | (917) | 163,583 | 170,092 | 169,369 | (723) | - | 134,013 | | F: Transactional Shared Services | 30,403 | (29,838) | 565 | - | - | - | 565 | 1,709 | 1,144 | 1,144 | - | | G: Hosted Functions | 1,102 | - | 1,102 | 1,272 | (1,222) | 50 | 1,152 | 1,250 | 98 | 98 | 1,340 | | H: Corporate Services Group | 130,794 | (95,003) | 35,791 | 744 | - | 744 | 36,535 | 81,094 | 44,559 | 30,228 | 73,796 | | I: Executive NDPBs (Net) | 1,799 | (5) | 1,794 | - | - | - | 1,794 | 1,887 | 93 | 93 | 1,442 | | Total Voted | 334,945 | (181,620) | 153,325 | 273,120 | (8,396) | 264,724 | 416,049 | 451,689 | 33,640 | 33,640 | 411,985 | | J: Consolidated Fund Standing Services | - | - | - | 1,826 | - | 1,826 | 1,826 | 2,000 | 174 | 174 | 1,831 | | Total DEL | 334,945 | (181,620) | 153,325 | 274,946 | (8,396) | 266,550 | 419,875 | 453,689 | 33,814 | 33,814 | 413,816 | | K: Corporate Services Group | - | - | - | (4,080) | - | (4,080) | (4,080) | 5,100 | 9,180 | 9,180 | (35,479) | | Non-budget | - | - | - | - | - | - | - | - | - | - | - | | Total | 334,945 | (181,620) | 153,325 | 270,866 | (8,396) | 262,470 | 415,795 | 458,789 | 42,994 | 42,994 | 378,337 |
### SOPS2.2 Analysis of net capital outturn by section
| Spending in Departmental Expenditure Limit | 2013-14 | 2012-13 | |-------------------------------------------|---------|---------| | Voted | Outturn | Estimate | Outturn | | | Gross | Income | Net | Net total compared to Estimate, adjusted for virements | Net Outturn | | A: Support to the Cabinet, the PM & the Deputy PM | 1,479 | (3) | 1,476 | 1,500 | 24 | 24 | 1,798 | | B: Political & Constitutional Reform | 6,567 | - | 6,567 | 11,000 | 4,433 | 4,433 | 2,290 | | C: National Security | 975 | - | 975 | 600 | (375) | - | (40) | | D: Efficiency & Reform | 4,547 | - | 4,547 | 7,130 | 2,583 | 373 | 3,949 | | E: Government Innovation Group | 12,185 | (105) | 12,080 | 11,929 | (151) | - | 482 | | H: Corporate Services Group | 17,512 | (284) | 17,228 | 15,544 | (1,684) | - | 6,575 | | Total DEL | 43,265 | (392) | 42,873 | 47,703 | 4,830 | 4,830 | 15,054 |
Detailed explanations on variances may be found in the Financial Review section. SOPS3. Reconciliation of outturn to net operating cost and against Administration Budget and Administration net operating costs
### SOPS3.1 Reconciliation of net resource outturn to net operating costs
| £000 | 2013-14 | 2012-13 | Restated | |------|---------|---------|----------| | **Total Resource Outturn in Statement of Parliamentary Supply Budget** | | | | | Non-Budget | SOPS2.1 | 415,795 | 378,337 | | **Add:** | | | | | Capital Grants | 6 | 15,804 | 7,963 | | Capital Grant-in-Kind | - | - | 44,145 | | Depreciation on dual reported PFI assets | - | - | 47 | | Service concession - Programme | 6 | - | 2,418 | | MyCSP Ltd dividend received | 17 | 470 | - | | **Less:** | | | | | Capital Grant Income | 7 | (3) | (8,105) | | Service concession – Administration | - | - | (1,834) | | UK Members of the European Parliament | SOPS2.1 | (1,826) | (1,831) | | Share of Associate profit and gain on opening net assets | 7, 17 | (48,283) | (5,882) | | **Net Operating Costs in Consolidated Statement of Comprehensive Net Expenditure** | | | | | | | 381,957 | 415,258 |
### SOPS3.2 Outturn against final Administration Budget and Administration net operating costs
| £000 | 2013-14 | 2012-13 | Restated | |------|---------|---------|----------| | **Estimate – Administration costs limit** | | | | | | | 184,809 | 199,434 | | **Outturn – Gross Administration Costs** | | | | | | | 334,945 | 289,858 | | **Outturn – Gross Income relating to administration costs** | | | | | | | (181,620) | (96,722) | | **Outturn – Net administration costs** | SOPS2.1 | 153,325 | 193,136 | | **Reconciliation to operating costs:** | | | | | Add: MyCSP Ltd dividend received | 17 | 470 | - | | Less: Utilisation of provisions | 24 | (1,421) | (4,062) | | Less: Service Concession (Administration) | - | - | (1,834) | | **Administration Net Operating Costs** | | | | | | | 152,374 | 187,240 |
Detailed explanations of the variances are given in the Financial Review section.
## SOPS4. Reconciliation of Net Resources to Net Cash Requirement
| £000 | 2013-14 | Note | Estimate | Outturn | saving/(excess) | |------|---------|------|----------|---------|----------------| | **Resource Outturn** | | | | | | | SOPS2.1 | | | 458,789 | 415,795 | 42,994 | | **Capital Outturn** | | | | | | | SOPS2.2 | | | 47,703 | 42,873 | 4,830 |
### Accruals to cash adjustments:
**Adjustments to remove non-cash items:**
- Depreciation 5, 6 (24,587) (5,457) (19,130)
- Release of deferred income 5 - 8 (8)
- Amortisation 5, 6 - (1,310) 1,310
- Impairment 5, 6 - (7,107) 7,107
- Devaluation 6 - 137 (137)
- Bad debt write off 5, 6 (300) (164) (136)
- New provisions and adjustments to previous provisions 5, 6 - 2,809 (2,809)
- Audit fee 5 (495) (495) -
- Loan impairment 19 378 (109) 487
- Investment property gain on change in fair value 9 - 23 (23)
**Adjustments for NDPBs:**
- Remove voted resource and capital SOPS2.1 (1,887) (1,794) (93)
- Add non-cash transactions relating to Civil Service Commission restatement - (11) 11
- Remove voted resource and capital - Accrual - 156 (156)
- Elimination adjustment - (457) 457
- Add cash grant-in-aid 1,887 2,106 (219)
**Adjustment to reflect movements in working balances:**
- Increase in inventories - 9 (9)
- Increase in trade receivables - 14,410 (14,410)
- Decrease in trade payables 35,648 10,546 25,102
- Use of provisions 24 2,409 1,421 988
### Carbon Reduction Commitment Energy Efficiency Scheme:
- Capital assets outside the scope of capital budgets and outturn
- Purchase of allowances for carbon dioxide emissions 10 - 75 (75)
- Disposal of allowances for carbon dioxide emissions 10 - (17) 17
| | | | | |---|---|---|---| | | 519,545 | 473,447 | 46,098 |
### Removal of non-voted budget items:
- Consolidated Fund Standing Services SOPS2.1 (2,000) (1,826) (174)
**Net cash requirement**
| | | | |---|---|---| | | 517,545 | 471,621 | 45,924 |
Detailed explanations on variances may be found in the Financial Review section. Consolidated Statement of Comprehensive Net Expenditure
for the period ended 31 March 2014
This account summarises the expenditure and income generated and consumed on an accruals basis. It also includes other comprehensive income, which includes changes to the values of non-current assets and other financial instruments that cannot yet be recognised as income.
| £000 | 2013-14 | 2012-13 Restated | |------|---------|------------------| | | Departmental Group | Departmental Group | | **Note** | **Administration costs** | **Programme expenditure** | **Net Operating Costs for the period ended 31 March** | | | Staff costs | Other costs | Income | Staff costs | Other costs | Income | Income from Associates | SOPS3.1 | | | 4 | 5 | 7 | 4 | 6 | 7 | 7 | | | | 114,661 | 216,118 | (178,405) | 52,565 | 233,788 | (8,487) | (48,283) | 381,957 | | | 106,130 | 175,504 | (94,394) | 32,756 | 220,508 | (19,364) | (5,882) | 415,258 | | **Total expenditure** | 617,132 | 534,898 | | **Total income** | (235,175) | (119,640) | | **Net Operating Costs for the period ended 31 March** | 381,957 | 415,258 |
**Other Comprehensive Income**
Items that will not be reclassified to net operating costs:
Net gain on:
- revaluation of Property, Plant and Equipment: (1,632) (15,138)
- revaluation of Intangible assets: (77) (852)
Investments in Associates:
- Share of unrecognised (gains)/losses: (2) 185
**Total Other Comprehensive Income**
(1,711) (15,805)
**Total Comprehensive Expenditure for the period ended 31 March**
380,246 399,453
Notes 1 to 31 form part of these accounts Consolidated Statement of Financial Position
as at 31 March 2014
This statement presents the financial position of the Cabinet Office. It comprises three main components; assets owned or controlled; liabilities owed to other bodies; and equity, the remaining value of the entity.
| £000 | As at 31 March 2014 | As at 31 March 2013 | As at 1 April 2012 | |------|---------------------|---------------------|-------------------| | | Departmental Group | Departmental Group | Departmental Group | | Non-current assets | | | | | Property, plant and equipment | 8 | 178,235 | 162,093 | 175,857 | | Investment properties | 9 | 2,288 | 62,265 | - | | Intangible assets | 10 | 4,600 | 6,190 | 4,406 | | Investments in Associates | 17 | 53,695 | 5,882 | - | | Other financial assets | 19 | 2,128 | 1,404 | 1,403 | | Other non-current assets | 21 | 16,450 | - | 354 | | Total non-current assets | | 257,396 | 237,834 | 182,020 | | Current assets | | | | | Other financial assets | 19 | - | 284 | 20 | | Assets held for sale | 20 | 60,000 | - | 44,145 | | Inventories | | 468 | 459 | 417 | | Trade and other receivables | 21 | 52,161 | 54,440 | 59,860 | | Cash and cash equivalents | 22 | 22,646 | 7,093 | 38,978 | | Total current assets | | 135,275 | 62,276 | 143,420 | | Total assets | | 392,671 | 300,110 | 325,440 | | Current liabilities | | | | | Trade and other payables | 23 | (100,484) | (95,600) | (169,779) | | Provisions | 24 | (4,693) | (1,884) | (4,288) | | Total current liabilities | | (105,177) | (97,484) | (174,067) | | Non-current assets less net current liabilities | | 287,494 | 202,626 | 151,373 | | Non-current liabilities | | | | | Provisions | 24 | (3,830) | (10,829) | (13,036) | | Total non-current liabilities | | (3,830) | (10,829) | (13,036) | | Total assets less liabilities | | 283,664 | 191,797 | 138,337 | | Taxpayers’ equity and other reserves | | | | | General fund | | 221,998 | 130,271 | 84,929 | | Revaluation reserve | | 61,666 | 61,526 | 53,408 | | Total equity | | 283,664 | 191,797 | 138,337 |
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
24 June 2014
Notes 1 to 31 form part of these accounts Consolidated Statement of Cash Flows
The Statement of Cash Flows shows the changes in cash and cash equivalents of the Department during the reporting period. The statement shows how the Department generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of service costs and the extent to which these operations are funded by way of income from the recipients of services provided by the Department. Investing activities represent the extent to which cash inflows and outflows have been made for resources which are intended to contribute to the Departments’ future public service delivery. Cash flows arising from financing activities include Parliamentary Supply and other cash flows, including borrowing.
Departmental Group for the period ended 31 March 2014
| £000 | 2013-14 | 2012-13 | Restated | |------|---------|---------|----------| | **Cash flows from operating activities** | | | | | Net operating cost | (381,957) | (415,258) | | | Adjustments for non-cash transactions | 11,662 | 24,541 | | | Remove income from Associates | 48,283 | (5,882) | | | Remove income from dividends | (2,641) | (2,615) | | | Increase in inventories | (9) | (42) | | | (Increase)/Decrease in trade and other receivables | (14,171) | 5,774 | | | **Less movements in receivables relating to items not passing through the Statement of Comprehensive Net Expenditure** | | | | | Movement in amounts relating to provision for doubtful debt | 40 | 371 | | | Amounts relating to bad debt write off | (164) | (80) | | | Increase/(Decrease) in trade and other payables | 4,884 | (74,179) | | | **Less movements in payables relating to items not passing through the Statement of Comprehensive Net Expenditure** | | | | | Amounts due to the Consolidated Fund for Supply | 16,380 | 18,699 | | | Release of deferred income | 8 | 19 | | | Movement in capital accruals relating to investing activities | (593) | 2,153 | | | Amounts relating to Consolidated Fund Standing Services – Elections | 4 | 458 | | | Amounts due to the Consolidated Fund for non voted receipts – Elections | 86 | 8,842 | | | Use of provisions | (1,421) | (4,062) | | | **Net cash outflow from operating activities** | (448,935) | (441,261) | | | **Cash flows from investing activities** | | | | | Purchase of property, plant and equipment | (24,785) | (11,068) | | | Purchase of intangible assets | (1,809) | (3,952) | | | Loans to other bodies | (938) | (444) | | | Net movement in trade payables - capital accruals | 593 | (2,153) | | | Income from dividends – Government Procurement Service | 2,641 | 2,615 | | | Dividends received from Associates | 470 | - | | | Proceeds of disposal of property, plant and equipment | - | 54 | | | Proceeds of disposal of intangible assets | 389 | 20 | | | Repayments from other bodies | 17 | - | | | **Net cash outflow from investing activities** | (23,422) | (14,928) | | | **Cash flows from financing activities** | | | | | From the Consolidated Fund (Supply) – current year | 488,000 | 422,214 | | | From the Consolidated Fund (Supply) – in respect of machinery of government transfer of function | - | 11,390 | | | **Net financing** | 488,000 | 433,604 | | | **Net increase/(decrease) in cash and cash equivalents in the period before adjustment for receipts and payments to the Consolidated Fund** | 15,643 | (22,585) | | | Non-voted receipts surrendered to the Consolidated Fund – Elections | (90) | (9,300) | | | **Net increase/(decrease) in cash and cash equivalents in the period after adjustment for receipts and payments to the Consolidated Fund** | 15,553 | (31,885) | | | Cash and cash equivalents at the beginning of the period | 7,093 | 38,978 | | | Cash and cash equivalents at the end of the period | 22,646 | 7,093 | |
Notes 1 to 31 form part of these accounts Consolidated Statement of Changes in Taxpayers’ Equity
This statement shows the movement in the year on the different reserves held by the Department, analysed into ‘general fund reserves’ (i.e. those reserves that reflect a contribution from the Consolidated Fund). Financing and the balance from the provision of services are recorded here. The Revaluation Reserve reflects the change in asset values that have not been recognised as income or expenditure.
**Departmental Group** for the period ended 31 March 2014
| £000 | General Fund | Revaluation Reserve | Taxpayers’ Equity | |------|--------------|---------------------|------------------| | **Note** | | | | | Restated Balance at 1 April 2012 | 84,929 | 53,408 | 138,337 | | Net Parliamentary Funding – drawn down | 422,214 | - | 422,214 | | Net Parliamentary Funding – deemed | 24,125 | - | 24,125 | | Supply payable adjustment | 23 | (5,426) | - | | Non-voted receipt surrenderable to the Consolidated Fund – Elections | (458) | - | (458) | | Comprehensive Net Expenditure for the year | (415,258) | - | (415,258) | | Assets and liabilities introduced: | | | | | Net gain on revaluation of property, plant and equipment | 8.2 | - | 15,138 | | Net gain on revaluation of intangible assets | 10.2 | - | 852 | | Transfers between reserves | 7,872 | (7,872) | - | | **Restated Balance at 31 March 2013** | 130,271 | 61,526 | 191,797 | | Net Parliamentary Funding – drawn down | 488,000 | - | 488,000 | | Net Parliamentary Funding – deemed | 23 | 5,426 | - | | Supply payable adjustment | 23 | (21,806) | - | | Non-voted receipt surrenderable to the Consolidated Fund – Elections | (4) | - | (4) | | Comprehensive Net Expenditure for the year | (381,957) | - | (381,957) | | **Non-Cash Adjustments** | | | | | Non-cash charges – auditors’ remuneration | 5 | 425 | - | | **Movements in Reserves** | | | | | Net gain on revaluation of property, plant and equipment | 8.1 | - | 1,632 | | Net gain on revaluation of intangible assets | 10.1 | - | 77 | | Transfers between reserves | 1,569 | (1,569) | - | | **Balance at 31 March 2014** | 221,998 | 61,666 | 283,664 |
Notes 1 to 31 form part of these accounts Notes to the Accounts for the period ended 31 March 2014
1. Statement of accounting policies
1.1 Statement of compliance
These financial statements have been prepared in accordance with the 2013-14 Government Financial Reporting Manual (FReM) issued by HM Treasury. The accounting policies contained in the FReM apply International Financial Reporting Standards (IFRS) as adapted or interpreted for the public sector context. Where the FReM permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the Cabinet Office for the purpose of giving a true and fair view has been selected. The particular policies adopted by the Cabinet Office are described below. They have been applied consistently in dealing with items that are considered material to the accounts.
In addition to the primary statements prepared under IFRS, the FReM also requires the Department to prepare one additional primary statement. The Statement of Parliamentary Supply and supporting notes show outturn against Estimate in terms of the net resource requirement and the net cash requirement.
1.2 Basis of preparation
These accounts have been prepared under the historical cost convention modified to account for the revaluation of investment property, property, plant and equipment, intangible assets, inventories and certain financial assets and liabilities at their value to the business by reference to their current costs.
1.3 Basis of consolidation
These accounts comprise a consolidation of the core Department and those Arm’s length bodies which fall within the departmental boundary as defined in the FReM and make up the “Departmental Group”. Transactions between entities included in the consolidation are eliminated. A list of all those entities within the departmental boundary is given at Note 30.
The Civil Service Commission accounts are not material to the Cabinet Office and therefore the core account is not disclosed in the Financial Statements and related Notes.
1.4 Going concern
The financial statements for the Cabinet Office have been prepared on the basis that the Department is a going concern. Spending Review 2010 and Spending Round 2013 set out budgets for 2014-15 and 2015-16 respectively and Parliament has authorised spending for 2014-15 in the Main Estimate published within 'Central Government Supply Estimates 2014-15' HC 1233.
The financial statements for the Civil Service Commission have been prepared on the basis that it is a going concern which is financed by grant-in-aid from the Cabinet Office.
1.5 Restated amounts
Prior year comparatives are restated for changes in accounting policy applied retrospectively and for machinery of government transfers of function.
Following a change in accounting policy applied retrospectively, the opening balance of the general fund is adjusted for the earliest prior period presented such that it is, as if, the new accounting policy had always been applied.
Machinery of government changes which involve the transfer of functions or responsibilities between two or more government departments are accounted for as a business combination using merger accounting principles in accordance with the FReM. Accordingly, the results and cash flows relating to the in-year transferred functions or responsibilities are written in or out of the accounts from the start of the financial year. Prior-year comparatives are restated, with corresponding adjustments being made to the general fund. By so doing, it appears that the Department always existed in its present form. This enables the user of the accounts to make useful comparisons between the data from the prior year to the current year. Further details can be found at Note 2.
1.6 Transfer by Absorption
Transfers of function between public sector bodies (excluding those between central government departments to which merger accounting applies) are accounted for as transfers by absorption.
In accordance with the FReM, the carrying value of the assets and liabilities of the combining bodies or functions are not adjusted to fair value on consolidation. There is no recognition of goodwill and no restatement of comparatives in the primary financial statements. The recorded amounts of net assets/liabilities are brought into the financial statements of the transferee and written out of those of the transferor from the date of transfer. The net asset/liability carrying value is recorded against non-operating gain/loss through net expenditure. Any revaluation reserves are transferred in full with the remaining balance transferred to the General Fund.
On 1 April 2013 the following functions transferred from the Cabinet Office to its executive non-departmental public body, the Civil Service Commission: the Advisory Committee on Business Appointments and the House of Lords Appointments Commission, both advisory non-departmental public bodies and the Office of the Commissioner for Public Appointments. The reason for the transfer is to improve the transparency of the Civil Service Commission’s financial reporting and to remove the need for complex recharges between four units under a single Accounting Officer.
1.7 Judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the date of the Statement of Financial Position (SoFP) and amounts reported for income and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.
Information about the assumptions made about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying value amounts of assets and liabilities within the next financial year are disclosed.
In the process of applying the Department’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:
Public Finance Initiative (PFI) arrangements The classification of Public Finance Initiative (PFI) arrangements as service concession arrangements requires the Department to determine, based on an evaluation of the terms and conditions of the arrangements, whether it controls the infrastructure.
Determining whether an arrangement contains a lease The classification of long term arrangements as containing a lease requires the Department to determine, based on an evaluation of the terms and conditions of the arrangements, whether the arrangement depends on a specific asset or assets and whether the arrangement conveys a right to use the asset.
Operating lease commitments The classification of property, plant and equipment leases as operating or finance lease requires the Department to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets; and, accordingly, whether the lease requires an asset and liability to be recognised in the SoFP. Impairment of assets The Department assesses whether there are any indicators of impairment for all financial and non-financial assets at each reporting date. Assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. Impairments that are due to a clear consumption of economic benefit are recognised in the Statement of Comprehensive Net Expenditure (SoCNE) rather than set against an available revaluation reserve. The treatment of impairments in accounts therefore corresponds with the treatment in departmental budgets and Estimates.
Development costs Initial capitalisation of costs is based on management’s judgement that technological and economical feasibility is confirmed.
1.8 Operating segments Operating segments are based on the main areas of business activity and align with performance reporting and are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker has been identified as the Accounting Officer and the Board.
1.9 Employee benefits
Short term benefits Where an employee has rendered service to the Department during the financial year, the Department recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for that service as an expense. Performance bonuses are not accrued at 31 March since the appraisal process which determines performance pay is only finalised after the accounts have been prepared.
Termination benefits Termination benefits include lump sum payments and payments in lieu of notice. The Department makes provision for termination benefits in cases of compulsory redundancy on announcement of a detailed plan. The Department then accrues for termination benefits in cases of both voluntary and compulsory redundancy at the point at which the employee has accepted the offer made by the Department, and where appropriate, reverses the earlier provision.
1.10 Pensions The majority of past and present employees of the core Department and its eNDPB, the Civil Service Commission, are covered by the provisions of the Principal Civil Service Pension Scheme (PCSPS). The defined benefit schemes are unfunded and are non-contributory except in respect of dependants’ benefits. The Department recognises the expected cost of these elements on a systematic and rational basis over the period during which it benefits from employees’ services by payment to the PCSPS of amounts calculated on an accruing basis. Liability for payment of future benefits is a charge on the PCSPS. In respect of the defined contribution schemes, the Department recognises the contributions payable for the year.
1.11 Administration and programme expenditure and income The SoCNE is analysed between administration and programme income and expenditure. The classification of expenditure and income as administration or as programme follows the definition of administration costs set out in the Consolidated Budgeting Guidance issued by HM Treasury.
Administration costs and operating income reflect the costs of running the Department. Income is analysed between that which is allowed to be offset against gross administration costs in determining the outturn against the gross administration budget and that operating income which is not.
Programme costs include payments of grants and grant-in-aid and other disbursements by the Department, as well as certain staff costs where they relate directly to service delivery. 1.12 Grants
Grants are unrequited payments made by the Department to outside bodies to reimburse expenditure on agreed items or functions and often only paid on statutory conditions being met. Grants may be resource or capital. The Department recognises grant expenditure at the point of cash disbursement.
Grants-in-aid are financing payments made by the Department to a NDPB or other arm’s length body. Grants-in-aid to NDPBs are recognised in the accounts of the core department only and eliminated on consolidation. The Department recognises grants-in-aid at the point of cash disbursement.
1.13 Revenue
Revenue is the gross inflow of economic benefits arising from the ordinary operating activities of the Department and is measured at the fair value of the consideration received or receivable. It is recognised when it is probable that any future economic benefit associated with the item of revenue will flow to the entity and when the amount of revenue can be measured with reliability; it may not be probable until the consideration is received or until an uncertainty is removed.
Operating Income
Operating income is generated by the Department in pursuit of its activities and in managing its affairs. It is stated net of VAT. Operating income principally comprises fees and charges for services provided on a full-cost basis to external customers as well as public re-payment work and includes income due to the Consolidated Fund, which in accordance with the FReM, is treated as operating income. Royalties are recognised on an accruals basis. Dividends are recognised when the Department’s right to receive payment has been established.
Non-operating income
Non-operating income relates to the sale of capital assets and repayment of loan principal. It may be retained to finance related capital spending in cases where it has been described in the income ambit to the Estimate, otherwise it may not be retained and is due to the Consolidated Fund.
Consolidated Fund Extra Receipts (CFERS)
Income which is of a type not anticipated by the Department within its budgets and which therefore has not been described in the income ambit to the Estimate may not be retained for use by the Department and must be paid over to Treasury’s Consolidated Fund. Such income is known as (CFERS). CFERS are accounted for on an accruals basis.
1.14 Value Added Tax
Most of the activities of the core Department are outside the scope of VAT and, in general output tax does not apply and input tax on purchases is not recoverable.
Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets.
Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT. The net amount due to, or from, HM Revenue and Customs in respect of VAT is included within receivables and payables within the SoFP.
Its NDPB, the Civil Service Commission, is not registered for VAT purposes.
1.15 Property, plant and equipment
Property, plant and equipment is recognised initially at cost and thereafter carried at fair value less depreciation and impairment charged subsequent to the date of revaluation, except for art and antiques and properties surplus to requirement. Cost comprises the amount of cash paid to acquire the asset and includes any costs directly attributable to making the asset capable of operating as intended. The capitalisation threshold for expenditure on property, plant and equipment is £5,000.
Land and buildings are restated to fair value every five years (every three years for Sunningdale Park) using professional valuations prepared in accordance with current Royal Institution of Chartered Surveyors Valuation Standards. In the intervening years, if material, changes in fair value are determined by reference to current prices on an active market for similar property.
Residual interests in Private Finance Initiative (PFI) properties are included in property, plant and equipment at the amount of unitary charge allocated for the acquisition of the residual to the date of the SoFP plus an adjustment based on the net present value of the change in fair value of the residual as estimated at the start of the contract and its estimated fair value at the date of the SoFP.
Properties surplus to requirement are valued on the basis of open market value less any directly attributable selling costs where material.
Other operational assets are revalued to open market value where obtainable, or on the basis of depreciated replacement cost where market value is not obtainable. Published indices appropriate to the category of asset are normally used to estimate value.
Art and antiques, including some heritage assets, have been inherited by the Department since its earliest existence and are held mainly in 10 Downing Street and 70 Whitehall. They are subject to professional valuation on the basis of insurance value or mid–auction estimate every five years with the revaluation being taken into the revaluation reserve. They are not depreciated or indexed.
Any revaluation surplus is credited to the revaluation reserve except to the extent that it reverses a decrease in the carrying value of the same asset previously recognised in the SoCNE, in which case the increase is recognised in the SoCNE. A revaluation deficit is recognised in the SoCNE, except to the extent of any existing surplus in respect of that asset in the revaluation reserve.
1.16 Depreciation on property, plant and equipment
Property, plant and equipment are depreciated at rates calculated to write them down to estimated residual value on a straight-line basis over their estimated useful lives. Useful lives and residual values are reviewed annually and, where adjustments are required, these are made prospectively.
Asset lives are normally in the following ranges:
- Freehold buildings including dwellings: 25 to 55 years
- Leasehold building improvements: over the remaining term of the lease
- Plant and equipment: 3 to 10 years
- Furniture and fittings: 5 to 7 years
- IT hardware and office equipment: 3 to 5 years
- Vehicles: 3 to 5 years
The following exceptions apply to the asset lives for property, plant and equipment at the Sunningdale Park site in Berkshire:
- Freehold buildings including dwellings: 25 to 60 years
- Furniture and fittings: 5 to 20 years
Assets in the course of construction are not depreciated until the assets are available for use. Residual interests in PFI contract assets are not depreciated until the asset reverts to the Department. No depreciation is provided on freehold land and items for collections since they have unlimited or very long estimated useful lives, nor on non-current assets held for sale. Assets continue to depreciate until they are derecognised, even if during that period they are idle. The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable. If an asset is determined to be impaired, the asset is written down immediately to its recoverable amount.
1.17 Donated Assets
The value of donated assets is recognised as income and credited to the general fund. Any subsequent revaluation surplus is credited to the revaluation reserve except to the extent that it reverses a decrease in the carrying value of the same asset previously recognised in the SoCNE; in which case the increase is recognised in the SoCNE. A revaluation deficit is recognised in the SoCNE, except to the extent of any existing surplus in respect of that asset in the revaluation reserve.
Gifts of ornaments and jewellery received by past and present Prime Ministers and their spouses are treated as donated assets within Art and Antiques and capitalised at their fair value on receipt. They are subject to professional valuation every five years. Gifts are not depreciated, since, by their nature, their useful economic life is indefinite.
The Civil Service Club is recognised as a donated asset. Members of the Civil Service and the Foreign Service contributed to the wedding present for Her Majesty the Queen and part of the sum subscribed was, by her wish, applied to some object of general benefit to the Civil and Foreign Services and consequently the Civil Service Club was purchased; see Note 8.
1.18 Investment Properties
Properties held to earn rentals, capital appreciation or both are recognised as investment properties at fair value.
Fair value of investment properties is based on professional valuations every five years (every three years for Sunningdale Park), or, if available for an individual investment property, by reference to an agreed sale price on an active market. In the intervening years, if material, changes in fair value are recognised by reference to current prices on an active market for similar property. Changes arising from valuations are recognised directly in the SoCNE. The Department does not depreciate its investment properties.
1.19 Intangible assets and amortisation
Intangible assets are defined as identifiable non-monetary assets without physical substance. Software that is embedded in computer-controlled equipment that cannot operate without that specific software is an integral part of the related hardware and is treated as property, plant and equipment.
Intangible assets are measured on initial recognition at cost. The capitalisation threshold for expenditure on intangible assets is £5,000. Following initial recognition, where an active market exists, intangible assets are carried at fair value at the SoFP. Where no active market exists, the Department uses published indices to assess the depreciated replacement cost.
The useful lives of intangible assets are assessed to be either finite or indefinite. All intangible assets are currently assessed to have a finite life of between three and five years and are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year end. Assets in the course of construction are not amortised until the assets are brought into use.
Software licences
Externally-acquired computer software licences are amortised over the shorter of the term of the licence and the useful economic life of three to five years. As reliable evidence of market value could not be obtained, these have not been re-valued. Research and development
Research costs are expensed as incurred. Development expenditure is recognised as an intangible asset when the Department can demonstrate: the technical feasibility of completing the intangible asset so that it will be available for use; its intention to complete and its ability to use the asset, how the asset will generate future economic benefits; the availability of resources to complete the asset; and the ability to measure reliably the expenditure during development.
Following initial recognition of development expenditure as an asset, where an active market exists, the asset is subsequently measured at fair value. Where no active market exists, the asset is carried at amortised replacement cost, indexed for relevant price increases, as a proxy for fair value. Expenditure which does not meet the criteria for capitalisation is treated as an operating cost in the year in which it is incurred.
1.20 Leases
Assets held under finance leases, which transfer to the Department substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease, with a corresponding liability being recognised for the lower of the fair value of the leased asset and the present value of the minimum lease payments.
Lease payments are apportioned between the reduction of the lease liability and finance charges in the SoCNE so as to achieve a constant rate of interest on the remaining balance of the liability. Assets held under finance leases are depreciated over the shorter of the estimated useful life of the asset and the lease term.
Leases where the lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases and the rentals payable are charged to the SoCNE on a straight-line basis over the lease term.
1.21 Private Finance Initiative (PFI) Transactions
PFI transactions are accounted for in accordance with IFRIC 12 and IAS 17, as interpreted for the public sector by the FReM.
Where the Department has control over a PFI asset, or where the Department does not have control but the balance of risks and rewards of control is borne by the Department, the asset is recognised as a non-current asset. The Department recognises a liability for the capital value of the contract. That liability does not include interest charges and service elements, which are expensed annually to the Statement of Comprehensive Net Expenditure.
Assets are revalued in accordance with the revaluation policy for property, plant and equipment (Note 1.15) and intangible assets (Note 1.19). Liabilities are measured using the appropriate discount rate.
Where the Department does not have control over the PFI asset and the balance of risks and rewards of control are borne by the PFI operator, the PFI payments are recorded as an expense in the Statement of Comprehensive Net Expenditure.
Where the Department has contributed assets to a PFI operator, a prepayment for their fair value is recognised and amortised over the life of the PFI contract. Amortisation is recognised as an expense to the Statement of Comprehensive Net Expenditure. Where at the end of the PFI contract, a property reverts to the Department, the difference between the expected fair value of the residual on reversion and any agreed payment on reversion is built up over the life of the contract by capitalising part of the unitary charge each year. The values for both of these elements (the prepayment and the reversionary interest) are recognised as Property, Plant and Equipment. The element of a property covered by a lease granted to a PFI operator, and for which sub-leases are granted to the Department for continued occupation, is recognised as an investment property. 1.22 Financial assets
Financial assets are recognised when the Department becomes party to the contracts that give rise to them and are classified as: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or as available-for-sale financial assets as appropriate. The Department determines the classification of its financial assets at initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end.
When financial assets are recognised initially, they are measured at fair value, except for loans, Public Dividend Capital (PDC) and other interests in public bodies outside the departmental boundary which are reported at historical cost less any impairment.
Fair value is determined as the transaction price plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. The Department considers whether a contract contains an embedded derivative when the entity first becomes party to it. Embedded derivatives are separated from the host contract if the contract is not measured at fair value through profit or loss and when the economic characteristics and risks are not closely related to those of the host contract.
The subsequent measurement of financial assets depends on their classification. The following classifications are currently applicable:
**Investments in other bodies** Loans, Public Dividend Capital (PDC) and other interests in public bodies outside the departmental boundary are shown at historical cost, less any impairment.
In the past, the Cabinet Office has issued loans to the London Hostels Association, LHA London Ltd, which have been repaid during 2013-14.
Loans issued by the Cabinet Office to the Bridges Social Entrepreneurs’ Fund LP are recognised at the point of the disbursement under the terms set out in the Limited Partnership Agreement. Bridges Social Entrepreneurs’ Fund LP is an entity which lies outside the departmental boundary and consequently the loans are reported at historical cost less any impairment. The impairment is assessed as the difference between the cost of the loan issued and the Department’s share of the net asset value as reported in the Bridges Social Entrepreneurs’ Fund LP accounts. The net asset value equals the sum of the investment value at cost in the initial year and marketable value in subsequent years, adjusted for other net assets.
The Cabinet Office has Public Dividend Capital held within the Government Procurement Service. The Cabinet Office assesses at 31 March whether there is objective evidence that this asset is impaired in terms of whether there has been a decline in value below its cost. Dividends are recognised in the SoCNE when the Department’s right to receive payment is established.
**Loans and receivables** Trade and other receivables are recognised and carried at the lower of their original invoiced value and recoverable amount. Where the time value of money is material, receivables are subsequently measured at amortised cost. Provision is made when there is objective evidence that the Department will not be able to recover balances in full. Balances are written off when the probability of recovery is assessed as being remote.
Financial assets are derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
1.23 Investments in associates
An associate is an entity in which the Department has significant influence, but not control or joint control, being the power to participate in, but not control, the financial and operating policy decisions of the associate investee. It is assumed that associate status exists where the Department has a shareholding of 20% or more. Investments in associates are required to be accounted for using the equity method whereby an investment is initially recorded at cost and subsequently adjusted to reflect the Department’s share of the net profit or loss, and thereby of the net assets, and of the other comprehensive income of the associate. Dividend distributions received from the associate reduce the carrying amount of the investment. Recoverable amounts are assessed for each individual associate.
In cases where the associate’s and the Department’s reporting periods are not co-terminous but are no greater than 3 months apart, the Department uses the most recent audited financial statements of the associate in applying the equity method of accounting and, where necessary, makes adjustments for the effects of significant transactions up to the reporting date of the Department’s financial statements.
In cases where the associate’s and the Department’s accounting policies are not uniform, then where material, adjustments are made.
1.24 Assets classified as held for sale
Assets held for sale are assets where the carrying amount will be recovered principally through a sale transaction rather than through continuing use.
For an asset to be classified as held for sale, it must be available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets; its sale must be highly probable; and it must genuinely be expected to be sold, not abandoned. Items of property, plant and equipment that are classified as held for sale are written down to fair value less costs to sell (if lower than its carrying value), and are not depreciated further.
1.25 Inventories
Inventories of insignia are valued at the lower of original cost and replacement cost.
1.26 Cash and cash equivalents
Cash in the SoFP comprises cash at bank and in hand. Any overdraft will be recorded as a creditor. For the purpose of the Cash Flow Statement, cash and cash equivalents consist of cash, net of outstanding bank overdrafts.
1.27 Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.
Other financial liabilities
Trade and other payables are recognised at cost, which is deemed to be materially the same as the fair value. Where the time value of money is material, payables are subsequently measured at amortised cost.
Financial liabilities are derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
1.28 Provisions
A provision is recognised when the Department has a legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect is material, expected future cash flows are discounted using real rates set by HM Treasury which are short-term (0-1 year) -1.90% (2012-13: -1.80%), medium-term (1-5 years) -0.65% (2012-13: -1%) and long-term (5+ years) 2.20% (2012-13: 2.20%) with effect from 31 March 2014.
For early departure costs the Department establishes a provision for the estimated payments discounted by the Treasury discount rate of 1.80% (2012-13: 2.35%) in real terms. Where discounting is used, the increase in the provision due to borrowing costs is recognised as a finance cost. 1.29 Contingent liabilities and contingent assets
Contingent assets and liabilities are not recognised as liabilities or assets in the SoFP but are disclosed in the notes to the accounts in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
A contingent liability is a possible obligation arising from past events whose existence will be confirmed only by uncertain future events or present obligation arising from past events that are not recognised because either an outflow of economic benefit is not probable or the amount of the obligation cannot be reliably measured.
The Department discloses a contingent asset where it is probable there will be an inflow of economic benefits from an event whose outcome is uncertain. An estimate of the financial effect is indicated where possible.
In addition to contingent assets and liabilities disclosed in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the Department discloses for parliamentary reporting and accountability purposes certain statutory and non-statutory contingent liabilities where the likelihood of a transfer of economic benefit is remote, but which have been reported to Parliament in accordance with the requirements of Managing Public Money.
Where the time value of money is material, contingent liabilities which are required to be disclosed under IAS 37 are stated at discounted amounts and the amount reported to Parliament separately noted. Contingent liabilities that are not required to be disclosed by IAS 37 are stated at the amounts reported to Parliament.
1.30 Impending application of newly issued accounting standards not yet effective
Certain new standards, interpretations and amendments to existing standards have been published that the Department will be required to apply on or after 1 April 2014 or later periods, following EU-adoption and as applied by the FReM. The Department provides disclosure that it has not yet applied a new accounting standard, and known or reasonably estimable information relevant to assessing the possible impact that initial application of the new standard will have on the Department’s financial statements. The Department will assess the impact of these standards.
Effective 1 January 2013:
IFRS 10 ‘Consolidated Financial Statements’ Definition of control requires more judgement, notably of agency-principal relationships.
IFRS 11 ‘Joint Arrangements’ This provides a principles-based definition of joint arrangements (joint operations or joint ventures) based on rights and obligations. Proportional consolidation accounting for joint ventures is no longer permitted (only equity accounting).
IFRS 12 ‘Disclosure of Interests in Other Entities’ This requires more disclosure of the financial effects on, and risks to, the consolidating entity.
IAS 27 ‘Consolidated and Separate Financial Statements’ - Amendment
IAS 28 ‘Investments in Associates and Joint Ventures’ – Amendment
IFRS 13 ‘Fair Value Measurement’ This will provide consistent guidance on fair value measurement for all relevant balances and transactions covered by IFRS.
## 2. Restatement of prior year comparatives
| £000 | 2012-13 Published Accounts | Machinery of government transfers | 2012-13 Restated Accounts | |------|-----------------------------|---------------------------------|---------------------------| | | Royal Mail Statutory Pension Scheme¹ | Youth Policy | | | **Expenditure** | | | | | Staff costs | 138,680 | 206 | - | 138,886 | | Administration costs | 169,488 | 6,016 | - | 175,504 | | Programme costs excluding staff costs, grants and election expenses | 101,977 | - | - | 101,977 | | Programme grants | 113,246 | - | 5,285 | 118,531 | | **Total expenditure** | 523,391 | 6,222 | 5,285 | 534,898 | | **Income** | | | | | Administration | (94,277) | (117) | - | (94,394) | | Programme | (19,364) | - | - | (19,364) | | Income from Associates | (5,882) | - | - | (5,882) | | **Total income** | (119,523) | (117) | - | (119,640) | | **Total Net Operating Costs** | 403,868 | 6,105 | 5,285 | 415,258 |
### Statement of Comprehensive Net Expenditure for the year ended 31 March 2013
| **Expenditure** | | | | | Property, plant and equipment | 162,093 | - | - | 162,093 | | Investment properties | 62,265 | - | - | 62,265 | | Intangible assets | 6,190 | - | - | 6,190 | | Investments in Associates | 5,882 | - | - | 5,882 | | Other financial assets | 1,688 | - | - | 1,688 | | Inventories | 459 | - | - | 459 | | Trade and other receivables | 54,440 | - | - | 54,440 | | Cash and cash equivalents | 7,093 | - | - | 7,093 | | Trade and other payables | (95,600) | - | - | (95,600) | | Provisions | (12,713) | - | - | (12,713) | | **Total net assets** | 191,797 | - | - | 191,797 |
### Taxpayers’ equity
| **General fund** | 130,271 | - | - | 130,271 | | **Revaluation reserve** | 61,526 | - | - | 61,526 | | **Total** | 191,797 | - | - | 191,797 |
### Average number of persons employed:
| **Permanently employed staff** | 1,896 | 3 | - | 1,899 | | **Commissioners** | 2 | - | - | 2 | | **Others²** | 85 | - | - | 85 | | **Ministers** | 8 | - | - | 8 | | **Special advisers** | 46 | - | - | 46 | | **Total** | 2,037 | 3 | - | 2,040 |
¹ This represents the management and administration of the Royal Mail Statutory Pension Scheme (RMSPS). RMSPS has its own separate Estimate and Accounts ² ‘Others’ category represents agency/temporary staff
## 2. Restatement of prior year comparatives (continued)
### Statement of Cash Flows for the year ended 31 March 2013
#### Cash flows from operating activities
| Description | 2012-13 Published Accounts | 2012-13 Restated Accounts | |----------------------------------------------------------------------------|-----------------------------|---------------------------| | Net operating cost | (403,868) | (415,258) | | Adjustments for non-cash transactions | 24,541 | 24,541 | | Remove income from Associates | (5,882) | (5,882) | | Remove income from dividends | (2,615) | (2,615) | | Increase in inventories | (42) | (42) | | Decrease in trade and other receivables | 5,774 | 5,774 | | **Less movements in receivables relating to items not passing through the Statement of Comprehensive Net Expenditure** | | | | Movement in amounts relating to provision for doubtful debt | 371 | 371 | | Amounts relating to bad debt write off | (80) | (80) | | Decrease in trade and other payables | (74,179) | (74,179) | | **Less movements in payables relating to items not passing through the Statement of Comprehensive Net Expenditure** | | | | Amounts due to the Consolidated Fund for Supply | 18,699 | 18,699 | | Release of deferred income | 19 | 19 | | Movement in capital accruals relating to investing activities | 2,153 | 2,153 | | Amounts relating to Consolidated Fund Standing Services – Elections | 458 | 458 | | Amounts due to Consolidated Fund for non voted receipts - Elections | 8,842 | 8,842 | | Use of provisions | (4,062) | (4,062) | | **Net cash outflow from operating activities** | (429,871) | (441,261) |
#### Cash flows from investing activities
| Description | 2012-13 Published Accounts | 2012-13 Restated Accounts | |----------------------------------------------------------------------------|-----------------------------|---------------------------| | Purchase of property, plant and equipment | (11,068) | (11,068) | | Purchase of intangible assets | (3,952) | (3,952) | | Loans to other bodies | (444) | (444) | | Net movement in trade payables - capital accruals | (2,153) | (2,153) | | Proceeds of disposal of property, plant and equipment | 54 | 54 | | Income from dividends | 2,615 | 2,615 | | Repayments from other bodies | 20 | 20 | | **Net cash outflow from investing activities** | (14,928) | (14,928) |
#### Cash flows from financing activities
| Description | 2012-13 Published Accounts | 2012-13 Restated Accounts | |----------------------------------------------------------------------------|-----------------------------|---------------------------| | From the Consolidated Fund (Supply) – current year | 422,214 | 422,214 | | From the Consolidated Fund (Supply) in respect of machinery of government transfer of function | - | 11,390 | | **Net financing** | 422,214 | 433,604 |
#### Net decrease in cash and cash equivalents in the period before adjustment for receipts and payments to the Consolidated Fund
| Description | 2012-13 Published Accounts | 2012-13 Restated Accounts | |----------------------------------------------------------------------------|-----------------------------|---------------------------| | **Net decrease in cash and cash equivalents in the period before adjustment for receipts and payments to the Consolidated Fund** | (22,585) | (22,585) |
## 2. Restatement of prior year comparatives (continued)
| £000 | 2012-13 Published Accounts | Machinery of government transfers | 2012-13 Restated Accounts | |------|-----------------------------|---------------------------------|---------------------------| | | Royal Mail Statutory Pension Scheme | Youth Policy | |
### Statement of Cash Flows (continued)
- **Non-voted receipts surrendered to the Consolidated Fund - Elections**: (9,300) - - (9,300)
- **Net decrease in cash and cash equivalents in the period after adjustment for receipts and payments to the Consolidated Fund**: (31,885) - - (31,885)
- **Cash and cash equivalents at the beginning of the period**: 38,978 - - 38,978
- **Cash and cash equivalents at the end of the period**: 7,093 - - 7,093
### Statement of Financial Position as at 1 April 2012
**Total net assets**
- Property, plant and equipment: 175,857 - - 175,857
- Intangible assets: 4,406 - - 4,406
- Other financial assets: 1,423 - - 1,423
- Other non current assets: 354 - - 354
- Assets held for sale: 44,145 - - 44,145
- Inventories: 417 - - 417
- Trade and other receivables: 59,860 - - 59,860
- Cash and cash equivalents: 38,978 - - 38,978
- Trade and other payables: (169,779) - - (169,779)
- Provisions: (17,324) - - (17,324)
**Total net assets**: 138,337 - - 138,337
**Taxpayers’ equity**
- General fund: 84,929 - - 84,929
- Revaluation reserve: 53,408 - - 53,408
**Taxpayers’ equity**: 138,337 - - 138,337
### 3. Statement of Net Resource Outturn by Operating Segment
| Operating Segment | Note | 2013-14 Gross Outturn | 2013-14 Income | 2013-14 Net Outturn | 2012-13 Restated Gross Outturn | 2012-13 Restated Income | 2012-13 Restated Net Outturn | |--------------------------------------------------------|------|-----------------------|----------------|---------------------|-------------------------------|-------------------------|-----------------------------| | Support to the Cabinet, PM & Deputy PM | 82,129 | (21,861) | 60,268 | 68,436 | 85,183 | (16,747) | 68,436 | | Political & Constitutional Reform | 26,587 | (352) | 26,235 | 11,800 | 13,008 | (1,208) | 11,800 | | National Security | 39,386 | (5,406) | 33,980 | 52,261 | 59,682 | (7,421) | 52,261 | | Efficiency & Reform | 189,040 | (123,052) | 65,988 | 99,102 | 160,736 | (61,634) | 99,102 | | Government Innovation Group | 221,013 | (6,492) | 214,521 | 168,567 | 187,465 | (18,898) | 168,567 | | Transactional Shared Services | 30,403 | (29,838) | 565 | - | - | - | - | | Independent Business Units | 3,039 | (3,003) | 36 | 1,915 | 4,012 | (2,097) | 1,915 | | Civil Service Commission | 2,303 | (12) | 2,291 | 1,470 | 1,644 | (174) | 1,470 | | **Subtotal** | 593,900 | (190,016) | 403,884 | 403,551 | 511,730 | (108,179) | 403,551 | | Consolidated Fund Standing Services – UK Members of European Parliament | 1,826 | - | 1,826 | 1,831 | 1,831 | - | 1,831 | | Ring fenced depreciation, amortisation, impairment and provision for doubtful debt | 13,670 | - | 13,670 | 8,009 | 8,009 | - | 8,009 | | Audit fee | 495 | - | 495 | 425 | 425 | - | 425 | | **Total Resource DEL** | 609,891 | (190,016) | 419,875 | 413,816 | 521,995 | (108,179) | 413,816 |
The segmental analysis has been prepared to align with the reporting of the Cabinet Office’s structure, where units within the Department have been organised into pillars, which are represented by the segments shown above. Financial information is reported through a regular Performance Report, which adopts the segmental analysis shown above. The Performance Report is reviewed by the Cabinet Office Board, chaired by the Minister for the Cabinet Office, and also the Executive Management Committee (EMC), chaired by the Accounting Officer.
The segmental analysis total net outturn in Resource Departmental Expenditure Limit agrees to SOPS2.1. Overall outturn at SOPS2.1 includes Resource Annually Managed Expenditure and is reconciled to net operating costs at SOPS3.1. Explanations on year on year variance may be found in the Financial Review section. Corporate Services Group net DEL outturn as reported in SOPS2.1 is allocated across operating segments in proportion to their gross expenditure and gross income, except for Transactional Shared Services.
**Support to the Cabinet, Prime Minister and Deputy Prime Minister**
This segment provides support to the Cabinet, to drive the coherence, quality and delivery of policy and operations across departments, and provides support to the Prime Minister and Deputy Prime Minister, to define and deliver the government’s objectives, implement political and constitutional reform, and drive forward from the centre particular cross-departmental priority issues.
**Political and Constitutional Reform**
This segment covers the work of Political and Constitutional Reform, which provides support to the Deputy Prime Minister and Minister for Political and Constitutional Reform in delivering the wide-ranging political and constitutional reform agenda set out in the coalition’s Programme for Government. Political and Constitutional Reform delivers day-to-day policy and operational work on issues relating to the constitutional structure of the UK and electoral law, policy and conduct and also includes the Office of the Privy Council, and supports ministerial sponsorship of the Independent Parliamentary Standards Authority (IPSA) and the Boundary Commissions for England and Wales. The segment also covers the implementation of individual electoral registration to tackle electoral fraud and improve the system of voter registration which will come into force in 2014. 3. Statement of Net Resource Outturn by Operating Segment (continued)
National Security
This segment covers the work of the National Security Secretariat (NSS), responsible for defence and foreign affairs as well as intelligence, security and resilience issues. NSS advises the Prime Minister and ministers on the Government’s response to cross-cutting strategic issues relating to intelligence and leads on intelligence assessment and priorities through the central intelligence machinery. It coordinates the Government’s response to civil emergencies, terrorist incidents and international crises. It is also responsible for the Single Intelligence Account, which funds the work of the UK intelligence agencies. It works in partnership with all government units with a security or intelligence remit as well as the security and intelligence agencies.
Efficiency and Reform
This segment covers the work carried out by the areas previously combined together as the Efficiency and Reform Group (ERG). ERG was created in early 2010-11, to bring together a range of functions previously scattered between departments to lead and drive substantial changes and reforms in Civil Service HR, ICT, commercial and procurement, estates and other support functions. The Efficiency and Reform Group (ERG) works in partnership with HM Treasury and government departments to deliver efficiencies, savings and reforms on behalf of UK taxpayers. ERG aims to transform the way public services are delivered, improve user experience and support UK growth. ERG includes Government Property Unit (GPU) and the Government Digital Service.
The Civil Service Reform Group is responsible for delivering the Civil Service Reform Plan (published June 2012) which set out a series of specific and practical actions for reform, which, when implemented, will lead to real change for the Civil Service. It will equip a smaller Civil Service to meet current and future challenges, including the demands of public sector reform and rising consumer expectations, as well as economic and financial challenges.
Government Innovation Group
The Government Innovation Group develops new approaches to tackle social problems in order that public services can deliver better with less. It is made up of Civil Society, which now also has lead responsibility for Youth Policy, Transparency, Analysis and Insight, Open Policy Making teams and for most of the year Behavioural Insights.
Transactional Shared Services
The Cabinet Office became accountable for the Department for Work and Pensions (DWP) Shared Service Centre (SSC) from 1 April 2013 until the Shared Services Connected Ltd associate was created from 1 November 2013. The programme costs and income relating to Transactional Shared Services are for monies paid and collected by the Cabinet Office in relation to the services provided by SSC.
Independent Business Units
This segment covers the Independent Business Units which are hosted by the Cabinet Office. The Cabinet Office is often tasked to lead with inquiries, reports, and other areas of work which require independence, but which work across a number of Departments. The work covered by this segment includes the Iraq Inquiry, Detainee Inquiry, Committee for Standards in Public Life and the Intelligence and Security Committee.
Civil Service Commission
This is an executive non-departmental public body whose accounts are consolidated with the Cabinet Office; see Note 30.
### 4. Staff numbers and related costs
**Staff costs comprise:**
| | Permanently employed staff | Commissioners | Others | Ministers | Special advisers | Total | Total | |----------------------|-----------------------------|---------------|--------|-----------|------------------|-------|-------| | **Wages and salaries** | 98,847 | 362 | - | 422 | 3,513 | 103,144 | 95,872 | | **Social security costs** | 9,364 | 37 | - | 42 | 343 | 9,786 | 9,388 | | **Other pension costs** | 19,273 | - | - | - | 746 | 20,019 | 19,056 | | **Agency/temporary** | 791 | - | 30,622 | - | - | 30,622 | 13,814 | | **Sub total** | 128,275 | 399 | 30,622 | 464 | 4,602 | 164,362 | 138,433 | | **Inward secondments** | - | - | 6,304 | - | - | 6,304 | 5,709 | | **Total** | 128,275 | 399 | 36,926 | 464 | 4,602 | 170,666 | 144,142 | | **Less:** | | | | | | | | | **Recoveries in respect of outward secondments** | - | - | (2,658) | - | (2,658) | (2,525) | | | **Total staff costs** | 128,275 | 399 | 34,268 | 464 | 4,602 | 168,008 | 141,617 | | **Staff engaged on Capital projects** | (353) | - | (429) | - | (782) | (2,731) | | | **Total net staff costs** | 127,922 | 399 | 33,839 | 464 | 4,602 | 167,226 | 138,886 |
1 £762,509 has been charged to capital
| | 2013-14 | 2012-13 Restated | |----------------------|---------|------------------| | **Charged to Administration budgets** | 113,307 | 137,981 | | **Charged to Programme budgets** | 53,347 | (782) | | **Charged to Capital budgets** | (782) | 165,872 | | **Total (Post Consolidation)** | 165,872 | 105,225 | | **Charged to Administration budgets** | 35,487 | (2,731) | | **Charged to Programme budgets** | - | - | | **Charged to Capital budgets** | - | - | | **Total (Post Consolidation)** | 35,487 | (2,731) |
2 The net amount charged to Programme budgets is £52.565m (2012-13: £32.756m) as shown within the Statement of Comprehensive Net Expenditure
During the year, costs of £20,019,716 were incurred in respect of pensions (2012-13 Restated: £19,055,524).
Of this amount, £19,905,719 (2012-13 Restated: £18,976,814) was borne by the core department and £113,997 was borne by the Civil Service Commission (2012-13: £78,710).
The following analysis is in respect of the core department:
The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer defined benefit scheme but the Cabinet Office is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the scheme as at 31 March 2007. Details can be found in the Accounts of the Cabinet Office: Civil Superannuation (www.civilservice.gov.uk/pensions).
For 2013-14, employers’ contributions of £19,034,241 were payable to the PCSPS (2012-13 Restated: £17,432,276) at one of four rates in the range 16.7% to 24.3% of pensionable pay, based on salary bands. The scheme Actuary reviews employer contributions usually every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2013-14 to be paid when the member retires and not the benefits paid during this period to existing pensioners. 4. Staff numbers and related costs (continued)
Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers’ contributions of £116,216 (2012-13: £100,461) were paid to one or more of the panel of three appointed stakeholder pension providers. Employer contributions are age-related and range from 3% to 12.5% of pensionable pay. Employers also match employee contributions up to 3% of pensionable pay.
In addition, employer contributions of £8,750 (2012-13: £6,658), 0.8% of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death-in-service and ill-health retirement of these employees.
Contributions due to the partnership pension providers at the reporting period date were £11,814 (2012-13: £7,123). Contributions prepaid at that date were £Nil (2012-13: £Nil).
Special advisers’ pension costs incurred during the year were £746,512 (2012-13: £496,352).
In 2012-13, the Department recognised a liability to pay a debt to the Trustees of the Labour Party Superannuation Society in the amount of £941,067. It represented a funding shortfall for benefits built up by special advisers and was due from the Crown following its cessation as a participating employer in its pension scheme. This shortfall was settled during 2013-14.
During the year three individuals (2012-13: one individual) retired early on ill-health grounds; the total additional accrued pension liabilities in the year amounted to £28,754 (2012-13: £2,610).
Average number of persons employed
The average number of whole time equivalent persons employed during the year was as follows. These figures include those working in the Department as well as other bodies included within the consolidated departmental accounts.
| Operating Segment | Permanently employed staff | Commissioners | Others | Ministers | Special advisers | Total | Total Restated | |-------------------|---------------------------|--------------|--------|-----------|-----------------|-------|---------------| | Support to the Cabinet, the PM & the Deputy PM | 609 | - | 2 | 9 | 52 | 672 | 641 | | Political & Constitutional Reform | 116 | - | 3 | - | - | 119 | 115 | | National Security | 225 | - | 4 | - | - | 229 | 242 | | Government Innovation Group | 162 | - | - | - | - | 162 | - | | Efficiency & Reform | 720 | - | 214 | - | - | 934 | 760 | | Hosted Functions | 11 | - | - | - | - | 11 | 9 | | Corporate Services Group | 167 | - | 2 | - | - | 169 | 187 | | Executive NDPBs | 16 | 3 | - | - | - | 19 | 14 | | Staff engaged on Capital projects | 9 | - | 3 | - | - | 12 | 72 | | Total | 2,035 | 3 | 228 | 9 | 52 | 2,327 | 2,040 |
Of which:
| | 2013-14 | 2012-13 | |-------------------|---------|---------| | Core Department | 2,019 | 2,026 | | NDPBs | 16 | 14 | | Total | 2,035 | 2,040 |
1 Permanent staff headcount is further analysed at Table 5 in the Financial Review where it is presented on the basis of actual headcount at 31 March 2 Commissioners receive emoluments for board fees 3 ‘Others’ category represents agency / temporary staff
### 4.1. Reporting of Civil Service and other compensation schemes – exit packages
| Exit package by cost band | Number of compulsory redundancies | Number of other departures agreed | Total number of exit packages by cost band | Total number of exit packages by cost band | |---------------------------|-----------------------------------|----------------------------------|------------------------------------------|------------------------------------------| | \<£10,000 | _ | _ | _ | 1 | | £10,000 - £25,000 | _ | 5 | 5 | _ | | £25,000 - £50,000 | _ | 9 | 9 | 2 | | £50,000 - £100,000 | _ | 2 | 2 | _ | | £100,000-£150,000 | _ | _ | _ | 2 | | £150,000-£200,000 | _ | 2 | 2 | _ | | Total number of exit packages | _ | 18 | 18 | 5 | | Total cost | _ | £791,491 | £791,491 | £302,595 |
Redundancy and other departure costs have been paid in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972. Exit costs are accounted for in full in the year in which the departure was agreed as binding. Where the Department has agreed early retirements, the additional costs are met by the Department and not by the Civil Service pension scheme. Ill-health retirement costs are met by the pension scheme and are not included in the table.
The termination benefits of £791,491 (2012-13: £302,595) are included in the staff costs and in the exit package table.
## 5. Other administration costs
| £000 | 2013-14 | 2012-13 Restated | |------|---------|-----------------| | | Departmental Group | Departmental Group | | **Rentals under operating leases** | | | | Hire of plant and machinery | - | 127 | | Land and buildings | 11,901 | 11,567 | | **Total rentals under operating leases** | 11,901 | 11,694 | | **Lease surrender premium** | - | 16,350 | | **PFI and other service concession arrangements** | | | | Service charges | 968 | 2,242 | | **Interest charges** | 132 | 121 | | **EU Funding received – transferred to DfID** | 7 | 731 | | **Goods and services** | | | | Pensions administration fee – MyCSP Limited | 29 | 32,515 | 30,834 | | Pensions administration additional costs – MyCSP Limited | 29 | 12,444 | 3,157 | | Pensions administration fee – Royal Mail Statutory Pension Scheme | 4,740 | 5,687 | | Pensions administration additional costs - Royal Mail Statutory Pension Scheme | 166 | 328 | | Transactional Shared Services | 7.1 | 30,403 | - | | Accommodation and utilities | 17,784 | 24,039 | | Business rates | 2,722 | 2,846 | | IT costs | 22,282 | 16,649 | | Consultancy | 23,819 | 5,136 | | Professional services | 25,759 | 25,684 | | Supplies and services | 10,778 | 12,299 | | Other staff-related costs | 2,170 | 2,966 | | Travel, subsistence and hospitality | 5,641 | 6,420 | | Auditors’ remuneration and expenses – NDPBs | 7 | 7 | | Competition fees paid to Commissioners | - | 167 | | **Total goods and services** | 191,230 | 136,019 | | **Non-cash items** | | | | Depreciation | 8 | 4,896 | 5,396 | | Release of deferred income | (8) | - | | Amortisation | 10 | 113 | 276 | | Impairment – Property, plant and equipment | 8, 11 | 4,603 | 2,891 | | Impairment – Intangible assets | 10, 11 | 709 | - | | Loss on disposal of property, plant and equipment | 8 | - | 9 | | Loss on disposal of PPE - donated assets | 8 | - | 4 | | Auditors’ remuneration and expenses – Core Department | 495 | 425 | | Bad debt write off | 167 | - | | Provision for bad debt | 21 | 181 | - | | Carbon Dioxide Emissions | 10 | - | 77 | | **Total non-cash items** | 11,156 | 9,078 | | **Total** | 216,118 | 175,504 |
1 During the year the Department and its NDPBs have not purchased any non-audit services from its auditors, the National Audit Office (2012-13: £Nil)
### 6. Programme costs
| £000 | 2013-14 | 2012-13 Restated | |------|---------|-----------------| | | Departmental Group | Departmental Group | | **Rentals under operating leases** | | | | Land and buildings | 2,716 | 1,338 | | **Total rentals under operating leases** | 2,716 | 1,338 | | **PFI and other service concession arrangements service charges** | - | 2,418 | | **Goods and services** | | | | Accommodation and utilities | 8,451 | 8,083 | | Business rates | 877 | 1,032 | | Consultancy | 4,316 | 1,061 | | Professional services | 452 | 123 | | Grant fund management services | 2,823 | 1,286 | | IT costs | 22,241 | 16,833 | | Other staff-related costs | 1,182 | 659 | | Supplies and services | 53,805 | 51,774 | | Lord Lieutenants’ expenses | 1,305 | 1,377 | | Travel, subsistence and hospitality | 1,210 | 646 | | **Total goods and services** | 96,462 | 82,674 | | **Grants and subsidies** | | | | Resource Grants to local authorities | 8,363 | 961 | | Resource Grants to private sector | 51,178 | 87,888 | | Resource Grants to NDPBs | 23,248 | 19,247 | | Resource Grants to central government bodies | 8 | 414 | | Capital Grants to private sector | 10,887 | 7,963 | | Capital Grants to NDPBs and other central government bodies | 4,917 | - | | Grants-in-Aid to Civil Service welfare bodies | 1,098 | 1,376 | | Grants-in-Aid to private sector | 34,402 | 682 | | **Total resource and capital grants** | 134,101 | 118,531 | | **Non-cash items** | | | | Depreciation | 8 | 561 | 596 | | Release of deferred income | - | (19) | | Amortisation | 10 | 1,197 | 1,741 | | Impairment – Property, plant and equipment | 8, 11 | 355 | 844 | | Impairment – Intangible assets | 10, 11 | 1,440 | - | | Impairment - loans | 11, 19 | 109 | 159 | | Devaluation of Property, plant and equipment | 11 | (137) | 811 | | Loss on disposal of Property, plant and equipment | 8 | - | 113 | | Capital Grant in Kind – Property | 20 | - | 44,145 | | Investment properties gains on change in fair value | 9 | (23) | (32,003) | | Provision provided for in year | 24 | (3,175) | (180) | | Borrowing costs (unwinding of discount on provisions) | 24 | 406 | (369) | | Bad debt write off | - | (3) | 80 | | Provision for doubtful debt | 21 | (221) | (371) | | **Total non-cash items** | 509 | 15,547 | | **Total** | 233,788 | 220,508 |
### Programme costs analysed by programme
| £000 | 2013-14 | 2012-13 Restated | |------|---------|-----------------| | | Departmental Group | Departmental Group | | PFI and other service concession arrangements service charges | - | 2,418 | | National Security Secretariat | | | | Government Security Zone | 890 | 890 | | Resilient Telecommunications | 6,742 | 6,396 | | Cyber Emergency Response Team (UK) | 2,333 | - | | BBC Monitoring | - | 17,476 | | Other | - | 369 | | Total National Security Secretariat | 9,965 | 25,131 | | Honours and Appointments Secretariat | | | | Lord Lieutenants’ Expenses | 1,305 | 1,377 | | Honours and Dignities | 1,189 | 1,185 | | Total Honours and Appointments Secretariat | 2,494 | 2,562 | | Political and Constitutional Reform | | | | Electoral Registration Transformation Programme | 13,120 | 852 | | Individual Electoral Registration | 3,084 | - | | Boundary Commissions for England and Wales | 80 | 603 | | Other | 82 | 74 | | Total Political and Constitutional Reform | 16,366 | 1,529 | | Prime Minister’s Office | | | | Great Campaign | 1,557 | 2,952 | | Efficiency and Reform Group | | | | Government Digital Service | 23,347 | 19,452 | | Mutuals | 2,942 | 767 | | Office of the Government CIO & SIRO | 771 | 453 | | Total Efficiency and Reform Group | 27,060 | 20,672 | | Government Innovation Group | | | | Open data programme | 501 | - | | Office of Civil Society | | | | v | 1,000 | 1,000 | | Strategic Programme | 1,710 | 2,191 | | Social Action | 20,271 | 27,387 | | National Citizen Service (NCS) | 84,297 | 62,036 | | Office for Civil Society general research programme | 1,060 | 953 | | Community Organisers | 6,424 | 5,412 | | Community First | 18,187 | 17,221 | | Structural Support | 75 | 15,392 | | Technical Assistance | 13,384 | 5,925 | | Advice Services Fund | 16,504 | 373 | | Youth Policy | 4,982 | 5,285 | | Other | 2,531 | 1,470 | | Total Office for Civil Society | 170,425 | 144,645 | | Total Government Innovation Group | 170,926 | 144,645 | | Other | 4,911 | 5,052 | | Sub total | 233,279 | 204,961 | | Total non-cash items | 509 | 15,547 | | Total | 233,788 | 220,508 | 6.1 Programme costs analysed by programme (continued)
National Security Secretariat Government Security Zone – Payments to the Metropolitan Police Service for the manning and running costs of the dedicated incident management control centre.
Resilient Telecommunications – A programme to provide resilient communications to Public Authorities.
Cyber Emergency Response Team (UK) – a new organisation formed in response to the 2011 national Cyber Security Strategy. It will work closely with industry, government and academia to enhance UK cyber resilience.
Honours & Appointments Secretariat Honours & Appointments Secretariat is responsible for making certain expenses payments to Her Majesty’s Lord-Lieutenants.
Honours and Dignities – The Honours and Appointments Secretariat provides the budget for the Central Chancery of the Orders of Knighthood at St James’ Palace (CCOK). CCOK is responsible for the administration of the Orders of Chivalry including the administration of investitures and the provision of medals and regalia for successful honours candidates.
Political and Constitutional Reform Electoral Registration Transformation Programme/ Individual Electoral Registration The Electoral Registration Transformation Programme (ERTP) supports the implementation of Individual Electoral Registration (IER), to tackle electoral fraud and improve electoral registration. This is a key part of the political reform package in the Coalition Agreement. Cabinet Office ministers have approved a timetable for implementation in 2014.
Prime Minister’s Office The Communications Great Campaign Team will be working to increase UK jobs and growth by encouraging more tourists, students and inward investors to visit, study and invest in the UK. They will also aim to encourage and support more British companies to export to our target markets and enhance the UK’s reputation abroad.
Efficiency and Reform Group Government Digital Service works to achieve the following objectives; to make transactions between citizens and government simpler, cheaper and easier; to encourage and support more people to use online services; to drive quality and take up of digital public services by making government on the web easier to find and simpler to use; to equip central government to engage with citizens online effectively; and, to foster, across government, a digital culture for the delivery of citizen, business and government focused services. This is supported by the ID Assurance work stream which looks at the provision of a simple, trusted and secure way to access digital public services based on published standards and commissioned services. This most notably looks at protecting personal data from compromise and misuse, and ensures an appropriate level of privacy for the transaction.
The Efficiency and Reform Group supports public sector workers to form their own employee-led organisations, in three key ways: a Mutuals Taskforce convenes key policymakers and experts to drive the changes to policy and process necessary across Whitehall to address the issues that mutuals face; a Pathfinder programme leading the way in forming more mutuals and; the Mutuals Support Programme will support some of the most promising and innovative mutuals so that they reach the point of investment readiness.
Government Innovation Group Open data programme – Improving the transparency and accountability of government and its services.
Office for Civil Society (OCS) [v] – Project funded by the Office for Civil Society aimed at encouraging volunteering and increasing the number of opportunities for young volunteers. [v] are an independent charity established by the then government on 8th May 2006.
Strategic Programme - Grants to civil society organisations to enable greater voice and engagement in policy development.
The OCS leads on Social Action making it easier for people to play a more active part in their communities through volunteering and giving and supports the voice of the sector through strategic funding relationships. 6.1 Programme costs analysed by programme (continued)
National Citizen Service (NCS) will help to build a more cohesive, responsible and engaged society by bringing 16 year olds from different backgrounds together in a residential and home-based programme of activity and service during the summer.
The Community Organisers programme is about catalysing community action at a neighbourhood level. Community Organisers will be well-trained and committed individuals who will play a major role in delivering the Big Society. They will work closely with communities to identify local leaders, projects and opportunities, and empower the local community to improve their local area.
The Community First programme encourages more social action in neighbourhoods with significant deprivation and low social capital. Groups, active individuals and communities work with businesses, charities and public authorities, encouraging people to help others and themselves to improve the quality of life locally.
Technical Assistance – specialist support to the voluntary, community and social enterprise sector to enable them to deliver contracts for tackling social problems and to grow the social investment market.
The Advice Services Fund supports not-for-profit advice service providers to ensure that people continue to have access to good quality free advice in their communities.
Youth Policy – During the year cross cutting responsibilities for youth policy transferred from the Department for Education to the Cabinet Office. The Cabinet Office now leads for the Government on: cross government youth strategy and policy co-ordination; management of the statutory duty on Local Authorities for youth provision in their areas; and, strategic relationship management with young people and youth sector organisations on policy development.
### 7. Income
| Note | Departmental Group | Departmental Group | 2013-14 | 2012-13 Restated | |------|--------------------|--------------------|---------|-----------------| | | | | | | | **Administration** | | | | | | Civil Service Pensions | | | | | | Central management of Principal Civil Service Pension Scheme | | | 51,937 | 39,146 | | Royal Mail Statutory Pension Scheme | | | 188 | 117 | | Transactional Shared Services | 7.1 | | 29,838 | - | | Next Generation Shared Services – Single Operating Platform | | | 2,550 | - | | Transfer of shares in AXELOS Limited | 29 | | 38,200 | - | | Framework Establishment Fee in respect of Shared Services Connected Limited | | | 7,500 | - | | Services of the Behavioural Insights Team (BIT) | | | 668 | - | | Rental income on freehold properties | | | 537 | 556 | | Next Generation HR | | | 21,330 | 24,183 | | Royalties | | | 7,699 | 10,275 | | Services of the Office of the Parliamentary Counsel | | | 3,028 | 3,003 | | **Other** | | | | | | Emergency Planning College events | | | 41 | 44 | | Employee Engagement Programme | | | 988 | 974 | | Media Monitoring Unit | | | 911 | 958 | | Regional News Network | | | 1,329 | 1,354 | | Fillers Marketing | | | 112 | 147 | | Media Planning, Buying and Evaluation | | | 1,011 | 1,279 | | Government Communications | | | 366 | 280 | | Supplier Rebates | | | 3,498 | 7,031 | | ERG Procurement Policy and Capability | | | 3,002 | 2,880 | | ERG Major Projects Team | | | 367 | 291 | | ERG Commercial Portfolio Team | | | 256 | - | | ERG Debt Market Integrator | | | 250 | - | | HR Capability and Talent | | | 264 | - | | Various cost recoveries | | | 1,804 | 1,876 | | EU funding received – transferred to DfID | 5 | | 731 | - | | **Total Administration Income** | | | 178,405 | 94,394 | | **Programme** | | | | | | National Security Secretariat | | | | | | Government Security Zone | | | 880 | 450 | | Iraq Inquiry | | | 1,222 | 974 | | Other | | | - | 1,175 | | **Office for Civil Society** | | | | | | | | | 858 | 246 | | **Office of the Government CIO & SIRO** | | | | | | Public Service Network | | | 777 | 3,868 | | **Dividends** | | | | | | Government Procurement Service | | | 2,641 | 2,615 | | Government Digital Service | | | 1,932 | 879 | | Various cost recoveries | | | 147 | 99 | | Grant Repayments | | | 27 | 953 | | Grant income – capital | | | - | 8,021 | | **Non Cash Income** | | | | | | Capital Grant in Kind income on donated assets | 8 | | 3 | 84 | | **Total Programme Income** | | | 8,487 | 19,364 | | **Other Non Cash Income** | | | | | | Income from Associates | 17 | | 48,283 | 5,882 | | **Total** | | | 235,175 | 119,640 | 7. Income (continued)
The Cabinet Office is responsible for governance of the Principal Civil Service Pension Scheme (PCSPS), and MyCSP Ltd is responsible for pension administration. Employers participating in the PCSPS pay the Cabinet Office for the cost of pension administration for current employee members. The Cabinet Office is responsible for meeting central costs, including the element of MyCSP costs not covered by the sums paid by employers. These costs are met by income from a charge on Civil Superannuation employer pension contributions.
With effect from 1st April 2012 the Government assumed responsibility for both the Royal Mail Pension Plan deficit and the majority of the plan’s liabilities. This was achieved through the establishment in the Department for Business Innovation and Skills (BIS) of a new unfunded pension scheme - the Royal Mail Statutory Pension Scheme (RMSPS). Responsibility for governance of the RMSPS passed from BIS to the Cabinet Office with effect from 1 April 2013. The Cabinet Office is responsible for meeting the administration costs of the scheme. The income represents charges that the Cabinet Office levies for some specific pension administration services.
Next Generation Shared Services: Single Operating Platform – Development of the Single Oracle Platform for Government. The objective is to reduce the cost to HMG of running multiple Oracle solutions for different Departments by consolidating solutions and achieving a better competitive deal for Oracle licensing, hosting and support that is applicable across the Crown Estate.
Transfer of shares in AXELOS Limited – The Cabinet Office transferred its 51 ‘B’ ordinary shares in AXELOS Limited, an associate, to Capita Business Services Limited, the immediate parent of AXELOS Limited.
Framework Establishment Fee in respect of Shared Services Connected Limited - The purpose of the Framework Establishment Fee is to allow the Cabinet Office to recoup its transaction costs, being the costs of the procurement project team, from Shared Services Connected Limited (SSCL).
Next Generation HR – Civil Service HR (CSHR) is a key part of the Government’s Efficiency and Reform agenda. CSHR involves sharing HR expertise and maximising buying power across the Civil Service in a joined up and effective manner, to deliver a professional and more efficient service. The programme operates on a cost sharing basis across the government departments and agencies participating in the programme.
Royalties This income relates to the sales of products (e.g. publications) and from fees for accreditation and examination of practitioners. The products, e.g. ITIL and PRINCE2, have been developed to support best practice in key areas of project, programme, portfolio and IT service management. The income comes from public and private sector organisations in the UK and overseas. This income stream ceased when the function transferred into AXELOS Limited, an associate; see Note 17.
The Office of the Parliamentary Counsel (OPC) drafts Government Bills for introduction into Parliament, advises on related Parliamentary procedure and drafts or vets subordinate legislation which amends or has a significant impact on primary legislation. They also advise the Government on certain constitutional matters (e.g. Ministerial appointments, elections, Parliamentary and the Royal prerogative). The Cabinet Office provides the funding for approximately 60% of the costs of the OPC, with the balance coming from Departments who use the OPC’s services. The contributions from Departments are based on their usage of the OPC’s services in the previous calendar year.
The Employee Engagement Programme includes the Civil Service People Survey which is an annual survey of staff perceptions across the Civil Service and provides key people metrics to help drive business improvement. The survey is provided by an external contractor, the cost of this plus the cost of the programme team based in the Cabinet Office is fully recharged to the participating Departments and Agencies.
Media Monitoring Unit provides a 24-hour/7 days a week media monitoring and briefing service to No.10 and all other government departments and organisations. This service is funded by annual subscriptions.
Regional News Network provides press office support to government departments and organisations in the regions. This service covers a range of activities including regionalisation of national messaging; proactive placement of stories and case studies in print, broadcast and online media; support for regional events and Ministerial visits; reactive response to media enquiries; drafting and issuing news releases; and ad hoc campaign work. This service is funded via annual subscriptions.
Fillers Marketing – providing a service to government departments/organisations in the delivery of free airtime for public good communications - or Fillers - which carry messages relating to health, safety and welfare issues. This service both manages the marketing and distribution of TV and Radio Fillers to terrestrial, digital and out-of-home TV and radio channels and also reports on their performance. This service is funded by annual subscriptions. 7. Income (continued)
Communications/media planning, media buying management and campaign evaluation involves providing expertise and guidance for government departments/organisations which require early stage communications planning services or support with the implementational media planning and buying process through M4C (the media buying agency). A key service is to support GPS in the management of the M4C contract and to oversee the independent auditing of both domestic and international media. This team also provides advice on campaign evaluation best practice and implementational support in the planning, conducting and commissioning of evaluation projects. This service (including the third party cost of independent media auditing) is funded by a levy on media spend.
Supplier Rebates is income from contractors relating to costs from previous years’ programmes.
ERG Procurement Policy and Capability – Government Procurement Service contribution to the costs of the work of the Commercial Reform Team for the internal development of Government Procurement Service to tackle existing capability issues and to grow capability for development into the future Crown Commercial Service.
EU funding received - transferred to Department for International Development – The Civil Contingencies Secretariat in the Cabinet Office is the National Contact Point for the EU Civil Protection Mechanism, through which the UK applied for grants for co-financing of the transportation of aid to the Philippines following Typhoon Haiyan. The European Union made the grants to CCS (as the National Contact Point), which was then paid to DFID who had arranged transportation of aid to the Philippines.
National Security Secretariat
Government Security Zone - The Cabinet Office makes two annual payments to the Metropolitan Police on behalf of Whitehall Departments for cost of the Whitehall Secure Zone. This income reflects the payments from the various Whitehall Departments to the Cabinet Office.
The Department for International Development (DFID), Ministry of Defence (MOD) and Foreign & Commonwealth Office (FCO) contributed toward the costs of the Iraq Inquiry in 2013-14, 2012-13 and 2011-12.
The aim of the Public Service Network (PSN) programme is to create a network of networks providing secure fixed and mobile communications operating to common standards.
Government Procurement Service - The Cabinet Office receives dividends for its holding in the Government Procurement Service Trading Fund.
7.1 Fees and charges
The analysis below provides details of the services for which a fee is charged. The information is provided for fees and charges purposes, not for IFRS 8 purposes.
The financial objective of Transactional Shared Services:
As a result of various investigations and recommendations relating to the sharing of back office functions across government, an initiative was identified to set up a second Independent Shared Service Centre (ISSC2). The business case demonstrated that the best value for money delivery model for ISSC2 would be an associate partnership between government and a Private Sector Partner. As a first step towards this, on 1 April 2013, accountability for the provision of IT, employee and financial transactional services to other public sector bodies transferred from the Department for Work and Pensions (DWP) until the Shared Services Connected Limited traded from 1 November 2013; see Note 17.
| Transactional Shared Services | £000 | |------------------------------|------| | Full cost of service to other government departments | 29,231 | | Less: Income received | (29,838) | | Net surplus | (607) |
## 8.1 Property, plant and equipment
### Consolidated 2013–14
| £000 | Land | Buildings | Dwellings | Information Technology | Plant & Machinery | Furniture & Fittings | Art & Antiques | Payments on Account & Assets under Construction | Total | |------|------|-----------|-----------|------------------------|------------------|---------------------|----------------|-----------------------------------------------|-------| | **Cost or valuation** | | | | | | | | | | | At 1 April 2013 | 32,602 | 86,703 | 37,432 | 6,985 | 7,533 | 1,955 | 9,733 | 16,849 | 199,792 | | Additions | 400 | 1,147 | - | 2,197 | 52 | 1,464 | 30 | 19,495 | 24,785 | | Donations | - | - | - | - | - | - | 3 | - | 3 | | Disposals<sup>1</sup> | - | - | - | (2,772) | (4,571) | (359) | - | - | (7,702) | | Impairment<sup>2</sup> | - | (4,603) | (74) | (223) | (620) | - | (17) | - | (5,537) | | Reclassifications | - | 15,485 | (313) | 304 | - | - | - | (15,476) | - | | Revaluations | 7,485 | (5,781) | (464) | (59) | (57) | (59) | 134 | - | 1,199 | | **At 31 March 2014** | 40,487 | 92,951 | 36,581 | 6,432 | 2,337 | 3,001 | 9,883 | 20,868 | 212,540 | | **Depreciation** | | | | | | | | | | | At 1 April 2013 | - | 19,488 | 5,036 | 5,148 | 6,595 | 1,432 | - | - | 37,699 | | Donations | - | - | - | - | - | - | - | - | - | | Charged in year | - | 2,811 | 1,223 | 956 | 340 | 127 | - | - | 5,457 | | Disposals<sup>1</sup> | - | - | - | (2,772) | (4,571) | (359) | - | - | (7,702) | | Impairment<sup>2</sup> | - | (91) | - | (147) | (341) | - | - | - | (579) | | Reclassifications | - | - | - | - | - | - | - | - | - | | Revaluations | - | (421) | (40) | (31) | (42) | (36) | - | - | (570) | | **At 31 March 2014** | - | 21,787 | 6,219 | 3,154 | 1,981 | 1,164 | - | - | 34,305 | | **Carrying amount at 31 March 2014** | 40,487 | 71,164 | 30,362 | 3,278 | 356 | 1,837 | 9,883 | 20,868 | 178,235 |
### Asset financing:
| | Owned | PFI Finance Leased | PFI Residual Assets | Total | |---|---|---|---|---| | **Carrying amount at 31 March 2013** | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 | | **Carrying amount at 31 March 2014** | 40,487 | 71,164 | 30,362 | 3,278 | 356 | 1,837 | 9,883 | 20,868 | 178,235 |
### Of the total:
| | Department | NDPBs | Total | |---|---|---|---| | **Carrying amount at 31 March 2014** | 40,487 | 71,164 | 30,362 | 3,278 | 356 | 1,837 | 9,883 | 20,868 | 178,235 |
<sup>1</sup> Disposals include retired assets; their values are fully written down and they are no longer in use
<sup>2</sup> Revaluations arise as a result of professional property valuations, the application of published indices and annual impairment reviews which ensure the asset base is correctly valued
## 8.2 Property, plant and equipment
### Consolidated 2012–13
| 2000 | Land | Buildings | Dwellings | Information Technology | Plant & Machinery | Furniture & Fittings | Art & Antiques | Payments on Account & Assets under Construction | Total | |------|------|-----------|-----------|------------------------|------------------|---------------------|----------------|-----------------------------------------------|-------| | Cost or valuation | | | | | | | | | | | At 1 April 2012 | 37,559 | 107,291 | 27,260 | 13,219 | 7,648 | 1,870 | 10,583 | 8,795 | 214,225 | | Additions | - | 892 | - | 716 | - | - | - | - | 9,460 | | Donations | - | - | - | - | - | - | - | - | 84 | | Disposals | - | (741) | - | (5,900) | (75) | (26) | (58) | - | (6,800) | | Impairment | - | (1,067) | - | (1,436) | (13) | (3) | (876) | (15) | (3,410) | | Reclassifications | - | 846 | 417 | - | - | 149 | - | (1,391) | 21 | | Revaluations | 5,966 | 155 | 10,067 | 386 | (27) | (35) | - | - | 16,512 | | Transfer to Investment Properties | (10,923) | (20,673) | (312) | - | - | - | - | - | (31,908) | | At 31 March 2013 | 32,602 | 86,703 | 37,432 | 6,985 | 7,533 | 1,955 | 9,733 | 16,849 | 199,792 | | Depreciation | | | | | | | | | | | At 1 April 2012 | - | 19,788 | 2,489 | 8,637 | 6,117 | 1,337 | - | - | 38,368 | | Donations | - | - | - | - | - | - | - | - | - | | Charged in year | - | 2,009 | 1,386 | 1,935 | 522 | 140 | - | - | 5,992 | | Disposals | - | (740) | - | (5,790) | (67) | (23) | - | - | (6,620) | | Impairment | - | - | 211 | (8) | - | - | - | - | 203 | | Reclassifications | - | - | 48 | - | - | - | - | - | 48 | | Revaluations | - | 30 | 1,208 | 107 | 31 | (22) | - | - | 1,354 | | Transfer to Investment Properties | - | (1,599) | (47) | - | - | - | - | - | (1,646) | | At 31 March 2013 | - | 19,488 | 5,036 | 5,148 | 6,595 | 1,432 | - | - | 37,699 | | Carrying amount at 31 March 2013 | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 | | Carrying amount at 31 March 2012 | 37,559 | 87,503 | 24,771 | 4,582 | 1,531 | 533 | 10,583 | 8,795 | 175,857 | | Asset financing: | | | | | | | | | | | Owned | 29,302 | 57,047 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 148,625 | | PFI Finance Leased | - | 2,926 | - | - | - | - | - | - | 2,926 | | PFI Contract Assets | 3,300 | 7,242 | - | - | - | - | - | - | 10,542 | | Carrying amount at 31 March 2013 | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 | | Of the total: | | | | | | | | | | | Department | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 | | NDPBs | - | - | - | - | - | - | - | - | - | | Carrying amount at 31 March 2013 | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 |
1 Disposals include assets written out of the accounts; their values are fully written down and they are no longer in use 2 Revaluations arise as a result of professional property valuations, the application of published indices and annual impairment reviews which ensure the asset base is correctly valued 3 Admiralty Arch and Sunningdale Park were recognised as investment properties; see Note 9 8. Property, plant and equipment (continued)
Valuation
Land and Buildings The Valuation Office Agency has determined fair value on the basis of market value but on the assumption that the property is sold as part of the continuing enterprise in occupation. For ‘in use’ non-specialised property assets, fair value has been interpreted as market value for existing use.
The Valuation Office Agency (VOA), independent chartered surveyors and members of the Royal Institute of Chartered Surveyors (RICS), valued all properties on the basis of fair value as at 31 March 2014 except for 10-12 Downing Street which was valued at 31 March 2013. Due to the unusual nature of the size, location and property category the valuation of 10-12 Downing Street is subject to valuation uncertainty.
Sunningdale Park The Valuation Office Agency valued Sunningdale Park, Ascot, Berkshire, as at 31 March 2014 on the basis of total worth in existing use reflecting the infrastructure. A breakdown of the carrying value of assets under the PFI contract is detailed at Note 15. Sunningdale Park is revalued every three years.
Art and Antiques Townley Valuation Services Limited valued art and antiques, including furniture, carpets, clocks, silver and ceramics situated in properties within the Whitehall Estate in January 2011 on the basis of insurance value being the likely cost of replacing the items.
Rosebery’s Auctioneers & Valuers valued art and antiques, including antique and other furniture, silver, plate and objects situated at The Hawkills, Easingwold, near York in February 2010 at an average of the lower and higher figures of a presale auction estimate.
Included within Art and Antiques are gifts to past and present Prime Ministers. These were valued by J. M. McCarthy Limited, jewellers and silversmiths in March 2010 on the basis of best estimate of the price at auction.
All Other Tangible Non-Heritage Assets All other tangible non-heritage fixed assets are re-valued annually using indices provided by the Office of National Statistics.
Assets under construction
Assets under construction of £20.868 million (2012-13: £16.849 million) include:
£14.252 million (2012-13: £13.795 million) spent on refurbishment to Whitehall properties which has yet to be completed; and
£6.616 million (2012-13: £3.054 million) spent on IT hardware and software developments which have yet to be completed.
Leasehold improvements
Included within Land and Buildings are improvements with a carrying amount of £0.662 million (2012-13: £0.715 million) relating to a leasehold property in London at 35 Great Smith Street. 9. Investment Properties
| £000 | Note | 2013-14 | 2012-13 | |------|------|---------|---------| | | | Admiralty Arch | Sunningdale Park | Total | Admiralty Arch | Sunningdale Park | Total | | Cost at 1 April | 60,000 | 2,265 | 62,265 | - | - | - | | Additions | - | - | - | - | - | - | | Accruals | - | - | - | - | - | - | | Disposals | - | - | - | - | - | - | | Impairment | - | - | - | - | - | - | | Transferred from Property, Plant and Equipment | 8.2 | - | - | 28,129 | 2,133 | 30,262 | | Revaluation | 6 | - | 23 | 31,871 | 132 | 32,003 | | Reclassified as held for sale | 20 | (60,000) | - | (60,000) | - | - | | Balance at 31 March | - | 2,288 | 2,288 | 60,000 | 2,265 | 62,265 |
Admiralty Arch
The Department has freehold ownership of Admiralty Arch which became vacant on 10 August 2012 from when it was recognised as an investment property. The Department reclassified this asset as held for sale as at 31 March 2014; see Note 20.
Sunningdale Park
Following the closure of the National School of Government on 31 March 2012, the Department retained freehold of the site at Sunningdale Park and recognised it as an investment property from 1 April 2012. Sunningdale Park is recognised at fair value which equates to market value for existing use of £2.288 million (2012-13: £2.265 million).
## 10.1 Intangible assets
### Consolidated 2013-14
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Cost or valuation**<sup>1</sup> | | | | | | | | At 1 April 2013 | 1,147 | 4,453 | 154 | 7,038 | 22 | 12,814 | | Additions | (6)<sup>2</sup> | 705 | - | 437 | 598 | 1,734 | | Allowances purchased | - | - | 75 | - | - | 75 | | Disposals | (330) | (1,636) | (17) | (234) | - | (2,217) | | Impairment | (772) | (1,766) | - | (3,019) | - | (5,557) | | Reclassifications | - | - | - | (288) | 288 | - | | Revaluations | - | 7 | - | 84 | - | 91 | | **At 31 March 2014** | 39 | 1,763 | 212 | 4,018 | 908 | 6,940 |
### Amortisation
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **At 1 April 2013** | 455 | 2,979 | 77 | 3,113 | - | 6,624 | | Charged in year | 9 | 191 | - | 1,110 | - | 1,310 | | Disposals | (330) | (1,636) | - | (234) | - | (2,200) | | Allowances surrendered | - | - | - | - | - | - | | Impairment | (108) | (951) | - | (2,349) | - | (3,408) | | Reclassifications | - | - | - | - | - | - | | Revaluations | - | 1 | - | 13 | - | 14 | | **At 31 March 2014** | 26 | 584 | 77 | 1,653 | - | 2,340 |
### Carrying amount at 31 March 2014
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Carrying amount at 31 March 2014** | 13 | 1,179 | 135 | 2,365 | 908 | 4,600 |
### Carrying amount at 31 March 2013
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Carrying amount at 31 March 2013** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 |
### Asset financing:
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Owned** | 13 | 1,179 | 135 | 2,365 | 908 | 4,600 |
### Of the total:
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Department** | 13 | 1,179 | 135 | 2,365 | 908 | 4,600 | | **NDPBs** | - | - | - | - | - | - | | **Carrying amount at 31 March 2014** | 13 | 1,179 | 135 | 2,365 | 908 | 4,600 |
______________________________________________________________________
<sup>1</sup> Purchased software licences are recorded at purchase cost and are not re-valued since an appropriate index is not available
<sup>2</sup> The negative amount of £6,000 under Purchased Software Licence Additions relates to a reversal of a 2012-13 accrual incorrectly raised against additions
## 10.2 Intangible assets
### Consolidated 2012-13
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Cost or valuation**<sup>1</sup> | | | | | | | | At 1 April 2012 | 1,396 | 4,826 | - | 3,168 | 506 | 9,896 | | Additions | 87 | 299 | - | 3,453 | 9 | 3,798 | | Allowances purchased | - | - | 154 | - | - | 154 | | Disposals<sup>2</sup> | (275) | (857) | - | - | - | (1,132) | | Impairment | (58) | (23) | - | - | (32) | (113) | | Reclassifications | - | - | - | 440 | (461) | (21) | | Revaluations | (3) | 208 | - | 27 | - | 232 | | **At 31 March 2013** | 1,147 | 4,453 | 154 | 7,038 | 22 | 12,814 |
### Amortisation
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **At 1 April 2012** | 640 | 2,927 | - | 1,923 | - | 5,490 | | Charged in year | 195 | 640 | - | 1,182 | - | 2,017 | | Disposals | (275) | (857) | - | - | - | (1,132) | | Allowances surrendered | - | - | 77 | - | - | 77 | | Impairment | - | 9 | - | - | - | 9 | | Reclassifications | (48) | - | - | - | - | (48) | | Revaluations | (57) | 260 | - | 8 | - | 211 | | **At 31 March 2013** | 455 | 2,979 | 77 | 3,113 | - | 6,624 |
### Carrying amount at 31 March 2013
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Carrying amount at 31 March 2013** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 |
### Asset financing:
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Owned** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 | | **Carrying amount at 31 March 2013** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 |
### Of the total:
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Department** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 | | **NDPBs** | - | - | - | - | - | - | | **Carrying amount at 31 March 2013** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 |
______________________________________________________________________
<sup>1</sup> Purchased software licences are recorded at purchase cost and are not re-valued since an appropriate index is not available
<sup>2</sup> Intangible assets at Sunningdale Park were reduced to nil from their carrying value as a result of the closure of National School of Government 11. Impairments
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Charged to Statement of Comprehensive Net Expenditure | Note | | | Impairment – PPE and Intangible assets | 5, 6 | 7,107 | 3,735 | | Impairment on loans | 6 | 109 | 159 | | | | 7,216 | 3,894 | | Devaluation of assets | 6 | (137) | 811 | | Taken through revaluation reserve | | 6,349 | 69 | | Total | | 13,428 | 4,774 |
12. Capital commitments
The Department has entered into non-cancellable contracts (which are not leases or PFI contracts) for capital goods and services.
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Contracted capital commitments at 31 March for which no provision has been made and not otherwise included in these financial statements | | | | Property, plant and equipment | | 10 | 279 | | Intangible assets | | 76 | 12 | | Total | | 86 | 291 |
13. Other financial commitments
The Department has entered into contracts (which are not leases or PFI contracts) for a range of services. The commitments of greatest value relate to information technology, estate management services and contracts relating to investments in the voluntary and community sector. The total payments to which the Department is committed, analysed by the period during which the payments will be made are as follows:
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Not later than one year | | 78,962 | 49,260 | | Later than one year and not later than five years | | 118,020 | 53,095 | | Later than five years | | - | 6,944 | | Total | | 196,982 | 109,299 | 14. Commitments under leases
14.1 Operating leases
Total future minimum lease payments under operating leases are given in the table below, analysed according to the period in which payments will be made:
| | 2013-14 | 2012-13 | |----------------------|---------|---------| | | Departmental Group | Departmental Group | | Obligations under operating leases for the following periods comprise: | | | | Land and Buildings | | | | Not later than one year | 15,616 | 17,282 | | Later than one year and not later than five years | 55,336 | 61,003 | | Later than five years | 29,587 | 54,126 | | | 100,539 | 132,411 | | Other | | | | Not later than one year | - | 3 | | Later than one year and not later than five years | - | - | | Later than five years | - | - | | | - | 3 | | Total | 100,539 | 132,414 |
14.2 Finance leases
There are no obligations under finance leases.
15. Commitments under PFI contracts
15.1 On-Statement of Financial Position
Fujitsu Services Ltd
The provision of Information and Communications Technology (ICT) services to the Cabinet Office included certain infrastructure assets for use in delivering public services that fall within the scope of IFRIC 12 service concession arrangements.
In June 2007 the Cabinet Office entered into a contract with Fujitsu Services Limited (FSL) for the provision of Information and Communications Technology (ICT) services over a 5 year term until June 2012. The contract terminated in June 2012. The services included the provision of IT equipment throughout the life of the contract. Those assets provided on an exclusive basis were recognised as property, plant and equipment at the time they were brought into use.
The total amount charged in the Statement of Comprehensive Net Expenditure in respect of the Fujitsu ICT contract was £Nil (2012-13: £2.418m). See Note 6.
The contract with Fujitsu expired on 30th June 2012. The Department now receives ICT services through HM Treasury under a memorandum of understanding.
Sunningdale Park site
Although the National School of Government closed on 31 March 2012, Cabinet Office has retained the site at Sunningdale Park for the present and is examining how the existing facilities can best be utilised going forwards. The site is operated under a PFI contract with a term of 30 years from 13 May 2002. The National School gave a lease to the private sector partner for the office buildings against which subleases were granted to the National School for their continuing use. This asset was recognised as property, plant and equipment at a carrying value of £2.133 million at 31 March 2012. The asset was reclassified as an investment property on 1 April 2012. Its carrying value at 31 March 2014 is £2.288 million (2012-13: £2.265 million). See Note 9.
The National School also gave a lease for the rest of the site upon which the private sector partner has undertaken an initial capital investment of £12 million in new training facilities.
As a consequence of these agreements:
**Deferred asset**
A pre-payment was established for the fair value of the property which was contributed to the scheme at the commencement of the contract. This deferred asset is recognised as property, plant and equipment and written off over 15 years. Its value at 31 March 2014 is £2.195 million (2012-13: £2.926 million); see Note 8.
**Reversionary interest**
A further asset is recognised for the Department’s residual interest in the training facilities which revert to the Cabinet Office at no cost at the end of the contract. The accruing residual interest, built up over the term of the contract by capitalising part of the contract payments, is recognised as property, plant and equipment. Additional interest accrued in 2013-14 was £1.070 million (2012-13: £Nil). The value of the residual interest at 31 March 2014 is £11.612 million (2012-13: £10.542 million).
Whilst these two individual transactions reflect the underlying contractual arrangements, the Cabinet Office retains ownership of the training facilities throughout the period of the contract, the value of which at 31 March 2014 is reflected in the combined carrying value of the deferred asset and reversionary interest - recognised as property, plant and equipment - of £13.807 million (2012-13: £13.468 million); see Note 8.
**Combined Value**
The combined carrying value of the office buildings and training facilities is £16.095 million (2012-13: £15.733 million). This is the sum of the Dwellings balances and Land and Buildings balances in Note 8 Property, Plant and Equipment and Note 9 Investment Properties.
**Charge to the Statement of Comprehensive Net Expenditure and future commitments**
**Sunningdale Park site**
The total amount charged in the Statement of Comprehensive Net Expenditure in respect of PFI transactions was £968,485 (2012-13: £2,242,597) as disclosed at Note 5. The payments to which the Department was committed during 2013-14, analysed by the period during which the commitment expires, are as follows:
| | 2013-14 | 2012-13 Restated¹ | |----------------------|---------|-------------------| | | Departmental Group | Departmental Group | | Not later than one year | 2,087 | 2,038 | | Later than one year and not later than five years | 4,616 | 6,570 | | **Total** | **6,703** | **8,608** |
¹ The 2012-13 figures have been restated to remove the office accommodation charge which formed part of the original guaranteed payments schedule to 2017. This commitment ceased when the National School of Government closed and no longer occupied the site at Sunningdale Park. 16. Loan commitments – Bridges Social Entrepreneurs Fund LP
The Cabinet Office has the following loan commitments to the Bridges Social Entrepreneurs Fund LP as at 31 March 2014:
| £000 | 2013-14 | 2012-13 | |---------------------------|---------|---------| | Total loan commitment | 3,910 | 3,910 | | Less: Capital and loan drawn down | (2,631) | (1,693) | | Total undrawn commitment | 1,279 | 2,217 |
Analysis of undrawn commitment
| Total loan commitment | 3,910 | | Loan made in 2009-10 | (662) | | Loan made in 2010-11 | (244) | | Loan made in 2011-12 | (343) | | Loan made in 2012-13 | 19 | | Loan made in 2013-14 | 19 | | Total undrawn commitment | 1,279 |
Bridges Social Entrepreneurs Fund LP is constituted under a Limited Partnership Agreement dated 21 August 2009 and is managed by Bridges Ventures LLP. The Fund invests in social enterprises that have the potential to generate scaleable and sustainable social impacts. The Fund currently has a committed capital of £11.75 million and has a life of 10 years (ending on 27 August 2019) unless terminated earlier in certain circumstances specified in the Limited Partnership Agreement.
The Department originally agreed to invest up to £5 million in the Bridges Social Entrepreneurs Fund LP, by match funding the investment that the Fund Manager secures from private investors. The Cabinet Office increased its commitment from £3,640,534 to £3,909,748 for the lifetime of the Fund, which in accordance with the terms set in the Limited Partnership Agreement denotes the Department’s commitment as at 31 March 2010 to be £3,909,748, constituting a 33.27% share of the Fund. This commitment level has now been fixed.
The investment period for the remaining drawdown is currently estimated to end in 2016, but may be extended at the discretion of Bridges Ventures LLP subject to an Investors Ordinary Consent. The investments in the Bridges Social Entrepreneurs Fund LP are valued by the Fund Manager using the International Private Equity and Venture Capital Valuation (IPEV) Guidelines. See Notes 19 and 29.
For further information see www.bridgesventures.com 17. Investments in Associates
| £000 | MyCSP Limited | Shared Services Connected Limited | AXELOS Limited | Behavioural Insights Team Limited | Total | |------|---------------|----------------------------------|----------------|----------------------------------|-------| | Cost or valuation¹ | Note | | | | | | At 1 April 2012 | - | - | - | - | - | | Acquisitions | - | - | - | - | - | | Disposals | - | - | - | - | - | | Share of opening net assets | 7 | 5,412 | - | - | 5,412 | | Dividend received | - | - | - | - | - | | Share of results | 7 | 470 | - | - | 470 | | Impairment in value | - | - | - | - | - | | At 31 March 2013 | 5,882 | - | - | - | 5,882 | | Acquisitions | - | - | - | - | - | | Disposals | - | - | - | - | - | | Share of opening net assets | 7 | 7,500 | 36,720 | - | 44,220 | | Dividend received | (470) | - | - | - | (470) | | Share of results | 7 | 1,955 | 436 | 1,672 | 4,063 | | Impairment in value | - | - | - | - | - | | At 31 March 2014 | 7,367 | 7,936 | 38,392 | - | 53,695 |
The Department accounts for its investments in associates using the equity method in accordance with IAS 28 Investments in Associates.
**MyCSP Limited**
The Department has a 35% equity shareholding in MyCSP Limited which administers civil service pensions, injury benefit claims and compensation awards for 1.5 million public and private sector employees.
The Government established MyCSP Limited as a private limited company with three minority shareholders: Paymaster (1836) Limited with a 40% equity stake, the Cabinet Office with a 35% equity stake and an Employee Benefit Trust with a 25% equity stake. It began trading on 1 May 2012. There has been no change in the Department’s ownership for the reported year. For additional information, see Notes 7 and 29.
MyCSP Limited has prepared its accounts on a UKGAAP basis. There are no material differences between this and an IFRS basis of preparation and therefore no adjustments have been required.
The reporting date of MyCSP Limited’s financial statements is 31 March and will be available at MyCSP Limited.
**Shared Services Connected Limited**
The Department has a 25% equity shareholding in Shared Services Connected Limited (SSCL) which provides Business Process Outsourcing services.
The Government established SSCL as a private limited company with two shareholders: Steria Limited with a 75% equity stake and the Cabinet Office with a 25% equity stake. It began trading on 1 November 2013. There has been no change in the Department’s ownership for the reported year. For additional information, see Notes 7 and 29.
SSCL has prepared its accounts on a UKGAAP basis. There are no material differences between this and an IFRS basis of preparation and therefore no adjustments have been required.
The reporting date of SSCL’s financial statements is 31 December, the same date as its major shareholder and ultimate controlling entity. When applying the equity method of accounting, SSCL 2013 financial statements have been used and adjustments have been made for the effects of transactions between 31 December and 31 March.
SSCL’s published accounts may be found at Shared Services Connected Limited 2013 Report and Accounts
**AXELOS Limited**
The Department has a 49% equity shareholding in AXELOS Limited which manages and develops intellectual property around best management practice methodologies and frameworks.
The Government established AXELOS Limited as a private limited company with two shareholders: Capita Business Services Limited with a 51% equity stake and the Cabinet Office with a 49% equity stake. It began trading on 1 January 2014. There has been no change in the Department’s ownership for the reported year. For additional information, see Notes 7 and 29.
AXELOS Limited has prepared its accounts on a UKGAAP basis. There are no material differences between this and an IFRS basis of preparation and therefore no adjustments have been required.
The reporting date of AXELOS Limited’s financial statements is 31 December, the same date as its major shareholder and immediate parent undertaking. When applying the equity method of accounting, AXELOS Limited’s 2013 financial statements have been used and adjustments have been made for the effects of transactions between 31 December and 31 March.
AXELOS Limited published accounts may be found at Axels Limited Directors’ Report and Financial Statements to 31 December 2013
**Behavioural Insights Team Limited**
The Department has a 35% equity shareholding share in Behavioural Insights Team Limited (BIT) which applies insights from behavioural sciences to tackle public policy problems.
The Government established BIT Limited as a private limited company with the following shareholders: NESTA with a 30% equity stake, employees with 35% equity stake and the Cabinet Office with a 35% equity stake. It began trading on 4 February 2014.
BIT Limited will prepare its first published accounts for the 14 month period from 4 February 2014 to 31 March 2015 and consequently Cabinet Office has not recognised its share of this associate’s net assets in 2013-14. 18. **Financial instruments**
As the cash requirements of the Department are met through the Estimates process, financial instruments play a more limited role in creating and managing risk than would apply to a non-public sector body of a similar size. The majority of financial instruments relate to contracts to buy non-financial items in line with the Department’s expected purchase and usage requirements and the Department is therefore exposed to little credit, liquidity or market risk.
The Department’s investment in the Bridges Social Entrepreneurs Fund LP subjects the Department to credit and market risks. The Cabinet Office appointed Capital for Enterprise Limited (CfEL), an asset management business, to assist in the establishment of the Fund. The loans issued to the Bridges Social Entrepreneurs Fund LP are invested as part of an investment portfolio to deliver both financial returns and social and environmental benefits. The disposal of an investment by the Fund may differ from its valuation and the difference could be significant. The loans are subject to an annual impairment review which is carried out by Bridges Ventures Ltd. See Notes 11 and 19.
The Department holds public dividend capital in the Government Procurement Service. This financial asset is carried at historical cost less any impairment recognised. Information on the Government Procurement Service, a body outside the departmental boundary, is included at Note 19 and 30.
19. **Other financial assets**
The Core Department holds investments which include loans to the Bridges Social Entrepreneurs Fund LP which invests in social enterprises and public dividend capital held in the Government Procurement Service.
| £000 | Public Dividend Capital | Loans | Total | |------|-------------------------|-------|-------| | | | | | | Balance at 1 April 2012 | 350 | 1,073 | 1,423 | | Additions | 16 | - | 444 | 444 | | Impairment | - | (159) | (159) | | Loan repayments | - | (20) | (20) | | **Balance at 31 March 2013** | 350 | 1,338 | 1,688 | | Additions | 16 | - | 938 | 938 | | Impairment | - | (109) | (109) | | Loan repayments | - | (389) | (389) | | **Balance at 31 March 2014** | 350 | 1,778 | 2,128 |
Of which at 31 March 2014
| Current liability | - | - | - | | Non current liability | 350 | 1,778 | 2,128 | | **Balance at 31 March 2014** | 350 | 1,778 | 2,128 |
Of which at 31 March 2013
| Current liability | - | 284 | 284 | | Non current liability | 350 | 1,054 | 1,404 | | **Balance at 31 March 2013** | 350 | 1,338 | 1,688 |
1 The balance of the loan of £0.284 million made to LHA London Ltd was repaid during 2013-14. For information on loan commitments, see Notes 16 and 29. The Department’s share of the assets and results of the Bridges Social Entrepreneurs Fund LP is as summarised below:
| £000 | Bridges Social Entrepreneurs Fund Loan | |------|---------------------------------------| | | | | Net assets at 31 March 2013 | 1,054 | | Turnover | - | | Surplus for the year (before financing) | - | | Net assets at 31 March 2014 | 1,778 | | Turnover | - | | Surplus for the year (before financing) | - |
2 The Department holds a 33.27% share of the total net assets and partnership funds amounting to £1,778,037
**Government Procurement Service**
In accordance with the FReM, the Cabinet Office’s investment in the Government Procurement Service is shown at its historical cost. The published accounts can be found at Government Procurement Service Annual Report and Accounts. A dividend of £2.641 million (2012-13: £2.615 million) is payable for the year ended 31 March 2014; see Notes 7 and 30.
### 20. Assets held for sale
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | | Note | 9 | 60,000 | 44,145 | | Land and buildings | 6 | - | (44,145) | | Disposal | Total carrying amount | 60,000 | - |
**Admiralty Arch**
The Department has sold Admiralty Arch on a long lease subject to the developer meeting certain conditions and considers it highly probable that the disposal will be completed within 12 months. Admiralty Arch is recognised at fair value as determined within an agreement between the Department and the developer. Further information on estate management strategy may be found within the Director’s Report.
### 21. Trade receivables, financial and other assets
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | | Current – Amounts falling due within one year | VAT | 6,019 | 2,589 | | | Trade receivables | 16,017 | 37,167 | | | Deposits and advances | 911 | 717 | | | Advances to Returning Officers - Elections | 665 | 780 | | | Other receivables | 480 | 263 | | | Prepayments and accrued income | 18,669 | 12,924 | | | Deferred consideration from Capita Business Services Limited | 9,400 | - | | | Total | 52,161 | 54,440 | | | Non-current – Amounts falling due after more than one year | Deferred consideration from Capita Business Services Limited | 16,450 | - | | | Total | 68,611 | 54,440 |
1 Cabinet Office transferred its 51 ‘B’ Ordinary shares in AXELOS Limited to AXELOS’ immediate parent, Capita Business Services Limited (CBSL), in return for consideration of £38.2 million; see Note 7 Income. CBSL has deferred payment of £25.850 million to be paid in 33 equal monthly instalments between April 2014 and December 2016. Trade receivables are non-interest bearing and are generally on 30 days’ terms and are shown net of a provision for impairment. Movements in the provision for impairment of receivables were as follows:
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | **At 1 April** | | | | Charge for the year | 679 | 1,050 | | Amounts written off | 250 | 246 | | Unused amounts reversed | (290) | (617) | | **At 31 March** | 639 | 679 |
The analysis of trade receivables that were past due but not impaired is as follows:
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Neither past due nor impaired | 12,454 | 28,077 | | Past due but not impaired | | | | < 30 days | 667 | 925 | | 30 – 60 days | 110 | 543 | | 60 – 90 days | 197 | 2,507 | | 90 – 120 days | 431 | 77 | | > 120 days | 2,797 | 5,717 | | **At 31 March** | 16,656 | 37,846 |
### 21.1 Intra-government balances
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | **Current – Amounts falling due within one year** | | | | Balances with other central government bodies | 28,285 | 31,498 | | Balances with local authorities | 335 | 772 | | Balances with NHS Bodies | - | 96 | | Balances with public corporations and trading funds | 198 | 62 | | **Subtotal: intra-government balances** | 28,818 | 32,428 | | Balances with bodies external to government | 23,343 | 22,012 | | **Total** | 52,161 | 54,440 |
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | **Non-current – Amounts falling due within one year** | | | | Balances with other central government bodies | - | - | | Balances with local authorities | - | - | | Balances with NHS Bodies | - | - | | Balances with public corporations and trading funds | - | - | | **Subtotal: intra-government balances** | - | - | | Balances with bodies external to government | 16,450 | - | | **Total** | 16,450 | - |
### 22. Cash and cash equivalents
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | Balance at 1 April | 7,093 | 38,978 | | Net change in cash and cash equivalent balances | 15,553 | (31,885) | | Balance at 31 March | 22,646 | 7,093 |
The following balances at 31 March were held at:
- Government Banking Service - Supply: 21,806 (2012-13: 5,312)
- Government Banking Service - Consolidated Fund Standing Services – UK Parliamentary By-elections: 840 (2012-13: 1,666)
- Commercial banks and cash in hand - Supply: - (2012-13: 115)
The cash balance includes an amount of £840,356 (2012-13: £1,666,296) in respect of the funding advanced from the Consolidated Fund to cover the costs of UK Parliamentary By-elections with the agreement of HM Treasury. This balance is held with the Government Banking Service. It is owned by the Cabinet Office but managed by the Election Claims Unit in the Department for Communities and Local Government.
### 23. Trade payables and other liabilities
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | Current – Amounts falling due within one year | | | | Other taxation and social security | 3,178 | 2,881 | | Trade payables | 9,720 | 37,605 | | Other payables | 2,414 | 2,088 | | Accruals and deferred income | 61,861 | 45,127 | | Accruals relating to Consolidated Fund Standing Services – UK Parliamentary By-elections | 1,505 | 2,360 | | Accruals – termination benefits | - | 27 | | Amounts issued from the Consolidated Fund for supply but not spent at year end | 21,806 | 5,426 | | Non voted receipts surrenderable to the Consolidated Fund - Elections | - | 86 | | Total | 100,484 | 95,600 |
#### 23.1 Intra-government balances
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | Current – Amounts falling due within one year | | | | Balances with other central government bodies | 49,179 | 52,242 | | Balances with local authorities | 715 | 494 | | Balances with NHS Bodies | 65 | 3 | | Balances with public corporations and trading funds | 31 | 605 | | Subtotal: intra-government balances | 49,990 | 53,344 | | Balances with bodies external to government | 50,494 | 42,256 | | Total | 100,484 | 95,600 |
### 24. Provisions for liabilities and charges
| £000 | Early Departures | Specific Dilapidations | Onerous Contracts | Total | |------|------------------|------------------------|-------------------|-------| | | Departmental Group | Departmental Group | Departmental Group | Departmental Group | | Balance at 1 April 2012 | 4,803 | 7,215 | 5,306 | 17,324 | | Provided in the year | 210 | - | 910 | 1,120 | | Provisions not required written back | (171) | (655) | (474) | (1,300) | | Provisions utilised in the year | (1,469) | (600) | (1,993) | (4,062) | | Borrowing costs (unwinding of discounts) | 113 | - | (482) | (369) | | Balance at 31 March 2013 | 3,486 | 5,960 | 3,267 | 12,713 | | Provided in the year | 121 | - | 5 | 126 | | Provisions not required written back | (91) | (1,191) | (2,019) | (3,301) | | Provisions utilised in the year | (1,159) | - | (262) | (1,421) | | Borrowing costs (unwinding of discounts) | 74 | - | 332 | 406 | | Balance at 31 March 2014 | 2,431 | 4,769 | 1,323 | 8,523 |
Of which:
- Current liability
- Non current liability
| £000 | Early Departures | Specific Dilapidations | Onerous Contracts | Total | |------|------------------|------------------------|-------------------|-------| | | Departmental Group | Departmental Group | Departmental Group | Departmental Group | | Balance at 31 March 2014 | 2,431 | 4,769 | 1,323 | 8,523 |
Of which:
- Current liability
- Non current liability
### Analysis of expected timing of discounted flows
| £000 | Early Departures | Specific Dilapidations | Onerous Contracts | Total | |------|------------------|------------------------|-------------------|-------| | | Departmental Group | Departmental Group | Departmental Group | Departmental Group | | Not later than one year | 982 | 3,142 | 569 | 4,693 | | Later than one year and not later than five years | 1,374 | 355 | 739 | 2,468 | | Later than five years | 75 | 1,272 | 15 | 1,362 | | Balance at 31 March 2014 | 2,431 | 4,769 | 1,323 | 8,523 |
### Analysis of expected timing of discounted flows
| £000 | Early Departures | Specific Dilapidations | Onerous Contracts | Total | |------|------------------|------------------------|-------------------|-------| | | Departmental Group | Departmental Group | Departmental Group | Departmental Group | | Not later than one year | 1,145 | 407 | 332 | 1,884 | | Later than one year and not later than five years | 2,147 | 354 | 1,536 | 4,037 | | Later than five years | 194 | 5,199 | 1,399 | 6,792 | | Balance at 31 March 2013 | 3,486 | 5,960 | 3,267 | 12,713 | 24. Provisions for liabilities and charges (continued)
24.1 Early departures
The Core Department meets the additional costs of benefits beyond the normal Principal Civil Service Pension Scheme (PCSPS) benefits in respect of employees who retire early by paying the required amounts annually to the PCSPS over the period between early departure and normal retirement date. The Department provides for early departure costs when the early retirement programme becomes binding on the Department. Payments are made monthly and it is anticipated that all payments will have been made against the provision by 2020-21.
During the year 2013-14 there were no new cases of early departures, although top ups of £0.121 million were made to the existing provisions. Those early exit packages whose costs have been accrued in year are disclosed at Note 4.
24.2 Specific dilapidations
A specific dilapidation provision is made where the Department is required to bring a property into a good state of repair at the end of a lease. A provision is made for the estimated costs of these repairs based on a rate per square metre which is updated each year on advice from a facilities management company. A provision is also written back when not required.
During 2013-14 provision of £1,191,410 was written back in respect of Hercules House. The expiry dates of the remaining leases range from 2016-17 to 2026-27.
24.3 Onerous Contracts
The Government Property Unit manages the Government’s property portfolio which includes vacant leasehold properties for which provision has been made for estimated payments discounted by the Treasury’s discount rates for general provisions. Payments include rent, rates, service charges, demolition work and property management charges.
During the financial year £261,668 was utilised. The provision was topped up by £5,322. There was a write back of £2,018,858 being no longer required; £1,660,175 of which related to County Farm. This was due to the change in expectation regarding the timing of the demolition of the buildings on site. The remaining £358,683 written back relates to Birch House, Willow House and Kings Court which generated increased revenues and fewer costs. The lease expiry dates of the remaining contracts range from 2014-15 to 2016-17.
25. Contingent asset - Futurebuilders programme
The Futurebuilders Fund provided loan financing, often combined with grants and professional support, to civil society organisations in England needing investment to help them bid for, win and deliver public service contracts. The Modernisation Fund provided interest-free loans to help organisations be more resilient to the impact of the economic downturn. Both Funds are closed for new applications.
| £000 | 2013-14 | 2012-13 | |---------------------------|---------|---------| | Futurebuilders England Fund | 96,843 | 101,960 | | Modernisation Fund | 5,832 | 5,752 | | Contingent asset as at 31 March | 102,675 | 107,712 | The Cabinet Office has a contingent asset of £102.675 million (2012-13: £107.712 million) which is reported as Restricted Funds in the 2013-14 accounts of Futurebuilders England Limited (FBE). FBE entered into a portfolio holding contract with the Cabinet Office to oversee the investment portfolio of the Futurebuilders and Modernisation Funds. The Cabinet Office contracts with The Social Investment Business Limited to manage the loan book. The contract has been re-awarded for a three year period from April 2013 with a possible six years extension period. At the end of the contracts the Funds will revert to the Cabinet Office or a third party appointed by the Cabinet Office. The service agreement contains a novation clause which applies to the Futurebuilders Restricted Funds and which gives the Cabinet Office the entitlement to assign, novate or otherwise dispose of its rights and obligations under the agreement or novate the agreement itself to any other body.
Further information about Futurebuilders England Limited (Registered company number 05066676) can be found at: www.futurebuilders-england.org.uk
26. Contingent Liabilities
In June 2010 the Office of Government Commerce (OGC) was transferred from HM Treasury to the Cabinet Office under machinery of government (MOG) arrangements whereby terms and conditions of those transferring were protected. OGC had comprised units including the Government Property Unit, oversight of Major Projects and the development of collaborative procurement and procurement policy. An Employment Tribunal claim was brought by three former members of OGC and the PCS Trade Union against the Cabinet Office with regard to expected pay progression, based on a 2008 pay deal negotiated with PCS by HMT. The Employment Tribunal found in favour of the claimants and the Cabinet Office was notified of this on 15th January 2013, and following an appeal lodged by Cabinet Office an Employment Appeal Tribunal upheld the Tribunal decision in favour of the claimants on 13 December 2013.
There are up to 290 former OGC members of staff who are affected by this Employment Tribunal ruling. The ruling relates to the two year pay deal entered into in 2008 which offered pay progression points to OGC staff at two, four, six and eight years’ continuous service in pay band and having the qualifying level of performance. This only affected OGC staff and not the rest of staff within the Cabinet Office. The estimated cost of the initial backdated pay progression payments to date is approximately £160,000. Agreement has been reached with a number of staff that they are due payment, however, the value and timing of these payments has yet to be agreed. In addition to this, there is also a number of staff where consultations with staff have not yet commenced or where agreement of a liability has yet been reached.
27. Contingent liabilities not required to be disclosed under IAS 37 but included for parliamentary reporting and accountability purposes
The Cabinet Office has given the following indemnity whose amount is unquantifiable and which, within the meaning of IAS 37, is not a contingent liability, since the likelihood of a transfer of economic benefit in settlement is too remote.
Indemnity for Returning Officers at the European Parliamentary Elections May 2014
The Cabinet Office has provided an indemnity to Regional and Local Returning Officers for the European Parliamentary Elections which were held on 22 May 2014. The indemnity is for amounts which are not covered under the existing insurance policies which Regional and Local Returning Officers hold. The Department will also certificate the Returning Officers under The Employers’ Liability (Compulsory Insurance) Regulations 1998 in respect of any liability to their employees. The indemnity and certificate will remain in place to provide cover to Regional and Returning Officers for any by-elections which are held prior to the next scheduled European Parliamentary election in 2019. A parliamentary minute was laid on 8 April 2014. 28. Losses and special payments
28.1 Losses statement
The Statement of Comprehensive Net Expenditure includes the following losses, including write-offs of unrecoverable debts and fruitless payments.
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Total | 179 | 16,432 |
Constructive losses 2013-14: £Nil (2012-13: £16.350 million)
In 2012-13 the Cabinet Office made payments in respect of two leases; one for £2.7 million in respect of 67 Tufton Street, London and the other for £13.650 million in respect of 1 Palace Street, London. The payments were made on the basis of value for money cases demonstrating future cost savings.
28.2 Special payments
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Total | 597 | 24 |
Number of cases
| 2013-14 | 2012-1 | |---------|--------| | Departmental Group | Departmental Group | | Total | 27 | 13 |
Compensation payments
There was one case relating to a personal injury claim in the amount of £0.600 million; £0.025 million of which was paid in 2011-12. 29. Related party transactions
The Cabinet Office undertakes the majority of its business with other government departments, public corporations, grant giving bodies and associate companies. The following bodies are regarded as related parties with which the Cabinet Office has had various material transactions during the year.
The main recipient of grants-in-aid from the Cabinet Office in 2013-14 was National Citizen Service Trust (NCS Trust). The new independent Trust is a Community Interest Company which was created to lead and manage the National Citizen Service. The programme aims to further establish itself as a key mechanism for encouraging personal and social development and social cohesion at a critical stage in young peoples’ lives.
The main recipients of grants from the Cabinet Office in this category in 2013-14 were Big Lottery Fund, The Challenge Network, Community Development Foundation, The Social Investment Business, Locality and Nesta.
Within government, the main suppliers to the Cabinet Office were Department for Work and Pensions, HM Revenue & Customs, HM Treasury and Home Office.
Within government, the main customers of the Cabinet Office were Department for Work and Pensions, HM Revenue and Customs, Ministry of Defence, Government Procurement Service (now known as Crown Commercial Service from 1 April 2014) an executive agency, with trading fund status (see Note 7 & 30.1), and Ministry of Justice.
The Cabinet Office is a sponsor of the Civil Service Commission, an executive non-departmental public body shown in Note 30. Balances and transactions between the department and its executive non-departmental public body have been eliminated on consolidation and are not disclosed in this note.
The Cabinet Office has four associate companies, MyCSP Limited, Shared Services Connected Limited, AXELOS Limited and Behavioural Insights Team Limited. The Cabinet Office received pension administration and other services from MyCSP Limited which are funded by a charge on Civil Superannuation employer pension contributions. Commencing November 2013, the Cabinet Office received payroll, HR, finance and procurement services from Shared Services Connected Limited. The Cabinet Office transferred its 51 ‘B’ Ordinary shares in AXELOS Limited to Capita Business Services Limited, its immediate parent. The ultimate parent undertaking of AXELOS Limited is Capita plc which holds an indirect interest in Capita Resourcing Limited with whom the Cabinet Office has transacted in year. Programme evaluation services were received from The Behavioural Insights Team Limited (see Other Administration Costs Note 5, Income Note 7 and Investments in Associates Note 17).
The Cabinet Office makes loans and has loan commitments to the Bridges Social Entrepreneurs Fund LP which is managed by Bridges Ventures Limited. The Fund invests in social enterprises that have the potential to generate scaleable and sustainable social impacts. Bridges Social Entrepreneurs Fund LP is outside the departmental boundary and is therefore not classed as an associate (see Notes 16 and 19).
The Cabinet Office has responsibility for setting and reimbursing the fees and expenses of Returning Officers conducting the polls at Parliamentary elections in England and Wales. No members of staff within the Cabinet Office and the Department for Communities and Local Government had undertaken any material transactions with Returning Officers.
The ministerial titles and names of all ministers who had responsibilities for the department during the year are included in the Governance section. No minister, board member, key manager or other related parties had undertaken any material transactions with the Cabinet Office during the year. The remuneration of ministers and board members and senior managers is set out in the Remuneration Report. 30. Entities within the departmental boundary
The departmental boundary in this context relates to the boundary of the Departmental Accounts. The following bodies have been designated for consolidation into the Cabinet Office Estimates and Accounts.
Executive Non-Departmental Public Bodies (eNDPBs)
Executive Non-Departmental Public Bodies are consolidated with the accounts of the core department. eNDPBs can be established in statute. They carry out administrative, regulatory and commercial functions; they employ their own staff, are allocated their own budgets, are self-accounting and produce their own accounts.
The Cabinet Office has one executive non-department public body; the Civil Service Commission.
The annual report and accounts for the Civil Service Commission (which includes the expenditure of the Advisory Committee on Business Appointments, the House of Lords Appointments Commission and the Office of the Commissioner for Public Appointments, for which the Civil Service Commission provides secretariat services) are published separately.
Further information can be found at the links: Civil Service Commission Annual Report and Accounts http://civilservicecommission.independent.gov.uk
Advisory Non-Departmental Public Bodies (ANDPBs)
The Cabinet Office sponsors a number of advisory non-departmental public bodies that have links to the Department but whose work does not contribute directly to the achievement of the Department’s objectives and whose funding arrangements can be separate. These ANDPBs provide independent and expert advice to ministers on particular topics of interest. ANDPBs of the Cabinet Office include:
- Boundary Commission for England
- Boundary Commission for Wales
- Committee on Standards in Public Life
- Security Vetting Appeals Panel
- Senior Salaries Review Body
- Advisory Committee on Business Appointments
- House of Lords Appointments Commission
- Main Honours Advisory Committee (Honours and Appointments Secretariat)
Other
The Office of the Commissioner for Public Appointments is not a Non Departmental Public Body however, its spending falls within the Cabinet Office budget and therefore it is listed in the Designation Order.
30.1 Entities outside the departmental boundary
Executive Agency – Government Procurement Service
Government Procurement Service was an Executive Agency and a Trading Fund (set up under the Government Trading Funds Act 1973) of the Cabinet Office. The overall priority was to provide savings for the UK public sector through centralised procurement agreements. In July 2013, the Minister for the Cabinet Office announced that a new Crown Commercial Service would be created to act on behalf of the Crown to drive savings for the taxpayer and improve the quality of commercial and procurement activity across the public sector. It brings together, into one organisation, Government Procurement Service (GPS), the commercial functions of the Cabinet Office and commercial activity related to common goods and services currently undertaken by departments. The Crown Commercial Service became a legal entity on 2 April 2014 and it is an Executive Agency and Trading Fund of the Cabinet Office.
Services provided by the Crown Commercial Service include direct buying, an advisory service and the UK Government’s procurement policy function.
Further information can be found at Note 19 and at the links: Government Procurement Service Government Procurement Service Annual Report and Accounts
Other
Cabinet Office’s role is to act as the principal point of liaison within government for the Parliamentary and Health Service Ombudsman and it is non-funded.
Cabinet Office Public Bodies
The Cabinet Office produces a comprehensive annual Public Bodies directory providing details of NDPBs and similar public bodies. The directory can be found at the link: Public Bodies directory
31. Events after the reporting period
No events occurred between 31 March 2014 and 25 June 2014, the point at which these accounts were authorised for issue by the Accounting Officer.
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7d3f7ae632f88f79cd27077d525f8ddceeb5225f | Cabinet Office
Annual Report and Accounts 2013-14 (For the year ended 31 March 2014)
Accounts presented to the House of Commons pursuant to Section 6 (4) of the Government Resources and Accounts Act 2000
Annual Report presented to the House of Commons by Command of Her Majesty
Ordered by the House of Commons to be printed on 30 June 2014 This is part of a series of departmental publications which, along with the Main Estimates 2014-15 and the document Public Expenditure: Statistical Analyses 2014, present the Government’s outturn for 2013-14 and planned expenditure for 2014-15.
## Contents
| Section | Page | |------------------------------------------------------------------------|------| | **STRATEGIC REPORT** | | | Introduction by Richard Heaton, Permanent Secretary for the Cabinet Office | | | First Parliamentary Counsel and Accounting Officer | 7 | | Who we are and what we do | 8 | | Spending summary | 9 | | How we create value | 10 | | Strategic Review by Rt Hon. Francis Maude MP, Minister for the Cabinet Office | 11 | | Highlights of the year in chronological order | 13 | | Sustainable Development | 15 | | Our Performance | 21 | | Coalition Priorities | 22 | | Performance on Business Plan commitments | 28 | | Financial Review | 32 | | **GOVERNANCE** | | | Performance Report by Lord Browne, the Lead Non-Executive Director | 58 | | Our Ministers | 60 | | Governance Statement | 63 | | Remuneration Report | 84 | | Directors’ Report | | | Corporate Information | 96 | | Statement of Accounting Officer’s responsibilities | 107 | | Statement of the disclosure of relevant audit information | 108 | | **FINANCIAL STATEMENTS** | | | The Certificate and Report of the Comptroller and Auditor General to the House of Commons | 110 | | Statement of Parliamentary Supply | 112 | | Notes to the Statement of Parliamentary Supply | 113 | | Consolidated Accounts | 119 | | Notes to the Consolidated Accounts | 123 | This page is intentionally left blank. Strategic Report This page is intentionally left blank. Introduction by Richard Heaton Permanent Secretary for the Cabinet Office
As Permanent Secretary, I am proud of the achievements of teams and individuals across the Department this year. Their flexibility, and their ability to lead on a challenging set of priorities, has produced substantial results. The Minister for the Cabinet Office’s Strategic Review on page 11, describes in more detail the strategic context in which the Cabinet Office has operated this year.
The annual report and accounts is an opportunity to look back at some of the year’s highlights, as well as to set out formally our financial position. Much of what we have done this year has been new or transformative. We have found different ways to help the government tackle public policy problems, and save money. We launched the Centre for Social Action, which has committed £36 million for volunteering projects to tackle persistent social problems. November saw the appointment of a second new shared services centre, bringing commercial expertise as well as government co-ownership to the efficient delivery of vital back-office functions. The National Citizen Service has been successfully nurtured under Cabinet Office management, and is now administered by an independent not-for-profit enterprise. And the Behavioural Insights Team is now a partnership with the innovation charity Nesta.
There is also a range of other business we have discharged professionally and safely: keeping the nation safe, stimulating economic growth, cutting regulation, taking legislation through Parliament, and supporting effective government. We have done that through a skilled and talented workforce, from career civil servants to those spending a chapter of their careers with us. I would like to thank all of those colleagues for their commitment.
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer Who we are
We are privileged to be tasked with some of the most important issues facing the country: from making government more efficient to supporting the voluntary sector through challenging times; from tackling the growing menace of cybercrime to overseeing UK honours and awards.
Cabinet Office supports the Prime Minister and Deputy Prime Minister, and ensures the effective running of government. We are also the corporate headquarters for government, in partnership with HM Treasury, and we take the lead in certain critical policy areas.
A ministerial department, the Cabinet Office is supported by 18 agencies and public bodies. Every day we work together to assist government function better, deliver exceptional public services and help the UK become a stronger and fairer society.
Organisational Structure
Our organisational structure is updated and published on the following link: Cabinet Office Organogram
What we do
- We support collective government and help to ensure the effective development, coordination and implementation of policy.
- We support the National Security Council and the Joint Intelligence Organisation, coordinating the Government’s response to crises and managing the UK’s cyber security.
- We promote efficiency and reform across government through innovation, better procurement and project management, and by transforming the delivery of services.
- We promote the release of government data and make the way government works more transparent.
- We lead for Government on Civil Service reform, improving its capability and effectiveness.
- We promote social action and the National Citizen Service, and grow the social investment market.
- We lead on political and constitutional reform. Departments report financial information quarterly through the Government Interrogating Spending Tool (GIST). On the GIST you will be able to see a breakdown of government spend as per HM Treasury's financial reporting system. Within major departments you will also be able to link to the Cabinet Office's Quarterly Data Summary information, which focuses on the expenditure that is most relevant for that department and is collected in a way that makes data comparable across government. The data can be found here: [www.gist.cabinetoffice.gov.uk/](http://www.gist.cabinetoffice.gov.uk/)
Below is the Spending Data for 2013-14. These totals tie to the totals in Financial Highlights within the Financial Review which explains the numbers in more detail.
### SPEND BY BUDGET TYPE
| TOTAL | £millions\* | |-------|------------| | Departmental Expenditure Limit (DEL) | 441.6 | | Annually Managed Expenditure (AME) | (4.5) | | Other outside DEL /AME\* | (48.3) | | **Total Spend** | **388.8** |
Of which:
### SPEND BY TYPE OF INTERNAL OPERATION
| TOTAL | £millions | |-------|-----------| | Running the estate | 54.4 | | Running IT | 26.2 | | Corporate services | 16.6 | | Policy and policy implementation | 339.9 | | Other * | (48.3) | | **Total Spend** | **388.8** |
### SPEND BY TYPE OF EXPENDITURE
| TOTAL | £millions | |-------|-----------| | Procurement costs | 133.3 | | People costs | 169.0 | | Grants | 134.8 | | Other * | (48.3) | | **Total Spend** | **388.8** |
\*Other outside DEL/AME represents income from Associates How we create value
The Cabinet Office saved the Government £14.3 billion for 2013-14. This is in addition to the £10 billion saved for 2012-13, with £5.5 billion for 2011-12 and £3.75 billion for the first ten months of this Government, all measured against a 2009-10 baseline. These savings are a combination of recurring and non-recurring items.
Increased spend with small and medium sized enterprises (SMEs)
Government spend with SMEs increased from £3 billion in 2009-10 to £4.5 billion in 2012-13. We have also more than halved the length of the average procurement process since 2012 - from 208 working days to 102 working days.
Over 19,000 opportunities have now been published on our on-line tool the Contracts Finder to help SMEs spot opportunities more easily.
G-Cloud
Cumulative G-Cloud spend surpassed the £100 million mark – 56% of it with SMEs.
Major Projects Leadership Academy (MPLA)
The second MPLA cohort graduated in February 2014.
Property
By the end of 2013-14, we had vacated over 1,000 leasehold properties and raised more than £1 billion for the taxpayer since 2010 by selling over 770 buildings and land we no longer need. This means that the government office estate is 17% smaller than it was in 2010.
Mutuals
Nearly 100 mutuals are now live and trading, up from just eight in 2010. Together they now deliver around £1.5 billion of public services.
Staff survey
We published the benchmark results of the Civil Service staff survey. The survey shows that 89% of staff are interested in their work; 88% say that they are trusted to carry out their job effectively; and 80% say their team works together to find ways to improve the service they provide.
Payroll
Civil Service employment has now reduced by 17% since the general election, helping to save the taxpayer £2.4 billion last year alone. The Civil Service is now at its smallest since the Second World War, representing a significant increase in efficiency and productivity.
Public bodies
Over 180 public bodies have now been abolished, with total number of public bodies reduced by 280. This means that 95% of proposed abolitions and mergers are now complete, and we achieved our public commitment to deliver 90% of abolitions and mergers by March 2014. To date, the Government has reduced the administrative cost of public bodies by over £1 billion and remains on track to achieve cumulative net reductions of at least £2.6 billion by 2014-15.
By the next general election, a third of public bodies in the Government’s reform programme will have been closed down, and there will be over 300 fewer than at the 2010 Election making this the largest reform of public bodies in a generation. The Cabinet Office has made good progress in 2013-14, continuing its work to eliminate waste and inefficient spending, reform the civil service, build a bigger society, drive greater transparency and protect national security. I am grateful to civil servants in this department and across the country for the work they have done.
The Government faced a substantial financial challenge in 2010. This department has played an important role in changing the way the Civil Service works to help reduce public expenditure and protect our frontline services.
The Efficiency and Reform Group (ERG) has delivered significant savings year after year. The Group has operated tight control over common activities such as property, ICT, and procurement in central government and reduce costs. For 2013-14, ERG supported departments to deliver a £14.3 billion of savings, against a 2009-10 baseline. Alongside our work on major projects, digital transformation, and fraud, error and debt, this department is helping to change the way the Civil Service works.
This year was another important milestone for the efficiency and reform agenda as the Crown Commercial Service (CCS) was launched. CCS brings together the government’s central commercial capability to manage common goods and service on behalf of departments. Government is acting as a single customer, helping us drive the best value for taxpayers through its collective buying power.
In other areas, the department has continued to drive innovative changes to public service delivery. The mutuals programme, for example, has seen the creation of almost 100 trading staff-owned mutuals, with responsibility for over £1.5 billion worth of services. The Government Digital Service (GDS) is changing the way citizens interact with public services, by consolidating more websites on GOV.UK and developing 25 new digital exemplar services. On transparency, the Cabinet Office has helped to release thousands of data sets on data.gov.uk and in June 2013, G8 governments came together under the UK presidency to agree a landmark Open Data Charter.
The Civil Service Reform programme is seeking to create a new culture - one that is more efficient and focused on service delivery. Our Civil Service Reform One Year On report gives an honest appraisal of what we have achieved. There is still much more to do and the Cabinet Office will continue to play an important part in building capability and strengthening cross-Whitehall functional leadership.
Along with HM Treasury, the Cabinet Office is a strong and effective corporate centre at the heart of the Civil Service. It supports the Prime Minister and Deputy Prime Minister on key policy areas, and helping to protect our national security. The Secretariats facilitate collective decision-making across government. 2013-14 has been a busy year, with many important milestones. We have continued to support the Government’s priorities to reduce the deficit, drive growth, build a fairer society and protect our security. I am proud of the work this department does and am confident that we can build on the progress made over the last four years in the last year of this Parliament.
A detailed account of the strategic risks and our mitigation strategy can be found in the Governance Statement.
Rt Hon. Francis Maude Minister for the Cabinet Office, Paymaster General Highlights of the year in chronological order
10 April – We signed a deal that will significantly reduce what government pays for energy. The new 20-year contract with Air Products is expected to deliver £84 million in savings over its lifetime, through an innovative fixed agreement that will provide stability in what the public sector pays for energy.
15 April – We appointed members to the Open Standards Board to help government identify the standards that will allow cheaper and more flexible ways of buying and using its IT.
15 April – A new Civil Service Fast Track Apprenticeship Scheme opened for applications, giving talented and ambitious young people the opportunity to work at the heart of government.
17 April – We launched the Centre for Social Action, which committed £36 million to finding and supporting the most effective volunteering projects to tackle persistent social problems.
26 April – We signed an innovative deal to create the first business based on government intellectual property. The new company, AXELOS Limited, will own and trade on the ‘Best Management Practice’ portfolio of professional standards developed by the Civil Service, and is expected to boost returns for taxpayers by £500 million over ten years.
29 April – The 24th and final ministerial department website moved across to the single domain GOV.UK.
24 May – The performance of the Government’s most expensive and important projects was revealed for the first time through the Major Projects Authority’s annual report, which will help overturn Whitehall secrecy and further improve project delivery.
6 June – The UK hosted the inaugural G8 conference on social impact investing, where the Prime Minister reinforced the UK’s commitment and leadership in growing the global social investment market.
10 July – We published a review of the first year of the Civil Service Reform Plan, including a traffic-light assessment showing where progress is on track, where more effort is needed and further actions.
17 July – We launched the Civil Service High Potential Stream, which targets ambitious individuals who consistently and significantly outperform their peers. Many will go on to become part of the Civil Service Top 200, and some could rise to become the permanent secretaries of tomorrow.
29 July – We launched the Government Interrogating Spending Tool (GIST) which is a powerful new online tool that gives taxpayers an unprecedented view of how their money is spent. The tool is the first of its kind in the world, and it increases accountability and transparency by opening the Government’s books.
20 Aug – We announced that measures introduced since the last general election had last year cut fraud and error that hits the public purse by £6.5 billion against a 2009-10 baseline. 15 Oct – We launched the new Government Communication Service to improve professionalism, standards, career development and value for money. The new approach will see departments’ teams supported by an additional central resource of expertise for specific, short-term projects or emerging priorities and breaking news issues.
1 Nov – We helped organise the Open Government Partnership annual summit. We used the summit to help drive forward our transparency agenda, and on the first day of the summit published the UK’s second National Action Plan.
1 Nov – We announced that Shared Services Connected Limited (SSCL) will run the second of two new Independent Shared Services Centres. The company will harness commercial expertise to deliver government back-office functions more efficiently.
12 Nov – We launched the Digital Services Framework for building digital public services, with more than a third of the companies on the new procurement framework never before having done business with government.
4 Dec – We published pipelines of future government business opportunities worth more than £177 billion. This gives firms of all sizes the confidence and time to invest in the relevant skills, labour and capabilities to win contracts. The 19 sectors in the latest update cover more industries than ever before.
31 Dec – The cost of the Civil Service pay bill spend on trade union facility time fell by around two thirds since November 2011.
15 Jan – The European Parliament agreed a revised package of EU Procurement Directives; it includes a number of UK wins on things we lobbied for in Brussels – including support for small and medium-sized enterprises and mutuals.
24 Jan – We published ‘red lines’ for government IT contracts to ensure maximum taxpayer value. This means that no IT contract worth more than £100 million will be allowed (unless there is an exceptional reason for permitting it) and that new hosting contracts will not last for more than two years.
4 Feb – The Cabinet Office’s Behavioural Insights Team joined with the innovation charity National Endowment for Science, Technology and the Arts (Nesta) to create a new associate company to apply insights from behavioural sciences and to help the Government save millions of pounds for the taxpayer by tackling public policy problems.
10 Feb – We published a unit cost database bringing together more than 600 service cost estimates. This enables civil society organisations to bid in to government with ideas for where they could provide more innovative and effective approaches to tackling social problems. The UK has more Social Impact Bonds (SIBs) than the rest of the world put together, and is supported by a dedicated Centre for SIBs in the Cabinet Office.
13 Feb – We published results from the 2013 Civil Service People Survey, showing results of the fifth annual survey of civil servants’ opinions about what it is like to work in government departments and agencies.
14 March – The UK and Israel signed a new memorandum of understanding on digital government which will create opportunities for future generations. Sustainable Development
Overview
Sustainable development means encouraging economic growth while protecting the environment and improving our quality of life – all without affecting the ability of future generations to do the same. Sustainable development recognises that the three ‘pillars’ of the economy, society and the environment are interconnected.
The Cabinet Office strives to embed the principles of sustainable development in all of its operations and activities. The Department is working to reduce its energy consumption and associated carbon emissions and costs, as well as to mitigate its wider environmental impacts, with the aim of becoming an exemplar in this field. The important work on protecting national security and improving social mobility undertaken by the Department continues to contribute to a secure and sustainable future for all.
The Cabinet Office has implemented a number of projects to help the Department deliver the carbon reduction targets announced under the Greening Government Commitments. The Department continues to drive down its waste arisings, and is working in partnership with the Department for Environment, Food and Rural Affairs (Defra) and the Waste and Resources Action Programme to make further savings in this area. As well as these measures, the Cabinet Office is also working to incorporate sustainability considerations into its wider policy- and decision-making process.
Initiatives
This work is further supported by Big Society Capital (BSC), the world’s first ever social investment institution. BSC was established by the Cabinet Office and launched as an independent organisation in April 2012. Its aim is to grow the social investment market. BSC invests in bodies that provide finance and other support to social sector organisations – making it easier for social entrepreneurs to access the capital they need and to become sustainable. BSC has up to £600 million in capital to invest: £400 million from England’s share of unclaimed assets and £200 million invested by four large retail banks.
Two years into its operation, BSC has just published its second annual report, available at: Social Investment from Ambition to Capital
Nearly £150 million in investment has been committed so far to a wide range of organisations. BSC has recently published its strategy, which sets out its vision for the future social investment market and what it will do to work towards this vision, in partnership with others. The strategy is available at: Big Society Capital - Our strategy for the next three years
The Implementation Unit in the Cabinet Office has supported Defra to embed sustainable development into the departmental business planning process, a key step in delivering the Government’s commitment to mainstreaming sustainable development. Sustainable development is now included within the guidance for departmental business plans as a mandatory component of all plans. Details of each department’s business plan can be found at: Business Plans: track progress in implementing our policies
The Cabinet Office leads on the cross-government transparency agenda. Transparency is not just about access to data. People need to be able to use that data, share it, and combine it with other data for use in their own applications. Used in this way, open data can create value by providing an opportunity for businesses to take the data and produce goods and services from it. Information on government transparency can be found at: Improving the transparency and accountability of government and its services The resulting data is published at: http://data.gov.uk/
The Cabinet Office sits on the cross-government Sustainable Development Practitioners’ Forum and the Sustainable Development Group, both chaired by Defra.
Wider work
The Cabinet Office is working on a number of key programmes which will also have a significant contribution to make towards mainstreaming sustainability. These work streams include:
- growing the social investment market – comprehensive information available at: Growing the social investment market
- the work of the Office for Civil Society: Civil Society update series including Promoting social action: encouraging and enabling people to play a more active part in society
- the launch of National Citizen Service: Take part- National Citizen Service
- leading on the transparency agenda, including regularly publishing progress reports showing performance across government against the key performance areas; these reports are available at: Procurement and contracting transparency progress reports
- making public services digital by default to improve their accessibility and openness, primarily through the launch of the GOV.UK website.
Social and environmental impacts
The Cabinet Office continues to look at options for assessing and managing social and environmental impacts and opportunities in its policy development and decision-making. The Department has a number of levers at its disposal to help ensure that this is happening domestically and across government as a whole. These include:
- the Department’s role in delivering the Government’s priorities for Civil Service reform in line with the recently published plan, available at: The Civil Service Reform Plan
- the inclusion of relevant information in the transparency reporting undertaken by departments.
In its policy, programme and project development processes, the Cabinet Office makes use of both the HM Treasury Green Book and the Regulatory Impact Assessment toolkit. Both of these documents contain detailed information on how to assess and mitigate negative outcomes which impact on sustainability. Wherever relevant, the Cabinet Office makes use of Defra’s national rural proofing guidance which can be found at: Rural proofing guidance to ensure that the needs and interests of rural people, communities and businesses are properly considered in the development and implementation of all policies and programmes. The Cabinet Office will be working over the coming year to identify further opportunities to build on existing processes, in order to ensure that sustainability is factored into its policy, programme and project management activities.
Delivery of the Greening Government Commitments
The Department has been successful in driving down its carbon footprint: this has fallen by 38.9% from its 2009-10 baseline, through a combination of improved housekeeping, investment in energy reduction measures and the implementation of an ambitious and extensive estate rationalisation and efficiency project. As the Department continues to drive forward with these measures, we anticipate a steady improvement in our performance over the lifetime of the project. The Cabinet Office now also has good-quality management information systems in place, allowing it to report accurately for the first time on the number of domestic flights taken by its staff.
The Department’s annual waste arisings continue to fall and are now 63.7% below 2009-10. This has primarily come about as a result of better streaming and waste separation at the processing plant. The Department has signed up to the ‘Closed Loop’ paper contract, along with other contractual arrangements, thereby potentially yielding further environmental benefits.
The Cabinet Office has made a reduction in its water consumption of 12.2% against the 2009-10 baseline. These savings have arisen primarily as a result of the Department’s estate rationalisation programme. The Cabinet Office has a headline consumption per full-time equivalent (FTE) member of staff of 15.5m³. This is significantly higher than is desirable, and the organisation will work to drive this down at both departmental and building level. It is in part because various buildings are currently under refurbishment and are therefore not fully utilised.
Sustainable procurement
The Cabinet Office continues to work to deliver the aspiration that 25% of contracts by value should be awarded to small and medium-sized enterprises (SMEs). In the period to December 2013, the proportion of the Department’s procurement expenditure with SMEs was 26.3%, against its annual target of 20%. This includes spend undertaken both directly, with SME prime contractors, and indirectly, through larger prime suppliers’ supply chains. In order to support this endeavour further, the Cabinet Office, including its agency, the Crown Commercial Service, has delivered the following:
- over 80% of contracts for the Mutuals Support Programme awarded to SMEs
- development of a new contracting model for facilities management services designed to be more accessible for SMEs
- roll-out of the Solutions Exchange online tool, enabling suppliers to engage with government about potential business, and to pitch their ideas
- introduction of simpler terms and conditions for lower-value contracts.
Food procurement
The Cabinet Office has been engaging with its key catering suppliers to encourage the procurement of food which meets British production standards. Approximately 92% of all meat and poultry supplied on the Department’s central London contract was produced to Farm Assured standard (or equivalent); 100% of fish supplied was from sustainable sources certified by bodies such as the Marine Stewardship Council. All the Department’s meat, poultry and milk comes from UK producers.
The Department’s total facilities management supplier provides healthy options within the standard daily menus, along with a diverse salad and deli bar.
Details of the Cabinet Office’s food procurement is available at: Cabinet Office food sustainability
People
The Cabinet Office has a network of Green Champions to promote sustainability issues within the Department and on its estate. The membership of the network comprises staff from the Department and tenants on the Cabinet Office estate. They work to improve the sustainability of the Department by raising staff awareness of sustainability issues and by encouraging staff to take responsibility for reducing their environmental impact. The Green Champions act as a forum to develop constructive ideas for improving all aspects of the Cabinet Office’s operations, from the way in which its estate is managed through to its corporate policies and processes.
The Civil Service has a long tradition of supporting staff to volunteer, with many civil servants giving their time in aid of a variety of charities and community groups. The Cabinet Office recently launched its second Charity of the Year Partnership with Samaritans. The Department offers up to five days’ special leave for each member of staff to undertake volunteering. Staff can organise their own volunteering activity or can visit www.do- Biodiversity
The Cabinet Office operates a mainly office-based estate and, as such, has not had to undertake any major work on biodiversity. The Department works to ensure that, whenever relevant, biodiversity considerations are taken into account in the event of a change of circumstances. These considerations have been embedded in the Department’s environmental policy.
Sustainable construction
The Cabinet Office seeks to apply the Building Research Establishment Environmental Assessment Method (BREEAM) on all relevant refurbishment projects. The Department has not completed any such projects in the last financial year. The ongoing refurbishment at 10–12 Downing Street has received a BREEAM in-use rating of ‘very good’. More information is available at: http://www.breeam.org/
The Cabinet Office will work to ensure that this good performance continues, by embedding the standards in all relevant projects. The Cabinet Office endeavours to recycle all construction waste, where possible, and this is monitored internally to ensure continuing compliance with this standard.
Adapting to climate change
The risks posed by climate change are too great to ignore. It is essential that policies and future plans consider these potential impacts from the very start. The Cabinet Office has an important role to play in ensuring national adaptation to the risks and opportunities presented by climate change. To this end, the Department has taken a number of steps to ensure that these considerations are reflected in its relevant planning, policies and strategies. For example:
- Some of the major impacts of climate change have been identified as key threats in the National Risk Register (NRR) of Civil Emergencies. However, The NRR and the National Risk Assessment cover only emergency events and do not include longer-term trends, such as technological advances or climate change in the broader sense. The document is available at: National Risk Register of Civil Emergencies
- The security implications of climate change have been embedded in the National Security Strategy, available at: The National Security Strategy - a strong Britain in an age of uncertainty
- The Cabinet works closely with Defra on the National Adaptation Programme, details of which are available at: Adapting to climate change: national adaptation programme
## Sustainable Development data tables
### Greening Government Commitments and resource use
#### Reduce greenhouse gas emissions by 25% from a 2009-10 baseline from the whole estate and domestic business-related transport
| Baseline emissions (tonnes of CO₂e) | 2013-14 emissions (tonnes of CO₂e) | % change | |-------------------------------------|------------------------------------|----------| | 11,733 | 7,272 | 38.1% reduction |
#### Cut domestic business travel flights by 20% by 2015 from a 2009-10 baseline
| Baseline flights | 2013-14 flights | % change | |------------------|-----------------|----------| | 2,306 | 2,390 | 3.6% increase |
#### Reduce the amount of waste we generate by 25% from a 2009-10 baseline
| Baseline waste arisings (tonnes) | 2013-14 waste arisings (tonnes) | % change | |----------------------------------|----------------------------------|----------| | 1,226 | 444 | 63.8% reduction |
#### Cut our paper use by 10% in 2011-12 from a 2009-10 baseline
| Baseline paper usage (reams of A4e) | 2013-14 paper usage (reams of A4e) | % change | |-------------------------------------|------------------------------------|----------| | 56,396 | 20,171 | 64.2% reduction |
#### Reduce water consumption from a 2009–10 baseline
| Baseline water consumption (m³) | 2013-14 water consumption (m³) | % change | |---------------------------------|--------------------------------|----------| | 52,388 | 45,123 | 13.9% reduction |
#### Report on percentage of offices meeting best/good/poor practice water-use benchmarks
| Benchmark | Poor (≥6 m³ per FTE) | Good (4m³ to 6m³ per FTE) | Best (≤4m³ per FTE) | |-----------|----------------------|---------------------------|---------------------| | % of offices | 92% | 0% | 8% |
### Carbon and energy
| Utility | 2013-14 Consumption (kWh) | 2013-14 Emissions (tonnes of CO₂e) | 2013-14 Expenditure (£k) | 2012-13 Consumption (kWh) | 2012-13 Emissions (tonnes of CO₂e) | 2012-13 Expenditure (£k) | |-------------------------------|---------------------------|-----------------------------------|--------------------------|---------------------------|-----------------------------------|--------------------------| | Gas | 3,131,616 | 576 | 98 | 4,136,459 | 759 | 148 | | Electricity | 11,191,391 | 5,412 | 1,234 | 12,130,313 | 6,364 | 840 | | Whitehall District Heating System | 2,723,958 | 724 | 445 | 4,070,368 | 987 | 584 |
### Travel
| Category | 2013–14 Mileage | 2013–14 Emissions (tonnes of CO₂e) | 2013–14 Expenditure (£k) | 2012–13 Mileage | 2012–13 Emissions (tonnes of CO₂e) | 2012–13 Expenditure (£k) | |---------------------------------|-----------------|-----------------------------------|--------------------------|-----------------|-----------------------------------|--------------------------| | Air travel – domestic | 495,915 | 138 | 267 | 493,685 | 143 | 249 | | Air travel – short haul | 529,529 | 147 | 173 | 618,668 | 196 | 202 | | Air travel – long haul | 3,299,691 | 918 | 1,264 | 3,082,116 | 1,119 | 984 | | UK rail travel | 3,682,169 | 290 | 935 | 3,194,782 | 290 | 1,263 | | Taxi travel | 61,103 | 14 | 108 | 51,179 | 12 | 102 | | Hire car | 105,596 | 32 | 21 | 47,323 | 16 | 23 | | Operational vehicles | 40,141 | 12 | - | 54,783 | 17 | - |
### Greenhouse gas emissions summary
| Scope | 2013-14 Emissions (tonnes of CO₂e) | 2012-13 Emissions (tonnes of CO₂e) | |--------------------------------|-----------------------------------|-----------------------------------| | Scope 1 | 638 | 776 | | Scope 2 | 5,709 | 7,351 | | Scope 3 | 891 | 1,776 | | Carbon Reduction Commitment data | CERs surrendered | CER balance | | Certified Emission Reductions (CERs) purchased | 1,753 | 6,777 |
### Waste
| Category | Arisings (tonnes) | Percentage of total arising | Disposal cost (£k) | |---------------------|-------------------|----------------------------|--------------------| | Landfill | 24 | 5% | N/K | | Recycled | 247 | 56% | N/K | | Energy from waste | 143 | 32% | N/K | | Waste to compost | 30 | 7% | N/K | | TOTAL | 444 | 100% | 64 |
### Water consumption
| Total consumption (m³) | Consumption (m³)/FTE | Total expenditure (£k) | |------------------------|----------------------|------------------------| | 45,123 | 15.5 | 95 |
### Paper Consumption
| Paper Size | Units Purchased (reams) | |------------|-------------------------| | A3 | 111 | | A4 | 19,949 | | Total A4e | 20,171 | Performance
How we have delivered against our Coalition Government priorities
The Cabinet Office works to ensure the successful and efficient delivery of the Government’s agenda and to help departments achieve their objectives. Alongside this, and as part of these more general responsibilities, the Cabinet Office leads on a number of specific Coalition Government priorities. Below is a diagram showing the relationship between the Cabinet Office’s strategic objectives and the structural reform priorities that derive from the Coalition Government’s Programme for Government.
All the strategic objectives contribute to the central priority of promoting UK growth; primary relationships between individual objectives and structural reform priorities are shown by arrows. The Cabinet Office publishes its commitments on No. 10’s Transparency website No 10 Transparency.
GOV.UK also provides news and updates on progress of work undertaken by the Cabinet Office, including details of announcements of achievements on the Cabinet Office Website.
Progress on the key actions during 2013-14 are summarised below.
Coalition Priorities
Drive efficiency and effectiveness in government
The Cabinet Office continues its strong progress to improve efficiency and effectiveness across Whitehall. This work is taking place across a broad front, ranging from reducing inefficient and wasteful spending on major projects, through transforming public services by reforming procurement processes, to the Government’s digital infrastructure, aimed at ensuring that services are readily accessible and provide a greater choice for the user. The Cabinet Office is coordinating action to reform the Civil Service, in order to improve the Service’s capability and strengthen its performance.
Actions during 2013-14
- The Efficiency and Reform Group (ERG) worked across government to tackle waste and inefficiency and to realise savings of £14.3 billion in 2013-14 against a 2009-10 baseline.
- The commitment to secure the Deregulation Bill in the third session of Parliament was achieved in 2013-14 and the Bill received Royal Assent on 14 May. It will help the Government in its drive to remove the burden of unnecessary bureaucracy on businesses.
- GOV.UK was launched in October 2012 as central government’s single domain website, bringing published government information from various separate websites under one domain. As a result of building GOV.UK government departments have saved over £60 million in 2013-14. Difficulties in resourcing and the complexity of some sites meant that the commitment to move more than 250 departmental, agency and arm’s length bodies to GOV.UK was missed. This was resolved and by March 2014 160 sites had moved to GOV.UK; it is on track for completion by July 2014.
- Developing a new organisation for debt management across government by March 2014 was delayed due to additional work required; it will now be commissioned during 2014-15. Increase transparency in the public sector
The Cabinet Office leads work on increasing transparency in the public sector by getting data out of departments and engaging with users of that data to explain its potential and to understand their needs. In so doing, it helps the public to hold government to account and enables users of public services to choose between suppliers in a better way.
Actions during 2013-14
- The Cabinet Office delivered a strong legacy from its G8 Presidency by securing a G8 Open Data Charter. It sets out five strategic principles that all G8 members and the EU have signed up to and will act upon. The UK’s G8 Open Data Charter action plan was published on 31 October 2013.
- As chair of the Open Government Partnership (OGP), the Cabinet Office organised a vibrant and inspirational OGP summit in London at the end of October that was attended by over 1,500 participants from around the world, including senior representatives from government and civil society. Ambitious new commitments to open government were secured from 37 attending countries. Three more countries adopted the Open Data Charter (Ireland, the Philippines and Panama).
- The Cabinet Office worked across government, in partnership with civil society organisations, to produce an updated Open Government Partnership UK National Action Plan, setting out 21 stretching and ambitious commitments to make government more transparent and accountable. This was launched by the Prime Minister and included a world-leading commitment to creating a publicly accessible registry of the beneficial owners of companies. This was an important example of open policy-making in action, with policy being discussed, developed and agreed between government and citizens. The Cabinet Office developed and published the world’s first National Information Infrastructure. This contains the data held by government that is likely to have the broadest and most significant economic and social impact if it is made available and accessible outside government.
- The Cabinet Office refreshed and redeveloped data.gov.uk to provide additional functionality to the data catalogue and to enhance online engagement tools and usability. There are now over 13,000 datasets published through data.gov.uk, exceeding our action to increase the number available by 20%.
13,962 datasets were published on data.gov.uk in April 2014 327 external applications use government data published on data.gov.uk Reform of the political and constitutional system
Since 2010, the Cabinet Office has been taking forward the Government’s political and constitutional reform agenda, which is already resulting in greater democratic accountability, transparency and economic growth. This work includes a number of activities, including the introduction of a new system of individual electoral registration. The Cabinet Office is also leading work to reform lobbying and make campaigning more transparent, by bringing before Parliament the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill. At the same time, the Cabinet Office is playing a key role, together with the Scotland Office and the Scottish Government, in preparing for a legal, fair and decisive referendum on Scottish independence. The Cabinet Office is also working with departments to implement measures to promote local growth.
Actions during 2013-14
- The Cabinet Office fulfilled the commitment to carry out an end-to-end test of digital services and a dry run of automatic confirmation of all electoral registers, showing that the vast majority of current electors (78%) will have to do nothing to stay registered to vote.
- The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill received Royal Assent in January 2014. It will bring greater transparency to politics, fairness to political campaigning and accuracy to trade union membership records.
- The Department published a response to the Political and Constitutional Reform Committee’s Report on the Recall of MPs White Paper and draft Bill in July 2013 and is preparing for a Bill in the fourth Parliamentary session.
- Since Wave 2 City Deals were launched in October 2012, the Government has launched ‘Growth Deals’ in response to the report by Lord Heseltine No Stone Unturned. These deals will be concluded in summer 2014. To date, all Wave 2 City Deals identified for agreement by the end of March have been concluded.
- In December 2013, the Government decided not to pursue the establishment of a House Business Committee, but remains open to the possibility of revisiting at a later date.
Build the Big Society
The Cabinet Office is leading work across government to support civil society in three ways: 1) to make it easier to set up and run a charity or voluntary organisation, 2) to get more resources into the charitable or voluntary sector and 3) to make it easier for the sector to work with the state. To achieve these objectives, the Cabinet Office is taking forward a number of programmes. These include the National Citizen Service, which encourages 16–17-year-olds to be more engaged in their communities; a range of social action initiatives and funding programmes to encourage people to give more of their time and money; and support for the development of social finance and enterprises to solve social problems and boost economic growth.
Last year, 44% of adults took part in formal volunteering at least once.
By October 2013, 372 community organisers have been trained. Actions during 2013-14
- The Cabinet Office achieved its commitment to launch a second round of the Social Incubator Fund. In March 2014, it was announced that match-funding had been provided to six new start-up incubators. The Department will help incubators to support new social ventures, expand their businesses and generate new employment.
- The Cabinet Office held a successful G8 event on social investment in October 2013, helping to promote the UK as a global hub for social investment.
- The Department launched the Centre for Social Action, which in April 2013 committed £36 million to find and support the most effective volunteering projects to tackle persistent social problems.
- Following a successful Olympics, a commitment to support 10,000 community events during 2013-14 was achieved.
Promote social mobility
The Cabinet Office works across government to support the Deputy Prime Minister in his activities to improve social mobility and create a fairer, more open and more mobile society. The Government’s social mobility strategy entitled Opening Doors, Breaking Barriers: A strategy for social mobility sets out the Government’s vision for a socially mobile country, and how it can become a reality.
Actions during 2013-14
- The Cabinet Office launched the Opening Doors campaign in November 2013 to call on companies, large and small, to sign up and open their doors to young people from all walks of life.
- The Department worked to promote the social mobility Business Compact. This encourages businesses to ensure that young people have fair and open access to employment opportunities through mentoring, talks and other career and skills-based activities; that they have fair access to work experience and internship opportunities; and that recruitment takes place openly and fairly.
- The Department worked in partnership with the Social Mobility Foundation to deliver the Civil Service Whitehall Internship Scheme. This has the aim of offering year 12 students valuable experience of life in government on two-week internships, and of providing skills and experiences that can assist in future employment.
- With the Department for Work and Pensions, the Cabinet Office delivered the Civil Service Fast Stream Summer Diversity Internship Programme. This will give talented school leavers who are looking for an alternative to the graduate route into employment an opportunity to earn while they learn in challenging roles at the heart of government.
- The Department published the latest set of social mobility indicators, providing information on the progress and effectiveness of the social mobility strategy.
- The first cohort of 100 apprentices joined the Civil Service.
Promote UK growth
The Cabinet Office works to promote UK growth through a number of avenues: leading the drive to improve government efficiency and effectiveness; reforming government procurement; transforming public services; introducing new commercial models across the public sector; getting out of surplus state-owned property; being a world leader in social investment; and exploiting open data. Work to advance these areas is ongoing.
Actions during 2013-14
- The Cabinet Office, together with the Department for Business, Innovation and Skills (BIS), achieved the commitment for the Red Tape Challenge to identify 3,000 regulations to be removed or substantially reduced during the lifetime of this Parliament. Stripping away unnecessary bureaucracy will remove those burdensome or over-complicated regulations that hamper businesses and stifle their ability to grow.
- Work continued on empowering communities to grow social capital by training a new generation of community organisers and supporting the creation of neighbourhood groups, especially in the most deprived areas.
- The Department reduced inefficient and wasteful spending on major projects through an enhanced Major Projects Authority (MPA). It published the MPA’s annual report, together with the status of the projects that make up the Government Major Projects Portfolio.
- There are now nearly a hundred mutuals live and trading. Together they deliver around £1.5 billion of public services.
Maintain a secure and resilient UK and help to shape a stable world
The Cabinet Office’s aim is to serve the Government’s national security priorities, including: supporting the effective operation of the National Security Council; preparing for and managing the coordination of the Government’s response to crises; planning and managing a transformative cyber security programme for the UK; and developing a better framework for the management of national security and intelligence material in courts.
Actions during 2013-14
- A new, simplified classification of documents across Whitehall was announced on 17 October 2013, to come into effect on 2 April 2014. The intention was to reduce the number of classifications from six to just three. That will improve the way government does business and make it easier for government to work with external partners.
- The major Be Cyberstreetwise campaign was launched. This aims to educate and change the way in which people view online safety; and to provide the public and businesses with the skills and knowledge they need to take control of their cyber security. The National Risk Register, published in 2013, is internationally recognised as a world-leading document (UN Hyogo Framework Peer Review 2013).
In February 2014, the Department established CERT-UK, a new computer emergency response organisation for national cyber incident management, to integrate the capabilities of the Cyber-Security Information Sharing Partnership, the Cyber Security Operations Centre and the Computer Security Incident Reporting Team.
In May 2013, the Cabinet Office delivered the successful Second International London Somalia Conference, co-hosted by the Prime Minister and the President of Somalia, with the participation of 54 country and organisational heads.
The Department secured pledges for Somalia from the international community of over $300 million.
It kicked off technical-level engagement between international financial institutions and new Somali institutions.
It enabled an EU–Somalia conference in September 2013 to agree specific, detailed priorities for stabilisation and development needs up to 2016, as well as donor funding of Euro 1.8 billion.
The Cabinet Office developed a G8 initiative on stopping payment of ransoms in terrorist kidnaps.
At all times, provide effective and professional support for government business
We have at all times supported the Government’s business effectively and professionally, including through the advice and support we provide to the Prime Minister, the Deputy Prime Minister and Cabinet; through our leading role in supporting the development, coordination and implementation of domestic, economic, security, European and global policies; and through our support for ministers in delivering their legislative programme and other parliamentary business. Performance on Business Plan commitments 2013-14
2013-14 achievements
- 91 actions in total
- 58 completed
- 25 currently in progress
- 3 to be commenced
- 5 overdue
Actions achieved:
2.2.i. Publish report on the work of the Mutuals Taskforce, the first annual report on the wider mutuals programme and a ‘one-year on’ report Achieved: Jul 2013
2.2.ii. Support public sector spin-outs including 50 mutuals in local authority control and further spin-outs in central government Achieved: Feb 2014
2.2.iii. Launch a new commercial entity for the provision of shared services, as part of the Next Generation Shared Services strategy and in line with the Civil Service Reform Plan Achieved: Nov 2013
2.2.iv. Commence three procurements with the aim of transforming the business models of Government services Achieved: Mar 2014
2.3.i. Appoint National Advisor for What Works, to support the development of What Works Centres across £200 billion of public spending Achieved: Jul 2013
2.3.ii. Publish Open Public Services 2014, the annual account of progress and next steps in reforming public services Achieved: March 2014
2.4.ii. Strengthen reporting lines from departmental Commercial Directors/Heads of Procurement to the Chief Procurement Officer Achieved: Jun 2013
2.5.ii. Develop and launch the Government Construction Pipeline website Achieved: Dec 2013
2.6.ii. Launch a new agile commissioning framework to create a more diverse IT and digital market through disaggregation, increased competition and making it easier for the best suppliers to bid Achieved: Nov 2013
2.6.iii. Publish guidelines for Government’s use of ‘open standard’ software, to allow a wider range of suppliers to build and improve digital services in a more cost effective way for Government, and first set of open standards, measured by number of departments that have agreed to, or have an implementation plan for, each ‘mandated’ open standard Achieved: Sep 2013
2.6.iv. Publish a ‘one year on’ report on the progress of the digital strategies including an approach to assisted digital Achieved: Dec 2013
2.6.vi. Establish a recruitment hub to assist departments to acquire high level and specialist digital skills in line with the Government Digital Strategy and the Civil Service Reform Plan Achieved: Jun 2013
2.7.i. Publish an action plan to deliver the aspiration that, by the end of this Parliament, at least half of all new appointees to the boards of public bodies are women Achieved: Dec 2013 2.9.ii. Publish a one-year on report on progress against the Civil Service Reform Plan, including next steps to deliver the Civil Service Reform agenda Achieved: Jul 2013
2.9.iii. First cohort of 100 apprentices to join the Civil Service Achieved: Sep 2013
2.9.iv. Review the guidance on civil servants giving evidence to Select Committees (Osmotherly rules) as part of wider work to sharpen accountability Achieved: Jul 2013
2.9.v. Publish 2013-14 Permanent Secretary objectives Achieved: Dec 2013
2.10.i. Publish the annual report of Lord Browne of Madingley, the Government lead non-executive, on progress on improving governance across Whitehall and on building leadership and management through non-executives and Departmental Boards Achieved: Jun 2013
2.11.i. Secure a place in the third legislative session for a Deregulation Bill and prepare the draft Bill to be published for pre-legislative scrutiny Achieved: Jul 2013
2.11.ii. Lead, with BIS, the Red Tape Challenge work of all Departments to collectively identify, by 31 December 2013, 3,000 regulations to be removed or substantially reduced during the lifetime of this Parliament Achieved: Dec 2013
2.12.i. Implement a new digital case management system for spending controls to improve collaboration and performance across Cabinet Office, HM Treasury and departments Achieved: Jun 2013
2.13.i. Work with departments, interested groups and the public to improve the quality and usefulness of published Quarterly Data Summary (QDS) expenditure data Achieved: Aug 2013
2.13.iv. Work with Internal Audit and the National Audit Office to quality assure QDS data Achieved: Mar 2014
2.13.v. Establish a network for management information professionals Achieved: Nov 2013
2.14.i. Publish MPA annual report and Red, Amber or Green (RAG) status of the Government Major Projects Portfolio (GMPP) projects Achieved: May 2013
2.14.ii. Establish an enhanced Major Projects Authority, working with Infrastructure UK, drawing on recommendations made in Lord Browne’s Review Achieved: Mar 2014
2.17.i. Reduce the running costs on the central government estate by £600 million per annum Achieved: Mar 2014
2.17.ii. Generate proceeds from the sale of freehold properties of £1.25 billion Achieved: Mar 2014
2.8.i. Complete 90% of all abolitions and mergers of quangos. Achieved: Mar 2014
3.1.i. Secure a G8 Open Data charter Achieved: Jul 2013
3.1.ii. Draft, in conjunction with civil society organisations, consult on and publish an updated Open Government Partnership (OGP) UK National Action Plan Achieved: Oct 2013
3.1.iii. Work with other steering committee members to deepen the OGP, secure a robust independent reporting mechanism, and deliver the October OGP plenary event in London Achieved: Oct 2013
3.1.iv. Maintain Britain’s global position as a leader on open data including by securing a future for the Post Code Address File that better meets the needs of start-up data businesses and work with the Department for Business, Innovation and Skills on a response to the Shakespeare Review Achieved: Oct 2013
3.2.i. Amend Freedom of Information Code of Practice as required by new legislation to extend the “right to data” to public authorities Achieved: Jul 2013
3.2.ii. Increase the number of datasets available via data.gov.uk by 20% Achieved: Nov 2013
3.2.iii. Extend current transparency arrangements to cover senior officials’ travel Achieved: Jan 2014
3.3.i. Work with departments to implement reforms to Trade Union Facility Time arrangements, including monitoring of participation in trade union activities and duties Achieved: Nov 2013
3.3.ii. Publish quarterly updates of cross-government Facility Time data Achieved: Aug 2013
4.1.i. Publish response to the Political and Constitutional Reform Committee’s Report on the Recall of MPs White Paper and draft Bill Achieved: Jun 2013
4.2.i. Establish House Business Committee by third year of Parliament Achieved: Dec 2013
4.2.ii. Respond to the Joint Committee’s report on Parliamentary Privilege Achieved: Dec 2013
4.3.i. Carry out end to end test of digital service and dry run of automatic confirmation of all electoral registers Achieved: Sep 2013
4.4.i. Pursue detailed agreement on limiting donations and reforming party funding Achieved: Jul 2013
4.4.ii. Bring forward proposals on limiting donations and reforming party funding Achieved: Sept 2013
4.4.iii. Introduce legislation that provides for a statutory register for lobbyists Achieved: Jul 2013
4.6.i. Negotiate and agree a second wave of deals, working with the Department for Business, Innovation and Skills (BIS) and the Department for Communities and Local Government (DCLG) and other government departments Achieved: Mar 2014
4.6.ii. Work with departments to finalise preparations to take forward Local Growth Deals in advance of negotiations commencing in April 2014 Achieved: Dec 2013
5.1.iii. Launch new Social Action Centre and first campaign Achieved: Sep 2013
5.1.iv. Support 10,000 Join In community events Achieved: Oct 2013
5.2.i. Support the Big Lottery Fund to complete awards from the Advice Services Transition Fund, the £65m package to help not-for-profit local advice providers across England transform and adapt Achieved: Jun 2013
5.2.ii. Deliver a nationwide programme of commercial skills master-classes for the voluntary, community and social enterprise (VCSE) sector, in partnership with VCSE and commercial organisations Achieved: Apr 2014
5.3.i. Launch a new independent management body (IMB) to give the National Citizen Service independent leadership, profile and sector support Achieved: Jul 2013
5.3.ii. Provide up to 50,000 places on the National Citizen Service during 2013 Achieved: Dec 2013
5.3.iii. IMB becomes fully operational and assumes operational control Achieved: Dec 2013
5.4.i. Hold a G8 event on social investment Achieved: Jun 2013 5.4.ii. Launch 2nd round of Social Incubator Fund and complete awards Achieved: Mar 2014
6.1.ii. Establish and hold the first Social Mobility ‘Opening Doors’ awards Achieved: Nov 2013
6.1.iii. Create open and fair opportunities for internships across Whitehall, expanding and building on the Whitehall Internship Programme and working with the Department for Work and Pensions (DWP) to deliver a successful Fast Stream Diversity Summer Internship Programme in 2013 Achieved: Sep 2013
Actions Overdue
2.4.i. Transfer all common goods and services spend to centralised arrangements Scheduled start date: Started Scheduled end date: Dec 2013
Although this action was not completed by the set deadline the transfer to a centralised arrangement has now been planned and agreed. The first phase of transition is underway and will take place in stages across 2014-15.
2.13.iii. Develop an automated collection tool for QDS data Scheduled start date: Started Scheduled end date: Mar 2014
Work to resolve resource challenges has delayed final completion of this commitment.
2.16.i. Develop and commission a new organisation for debt management across government Scheduled start date: Started Scheduled end date: Mar 2014
Work is continuing on preparing a revised timescale for commissioning a new organisation during 2014-15.
6.1.i. Develop and expand the Social Mobility Business Compact, embedding and sharing best practice between employers and mainstreaming the Compact with businesses and Departments. Scheduled start date: Started Scheduled end date: Dec 2013
Responsibility for this action covering the Social Mobility Business Compact transferred from Cabinet Office to the Department for Business, Innovation and Skills on 29 November 2013. Financial Review 2013-14
Parliament gives statutory authority for the use of resources and funds through the Supply Estimates in order that the Cabinet Office may meet its expenditure and, in turn, the Department is accountable to Parliament for the use of those resources and funds as reported in the Statement of Parliamentary Supply.
This financial review sets out the following:
Financial Highlights
Performance against Parliamentary Control Totals & non-voted budget
Comparison of 2013-14 outturn against Estimate and against prior year for:
- Net Resource Outturn, Net Capital Outturn, Net Cash Requirement
- Resource Departmental Expenditure Limit (RDEL)
- Resource Annually Managed Expenditure (RAME)
- Capital Departmental Expenditure Limit (CDEL)
Public Expenditure Data
Commentary upon outturn data and future spending plans
- Table 1 – Total departmental spending
- Table 2 – Outturn year 2013-14
- Table 3 – Capital employed
- Table 4 – Administration budget
- Table 5 – Staff numbers
- Tables 6, 7 & 8 Country and regional analysis
Accounting Officer approval to the Strategic Report Financial Highlights
Total Managed Expenditure (TME) - a measure defined by the Treasury to cover all public expenditure (not just central government departments) comprising AME and DEL.
Annually Managed Expenditure (AME) is less predictable and controllable than expenditure in DEL. It includes provisions for early departures, dilapidations, onerous contracts, revaluation of assets and depreciation on donated assets. Total AME is the sum of resource and capital AME less depreciation in AME.
Departmental Expenditure Limit (DEL) - includes expenditure which is generally controlled within departments and is managed with fixed multi-year limits set via a spending review conducted by the Treasury. DEL budget is split into resource administration, resource programme and capital. Total DEL is the sum of the resource budget DEL and capital budget DEL less depreciation in DEL.
Resource DEL Administration controls administration expenditure other than the costs of direct frontline services.
Resource DEL Programme controls expenditure directly associated with frontline activities.
Capital DEL controls spending on investments, assets and capital grants. Performance against Parliamentary Control Totals & non-voted budget
Net Resource Outturn, Net Capital Outturn and Net Cash Requirement
| £000 | Outturn 2013-14 | Estimate 2013-14 | Saving 2013-14 | % | Outturn 2012-13 | |---------------|-----------------|------------------|----------------|-----|-----------------| | Net Resource Outturn | 415,795 | 458,789 | 42,994 | 9.4 | 378,337 | | of which: | | | | | | | Resource DEL | 419,875 | 453,689 | 33,814 | 7.4 | 413,816 | | Resource AME | (4,080) | 5,100 | 9,180 | 180.0 | (35,479) | | Net Capital Outturn | 42,873 | 47,703 | 4,830 | 10.1 | 15,054 | | Net Cash Requirement | 471,621 | 517,545 | 45,924 | 8.9 | 440,913 |
Net Resource Outturn
Net resource outturn for this period was £415.795 million, a saving of £42.994 million (9.4%) attributable to underspends in resource DEL and resource AME. Compared to prior year, outturn has increased by £37.458 million. See next section for explanations.
Net Capital Outturn
Net capital outturn for this period was £42.873 million, a saving of £4.830 million (10.1%). Compared to prior year, outturn has increased by £27.819 million. See next section for explanations.
Net Cash Requirement Outturn
The Cabinet Office required cash amounting to £471.621 million to finance its activities; £45.924 million (8.9%) less than the sum approved by Parliament. The saving is attributable to underspends in net resource and capital outturn (adjusted to remove non-cash items) and small movements in working capital. Compared to prior year, the net cash requirement has increased by £30.708 million due to increases in net resource and capital outturn offset by a reduction in movements in working capital, both described above. See Note SOPS 4 Reconciliation of Net Resource Outturn to Net Cash Requirement. Resource DEL (RDEL)
| £000 | Outturn 2013-14 | Estimate 2013-14 | Saving 2013-14 | % | Outturn 2012-13 | |---------------------------|-----------------|------------------|----------------|-------|-----------------| | Administration voted | 153,325 | 184,809 | 31,484 | 17.0 | 193,137 | | Programme voted | 264,724 | 266,880 | 2,156 | 0.8 | 218,848 | | Programme non voted: UK MEPs | 1,826 | 2,000 | 174 | 8.7 | 1,831 | | Resource DEL | 419,875 | 453,689 | 33,814 | 7.4 | 413,816 |
of which:
- Policy ring-fence Boundary Review: 382, 480, 98, 20.4, 1,970
- Policy ring-fence Individual Electoral Registration: 14,896, 15,149, 253, 1.7, 2,798
- Ring-fenced depreciation, amortisation, impairment and provision for doubtful debt: 13,670, 17,000, 3,330, 19.6, 11,289
- Non ring-fenced expenditure: 390,927, 421,060, 30,133, 7.2, 397,759
Resource DEL outturn for 2013-14 was £419.875 million, a saving of £33.814 million (7.4%) against the budget of £453.689 million approved by Parliament. Compared to prior year, outturn has increased by £6.059 million. Resource DEL is broken down by Operating Segment in Note SOPS 2.1 to the Accounts.
Saving in Administration spend against budget of £31.484 million is attributable to the following:
- **Transactional Shared Services**: £1.1 million underspend
For the period 1 April to 31 October 2013, Cabinet Office was responsible for overseeing the former DWP Shared Services operation. During that period, a number of staff vacancies arose which remained unfilled due to the expected transition of the operation to the private sector. These unfilled vacancies account for the bulk of the lower than expected costs. See Note 7.1.
- **Corporate Services Group Royal Mail Statutory Pension Scheme (RMSPS)**: £3.5 million underspend
The budgets for the first 3 years were set by the Department for Business, Innovation and Skills (BIS) in 2011. At the time, the potential costs of managing the scheme were uncertain and it was not possible to accurately predict what the costs of the scheme would be for future years. The budget for 2013-14 was set at £8.5 million. The actual cost of running the scheme in 2013-14 was £5 million. The underspend was in part due to the number of staff required to deliver the scheme being considerably lower than estimated in 2011, because BIS had only recruited a core team before the scheme was handed over to Cabinet Office. In addition to this, running costs were also lower than had been estimated because RMSPS has moved past the set up stage and are into business as usual. See Note 5. Corporate Services Group Transfer of shares in AXELOS Limited: £28.2 million underspend
The Cabinet Office transferred its 51 ‘B’ Ordinary shares in AXELOS Limited to AXELOS’ immediate parent, Capita Business Services Limited (CBSL) in return for consideration of £38.2 million of which £10 million was settled at the point of sale and the balance of payment was deferred over 36 months commencing January 2014. Cabinet Office budgeted for the cash receipt of £10 million and recognised in its accounts the total consideration of £38.2 million; hence creating an underspend of £28.2 million. See Note 7.
Ring-fenced Depreciation, amortisation and impairment: total underspend of £3.330 million
The ring-fenced depreciation and amortisation is £3.330 million less than originally planned; of which £1.497 million administration and £1.833 million programme. Impairment losses related to major construction works carried out on Cabinet Office properties, determined by independent professional valuations as at 31 March 2014, were low compared to cover for uncertainty assumed for the 2013-14 Supplementary Estimate.
Impairment losses for information technology assets, through the application of published indices, or through shorter than anticipated useful lives, were low compared to the cover for uncertainty assumed for the 2013-14 Supplementary Estimate.
Year on year decrease in Administration spend of £39.812 million is attributable to the transfer of shares in AXELOS Limited and also to the following:
There have been a number of changes to the workload which was undertaken by Constitution Group in 2013-14 compared to the previous financial year. The overall financial impact on the change in workload has been a reduction in costs of £1.1 million. The reduction in costs can be largely explained by the Parliament’s decision at the end of January 2013 to stop the review of constituencies with immediate effect. This meant much lower costs in 2013-14: Staff numbers quickly reduced to just 5 by the summer of 2013 and then to 3.2 by November 2013.
The cancellation also meant that there was no further work on the Communications Strategy as all elements of the review came to an end, apart from some final and essential “close down” activities. In addition to this costs were also committed in 2012-13 (but not in 2013-14) for the cost of staffing the McKay Commission which was set up in February 2012 to consider the consequences of devolution for the House of Commons. The decrease in staff numbers would have been higher had it not been for the Scottish Referendum where increased number were required in order to deliver Ministerial policies and priorities; £1 million.
An increase in income within Efficiency & Reform Group is due to ISSC2 of £7.5 million and Single Oracle Platform of £2.5 million which are new to 2013-14. Rationalisation of the Cabinet Office Estate led to reduced costs 2013-14 within Corporate Services Group of around £3 million.
Year on year increase in voted Programme spend of £45.876 million is attributable to the following:
Electoral Registration Transformation Programme and Individual Electoral Registration: year on year increase in programme spend of £15 million
Individual Electoral Registration (IER) in Great Britain will modernise the way people register to vote, help to tackle electoral fraud and improve confidence in the electoral register. In 2012-13 the Electoral Registration Transformation Programme (ERTP) was in the early phase of policy and delivery planning to implement IER and in 2013-14 ERTP moved into the first stages of implementation. This led to an increase in staffing and consequently an increase in pay costs of around £2 million as the deliverables to manage across all projects increased. In 2013-14, IT costs increased by £2 million as the programme moved into development and delivery of the IER digital service. Each Local Authority has an electoral management system (EMS) used for storing and processing data in support of electoral registration. In 2013-14 the four EMS suppliers were contracted to deliver the changes to local authority Electoral Management Systems. The increase in ICT expenditure also relates to a contract, which was awarded to provide a highly secure and reliable hosting platform and data transfer mechanism to support the steady state running of the service.
In 2013-14 the Cabinet Office provided local authorities with grant funding to support the transition to IER. Specifically these covered costs linked to change management in the preparation for IER. Additional funding was provided where the national funding allocation did not meet local unique circumstances: authorities were allowed to apply for additional funds if justified. In 2013-14, the Cabinet Office provided funding to all authorities in Great Britain and 5 national organisations to support the cost of activities for maximising registration as part of the transition to IER. See Note 6.1.
National Security: year on year decrease in programme spend of £15 million
As part of the Licence Fee settlement between the BBC Trust and DCMS it was agreed that BBC Monitoring services, in line with the revised funding arrangements for BBC World Service and S4C, would be funded directly from the licence fee rather than a grant from the Cabinet Office; a saving of £17.476 million.
CERT UK has recently been set up and delivers a key component of the UK’s cyber security strategy in facilitating the sharing of information on cyber threats in order to make UK businesses more secure in cyberspace. The partnership includes the introduction of a secure virtual ‘collaboration environment’ where government and industry partners can exchange information on threats and vulnerabilities in real time. Costs amounted to £2.333 million in 2013-14. See Note 6.1.
Government Digital Service: year on year increase in programme spend of £15.6 million
The Government Digital Service (GDS) programme of work increased in size and cost between 2012-13 and 2013-14. The increases reflect the additional activities which GDS took forward during the course of the latter financial year. This most notably related to continuing to develop and improve GOV.UK (setting up GOV.UK was the main programme cost in 2012-13), to rationalise and bring over 300 ALB websites to GOV.UK and taking forward a number of exemplar projects with other Government Departments on transactional services which were aimed at improving the level of customer satisfaction, increasing the uptake of online services, saving money from reduced service and IT delivery contracts; and building capability within each department. See Notes 4 and 6.1.
Government Innovation Group: year on year increase in programme spend of £26 million
The Government Innovation Group (GIG) moved forward at speed with a number of programmes coming to an end, a range of new ones starting and some of the existing programmes developing at pace. The Social Action Fund did not run in 2013-14 but social action momentum was maintained by a number of new initiatives introduced by the Centre for Social Action. The overall increase of £26 million in GIG programme expenditure during 2013-14 would not have been delivered without a contribution of over £16 million to BIG Lottery in respect of the Advice Services fund that was not made in 2012-13. The Advice Services fund aims to help the not-for-profit advice sector to adapt to changes in the way it is funded. Other significant increases in expenditure included the flag ship National Citizen Service (NCS) programme. The programme enables young people to take part in social action projects and build skills for life and work. The programme’s success resulted in the number places available to young people increasing from 26,000 in 2012-13 to 42,000 in 2013-14. The programme incurred further additional expenditure by setting up a new independent Trust to lead and manage the NCS programme. See Note 6.1. Ring-fenced Depreciation, amortisation and impairment: year on year increase of £2.381 million; of which £1.941 million administration and £0.440 million programme
Whilst lower than the cover for uncertainty assumed for the 2013-14 Supplementary Estimate, the outturn reflects reductions in values related to some building overhaul works in Cabinet Office buildings, as determined by independent professional valuations. The relatively small increase compared to 2012-13 reflects reduced useful lives for some relatively long-standing information technology assets.
Resource AME (RAME)
| £000 | Note to the Accounts | Outturn 2013-14 | Estimate 2013-14 | Saving/ (Excess) 2013-14 | % | Outturn 2012-13 | |------|----------------------|-----------------|------------------|--------------------------|---|----------------| | Resource AME | SOPS2.1 | (4,080) | 5,100 | 9,180 | 180.0 | (35,479) | | of which: | | | | | | | | New provisions and borrowing costs | Note 6 | (2,769) | - | 2,769 | 100.0 | (549) | | Depreciation on donated assets | - | 99 | 200 | 101 | 50.5 | 454 | | Impairment on donated assets | - | 354 | - | (354) | (100.0) | - | | Devaluation of PPE assets | Note 6 | (137) | 6,631 | 6,768 | 102.0 | 812 | | Impairment of loans | Note 6 | 109 | 378 | 269 | 71.16 | 159 | | Write off bad debts | - | (292) | 300 | 592 | 197.2 | (290) | | Investment properties gain on changes in fair value | Note 6 | (23) | - | 23 | 100.0 | (32,003) | | Utilisation of provisions | Note 24 | (1,421) | (2,409) | (988) | (41.0) | (4,062) |
Resource AME budget for 2013-14 was £5.100 million, and actual outturn was £4.080 million negative, a saving of £9.180 million (180%) against the budget approved by Parliament. In 2012-13 an outturn was recorded of £35.479 million negative.
Devaluation of PPE assets: underspend against budget of £6.768 million
The values of properties at 31 March 2014, as reported by professional valuations, were higher than those that were assumed for the 2013-14 Supplementary Estimate. The Estimate included cover in case of decreases in asset values compared to those reported in 2013.
Provisions: underspend against budget of £2.769 million
The majority of the underspend relates to amounts written back under Early Departures (£0.091m), Specific Dilapidations (£1.191m) and Onerous Contracts (£2.019m), totalling £3.301m. During 2013-14 £1,191,410 was written back of the specific dilapidations in respect of Hercules House due to the early surrender of the lease. On onerous contracts, there was a write back of £2,018,858 being no longer required; £1,660,175 of which related to County Farm. This was due to the change in expectation regarding the timing of the demolition of the buildings on site. The remaining £358,683 written back relates to Birch House, Willow House and Kings Court which generated increased revenues and incurred fewer costs. Investment properties gains on changes in fair value: year on year change of £31.980 million
During 2012-13 Sunningdale Park and Admiralty Arch became investment properties and gains resulted from changing the basis of fair value estimates from ‘existing use value in use’ to ‘market value’.
Capital DEL (CDEL)
| £000 | Outturn 2013-14 | Estimate 2013-14 | Saving 2013-14 | % | Outturn 2012-13 | |---------------------------|-----------------|------------------|----------------|-----|-----------------| | Capital grants | 15,804 | 19,000 | 3,196 | 16.8| (57) | | Non-current assets | 26,520 | 28,137 | 1,617 | 5.7 | 14,687 | | Financial assets | 549 | 566 | 17 | 3.0 | 424 | | Capital DEL | 42,873 | 47,703 | 4,830 | 10.1| 15,054 |
of which:
| Policy ring-fence Individual Electoral Registration | 6,567 | 11,000 | 4,433 | 40.3 | 2,290 | | Non ring-fenced expenditure | 36,306| 36,703 | 397 | 1.1 | 12,764 |
Capital DEL budget for 2013-14 was £47.703 million, and actual outturn was £42.873 million, a saving of £4.830 million (10.1%) against the budget approved by Parliament. Compared with prior year, there has been an increase in Capital DEL expenditure of £27.819 million. Capital DEL is broken down by Operating Segment in Note SOPS 2.2 to the Accounts.
Political and Constitutional Reform - Individual Electoral Registration: underspend against budget of £4.433 million, year on year increase of £4.277 million
The reason overall for the underspend can be attributed to the contingency budget incorporated into the digital budget to offset potential risks associated with various development activities scheduled to take place in financial year 2013-14.
The capital budget was set in late 2010 – well ahead of the IT development and testing. Given the history of cost over-run within Government Programmes, a healthy provision (contingency) for cost increases due to the financial risk profile of a number of development activities where put in place as per HM Treasury guidelines for good practice. The fact that capital budgetary spend has been surrendered for use elsewhere, is a mark that to date, the programme’s capital costs have been carefully managed and have come in below budget.
Capital spend in 2012-13 and 2013-14 relates to the delivery of the IT and Digital services which will support this business change and the steady state running of the new service. Firstly, this includes the making of digital and non-digital applications. Secondly, this includes the verification of applications using data provided by applicants against data held by the Department for Work and Pensions. Thirdly, it involves the secure transfer of data across the system. Lastly, it involves the delivery of changes to local authority Electoral Management Systems required to interface with the new service and to handle the additional data requirements. Efficiency and Reform: underspend against budget of £2.583 million
There was an underspend on the Government Digital Service (GDS) capital budget for a variety of reasons. Budgets were managed meticulously to ensure that spend was closely monitored with value for money decisions being made on all expenditure under capital projects. In practice this led to projects coming in under budget. Work on the Private facing IDAP hub originally planned for 2013-14 has been carried into the next financial year. A number of costs relating to the Cloudstore and the Performance Platforms being diagnosed as resource and not capital costs which resulted in reduced spent under the latter category. See Note SOPS2.2.
Government Innovation Group: year on year increase of £11.598 million
An increase of £3 million relates to the Endowment Match Challenge where the supplier was much more successful raising funds to be matched in 2013-14 compared to 2012-13. In the prior year, an amount of £8 million capital income was received representing loan repayments from the Futurebuilders Fund. See Note SOPS2.2.
Corporate Services Group: year on year increase of £10.653 million
In 2013-14 investment in the Cabinet Office’s London estate was greater than in 2012-13, in particular seeing the completion of several phases of ongoing building modernisation works at 70 Whitehall under plans agreed prior to 2010. This work is contributing to the overall estate strategy of increasing the capacity of core freehold buildings (for example by providing more modern open plan space) and disposing of non-core leasehold buildings. In 2013-14 the leased Hercules House and 67 Tufton Street were handed back to landlords and more teams consolidated at 70 Whitehall. In addition, 2013-14 saw investment in enhancing crisis management facilities operated by the Cabinet Office. See Note SOPS2.2.
PUBLIC EXPENDITURE DATA
The aim of the published expenditure data tables is to present spending plans and comparable outturn data and to provide an explanation of the Cabinet Office’s budgetary spending.
These tables analyse spending in terms of the main spending control aggregates: the Departmental Expenditure Limit (DEL), showing resource DEL (RDEL) and capital DEL (CDEL) consumption and departmental Annually Managed Expenditure (AME).
Budgets are negotiated with HM Treasury by means of Spending Reviews (SR) and the most recent are the Spending Review 2010 (SR2010) covering financial years 2011-12, 2012-13, 2013-14 and 2014-15 and Spending Round 2013 covering financial year 2015-16. Table 1 Cabinet Office total departmental spending 2007-08 to 2015-16
| £000 | 2007-08 Outturn | 2008-09 Outturn | 2009-10 Outturn | 2010-11 Outturn | 2011-12 Outturn | 2012-13 Outturn | 2013-14 Outturn | 2014-15 Plans | 2015-16 Plans | |-------|----------------|----------------|----------------|----------------|----------------|----------------|----------------|---------------|---------------| | **Resource DEL** | | | | | | | | | | | Support to the Cabinet, the PM & the Deputy PM | - | - | - | - | 65,978 | 61,096 | 57,691 | 83,497 | 42,646 | | Political & Constitutional Reform | 9,047 | 9,499 | 9,499 | 6,414 | 10,830 | 9,958 | 20,629 | 70,092 | 25,445 | | National Security | - | - | - | - | 52,011 | 44,472 | 29,076 | 20,100 | 12,824 | | Efficiency and Reform | 130,325 | 179,155 | 207,716 | 178,910 | 252,992 | 210,665 | 93,015 | 48,081 | 9,321 | | Government Innovation Group | - | - | - | - | 5,285 | 170,092 | 225,508 | 194,865 | | | Transactional Shared Services | - | - | - | - | - | 565 | - | - | - | | Hosted Functions | 2,726 | 2,748 | 2,620 | 2,175 | 1,286 | 1,340 | 1,152 | 1,150 | 767 | | Corporate Services Group | 225,014 | 249,827 | 193,485 | 208,460 | 62,546 | 77,727 | 36,535 | 67,020 | 62,328 | | Civil Service Capability | - | - | - | - | - | - | 7,392 | 7,392 | | | Pensions | - | - | - | - | - | - | 6,000 | 6,000 | | | eNDPBs (NET) | - | - | - | - | 1,313 | 1,442 | 1,794 | 1,887 | 1,803 | | Consolidated Fund Standing Services (CFSS) | 15,929 | 6,941 | 100,023 | 104,397 | 1,849 | 1,831 | 1,826 | 121,100 | - | | **Total Resource DEL** | 383,041 | 448,170 | 513,343 | 500,356 | 448,805 | 413,816 | 412,375 | 651,827 | 363,391 | | **Of which:** | | | | | | | | | | | Staff costs | 129,665 | 138,090 | 146,484 | 150,867 | 163,777 | 138,680 | 170,212 | 131,000 | 99,473 | | Purchase of goods and services | 202,349 | 212,894 | 270,502 | 252,216 | 217,245 | 231,323 | 291,022 | 396,620 | 126,590 | | Income from sales of goods and services | -89,724 | -96,443 | -88,423 | -73,576 | -127,805 | -91,190 | -183,910 | -100,539 | -100,029 | | Current grants to local government (net) | 1,744 | 1,677 | 1,915 | 613 | 92 | 962 | 8,363 | 37,476 | 18,000 | | Current grants to persons and non-profit bodies (net) | 122,105 | 136,470 | 154,100 | 136,142 | 177,105 | 103,908 | 109,921 | 160,684 | 191,000 | | Subsidies to private sector companies | - | - | - | - | 6,282 | - | - | - | - | | Rentals | 12,488 | 15,605 | 11,737 | 20,122 | 17,863 | 31,581 | 12,857 | 13,091 | 13,091 | | Depreciation | 9,451 | 35,516 | 10,514 | 10,565 | 8,122 | 11,241 | 13,253 | 15,000 | 15,266 | | Other resource | -5,037 | 4,361 | 6,514 | 3,407 | -13,876 | -12,689 | -9,343 | -1,505 | - | | **Resource AME** | | | | | | | | | | | Corporate Services Group (AME) | -2,039 | -1,152 | 6,049 | 67 | 5,119 | -35,479 | -4,080 | 4,942 | 5,000 | | **Total Resource AME** | -2,039 | -1,152 | 6,049 | 67 | 5,119 | -35,479 | -4,080 | 4,942 | 5,000 | | Of which | 2013-14 Numbers | 2014-15 Numbers | 2015-16 Numbers | 2016-17 Numbers | 2017-18 Numbers | 2018-19 Numbers | 2019-20 Numbers | 2020-21 Numbers | 2021-22 Numbers | |----------------------------------------------|-----------------|-----------------|-----------------|-----------------|-----------------|-----------------|-----------------|-----------------|-----------------| | Staff costs | - | - | - | - | - | - | - | - | - | | Rentals | - | - | - | - | - | - | - | - | - | | Depreciation 1 | - | - | 6,845 | 895 | 1,587 | 988 | 317 | 6,254 | 5,000 | | Take up of provisions | 568 | 1,600 | 1,635 | 757 | 13,022 | -840 | -3,057 | - | - | | Release of provision | -2,720 | -3,875 | -2,432 | -2,543 | -9,445 | -4,062 | -1,424 | -1,312 | - | | Other resource | 113 | 1,123 | 1 | 958 | -47 | -31,565 | 83 | - | - | | **Total Resource Budget** | 381,002 | 447,018 | 519,392 | 500,423 | 453,924 | 378,337 | 408,295 | 656,769 | 368,391 | | Of which: | | | | | | | | | | | Depreciation 1 | 9,451 | 35,516 | 17,359 | 11,460 | 11,460 | 9,709 | 12,229 | 13,570 | 21,254 | | **Capital DEL** | | | | | | | | | | | Support to the Cabinet, the PM & the Deputy | - | - | - | - | - | 1,604 | 1,798 | 1,476 | 2,000 | | PM | - | - | - | - | - | 2,290 | 6,567 | - | - | | National Security | - | - | - | - | - | -1,832 | -40 | 975 | - | | Efficiency and Reform | 16,963 | 30,608 | 94,053 | 75,742 | 12,335 | 4,431 | 4,547 | - | - | | Government Innovation Group | - | - | - | - | - | 12,080 | 10,000 | - | - | | Corporate Services Group | 17,307 | 10,666 | 9,852 | 11,505 | 5,334 | 6,575 | 17,228 | 8,500 | 14,600 | | **Total Capital DEL** | 34,270 | 41,274 | 103,905 | 87,247 | 17,441 | 15,054 | 42,873 | 20,500 | 14,600 | | Of which: | | | | | | | | | | | Capital support for local government (net) | 5,268 | 13,293 | 12,191 | 7,102 | -20 | 4,914 | - | - | - | | Capital grants to persons & non-profit bodies (net) | 16,813 | 22,871 | 53,631 | 38,206 | -8,084 | -3 | - | - | - | | Capital grants to private sector companies (net) | - | - | 22,434 | 23,208 | 10,840 | 7,963 | 10,887 | 10,000 | - | | Purchase of assets | 18,986 | 10,648 | 15,486 | 13,507 | 8,552 | 14,887 | 26,528 | 10,500 | 14,600 | | Income from sales of assets | -64 | -10 | -5,479 | -134 | -44,261 | -2 | - | - | - | | Net lending to the private sector and abroad | -22 | -28 | 642 | 224 | 58 | 424 | 549 | - | - | | Other capital | -6,711 | -5,500 | 5,000 | 5,000 | -1,875 | 44,145 | - | - | - | | **Total Capital Budget** | 34,270 | 41,274 | 103,905 | 87,247 | 17,441 | 15,054 | 42,873 | 20,500 | 14,600 | | **Total departmental spending** | 405,821 | 452,776 | 560,938 | 576,210 | 461,656 | 431,162 | 437,598 | 656,015 | 362,725 | | Of which: | | | | | | | | | | | Total DEL | 407,860 | 453,928 | 606,734 | 577,038 | 458,124 | 417,629 | 441,995 | 657,327 | 362,725 | | Total AME | -2,039 | -1,152 | -796 | -828 | 3,532 | -36,467 | -4,397 | -1,312 | - |
1 Includes impairments 2 Total departmental spending is the sum of the resource budget and the capital budget less depreciation. Similarly, total DEL is the sum of the resource budget DEL and capital budget DEL less depreciation in DEL, and total AME is the sum of resource budget AME and capital budget AME less depreciation in AME 3 2013-14 numbers are provisional outturn; see table 2 for reconciliation to the account Table 2 Cabinet Office outturn year 2013-14
| £000 | 2013-14 Original Plans | 2013-14 Final Plans | 2013-14 Provisional Outturn | 2013-14 Final Outturn | |------|------------------------|---------------------|-----------------------------|-----------------------| | | Resource | Capital | Resource | Capital | Resource | Capital | Resource | Capital | | **Spending in Departmental Expenditure Limits (DEL)** | | | | | | | | | | Voted expenditure | 436,761 | 34,500 | 451,689 | 47,703 | 410,549 | 42,873 | 418,049 | 42,873 | | Of which: | | | | | | | | | | Support to the Cabinet, the PM & the Deputy PM | 70,161 | - | 59,417 | 1,500 | 57,691 | 1,476 | 57,691 | 1,476 | | Political & Constitutional Reform | 9,571 | 11,000 | 19,986 | 11,000 | 20,629 | 6,567 | 20,629 | 6,567 | | National Security | 26,638 | - | 28,246 | 600 | 29,076 | 975 | 29,076 | 975 | | Efficiency and Reform | 44,736 | 450 | 88,731 | 7,130 | 93,015 | 4,547 | 100,515 | 4,547 | | Hosted Functions | 1,341 | - | 1,250 | - | 1,152 | - | 1,152 | - | | Government Innovation Group | 179,906 | 15,238 | 169,369 | 11,929 | 170,092 | 12,080 | 170,092 | 12,080 | | Corporate Services Group | 101,630 | 7,812 | 81,094 | 15,544 | 36,535 | 17,228 | 36,535 | 17,228 | | Transactional Shared Services | 1,673 | - | 1,709 | - | 565 | - | 565 | - | | eNDPBs (NET) | 1,105 | - | 1,887 | - | 1,794 | - | 1,794 | - | | Non-voted expenditure | 2,000 | - | 2,000 | - | 1,826 | - | 1,826 | - | | Of which: | | | | | | | | | | Consolidated Fund Standing Services (CFSS) | 2,000 | - | 2,000 | - | 1,826 | - | 1,826 | - | | **Total Spending in DEL** | 438,761 | 34,500 | 453,689 | 47,703 | 412,375 | 42,873 | 419,875 | 42,873 |
**Spending in Annually Managed Expenditure (AME)**
| £000 | 2013-14 | 2013-14 | 2013-14 | 2013-14 | |------|---------|---------|---------|---------| | | Resource | Capital | Resource | Capital | | Voted expenditure | 4,866 | - | 5,100 | - | -4,080 | - | -4,080 | - | | Of which: | | | | | | | | | | Corporate Services Group (AME) | 4,866 | - | 5,100 | - | -4,080 | - | -4,080 | - | | **Total Spending in AME** | 4,866 | - | 5,100 | - | -4,080 | - | -4,080 | - |
**Total**
| £000 | 2013-14 | 2013-14 | 2013-14 | 2013-14 | |------|---------|---------|---------|---------| | | Resource | Capital | Resource | Capital | | Voted expenditure | 441,627 | 34,500 | 456,789 | 47,703 | 406,469 | 42,873 | 413,969 | 42,873 | | Non-voted expenditure | 2,000 | - | 2,000 | - | 1,826 | - | 1,826 | - |
† Figures for Adjusted Plans have been adjusted for machinery of government changes effected during 2013 to reflect the Final Plans structure where applicable
† Total Resource DEL reported in the Accounts at Note SOPS2 is £419.875 million which is £7.5 million higher than the provisional outturn reported on HM Treasury’s public expenditure database of £412.375 million. The increase in resource programme outturn within Efficiency and Reform of £7.5 million represents a late audit adjustment. Table 3 Cabinet Office Capital Employed
| £000 | 2009-10 Outturn | 2010-11 Outturn | 2011-12 Outturn | 2012-13 Outturn | 2013-14 Outturn | 2014-15 Plans | 2015-16 Plans | |-------|----------------|----------------|----------------|----------------|----------------|---------------|---------------| | Assets and Liabilities on the Statement of Financial Position at year end | | | | | | | | | Non-current assets | | | | | | | | | Property, plant and equipment of which: | | | | | | | | | Land and buildings | 136,182 | 147,661 | 125,060 | 99,817 | 111,651 | 129,705 | 137,393 | | Dwellings | 23,905 | 24,709 | 24,771 | 32,396 | 30,362 | 29,138 | 27,915 | | Information technology | 4,410 | 4,656 | 4,583 | 1,837 | 3,278 | 2,323 | 1,367 | | Plant and machinery | 2,078 | 1,720 | 1,530 | 938 | 356 | 15 | - | | Furniture and fittings | 176 | 313 | 535 | 523 | 1,837 | 1,712 | 1,585 | | Art and antiques | 10,252 | 12,231 | 10,584 | 9,733 | 9,883 | 9,884 | 9,884 | | Assets under construction (AUC) | 4,545 | 8,093 | 8,794 | 16,849 | 20,868 | 10,500 | 14,600 | | Total Property, plant and equipment | 181,548 | 199,383 | 175,857 | 162,093 | 178,235 | 183,277 | 192,744 | | Investment properties | - | - | - | 62,265 | 2,288 | 2,288 | 2,288 | | Intangible assets | 1,851 | 3,832 | 4,406 | 6,190 | 4,600 | 3,290 | 1,980 | | Sub total | 183,399 | 203,215 | 180,263 | 230,548 | 185,123 | 188,855 | 197,012 | | Investment in associates | - | - | - | 5,882 | 53,695 | 62,898 | 73,055 | | Other financial assets | 1,006 | 1,228 | 1,403 | 1,404 | 2,128 | 2,628 | 3,128 | | Other non-current assets | 2,077 | 411 | 354 | - | 16,450 | 7,050 | - | | Total non-current assets | 186,482 | 204,854 | 182,020 | 237,834 | 257,396 | 261,431 | 273,195 | | Current assets | | | | | | | | | Assets held for sale | - | - | 44,145 | - | 60,000 | - | - | | Returning Officers’ expenses | - | - | - | - | 1,505 | - | - | | Deferred consideration | - | - | - | - | 9,400 | 9,400 | 7,050 | | Other current assets | 40,402 | 131,056 | 99,275 | 62,276 | 64,370 | 64,370 | 64,370 | | Total current assets | 40,402 | 131,056 | 143,420 | 62,276 | 135,275 | 73,770 | 71,420 | | Current Liabilities | | | | | | | | | Returning Officers’ expenses | - | - | - | - | (1,505) | - | - | | Trade and other payables | (52,003) | (177,395) | (169,779) | (95,600) | (98,979) | (98,979) | (98,979) | | Provisions | - | - | (4,288) | (1,884) | (4,693) | (1,000) | (1,000) | | Total current liabilities | (52,003) | (177,395) | (174,067) | (97,484) | (105,177) | (99,979) | (99,979) | | Non-current liabilities | | | | | | | | | Provisions | (3,941) | (6,240) | (13,036) | (10,829) | (3,830) | (2,830) | (1,830) | | Total capital employed | 170,940 | 152,275 | 138,337 | 191,797 | 283,664 | 232,392 | 242,806 | | of which: | | | | | | | | | Core Department | 170,940 | 152,275 | 138,501 | 191,864 | 283,889 | 232,617 | 243,031 | | eNDPB | - | - | - | - | - | - | - |
### Table 4 Cabinet Office Administration budget 2007-08 to 2015-16
| £000 | 2007-08 Outturn | 2008-09 Outturn | 2009-10 Outturn | 2010-11 Outturn | 2011-12 Outturn | 2012-13 Outturn | 2013-14 Outturn | 2014-15 Plans | 2015-16 Plans | |------|----------------|----------------|----------------|----------------|----------------|----------------|----------------|---------------|---------------| | **Resource DEL** | | | | | | | | | | | Support to the Cabinet, the PM & the Deputy PM | - | - | - | - | 63,500 | 56,277 | 53,789 | 55,970 | 42,646 | | Political & Constitutional Reform | 5,365 | 5,633 | 5,633 | 4,163 | 3,699 | 3,740 | 4,012 | 4,132 | 7,445 | | National Security | - | - | - | - | 17,523 | 15,597 | 15,276 | 13,810 | 12,824 | | Efficiency and Reform | 4,875 | 33,445 | 31,867 | 24,647 | 48,992 | 39,331 | 26,987 | 17,300 | 10,054 | | Government Innovation Group | - | - | - | - | - | - | 6,509 | 4,638 | 2,865 | | Transactional Shared Services | - | - | - | - | - | - | 565 | - | - | | Hosted Functions | 2,726 | 2,748 | 2,620 | 2,175 | 1,144 | 1,360 | 1,102 | 1,150 | 767 | | Corporate Services Group | 149,866 | 170,479 | 153,157 | 170,529 | 50,568 | 75,389 | 35,791 | 67,020 | 62,328 | | Civil Service Capability | - | - | - | - | - | - | - | 6,572 | 6,572 | | Pensions | - | - | - | - | - | - | - | 6,000 | 6,000 | | eNDPBs (NET) | - | - | - | - | 1,313 | 1,442 | 1,794 | 1,887 | 1,803 | | **Total administration budget** | 162,832 | 212,305 | 193,277 | 201,514 | 186,739 | 193,136 | 145,825 | 178,479 | 153,304 | | Of which: | | | | | | | | | | | Staff costs | 110,008 | 126,277 | 137,961 | 145,583 | 125,653 | 105,924 | 115,822 | 97,280 | 94,473 | | Purchase of goods and services | 100,459 | 136,013 | 117,020 | 97,902 | 111,803 | 140,054 | 192,379 | 149,702 | 126,003 | | Income from sales of goods and services | -68,530 | -75,120 | -84,490 | -72,070 | -62,061 | -83,432 | -178,094 | -97,089 | -95,529 | | Current grants to local government (net) | - | - | - | -1 | - | - | - | - | - | | Current grants to persons and non-profit bodies (net) | - | - | - | - | - | - | -1 | - | - | | Rentals | 12,465 | 15,605 | 11,737 | 20,122 | 17,505 | 31,743 | 12,314 | 13,091 | 13,091 | | Depreciation | 8,106 | 9,235 | 10,380 | 10,015 | 5,688 | 8,563 | 10,157 | 15,000 | 15,266 | | Other resource | 324 | 295 | 669 | -37 | -11,849 | -9,716 | -6,752 | 495 | - | Table 5a Staff numbers for the Cabinet Office
| | 2011-12 | 2012-13 | 2013-14 | 2014-15 | |----------------------|---------|---------|---------|---------| | CS FTEs | 2,216 | 1,663 | 1,668 | 1,690 | | Casuals (incl. short-term / fix term appointments) | 138 | 244 | 425 | 258 | | Special advisers | 47 | 48 | 56 | 56 | | **Total Cabinet Office** | **2,401** | **1,955** | **2,149** | **2,004** |
Table 5b Staff numbers for the Cabinet Office
| Grade | Pay Band | Full-time equivalents (FTEs) | |------------------------|---------------------------|------------------------------| | Permanent Secretary | £141,800 - £277,300 | 5 | | SCS 3 | £103,000 - £208,100 | 21 | | SCS 2 | £84,000 - £162,500 | 41 | | SCS 1 | £60,000 - £117,800 | 165 | | **Total** | | **232** |
\*Total includes 40 SCS-equivalent graded staff in the Office of Parliamentary Counsel Table 6 Total identifiable expenditure on services by country and region 2008-09 to 2012-13
| £ million | National Statistics | |-----------|---------------------| | Cabinet Office | 2008-09 | 2009-10 | 2010-11 | 2011-12 | 2012-13 | | North East | 17 | 23 | 23 | 14 | 7 | | North West | 47 | 64 | 62 | 38 | 18 | | Yorkshire and the Humber | 35 | 48 | 46 | 29 | 14 | | East Midlands | 30 | 41 | 40 | 25 | 12 | | West Midlands | 37 | 50 | 49 | 30 | 15 | | East | 39 | 53 | 51 | 32 | 16 | | London | 53 | 73 | 71 | 45 | 23 | | South East | 57 | 78 | 76 | 47 | 23 | | South West | 35 | 48 | 46 | 29 | 14 | | Total England | 350 | 477 | 465 | 289 | 142 | | Scotland | 20 | 17 | 18 | 11 | 4 | | Wales | 21 | 31 | 29 | 17 | 8 | | Northern Ireland | 7 | 6 | 6 | 4 | 1 | | UK identifiable expenditure | 397 | 530 | 518 | 321 | 155 | | Outside UK | - | - | - | - | - | | Total identifiable expenditure | 397 | 530 | 518 | 321 | 155 | | Non-identifiable expenditure | 43 | 51 | 42 | 153 | 185 | | Total expenditure on services | 440 | 581 | 561 | 474 | 340 |
Table 7 Total identifiable expenditure on services by country and region per head 2008-09 to 2012-13
| £ per head | National Statistics | |-----------|---------------------| | Cabinet Office (excluding Civil Superannuation) | 2008-09 | 2009-10 | 2010-11 | 2011-12 | 2012-13 | | North East | 7 | 9 | 9 | 5 | 3 | | North West | 7 | 9 | 9 | 5 | 3 | | Yorkshire and the Humber | 7 | 9 | 9 | 5 | 3 | | East Midlands | 7 | 9 | 9 | 5 | 3 | | West Midlands | 7 | 9 | 9 | 5 | 3 | | East | 7 | 9 | 9 | 5 | 3 | | London | 7 | 9 | 9 | 6 | 3 | | South East | 7 | 9 | 9 | 5 | 3 | | South West | 7 | 9 | 9 | 5 | 3 | | England | 7 | 9 | 9 | 5 | 3 | | Scotland | 4 | 3 | 3 | 2 | 1 | | Wales | 7 | 10 | 10 | 6 | 3 | | Northern Ireland | 4 | 3 | 3 | 2 | 1 | | UK identifiable expenditure per head | 6 | 9 | 8 | 5 | 2 | Table 8 Cabinet Office Expenditure on services by sub-function 2012-13
Data in this table are National Statistics
| Sub-function | North East | North West | Yorkshire and the Humber | East Midlands | West Midlands | East | London | South East | South West | England | Scotland | Wales | Northern Ireland | Outside UK | Not Identifiable | Grand Total | |--------------|------------|------------|--------------------------|---------------|---------------|------|--------|------------|------------|---------|-----------|-------|-------------------|------------|------------------|-------------| | 1. General public services | 5 | 12 | 9 | 8 | 10 | 10 | 15 | 15 | 9 | 94 | -1 | 5 | 0 | - | 185 | 283 | | 1.1 Executive and legislative organs, financial and | 0 | 1 | 1 | 1 | 1 | 1 | 2 | 2 | 1 | 12 | 1 | 1 | 0 | - | - | 14 | | 1.6 General public services n.e.c. | 2 | 5 | 4 | 3 | 4 | 4 | 6 | 6 | 4 | 36 | 4 | 2 | 1 | - | - | 43 | | Total general public services | 7 | 18 | 14 | 12 | 15 | 16 | 23 | 23 | 14 | 142 | 4 | 8 | 1 | - | 185 | 340 | | 3.6 Public order and safety n.e.c. | 2 | 5 | 4 | 3 | 4 | 4 | 6 | 6 | 4 | 36 | 4 | 2 | 1 | - | - | 43 | | Total public order and safety | 7 | 18 | 14 | 12 | 15 | 16 | 23 | 23 | 14 | 142 | 4 | 8 | 1 | - | 185 | 340 | Commentary on Public Expenditure Data Tables
Tables 1 and 2 Total Departmental Spending and Outturn year 2013-14
Resource DEL (RDEL)
The 2010 Spending Review Settlement provides for a real reduction in non-ring fenced RDEL of 35% on the Cabinet Office 2011-12 baseline after excluding all changes in departmental responsibilities.
The 2013 Spending Round Settlement provides for a real reduction in non-ring fenced RDEL of 10% on the Cabinet Office 2014-15 baseline.
Staff costs
There is a decrease in future years pay costs in response to the Government’s deficit reduction plans.
The year on year increase in 2013-14 in wages and salaries permanent staff costs is due to increased responsibilities within the Efficiency & Reform Group (ERG) and Government Innovation Group (GIG) which led to the creation of new teams.
Efficiency & Reform Group
Within ERG there have been numerous new projects/teams, including Crown Hosting, Debt Market Integrator, Shared Services Centre 2, Single Operating Platform, Civil Service HR, ERG HR Team, Commercial Reform Team and the Complex Transactions Team.
Also within ERG, the Government Digital Service (GDS) staff numbers and associated costs increased to take into account the additional activities which GDS took forward during the course of the latter financial year. This most notably related to continuing to develop and improve GOV.UK (setting up GOV.UK was the main staff cost in 2012-13), to rationalise and bring over 300 ALB websites to GOV.UK and taking forward a number of exemplar projects with other Government Departments on transactional services which were aimed at improving the level of customer satisfaction, increasing the uptake of online services, saving money from reduced service and IT delivery contracts; and building capability within each department.
Government Innovation Group
Within the Government Innovation Group new teams have been created during 2013-14, such as the Data Sharing Public Sector Partnership & Contestable Policy.
Outturn may be reconciled to staff costs at Note 4 to the Accounts by adding the salaries and pensions of the UK Members of the European Parliament and by adding utilisation of early departures costs (whereby cash disbursement is a charge against RDEL and release of the provision is a benefit to RAME): both are reported in Note SOPS3.
Purchase of goods and services and income from sales of goods and services
Political and Constitutional Reform – Consolidated Fund Standing Services
SR2010 settlement includes funding for the boundary review and in 2014-15 funding for the introduction of Individual Electoral Registration and funding for elections to the European Parliament.
In 2009-10 the 2009 European Parliamentary elections were budgeted at £95.3 million, in 2010-11 the 2010 UK Parliamentary Elections for England and Wales were budgeted at £102.2 million and in 2014-15 the 2014 European Parliamentary elections are budgeted at £119.1 million. Current grants and subsidies
SR2010 settlement includes funding for the voluntary sector and for the Electoral Registration Transformation Programme. See Note 6 to the Accounts which describes the purpose of the grant programmes.
Government Innovation Group
The Government Innovation Group is charged with implementing the Government’s commitment to the Big Society and the settlement provides for the Community First Fund, support for volunteering, capacity building, community organisers and support for mutuals. The pilot phase of the National Citizen Service was implemented during 2011-12 and 2012-13. Key programmes have included National Citizen Service, Strategic Partners Programme, Social Action, Community Organisers, Community First, Structural Support and Technical Assistance and Advice Services Fund.
Funding includes £100 million in 2013-14 and £140 million in 2014-15 for the National Citizen Service programme and £16.8 million in 2014-15 for “Help for Not-for-Profit organisations in the Third Sector”. In 2015-16 SR2013 provides £140 million for the National Citizen Service and £56 million for other civil society programmes.
Rentals
Rentals include offices at 1 Horse Guards Road and a PFI service charge in respect of Sunningdale Park. See Note 5 to the Accounts.
During 2012-13 the Cabinet Office paid lease surrender premiums totalling £16.350 million to secure early exit from leasehold properties at 1 Palace Street and 67 Tufton Street in order to realise future value for money savings. The Cabinet Office assumed responsibility for the lease of 1 Palace Street from the Department for International Development who moved to cheaper premises at 22-26 Whitehall which were gifted to them by the Cabinet Office. By incurring a charge of £13.650 million, the Cabinet Office secured early exit from the lease in December 2013 with the prospect of achieving overall savings of £62.5 million which include the avoidance of future rental payments to September 2020.
Depreciation and impairment
Depreciation is a ring-fenced budget and may not be re-deployed. It includes depreciation and impairment caused by loss or damage to assets resulting from normal business operations, abandonment of assets under construction or over-specification of assets. Depreciation arises mainly on owned buildings and amortisation mainly on websites. See Notes 5 and 6 to the Accounts.
Other resource
This includes income from royalties and dividends. See Note 7 to the Accounts.
Resource AME (RAME)
Resource AME comprises the take up of new provisions and the release of provisions at the point of cash utilisation for both dilapidations on leasehold properties and onerous contract on vacant leasehold properties, staff early departures, depreciation on donated assets and impairments against property assets and loans and investment properties gains/loss on changes in fair value.
Other resource
During 2012-13 Admiralty Arch became vacant and was recognised as an investment property at fair value of £60 million resulting in a gain on change in fair value of £32.003 million. See Note 9 to the Accounts. Capital DEL (CDEL)
The 2010 Spending Review Settlement provides for a real reduction of 28% on the Department’s 2011-12 baseline. The Public Expenditure Committee agreed the following should be funded within this capital settlement: Cabinet Office Estate Rationalisation, Constitutional Reform – Individual Electoral Registration, Social Action and Community First.
Spending Round 2013 allows £14.6 million for the upkeep of estates and crisis facilities and future ICT.
Capital grants
Government Innovation Group
Expenditure from 2007-08 to 2010-11 represents capital grants mainly to Futurebuilders England Limited to deliver the Futurebuilders programme which came to an end on 31 March 2011. During 2012-13 Futurebuilders England Limited returned capital income of £8 million to the Cabinet Office representing the repayment of loans by investees; see Notes 6 and 25 to the Accounts. Since 2011-12 capital grants have been made to Community First Endowment Match Challenge programme and in 2013-14 amounted to £10.880 million. See Note 6 to the Accounts.
Political and Constitutional Reform
During 2013-14 £4.917 million capital expenditure was incurred on Individual Electoral Registration. SR2010 provided the Constitutional Reform Group the opportunity to set out its plans to bring forward the introduction of Individual Electoral Registration. Individual Electoral Register will require each member of the household to register, and be responsible for, their own entry on the register which will subsequently be checked against other sources of public data to ensure that the electoral register is trusted and secure. Individual Electoral Registration should furthermore improve accuracy of the register, allow people to register in different ways and will allow the government to take steps to address the completeness of the register.
Purchase of assets
Corporate Services Group
In 2013-14 spend on capital relates to investment in the Cabinet Office’s London estate. See previous section on outturn for a further explanation. See Notes 8 and 10 to the Accounts.
Other capital and income from sale of assets
In 2012-13 the Minister for the Cabinet Office transferred all rights and obligations under the freehold and associated agreements for 22/26 Whitehall, London SW1A 2WH to The Secretary of State for International Development (DFID). The fair value of property at the date of transfer was £44.145 million on the assumption that the property was sold as part of the continuing enterprise in occupation with vacant possession. See Note 20 to the Accounts. Table 3 Capital Employed for the Cabinet Office
Property, plant and equipment
Overall carrying values increased from March 2013 to March 2014 by £16 million of which £25 million in additions, £6 million impairment, £2 million revaluations and £5 million depreciation. A relatively small upwards valuation of non-current assets in 2013-14 of just under £2 million overall (around 1% of the total carrying value) is predominantly the result of independent professional valuations of freehold land and buildings. See outturn in previous section, and Note 8.1 to the Accounts.
Forecasts assume that depreciation in 2014-15 and 2015-16 will remain at similar levels to 2013-14. Capital additions in 2014-15 and in 2015-16 reflect the capital requirement approved by Parliament in the Main Estimate 2014-15 and the capital budget within the Spending Round 2013, respectively.
Investments in associates
This represents the Cabinet Office’s share of its associates net assets based on their forecast profits. The Department holds the following equity shareholdings; see Note 17 to the Accounts:
| Associate | Equity shareholding % | |----------------------------------|-----------------------| | MyCSP Limited | 35 | | Shared Services Connected Limited| 25 | | AXELOS Limited | 49 | | Behavioural Insights Team Limited| 35 |
Other financial assets
Additional loans are expected to be made to Bridges Social Entrepreneurs Fund LP which invests in social enterprises. See Note 19 to the Accounts.
Assets held for sale
Admiralty Arch is expected to be sold on a long-leasehold during 2013-14. See Notes 9 and 20 to the Accounts.
Returning Officers’ Expenses
Claims from Returning Officers relating to UK Parliamentary By-elections and 2014 European Parliamentary Elections are expected to be settled by 31 March 2015 and claims relating to 2015 UK General Election by 31 March 2016. See Notes 21, 22 and 23 to the Accounts.
Deferred consideration
Cabinet Office transferred its 51 ‘B’ Ordinary shares in AXELOS Limited to AXELOS’ immediate parent, Capita Business Services Limited (CBSL) in return for consideration of £38.2 million. CBSL has deferred payment of £25.850 million to be settled in 33 equal monthly instalments between April 2014 and December 2016. See Note 21 to the Accounts.
Non-current liabilities provisions
There are no new significant provisions anticipated for 2014-15 or 2015-16. Existing provisions will be utilised as shown within the analysis of expected timing of cash flows as set out at Note 24 to the Accounts.
It is assumed that all other balances will remain at levels similar to 2013-14. Table 4 Administration budget
Administration budgets help drive economy and efficiency and are controlled to ensure that as much money as practicable is available for front-line services and programmes.
The 2010 Spending Review Settlement provides for a real reduction of 33% in the administration budget excluding depreciation over the four years on the 2010-11 baseline.
The 2013 Spending Round Settlement provides for a real reduction of 10% in the administration budget excluding depreciation on the 2014-15 baseline.
The decrease of £14.775 million in 2011-12 outturn administration costs compared to 2010-11 is largely due to efficiency savings across the Department, a reduction in the general workforce which took place during 2010-11 and a reclassification from administration to programme of the expenditure of the Civil Service Capabilities and Public Services Reform Groups upon their transfer into the Efficiency and Reform Group.
2013-14 outturn includes income of £38.2 million upon sale of shares in Axelos Limited to Capita Business Services Limited; see previous section on outturn.
In 2014-15 two new operating segments have been created for Civil Service Capability and Pensions. Civil Service Capability includes Civil Service Human Resources and Civil Service Reform. Civil Service Human Resources aims to alter the way in which the Civil Service delivers HR services cross-government. Civil Service Reform will equip a smaller Civil Service to meet future challenges. Pensions includes the Royal Mail Statutory Pension Scheme, and also the Principal Civil Service Pension Scheme (PCSPS) whose costs are met through income from a charge on Civil Superannuation employer pension contributions and directly from employers who participate in the PCSPS.
Table 5 Staff numbers
These tables show the actual number of staff as at 31 March in each year up to 2013-14 and projected staffing for 2014-15. Staff are categorised as permanent, casual and special adviser. By contrast, Note 4 to the Accounts shows headcount expressed as the average number of whole-time equivalent persons employed and includes ministers, temporary staff and commissioners.
Civil Service Full Time Equivalent
In 2012-13 there were significant number of leavers who had previously worked for National School of Government and Central Office of Information. In 2013-14, overall there is a little change compared to 2012-13. 27 staff working in the Civil Service HR unit and 6 staff working in the Functional Leadership team transferred from the Department for Communities and Local Government with these functions into the Cabinet Office. During the course of the year, 6 staff working in the SWIRL Unit, part of the Efficiency and Reform Group, and 15 staff in the Behavioural Insights Team, part of the Government Innovation Group, transferred out of the Cabinet Office to the Private Sector under TUPE arrangements. Projected staff numbers for 2014-15 are based on current business planning assumptions.
Casuals
In 2013-14 an increasing number of projects took place around GOV.UK, the rationalisation of 300 arm’s length body websites to GOV.UK and as part of the wider transformation programme which is aimed at delivering public services online or by other digital means. A number of these projects were carried out by interim staff, particularly where the length of the project was 12 months or less, or where specialist skills were required. This work necessitated an increase in the number of casual staff. Given the short term nature of the projects involved and the specialist skills required the use of casual staff represented the most cost effective solution to their successful delivery. Tables 6 to 8 Country and Regional Analysis tables
The Country and Regional Analysis table is an analysis of public expenditure by country, region and function. Data in this release are National Statistics for all years. This is purely a statistical exercise and plays no part in resource allocation.
Most public spending is planned to benefit categories of individuals and enterprises irrespective of location. The regional analyses presented show where the individuals and enterprises that benefited from public spending were located. It does not mean that all such spending was planned to benefit a particular region, because only a minority of public spending is planned on a regional basis. Public expenditure is planned and controlled on a departmental basis.
The tables present statistical analyses of public expenditure by country, region and function and present the spending attributed to the English regions alongside the spending attributed to Scotland, Wales and Northern Ireland.
Tables 6, 7 and 8 show analyses of the Department’s spending by country and region, and by function. The data presented in these tables are consistent with the country and regional analyses (CRA) published by HM Treasury in the November 2013 release.
The figures were largely taken from the Online System for Central Accounting and Reporting (OSCAR) during the summer of 2013 and the regional distributions were completed by the following autumn (taking on board any revisions to departmental totals). Please note that totals may not sum due to rounding.
The analyses are set within the overall framework of Total Expenditure on Services (TES). TES broadly represents the current and capital expenditure of the public sector, with some differences from the national accounts measure Total Managed Expenditure.
The tables show the central government and public corporation elements of TES. They include current and capital spending by the Department and its NDPBs, and public corporations’ capital expenditure, but do not include capital finance to public corporations. They do not include payments to local authorities or local authorities own expenditure.
TES is a cash equivalent measure of public spending. The tables do not include depreciation, cost of capital charges, or movements in provisions that are in departmental budgets. They do include pay, procurement, capital expenditure, and grants and subsidies to individuals and private sector enterprises. Further information on TES can be found in Appendix E of PESA 2013.
The data feature both identifiable and non-identifiable spending:
1. Identifiable expenditure on services – which is capable of being analysed as being for the benefit of individual countries and regions.
2. Expenditure that is incurred for the benefit of the UK as a whole and cannot be disseminated by individual country or region is considered to be non-identifiable.
Across government, most expenditure is not planned or allocated on a regional basis. Social security payments, for example, are paid to eligible individuals irrespective of where they live. Expenditure on other programmes is allocated by looking at how all the projects across the Department’s area of responsibility, usually England, compare. So the analyses show the regional outcome of spending decisions that on the whole have not been made primarily on a regional basis. The functional analyses of spending in Table 8 are based on the United Nations Classification of the Functions of Government (COFOG), the international standard. The presentations of spending by function are consistent with those used in Chapter A of the CRA November 2013 release. These are not the same as the strategic priorities shown elsewhere in the report.
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
24 June 2014 This page is intentionally left blank. Governance The role of government is changing. It is increasingly becoming a commissioning body, buying and managing a range of complex services and commercial relationships, with a greater focus on value for money. As a result, it needs a Civil Service with new and enhanced skills. The Cabinet Office is at the forefront of the change programme required to deliver this shift.
Board effectiveness
The Board met seven times during the 2013-14 financial year. Board membership has remained stable, with the departure of just one minister.
The evidence from the latest Cabinet Office board effectiveness evaluation, incorporating a peer review by Sara Weller (lead non-executive at the Department for Communities and Local Government), demonstrated that most Board members believe the Board is operating more effectively, compared to 12 months ago.
Following recommendations made in last year’s Board evaluation, the flow of information between Board members and the Department’s management has improved, and the Board agendas are now becoming more focused.
The quality of Board meetings has also been improved by greater engagement between the Board chair and non-executives outside formal Board meetings. Rona Fairhead chairs the Department’s highly effective Audit and Risk Committee, and non-executives continue to contribute to committees such as the Senior Pay and Talent Committee.
Strategic clarity
Compared to other government departments, the Cabinet Office has a remit of unusual breadth and depth, which changes regularly to reflect the evolution of government and Civil Service priorities. It is therefore essential for the Department continually to clarify its strategic purpose.
Commercial sense
A number of the recommendations in my review of major project leadership, ‘Getting a Grip’ (March 2013), have been implemented. The appointment of a new Chief Executive, John Manzoni, will bring fresh impetus to these important reforms. The Cabinet Office has also launched a fully integrated Crown Commercial Service (CCS), which centralises responsibility for procurement, and which will improve supplier management as a result. Talented people
The Board’s Senior Pay and Talent Committee has provided good strategic input into the performance and talent management of senior civil servants (SCS). Succession plans have improved, particularly at Director General level, where 93% of roles have succession plans in place. There should, however, be more discussion of the Department’s wider talent management strategy, covering both people and departmental capability. This could happen in the Board itself or in a sub-committee chaired by a non-executive.
Results focus
The Board has maintained its focus on the link between strategy and results. An example was the analysis of risk, resources and capabilities submitted to the Board to inform its discussions about the creation of the CCS. This enabled the Board to satisfy itself that these key issues had been properly considered by the departmental management team.
Management information
The improvements I highlighted last year have continued, with management information now better reflecting the Board’s need to review the progress of key programmes and strategic goals.
The Cabinet Office has also maintained its focus on improving management information across government, by reviewing the data being collected, developing a plan to streamline Quarterly Data Summaries (QDS) and producing a ‘Board Reporting’ booklet to disseminate best practice across government.
Lord Browne of Madingley Government Lead Non-Executive Director and Lead Non-Executive Director for the Cabinet Office Our Ministers
The Rt Hon. David Cameron MP First Lord of the Treasury, Minister for the Civil Service, Prime Minister (remunerated by HMT)
The Rt Hon. Nick Clegg MP Deputy Prime Minister and Lord President of the Council
The Rt Hon. Francis Maude MP Minister for the Cabinet Office, Paymaster General
The Rt Hon. Oliver Letwin MP Minister for Government Policy
The Rt Hon. David Laws MP\* Minister of State jointly with the Department for Education (remunerated by the Department for Education)
Nick Hurd MP Minister for Civil Society Parliamentary Under-Secretary of State
The Rt Hon. Grant Shapps MP\*\* Minister without Portfolio (Minister of State) and Co-Chairman of the Conservative Party (Not remunerated)
Jo Johnson MP Assistant Whip and Parliamentary Secretary From 25 April 2013 (Not remunerated)
The Rt Hon. Lord Hill of Oareford CBE Leader of the House of Lords and Chancellor of the Duchy of Lancaster
The Rt Hon. Kenneth Clarke QC MP Minister without Portfolio (Minister of State)
The Rt Hon. John Hayes MP Minister without Portfolio (Minister of State)
The Rt Hon. Andrew Lansley CBE MP Leader of the House of Commons and Lord Privy Seal
The Rt Hon. Greg Clark MP Minister of State (Cities and Constitution) from 7 October 2013
Chloe Smith MP Minister for Political and Constitutional Reform and Parliamentary Secretary until 6 October 2013 Permanent Secretary
Richard Heaton is our Permanent Secretary and is the head of the Department, responsible for the leadership and governance of the Cabinet Office. The Permanent Secretary is also the Cabinet Office’s Accounting Officer.
Richard also holds the post of First Parliamentary Counsel, whose role it is to oversee the Government in Parliament Group, which includes Parliamentary Counsel and the business managers in each House of Parliament. The Group works with teams across government to prepare and deliver the government’s legislative programme.
Richard Heaton, Permanent Secretary for the Cabinet Office
Richard Heaton has been Permanent Secretary for the Cabinet Office since August 2012. He has also been First Parliamentary Counsel since February 2012.
Richard started his career as a barrister and joined the Home Office as a legal adviser in 1991. He then worked in legal teams across government, focusing particularly on criminal law, the constitution, and human rights law. His recent legal and non-legal posts have been:
- Director of Legal Services at the Department for Constitutional Affairs (now Ministry of Justice)
- Head of Law and Governance at the Department for Work and Pensions
- Director General for Pensions and Ageing Society, Department for Work and Pensions
Cabinet Secretary
Sir Jeremy Heywood is the Cabinet Secretary and the Prime Minister’s and Deputy Prime Minister’s most senior policy adviser and he acts as Secretary to the Cabinet, responsible to all ministers.
Sir Jeremy Heywood, Cabinet Secretary
Sir Jeremy Heywood was appointed Cabinet Secretary in December 2011. Prior to that, Sir Jeremy was Permanent Secretary to two successive Prime Ministers at 10 Downing Street. He also spent over three years as a managing director including as co-head of the UK Investment Banking Division at Morgan Stanley. Before joining Morgan Stanley, Sir Jeremy occupied a range of senior civil service roles, including as Principal Private Secretary to the Prime Minister (1999–2003).
Prior to that, he had a variety of senior roles at HM Treasury including:
- Head of Securities and Markets Policy
- Head of Corporate and Management Change
He also served as Principal Private Secretary to Chancellors Norman Lamont and Kenneth Clarke and had a spell at the International Monetary Fund in Washington DC. His first job in the Civil Service was as an economic adviser to the Health and Safety Executive. Head of the Civil Service
Sir Bob Kerslake, Head of the Civil Service
Sir Bob Kerslake is Head of the Civil Service (HoCS) in which capacity he reports directly to the Prime Minister and works closely with the Cabinet Secretary and the Minister for the Cabinet Office. He is responsible for providing professional and corporate leadership to the Civil Service and enhancing the immediate and longer term capability of the Civil Service with strong governance and accountability.
Sir Bob has dual roles and perform his HoCS role alongside his existing departmental responsibilities as Permanent Secretary for the Department for Communities and Local Government (DCLG).
His remuneration, including an allowance of £20,000 per annum for his role as HoCS and a benefit–in-kind of £75,000 arising from the use of a car shared with the Cabinet Secretary, is disclosed within the Remuneration Report in DCLG Annual Report and Accounts, since DCLG are liable for all pay related costs. Governance Statement
Our new governance structure
Historically, the Executive Management Committee (EMC) – the top team of managers running the Department – has looked at the whole range of issues – large and small – affecting the Cabinet Office. As the scope and complexity of the Cabinet Office work continues to grow, there is now a need to re-focus the way we manage the Department at a tactical and strategic level.
The changes made:
- The new core EMC group will focus on the decisions that need to be made at a strategic level. This group is chaired by Richard Heaton, and other members are Sue Gray, Stephen Kelly, Oly Robbins, Paul Maltby, Helen Stephenson, Will Cavendish, Bruce Mann, Mel Steel, Stefan Czerniawski, Alex Aiken, Hugh Powell, Melanie Dawes and Chris Martin.
- There are a number of sub-committees (led by EMC members or other senior leaders) with delegated authority to make decisions in particular areas. If these decisions are of strategic importance to the Cabinet Office, they will be referred to the EMC.
- There are four sub-committees – two of which are new. These are:
- the new People and Performance Committee – focusing on pay, talent and performance decisions below SCS
- the new Environment and The Way We Work Committee – focused on improving the tools we use, our working environment and the communications/engagement decisions
- the Resourcing Panel – this reviews additional headcount and retention requirements across the Cabinet Office
- the Investment and Programme Review Committee – advising on financial investment decisions and associated risks.
- The EMC and its sub-committees work in conjunction with a number of other boards and committees with a key role across the Department, including the Cabinet Office Board, the Approvals Board, and the Senior Pay and Talent Committee (SPTC). The new governance arrangements Introduction
The Cabinet Office’s Governance Statement sets out the governance structures, and the internal control and risk management procedures that have operated within the Cabinet Office during the financial year 2013-14 and up to the date of approval of the Annual Report and Accounts, and is in accordance with the HM Treasury guidance.
Ministerial responsibilities
Ministers lead departments and are responsible for (and accountable to Parliament for) the actions and policies of their departments. Boards, within the strategic framework set by the minister, support the head of the Department by advising ministers and taking ownership of the Department’s performance. Ministers and board members are responsible for corporate governance, which defines the rights and responsibilities of different stakeholders, determines rules and procedures for making decisions, and includes the process through which the Department’s objectives are set and monitored.
‘Machinery of government’ transfers of function into the Cabinet Office
During the financial year 2013-14 the following changes in ministerial responsibilities resulted from machinery of government transfers of function.
Royal Mail Statutory Pension Scheme
With effect from 1 April 2012 and under the provisions of the Postal Services Act 2011, the Government assumed responsibility for both the Royal Mail Pension Plan deficit and the majority of the plan’s liabilities. This was achieved through the establishment in the Department for Business, Innovation and Skills (BIS) of a new unfunded pension scheme - the Royal Mail Statutory Pension Scheme (RMSPS).
Concerns about the size of the RMSPS management and the resilience of a small management team led to a review of where the scheme would best sit within government. The review concluded that the future of the scheme and its membership would be best served by moving the scheme to the Cabinet Office, to be run alongside the Principal Civil Service Pension Scheme (PCSPS).
Consequently, from 1 April 2013, the Cabinet Office assumed responsibility for the scheme’s management and administration.
Youth policy
On 3 July 2013, a ‘machinery of government’ change was announced, whereby cross-cutting responsibilities for youth policy transferred from the Department for Education to the Cabinet Office, which now leads for the government on: cross-government youth strategy and policy coordination; management of the statutory duty on Local Authorities for youth provision in their areas; and strategic relationship management with young people and youth sector organisations on policy development.
Other changes – transactional shared services
As a result of various investigations and recommendations relating to the sharing of back-office functions across government, there was an initiative to set up a second Independent Shared Service Centre (ISSC2). The business case demonstrated that the best value-for-money delivery model for ISSC2 would be an associate partnership between government and the private sector. Following the publication of the Next Generation Shared Services Strategy in December 2012, the Department for Work and Pensions (DWP) Shared Services was identified as a founding member of the ISSC2 programme. As a first step towards this, the accountability for the current DWP Shared Service Centre (SSC) transferred on 1 April 2013 to the Cabinet Office until 31 October, after which date the service was delivered by Shared Services Connected Limited, an associate company.
**Associates**
**Shared Services Connected Limited (SSCL)**
On 1 November The Minister for the Cabinet Office announced that Steria Limited had been appointed as the private sector partner in a new associate company, Shared Services Connected Limited (SSCL), to run the second of two new Independent Shared Services Centres. The associate will harness commercial expertise to deliver government back-office functions more efficiently. The project is a key example of driving innovation in government commercial models – which are key parts of the Civil Service Reform Plan. The new company, SSCL, was initially formed from a consolidation of some existing shared service centres in DWP, the Department for the Environment, Food and Rural Affairs (Defra) and the Environment Agency. Some services from UK Shared Business Services Ltd (UK SBS) are expected to join by 2015. SSCL will deliver payroll, human resources, finance and procurement services to the existing customers of these centres, with further government departments, agencies and public bodies expected to join in due course.
**AXELOS Limited**
An innovative deal to create the first associate business based on government intellectual property was announced on 23 April by the Minister for the Cabinet Office. The new company owns and trades on the ‘Best Management Practice’ portfolio of professional standards developed by the Civil Service.
**Behavioural Insights Team Limited**
On 4 February 2014, the Cabinet Office’s Behavioural Insights Team joined with innovation charity National Endowment for Science, Technology and the Arts (Nesta) to create a new associate company that will apply insights from behavioural sciences and help the Government save millions of pounds for the taxpayer by tackling public policy problems. The Cabinet Office Board - our Board members
Members of the Cabinet Office Board during the year were:
Chair
The Rt Hon. Francis Maude MP Minister for the Cabinet Office, Paymaster General
Ministers
Nick Hurd MP Minister for Civil Society and Parliamentary Under-Secretary of State
Chloe Smith MP Minister for Political and Constitutional Reform and Parliamentary Secretary until 6 October 2013
Executive Membership
Sir Jeremy Heywood KCB, CVO Cabinet Secretary
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
Melanie Dawes CB Director General of Economic & Domestic Affairs Secretariat
Phillip Rycroft CB Director General, Deputy Prime Minister’s Office
Bruce Mann Finance Director, Board Secretary
Sue Gray Director General Propriety and Ethics and Head of Private Office Group
Non-Executive Membership
Details of the non-executive directors may be found within the section ‘Our Non-Executive Directors’. The Cabinet Office Board - responsibilities
The Cabinet Office Board is responsible for:
- **Planning and Performance** – agreeing the Departmental Plan, especially the Department’s strategic aims and objectives and the allocation of human and financial resources to achieving them, and their public expression in the Business plan; monitoring and steering performance against the Plan; scrutinising the performance of sponsored bodies; and setting the Department’s standards and values.
- **Strategy and Learning** – setting the vision/mission and ensuring that all activities contribute towards it, either directly or through establishment of a credible ‘licence to operate’; long-term capability and horizon scanning, ensuring that strategic decisions are based on a collective understanding of policy issues; using expertise and outside perspectives to hold the Department to account for its interaction with the ‘real world’.
- **Resources and Change** – signing off large projects or programmes, or scrutinising those above the Department’s financial delegation prior to submission to the Treasury; drawing on advice from the Audit and Risk Committee, ensuring sound financial management including the operation of delegations and internal controls; ensuring that organisational design supports the attainment of strategic objectives; evaluation of the Board and its members, and succession planning.
- **Capability** – ensuring that the Department has the capability to deliver and to plan to meet current and future needs.
- **Risk** – drawing on advice from the Audit and Risk Committee, setting the Department’s risk appetite and ensuring that effective and proportionate controls are in place to manage risk. Work of the Cabinet Office Board
The Cabinet Office Board forms the collective strategic and operational leadership of the Department, bringing together its Ministerial and Civil Service leaders with senior non-executives from outside government.
A Board effectiveness evaluation, led by Lord Browne, was conducted on his behalf by Internal Audit and discussed at the Board meeting in April 2013. The evaluation found that the Board’s composition gave it great strength and provided a forum and culture in which challenge was encouraged and valued: the contribution of Non-Executive Board Members was highly regarded. The Audit and Risk Committee was working well, and risk management processes were considered to be effective. The evaluation concluded that there had been a marked improvement in the operation of, and support to, the Board, including better agenda setting, performance reporting and minutes. Further improvements were needed in Board papers, in raising Non-Executive Board Members’ awareness of the Department’s arm’s length bodies, and in providing Non-Executive Board Members both with updates on key matters between Board meetings and with more opportunities for engagement.
In response to the evaluation findings, the template for Board papers was revised and updates on the activities of Arm’s length bodies were provided to Board members. The Board discussed the Department’s plans for the creation of a new Arm’s length body, the Crown Commercial Service, which will merge the Government Procurement Service (an existing Arm’s length body), the Department’s commercial function, and common goods and services procurement and commercial management into one organisation. Notes celebrating departmental successes and including information about the Department’s plans are now circulated to Non-Executive Board Members weekly, providing an overview of the work of the entire Cabinet Office. Lord Browne continues to be involved in developing agendas for each meeting, enabling the Board to focus its discussions on areas where the Non-Executive Board Members can add value.
The Board also agreed that Non-Executive Board Members were welcome to identify issues or areas in which they were willing to be involved. Dame Barbara Stocking joined the Challenge Group for the Triennial Review of the Big Lottery Fund, a Cabinet Office-sponsored Arm’s length body. The review was published on the 11th June 2014.
Rona Fairhead and Ian Davis joined a small group of Non-Executive Board Members in a discussion on functional leadership. The Minister for the Cabinet Office also held regular meetings with the Non-Executive Board Members.
In response to a request from Non-Executive Board Members, the Board reviewed the criteria used in deciding which elements of service delivery might provide opportunities for the design and implementation of alternative delivery models such as mutualisation. A discussion on public service reform identified digital capability as a key issue, so the Board held a follow-up meeting to review progress on the 25 digital exemplar projects. The Board also discussed Lord Browne’s review of the Major Projects Authority and the Government’s response.
Board effectiveness evaluations are conducted annually and the next evaluation was conducted in the first half of 2014.
During the year, the Board’s agenda included regular updates from the Chair of the Audit and Risk Committee, and the Board discussed risks associated with people issues. The Audit and Risk Committee also reviewed the Electoral Registration Transformation Programme, at the Board’s request, in advance of a further Board discussion.
A regular horizon-scanning slot provided an opportunity for Board members to be updated on recent developments and the priorities of key Board members and stakeholders. The Department’s performance was discussed through the year. The Board discussed the Quarterly Data Summary (QDS) Board Pack and agreed that selected highlights of the QDS should be introduced into the performance report. The Board also discussed plans for the Spending Round and the Department’s Business plan.
As part of its programme of scrutinising new projects with a value of more than £5 million, the Board considered plans for the establishment of a new independent management body for the National Citizen Service.
The Board reviewed the Permanent Secretary’s plans to identify and address areas of potential departmental improvement and Non-Executive Board Members provided valuable external challenge and input, suggesting a greater focus on people, skills and talent, IT, governance and relationships with departments. As well as reviewing progress on delivering efficiency savings, the Board also discussed Civil Service reform, the reform of public bodies and cyber security.
### Board attendance
The Board met seven times this year. The Corporate Governance Code requires that Board members’ attendances are published in the Cabinet Office Annual Report and Accounts. Board meetings were attended by all members except for the following:
| Meeting | Apologies | |------------------|----------------------------| | 26 April 2013 | Rona Fairhead | | | Jeremy Heywood | | 21 June 2013 | Rona Fairhead | | | Philip Rycroft | | 19 July 2013 | Nick Hurd MP | | | Dame Barbara Stocking | | | Jeremy Heywood | | 4 October 2013 | Nick Hurd MP | | | Dame Barbara Stocking | | | Rona Fairhead | | 17 December 2013 | None | | 24 January 2014 | Melanie Dawes | | 28 March 2014 | Nick Hurd MP | | | Lord Browne | | | Ian Davis | | | Melanie Dawes | | | Philip Rycroft | Public Interest
Board Members
The Cabinet Office maintains a register of Cabinet Office Board members’ interests, with details of company directorships and other significant interests held by Board members. Copies of the register are available on request. Copies are laid in the House of Commons library from time to time.
House of Commons
The register of House of Commons members’ financial interests can be found at: http://www.publications.parliament.uk/register of HOC members’ interest
House of Lords
The register of House of Lords members’ interests can be found at: http://www.parliament.uk/register-of-lords-interests
Senior management remuneration is disclosed within the Remuneration Report.
Compliance with the Corporate Governance Code
Departments are expected to apply the principles set out in Corporate Governance in Central Government Departments: Code of good practice 2011, unless good governance can be achieved by other means. They are also required to identify and explain areas where they have departed from the Code. The Cabinet Office is fully compliant with the principles of the Code.
Cabinet Office Audit and Risk Committee
Purpose
The Cabinet Office Audit and Risk Committee (COARC) is a Board committee, supporting the Cabinet Office Board and Principal Accounting Officer by providing an independent view of the Department’s risk control and corporate governance arrangements, and assessing the comprehensiveness, reliability and integrity of those assurances.
COARC was chaired by Barbara Stocking until 22 April 2013, after which date Rona Fairhead resumed the role of Chair. The Corporate Governance Code requires COARC members’ attendances to be published in the Cabinet Office Annual Report and Accounts.
Work of the Audit and Risk Committee
The Cabinet Office Audit and Risk Committee’s remit covers the Cabinet Office: Civil Superannuation, the Royal Mail Statutory Pension Scheme and Returning Officers’ Expenses for England and Wales. Separate Accounts are published for each of these, and each is audited separately, but all four have the same Principal Accounting Officer.
During the year the Committee’s work was divided between audit and assurance work, and risk review.
Its audit and assurance work included reviewing all the sets of accounts mentioned above, and providing assurance to the Accounting Officer that the accounts could properly be signed by him.
Following the qualification of the Cabinet Office: Civil Superannuation Accounts 2011-12 on the basis that some service and salary documentary evidence (required to validate the accuracy of some pension awards) could not be made available within the statutory timescales for publishing the accounts, the Committee reviewed the situation on an ongoing basis, receiving regular reports from management on the development and implementation of a Records Improvement Action Plan. The 2012-13 financial statements were certified with an unqualified audit opinion, without modification, and the accounts for 2012-13 were laid before Parliament in accordance with HM Treasury requirements.
The Committee’s risk work programme included reviews of a number of the Department’s strategic and operational risks, but it also undertook rigorous scrutiny of new activities that the Department is undertaking to ensure that there was a good understanding of potential risks, and that suitable mitigations were in place. An example of this was its review of the plans for the vesting of the Independent ISSC2 operation, seeking and receiving assurance that the lessons learnt from the MyCivil Service Pension programme had been applied to the ISSC2 transformation programme.
As a result of that work, the Committee asked for an audit and risk sub-committee, chaired by Christine Daws, to provide independent oversight of the operation of ISSC2, pending clarification of the longer-term role of such a sub-committee, reporting back to the Audit and Risk Committee on a regular basis. The Sub-committee provided advice and scrutiny of the proposal, especially on associated risks and how they could be mitigated. Shared Services Connected Limited was vested at the end of October.
The Chair of the Audit and Risk Committee, and the Chair of the sub-Committee, both have regular dialogue and meetings with the Head of Internal Audit and the Deputy Finance Director to discuss key areas of governance in relation to the Committee’s agenda. The Committee also regularly reviews the internal audit work programme.
### COARC Meeting Attendance
COARC met six times this year. Its meetings were attended by all members except for the following:
| Meeting | Apologies | |---------------------|--------------------------------| | 22 April 2013 | None | | 19 June 2013 | None | | 9 July 2013 | Dame Barbara Stocking DBE, Non-Executive Board Member | | 25 September 2013 | Ian Davis, Non-Executive Board Member | | 15 November 2013 | None | | 13 February 2014 | None |
A sub-committee of COARC, the Shared Services Audit Committee, was established in July 2013 to advise COARC and, through it, the Board and Principal Accounting Officer in connection with Independent Shared Service Centres 1 and 2, including their vesting, contract novation, risks, internal controls and assurance processes. The Shared Services Audit Committee is chaired by Christine Daws, who was also appointed an independent member of the Audit and Risk Committee in January 2014. Our Management Team – The Executive Management Committee
Chair: Richard Heaton Permanent Secretary
Will Cavendish Executive Director, Implementation Group
Alex Aiken Executive Director, Government Communications
Stefan Czerniawski Head of Corporate Strategy
Sue Gray Head of Propriety and Ethics Team and Director of Private Offices Group
Melanie Dawes Director General, Economic and Domestic Affairs Secretariat
Stephen Kelly Chief Operating Officer, UK Government
Paul Maltby Director, Government Innovation Group
Bruce Mann Finance Director (Secretary to the Executive Management Committee)
Helen Stephenson Director, Government Innovation Group
Melanie Steel Director of Human Resources
Chris Martin Director General, Prime Minister’s Office
Philip Rycroft Director General, Deputy Prime Minister’s Office
Hugh Powell, Director General, Foreign Policy
[No photo available]
Oliver Robbins, Director General, Civil Service Our Non-Executive Directors
Lord Browne of Madingley Government Lead-Non Executive Director and Lead Non-Executive Director for the Cabinet Office
Lord Browne of Madingley, FRS FREng holds degrees from Cambridge University and Stanford University, and numerous honorary degrees and fellowships.
He joined BP in 1966, became a member of the board in 1991 and was Group Chief Executive from 1995 until 2007. He has served on the boards of Intel, DaimlerChrysler AG, Goldman Sachs and SmithKline Beecham.
He is presently a Partner of Riverstone Holdings LLC, the Chairman of the Trustees of both Tate and the Queen Elizabeth Prize for Engineering and Chairman of the International Advisory Board of the Blavatnik School of Government at Oxford University. He is a member of a variety of other advisory boards.
Rona Fairhead CBE Non-Executive Board Member and Chair of the Audit and Risk Committee
Rona Fairhead is Chairman of HSBC North America Holdings Inc. and has been an independent non-executive Director of HSBC Holdings plc since December 2004. She is Chairman of the Financial Services Vulnerabilities Committee and a member of its Nomination Committee.
Rona is also currently a non-executive director of The Economist Group and PepsiCo Inc. She was recently appointed a British Business Ambassador by the Prime Minister and is actively involved with Cambridge University, the Teach First charity and Women2Win.
Formerly she was Chairman and Chief Executive Officer (CEO) of the Financial Times Group, a director of Pearson plc and Chairman of Interactive Data Corporation. In her earlier career she held senior executive positions in Bombardier Aerospace and ICI plc.
Dame Barbara Stocking DBE Non-Executive Board Member and Member of the Audit and Risk Committee
Dame Barbara Stocking has been President of Murray Edwards College, Cambridge, since July 2013. For the previous 12 years, Dame Barbara was Chief Executive of Oxfam GB, a major international non-governmental organisation whose mission is ‘to work with others to overcome poverty and suffering’.
In her earlier career, Dame Barbara was a member of the top management team of the NHS, as Regional Director for the South East of England and then as the founding Director of the NHS Modernisation Agency. Dame Barbara was awarded a CBE for services to health in 2000, and in 2008 was made a DBE for humanitarian services.
Ian Davis Non-Executive Board Member and Member of the Audit and Risk Committee
Ian Davis is the Chairman of Rolls-Royce plc. He is also an independent Non-Executive Director of BP plc, Johnson & Johnson Inc. and Majid Al Futtaim Holding. In the social sector he is a Non-Executive Director of Teach for All and the Big Society Trust.
He is also an adviser to Apax LLP and is Senior Partner Emeritus of McKinsey & Company. He was a partner at McKinsey for 31 years until 2010 and served as Chairman and Managing Director between 2003 and 2009. Independent Non-Executive Membership
The role of the Non-Executive Members of the Board is set out in ‘Enhanced Departmental Boards: Protocol’ published on the Cabinet Office website.
The Non-Executive Board Members (NEBM) exercise their role through influence and advice, supporting as well as challenging the executive. They advise on performance (including agreeing key performance indicators), operational issues (including the operational/delivery implications of policy proposals) and effective management of the Department. They also provide support, guidance and challenge on the progress and implementation of the operational business plan, and in relation to recruiting, appraising and ensuring appropriate succession planning of senior executives. They form the committee responsible for audit and risk. To share best practice and to ensure that departments learn from the successes and failures of comparable organisations, they regularly meet with other non-executives across government.
Executive committees
Executive Management Committee
The Executive Management Committee (EMC) is responsible for the executive management of the Department within the strategic framework established by ministers and the Cabinet Office Board. The EMC is responsible for supporting the Cabinet Office Board by considering detailed issues concerning the management of the Department, including:
- planning
- budgeting
- performance
- people
- corporate services.
The EMC is chaired by Richard Heaton, Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer.
Investment and Programme Review Committee
The Investment and Programme Review Committee (IPRC) supports the Accounting Officer in ensuring the effective design, control, accountability, value for money and evaluation of major Cabinet Office investments, programmes and projects. Constituted in November 2013, the IPRC reviews the Department’s significant investments, main programmes and projects with a view to improving their governance, effectiveness, value for money and deliverability.
To assure the Accounting Officer that strategic risks are being handled appropriately, the IPRC may suggest that the Accounting Officer should refer projects to the Cabinet Office Audit and Risk Committee or the Cabinet Office Board for strategic advice, before advising on approval decisions.
The IPRC was initially chaired by Richard Heaton. Following a review of executive governance arrangements (see below), it will be chaired by Bill Crothers, Director General, Commercial and the Government’s Chief Procurement Officer.
Changes to Executive Governance Arrangements
At the end of the financial year, Richard Heaton conducted a review of executive governance arrangements, including the establishment of two new sub-committees of the Executive Management Committee. The two new sub-committees are The Performance and Pay Committee, which Richard Heaton chairs, and the Environment and The Way We Work Committee, which is chaired by Paul Maltby, joint Director of the Government Innovation Group. Bill Crothers, Director General, Commercial, and the Government’s Chief Procurement Officer, became the Chair of the IPRC at the same point.
The new arrangements came into effect in April 2014. Review of Effectiveness
Work of Internal Audit
The Department’s internal audit service is provided under a Service Level Agreement by the joint shared internal audit service- the Cross Departmental Audit Services (XDIAS). XDIAS provides internal audit and assurance services to eight central government departments and a range of arm’s length bodies. XDIAS activity for the year included work to provide assurance in the following areas of risk:
- Planning and resource allocation
- Totemic policies and programmes
- Generating and reporting of savings
- Requirements on and relationships with Other Government Departments
- Civil contingencies
- Elections
- Regularity and Propriety and value for money
Internal Audit opinion
XDIAS works in accordance with Government Internal Audit Standards. Its work is informed by its analysis of the risks to which the Department is exposed and the annual audit plan is based on that analysis. The plans are discussed and endorsed by COARC and then agreed with the Accounting Officer. The Head of Internal Audit (HIA) annually provides an independent opinion on the adequacy and effectiveness of the Department’s governance, risk and control arrangements. The HIA’s opinion for 2013-14 is that a partial assurance opinion can be placed on the Department’s arrangements for governance, risk and control arrangements.
The Internal Audit opinion did not identify any control weaknesses requiring disclosure in this Governance statement. But it did identify that the Cabinet Office should be cognisant of the potential need to continue to upgrade management controls and keep governance arrangements under review, in response to the increasing levels of risk to which it is exposed, for example due to its role as a provider of services.
NAO Assurance Reports
Over the period 2013-14 the National Audit Office looked at many aspects of Cabinet Office business:
- Next Generation Shared Services Strategy
- Managing debt owed to central government
- Progress on public bodies reform
- Major Projects Authority Annual Report 2012-13 and government project assurance
- Government whistleblowing policies
- Departmental Overview: The performance of the Cabinet Office 2012-13
- Memorandum on the role of major contractors in the delivery of public services
- Memorandum on Managing government suppliers Risk Management
Risk Assurance
HM Treasury mandate that internal audit must give a year end assurance on the effectiveness of a department’s Governance, Risk and Control arrangements. This Internal Audit assurance is one of the key sources of evidence underpinning the Accounting Officer’s Governance Statement.
The Internal Audit assurance is based on internal audit work performed over the course of the year, combined with knowledge of the governance, risk and control framework gained through attendance at meetings and discussions with senior management.
Key Strategic Risks
A strategic risk register for the Cabinet Office was completed in 12-13. These risks are reviewed on a rolling basis, and a number of them were reviewed by COARC in 13-14.
Risk
Resourcing is a key strategic risk. The IA reviews of Flexible Resourcing, Recruitment and Training all found a lack of formalised risk management.
Mitigation
High level of engagement of senior staff with resourcing through the annual resource planning process and the in-year Resourcing Panel. This brings Senior Officials insights on risk to bear in decision-making. 2013-14 saw the submission to the Resourcing Panel of the first Workforce Planning quarterly review, improved engagement by Management Unit leadership with workforce planning and better Management Information from the workforce Resource Management system.
Group-level Risks
There has been sound assurance over the quality of Group-level risk management in the Cabinet Office. This comprises review and challenge of the Corporate Management Responsibilities Statements on risk management and provision of detailed guidance on risk management processes on Cabweb. Risks can be escalated through the monthly meeting with the Finance Director and regular liaison of Finance with risk managers.
The Risk Managers Network met twice in 2013-14 and will be moving to quarterly. The Network is intended to drive up the quality and consistency of Group–level risk management. However, we noted continuing inconsistency in risk management across the Cabinet Office.
Project-level Key Risks
Risk 1
There was no formal risk management process in the Election Administration Unit but a good implicit awareness of risk around the Funding review. More formal risk mitigation planning would provide assurance that major risks are being countered.
Risk 2
On Cities Deals the IA follow up review showed that there is now a comprehensive risk management process in place, with good risk mitigation planning in place and regular update/reporting activity. However, the risks for the transition to Local Growth Deals, including the effect on conclusion and ongoing monitoring of Cities Deals, need to be assessed.
Risk 3
Professional Head of Intelligence Analysis Programme Risks should be fully captured and monitored as part of the Joint Intelligence Operations (JIO) Risk Register. Risk 4
There is no formal risk management process in Departmental Engagement Units but a good implicit awareness of risk. Risk was seen as focussed on ensuring the right staff - in terms of grade and capability – were delivering engagement activities and that they sound relationship management was in place. Assurance would be strengthened by a more formal approach in each team, which would provide focus on risk mitigation planning.
Risk 5
With regard to civil contingencies strong controls for the management of near and long term disruptive challenges are in place along with incident response mechanisms. Whilst the assessment of individual risks follows a robust method, it was unclear whether a comparative assessment is undertaken to ensure the application of the methodology provides a fair representation of national long and medium term risks. In addition, opportunities to assess risks with an impact greater than 5 years, aggregated or concurrent risks are limited by the current methodology.
Assurance over Risk
During the year the Audit and Risk Committee reviewed the three types of risks faced by the Department – strategic risks, risks to programmes and projects, and day-to-day operational risks in business units – and chose to review some of the strategic risks and risks arising from major programmes and projects and measures in hand to manage them. These reviews included risks around development and deployment of human resources, operating with integrity, the Electoral Registration Transformation Programme, Next Generation Shared Services and progress in implementing data improvement plans with MyCSP, with risk appetite considered as part of each discussion. The Cabinet Office Board reviewed risks associated with major programmes and the position on the management of major strategic risks at each of its meetings.
All Groups within the Cabinet Office are required to have in place a structured approach to managing risks. This includes maintaining risk registers and risk escalation, mitigation and communication processes. Guidance and example templates for risk registers are published on the Department’s intranet. At regular intervals, assurance is sought from each Group that risk management requirements are being complied with; this is supported by internal reviews of processes and practice.
During the year guidance and an updated risk register template were issued to require all Groups to include two mandatory risks, Business Continuity and Resources, in their Group level risk registers. Compliance with this new requirement is being monitored centrally. One review of these risks and concluded that the risks were being well managed across the organisation.
The Risk Managers’ Network is now well established and members have decided to increase the frequency of the meetings from two each year to four to further enhance networking opportunities and information exchange between Risk Managers. A regular feature of the meetings is a practical exercise and discussion on common issues.
Risk management of Shared Services
There have been a significant number of changes in Accounting Officer responsibility within the Cabinet Office during 2013-14, requiring new governance arrangements to be put in place (for example the Shared Services Sub-Committee, referred to above).
The Internal Audit opinion identified that the Cabinet Office took some time to develop and implement these arrangements, but that these are now working effectively.
ISSC1
On the 19 October 2013 the contract between the Department for Transport (DFT) and arvato was novated to the Cabinet Office. ISSC2
Until 1 April 2013, DWP had Accounting Officer responsibility for the Shared Service centre operations.
During the period 1 April to 31 October 2013, the former DWP shared services operation was managed by the Cabinet Office. During this time there were no material changes to the operations.
From 1 November 2013 to 31 March 2014, the framework contract was let by the Cabinet Office which assumed Accounting Officer responsibility for the Framework contract. Individual customers retain their own accounting officer responsibility at the call-off contract level. The Founding Organisations also signed a transition service agreement which provides services back to SSCL, for which they are accountable.
As a result of these changes, the responsibilities of the Cabinet Office Accounting Officer have changed significantly.
The Accounting Officer has outlined his responsibilities in a letter to departments assuring them that the Cabinet Office as the framework authority:
- carries out its duties and obligations under the Framework Agreement in accordance with the Agreement’s terms, and that it has exercised, and continues to exercise, reasonable skill, care and diligence in the performance of those duties and obligations;
- monitors the compliance of SSCL and arvato with their obligations under the Framework Agreement and notifies the customer of any issues that may have an adverse material impact on the Call-Off Agreement;
- has sufficient, appropriately skilled and experienced resources to enable the Department to comply with its obligations under the Framework Agreement.
To manage these responsibilities the Crown Oversight Function was created, reporting to Rannia Leontaridi in the Efficiency and Reform Group. The Crown Oversight Function will manage the following aspects of the relationship between the Cabinet Office, customers and SSCL:
- day-to-day contract management of SSCL and arvato at Framework level
- customer and SSCL and arvato change management requests
- tracking and developing the benefits delivered by SSCL and arvato.
- operational benchmark setting of all finance and HR transactional shared services
Within the Crown Oversight Function, a governance structure (including a risk management process) has been put in place to support effective management of the Framework Agreement with arvato.
Customer departments receive formal assurance letter at the end of each financial year, setting out how the Cabinet Office has met its responsibilities.
Risk management – ISSC1
During 2013-14, arvato, the Cabinet Office, and customer departments managed and mitigated the following two key risks:
- risk to service continuity, employee relationships and key performance indicators during handover from DfT to arvato
**Mitigation:** DfT and arvato jointly managed the transition of the Shared Service Centre to arvato. They jointly developed an agreed transition plan, which was robustly managed by both parties
- risk to service continuity during SAP migration
**Mitigation:** infrastructure build and implementation managed via appropriate governance structures. Robust change control and risk and issue management processes put in place; clear acceptance criteria. Risk Management – ISSC2
During the creation and operation of SSCL, the Cabinet Office, SSCL and customer departments managed and mitigated the following two key risks:
- During the period when the Cabinet Office had Accounting Officer responsibility but DWP was still managing the staff and operations, there was a risk that disgruntled staff might exploit the weaknesses in the IT security that had not been resolved, with consequences for service continuity and/or information assurance.
**Mitigation:** A rigorous due diligence process by the Cabinet Office prior to the transfer of Accounting Officer responsibility meant that there was a good understanding of the IT issues and the potential for exploitation. Prior to the transfer to SSCL, the Shared Services senior management team in DWP monitored the position, and neither disruption to services nor any malicious activity was experienced.
- During the period from 1 November 2013 to 31 March 2014, the IT security issues were largely addressed and the resultant risk diminished. But instead, there arose a new risk to service continuity and/or a risk of malicious activity: during this period, staff and operations moved from DWP, the Environment Agency and Defra (the Founding Organisations) to SSCL. There was a period of uncertainty for staff over their future roles and locations, and therefore potential for disgruntlement.
**Mitigation:** This was mitigated through careful management of the handover process by both the Founding Organisations and SSCL, including ongoing engagement and consultation with the recognised trade unions. There was a stabilisation period, with specific criteria to be fulfilled, and close management monitoring and oversight. In addition, it was contractually agreed that no changes would be made to existing operations for the first six months, and that no sites would close for 12 months, so as to minimise the impact on staff. Neither disruption to services nor any malicious activity was experienced.
ISSC1 Assurance Summary
The Cabinet Office Shared Services Audit Committee met on 14 May and considered evidence from:
- arvato management
- Ernst & Young (in relation to independent review of arvato’s control processes)
- XDIAS
It concluded that reasonable assurance can be given at a Framework Level, taking into account the following factors:
- During its time in DfT, no significant control weaknesses was identified by DfT management or Internal Audit in the shared services operation or environment
- No outstanding audit issues existed at the point of handover.
- No audit issues have been identified by arvato management since then.
- No significant control weaknesses have been identified by Ernst & Young in its review work
- No issues have been identified by the National Audit Office (NAO) in its financial audit work to date
ISSC2 assurance summary
The Cabinet Office Shared Services Audit Committee met on 14 May and considered evidence from:
- SSCL management Grant Thornton’s ISAE 3402 ‘lite’ report XDIAS.
It concluded that reasonable assurance can be given at a Framework Level, taking account of the following factors:
- The outstanding audit issues existing at the point of handover continue to be closely monitored and mitigated.
- No audit issues have been identified by SSCL management since that time.
- No significant audit issues have been raised by customers via the governance forums.
- No significant control weaknesses have been identified by Grant Thornton in its review work.
- No issues have been identified by the National Audit Office in its financial audit work to date.
Risk management in the Finance Shared Services Division in the Department for Communities and Local Government
The Cabinet Office continues to receive financial services from the Elections Claim Unit of the Department for Communities and Local Government (DCLG) under a shared services arrangement. An annual letter of assurance from DCLG confirms that risk management is reviewed regularly and that appropriate systems of internal controls are applied to ensure the integrity of Cabinet Office data which DCLG is processing on behalf of the Cabinet Office.
The Accounting Officer receives a letter of assurance from the DCLG’s Accounting Officer, covering the services which DCLG provides to the Cabinet Office. The letter of assurance for 2013-14 states that: ‘My review is informed by internal and external audit opinions and by other ad-hoc reviews (both internal and external). No issues have been raised by the Audit and Risk Committee in relation to the services provided and no Significant Control Issues have been identified.’
It also confirms that, ‘specifically for services provided to [the Cabinet Office] by [the Finance Shared Services Division], all key controls are in place’.
Fraud, error and debt
The Cabinet Office’s fraud policy, available to all staff via the intranet, requires staff at all times to act honestly, with integrity, and to safeguard the public resources for which they are responsible. The Cabinet Office views fraud and negligence very seriously and will take appropriate disciplinary and legal action against anyone found guilty of either. Cases of suspected or actual fraud are reported to the Audit and Risk Committee.
The Cabinet Office contributes fully to the intra-governmental fraud information and intelligence capability. The Counter Fraud Champion and two Alert System Co-ordinators continue to work with a department wide network of contacts to facilitate the quick and comprehensive identification and dissemination of appropriate information.
In March 2013, the Cabinet Office participated in the National Fraud Initiative run by the Audit Commission. Payroll and supplier data was matched with similar data from a wide range of organisations across the public sector. A small number of duplicate payments were identified and have been recovered.
Cabinet Office officials are contributing to the Grants Efficiency Programme, the Best Practice Network and have helped develop guidance and a toolkit for use by grant-makers across government.
An exercise to check for duplicate payments to suppliers has been commissioned to cover the years 2011-12 to 2013-14. The organisation carrying out the exercise receives no fee if it does not identify and recover any such duplicates; if duplicates are identified, the fee is taken from the recoveries. Information risk, information handling and protective security
The Cabinet Office holds personal data primarily relating to: its own employees; staff in other departments who are members of ISSC2; members of the Royal Mail Statutory Pension Scheme; members of the Principal Civil Service Pensions Scheme; those who have been nominated for honours, gallantry awards, appointments etc.; Civil Service Internships; and those members of the public who have participated in various Cabinet Office sponsored initiatives.
The Department has continued to monitor and assess its information risks in order to identify and address any weaknesses and ensure continuous improvements of its systems.
The Department has completed its latest rolling programme of audits assessing compliance against the mandatory requirements contained in the Security Policy Framework. The Report supported work currently being undertaken to strengthen the Department’s Business Continuity arrangements and identified a small number of other instances where further work might be beneficial in order to emphasise the Department’s compliance with the Security Policy Framework (SPF). Work has continued on implementing some outstanding recommendations from earlier audits.
The Department has continued to operate two Security Working Groups (SWGs). The first monitors the work of ISSC2, and the second that of MyCSP. The purpose of the SWGs is to ensure that controls deployed are appropriate for the data sensitivity, risks are identified and work continues to fully adhere to the SPF.
Two losses of Personal Information have been notified to the Information Commissioner’s Office. Further detail can be found at the section ‘Reporting of personal data-related incidents’ within the Directors’ Report.
Other major work undertaken during the year included the implementation of the new Government Security Classification scheme.
A major information/publicity campaign was undertaken along with a programme of staff training/briefing, and the scheme was successfully launched on 2 April 2014.
The security of the data held on the Department’s corporate IT network (Flex) continued to be maintained in line with relevant security accreditation. Non-corporate IT systems continued to comply with the service-wide security requirements through restrictions on the movement and transmission of data.
Arm’s length bodies
The Accounting Officer takes assurance from the Governance Statements produced by the Civil Service Commission and the Government Procurement Service. Both are subjected to the Department’s normal financial control procedures and practices as well as to scrutiny by both internal and external audit. There were no concerns.
Oversight of Local Responsibilities
The Cabinet Office makes a number of direct grant awards, principally to organisations in the voluntary, community and social enterprise sector, and funds a number of grant schemes delivered through partners such as the Big Lottery Fund, which is an executive non-departmental public body of the Department for Culture, Media and Sport, for which the Minister for the Cabinet Office has some responsibility (as set out at Note 30 to the Accounts).
Grants are distributed on the basis of the Coalition Government’s stated priorities, in particular around the building of the Big Society. This includes delivery of commitments such as the National Citizen Service.
For direct awards, the Cabinet Office issues each grant recipient with a formal grant offer letter and associated terms and conditions of grant. Payment of grants is done in instalments based on the grant recipient fulfilling the terms and conditions of grant payment and on satisfactory progress in achieving the outcomes of the grant award. Regular but proportionate monitoring of progress is undertaken by named policy officials, in conjunction with Cabinet Office finance teams. Spend across all grant programmes is monitored on a monthly basis through the established Cabinet Office financial reporting and scrutiny processes.
Some direct grants are awarded on the basis of competition between potential recipients, to ensure that there is value for money and that the objectives of the Government can be appropriately delivered. In some limited cases grant awards are made without a competitive process, where the recipients’ objectives and programme of work already align with the Government’s objectives for grant funding.
For a number of larger grant programmes, the Cabinet Office works through a delivery partner, rather than administering the grant in-house. This is achieved in two key ways. The Cabinet Office has, in some cases, tendered through open competition for a delivery partner. Following competition, a grant administrator is appointed and runs the scheme under contract to the Cabinet Office. Through the contracting arrangements, the Cabinet Office monitors the performance and progress of the grant administrator in carrying out its functions in relation to grant competitions and awards, organisation verification, grant set-up and payments and grant monitoring. A management fee is payable for these services, and the Cabinet Office passes on grant funding, which the grant administrator distributes to the successful grant recipients.
In other cases, the Cabinet Office works through the Big Lottery Fund to deliver funds as part of the sponsorship role that the Cabinet Office holds in relation to the Big Lottery Fund as a Non-Departmental Public Body (NDPB). The Cabinet Office and the Big Lottery Fund work jointly to develop the fund and the Big Lottery Fund fulfils the grant administration role, as set out in agreed schedules of work. Funds are paid to the Big Lottery Fund by way of grant funding to the NDPB to cover costs and grant awards. The Cabinet Office takes assurance from the fact that Big Lottery Fund has the duty to ensure that there is propriety and regularity in the handling of all public funds, in accordance with the Non-Departmental Public Bodies’ Accounting Officers’ memorandum (issued by the Treasury and published in Managing Public Money) and with the Financial Directions issued to the Big Lottery Fund from time to time by the Secretary of State for Culture, Media and Sport under section 26(3) of the National Lottery etc. Act 1993.
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
24 June 2014 Remuneration Report
Remuneration of Ministers and Board Members
Remuneration Policy
The remuneration of senior civil servants is set by the Prime Minister, following independent advice from the Review Body on Senior Salaries.
The Government announced in May 2010 a two year pay freeze for public sector workers earning more than £21,000. As such Senior Civil Servants entered a two-year pay freeze from 1 April 2011 and exited it in April 2013. The Government also announced in May 2010 that future non-consolidated awards will be restricted to the top 25% of Senior Civil Servants and non-consolidated awards paid in 2013-14 were in line with this policy.
Performance-related non-consolidated awards are paid one year in arrears so the pay reported and paid in 2013-14 was earned in the financial year of 2012-13.
The performance management system for senior civil servants is common across all government departments. Pay awards are made in two parts: non-consolidated variable payments, which are used to reward members of staff who demonstrate exceptional performance, and base pay progression, to reward growth in competence. The size of awards is based on recommendations from the Review Body on Senior Salaries, and in 2013-14 non-consolidated awards paid to the senior civil servants disclosed in this report ranged from £10,000 to £15,000.
The Review Body also advises the Prime Minister from time to time on the pay and pensions of Members of Parliament and on their allowances; on peers’ allowances; and on the pay, pensions and allowances of ministers and others whose pay is determined by the Ministerial and Other Salaries Act 1975. In reaching its recommendations, the Review Body is to have regard to the following considerations:
- the need to recruit, retain 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
- government policies for improving the public services, including the requirement for departments to meet the output targets for the delivery of departmental services
- the funds available to departments as set out in the Government’s departmental expenditure limits
- the Government’s inflation target.
The Review Body takes account of the evidence it receives about wider economic considerations and the affordability of its recommendations. Further information about the work of the Review Body can be found at www.ome.uk.com Service Contracts
The Constitutional Reform and Governance Act 2010 requires Civil Service appointments to be made on merit on the basis of fair and open competition. The Recruitment Principles issued by the Civil Service Commission specify the circumstances under which appointments may be made otherwise.
Unless otherwise stated below, the officials covered by this report hold appointments which are open ended. Early termination, other than for misconduct, would result in the individual receiving compensation, as set out in the Civil Service Compensation Scheme.
Further information about the work of the Civil Service Commission can be found at www.civilservicecommission.org.uk
Audited Information
The following tables detailing salary and pension entitlements of ministers and senior management have been audited.
Remuneration (Including Salary) And Pension Entitlements
The following sections provide details of the remuneration and pension interests of the ministers and board members of the Department.
## Remuneration (Salary, Benefits in Kind and Pensions)
### Single total figure of remuneration
| Ministers | Salary (to nearest £) | Benefits in kind (to nearest £100) | Pension benefits (to nearest £1,000) | Total (to nearest £1,000) | |-----------|-----------------------|------------------------------------|-------------------------------------|--------------------------| | | 2013-14 | 2012-13 | 2013-14 | 2012-13 | 2013-14 | 2012-13 | 2013-14 | 2012-13 | | The Rt Hon. Nick Clegg MP | 68,169 | 68,827 | – | – | 21,000 | 22,000 | 89,000 | 91,000 | | Deputy Prime Minister and Lord President of the Council | | | | | | | | | | The Rt Hon. Francis Maude MP | 32,344 | 33,002 | – | – | 15,000 | 10,000 | 47,000 | 43,000 | | Minister for the Cabinet Office and Paymaster General | | | | | | | | | | The Rt Hon. Oliver Letwin MP | 32,344 | 33,002 | – | – | – | – | 32,000 | 33,000 | | Minister for Government Policy | | | | | | | | | | Nick Hurd MP | 23,039 | 23,697 | – | – | 8,000 | 9,000 | 31,000 | 33,000 | | Minister for Civil Society and Parliamentary Under-Secretary of State | | | | | | | | | | Chloe Smith MP | 17,651 | 11,849 | – | – | 5,000 | 4,000 | 23,000 | 16,000 | | Minister for Political and Constitutional Reform and Parliamentary Secretary | | | | | | | | until 6 October 2013 | | The Rt Hon. Greg Clark MP | 13,477 | – | – | – | 5,000 | 5,000 | 18,000 | 5,000 | | Minister of State (Cities and Constitution) | | | | | | | | from 7 October 2013 | | The Rt Hon. Lord Hill of Oareford CBE | 137,404 | 24,986 | 900 | – | 37,000 | 34,000 | 175,000 | 59,000 | | Leader of the House of Lords and Chancellor of the Duchy of Lancaster | | | | | | | | | | The Rt Hon. Andrew Lansley CBE MP | 32,344 | 16,501 | – | – | 9,000 | 3,000 | 41,000 | 20,000 | | Leader of the House of Commons and Lord Privy Seal | | | | | | | | | | The Rt Hon. Kenneth Clarke QC MP | 32,344 | 18,426 | – | – | – | – | 32,000 | 18,000 | | Minister without Portfolio (Minister of State) | | | | | | | | | | The Rt Hon. John Hayes MP | 32,344 | – | – | – | 12,000 | 12,000 | 44,000 | 12,000 | | Minister without Portfolio (Minister of State) | | | | | | | | |
When a minister is transferred to another department the existing host department pays the salary at the current rate of pay up to the end of the month of departure, and the new host department pays in the month following, at the appropriate salary, along with any arrears.
1. The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to a transfer of pension rights.
2. Figure quoted is for the period 1 April 2013 to 6 October 2013 includes £5,760 compensation in lieu of notice. The full year equivalent is £23,039. Ministers who have not attained the age of 65, and are not appointed to a relevant Ministerial or other paid office within three weeks, are eligible for a severance payment of one quarter of the annual ministerial salary being paid.
3. Figure quoted is for the period 7 October 2013 to 31 March 2014. The full-year equivalent is £32,344. Salaries for the ministers joining the Department for the first time are paid from the date of their appointment.
4. Figure quoted includes Lords Office Holders’ Allowance of £36,366 (2012-13:£8,047).
## Remuneration (Salary, Benefits in Kind and Pensions)
### Single total figure of remuneration
| Board Members | Salary (£000) | Bonus payments (£000) | Benefits in kind (to nearest £100) | Pension benefits (to nearest £1,000) | Total (£000) | |---------------|--------------|-----------------------|------------------------------------|--------------------------------------|-------------| | | 2013-14 | 2012-13 | 2013-14 | 2012-13 | 2013-14 | 2012-13 | | Sir Jeremy Heywood KCB, CVO Cabinet Secretary | 190 -195 | 185 -190 | – | – | 75,600² | 83,900 | 21,000 | 229,000 | 285-290 | 500-505 | | Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer | 160 -165 | 155 -160 | – | – | – | 300 | 31,000 | 64,000 | 190-195 | 220-225 | | Philip Rycroft CB Director General, Deputy Prime Minister's Office | 140 -145 | 115 -120 | – | – | 17,300 | 11,800 | – | – | 155-160 | 130-135 | | Sue Gray Director General Propriety and Ethics and Head of Private Office Group | 105 -110³ | 105 -110³ | – | – | – | 200 | 2,000 | 200,000 | 115-120 | 310-315 | | Melanie Dawes Director General, Economic and Domestic Affairs Secretariat | 125 -130 | 125 -130 | 10 - 15 | – | – | 300 | – | 37,000 | 140-145 | 165-170 | | Bruce Mann Finance Director, Board Secretary | 105 -110 | 105 -110 | – | 10 - 15 | – | – | (4,000) | 5,000 | 100-105 | 125-130 |
Disclosures above represent the salary paid in respect of their role as Board Members, and may not be the same as the periods employed by the Department. When a Board Member is transferred to another department the existing host department pays the salary at the current rate of pay up to the end of the month of departure and the new host department pays them in the month following at the appropriate salary, along with any arrears.
1. The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation or any increase or decreases due to a transfer of pension rights.
2. The Permanent Secretary had the private use of an allocated car in the circumstances permitted by the Civil Service Management Code. The car is a shared resource between the Cabinet Secretary and the Head of the Civil Service (footnote 4). Ministers and civil servants in the Cabinet Office and No 10 also use the car on a regular basis. The Cabinet Secretary uses the car predominantly for home to office journeys.
3. Private Secretary Allowance of £6,042 was paid in addition (2012-13:£6,042).
4. In his capacity as Head of the Civil Service, Sir Bob Kerslake receives an allowance of £20,000 per annum and has the shared use of a car predominantly for home to office journeys and journeys between the Cabinet Office, Parliament and Eland House which gives rise to a benefit-in-kind of £75,000 in 2013-14 (2012-13: £82,900). His full remuneration for his roles as Permanent Secretary to the Department for Communities and Local Government (DCLG) and as Head of the Civil Service is disclosed within DCLG’s Annual Report and Accounts. Salary
'Salary' includes gross salary; overtime; reserved rights to London weighting or London allowances; recruitment and retention allowances; private office allowances and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by the Department and thus recorded in these accounts. In respect of ministers in the House of Commons, departments bear only the cost of the additional Ministerial remuneration; the salary for their services as an MP (£65,738 from 1 April 2010, £66,396 from 1 April 2013) and various allowances to which they are entitled are borne centrally. However, the arrangement for ministers in the House of Lords is different in that they do not receive a salary but rather an additional remuneration, which cannot be quantified separately from their Ministerial salaries. This total remuneration, as well as the allowances to which they are entitled, is paid by the Department and is therefore shown in full in the figures above.
Benefits in Kind
The monetary value of benefits in kind covers any benefits provided by the Department and treated by HM Revenue and Customs as a taxable emolument.
Bonuses
Bonuses are based on performance levels attained and are made as part of the appraisal process. Bonuses reported in the accounts are those paid in year relating to prior year’s performance. Bonuses are not accrued or provided for at 31 March since the appraisal process is not complete until summer. This is consistent with accounting treatment in previous financial years. The bonuses reported in 2013-14 relate to performance in 2012-13 and the comparative bonuses reported for 2012-13 relate to the performance in 2011-12. Pay Multiples
| Band of highest-paid director’s Total Remuneration (£000) | 2013-14 | 2012-13 | |----------------------------------------------------------|---------|---------| | £265 - 270,000 | £270 - 275,000 | | Median Total Remuneration | £42,300 | £44,743 | | Ratio | 6.33 | 6.12 |
Reporting bodies are required to disclose the relationship between the remuneration of the banded highest-paid director in their organisation and the median remuneration of the organisation’s workforce. The median is the mid-point of the remuneration of the organisation’s workforce.
The banded remuneration of the highest-paid director in the Cabinet Office in the financial year 2013-14 was £265 – 270,000 (2012-13 : £270 – 275,000). This was 6.33 times (2012-13 : 6.12) the median remuneration of the workforce, which was £42,300 (2012-13 : £44,743).
In 2013-14, no (2012-13 : none) employees received remuneration in excess of the highest-paid director. Remuneration ranged from £17,000 to £270,000 (2012-13: £17,000 to £275,000).
Total remuneration of the highest-paid director includes salary, non-consolidated performance-related pay and benefits in kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.
The pay multiples (ratio) is calculated by taking the highest paid director and remuneration of the full-time equivalent staff of the Cabinet Office at the reporting period end date on an annualised basis. The purpose of this calculation is to allow some comparability over time and across the public sector and private sector, where similar disclosures of Chief Executive remuneration and pay multiples are made. However, the comparison should be treated with caution, given the different services provided, workforce skills, geographical locations and organisational structures. A balance is therefore considered in analysing and supporting narrative to give sufficient explanation and justification to ensure that users can understand the intricacies of the Cabinet Office’s pay policy. Staff costs Note 4 discloses termination benefits and fees paid to agencies for temporary staff. These have not been included in the computation of pay multiples.
There has been an increase in the ratio of the year on year variance from 6.12 in 2012-13 to 6.33 in 2013-14 of top to median staff remuneration of the workforce. This is mainly attributable to the following:
- the highest-paid director received a minor salary increment and his benefits in kind were lower compared with the previous year, which contributed to the decrease in the total remuneration figure
- an increase in headcount which drove the median salary slightly towards the lower band. Fees Paid to Non-Executive Board Members
Non-Executive Board Members (NEBM) have been offered a fee of £15,000 a year in line with the Bank of England Non-Executive Directors of Court. The role of Lead NEBM and the role of chair of the audit committee will each attract an additional £5,000 a year. Individuals may waive all or part of their fee. The estimated annual time commitment is likely to be around 12-15 days, including a strategy away-day. Board members may claim their fees as and when preferred and therefore fees paid and fee entitlement may differ in the table below. Claimed fees are included within wages and salaries costs at Note 4 to the Accounts.
Lord Browne of Madingley, as a lead non-executive board member of the Cabinet Office and Government Lead Non-Executive Board Member has agreed that he will not be paid a fee in respect of this appointment. Ian Davis and Dame Barbara Stocking DBE are non-executive board members and members of the Audit and Risk Committee. They are each entitled to a fee of £15,000 per annum. Ian has waived his entire fee. Rona Fairhead is non-executive board member and Chair of the Audit and Risk Committee. She is entitled to a fee of £20,000 per annum. Rona has waived her entire fee.
| Non-Executive Board Members | 2013-14 | 2012-13 | |-----------------------------|---------|---------| | Fee Entitlement | Fees Paid | Fees Paid | | £ | £ | £ | | Lord Browne of Madingley | 20,000 | Waived | | Lead Non-Executive Board Member for the Cabinet Office and Government Lead Non-Executive Board Member | Waived | Waived | | Ian Davis | 15,000 | Waived | | Non-Executive Board Member and Member of Audit and Risk Committee | Waived | Waived | | Rona Fairhead CBE | 20,000 | Waived | | Non-Executive Board Member and Chair of Audit and Risk Committee | Waived | Waived | | Dame Barbara Stocking DBE | 15,000 | 15,000 | | Non-Executive Board Member, Member of Audit and Risk Committee | 18,750 |
## Pension Benefits
| Ministers | Accrued Pension at age 65 as at 31/03/2014 | Real increase in pension at age 65 | CETV at 31/03/2014¹ | CETV at 31/03/2013² | Real increase in CETV | |-----------|------------------------------------------|-----------------------------------|---------------------|---------------------|----------------------| | The Rt Hon. Nick Clegg MP Deputy Prime Minister and Lord President of the Council | 5-10 | 0-2.5 | 61 | 43 | 10 | | The Rt Hon. Francis Maude MP Minister for the Cabinet Office and Paymaster General | 5-10 | 0-2.5 | 175 | 152 | 12 | | The Rt Hon. Oliver Letwin MP Minister for Government Policy | – | – | – | – | – | | Nick Hurd MP Minister for Civil Society and and Parliamentary Under-Secretary of State | 0-5 | 0-2.5 | 34 | 25 | 5 | | Chloe Smith MP Minister for Political and Constitutional Reform and Parliamentary Secretary until 6 October 2013 | 0-5 | 0-2.5 | 16 | 13 | 1 | | The Rt Hon. Greg Clark MP Minister of State (Cities and Constitution) from 7 October 2013 | 0-5 | 0-2.5 | 40 | 36 | 2 | | The Rt Hon. Lord Hill of Oareford, CBE Leader of the House of Lords and Chancellor of the Duchy of Lancaster | 5-10 | 0-2.5 | 117 | 78 | 22 | | The Rt Hon. Andrew Lansley CBE MP Leader of the House of Commons and Lord Privy Seal | 0-5 | 0-2.5 | 63 | 50 | 7 | | The Rt Hon. Kenneth Clarke QC MP³ Minister without Portfolio (Minister of State) | – | – | – | – | – | | The Rt Hon. John Hayes MP Minister without Portfolio (Minister of State) | 0-5 | 0-2.5 | 57 | 43 | 8 |
¹ The end date for calculations is 31 March 2014 unless the Minister left the Department during the year ² The start date for calculations is 31 March 2013 unless the Minister was appointed to the Department during the year ³ Minister no longer has benefits in the Parliamentary Contributory Pension Fund. Following his time as Lord Chancellor his benefits were transferred to the Consolidated Fund who will pay his benefits when he retires Ministerial Pensions
Pension benefits for ministers are provided by the Parliamentary Contributory Pension Fund (PCPF). The scheme is made under statute (the regulations are set out in Statutory Instrument SI 1993 No. 3253, as amended).
Those ministers who are Members of Parliament may also accrue an MP’s pension under the PCPF (details of which are not included in this report). The accrual rate has been 1/40th since 15 July 2002 (or 5 July 2001, for those that chose to backdate the change), but ministers, in common with all other members of the PCPF, can opt for a 1/50th accrual rate and a lower rate of member contribution. An additional 1/60th accrual rate option (backdated to 1 April 2008) was introduced from 1 January 2010.
Benefits for ministers are payable at the same time as MPs’ benefits become payable under the PCPF or, for those who are not MPs, on retirement from Ministerial office from age 65. Pensions are re-valued annually in line with Pensions-Increase legislation. From 1 April 2013 members paid contributions of between 7.9% and 16.7%, depending on their level of seniority and chosen accrual rate. The contribution rates will increase from April 2014.
The accrued pension quoted is the pension that the Minister is entitled to receive on reaching the age 65, or on ceasing to be an active member of the scheme if they are already 65.
In line with reforms to other public service pension schemes, it is intended to reform the Ministerial Pension Scheme in 2015.
Cash Equivalent Transfer Value
This 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 Cash Equivalent Transfer Value (CETV) is a payment made by a pension scheme or an arrangement to secure pension benefits in another pension scheme or an arrangement when the member leaves a scheme and chooses to transfer the pension benefits accrued in the former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total Ministerial service, not just their current appointment as a Minister. CETVs are calculated in accordance with the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax, which may be due when pension benefits are taken.
Real Increase in the value of the CETV
This is the element of the increase in accrued pension funded by the Exchequer. It excludes increases due to inflation and contributions paid by the Minister. It is worked out using common market valuation factors for the start and end of the period.
## Pension Benefits
| Board Members | Accrued pension at pension age as at 31/3/14 and related lump sum | Real increase in pension and related lump sum at pension age | CETV at 31/03/14 | CETV at 31/03/13 | Real increase in CETV | Employer contribution to partnership pension account | |---------------|---------------------------------------------------------------|----------------------------------------------------------|-----------------|-----------------|---------------------|-----------------------------------------------------| | Sir Jeremy Heywood KCB, CVO Cabinet Secretary | 65-70 plus lump sum of 195-200 | 0-2.5 plus lump sum of 5-7.5 | 1,206 | 1,104 | 11 | – | | Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer | 40-45 plus lump sum of 120-125 | 0-2.5 plus lump sum of 5-7.5 | 666 | 603 | 20 | – | | Phillip Rycroft CB¹ Director General, Deputy Prime Minister’s Office | 35-40 plus lump sum of 105-110 | 0 - (2.5) plus lump sum of 0 - (2.5) | 661 | 630 | (4) | – | | Sue Gray Director General Propriety and Ethics and Head of Private Office Group | 50-55 plus lump sum of 155-160 | 0-2.5 plus lump sum of 0-2.5 | 1,077 | 1,010 | 1 | – | | Melanie Dawes Director General, Economic and Domestic Affairs Secretariat | 35-40 plus lump sum of 115-120 | 0-2.5 plus lump sum of 0-2.5 | 631 | 592 | (2) | – | | Bruce Mann Finance Director, Board Secretary | 45-50 plus lump sum of 140-145 | 0-2.5 plus lump sum of 0-2.5 | 994 | 937 | (4) | – |
¹All pension figures are preserved Civil Service Pensions
Pension benefits are provided through the Civil Service pension arrangements. From 30 July 2007, civil servants may be in one of four defined benefit schemes in; either a final salary scheme (classic, premium or classic plus); or a whole career scheme (nuvos). These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus and nuvos are increased annually in line with Pensions-Increase legislation. Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a ‘money purchase’ stakeholder pension with an employer contribution (partnership pension account).
Employee contributions are salary related and range between from 1.5% and 6.25% of pensionable earnings for classic, and between 3.5% and 8.25% for premium, classic plus and nuvos. Increases to employee contributions will apply from 1 April 2014. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum, equivalent to three years initial 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. Classic plus is essentially a hybrid, with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos a member builds up a pension based on his/her pensionable earnings during the period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of the pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions-Increase legislation. In all cases members may opt to give up (commute) pension for a lump sum, up to the limits set by the Finance Act 2004.
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 from a panel of three providers. The employee does not have to contribute, but if he/she does 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).
The accrued pension quoted is the pension that the member is entitled to receive when on reaching pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, and 65 for members of nuvos.
Further details about the Civil Service pension arrangements can be found at www.civilservice.gov.uk/pensions
Cash Equivalent Transfer Values
A 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 an arrangement to secure pension benefits in another pension scheme or an 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 his/her total membership of the pension scheme, not just service in a senior capacity to which disclosure applies.
The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued by the member as a result of buying additional pension benefits out of their own pocket. CETVs are worked out in accordance with the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.
Real Increase in CETV
This reflects the increase in CETV that is funded by the employer. It does not include 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.
Compensation for Loss of Office
There were no cases of compensation for loss of office during the reporting year.
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
24 June 2014 Directors’ Report
This Directors’ Report covers corporate information, the Statement of the Accounting Officer’s Responsibilities and the Statement of the Disclosure of Relevant Audit Information
Corporate Information
Monitoring spending on consultancy and temporary staff
Measures to control spending were introduced after the freeze on consultancy and interim managers and other temporary staff announced by the Chancellor of the Exchequer in May 2010. These measures have had a significant impact on the Cabinet Office’s use of external resources since 2009-10, despite variations in classification and the Cabinet Office gaining extra business functions from other departments following the formation of the Coalition Government.
Expenditure by the Cabinet Office in 2013-14 on consultancy has fallen by some 67% compared with 2009-10 although there was an increase of just under 50% on the previous year. Similarly, expenditure on temporary staff increased. Both these increases are mainly attributable to the need to buy in specialist skills necessary to support the Mutualisation Programme (including the ISSC2 project), the Commercial Reform Programme, the Public Service Network programme and the Government Digital Strategy. The Cabinet Office utilised consultants as a more cost-effective option than taking on further permanent staff.
Reporting of high-paid off-payroll appointments
Table 1: For all off-payroll engagements as of 31 March 2014, for more than £220 per day and that last for longer than six months
This table excludes Government Digital Services and the Public Services Network as their figures are in the process of being verified.
| Main department | ALB 1 | ALB 2 | |-----------------|-------|-------| | No. of existing engagements as of 31 March 2014 | 17 | | | Of which... | | | | No. that have existed for less than one year at time of reporting. | 7 | | | No. that have existed for between one and two years at time of reporting. | 6 | | | No. that have existed for between two and three years at time of reporting. | 2 | | | No. that have existed for between three and four years at time of reporting. | 2 | | | No. that have existed for four or more years at time of reporting. | 0 | |
1. Excludes Government Digital Service, Public Services Network and Crown Commercial Service
2. All existing off-payroll engagements identified above have been subject to a risk based assessment as to whether assurance is required that the individual is paying the right amount of tax and that assurance has been sought. Table 2: For all new off-payroll engagements, or those that reached six months in duration, between 1 April 2013 and 31 March 2014, for more than £220 per day and that last for longer than six months.
This table excludes Government Digital Services and the Public Services Network as their figures are in the process of being verified.
| Main department | ALB 1 | ALB 2 | |-----------------|-------|-------| | No. of new engagements, or those that reached six months in duration, between 1 April 2013 and 31 March 2014 | 13 | | | No. of the above which include contractual clauses giving the Department the right to request assurance in relation to income tax and National Insurance obligations | 11 | | | No. for whom assurance has been requested | 12 | | | Of which... | | | | No. for whom assurance has been received | 4 | | | No. for whom assurance has not been received | 8 | | | No. that have been terminated as a result of assurance not being received | 0 | |
1. Excludes Government Digital Service, Public Services Network and Crown Commercial Service.
2. For remaining 2 engagements, inclusion of contractual clauses is being verified.
3. Assurance is in the process of being submitted.
Number of Senior Civil Servants by pay band - full-time employees as of 31 March 2014
| Pay Band | Number | |----------|--------| | Permanent Secretaries | 6.00 | | Senior Civil Service Pay Band 1 | 145.15 | | Senior Civil Service Pay Band 2 | 29.00 | | Senior Civil Service Pay Band 3 | 13.10 | | Parliamentary Counsel | 7.80 | | Deputy Parliamentary Counsel | 12.40 | | Assistant Parliamentary Counsel | 7.81 | | Senior Assistant Parliamentary Counsel | 12.49 | | Total | 233.75 |
Senior civil servant headcount figure as of 31 March 2014
| Pay Band | Number | |----------|--------| | Permanent Secretaries | 6 | | Senior Civil Service Pay Band 1 | 146 | | Senior Civil Service Pay Band 2 | 29 | | Senior Civil Service Pay Band 3 | 14 | | Parliamentary Counsel | 8 | | Deputy Parliamentary Counsel | 13 | | Assistant Parliamentary Counsel | 9 | | Senior Assistant Parliamentary Counsel | 13 | | Total | 238 | Recruitment Practice
All Civil Service recruitment within the Cabinet Office is carried out in accordance with relevant employment legislation and the Recruitment Principles issued by the Civil Service Commission.
For the year 2012-13, the number of vacancies filled was 340. In 2013-14, the number of vacancies filled was 480. This was due to a high requirement for expertise to be brought in from government departments, other parts of the public sector and, in some cases, the private sector to work on departmental priorities. The Cabinet Office resourcing model aims for a relatively high ratio of staff on loan from other departments. Staff bring expertise into the Cabinet Office, develop their skills and return to their home departments with the benefit of experience of working in central government. Vacancies arise as staff return to their departments.
| Number of vacancies filled | Senior civil servant or equivalent | Non-senior civil servant | Total | |---------------------------|-----------------------------------|--------------------------|-------| | | 2012-13 | 2013-14 | 2012-13 | 2013-14 | 2012-13 | 2013-14 | | Internal | 27 | 37 | 229 | 240 | 256 | 277 | | External | 14 | 20 | 70 | 183 | 84 | 203 | | Total | 41 | 57 | 299 | 423 | 340 | 480 |
The Department continued to offer young people the opportunity to enhance their employability through the Apprenticeships programme, through intern and work-experience opportunities. In 2013-14, five apprentices and eight Fast-track apprentices joined the Department; and 35 opportunities for undergraduate and graduate internships were filled. In addition, five work-experience opportunities were successfully filled as part of the social mobility-oriented Whitehall Internship Programme.
Public Appointments and re-appointments
As at 31 March 2014, the Cabinet Office sponsored nine non-departmental public bodies (NDPBs), two executive NDPBs and seven advisory NDPBs. In addition, the Cabinet Office oversees the public appointments for the Charity Commission and the UK Statistics Authority, both of which are Non-Ministerial Government Departments.
Between 1 April 2013 and 31 March 2014, 18 appointments were made, of which 15 were new. During the period April to September 2013, 40% of the new appointments were given to women. Of these, seven appointments were to the Charity Commission for England and Wales, four to the House of Lords Appointments Commission, two to the UK Statistics Authority, and one each to the Committee on Standards in Public Life and the Civil Service Commission. Re-appointments were made to the Boundary Commission for England and Wales and the Charity Commission for England and Wales.
For comparison, in 2012-13 there were 11 new appointments, including to the Big Lottery Fund and the Committee on Standards in Public Life. Re-appointments were made to the Senior Salaries Review Body, the Committee on Standards in Public Life and the Charity Commission for England and Wales.
Employee Consultation
The Cabinet Office recognises the importance of sustaining good employee relations to achieve its objectives, and consultation with employees and their representatives is central to that work.
Regular communication and consultation continues to take place with all staff through a variety of channels, including the intranet, staff bulletins and team briefings. More formal consultation exercises also take place with staff and unions on matters such as organisational change and changes to staff terms and conditions. The Department formally recognises the FDA union, the Public and Commercial Services Union and Prospect. It has a partnership agreement with the trade unions and senior managers meet regularly to discuss a shared agenda. There are also regular meetings to negotiate pay awards and other informal meetings to discuss trade union concerns at both the corporate and the local level.
The Cabinet Office Employee Relations Strategy embeds monthly trade union/human resources (HR) meetings and quarterly meetings with the HR Director.
There are also staff networks which represent particular groups of employees, including women, people with disabilities, staff with dyslexia, lesbian, gay, bisexual or transgender employees, and carers.
The Cabinet Office runs an annual people survey which captures employees’ views on a number of issues. The results of the survey are used to measure levels of engagement at the local and the corporate level.
Sickness and Absence
The sickness absence figure for the rolling 12 months to 31 March 2014 stands at 2.3 average working days lost, including the Government Procurement Service (GPS) or 1.8 excluding (GPS).
Diversity and inclusion policy
The Cabinet Office is committed to:
- eliminating discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Equality Act 2010
- advancing equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it
- fostering good relations between persons who share a relevant protected characteristic and persons who do not share it
The Cabinet Office aims to be an organisation where everyone is:
- treated with fairness and respect
- able to contribute and develop
- confident about how to ensure that the work they do supports equality of outcomes for everyone in society.
The Cabinet Office’s people management policies and practices reflect the Cabinet Office and Civil Service Management Codes. They build on the legal obligations under national and European law.
However, diversity for the Cabinet Office entails more than just those elements covered by legislation and enshrines the true diversity of thought, skills, background and experience. It does not tolerate any form of unfair discriminatory behaviour, harassment, bullying or victimisation, and will do all it can to ensure that any such allegations are dealt with sensitively and fairly.
During 2012, the Cabinet Office introduced three equality objectives in line with the requirement of the Public Sector Equality Duty. Equality data about the workforce population can be found on the Cabinet Office website, together with updates on progress, at: Public Sector Equality Duty
Employment, training and advancement of disabled persons
The Cabinet Office supports the employment, training and advancement of disabled persons. This is done in several ways. First, the Cabinet Office takes part in the ‘Two Ticks’ scheme, which encourages candidates with a disability to apply. If a candidate declares a disability and meets the minimum standards required for the job, he or she is offered an interview.
The Cabinet Office uses management information to monitor how the policies and procedures affect staff, and takes necessary action to mitigate any negative effects that may occur. The Cabinet Office is also a corporate member of the Business Disability Forum, which helps to measure and improve on performance for disabled employees and stakeholders.
Pensions
Present and past employees of the Cabinet Office are covered by the provisions of the Principal Civil Service Pension Scheme. The scheme allows employees to make pension provision for retirement if they wish. Information on Civil Service pension scheme options is available on the Civil Service website at: www.civilservice.gov.uk/pensions
The financial status of the scheme is reported in the Cabinet Office Civil Superannuation Accounts, published on the Civil Service website. The accounting policy adopted for pension costs is set out at Note 1.10 to the Accounts. Details of senior management pension entitlements are set out in the Remuneration Report.
Capabilities learning and development
The Cabinet Office has fully embraced building capability within the four priority areas as identified by the Capabilities Plan 2013 – digital; commercial; programme and project management; and leadership and management of change. A Senior Capabilities Working Group has been established, and Capability Champions have been appointed to identify corporate solutions to closing the capability gaps identified.
Each business unit has a plan to build capability and activity, and this is monitored on a quarterly basis.
At the end of February 2014, each business unit had in place on average four key actions to address capability gaps.
In addition, the Cabinet Office has identified departmental specific capabilities, and people are supported in their personal development.
Health and safety
The Cabinet Office accepts its responsibilities under the provisions of the Health and Safety at Work etc. Act 1974 and other associated legislation. The Department undertakes, so far as is reasonably practicable, to meet its legal obligations regarding the safety and health of its staff and others who may be affected by the Department’s activities.
In the financial year 2013-14, 11 accidents were reported by staff, of which one was reported to the Health and Safety Executive as required under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995.
Policy on social and community issues
Internally, as part of its corporate social responsibility agenda, the Cabinet Office actively promotes awareness of social and community issues, and is committed to promoting inclusion and equality through its human resource and other policies. A major contributor to this is the encouragement of volunteering, whether individually or in groups, including providing special leave for this purpose. Information is made easily available through the Cabinet Office intranet.
Health and well-being is also embedded within the Cabinet Office People Strategy. A fitness centre is available in some buildings, and, it is hoped, there will also be opportunities to attend well-being seminars as part of an annual Better Cabinet Office event later in the year.
Externally, the Cabinet Office includes the Office for Civil Society (OCS), which works across government to translate the vision for a Big Society into practical policies, provides support to voluntary and community sector organisations, and is responsible for delivering a number of key Big Society programmes, as well as the Civil Society Compact. Many programmes within the OCS play a hugely important role in encouraging social action. These include the Centre for Social Action, the Government’s commitment to the volunteering legacy of the London 2012 Olympic and Paralympic Games, and the Community Organisers programme, to name just a few.
The OCS is leading on work to change the Civil Service into a ‘civic service’. This project aims to provide civil servants with opportunities to use their skills to support civil society organisations, and to utilise social action as a means of learning and professional development for civil servants. This ambition to work more closely with the civil society sector was set out in the Civil Service Reform Plan, and the Cabinet Office is working with other departments to help implement it. In line with this, the Cabinet Office has developed a successful Charity of the Year initiative, which is run by staff from across the Department. This partnership successfully supported the British Heart Foundation in 2013-14, and in 2014-15 will be working with the Samaritans, which was selected through a staff vote.
**Estates management strategy**
The Cabinet Office owns five freehold properties in London: the interconnected 70 Whitehall and 10–12 Downing Street, Admiralty Arch, Admiralty House and 36 Whitehall. In addition, the Cabinet Office is responsible for the freehold of the Civil Service Club building in Great Scotland Yard. Outside London, it owns the freehold of the Emergency Planning College at Easingwold, Yorkshire, and of the site on which the Hannington radio mast sits. Both of these were inherited from the Home Office on earlier ‘machinery of government’ changes. The Cabinet Office is also responsible for the Sunningdale Park site, which is the subject of a private finance initiative contract.
The Cabinet Office takes a proactive approach to the management of its estate, in order to provide the necessary accommodation to meet current and future business needs. The strategy is to consolidate as far as possible in the interconnected 70 Whitehall and 10–12 Downing Street (by investing, where possible, to increase their capacity and provide modernised, more flexible accommodation) and to co-locate with HM Treasury at 1 Horse Guards Road. Leasehold properties will be disposed of, and the Cabinet Office is working with the Government Property Unit to achieve the re-use of the non-core freehold buildings that will no longer be required by the Cabinet Office. Following open planning and modernisation of the infrastructure, 36 Whitehall, which is currently vacant, will be re-used by the Government as office space. Parts of the Sunningdale Park site are now categorised as an investment property, since it is no longer owner occupied and is being held for capital appreciation; see Note 9 to the Accounts. Admiralty Arch is classified as an asset held for sale; see Note 20 to the Accounts.
**Payment of suppliers**
Terms of contract are usually payment within 30 days of receipt of a valid invoice. During the year, the Department paid 98.6% of invoices within 30 days (2012-13: 99.0%).
On 8 October 2008, the then Prime Minister committed government organisations to speeding up the payments process, paying suppliers wherever possible within ten days. This commitment is a target rather than a change to standard terms and conditions and is not contractual. During the year, the Cabinet Office paid 93.4% of invoices within ten days (2012-13: 94.5%).
During 2010-11 the then Prime Minister further committed government organisations to speeding up the payments process, to pay suppliers, wherever possible, within five days. This is a target rather than a change to the standard terms and conditions and is not contractual. During the year, the Cabinet Office paid 78.9% of invoices within five days (2012-13: 79.0%). The amount owed to trade creditors at 31 March, compared with the amount invoiced by suppliers during the year, expressed as number of days, was 12 days (2012-13: 54 days). The significant variance which is expressed as number of days is due to the sum of £18.35 million, mainly made up of invoices for Next Generation HR and Corporate Services ICT costs which were received and unpaid at the end of March 2013. The Department paid out £131,950 on account of late payment of invoices for the year to 31 March 2014 (2012-13: £120,914).
Better regulation
During 2013-14 the Cabinet Office was responsible for three regulatory changes that are in scope of the ‘one-in, two out’ (OITO) rule. All of these measures were confirmed by the independent Regulatory Policy Committee (RPC) as having no cost to business, and on that basis the Cabinet Office has maintained a zero balance for ‘one in, one out’ and ‘one in, two out’. Details of the new Cabinet Office regulation subject to OITO are published on the GOV.UK website at: Cabinet Office Statement of New Regulation
Statements of new regulation for all departments are published at: One-in, two-out: statement of new regulation
The RPC provides an external and independent challenge to the evidence and analysis presented in impact assessments supporting the development of new regulatory measures proposed by the Government.
During the year, the Cabinet Office published four consultations in its own right, and collaborated with other departments on six further consultations. All Cabinet Office consultations are available on the GOV.UK website.
Cabinet Office consultations
- Extending Charity Commission’s powers to tackle abuse in charities – Cabinet Office
- Draft identity assurance principles – Cabinet Office
- OGP UK 2011 national action plan: self assessment report – Cabinet Office
- Open Government Partnership: UK National Action Plan 2013 – Cabinet Office
Collaborative consultations
- Deregulation Bill: amendment to Clause 47 – Cabinet Office and Ministry of Justice
- Big Lottery Fund triennial review: call for evidence – Cabinet Office and Big Lottery Fund
- Making public sector procurement more accessible to SMEs – Cabinet Office, Department for Business, Innovation and Skills, Department for Communities and Local Government, Department for Education, Department of Health and Home Office
- Cyber security organisational standards: call for evidence – Cabinet Office and Department for Business, Innovation and Skills
- EU directive on network and information security: call for evidence – Cabinet Office, Department for Business, Innovation and Skills and Shareholder Executive
- Rail and maritime Red Tape Challenge – Cabinet Office and Department for Transport Correspondence, complaints and parliamentary questions
The information in this section is taken from the Efficiency and Reform Group (ERG) Service Desk call record system. Each call the Service Desk receives is logged, and agents record relevant detail so that the customer’s call can be managed efficiently. This also provides an audit trail, enabling each agent to handle any open calls. The ERG Service Desk is renowned for its exceptional customer service, and over 90% of calls are handled within agreed Service Level Agreements.
For this year’s reporting period, the Cabinet Office received 12 complaints in total. There follows a breakdown of the business units receiving complaints.
| Cabinet Office | Number of Complaints | |---------------------------------|----------------------| | Scheme Management | 3 | | Executive/My Civil Service | | | Pension | | | Fast Stream – Civil Service | 1 | | Resourcing | | | Civil Service Learning | 1 | | Office for Civil Society | 3 | | Propriety and Ethics | 2 | | Best Management Practice | 1 | | Individual | 1 |
Breakdown of complaints by stage reached:
- Stage 1 – 10 complaints
- Stage 2 – 1 complaint
- Stage 3 – 1 complaint
Complaints from the Parliamentary and Health Service Ombudsman
The Parliamentary and Health Service Ombudsman received ten complaints about the Cabinet Office in 2013 and did not accept any complaints for investigation, as set out in the table below.
| Cabinet Office | Total | |----------------|-------| | Complaints received | 10 | | Complaints resolved through intervention | 0 | | Complains accepted for investigation | 0 | | Investigations upheld | 0 | | Investigations partly upheld | 0 | | Investigations not upheld | 0 |
Freedom of Information requests
Statistics on Freedom of Information implementation in central government are published quarterly by the Ministry of Justice here: Government FOI statistics Parliamentary questions
The Government has committed itself to providing departmental parliamentary question statistics to the Procedure Committee of the House of Commons on a sessional basis. Cabinet Office statistics for the 2013-14 sessions are available on the Committee’s website at:
www.parliament.uk/business/committees/committees-a-z/commons-select/procedure-committee/
Cabinet Office ministerial cases performance against 15-day target: January–December 2013
| Month | Total | |------------------------------|-------| | Total no. of MP/peer letters handled (inc. transfer, NRN and outgoing) | 14,009 | | No. of MP/peer letters received | 3,072 | | No. of MP/peer letters transferred to Other Government Departments | 303 | | No. of MP/peer letters where no response was needed | 144 | | No. of MP/peer letters where a response was needed | 2,500 | | No. replied to within 15 working day target | 1,801 | | % in time | 72% |
Note: Information taken from the date letters were received
Transparency
The Cabinet Office published its first Dataset Inventory in October 2013, identifying over 80 new datasets, including hitherto unpublished data on major projects, social investment, government procurement and Civil Service reform. Some 37 key datasets were also identified as part of the National Information Infrastructure.
A key achievement this year was the publication of data from the first Annual Report of the Major Projects Authority (MPA). Data of the Government Major Projects Portfolio (GMPP) included progress and future priorities. In addition, each government department has published detailed information about its GMPP. This includes the MPA red/amber/green rating, key project data including financial information (whole life cost, annual budget and forecast spend) and timetable. This data will be updated every 12 months.
Other key information published as open data for the first time in 2013-14 included data on the Government Construction Pipeline, which includes some 1,047 projects and programmes, and more than £109 billion of investment to 2020 and beyond. Also, detailed results of the confirmation process which will be the first step in transition to individual electoral registration. The test involved the matching of all 380 registers, with around 46 million people, against Department for Work and Pensions data.
As part of our commitment to embed open data skills into the business, we ran an Open Data Discovery course for staff in March, run by the Open Data Institute. We are following this up with a programme of regular open data training in 2014-15.
Approval has also now been obtained to establish a Cabinet Office Transparency Board as part of our Open Data Strategy for 2014. The Board will fulfil the senior leadership role necessary for transparency and open data across the Cabinet Office and our arm’s length bodies. Its role will be to:
- define what is out of scope for publication and ring-fence data that should not be published
- monitor progress against our departmental commitments and hold data owners accountable for meeting them
- identify data owners and work with them to disseminate good practice in opening up our data and publishing it in ways that encourage re-use by others
- mainstream transparency and open data principles within the Department’s core values and behaviours
- embed a culture of transparency and open data across the Cabinet Office and our arm’s length bodies.
Advertising and publicity costs
The Cabinet Office spent approximately £3.85 million on publicity production costs and advertising media in the financial year 2013-14. Reporting of personal data-related incidents
The table below gives a summary of protected personal data-related incidents reported to the Information Commissioner’s Office (ICO) in 2013-14.
| Date of incident | Nature of incident | Nature of data involved | Number of people potentially affected | Notification steps | |------------------|--------------------|-------------------------|---------------------------------------|--------------------| | 16 January 2014 | A staff member had their bag stolen. The bag contained a paper copy of the ‘Director’s Talent Grid’. The Grid lists the name, gender, department and talent assessment rating of directors (at SCS2) level in all departments. An explanation of the rating’s definitions was not lost. | Personal information | 615 | The ICO was notified and internal investigation and review were undertaken. | | 24 February 2014 | The payslips of 32 pensioners of the Royal Mail Statutory Pension Scheme were erroneously put into the envelopes of other members by the pension administrator’s supplier during the payslip print run. | Personal information | 32 | All payslips have been recovered and sent to the right member. Letters of apology have been issued to all concerned. No complaints or media interest. | Statement of Accounting Officer’s responsibilities
Under the Government Resources and Accounts Act 2000 (the GRAA), HM Treasury has directed the Cabinet Office to prepare, for each financial year, consolidated resource accounts detailing the resources acquired, held or disposed of, and the use of resources, during the year by the Department inclusive of its executive agencies and its sponsored non-departmental public body designated by order made under the Government Resources and Accounts Act 2000 (Estimates and Accounts) Order 2013 (S.I. 2013/488) & Government Resources and Accounts Act 2000 (Estimates and Accounts) (Amendment) Order 2013 (S.I. 2013/3187) (together known as the ‘departmental group’, consisting of the Department and sponsored bodies listed at Note 30 to the accounts). The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the Department and the departmental group and of the net resource outturn, the application of resources, changes in taxpayers’ equity and cash flows of the departmental group for the financial year.
In preparing the accounts, the Accounting Officer of the Department is required to comply with the requirements of the ‘Government Financial Reporting Manual’ and in particular to:
- observe the Accounts Direction issued by the Treasury, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
- ensure that the Department has in place appropriate and reliable systems and procedures to carry out the consolidation process
- make judgements and estimates on a reasonable basis, including those judgements involved in consolidating the accounting information provided by non-departmental public bodies
- state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the accounts
- prepare the accounts on a going concern basis.
HM Treasury has appointed the Permanent Head of the Department as Accounting Officer of the Cabinet Office. The Accounting Officer of the Cabinet Office has also appointed Clare Salters, Chief Executive, of its sponsored non-departmental public body, Civil Service Commission, as Accounting Officer of that body. Under her terms of appointment, the Accounting Officer of the Civil Service Commission is accountable for the use, including the regularity and propriety, of the grants received and the other income and expenditure of the sponsored body. This appointment does not detract from the Head of Department’s overall responsibility as Accounting Officer for the Department’s accounts.
The Accounting Officer of the Department is responsible for ensuring that appropriate systems and controls are in place to ensure that any grants that the Department makes to its sponsored bodies are applied for the purposes intended and that such expenditure and the other income and expenditure of the sponsored bodies are properly accounted for, for the purposes of consolidation within the resource accounts.
The responsibilities of an Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, for keeping proper records and for safeguarding the assets of the Department or non-departmental public body for which the Accounting Officer is responsible, are set out in ‘Managing Public Money’ published by HM Treasury. Statement on the Disclosure of Relevant Audit Information
The Cabinet Office Accounts have been prepared on a statutory basis in accordance with the requirements of HM Treasury and are designed to comply with generic Accounts Directions issued to departments by HM Treasury under section 5 (2) of the Government Resources and Accounts Act 2000.
The financial statements are audited by the Comptroller and Auditor General, who is appointed under statute and reports to Parliament on the audit examination. Auditors’ remuneration and expenses are disclosed at Notes 5 and 6 to the Accounts. During the reporting year no payment was made to the auditors for non-audit work (2012-13: £Nil).
I hereby confirm that so far as I am aware, there is no relevant audit information of which the Cabinet Office’s auditors are unaware and that I have taken all reasonable steps to ensure that I am aware of any relevant audit information and to establish that the Cabinet Office’s auditors are aware of that information.
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
24 June 2014 Financial Statements The Certificate and Report of the Comptroller and Auditor General to the House of Commons
I certify that I have audited the financial statements of the Cabinet Office and of its Departmental Group for the year ended 31 March 2014 under the Government Resources and Accounts Act 2000. The Departmental Group consists of the Department and the bodies designated for inclusion under the Government Resources and Accounts Act 2000 (Estimates and Accounts) Order 2013. The financial statements comprise: the Departmental Group’s Statements of Comprehensive Net Expenditure, Financial Position, Cash Flows, Changes in Taxpayers’ Equity; and the related notes. I have also audited the Statement of Parliamentary Supply and the related notes. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration Report that is described in that report as having been audited.
Respective responsibilities of the Accounting Officer and auditor As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Accounting Officer is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. My responsibility is to audit, certify and report on the financial statements in accordance with the Government Resources and Accounts Act 2000. I conducted my audit in accordance with International Standards on Auditing (UK and Ireland). Those standards require me and my staff to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Departmental Group’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Accounting Officer; and the overall presentation of the financial statements. In addition I read all the financial and non-financial information in the Annual Report and Accounts to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by me in the course of performing the audit. If I become aware of any apparent material misstatements or inconsistencies I consider the implications for my certificate.
I am required to obtain evidence sufficient to give reasonable assurance that the Statement of Parliamentary Supply properly presents the outturn against voted Parliamentary control totals and that those totals have not been exceeded. The voted Parliamentary control totals are Departmental Expenditure Limits (Resource and Capital), Annually Managed Expenditure (Resource and Capital), Non-Budget (Resource) and Net Cash Requirement. I am also required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.
Opinion on regularity In my opinion, in all material respects:
- the Statement of Parliamentary Supply properly presents the outturn against voted Parliamentary control totals for the year ended 31 March 2014 and shows that those totals have not been exceeded; and the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.
Opinion on financial statements In my opinion:
- the financial statements give a true and fair view of the state of the Departmental Group’s affairs as at 31 March 2014 and of the Departmental Group’s net operating cost for the year then ended; and
- the financial statements have been properly prepared in accordance with the Government Resources and Accounts Act 2000 and HM Treasury directions issued thereunder.
Opinion on other matters In my opinion:
- the part of the Remuneration Report to be audited has been properly prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000; and
- the information given in the Strategic Report and Governance section for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which I report by exception I have nothing to report in respect of the following matters which I report to you if, in my opinion:
- adequate accounting records have not been kept or returns adequate for my audit have not been received from branches not visited by my staff; or
- the financial statements and the part of the Remuneration Report to be audited are not in agreement with the accounting records and returns; or
- I have not received all of the information and explanations I require for my audit; or
- the Governance Statement does not reflect compliance with HM Treasury’s guidance.
Report I have no observations to make on these financial statements.
Sir Amyas C E Morse Comptroller and Auditor General National Audit Office 157-197 Buckingham Palace Road Victoria, London, SW1W 9SP 25 June 2014 Statement of Parliamentary Supply
In addition to the primary statements prepared under IFRS, the Government Financial Reporting Manual (FReM) requires the Cabinet Office to prepare a Statement of Parliamentary Supply and supporting notes to show resource outturn against the Supply Estimate presented to Parliament, in respect of each budgetary control limit.
Summary of Resource and Capital Outturn 2013-14
| £000 | 2013-14 | 2012-13 Restated | |------|---------|------------------| | | Note | Voted | Non-Voted | Total | Voted | Non-Voted | Total | Voted outturn compared with Estimate: saving / (excess) | Outturn | | | | | | | | | | | | | Departmental Expenditure Limit | SOPS2.1 | 451,689 | 2,000 | 453,689 | 418,049 | 1,826 | 419,875 | 33,640 | 413,816 | | Capital | SOPS2.2 | 47,703 | - | 47,703 | 42,873 | - | 42,873 | 4,830 | 15,054 | | Annually Managed Expenditure | SOPS2.1 | 5,100 | - | 5,100 | (4,080) | - | (4,080) | 9,180 | (35,479) | | Capital | - | - | - | - | - | - | - | - | - | | Total Budget | | 504,492 | 2,000 | 506,492 | 456,842 | 1,826 | 458,668 | 47,650 | 393,391 | | Non-Budget | - | - | - | - | - | - | - | - | - | | Total | | 504,492 | 2,000 | 506,492 | 456,842 | 1,826 | 458,668 | 47,650 | 393,391 |
Net Cash Requirement 2013-14
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Note | Estimate | Outturn | Outturn compared with Estimate: saving / (excess) | Outturn | | | | | | | | | SOPS4 | | 517,545 | 471,621 | 45,924 | 440,914 |
Administration Costs 2013-14
| £000 | 2013-14 | 2012-13 Restated | |------|---------|------------------| | | Note | Estimate | Outturn | Outturn compared with Estimate: saving / (excess) | Outturn | | | | | | | | | SOPS2.1 | | 184,809 | 153,325 | 31,484 | 193,137 |
Figures in the areas outlined in bold are voted totals or other totals subject to Parliamentary control. In addition, although not a separate voted limit, any breach of the administration budget will also result in an excess vote.
Explanations of variances between Estimate and outturn are given in the Financial Review section.
Notes SOPS1 to SOPS4 form part of these accounts. Notes to the Accounts (Statement of Parliamentary Supply) for the period ended 31 March 2014
SOPS1. Statement of accounting policies
The Statement of Parliamentary Supply and supporting notes have been prepared in accordance with the 2013-14 Government Financial Reporting Manual (FReM) issued by HM Treasury. The Statement of Parliamentary Supply accounting policies contained in the FReM are consistent with the requirements set out in the 2013-14 Consolidated Budgeting Guidance and Supply Estimates Guidance Manual.
SOPS1.1 Accounting convention
The Statement of Parliamentary Supply and related notes are presented consistently with Treasury budget control and Supply Estimates. The aggregates across government are measured using National Accounts, prepared in accordance with the internationally agreed framework 'European System of Accounts' (ESA95). ESA95 is in turn consistent with the System of National Accounts (SNA93), which is prepared under the auspices of the United Nations.
The budgeting system and the consequential presentation of Supply Estimates and the Statement of Parliamentary Supply and related notes, have different objectives to IFRS-based accounts. The system supports the achievement of macro-economic stability by ensuring that public expenditure is controlled, with relevant Parliamentary authority, in support of the Government's fiscal framework. The system provides incentives to departments to manage spending well so as to provide high-quality public services that offer value for money to the taxpayer.
The Government's objectives for fiscal policy are set out in the Charter for Budget Responsibility. These are to:
- ensure sustainable public finances that support confidence in the economy, promote intergenerational fairness, and ensure the effectiveness of wider government policy; and
- support and improve the effectiveness of monetary policy in stabilising economic fluctuations.
SOPS1.2 Comparison with IFRS-based accounts
Many transactions are treated in the same way in National Accounts and IFRS-based accounts, but there are a number of differences as detailed below. The accounting treatment under IFRS is set out at Note 1 Statement of Accounting Policies accompanying the Accounts. A reconciliation of the Department’s outturn as recorded in the SoPS compared to the IFRS-based Statement of Comprehensive Net Expenditure (SoCNE) is provided in SOPS Note 3.1.
SOPS1.21 Capital Grants
Grant income, expenditure and Grant-in-Kind used for capital purposes are treated as capital (CDEL) items in the Statement of Parliamentary Supply to reflect the creation of assets in the wider economy. Under IFRS, as applied by the FReM, there is no distinction between capital grants and other grants, and they score as an item of expenditure and income in the Consolidated SoCNE. Accounting treatment is set out in Accounting Policy Note 1.12 accompanying the Accounts.
SOPS1.22 Investments in Associates
The Department recognises in accounts an investment equal to its share of its associates’ net assets as at 31 March. The initial investment and eventual disposal are scored as a charge and benefit to Capital DEL respectively but in other respects, accounting and budgeting treatment are mis-aligned. The share of opening net assets recognised in the Statement of Financial Position (SoFP) and in the SoCNE is classified to Capital DEL non-budget and non-voted and therefore has no impact on control totals. Dividends received which reduce the investment score to administration in Resource DEL. The share of profit or loss for the year and of any impairment in value are outside the scope of budgets. Accounting treatment is set out in Accounting Policy Note 1.23 accompanying the Accounts.
**SOPS1.23 Private Finance Initiative (PFI) Transactions**
The accounting treatment applied to PFI transactions is set out in Accounting Policy Note 1.21 accompanying the Accounts; and the transactions are recognised in the SoPS as follows.
Non-current asset additions under a PFI contract are recognised as capital expenditure (CDEL). PFI expenditure on service charges and finance lease interest charges is recognised as resource expenditure (RDEL).
Where the Department contributes assets to a PFI operator, a prepayment for their fair value is recognised as capital expenditure (CDEL). Amortisation of the prepayment is recognised over the life of the contract as resource expenditure (RDEL).
Where, at the end of a PFI contract, a property reverts to the Department, the difference between the expected fair value of the residual element on reversion and any agreed payment on reversion is built up over the life of the contract through recognising part of the unitary charge each year as capital expenditure (CDEL).
**SOPS1.24 Provisions – Administration and Programme expenditure**
Provisions recognised in IFRS-based accounts are not recognised as expenditure for national accounts purposes until the actual payment of cash (or accrual liability) is recognised. To meet the requirements of both resource accounting and national accounts, additional data entries are made in the SoPS across AME and DEL control totals, which do not affect the SoCNE. As the Administration control total is a sub-category of DEL, Administration and Programme expenditure reported in the SoPS differ from that reported in the IFRS-based accounts; see SOPS Note 3.2.
**SOPS1.25 Consolidated Fund Standing Services**
Budgets include payments from the Consolidated Fund in relation to the salaries and pension costs of the UK Members of the European Parliament (MEPs). These are included in the Estimates but do not form part of the net cash requirement since they are paid directly from the Consolidated Fund as a standing service. The MEP salaries are not included in accounts, since the Cabinet Office does not benefit directly from MEPs’ services and cannot re-deploy the funds.
Election expenses are included in budgets and accounts but not in Estimates since they are classified as Consolidated Fund Standing Services which are funded directly from the Consolidated Fund at Treasury and therefore do not form part of Supply net cash requirement.
**SOPS1.26 Grant-in-aid to eNDPBs**
Grant-in-aid to eNDPBs is included in the accounts as resource expenditure and in Estimates as part of net cash requirement but is excluded from budgets which instead include the resource and capital expenditure incurred by the eNDPB. Accounting treatment is set out in Accounting Policy Note 1.12 accompanying the Accounts.
## SOPS2. Net Outturn
### SOPS2.1 Analysis of net resource outturn by section
| £000 | Outturn | Estimate | 2013-14 | 2012-13 Restated | |------|---------|----------|---------|-----------------| | | Administration | Programme | Total | Net Total compared to Estimate | Net Total compared to Estimate, adjusted for virements | Prior-year outturn | | | Gross | Income | Net | Gross | Income | Net | Net Total | Net Total | | | A: Support to the Cabinet, the PM & the Deputy PM | 62,684 | (8,895) | 53,789 | 3,902 | - | 3,902 | 57,691 | 59,417 | 1,726 | 1,726 | 60,679 | | B: Political & Constitutional Reform | 4,155 | (143) | 4,012 | 16,617 | - | 16,617 | 20,629 | 19,986 | (643) | 351 | 9,958 | | C: National Security | 16,569 | (1,293) | 15,276 | 14,707 | (907) | 13,800 | 28,246 | 26,264 | (830) | - | 44,472 | | D: Efficiency & Reform | 79,206 | (44,719) | 34,487 | 71,378 | (5,350) | 66,028 | 100,515 | 88,731 | (11,784) | - | 86,285 | | E: Government Innovation Group | 8,233 | (1,724) | 6,509 | 164,500 | (917) | 163,583 | 170,092 | 169,369 | (723) | - | 134,013 | | F: Transactional Shared Services | 30,403 | (29,838) | 565 | - | - | - | 565 | 1,709 | 1,144 | 1,144 | - | | G: Hosted Functions | 1,102 | - | 1,102 | 1,272 | (1,222) | 50 | 1,152 | 1,250 | 98 | 98 | 1,340 | | H: Corporate Services Group | 130,794 | (95,003) | 35,791 | 744 | - | 744 | 36,535 | 81,094 | 44,559 | 30,228 | 73,796 | | I: Executive NDPBs (Net) | 1,799 | (5) | 1,794 | - | - | - | 1,794 | 1,887 | 93 | 93 | 1,442 | | **Total Voted** | 334,945 | (181,620) | 153,325 | 273,120 | (8,396) | 264,724 | 416,049 | 451,689 | 33,640 | 33,640 | 411,985 | | J: Consolidated Fund Standing Services | - | - | - | 1,826 | - | 1,826 | 1,826 | 2,000 | 174 | 174 | 1,831 | | **Total DEL** | 334,945 | (181,620) | 153,325 | 274,946 | (8,396) | 266,550 | 419,875 | 453,689 | 33,814 | 33,814 | 413,816 | | K: Corporate Services Group | - | - | - | (4,080) | - | (4,080) | (4,080) | 5,100 | 9,180 | 9,180 | (35,479) | | **Non-budget** | - | - | - | - | - | - | - | - | - | - | - | | **Total** | 334,945 | (181,620) | 153,325 | 270,866 | (8,396) | 262,470 | 415,795 | 458,789 | 42,994 | 42,994 | 378,337 |
### SOPS2.2 Analysis of net capital outturn by section
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Outturn | Estimate | Outturn | | | Gross | Income | Net | Net total compared to Estimate, adjusted for virements | Net Outturn | | Spending in Departmental Expenditure Limit | | Voted | | A: Support to the Cabinet, the PM & the Deputy PM | 1,479 | (3) | 1,476 | 1,500 | 24 | 24 | 1,798 | | B: Political & Constitutional Reform | 6,567 | - | 6,567 | 11,000 | 4,433 | 4,433 | 2,290 | | C: National Security | 975 | - | 975 | 600 | (375) | - | (40) | | D: Efficiency & Reform | 4,547 | - | 4,547 | 7,130 | 2,583 | 373 | 3,949 | | E: Government Innovation Group | 12,185 | (105) | 12,080 | 11,929 | (151) | - | 482 | | H: Corporate Services Group | 17,512 | (284) | 17,228 | 15,544 | (1,684) | - | 6,575 | | Total DEL | 43,265 | (392) | 42,873 | 47,703 | 4,830 | 4,830 | 15,054 |
Detailed explanations on variances may be found in the Financial Review section. SOPS3. Reconciliation of outturn to net operating cost and against Administration Budget and Administration net operating costs
SOPS3.1 Reconciliation of net resource outturn to net operating costs
| £000 | 2013-14 | 2012-13 | Restated | |------|---------|---------|----------| | **Total Resource Outturn in Statement of Parliamentary Supply Budget** | | | | | Non-Budget | SOPS2.1 | 415,795 | 378,337 | | **Add:** | | | | | Capital Grants | 6 | 15,804 | 7,963 | | Capital Grant-in-Kind | - | - | 44,145 | | Depreciation on dual reported PFI assets | - | - | 47 | | Service concession - Programme | 6 | - | 2,418 | | MyCSP Ltd dividend received | 17 | 470 | - | | **Less:** | | | | | Capital Grant Income | 7 | (3) | (8,105) | | Service concession – Administration | - | - | (1,834) | | UK Members of the European Parliament | SOPS2.1 | (1,826) | (1,831) | | Share of Associate profit and gain on opening net assets | 7, 17 | (48,283) | (5,882) | | **Net Operating Costs in Consolidated Statement of Comprehensive Net Expenditure** | | | | | | | 381,957 | 415,258 |
SOPS3.2 Outturn against final Administration Budget and Administration net operating costs
| £000 | 2013-14 | 2012-13 | Restated | |------|---------|---------|----------| | **Estimate – Administration costs limit** | | | | | | | 184,809 | 199,434 | | **Outturn – Gross Administration Costs** | | | | | | | 334,945 | 289,858 | | **Outturn – Gross Income relating to administration costs** | | | | | | | (181,620) | (96,722) | | **Outturn – Net administration costs** | SOPS2.1 | 153,325 | 193,136 | | **Reconciliation to operating costs:** | | | | | Add: MyCSP Ltd dividend received | 17 | 470 | - | | Less: Utilisation of provisions | 24 | (1,421) | (4,062) | | Less: Service Concession (Administration) | - | - | (1,834) | | **Administration Net Operating Costs** | | | | | | | 152,374 | 187,240 |
Detailed explanations of the variances are given in the Financial Review section.
## SOPS4. Reconciliation of Net Resources to Net Cash Requirement
| £000 | Note | Estimate | Outturn | saving/(excess) | |------|------|----------|---------|----------------| | **Resource Outturn** | | | | | | SOPS2.1 | | 458,789 | 415,795 | 42,994 | | **Capital Outturn** | | | | | | SOPS2.2 | | 47,703 | 42,873 | 4,830 |
### Accruals to cash adjustments:
**Adjustments to remove non-cash items:**
- Depreciation: 5, 6 (24,587) (5,457) (19,130)
- Release of deferred income: 5 - 8 (8)
- Amortisation: 5, 6 - (1,310) 1,310
- Impairment: 5, 6 - (7,107) 7,107
- Devaluation: 6 - 137 (137)
- Bad debt write off: 5, 6 (300) (164) (136)
- New provisions and adjustments to previous provisions: 5, 6 - 2,809 (2,809)
- Audit fee: 5 (495) (495)
- Loan impairment: 19 378 (109) 487
- Investment property gain on change in fair value: 9 - 23 (23)
**Adjustments for NDPBs:**
- Remove voted resource and capital: SOPS2.1 (1,887) (1,794) (93)
- Add non-cash transactions relating to Civil Service Commission restatement: - (11) 11
- Remove voted resource and capital - Accrual: - 156 (156)
- Elimination adjustment: - (457) 457
- Add cash grant-in-aid: 1,887 2,106 (219)
**Adjustment to reflect movements in working balances:**
- Increase in inventories: - 9 (9)
- Increase in trade receivables: - 14,410 (14,410)
- Decrease in trade payables: 35,648 10,546 25,102
- Use of provisions: 24 2,409 1,421 988
### Carbon Reduction Commitment Energy Efficiency Scheme:
- Capital assets outside the scope of capital budgets and outturn
- Purchase of allowances for carbon dioxide emissions: 10 - 75 (75)
- Disposal of allowances for carbon dioxide emissions: 10 - (17) 17
| £000 | | |------|------| | 519,545 | 473,447 | | 46,098 | |
### Removal of non-voted budget items:
- Consolidated Fund Standing Services: SOPS2.1 (2,000) (1,826) (174)
| £000 | | |------|------| | 517,545 | 471,621 | | 45,924 | |
Detailed explanations on variances may be found in the Financial Review section. Consolidated Statement of Comprehensive Net Expenditure
for the period ended 31 March 2014
This account summarises the expenditure and income generated and consumed on an accruals basis. It also includes other comprehensive income, which includes changes to the values of non-current assets and other financial instruments that cannot yet be recognised as income.
| £000 | 2013-14 | 2012-13 Restated | |------|---------|-----------------| | | Departmental Group | Departmental Group | | **Note** | **Administration costs** | **Programme expenditure** | **Net Operating Costs for the period ended 31 March** | | | Staff costs | Other costs | Income | Staff costs | Other costs | Income | Income from Associates | SOPS3.1 | | 4 | 114,661 | 216,118 | (178,405) | 52,565 | 233,788 | (8,487) | (48,283) | 381,957 | | 5 | 106,130 | 175,504 | (94,394) | 32,756 | 220,508 | (19,364) | (5,882) | 415,258 | | 7 | | | | | | | | | | **Total expenditure** | 617,132 | 534,898 | **Total income** | (235,175) | (119,640) | **Net Operating Costs for the period ended 31 March** | 381,957 | 415,258 | | **Other Comprehensive Income** | | | | | | | | | | **Items that will not be reclassified to net operating costs:** | | | | | | | | | | Net gain on: | | | | | | | | | | revaluation of Property, Plant and Equipment | (1,632) | (15,138) | | | | | | | | revaluation of Intangible assets | (77) | (852) | | | | | | | | Investments in Associates: | | | | | | | | | | Share of unrecognised (gains)/losses | (2) | 185 | | | | | | | | **Total Other Comprehensive Income** | (1,711) | (15,805) | | | | | | | | **Total Comprehensive Expenditure for the period ended 31 March** | 380,246 | 399,453 | | | | | | |
Notes 1 to 31 form part of these accounts Consolidated Statement of Financial Position
as at 31 March 2014
This statement presents the financial position of the Cabinet Office. It comprises three main components; assets owned or controlled; liabilities owed to other bodies; and equity, the remaining value of the entity.
| £000 | As at 31 March 2014 | As at 31 March 2013 | As at 1 April 2012 | |------|---------------------|---------------------|-------------------| | | Departmental Group | Departmental Group | Departmental Group | | Non-current assets | | | | | Property, plant and equipment | 8 | 178,235 | 162,093 | 175,857 | | Investment properties | 9 | 2,288 | 62,265 | - | | Intangible assets | 10 | 4,600 | 6,190 | 4,406 | | Investments in Associates | 17 | 53,695 | 5,882 | - | | Other financial assets | 19 | 2,128 | 1,404 | 1,403 | | Other non-current assets | 21 | 16,450 | - | 354 | | Total non-current assets | | 257,396 | 237,834 | 182,020 | | Current assets | | | | | Other financial assets | 19 | - | 284 | 20 | | Assets held for sale | 20 | 60,000 | - | 44,145 | | Inventories | | 468 | 459 | 417 | | Trade and other receivables | 21 | 52,161 | 54,440 | 59,860 | | Cash and cash equivalents | 22 | 22,646 | 7,093 | 38,978 | | Total current assets | | 135,275 | 62,276 | 143,420 | | Total assets | | 392,671 | 300,110 | 325,440 | | Current liabilities | | | | | Trade and other payables | 23 | (100,484) | (95,600) | (169,779) | | Provisions | 24 | (4,693) | (1,884) | (4,288) | | Total current liabilities | | (105,177) | (97,484) | (174,067) | | Non-current assets less net current liabilities | | 287,494 | 202,626 | 151,373 | | Non-current liabilities | | | | | Provisions | 24 | (3,830) | (10,829) | (13,036) | | Total non-current liabilities | | (3,830) | (10,829) | (13,036) | | Total assets less liabilities | | 283,664 | 191,797 | 138,337 | | Taxpayers’ equity and other reserves | | | | | General fund | | 221,998 | 130,271 | 84,929 | | Revaluation reserve | | 61,666 | 61,526 | 53,408 | | Total equity | | 283,664 | 191,797 | 138,337 |
Richard Heaton CB Permanent Secretary for the Cabinet Office, First Parliamentary Counsel and Accounting Officer
24 June 2014
Notes 1 to 31 form part of these accounts Consolidated Statement of Cash Flows
The Statement of Cash Flows shows the changes in cash and cash equivalents of the Department during the reporting period. The statement shows how the Department generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of service costs and the extent to which these operations are funded by way of income from the recipients of services provided by the Department. Investing activities represent the extent to which cash inflows and outflows have been made for resources which are intended to contribute to the Departments’ future public service delivery. Cash flows arising from financing activities include Parliamentary Supply and other cash flows, including borrowing.
Departmental Group for the period ended 31 March 2014
| £000 | 2013-14 | 2012-13 | Restated | |------|---------|---------|----------| | **Cash flows from operating activities** | | | | | Net operating cost | (381,957) | (415,258) | | | Adjustments for non-cash transactions | 11,662 | 24,541 | | | Remove income from Associates | 48,283 | (5,882) | | | Remove income from dividends | (2,641) | (2,615) | | | Increase in inventories | (9) | (42) | | | (Increase)/Decrease in trade and other receivables | (14,171) | 5,774 | | | **Less movements in receivables relating to items not passing through the Statement of Comprehensive Net Expenditure** | | | | | Movement in amounts relating to provision for doubtful debt | 40 | 371 | | | Amounts relating to bad debt write off | (164) | (80) | | | Increase/(Decrease) in trade and other payables | 4,884 | (74,179) | | | **Less movements in payables relating to items not passing through the Statement of Comprehensive Net Expenditure** | | | | | Amounts due to the Consolidated Fund for Supply | 16,380 | 18,699 | | | Release of deferred income | 8 | 19 | | | Movement in capital accruals relating to investing activities | (593) | 2,153 | | | Amounts relating to Consolidated Fund Standing Services – Elections | 4 | 458 | | | Amounts due to the Consolidated Fund for non voted receipts – Elections | 86 | 8,842 | | | Use of provisions | (1,421) | (4,062) | | | **Net cash outflow from operating activities** | (448,935) | (441,261) | | | **Cash flows from investing activities** | | | | | Purchase of property, plant and equipment | (24,785) | (11,068) | | | Purchase of intangible assets | (1,809) | (3,952) | | | Loans to other bodies | (938) | (444) | | | Net movement in trade payables - capital accruals | 593 | (2,153) | | | Income from dividends – Government Procurement Service | 2,641 | 2,615 | | | Dividends received from Associates | 470 | - | | | Proceeds of disposal of property, plant and equipment | - | 54 | | | Proceeds of disposal of intangible assets | 389 | 20 | | | Repayments from other bodies | 17 | - | | | **Net cash outflow from investing activities** | (23,422) | (14,928) | | | **Cash flows from financing activities** | | | | | From the Consolidated Fund (Supply) – current year | 488,000 | 422,214 | | | From the Consolidated Fund (Supply) – in respect of machinery of government transfer of function | - | 11,390 | | | **Net financing** | 488,000 | 433,604 | | | **Net increase/(decrease) in cash and cash equivalents in the period before adjustment for receipts and payments to the Consolidated Fund** | 15,643 | (22,585) | | | Non-voted receipts surrendered to the Consolidated Fund – Elections | (90) | (9,300) | | | **Net increase/(decrease) in cash and cash equivalents in the period after adjustment for receipts and payments to the Consolidated Fund** | 15,553 | (31,885) | | | Cash and cash equivalents at the beginning of the period | 7,093 | 38,978 | | | Cash and cash equivalents at the end of the period | 22,646 | 7,093 | |
Notes 1 to 31 form part of these accounts Consolidated Statement of Changes in Taxpayers’ Equity
This statement shows the movement in the year on the different reserves held by the Department, analysed into ‘general fund reserves’ (i.e. those reserves that reflect a contribution from the Consolidated Fund). Financing and the balance from the provision of services are recorded here. The Revaluation Reserve reflects the change in asset values that have not been recognised as income or expenditure.
**Departmental Group** for the period ended 31 March 2014
| £000 | General Fund | Revaluation Reserve | Taxpayers’ Equity | |------|--------------|---------------------|------------------| | **Note** | | | | | Restated Balance at 1 April 2012 | 84,929 | 53,408 | 138,337 | | Net Parliamentary Funding – drawn down | 422,214 | - | 422,214 | | Net Parliamentary Funding – deemed | 24,125 | - | 24,125 | | Supply payable adjustment | 23 | (5,426) | - | | Non-voted receipt surrenderable to the Consolidated Fund – Elections | (458) | - | (458) | | Comprehensive Net Expenditure for the year | (415,258) | - | (415,258) | | Assets and liabilities introduced: | | | | | Amounts relating to machinery of government transfer of functions | 2 | 11,390 | - | | **Non-Cash Adjustments** | | | | | Non-cash charges – auditors’ remuneration | 5 | 425 | - | | **Movements in Reserves** | | | | | Net gain on revaluation of property, plant and equipment | 8.2 | - | 15,138 | | Net gain on revaluation of intangible assets | 10.2 | - | 852 | | Amounts relating to Consolidated Fund Standing Services – Elections | 458 | - | 458 | | Transfers between reserves | 7,872 | (7,872) | - | | Restated Balance at 31 March 2013 | 130,271 | 61,526 | 191,797 | | Net Parliamentary Funding – drawn down | 488,000 | - | 488,000 | | Net Parliamentary Funding – deemed | 23 | 5,426 | - | | Supply payable adjustment | 23 | (21,806) | - | | Non-voted receipt surrenderable to the Consolidated Fund – Elections | (4) | - | (4) | | Comprehensive Net Expenditure for the year | (381,957) | - | (381,957) | | **Non-Cash Adjustments** | | | | | Non-cash charges – auditors’ remuneration | 5 | 495 | - | | **Movements in Reserves** | | | | | Net gain on revaluation of property, plant and equipment | 8.1 | - | 1,632 | | Net gain on revaluation of intangible assets | 10.1 | - | 77 | | Amounts relating to Consolidated Fund Standing Services – Elections | 4 | - | 4 | | Transfers between reserves | 1,569 | (1,569) | - | | **Balance at 31 March 2014** | 221,998 | 61,666 | 283,664 |
Notes 1 to 31 form part of these accounts Notes to the Accounts for the period ended 31 March 2014
1. Statement of accounting policies
1.1 Statement of compliance
These financial statements have been prepared in accordance with the 2013-14 Government Financial Reporting Manual (FReM) issued by HM Treasury. The accounting policies contained in the FReM apply International Financial Reporting Standards (IFRS) as adapted or interpreted for the public sector context. Where the FReM permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the Cabinet Office for the purpose of giving a true and fair view has been selected. The particular policies adopted by the Cabinet Office are described below. They have been applied consistently in dealing with items that are considered material to the accounts.
In addition to the primary statements prepared under IFRS, the FReM also requires the Department to prepare one additional primary statement. The Statement of Parliamentary Supply and supporting notes show outturn against Estimate in terms of the net resource requirement and the net cash requirement.
1.2 Basis of preparation
These accounts have been prepared under the historical cost convention modified to account for the revaluation of investment property, property, plant and equipment, intangible assets, inventories and certain financial assets and liabilities at their value to the business by reference to their current costs.
1.3 Basis of consolidation
These accounts comprise a consolidation of the core Department and those Arm’s length bodies which fall within the departmental boundary as defined in the FReM and make up the “Departmental Group”. Transactions between entities included in the consolidation are eliminated. A list of all those entities within the departmental boundary is given at Note 30.
The Civil Service Commission accounts are not material to the Cabinet Office and therefore the core account is not disclosed in the Financial Statements and related Notes.
1.4 Going concern
The financial statements for the Cabinet Office have been prepared on the basis that the Department is a going concern. Spending Review 2010 and Spending Round 2013 set out budgets for 2014-15 and 2015-16 respectively and Parliament has authorised spending for 2014-15 in the Main Estimate published within 'Central Government Supply Estimates 2014-15' HC 1233.
The financial statements for the Civil Service Commission have been prepared on the basis that it is a going concern which is financed by grant-in-aid from the Cabinet Office.
1.5 Restated amounts
Prior year comparatives are restated for changes in accounting policy applied retrospectively and for machinery of government transfers of function.
Following a change in accounting policy applied retrospectively, the opening balance of the general fund is adjusted for the earliest prior period presented such that it is, as if, the new accounting policy had always been applied.
Machinery of government changes which involve the transfer of functions or responsibilities between two or more government departments are accounted for as a business combination using merger accounting principles in accordance with the FReM. Accordingly, the results and cash flows relating to the in-year transferred functions or responsibilities are written in or out of the accounts from the start of the financial year. Prior-year comparatives are restated, with corresponding adjustments being made to the general fund. By so doing, it appears that the Department always existed in its present form. This enables the user of the accounts to make useful comparisons between the data from the prior year to the current year. Further details can be found at Note 2.
1.6 Transfer by Absorption
Transfers of function between public sector bodies (excluding those between central government departments to which merger accounting applies) are accounted for as transfers by absorption.
In accordance with the FReM, the carrying value of the assets and liabilities of the combining bodies or functions are not adjusted to fair value on consolidation. There is no recognition of goodwill and no restatement of comparatives in the primary financial statements. The recorded amounts of net assets/liabilities are brought into the financial statements of the transferee and written out of those of the transferor from the date of transfer. The net asset/liability carrying value is recorded against non-operating gain/loss through net expenditure. Any revaluation reserves are transferred in full with the remaining balance transferred to the General Fund.
On 1 April 2013 the following functions transferred from the Cabinet Office to its executive non-departmental public body, the Civil Service Commission: the Advisory Committee on Business Appointments and the House of Lords Appointments Commission, both advisory non-departmental public bodies and the Office of the Commissioner for Public Appointments. The reason for the transfer is to improve the transparency of the Civil Service Commission’s financial reporting and to remove the need for complex recharges between four units under a single Accounting Officer.
1.7 Judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the date of the Statement of Financial Position (SoFP) and amounts reported for income and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.
Information about the assumptions made about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying value amounts of assets and liabilities within the next financial year are disclosed.
In the process of applying the Department’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:
Public Finance Initiative (PFI) arrangements The classification of Public Finance Initiative (PFI) arrangements as service concession arrangements requires the Department to determine, based on an evaluation of the terms and conditions of the arrangements, whether it controls the infrastructure.
Determining whether an arrangement contains a lease The classification of long term arrangements as containing a lease requires the Department to determine, based on an evaluation of the terms and conditions of the arrangements, whether the arrangement depends on a specific asset or assets and whether the arrangement conveys a right to use the asset.
Operating lease commitments The classification of property, plant and equipment leases as operating or finance lease requires the Department to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets; and, accordingly, whether the lease requires an asset and liability to be recognised in the SoFP. Impairment of assets The Department assesses whether there are any indicators of impairment for all financial and non-financial assets at each reporting date. Assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. Impairments that are due to a clear consumption of economic benefit are recognised in the Statement of Comprehensive Net Expenditure (SoCNE) rather than set against an available revaluation reserve. The treatment of impairments in accounts therefore corresponds with the treatment in departmental budgets and Estimates.
Development costs Initial capitalisation of costs is based on management’s judgement that technological and economical feasibility is confirmed.
1.8 Operating segments Operating segments are based on the main areas of business activity and align with performance reporting and are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker has been identified as the Accounting Officer and the Board.
1.9 Employee benefits
Short term benefits Where an employee has rendered service to the Department during the financial year, the Department recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for that service as an expense. Performance bonuses are not accrued at 31 March since the appraisal process which determines performance pay is only finalised after the accounts have been prepared.
Termination benefits Termination benefits include lump sum payments and payments in lieu of notice. The Department makes provision for termination benefits in cases of compulsory redundancy on announcement of a detailed plan. The Department then accrues for termination benefits in cases of both voluntary and compulsory redundancy at the point at which the employee has accepted the offer made by the Department, and where appropriate, reverses the earlier provision.
1.10 Pensions The majority of past and present employees of the core Department and its eNDPB, the Civil Service Commission, are covered by the provisions of the Principal Civil Service Pension Scheme (PCSPS). The defined benefit schemes are unfunded and are non-contributory except in respect of dependants’ benefits. The Department recognises the expected cost of these elements on a systematic and rational basis over the period during which it benefits from employees’ services by payment to the PCSPS of amounts calculated on an accruing basis. Liability for payment of future benefits is a charge on the PCSPS. In respect of the defined contribution schemes, the Department recognises the contributions payable for the year.
1.11 Administration and programme expenditure and income The SoCNE is analysed between administration and programme income and expenditure. The classification of expenditure and income as administration or as programme follows the definition of administration costs set out in the Consolidated Budgeting Guidance issued by HM Treasury.
Administration costs and operating income reflect the costs of running the Department. Income is analysed between that which is allowed to be offset against gross administration costs in determining the outturn against the gross administration budget and that operating income which is not.
Programme costs include payments of grants and grant-in-aid and other disbursements by the Department, as well as certain staff costs where they relate directly to service delivery. 1.12 Grants
Grants are unrequited payments made by the Department to outside bodies to reimburse expenditure on agreed items or functions and often only paid on statutory conditions being met. Grants may be resource or capital. The Department recognises grant expenditure at the point of cash disbursement.
Grants-in-aid are financing payments made by the Department to a NDPB or other arm’s length body. Grants-in-aid to NDPBs are recognised in the accounts of the core department only and eliminated on consolidation. The Department recognises grants-in-aid at the point of cash disbursement.
1.13 Revenue
Revenue is the gross inflow of economic benefits arising from the ordinary operating activities of the Department and is measured at the fair value of the consideration received or receivable. It is recognised when it is probable that any future economic benefit associated with the item of revenue will flow to the entity and when the amount of revenue can be measured with reliability; it may not be probable until the consideration is received or until an uncertainty is removed.
Operating Income
Operating income is generated by the Department in pursuit of its activities and in managing its affairs. It is stated net of VAT. Operating income principally comprises fees and charges for services provided on a full-cost basis to external customers as well as public re-payment work and includes income due to the Consolidated Fund, which in accordance with the FReM, is treated as operating income. Royalties are recognised on an accruals basis. Dividends are recognised when the Department’s right to receive payment has been established.
Non-operating income
Non-operating income relates to the sale of capital assets and repayment of loan principal. It may be retained to finance related capital spending in cases where it has been described in the income ambit to the Estimate, otherwise it may not be retained and is due to the Consolidated Fund.
Consolidated Fund Extra Receipts (CFERS)
Income which is of a type not anticipated by the Department within its budgets and which therefore has not been described in the income ambit to the Estimate may not be retained for use by the Department and must be paid over to Treasury’s Consolidated Fund. Such income is known as (CFERS). CFERS are accounted for on an accruals basis.
1.14 Value Added Tax
Most of the activities of the core Department are outside the scope of VAT and, in general output tax does not apply and input tax on purchases is not recoverable.
Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets.
Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT. The net amount due to, or from, HM Revenue and Customs in respect of VAT is included within receivables and payables within the SoFP.
Its NDPB, the Civil Service Commission, is not registered for VAT purposes.
1.15 Property, plant and equipment
Property, plant and equipment is recognised initially at cost and thereafter carried at fair value less depreciation and impairment charged subsequent to the date of revaluation, except for art and antiques and properties surplus to requirement. Cost comprises the amount of cash paid to acquire the asset and includes any costs directly attributable to making the asset capable of operating as intended. The capitalisation threshold for expenditure on property, plant and equipment is £5,000.
Land and buildings are restated to fair value every five years (every three years for Sunningdale Park) using professional valuations prepared in accordance with current Royal Institution of Chartered Surveyors Valuation Standards. In the intervening years, if material, changes in fair value are determined by reference to current prices on an active market for similar property.
Residual interests in Private Finance Initiative (PFI) properties are included in property, plant and equipment at the amount of unitary charge allocated for the acquisition of the residual to the date of the SoFP plus an adjustment based on the net present value of the change in fair value of the residual as estimated at the start of the contract and its estimated fair value at the date of the SoFP.
Properties surplus to requirement are valued on the basis of open market value less any directly attributable selling costs where material.
Other operational assets are revalued to open market value where obtainable, or on the basis of depreciated replacement cost where market value is not obtainable. Published indices appropriate to the category of asset are normally used to estimate value.
Art and antiques, including some heritage assets, have been inherited by the Department since its earliest existence and are held mainly in 10 Downing Street and 70 Whitehall. They are subject to professional valuation on the basis of insurance value or mid–auction estimate every five years with the revaluation being taken into the revaluation reserve. They are not depreciated or indexed.
Any revaluation surplus is credited to the revaluation reserve except to the extent that it reverses a decrease in the carrying value of the same asset previously recognised in the SoCNE, in which case the increase is recognised in the SoCNE. A revaluation deficit is recognised in the SoCNE, except to the extent of any existing surplus in respect of that asset in the revaluation reserve.
1.16 Depreciation on property, plant and equipment
Property, plant and equipment are depreciated at rates calculated to write them down to estimated residual value on a straight-line basis over their estimated useful lives. Useful lives and residual values are reviewed annually and, where adjustments are required, these are made prospectively.
Asset lives are normally in the following ranges:
- Freehold buildings including dwellings: 25 to 55 years
- Leasehold building improvements: over the remaining term of the lease
- Plant and equipment: 3 to 10 years
- Furniture and fittings: 5 to 7 years
- IT hardware and office equipment: 3 to 5 years
- Vehicles: 3 to 5 years
The following exceptions apply to the asset lives for property, plant and equipment at the Sunningdale Park site in Berkshire:
- Freehold buildings including dwellings: 25 to 60 years
- Furniture and fittings: 5 to 20 years
Assets in the course of construction are not depreciated until the assets are available for use. Residual interests in PFI contract assets are not depreciated until the asset reverts to the Department. No depreciation is provided on freehold land and items for collections since they have unlimited or very long estimated useful lives, nor on non-current assets held for sale. Assets continue to depreciate until they are derecognised, even if during that period they are idle. The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable. If an asset is determined to be impaired, the asset is written down immediately to its recoverable amount.
1.17 Donated Assets
The value of donated assets is recognised as income and credited to the general fund. Any subsequent revaluation surplus is credited to the revaluation reserve except to the extent that it reverses a decrease in the carrying value of the same asset previously recognised in the SoCNE; in which case the increase is recognised in the SoCNE. A revaluation deficit is recognised in the SoCNE, except to the extent of any existing surplus in respect of that asset in the revaluation reserve.
Gifts of ornaments and jewellery received by past and present Prime Ministers and their spouses are treated as donated assets within Art and Antiques and capitalised at their fair value on receipt. They are subject to professional valuation every five years. Gifts are not depreciated, since, by their nature, their useful economic life is indefinite.
The Civil Service Club is recognised as a donated asset. Members of the Civil Service and the Foreign Service contributed to the wedding present for Her Majesty the Queen and part of the sum subscribed was, by her wish, applied to some object of general benefit to the Civil and Foreign Services and consequently the Civil Service Club was purchased; see Note 8.
1.18 Investment Properties
Properties held to earn rentals, capital appreciation or both are recognised as investment properties at fair value.
Fair value of investment properties is based on professional valuations every five years (every three years for Sunningdale Park), or, if available for an individual investment property, by reference to an agreed sale price on an active market. In the intervening years, if material, changes in fair value are recognised by reference to current prices on an active market for similar property. Changes arising from valuations are recognised directly in the SoCNE. The Department does not depreciate its investment properties.
1.19 Intangible assets and amortisation
Intangible assets are defined as identifiable non-monetary assets without physical substance. Software that is embedded in computer-controlled equipment that cannot operate without that specific software is an integral part of the related hardware and is treated as property, plant and equipment.
Intangible assets are measured on initial recognition at cost. The capitalisation threshold for expenditure on intangible assets is £5,000. Following initial recognition, where an active market exists, intangible assets are carried at fair value at the SoFP. Where no active market exists, the Department uses published indices to assess the depreciated replacement cost.
The useful lives of intangible assets are assessed to be either finite or indefinite. All intangible assets are currently assessed to have a finite life of between three and five years and are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year end. Assets in the course of construction are not amortised until the assets are brought into use.
Software licences
Externally-acquired computer software licences are amortised over the shorter of the term of the licence and the useful economic life of three to five years. As reliable evidence of market value could not be obtained, these have not been re-valued. Research and development
Research costs are expensed as incurred. Development expenditure is recognised as an intangible asset when the Department can demonstrate: the technical feasibility of completing the intangible asset so that it will be available for use; its intention to complete and its ability to use the asset, how the asset will generate future economic benefits; the availability of resources to complete the asset; and the ability to measure reliably the expenditure during development.
Following initial recognition of development expenditure as an asset, where an active market exists, the asset is subsequently measured at fair value. Where no active market exists, the asset is carried at amortised replacement cost, indexed for relevant price increases, as a proxy for fair value. Expenditure which does not meet the criteria for capitalisation is treated as an operating cost in the year in which it is incurred.
1.20 Leases
Assets held under finance leases, which transfer to the Department substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease, with a corresponding liability being recognised for the lower of the fair value of the leased asset and the present value of the minimum lease payments.
Lease payments are apportioned between the reduction of the lease liability and finance charges in the SoCNE so as to achieve a constant rate of interest on the remaining balance of the liability. Assets held under finance leases are depreciated over the shorter of the estimated useful life of the asset and the lease term.
Leases where the lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases and the rentals payable are charged to the SoCNE on a straight-line basis over the lease term.
1.21 Private Finance Initiative (PFI) Transactions
PFI transactions are accounted for in accordance with IFRIC 12 and IAS 17, as interpreted for the public sector by the FReM.
Where the Department has control over a PFI asset, or where the Department does not have control but the balance of risks and rewards of control is borne by the Department, the asset is recognised as a non-current asset. The Department recognises a liability for the capital value of the contract. That liability does not include interest charges and service elements, which are expensed annually to the Statement of Comprehensive Net Expenditure.
Assets are revalued in accordance with the revaluation policy for property, plant and equipment (Note 1.15) and intangible assets (Note 1.19). Liabilities are measured using the appropriate discount rate.
Where the Department does not have control over the PFI asset and the balance of risks and rewards of control are borne by the PFI operator, the PFI payments are recorded as an expense in the Statement of Comprehensive Net Expenditure.
Where the Department has contributed assets to a PFI operator, a prepayment for their fair value is recognised and amortised over the life of the PFI contract. Amortisation is recognised as an expense to the Statement of Comprehensive Net Expenditure. Where at the end of the PFI contract, a property reverts to the Department, the difference between the expected fair value of the residual on reversion and any agreed payment on reversion is built up over the life of the contract by capitalising part of the unitary charge each year. The values for both of these elements (the prepayment and the reversionary interest) are recognised as Property, Plant and Equipment. The element of a property covered by a lease granted to a PFI operator, and for which sub-leases are granted to the Department for continued occupation, is recognised as an investment property. 1.22 Financial assets
Financial assets are recognised when the Department becomes party to the contracts that give rise to them and are classified as: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or as available-for-sale financial assets as appropriate. The Department determines the classification of its financial assets at initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end.
When financial assets are recognised initially, they are measured at fair value, except for loans, Public Dividend Capital (PDC) and other interests in public bodies outside the departmental boundary which are reported at historical cost less any impairment.
Fair value is determined as the transaction price plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. The Department considers whether a contract contains an embedded derivative when the entity first becomes party to it. Embedded derivatives are separated from the host contract if the contract is not measured at fair value through profit or loss and when the economic characteristics and risks are not closely related to those of the host contract.
The subsequent measurement of financial assets depends on their classification. The following classifications are currently applicable:
**Investments in other bodies** Loans, Public Dividend Capital (PDC) and other interests in public bodies outside the departmental boundary are shown at historical cost, less any impairment.
In the past, the Cabinet Office has issued loans to the London Hostels Association, LHA London Ltd, which have been repaid during 2013-14.
Loans issued by the Cabinet Office to the Bridges Social Entrepreneurs’ Fund LP are recognised at the point of the disbursement under the terms set out in the Limited Partnership Agreement. Bridges Social Entrepreneurs’ Fund LP is an entity which lies outside the departmental boundary and consequently the loans are reported at historical cost less any impairment. The impairment is assessed as the difference between the cost of the loan issued and the Department’s share of the net asset value as reported in the Bridges Social Entrepreneurs’ Fund LP accounts. The net asset value equals the sum of the investment value at cost in the initial year and marketable value in subsequent years, adjusted for other net assets.
The Cabinet Office has Public Dividend Capital held within the Government Procurement Service. The Cabinet Office assesses at 31 March whether there is objective evidence that this asset is impaired in terms of whether there has been a decline in value below its cost. Dividends are recognised in the SoCNE when the Department’s right to receive payment is established.
**Loans and receivables** Trade and other receivables are recognised and carried at the lower of their original invoiced value and recoverable amount. Where the time value of money is material, receivables are subsequently measured at amortised cost. Provision is made when there is objective evidence that the Department will not be able to recover balances in full. Balances are written off when the probability of recovery is assessed as being remote.
Financial assets are derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
1.23 Investments in associates
An associate is an entity in which the Department has significant influence, but not control or joint control, being the power to participate in, but not control, the financial and operating policy decisions of the associate investee. It is assumed that associate status exists where the Department has a shareholding of 20% or more. Investments in associates are required to be accounted for using the equity method whereby an investment is initially recorded at cost and subsequently adjusted to reflect the Department’s share of the net profit or loss, and thereby of the net assets, and of the other comprehensive income of the associate. Dividend distributions received from the associate reduce the carrying amount of the investment. Recoverable amounts are assessed for each individual associate.
In cases where the associate’s and the Department’s reporting periods are not co-terminous but are no greater than 3 months apart, the Department uses the most recent audited financial statements of the associate in applying the equity method of accounting and, where necessary, makes adjustments for the effects of significant transactions up to the reporting date of the Department’s financial statements.
In cases where the associate’s and the Department’s accounting policies are not uniform, then where material, adjustments are made.
1.24 Assets classified as held for sale
Assets held for sale are assets where the carrying amount will be recovered principally through a sale transaction rather than through continuing use.
For an asset to be classified as held for sale, it must be available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets; its sale must be highly probable; and it must genuinely be expected to be sold, not abandoned. Items of property, plant and equipment that are classified as held for sale are written down to fair value less costs to sell (if lower than its carrying value), and are not depreciated further.
1.25 Inventories
Inventories of insignia are valued at the lower of original cost and replacement cost.
1.26 Cash and cash equivalents
Cash in the SoFP comprises cash at bank and in hand. Any overdraft will be recorded as a creditor. For the purpose of the Cash Flow Statement, cash and cash equivalents consist of cash, net of outstanding bank overdrafts.
1.27 Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.
Other financial liabilities
Trade and other payables are recognised at cost, which is deemed to be materially the same as the fair value. Where the time value of money is material, payables are subsequently measured at amortised cost.
Financial liabilities are derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
1.28 Provisions
A provision is recognised when the Department has a legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect is material, expected future cash flows are discounted using real rates set by HM Treasury which are short-term (0-1 year) -1.90% (2012-13: -1.80%), medium-term (1-5 years) -0.65% (2012-13: -1%) and long-term (5+ years) 2.20% (2012-13: 2.20%) with effect from 31 March 2014.
For early departure costs the Department establishes a provision for the estimated payments discounted by the Treasury discount rate of 1.80% (2012-13: 2.35%) in real terms. Where discounting is used, the increase in the provision due to borrowing costs is recognised as a finance cost. 1.29 Contingent liabilities and contingent assets
Contingent assets and liabilities are not recognised as liabilities or assets in the SoFP but are disclosed in the notes to the accounts in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
A contingent liability is a possible obligation arising from past events whose existence will be confirmed only by uncertain future events or present obligation arising from past events that are not recognised because either an outflow of economic benefit is not probable or the amount of the obligation cannot be reliably measured.
The Department discloses a contingent asset where it is probable there will be an inflow of economic benefits from an event whose outcome is uncertain. An estimate of the financial effect is indicated where possible.
In addition to contingent assets and liabilities disclosed in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the Department discloses for parliamentary reporting and accountability purposes certain statutory and non-statutory contingent liabilities where the likelihood of a transfer of economic benefit is remote, but which have been reported to Parliament in accordance with the requirements of Managing Public Money.
Where the time value of money is material, contingent liabilities which are required to be disclosed under IAS 37 are stated at discounted amounts and the amount reported to Parliament separately noted. Contingent liabilities that are not required to be disclosed by IAS 37 are stated at the amounts reported to Parliament.
1.30 Impending application of newly issued accounting standards not yet effective
Certain new standards, interpretations and amendments to existing standards have been published that the Department will be required to apply on or after 1 April 2014 or later periods, following EU-adoption and as applied by the FReM. The Department provides disclosure that it has not yet applied a new accounting standard, and known or reasonably estimable information relevant to assessing the possible impact that initial application of the new standard will have on the Department’s financial statements. The Department will assess the impact of these standards.
Effective 1 January 2013:
IFRS 10 ‘Consolidated Financial Statements’ Definition of control requires more judgement, notably of agency-principal relationships.
IFRS 11 ‘Joint Arrangements’ This provides a principles-based definition of joint arrangements (joint operations or joint ventures) based on rights and obligations. Proportional consolidation accounting for joint ventures is no longer permitted (only equity accounting).
IFRS 12 ‘Disclosure of Interests in Other Entities’ This requires more disclosure of the financial effects on, and risks to, the consolidating entity.
IAS 27 ‘Consolidated and Separate Financial Statements’ - Amendment
IAS 28 ‘Investments in Associates and Joint Ventures’ – Amendment
IFRS 13 ‘Fair Value Measurement’ This will provide consistent guidance on fair value measurement for all relevant balances and transactions covered by IFRS.
## 2. Restatement of prior year comparatives
| £000 | 2012-13 Published Accounts | Machinery of government transfers | 2012-13 Restated Accounts | |------|---------------------------|---------------------------------|---------------------------| | | | Royal Mail Statutory Pension Scheme | Youth Policy | | | | | | | | | | | | | |
### Statement of Comprehensive Net
Expenditure for the year ended 31 March 2013
| Expenditure | 2012-13 Published Accounts | Machinery of government transfers | 2012-13 Restated Accounts | |---------------------------------|---------------------------|---------------------------------|---------------------------| | Staff costs | 138,680 | 206 | - | 138,886 | | Administration costs | 169,488 | 6,016 | - | 175,504 | | Programme costs excluding staff costs, grants and election expenses | 101,977 | - | - | 101,977 | | Programme grants | 113,246 | - | 5,285 | 118,531 | | Total expenditure | 523,391 | 6,222 | 5,285 | 534,898 |
### Income
| Income | 2012-13 Published Accounts | Machinery of government transfers | 2012-13 Restated Accounts | |---------------------------------|---------------------------|---------------------------------|---------------------------| | Administration | (94,277) | (117) | - | (94,394) | | Programme | (19,364) | - | - | (19,364) | | Income from Associates | (5,882) | - | - | (5,882) | | Total income | (119,523) | (117) | - | (119,640) |
### Total Net Operating Costs
| Total Net Operating Costs | 403,868 | 6,105 | 5,285 | 415,258 |
### Statement of Financial Position as at 31 March 2013
| Total net assets | | | | | |---------------------------------|---------------------------|---------------------------------|---------------------------|---------------------------| | Property, plant and equipment | 162,093 | - | - | 162,093 | | Investment properties | 62,265 | - | - | 62,265 | | Intangible assets | 6,190 | - | - | 6,190 | | Investments in Associates | 5,882 | - | - | 5,882 | | Other financial assets | 1,688 | - | - | 1,688 | | Inventories | 459 | - | - | 459 | | Trade and other receivables | 54,440 | - | - | 54,440 | | Cash and cash equivalents | 7,093 | - | - | 7,093 | | Trade and other payables | (95,600) | - | - | (95,600) | | Provisions | (12,713) | - | - | (12,713) | | | 191,797 | - | - | 191,797 |
| Taxpayers' equity | | | | | |---------------------------------|---------------------------|---------------------------------|---------------------------|---------------------------| | General fund | 130,271 | - | - | 130,271 | | Revaluation reserve | 61,526 | - | - | 61,526 | | | 191,797 | - | - | 191,797 |
| Average number of persons employed: | | | | | |------------------------------------|---------------------------|---------------------------------|---------------------------|---------------------------| | Permanently employed staff | 1,896 | 3 | - | 1,899 | | Commissioners | 2 | - | - | 2 | | Others2 | 85 | - | - | 85 | | Ministers | 8 | - | - | 8 | | Special advisers | 46 | - | - | 46 | | Total | 2,037 | 3 | - | 2,040 |
1 This represents the management and administration of the Royal Mail Statutory Pension Scheme (RMSPS). RMSPS has its own separate Estimate and Accounts 2 'Others' category represents agency/temporary staff 2. Restatement of prior year comparatives (continued)
| £000 | 2012-13 Published Accounts | Machinery of government transfers | 2012-13 Restated Accounts | |------|-----------------------------|---------------------------------|---------------------------| | | Royal Mail Statutory Pension Scheme | Youth Policy | |
Statement of Cash Flows for the year ended 31 March 2013
Cash flows from operating activities
Net operating cost (403,868) (6,105) (5,285) (415,258) Adjustments for non-cash transactions 24,541 - - 24,541 Remove Income from Associates (5,882) - - (5,882) Remove income from dividends (2,615) - - (2,615) Increase in inventories (42) - - (42) Decrease in trade and other receivables 5,774 - - 5,774
Less movements in receivables relating to items not passing through the Statement of Comprehensive Net Expenditure Movement in amounts relating to provision for doubtful debt 371 - - 371 Amounts relating to bad debt write off (80) - - (80) Decrease in trade and other payables (74,179) - - (74,179)
Less movements in payables relating to items not passing through the Statement of Comprehensive Net Expenditure Amounts due to the Consolidated Fund for Supply 18,699 - - 18,699 Release of deferred income 19 - - 19 Movement in capital accruals relating to investing activities 2,153 - - 2,153 Amounts relating to Consolidated Fund Standing Services – Elections 458 - - 458 Amounts due to Consolidated Fund for non voted receipts - Elections 8,842 - - 8,842 Use of provisions (4,062) - - (4,062)
Net cash outflow from operating activities (429,871) (6,105) (5,285) (441,261)
Cash flows from investing activities
Purchase of property, plant and equipment (11,068) - - (11,068) Purchase of intangible assets (3,952) - - (3,952) Loans to other bodies (444) - - (444) Net movement in trade payables - capital accruals (2,153) - - (2,153) Proceeds of disposal of property, plant and equipment 54 - - 54 Income from dividends 2,615 - - 2,615 Repayments from other bodies 20 - - 20
Net cash outflow from investing activities (14,928) - - (14,928)
Cash flows from financing activities
From the Consolidated Fund (Supply) – current year 422,214 - - 422,214 From the Consolidated Fund (Supply) in respect of machinery of government transfer of function - 6,105 5,285 11,390
Net financing 422,214 6,105 5,285 433,604
Net decrease in cash and cash equivalents in the period before adjustment for receipts and payments to the Consolidated Fund (22,585) - - (22,585)
## 2. Restatement of prior year comparatives (continued)
| £000 | 2012-13 Published Accounts | Machinery of government transfers | 2012-13 Restated Accounts | |------|-----------------------------|---------------------------------|---------------------------| | | Royal Mail | Statutory Pension Scheme | Youth Policy |
### Statement of Cash Flows (continued)
- **Non-voted receipts surrendered to the Consolidated Fund - Elections**: (9,300)
- **Net decrease in cash and cash equivalents in the period after adjustment for receipts and payments to the Consolidated Fund**: (31,885)
- **Cash and cash equivalents at the beginning of the period**: 38,978
- **Cash and cash equivalents at the end of the period**: 7,093
### Statement of Financial Position as at 1 April 2012
**Total net assets**
- Property, plant and equipment: 175,857
- Intangible assets: 4,406
- Other financial assets: 1,423
- Other non current assets: 354
- Assets held for sale: 44,145
- Inventories: 417
- Trade and other receivables: 59,860
- Cash and cash equivalents: 38,978
- Trade and other payables: (169,779)
- Provisions: (17,324)
**Taxpayers’ equity**
- General fund: 84,929
- Revaluation reserve: 53,408
**Total**: 138,337
### 3. Statement of Net Resource Outturn by Operating Segment
| Operating Segment | Note | Gross Outturn | Income | Net Outturn | Gross Outturn | Income | Net Outturn | |--------------------------------------------------------|------|---------------|--------|-------------|---------------|--------|-------------| | Support to the Cabinet, PM & Deputy PM | 82,129 | (21,861) | 60,268 | 85,183 | (16,747) | 68,436 | | Political & Constitutional Reform | 26,587 | (352) | 26,235 | 13,008 | (1,208) | 11,800 | | National Security | 39,386 | (5,406) | 33,980 | 59,682 | (7,421) | 52,261 | | Efficiency & Reform | 189,040 | (123,052) | 65,988 | 160,736 | (61,634) | 99,102 | | Government Innovation Group | 221,013 | (6,492) | 214,521 | 187,465 | (18,898) | 168,567 | | Transactional Shared Services | 30,403 | (29,838) | 565 | - | - | | Independent Business Units | 3,039 | (3,003) | 36 | 4,012 | (2,097) | 1,915 | | Civil Service Commission | 2,303 | (12) | 2,291 | 1,644 | (174) | 1,470 | | **Subtotal** | 593,900 | (190,016) | 403,884 | 511,730 | (108,179) | 403,551 | | Consolidated Fund Standing Services – UK Members of European Parliament | 1,826 | - | 1,826 | 1,831 | - | 1,831 | | Ring fenced depreciation, amortisation, impairment and provision for doubtful debt | 13,670 | - | 13,670 | 8,009 | - | 8,009 | | Audit fee | 495 | - | 495 | 425 | - | 425 | | **Total Resource DEL** | 609,891 | (190,016) | 419,875 | 521,995 | (108,179) | 413,816 |
The segmental analysis has been prepared to align with the reporting of the Cabinet Office’s structure, where units within the Department have been organised into pillars, which are represented by the segments shown above. Financial information is reported through a regular Performance Report, which adopts the segmental analysis shown above. The Performance Report is reviewed by the Cabinet Office Board, chaired by the Minister for the Cabinet Office, and also the Executive Management Committee (EMC), chaired by the Accounting Officer.
The segmental analysis total net outturn in Resource Departmental Expenditure Limit agrees to SOPS2.1. Overall outturn at SOPS2.1 includes Resource Annually Managed Expenditure and is reconciled to net operating costs at SOPS3.1. Explanations on year on year variance may be found in the Financial Review section. Corporate Services Group net DEL outturn as reported in SOPS2.1 is allocated across operating segments in proportion to their gross expenditure and gross income, except for Transactional Shared Services.
**Support to the Cabinet, Prime Minister and Deputy Prime Minister**
This segment provides support to the Cabinet, to drive the coherence, quality and delivery of policy and operations across departments, and provides support to the Prime Minister and Deputy Prime Minister, to define and deliver the government’s objectives, implement political and constitutional reform, and drive forward from the centre particular cross-departmental priority issues.
**Political and Constitutional Reform**
This segment covers the work of Political and Constitutional Reform, which provides support to the Deputy Prime Minister and Minister for Political and Constitutional Reform in delivering the wide-ranging political and constitutional reform agenda set out in the coalition’s Programme for Government. Political and Constitutional Reform delivers day-to-day policy and operational work on issues relating to the constitutional structure of the UK and electoral law, policy and conduct and also includes the Office of the Privy Council, and supports ministerial sponsorship of the Independent Parliamentary Standards Authority (IPSA) and the Boundary Commissions for England and Wales. The segment also covers the implementation of individual electoral registration to tackle electoral fraud and improve the system of voter registration which will come into force in 2014. 3. Statement of Net Resource Outturn by Operating Segment (continued)
National Security
This segment covers the work of the National Security Secretariat (NSS), responsible for defence and foreign affairs as well as intelligence, security and resilience issues. NSS advises the Prime Minister and ministers on the Government’s response to cross-cutting strategic issues relating to intelligence and leads on intelligence assessment and priorities through the central intelligence machinery. It coordinates the Government’s response to civil emergencies, terrorist incidents and international crises. It is also responsible for the Single Intelligence Account, which funds the work of the UK intelligence agencies. It works in partnership with all government units with a security or intelligence remit as well as the security and intelligence agencies.
Efficiency and Reform
This segment covers the work carried out by the areas previously combined together as the Efficiency and Reform Group (ERG). ERG was created in early 2010-11, to bring together a range of functions previously scattered between departments to lead and drive substantial changes and reforms in Civil Service HR, ICT, commercial and procurement, estates and other support functions. The Efficiency and Reform Group (ERG) works in partnership with HM Treasury and government departments to deliver efficiencies, savings and reforms on behalf of UK taxpayers. ERG aims to transform the way public services are delivered, improve user experience and support UK growth. ERG includes Government Property Unit (GPU) and the Government Digital Service.
The Civil Service Reform Group is responsible for delivering the Civil Service Reform Plan (published June 2012) which set out a series of specific and practical actions for reform, which, when implemented, will lead to real change for the Civil Service. It will equip a smaller Civil Service to meet current and future challenges, including the demands of public sector reform and rising consumer expectations, as well as economic and financial challenges.
Government Innovation Group
The Government Innovation Group develops new approaches to tackle social problems in order that public services can deliver better with less. It is made up of Civil Society, which now also has lead responsibility for Youth Policy, Transparency, Analysis and Insight, Open Policy Making teams and for most of the year Behavioural Insights.
Transactional Shared Services
The Cabinet Office became accountable for the Department for Work and Pensions (DWP) Shared Service Centre (SSC) from 1 April 2013 until the Shared Services Connected Ltd associate was created from 1 November 2013. The programme costs and income relating to Transactional Shared Services are for monies paid and collected by the Cabinet Office in relation to the services provided by SSC.
Independent Business Units
This segment covers the Independent Business Units which are hosted by the Cabinet Office. The Cabinet Office is often tasked to lead with inquiries, reports, and other areas of work which require independence, but which work across a number of Departments. The work covered by this segment includes the Iraq Inquiry, Detainee Inquiry, Committee for Standards in Public Life and the Intelligence and Security Committee.
Civil Service Commission
This is an executive non-departmental public body whose accounts are consolidated with the Cabinet Office; see Note 30.
### 4. Staff numbers and related costs
#### Staff costs comprise:
| | Permanently employed staff | Commissioners | Others | Ministers | Special advisers | Total | Total | |----------------------|---------------------------|--------------|--------|-----------|-----------------|-------|-------| | Wages and salaries | 98,847 | 362 | - | 422 | 3,513 | 103,144 | 95,872 | | Social security costs| 9,364 | 37 | - | 42 | 343 | 9,786 | 9,388 | | Other pension costs | 19,273 | - | - | - | 746 | 20,019 | 19,056 | | Agency/temporary | - | - | 30,622 | - | - | 30,622 | 13,814 | | Termination benefits | 791 | - | - | - | - | 791 | 303 | | **Sub total** | **128,275** | **399** | **30,622** | **464** | **4,602** | **164,362** | **138,433** | | Inward secondments | - | - | 6,304 | - | - | 6,304 | 5,709 | | **Total** | **128,275** | **399** | **36,926** | **464** | **4,602** | **170,666** | **144,142** | | Less: | | | | | | | | | Recoveries in respect of outward secondments | - | - | (2,658) | - | - | (2,658) | (2,525) | | **Total staff costs** | **128,275** | **399** | **34,268** | **464** | **4,602** | **168,008** | **141,617** | | Staff engaged on Capital projects(^1) | (353) | - | (429) | - | - | (782) | (2,731) | | **Total net staff costs** | **127,922** | **399** | **33,839** | **464** | **4,602** | **167,226** | **138,886** |
(^1) £762,509 has been charged to capital
#### Of which:
| | Charged to Administration budgets | Charged to Programme budgets(^2) | Charged to Capital budgets(^2) | Total (Post Consolidation) | Charged to Administration budgets | Charged to Programme budgets(^2) | Charged to Capital budgets(^2) | Total (Post Consolidation) | |----------------------|----------------------------------|-----------------------------------|---------------------------------|-----------------------------|----------------------------------|-----------------------------------|---------------------------------|-----------------------------| | Core department | 113,307 | 53,347 | (782) | 165,872 | 105,225 | 35,487 | (2,731) | 137,981 | | NDPBs | 1,354 | - | - | 1,354 | 905 | - | - | 905 | | **Total net costs** | **114,661** | **53,347** | **(782)** | **167,226** | **106,130** | **35,487** | **(2,731)** | **138,886** |
(^2) The net amount charged to Programme budgets is £52.565m (2012-13: £32.756m) as shown within the Statement of Comprehensive Net Expenditure
During the year, costs of £20,019,716 were incurred in respect of pensions (2012-13 Restated: £19,055,524).
Of this amount, £19,905,719 (2012-13 Restated: £18,976,814) was borne by the core department and £113,997 was borne by the Civil Service Commission (2012-13: £78,710).
The following analysis is in respect of the core department:
The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer defined benefit scheme but the Cabinet Office is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the scheme as at 31 March 2007. Details can be found in the Accounts of the Cabinet Office: Civil Superannuation (www.civilservice.gov.uk/pensions).
For 2013-14, employers’ contributions of £19,034,241 were payable to the PCSPS (2012-13 Restated: £17,432,276) at one of four rates in the range 16.7% to 24.3% of pensionable pay, based on salary bands. The scheme Actuary reviews employer contributions usually every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2013-14 to be paid when the member retires and not the benefits paid during this period to existing pensioners. 4. Staff numbers and related costs (continued)
Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers’ contributions of £116,216 (2012-13: £100,461) were paid to one or more of the panel of three appointed stakeholder pension providers. Employer contributions are age-related and range from 3% to 12.5% of pensionable pay. Employers also match employee contributions up to 3% of pensionable pay.
In addition, employer contributions of £8,750 (2012-13: £6,658), 0.8% of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death-in-service and ill-health retirement of these employees.
Contributions due to the partnership pension providers at the reporting period date were £11,814 (2012-13: £7,123). Contributions prepaid at that date were £Nil (2012-13: £Nil).
Special advisers’ pension costs incurred during the year were £746,512 (2012-13: £496,352).
In 2012-13, the Department recognised a liability to pay a debt to the Trustees of the Labour Party Superannuation Society in the amount of £941,067. It represented a funding shortfall for benefits built up by special advisers and was due from the Crown following its cessation as a participating employer in its pension scheme. This shortfall was settled during 2013-14.
During the year three individuals (2012-13: one individual) retired early on ill-health grounds; the total additional accrued pension liabilities in the year amounted to £28,754 (2012-13: £2,610).
Average number of persons employed
The average number of whole time equivalent persons employed during the year was as follows. These figures include those working in the Department as well as other bodies included within the consolidated departmental accounts.
| Operating Segment | Permanently employed staff | Commissioners | Others | Ministers | Special advisers | Total | Total Restated | |-------------------|---------------------------|--------------|--------|-----------|-----------------|-------|---------------| | Support to the Cabinet, the PM & the Deputy PM | 609 | - | 2 | 9 | 52 | 672 | 641 | | Political & Constitutional Reform | 116 | - | 3 | - | - | 119 | 115 | | National Security | 225 | - | 4 | - | - | 229 | 242 | | Government Innovation Group | 162 | - | - | - | - | 162 | - | | Efficiency & Reform | 720 | - | 214 | - | - | 934 | 760 | | Hosted Functions | 11 | - | - | - | - | 11 | 9 | | Corporate Services Group | 167 | - | 2 | - | - | 169 | 187 | | Executive NDPBs | 16 | 3 | - | - | - | 19 | 14 | | Staff engaged on Capital projects | 9 | - | 3 | - | - | 12 | 72 | | Total | 2,035 | 3 | 228 | 9 | 52 | 2,327 | 2,040 | | Of which: | | | | | | | | | Core Department | 2,019 | - | 228 | 9 | 52 | 2,308 | 2,026 | | NDPBs | 16 | 3 | - | - | - | 19 | 14 | | Total | 2,035 | 3 | 228 | 9 | 52 | 2,327 | 2,040 |
1 Permanent staff headcount is further analysed at Table 5 in the Financial Review where it is presented on the basis of actual headcount at 31 March 2 Commissioners receive emoluments for board fees 3 ‘Others’ category represents agency / temporary staff
### 4.1. Reporting of Civil Service and other compensation schemes – exit packages
| Exit package by cost band | Number of compulsory redundancies | Number of other departures agreed | Total number of exit packages by cost band | Total number of exit packages by cost band | |--------------------------|-----------------------------------|----------------------------------|------------------------------------------|------------------------------------------| | £10,000 - £25,000 | _ | 5 | 5 | _ | | £25,000 - £50,000 | _ | 9 | 9 | 2 | | £50,000 - £100,000 | _ | 2 | 2 | _ | | £100,000-£150,000 | _ | _ | _ | 2 | | £150,000-£200,000 | _ | 2 | 2 | _ | | Total number of exit packages | _ | 18 | 18 | 5 | | Total cost | _ | £791,491 | £791,491 | £302,595 |
Redundancy and other departure costs have been paid in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972. Exit costs are accounted for in full in the year in which the departure was agreed as binding. Where the Department has agreed early retirements, the additional costs are met by the Department and not by the Civil Service pension scheme. Ill-health retirement costs are met by the pension scheme and are not included in the table.
The termination benefits of £791,491 (2012-13: £302,595) are included in the staff costs and in the exit package table.
## 5. Other administration costs
| £000 | 2013-14 | 2012-13 Restated | |------|---------|-----------------| | | Departmental Group | Departmental Group | | **Rentals under operating leases** | | | | Hire of plant and machinery | - | 127 | | Land and buildings | 11,901 | 11,567 | | **Total rentals under operating leases** | 11,901 | 11,694 | | **Lease surrender premium** | - | 16,350 | | **PFI and other service concession arrangements** | | | | Service charges | 968 | 2,242 | | **Interest charges** | 132 | 121 | | **EU Funding received – transferred to DfID** | 7 | 731 | | **Goods and services** | | | | Pensions administration fee – MyCSP Limited | 29 | 32,515 | 30,834 | | Pensions administration additional costs – MyCSP Limited | 29 | 12,444 | 3,157 | | Pensions administration fee – Royal Mail Statutory Pension Scheme | 4,740 | 5,687 | | Pensions administration additional costs - Royal Mail Statutory Pension Scheme | 166 | 328 | | Transactional Shared Services | 7.1 | 30,403 | - | | Accommodation and utilities | 17,784 | 24,039 | | Business rates | 2,722 | 2,846 | | IT costs | 22,282 | 16,649 | | Consultancy | 23,819 | 5,136 | | Professional services | 25,759 | 25,684 | | Supplies and services | 10,778 | 12,299 | | Other staff-related costs | 2,170 | 2,966 | | Travel, subsistence and hospitality | 5,641 | 6,420 | | Auditors’ remuneration and expenses – NDPBs | 7 | 7 | | Competition fees paid to Commissioners | - | 167 | | **Total goods and services** | 191,230 | 136,019 | | **Non-cash items** | | | | Depreciation | 8 | 4,896 | 5,396 | | Release of deferred income | (8) | - | | Amortisation | 10 | 113 | 276 | | Impairment – Property, plant and equipment | 8, 11 | 4,603 | 2,891 | | Impairment – Intangible assets | 10, 11 | 709 | - | | Loss on disposal of property, plant and equipment | 8 | - | 9 | | Loss on disposal of PPE - donated assets | 8 | - | 4 | | Auditors’ remuneration and expenses – Core Department | 495 | 425 | | Bad debt write off | 167 | - | | Provision for bad debt | 21 | 181 | - | | Carbon Dioxide Emissions | 10 | - | 77 | | **Total non-cash items** | 11,156 | 9,078 | | **Total** | 216,118 | 175,504 |
1 During the year the Department and its NDPBs have not purchased any non-audit services from its auditors, the National Audit Office (2012-13: £Nil)
### 6. Programme costs
| £000 | 2013-14 | 2012-13 Restated | |------|---------|-----------------| | | Departmental Group | Departmental Group | | **Rentals under operating leases** | | | | Land and buildings | 2,716 | 1,338 | | **Total rentals under operating leases** | 2,716 | 1,338 | | **PFI and other service concession arrangements service charges** | - | 2,418 | | **Goods and services** | | | | Accommodation and utilities | 8,451 | 8,083 | | Business rates | 877 | 1,032 | | Consultancy | 4,316 | 1,061 | | Professional services | 452 | 123 | | Grant fund management services | 2,823 | 1,286 | | IT costs | 22,241 | 16,833 | | Other staff-related costs | 1,182 | 659 | | Supplies and services | 53,805 | 51,774 | | Lord Lieutenants’ expenses | 1,305 | 1,377 | | Travel, subsistence and hospitality | 1,210 | 646 | | **Total goods and services** | 96,462 | 82,674 | | **Grants and subsidies** | | | | Resource Grants to local authorities | 8,363 | 961 | | Resource Grants to private sector | 51,178 | 87,888 | | Resource Grants to NDPBs | 23,248 | 19,247 | | Resource Grants to central government bodies | 8 | 414 | | Capital Grants to private sector | 10,887 | 7,963 | | Capital Grants to NDPBs and other central government bodies | 4,917 | - | | Grants-in-Aid to Civil Service welfare bodies | 1,098 | 1,376 | | Grants-in-Aid to private sector | 34,402 | 682 | | **Total resource and capital grants** | 134,101 | 118,531 | | **Non-cash items** | | | | Depreciation | 8 | 561 | | Release of deferred income | - | (19) | | Amortisation | 10 | 1,197 | | Impairment – Property, plant and equipment | 8, 11 | 355 | | Impairment – Intangible assets | 10, 11 | 1,440 | | Impairment - loans | 11, 19 | 109 | | Devaluation of Property, plant and equipment | 11 | (137) | | Loss on disposal of Property, plant and equipment | 8 | - | | Capital Grant in Kind – Property | 20 | - | | Investment properties gains on change in fair value | 9 | (23) | | Provision provided for in year | 24 | (3,175) | | Borrowing costs (unwinding of discount on provisions) | 24 | 406 | | Bad debt write off | (3) | 80 | | Provision for doubtful debt | 21 | (221) | | **Total non-cash items** | 509 | 15,547 | | **Total** | 233,788 | 220,508 |
### Programme costs analysed by programme
| £000 | 2013-14 | 2012-13 Restated | |------|---------|-----------------| | | Departmental Group | Departmental Group | | PFI and other service concession arrangements service charges | - | 2,418 | | National Security Secretariat | | | | Government Security Zone | 890 | 890 | | Resilient Telecommunications | 6,742 | 6,396 | | Cyber Emergency Response Team (UK) | 2,333 | - | | BBC Monitoring | - | 17,476 | | Other | - | 369 | | Total National Security Secretariat | 9,965 | 25,131 | | Honours and Appointments Secretariat | | | | Lord Lieutenants’ Expenses | 1,305 | 1,377 | | Honours and Dignities | 1,189 | 1,185 | | Total Honours and Appointments Secretariat | 2,494 | 2,562 | | Political and Constitutional Reform | | | | Electoral Registration Transformation Programme | 13,120 | 852 | | Individual Electoral Registration | 3,084 | - | | Boundary Commissions for England and Wales | 80 | 603 | | Other | 82 | 74 | | Total Political and Constitutional Reform | 16,366 | 1,529 | | Prime Minister’s Office | | | | Great Campaign | 1,557 | 2,952 | | Efficiency and Reform Group | | | | Government Digital Service | 23,347 | 19,452 | | Mutuals | 2,942 | 767 | | Office of the Government CIO & SIRO | 771 | 453 | | Total Efficiency and Reform Group | 27,060 | 20,672 | | Government Innovation Group | | | | Open data programme | 501 | - | | Office of Civil Society | | | | v | 1,000 | 1,000 | | Strategic Programme | 1,710 | 2,191 | | Social Action | 20,271 | 27,387 | | National Citizen Service (NCS) | 84,297 | 62,036 | | Office for Civil Society general research programme | 1,060 | 953 | | Community Organisers | 6,424 | 5,412 | | Community First | 18,187 | 17,221 | | Structural Support | 75 | 15,392 | | Technical Assistance | 13,384 | 5,925 | | Advice Services Fund | 16,504 | 373 | | Youth Policy | 4,982 | 5,285 | | Other | 2,531 | 1,470 | | Total Office for Civil Society | 170,425 | 144,645 | | Total Government Innovation Group | 170,926 | 144,645 | | Other | 4,911 | 5,052 | | Sub total | 233,279 | 204,961 | | Total non-cash items | 509 | 15,547 | | Total | 233,788 | 220,508 | 6.1 Programme costs analysed by programme (continued)
National Security Secretariat Government Security Zone – Payments to the Metropolitan Police Service for the manning and running costs of the dedicated incident management control centre.
Resilient Telecommunications – A programme to provide resilient communications to Public Authorities.
Cyber Emergency Response Team (UK) – a new organisation formed in response to the 2011 national Cyber Security Strategy. It will work closely with industry, government and academia to enhance UK cyber resilience.
Honours & Appointments Secretariat Honours & Appointments Secretariat is responsible for making certain expenses payments to Her Majesty’s Lord-Lieutenants.
Honours and Dignities – The Honours and Appointments Secretariat provides the budget for the Central Chancery of the Orders of Knighthood at St James’ Palace (CCOK). CCOK is responsible for the administration of the Orders of Chivalry including the administration of investitures and the provision of medals and regalia for successful honours candidates.
Political and Constitutional Reform Electoral Registration Transformation Programme/ Individual Electoral Registration The Electoral Registration Transformation Programme (ERTP) supports the implementation of Individual Electoral Registration (IER), to tackle electoral fraud and improve electoral registration. This is a key part of the political reform package in the Coalition Agreement. Cabinet Office ministers have approved a timetable for implementation in 2014.
Prime Minister’s Office The Communications Great Campaign Team will be working to increase UK jobs and growth by encouraging more tourists, students and inward investors to visit, study and invest in the UK. They will also aim to encourage and support more British companies to export to our target markets and enhance the UK’s reputation abroad.
Efficiency and Reform Group Government Digital Service works to achieve the following objectives; to make transactions between citizens and government simpler, cheaper and easier; to encourage and support more people to use online services; to drive quality and take up of digital public services by making government on the web easier to find and simpler to use; to equip central government to engage with citizens online effectively; and, to foster, across government, a digital culture for the delivery of citizen, business and government focused services. This is supported by the ID Assurance work stream which looks at the provision of a simple, trusted and secure way to access digital public services based on published standards and commissioned services. This most notably looks at protecting personal data from compromise and misuse, and ensures an appropriate level of privacy for the transaction.
The Efficiency and Reform Group supports public sector workers to form their own employee-led organisations, in three key ways: a Mutuals Taskforce convenes key policymakers and experts to drive the changes to policy and process necessary across Whitehall to address the issues that mutuals face; a Pathfinder programme leading the way in forming more mutuals and; the Mutuals Support Programme will support some of the most promising and innovative mutuals so that they reach the point of investment readiness.
Government Innovation Group Open data programme – Improving the transparency and accountability of government and its services.
Office for Civil Society (OCS) v – Project funded by the Office for Civil Society aimed at encouraging volunteering and increasing the number of opportunities for young volunteers. v are an independent charity established by the then government on 8th May 2006.
Strategic Programme - Grants to civil society organisations to enable greater voice and engagement in policy development.
The OCS leads on Social Action making it easier for people to play a more active part in their communities through volunteering and giving and supports the voice of the sector through strategic funding relationships. 6.1 Programme costs analysed by programme (continued)
National Citizen Service (NCS) will help to build a more cohesive, responsible and engaged society by bringing 16 year olds from different backgrounds together in a residential and home-based programme of activity and service during the summer.
The Community Organisers programme is about catalysing community action at a neighbourhood level. Community Organisers will be well-trained and committed individuals who will play a major role in delivering the Big Society. They will work closely with communities to identify local leaders, projects and opportunities, and empower the local community to improve their local area.
The Community First programme encourages more social action in neighbourhoods with significant deprivation and low social capital. Groups, active individuals and communities work with businesses, charities and public authorities, encouraging people to help others and themselves to improve the quality of life locally.
Technical Assistance – specialist support to the voluntary, community and social enterprise sector to enable them to deliver contracts for tackling social problems and to grow the social investment market.
The Advice Services Fund supports not-for-profit advice service providers to ensure that people continue to have access to good quality free advice in their communities.
Youth Policy – During the year cross cutting responsibilities for youth policy transferred from the Department for Education to the Cabinet Office. The Cabinet Office now leads for the Government on: cross government youth strategy and policy co-ordination; management of the statutory duty on Local Authorities for youth provision in their areas; and, strategic relationship management with young people and youth sector organisations on policy development.
## 7. Income
| Note | Departmental Group | Departmental Group | Departmental Group | |------|--------------------|--------------------|--------------------| | | 2013-14 | 2012-13 | Restated | | **Administration** | | | | | Civil Service Pensions | | | | | Central management of Principal Civil Service Pension Scheme | 51,937 | 39,146 | | | Royal Mail Statutory Pension Scheme | 188 | 117 | | | Transactional Shared Services | 7.1 | 29,838 | - | | Next Generation Shared Services – Single Operating Platform | 2,550 | - | - | | Transfer of shares in AXELOS Limited | 29 | 38,200 | - | | Framework Establishment Fee in respect of Shared Services Connected Limited | 7,500 | - | - | | Services of the Behavioural Insights Team (BIT) | 668 | - | - | | Rental income on freehold properties | 537 | 556 | - | | Next Generation HR | 21,330 | 24,183 | - | | Royalties | 7,699 | 10,275 | - | | Services of the Office of the Parliamentary Counsel | 3,028 | 3,003 | - | | **Other** | | | | | Emergency Planning College events | 41 | 44 | - | | Employee Engagement Programme | 988 | 974 | - | | Media Monitoring Unit | 911 | 958 | - | | Regional News Network | 1,329 | 1,354 | - | | Fillers Marketing | 112 | 147 | - | | Media Planning, Buying and Evaluation | 1,011 | 1,279 | - | | Government Communications | 366 | 280 | - | | Supplier Rebates | 3,498 | 7,031 | - | | ERG Procurement Policy and Capability | 3,002 | 2,880 | - | | ERG Major Projects Team | 367 | 291 | - | | ERG Commercial Portfolio Team | 256 | - | - | | ERG Debt Market Integrator | 250 | - | - | | HR Capability and Talent | 264 | - | - | | Various cost recoveries | 1,804 | 1,876 | - | | EU funding received – transferred to DfID | 5 | 731 | - | | **Total Administration Income** | 178,405 | 94,394 | - | | **Programme** | | | | | National Security Secretariat | | | | | Government Security Zone | 880 | 450 | - | | Iraq Inquiry | 1,222 | 974 | - | | Other | - | 1,175 | - | | **Office for Civil Society** | | | | | Office for Civil Society | 858 | 246 | - | | **Office of the Government CIO & SIRO** | | | | | Public Service Network | 777 | 3,868 | - | | **Dividends** | | | | | Government Procurement Service | 2,641 | 2,615 | - | | Government Digital Service | 1,932 | 879 | - | | Various cost recoveries | 147 | 99 | - | | Grant Repayments | 27 | 953 | - | | Grant income – capital | - | 8,021 | - | | **Non Cash Income** | | | | | Capital Grant in Kind income on donated assets | 8 | 3 | 84 | | **Total Programme Income** | 8,487 | 19,364 | - | | **Other Non Cash Income** | | | | | Income from Associates | 17 | 48,283 | 5,882 | | **Total** | 235,175 | 119,640 | - | 7. Income (continued)
The Cabinet Office is responsible for governance of the Principal Civil Service Pension Scheme (PCSPS), and MyCSP Ltd is responsible for pension administration. Employers participating in the PCSPS pay the Cabinet Office for the cost of pension administration for current employee members. The Cabinet Office is responsible for meeting central costs, including the element of MyCSP costs not covered by the sums paid by employers. These costs are met by income from a charge on Civil Superannuation employer pension contributions.
With effect from 1st April 2012 the Government assumed responsibility for both the Royal Mail Pension Plan deficit and the majority of the plan’s liabilities. This was achieved through the establishment in the Department for Business Innovation and Skills (BIS) of a new unfunded pension scheme - the Royal Mail Statutory Pension Scheme (RMSPS). Responsibility for governance of the RMSPS passed from BIS to the Cabinet Office with effect from 1 April 2013. The Cabinet Office is responsible for meeting the administration costs of the scheme. The income represents charges that the Cabinet Office levies for some specific pension administration services.
Next Generation Shared Services: Single Operating Platform – Development of the Single Oracle Platform for Government. The objective is to reduce the cost to HMG of running multiple Oracle solutions for different Departments by consolidating solutions and achieving a better competitive deal for Oracle licensing, hosting and support that is applicable across the Crown Estate.
Transfer of shares in AXELOS Limited – The Cabinet Office transferred its 51 ‘B’ ordinary shares in AXELOS Limited, an associate, to Capita Business Services Limited, the immediate parent of AXELOS Limited.
Framework Establishment Fee in respect of Shared Services Connected Limited - The purpose of the Framework Establishment Fee is to allow the Cabinet Office to recoup its transaction costs, being the costs of the procurement project team, from Shared Services Connected Limited (SSCL).
Next Generation HR – Civil Service HR (CSHR) is a key part of the Government’s Efficiency and Reform agenda. CSHR involves sharing HR expertise and maximising buying power across the Civil Service in a joined up and effective manner, to deliver a professional and more efficient service. The programme operates on a cost sharing basis across the government departments and agencies participating in the programme.
Royalties This income relates to the sales of products (e.g. publications) and from fees for accreditation and examination of practitioners. The products, e.g. ITIL and PRINCE2, have been developed to support best practice in key areas of project, programme, portfolio and IT service management. The income comes from public and private sector organisations in the UK and overseas. This income stream ceased when the function transferred into AXELOS Limited, an associate; see Note 17.
The Office of the Parliamentary Counsel (OPC) drafts Government Bills for introduction into Parliament, advises on related Parliamentary procedure and drafts or vets subordinate legislation which amends or has a significant impact on primary legislation. They also advise the Government on certain constitutional matters (e.g. Ministerial appointments, elections, Parliamentary and the Royal prerogative). The Cabinet Office provides the funding for approximately 60% of the costs of the OPC, with the balance coming from Departments who use the OPC’s services. The contributions from Departments are based on their usage of the OPC’s services in the previous calendar year.
The Employee Engagement Programme includes the Civil Service People Survey which is an annual survey of staff perceptions across the Civil Service and provides key people metrics to help drive business improvement. The survey is provided by an external contractor, the cost of this plus the cost of the programme team based in the Cabinet Office is fully recharged to the participating Departments and Agencies.
Media Monitoring Unit provides a 24-hour/7 days a week media monitoring and briefing service to No.10 and all other government departments and organisations. This service is funded by annual subscriptions.
Regional News Network provides press office support to government departments and organisations in the regions. This service covers a range of activities including regionalisation of national messaging; proactive placement of stories and case studies in print, broadcast and online media; support for regional events and Ministerial visits; reactive response to media enquiries; drafting and issuing news releases; and ad hoc campaign work. This service is funded via annual subscriptions.
Fillers Marketing – providing a service to government departments/organisations in the delivery of free airtime for public good communications - or Fillers - which carry messages relating to health, safety and welfare issues. This service both manages the marketing and distribution of TV and Radio Fillers to terrestrial, digital and out-of-home TV and radio channels and also reports on their performance. This service is funded by annual subscriptions. 7. Income (continued)
Communications/media planning, media buying management and campaign evaluation involves providing expertise and guidance for government departments/organisations which require early stage communications planning services or support with the implementational media planning and buying process through M4C (the media buying agency). A key service is to support GPS in the management of the M4C contract and to oversee the independent auditing of both domestic and international media. This team also provides advice on campaign evaluation best practice and implementational support in the planning, conducting and commissioning of evaluation projects. This service (including the third party cost of independent media auditing) is funded by a levy on media spend.
Supplier Rebates is income from contractors relating to costs from previous years’ programmes.
ERG Procurement Policy and Capability – Government Procurement Service contribution to the costs of the work of the Commercial Reform Team for the internal development of Government Procurement Service to tackle existing capability issues and to grow capability for development into the future Crown Commercial Service.
EU funding received - transferred to Department for International Development – The Civil Contingencies Secretariat in the Cabinet Office is the National Contact Point for the EU Civil Protection Mechanism, through which the UK applied for grants for co-financing of the transportation of aid to the Philippines following Typhoon Haiyan. The European Union made the grants to CCS (as the National Contact Point), which was then paid to DFID who had arranged transportation of aid to the Philippines.
National Security Secretariat
Government Security Zone - The Cabinet Office makes two annual payments to the Metropolitan Police on behalf of Whitehall Departments for cost of the Whitehall Secure Zone. This income reflects the payments from the various Whitehall Departments to the Cabinet Office.
The Department for International Development (DFID), Ministry of Defence (MOD) and Foreign & Commonwealth Office (FCO) contributed toward the costs of the Iraq Inquiry in 2013-14, 2012-13 and 2011-12.
The aim of the Public Service Network (PSN) programme is to create a network of networks providing secure fixed and mobile communications operating to common standards.
Government Procurement Service - The Cabinet Office receives dividends for its holding in the Government Procurement Service Trading Fund.
7.1 Fees and charges
The analysis below provides details of the services for which a fee is charged. The information is provided for fees and charges purposes, not for IFRS 8 purposes.
The financial objective of Transactional Shared Services:
As a result of various investigations and recommendations relating to the sharing of back office functions across government, an initiative was identified to set up a second Independent Shared Service Centre (ISSC2). The business case demonstrated that the best value for money delivery model for ISSC2 would be an associate partnership between government and a Private Sector Partner. As a first step towards this, on 1 April 2013, accountability for the provision of IT, employee and financial transactional services to other public sector bodies transferred from the Department for Work and Pensions (DWP) until the Shared Services Connected Limited traded from 1 November 2013; see Note 17.
| Transactional Shared Services | £000 | |------------------------------|------| | Full cost of service to other government departments | 29,231 | | Less: Income received | (29,838) | | Net surplus | (607) |
## 8.1 Property, plant and equipment
### Consolidated 2013–14
| £000 | Land | Buildings | Dwellings | Information Technology | Plant & Machinery | Furniture & Fittings | Art & Antiques | Payments on Account & Assets under Construction | Total | |------|------|-----------|-----------|------------------------|------------------|---------------------|----------------|-----------------------------------------------|-------| | **Cost or valuation** | | | | | | | | | | | | At 1 April 2013 | 32,602 | 86,703 | 37,432 | 6,985 | 7,533 | 1,955 | 9,733 | 16,849 | 199,792 | | Additions | 400 | 1,147 | - | 2,197 | 52 | 1,464 | 30 | 19,495 | 24,785 | | Donations | - | - | - | - | - | - | 3 | - | 3 | | Disposals<sup>1</sup> | - | - | - | (2,772) | (4,571) | (359) | - | - | (7,702) | | Impairment<sup>2</sup> | - | (4,603) | (74) | (223) | (620) | - | (17) | - | (5,537) | | Reclassifications | - | 15,485 | (313) | 304 | - | - | - | (15,476) | - | | Revaluations | 7,485 | (5,781) | (464) | (59) | (57) | (59) | 134 | - | 1,199 | | **At 31 March 2014** | 40,487 | 92,951 | 36,581 | 6,432 | 2,337 | 3,001 | 9,883 | 20,868 | 212,540 | | **Depreciation** | | | | | | | | | | | At 1 April 2013 | - | 19,488 | 5,036 | 5,148 | 6,595 | 1,432 | - | - | 37,699 | | Donations | - | - | - | - | - | - | - | - | - | | Charged in year | - | 2,811 | 1,223 | 956 | 340 | 127 | - | - | 5,457 | | Disposals<sup>1</sup> | - | - | - | (2,772) | (4,571) | (359) | - | - | (7,702) | | Impairment<sup>2</sup> | - | (91) | - | (147) | (341) | - | - | - | (579) | | Reclassifications | - | - | - | - | - | - | - | - | - | | Revaluations | - | (421) | (40) | (31) | (42) | (36) | - | - | (570) | | **At 31 March 2014** | - | 21,787 | 6,219 | 3,154 | 1,981 | 1,164 | - | - | 34,305 | | **Carrying amount at 31 March 2014** | 40,487 | 71,164 | 30,362 | 3,278 | 356 | 1,837 | 9,883 | 20,868 | 178,235 |
### Asset financing:
| | Owned | PFI Finance Leased | PFI Residual Assets | Total | |---|---|---|---|---| | **Carrying amount at 31 March 2013** | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 | | **Carrying amount at 31 March 2014** | 40,487 | 71,164 | 30,362 | 3,278 | 356 | 1,837 | 9,883 | 20,868 | 178,235 |
### Of the total:
| | Department | NDPBs | Total | |---|---|---|---| | **Carrying amount at 31 March 2014** | 40,487 | 71,164 | 30,362 | 3,278 | 356 | 1,837 | 9,883 | 20,868 | 178,235 |
<sup>1</sup> Disposals include retired assets; their values are fully written down and they are no longer in use
<sup>2</sup> Revaluations arise as a result of professional property valuations, the application of published indices and annual impairment reviews which ensure the asset base is correctly valued
### 8.2 Property, plant and equipment
#### Consolidated 2012–13
| 2000 | Land | Buildings | Dwellings | Information Technology | Plant & Machinery | Furniture & Fittings | Art & Antiques | Payments on Account & Assets under Construction | Total | |------|------|-----------|-----------|------------------------|------------------|---------------------|----------------|-----------------------------------------------|-------| | **Cost or valuation** | | | | | | | | | | | At 1 April 2012 | 37,559 | 107,291 | 27,260 | 13,219 | 7,648 | 1,870 | 10,583 | 8,795 | 214,225 | | Additions | - | 892 | - | 716 | - | - | - | - | 9,460 | | Donations | - | - | - | - | - | - | - | - | 84 | | Disposals | - | (741) | - | (5,900) | (75) | (26) | (58) | - | (6,800) | | Impairment | - | (1,067) | - | (1,436) | (13) | (3) | (876) | (15) | (3,410) | | Reclassifications | - | 846 | 417 | - | - | 149 | - | (1,391) | 21 | | Revaluations | 5,966 | 155 | 10,067 | 386 | (27) | (35) | - | - | 16,512 | | Transfer to Investment Properties | (10,923) | (20,673) | (312) | - | - | - | - | - | (31,908) | | **At 31 March 2013** | 32,602 | 86,703 | 37,432 | 6,985 | 7,533 | 1,955 | 9,733 | 16,849 | 199,792 | | **Depreciation** | | | | | | | | | | | At 1 April 2012 | - | 19,788 | 2,489 | 8,637 | 6,117 | 1,337 | - | - | 38,368 | | Donations | - | - | - | - | - | - | - | - | - | | Charged in year | - | 2,009 | 1,386 | 1,935 | 522 | 140 | - | - | 5,992 | | Disposals | - | (740) | - | (5,790) | (67) | (23) | - | - | (6,620) | | Impairment | - | - | 211 | (8) | - | - | - | - | 203 | | Reclassifications | - | - | 48 | - | - | - | - | - | 48 | | Revaluations | - | 30 | 1,208 | 107 | 31 | (22) | - | - | 1,354 | | Transfer to Investment Properties | - | (1,599) | (47) | - | - | - | - | - | (1,646) | | **At 31 March 2013** | - | 19,488 | 5,036 | 5,148 | 6,595 | 1,432 | - | - | 37,699 | | **Carrying amount at 31 March 2013** | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 | | **Carrying amount at 31 March 2012** | 37,559 | 87,503 | 24,771 | 4,582 | 1,531 | 533 | 10,583 | 8,795 | 175,857 | | **Asset financing:** | | | | | | | | | | | Owned | 29,302 | 57,047 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 148,625 | | PFI Finance Leased | - | 2,926 | - | - | - | - | - | - | 2,926 | | PFI Contract Assets | - | - | - | - | - | - | - | - | - | | PFI Residual Assets | 3,300 | 7,242 | - | - | - | - | - | - | 10,542 | | **Carrying amount at 31 March 2013** | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 | | **Of the total:** | | | | | | | | | | | Department | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 | | NDPBs | - | - | - | - | - | - | - | - | - | | **Carrying amount at 31 March 2013** | 32,602 | 67,215 | 32,396 | 1,837 | 938 | 523 | 9,733 | 16,849 | 162,093 |
1 Disposals include assets written out of the accounts; their values are fully written down and they are no longer in use 2 Revaluations arise as a result of professional property valuations, the application of published indices and annual impairment reviews which ensure the asset base is correctly valued 3 Admiralty Arch and Sunningdale Park were recognised as investment properties; see Note 9 8. Property, plant and equipment (continued)
Valuation
Land and Buildings The Valuation Office Agency has determined fair value on the basis of market value but on the assumption that the property is sold as part of the continuing enterprise in occupation. For ‘in use’ non-specialised property assets, fair value has been interpreted as market value for existing use.
The Valuation Office Agency (VOA), independent chartered surveyors and members of the Royal Institute of Chartered Surveyors (RICS), valued all properties on the basis of fair value as at 31 March 2014 except for 10-12 Downing Street which was valued at 31 March 2013. Due to the unusual nature of the size, location and property category the valuation of 10-12 Downing Street is subject to valuation uncertainty.
Sunningdale Park The Valuation Office Agency valued Sunningdale Park, Ascot, Berkshire, as at 31 March 2014 on the basis of total worth in existing use reflecting the infrastructure. A breakdown of the carrying value of assets under the PFI contract is detailed at Note 15. Sunningdale Park is revalued every three years.
Art and Antiques Townley Valuation Services Limited valued art and antiques, including furniture, carpets, clocks, silver and ceramics situated in properties within the Whitehall Estate in January 2011 on the basis of insurance value being the likely cost of replacing the items.
Rosebery’s Auctioneers & Valuers valued art and antiques, including antique and other furniture, silver, plate and objects situated at The Hawkills, Easingwold, near York in February 2010 at an average of the lower and higher figures of a presale auction estimate.
Included within Art and Antiques are gifts to past and present Prime Ministers. These were valued by J. M. McCarthy Limited, jewellers and silversmiths in March 2010 on the basis of best estimate of the price at auction.
All Other Tangible Non-Heritage Assets All other tangible non-heritage fixed assets are re-valued annually using indices provided by the Office of National Statistics.
Assets under construction
Assets under construction of £20.868 million (2012-13: £16.849 million) include:
£14.252 million (2012-13: £13.795 million) spent on refurbishment to Whitehall properties which has yet to be completed; and
£6.616 million (2012-13: £3.054 million) spent on IT hardware and software developments which have yet to be completed.
Leasehold improvements
Included within Land and Buildings are improvements with a carrying amount of £0.662 million (2012-13: £0.715 million) relating to a leasehold property in London at 35 Great Smith Street.
## 9. Investment Properties
| £000 | Note | 2013-14 | 2012-13 | |---------------|------|---------|---------| | | | Admiralty Arch | Sunningdale Park | Total | Admiralty Arch | Sunningdale Park | Total | | Cost at 1 April | 60,000 | 2,265 | 62,265 | - | - | - | - | | Additions | - | - | - | - | - | - | - | | Accruals | - | - | - | - | - | - | - | | Disposals | - | - | - | - | - | - | - | | Impairment | - | - | - | - | - | - | - | | Transferred from Property, Plant and Equipment | 8.2 | - | - | - | 28,129 | 2,133 | 30,262 | | Revaluation | 6 | - | 23 | 23 | 31,871 | 132 | 32,003 | | Reclassified as held for sale | 20 | (60,000) | - | (60,000) | - | - | - | | Balance at 31 March | - | 2,288 | 2,288 | 60,000 | 2,265 | 62,265 |
### Admiralty Arch
The Department has freehold ownership of Admiralty Arch which became vacant on 10 August 2012 from when it was recognised as an investment property. The Department reclassified this asset as held for sale as at 31 March 2014; see Note 20.
### Sunningdale Park
Following the closure of the National School of Government on 31 March 2012, the Department retained freehold of the site at Sunningdale Park and recognised it as an investment property from 1 April 2012. Sunningdale Park is recognised at fair value which equates to market value for existing use of £2.288 million (2012-13: £2.265 million).
## 10.1 Intangible assets
### Consolidated 2013-14
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Cost or valuation**¹ | | | | | | | | At 1 April 2013 | 1,147 | 4,453 | 154 | 7,038 | 22 | 12,814 | | Additions | (6)² | 705 | - | 437 | 598 | 1,734 | | Allowances purchased | - | - | 75 | - | - | 75 | | Disposals | (330) | (1,636) | (17) | (234) | - | (2,217) | | Impairment | (772) | (1,766) | - | (3,019) | - | (5,557) | | Reclassifications | - | - | - | (288) | 288 | - | | Revaluations | - | 7 | - | 84 | - | 91 | | **At 31 March 2014** | 39 | 1,763 | 212 | 4,018 | 908 | 6,940 |
### Amortisation
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Amortisation** | | | | | | | | At 1 April 2013 | 455 | 2,979 | 77 | 3,113 | - | 6,624 | | Charged in year | 9 | 191 | - | 1,110 | - | 1,310 | | Disposals | (330) | (1,636) | - | (234) | - | (2,200) | | Allowances surrendered | - | - | - | - | - | - | | Impairment | (108) | (951) | - | (2,349) | - | (3,408) | | Reclassifications | - | - | - | - | - | - | | Revaluations | - | 1 | - | 13 | - | 14 | | **At 31 March 2014** | 26 | 584 | 77 | 1,653 | - | 2,340 |
### Carrying amount at 31 March 2014
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Carrying amount at 31 March 2014** | 13 | 1,179 | 135 | 2,365 | 908 | 4,600 |
### Carrying amount at 31 March 2013
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Carrying amount at 31 March 2013** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 |
### Asset financing:
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Owned** | 13 | 1,179 | 135 | 2,365 | 908 | 4,600 |
### Of the total:
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Department** | 13 | 1,179 | 135 | 2,365 | 908 | 4,600 | | **NDPBs** | - | - | - | - | - | - | | **Carrying amount at 31 March 2014** | 13 | 1,179 | 135 | 2,365 | 908 | 4,600 |
¹ Purchased software licences are recorded at purchase cost and are not re-valued since an appropriate index is not available ² The negative amount of £6,000 under Purchased Software Licence Additions relates to a reversal of a 2012-13 accrual incorrectly raised against additions
## 10.2 Intangible assets
### Consolidated 2012-13
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Cost or valuation**¹ | | | | | | | | At 1 April 2012 | 1,396 | 4,826 | - | 3,168 | 506 | 9,896 | | Additions | 87 | 299 | - | 3,453 | 9 | 3,798 | | Allowances purchased | - | - | 154 | - | - | 154 | | Disposals² | (275) | (857) | - | - | - | (1,132) | | Impairment | (58) | (23) | - | - | (32) | (113) | | Reclassifications | - | - | - | 440 | (461) | (21) | | Revaluations | (3) | 208 | - | 27 | - | 232 | | **At 31 March 2013** | 1,147 | 4,453 | 154 | 7,038 | 22 | 12,814 |
### Amortisation
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **At 1 April 2012** | 640 | 2,927 | - | 1,923 | - | 5,490 | | Charged in year | 195 | 640 | - | 1,182 | - | 2,017 | | Disposals | (275) | (857) | - | - | - | (1,132) | | Allowances surrendered | - | - | 77 | - | - | 77 | | Impairment | - | 9 | - | - | - | 9 | | Reclassifications | (48) | - | - | - | - | (48) | | Revaluations | (57) | 260 | - | 8 | - | 211 | | **At 31 March 2013** | 455 | 2,979 | 77 | 3,113 | - | 6,624 |
### Carrying amount at 31 March 2013
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Carrying amount at 31 March 2013** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 |
### Asset financing:
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Owned** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 | | **Carrying amount at 31 March 2013** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 |
### Of the total:
| £000 | Purchased Software Licences | IT Software | Carbon Reduction Commitment | Website | Payments on Account & Assets under Construction | Total | |------|-----------------------------|-------------|-----------------------------|---------|-----------------------------------------------|-------| | | | | | | | | | **Department** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 | | **NDPBs** | - | - | - | - | - | - | | **Carrying amount at 31 March 2013** | 692 | 1,474 | 77 | 3,925 | 22 | 6,190 |
¹ Purchased software licences are recorded at purchase cost and are not re-valued since an appropriate index is not available
² Intangible assets at Sunningdale Park were reduced to nil from their carrying value as a result of the closure of National School of Government 11. Impairments
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Charged to Statement of Comprehensive Net Expenditure | Note | | | Impairment – PPE and Intangible assets | 5, 6 | 7,107 | 3,735 | | Impairment on loans | 6 | 109 | 159 | | | | 7,216 | 3,894 | | Devaluation of assets | 6 | (137) | 811 | | Taken through revaluation reserve | | 6,349 | 69 | | Total | | 13,428 | 4,774 |
12. Capital commitments
The Department has entered into non-cancellable contracts (which are not leases or PFI contracts) for capital goods and services.
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Contracted capital commitments at 31 March for which no provision has been made and not otherwise included in these financial statements | | | | Property, plant and equipment | | 10 | 279 | | Intangible assets | | 76 | 12 | | Total | | 86 | 291 |
13. Other financial commitments
The Department has entered into contracts (which are not leases or PFI contracts) for a range of services. The commitments of greatest value relate to information technology, estate management services and contracts relating to investments in the voluntary and community sector. The total payments to which the Department is committed, analysed by the period during which the payments will be made are as follows:
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Not later than one year | | 78,962 | 49,260 | | Later than one year and not later than five years | | 118,020 | 53,095 | | Later than five years | | - | 6,944 | | Total | | 196,982 | 109,299 | 14. Commitments under leases
14.1 Operating leases
Total future minimum lease payments under operating leases are given in the table below, analysed according to the period in which payments will be made:
| | 2013-14 | 2012-13 | |----------------------|---------|---------| | | Departmental Group | Departmental Group | | Obligations under operating leases for the following periods comprise: | | | | Land and Buildings | | | | Not later than one year | 15,616 | 17,282 | | Later than one year and not later than five years | 55,336 | 61,003 | | Later than five years | 29,587 | 54,126 | | | 100,539 | 132,411 | | Other | | | | Not later than one year | - | 3 | | Later than one year and not later than five years | - | - | | Later than five years | - | - | | | - | 3 | | Total | 100,539 | 132,414 |
14.2 Finance leases
There are no obligations under finance leases.
15. Commitments under PFI contracts
15.1 On-Statement of Financial Position
Fujitsu Services Ltd
The provision of Information and Communications Technology (ICT) services to the Cabinet Office included certain infrastructure assets for use in delivering public services that fall within the scope of IFRIC 12 service concession arrangements.
In June 2007 the Cabinet Office entered into a contract with Fujitsu Services Limited (FSL) for the provision of Information and Communications Technology (ICT) services over a 5 year term until June 2012. The contract terminated in June 2012. The services included the provision of IT equipment throughout the life of the contract. Those assets provided on an exclusive basis were recognised as property, plant and equipment at the time they were brought into use.
The total amount charged in the Statement of Comprehensive Net Expenditure in respect of the Fujitsu ICT contract was £Nil (2012-13: £2.418m). See Note 6.
The contract with Fujitsu expired on 30th June 2012. The Department now receives ICT services through HM Treasury under a memorandum of understanding.
Sunningdale Park site
Although the National School of Government closed on 31 March 2012, Cabinet Office has retained the site at Sunningdale Park for the present and is examining how the existing facilities can best be utilised going forwards. The site is operated under a PFI contract with a term of 30 years from 13 May 2002. The National School gave a lease to the private sector partner for the office buildings against which subleases were granted to the National School for their continuing use. This asset was recognised as property, plant and equipment at a carrying value of £2.133 million at 31 March 2012. The asset was reclassified as an investment property on 1 April 2012. Its carrying value at 31 March 2014 is £2.288 million (2012-13: £2.265 million). See Note 9.
The National School also gave a lease for the rest of the site upon which the private sector partner has undertaken an initial capital investment of £12 million in new training facilities.
As a consequence of these agreements:
**Deferred asset**
A pre-payment was established for the fair value of the property which was contributed to the scheme at the commencement of the contract. This deferred asset is recognised as property, plant and equipment and written off over 15 years. Its value at 31 March 2014 is £2.195 million (2012-13: £2.926 million); see Note 8.
**Reversionary interest**
A further asset is recognised for the Department’s residual interest in the training facilities which revert to the Cabinet Office at no cost at the end of the contract. The accruing residual interest, built up over the term of the contract by capitalising part of the contract payments, is recognised as property, plant and equipment. Additional interest accrued in 2013-14 was £1.070 million (2012-13: £Nil). The value of the residual interest at 31 March 2014 is £11.612 million (2012-13: £10.542 million).
Whilst these two individual transactions reflect the underlying contractual arrangements, the Cabinet Office retains ownership of the training facilities throughout the period of the contract, the value of which at 31 March 2014 is reflected in the combined carrying value of the deferred asset and reversionary interest - recognised as property, plant and equipment - of £13.807 million (2012-13: £13.468 million); see Note 8.
**Combined Value**
The combined carrying value of the office buildings and training facilities is £16.095 million (2012-13: £15.733 million). This is the sum of the Dwellings balances and Land and Buildings balances in Note 8 Property, Plant and Equipment and Note 9 Investment Properties.
**Charge to the Statement of Comprehensive Net Expenditure and future commitments**
**Sunningdale Park site**
The total amount charged in the Statement of Comprehensive Net Expenditure in respect of PFI transactions was £968,485 (2012-13: £2,242,597) as disclosed at Note 5. The payments to which the Department was committed during 2013-14, analysed by the period during which the commitment expires, are as follows:
| | 2013-14 | 2012-13 Restated¹ | |----------------------|---------|-------------------| | | Departmental Group | Departmental Group | | Not later than one year | 2,087 | 2,038 | | Later than one year and not later than five years | 4,616 | 6,570 | | Total | 6,703 | 8,608 |
¹ The 2012-13 figures have been restated to remove the office accommodation charge which formed part of the original guaranteed payments schedule to 2017. This commitment ceased when the National School of Government closed and no longer occupied the site at Sunningdale Park. 16. Loan commitments – Bridges Social Entrepreneurs Fund LP
The Cabinet Office has the following loan commitments to the Bridges Social Entrepreneurs Fund LP as at 31 March 2014:
| £000 | 2013-14 | 2012-13 | |---------------------------|---------|---------| | Total loan commitment | 3,910 | 3,910 | | Less: Capital and loan drawn down | (2,631) | (1,693) | | Total undrawn commitment | 1,279 | 2,217 |
Analysis of undrawn commitment
| Total loan commitment | 3,910 | |-----------------------|-------| | Loan made in 2009-10 | (662) | | Loan made in 2010-11 | (244) | | Loan made in 2011-12 | (343) | | Loan made in 2012-13 | 19 | | Loan made in 2013-14 | 19 | | Total undrawn commitment | 1,279 |
Bridges Social Entrepreneurs Fund LP is constituted under a Limited Partnership Agreement dated 21 August 2009 and is managed by Bridges Ventures LLP. The Fund invests in social enterprises that have the potential to generate scaleable and sustainable social impacts. The Fund currently has a committed capital of £11.75 million and has a life of 10 years (ending on 27 August 2019) unless terminated earlier in certain circumstances specified in the Limited Partnership Agreement.
The Department originally agreed to invest up to £5 million in the Bridges Social Entrepreneurs Fund LP, by match funding the investment that the Fund Manager secures from private investors. The Cabinet Office increased its commitment from £3,640,534 to £3,909,748 for the lifetime of the Fund, which in accordance with the terms set in the Limited Partnership Agreement denotes the Department’s commitment as at 31 March 2010 to be £3,909,748, constituting a 33.27% share of the Fund. This commitment level has now been fixed.
The investment period for the remaining drawdown is currently estimated to end in 2016, but may be extended at the discretion of Bridges Ventures LLP subject to an Investors Ordinary Consent. The investments in the Bridges Social Entrepreneurs Fund LP are valued by the Fund Manager using the International Private Equity and Venture Capital Valuation (IPEV) Guidelines. See Notes 19 and 29.
For further information see www.bridgesventures.com 17. Investments in Associates
| £000 | MyCSP Limited | Shared Services Connected Limited | AXELOS Limited | Behavioural Insights Team Limited | Total | |------|---------------|----------------------------------|----------------|----------------------------------|-------| | Cost or valuation¹ | Note | | | | | | At 1 April 2012 | - | - | - | - | - | | Acquisitions | - | - | - | - | - | | Disposals | - | - | - | - | - | | Share of opening net assets | 7 | 5,412 | - | - | 5,412 | | Dividend received | - | - | - | - | - | | Share of results | 7 | 470 | - | - | 470 | | Impairment in value | - | - | - | - | - | | At 31 March 2013 | 5,882 | - | - | - | 5,882 | | Acquisitions | - | - | - | - | - | | Disposals | - | - | - | - | - | | Share of opening net assets | 7 | 7,500 | 36,720 | - | 44,220 | | Dividend received | (470) | - | - | - | (470) | | Share of results | 7 | 1,955 | 436 | 1,672 | 4,063 | | Impairment in value | - | - | - | - | - | | At 31 March 2014 | 7,367 | 7,936 | 38,392 | - | 53,695 |
The Department accounts for its investments in associates using the equity method in accordance with IAS 28 Investments in Associates.
**MyCSP Limited**
The Department has a 35% equity shareholding in MyCSP Limited which administers civil service pensions, injury benefit claims and compensation awards for 1.5 million public and private sector employees.
The Government established MyCSP Limited as a private limited company with three minority shareholders: Paymaster (1836) Limited with a 40% equity stake, the Cabinet Office with a 35% equity stake and an Employee Benefit Trust with a 25% equity stake. It began trading on 1 May 2012. There has been no change in the Department’s ownership for the reported year. For additional information, see Notes 7 and 29.
MyCSP Limited has prepared its accounts on a UKGAAP basis. There are no material differences between this and an IFRS basis of preparation and therefore no adjustments have been required.
The reporting date of MyCSP Limited’s financial statements is 31 March and will be available at MyCSP Limited.
**Shared Services Connected Limited**
The Department has a 25% equity shareholding in Shared Services Connected Limited (SSCL) which provides Business Process Outsourcing services.
The Government established SSCL as a private limited company with two shareholders: Steria Limited with a 75% equity stake and the Cabinet Office with a 25% equity stake. It began trading on 1 November 2013. There has been no change in the Department’s ownership for the reported year. For additional information, see Notes 7 and 29.
SSCL has prepared its accounts on a UKGAAP basis. There are no material differences between this and an IFRS basis of preparation and therefore no adjustments have been required.
The reporting date of SSCL’s financial statements is 31 December, the same date as its major shareholder and ultimate controlling entity. When applying the equity method of accounting, SSCL 2013 financial statements have been used and adjustments have been made for the effects of transactions between 31 December and 31 March.
SSCL’s published accounts may be found at Shared Services Connected Limited 2013 Report and Accounts
**AXELOS Limited**
The Department has a 49% equity shareholding in AXELOS Limited which manages and develops intellectual property around best management practice methodologies and frameworks.
The Government established AXELOS Limited as a private limited company with two shareholders: Capita Business Services Limited with a 51% equity stake and the Cabinet Office with a 49% equity stake. It began trading on 1 January 2014. There has been no change in the Department’s ownership for the reported year. For additional information, see Notes 7 and 29.
AXELOS Limited has prepared its accounts on a UKGAAP basis. There are no material differences between this and an IFRS basis of preparation and therefore no adjustments have been required.
The reporting date of AXELOS Limited’s financial statements is 31 December, the same date as its major shareholder and immediate parent undertaking. When applying the equity method of accounting, AXELOS Limited’s 2013 financial statements have been used and adjustments have been made for the effects of transactions between 31 December and 31 March.
AXELOS Limited published accounts may be found at Axels Limited Directors’ Report and Financial Statements to 31 December 2013
**Behavioural Insights Team Limited**
The Department has a 35% equity shareholding share in Behavioural Insights Team Limited (BIT) which applies insights from behavioural sciences to tackle public policy problems.
The Government established BIT Limited as a private limited company with the following shareholders: NESTA with a 30% equity stake, employees with 35% equity stake and the Cabinet Office with a 35% equity stake. It began trading on 4 February 2014.
BIT Limited will prepare its first published accounts for the 14 month period from 4 February 2014 to 31 March 2015 and consequently Cabinet Office has not recognised its share of this associate’s net assets in 2013-14. 18. Financial instruments
As the cash requirements of the Department are met through the Estimates process, financial instruments play a more limited role in creating and managing risk than would apply to a non-public sector body of a similar size. The majority of financial instruments relate to contracts to buy non-financial items in line with the Department’s expected purchase and usage requirements and the Department is therefore exposed to little credit, liquidity or market risk.
The Department’s investment in the Bridges Social Entrepreneurs Fund LP subjects the Department to credit and market risks. The Cabinet Office appointed Capital for Enterprise Limited (CfEL), an asset management business, to assist in the establishment of the Fund. The loans issued to the Bridges Social Entrepreneurs Fund LP are invested as part of an investment portfolio to deliver both financial returns and social and environmental benefits. The disposal of an investment by the Fund may differ from its valuation and the difference could be significant. The loans are subject to an annual impairment review which is carried out by Bridges Ventures Ltd. See Notes 11 and 19.
The Department holds public dividend capital in the Government Procurement Service. This financial asset is carried at historical cost less any impairment recognised. Information on the Government Procurement Service, a body outside the departmental boundary, is included at Note 19 and 30.
19. Other financial assets
The Core Department holds investments which include loans to the Bridges Social Entrepreneurs Fund LP which invests in social enterprises and public dividend capital held in the Government Procurement Service.
| £000 | Public Dividend Capital | Loans | Total | |------|-------------------------|-------|-------| | | | | | | Balance at 1 April 2012 | 350 | 1,073 | 1,423 | | Additions | 16 | - | 444 | 444 | | Impairment | - | (159) | (159) | | Loan repayments | - | (20) | (20) | | **Balance at 31 March 2013** | 350 | 1,338 | 1,688 | | Additions | 16 | - | 938 | 938 | | Impairment | - | (109) | (109) | | Loan repayments | - | (389) | (389) | | **Balance at 31 March 2014** | 350 | 1,778 | 2,128 |
Of which at 31 March 2014
| Current liability | - | - | - | | Non current liability | 350 | 1,778 | 2,128 | | **Balance at 31 March 2014** | 350 | 1,778 | 2,128 |
Of which at 31 March 2013
| Current liability | - | 284 | 284 | | Non current liability | 350 | 1,054 | 1,404 | | **Balance at 31 March 2013** | 350 | 1,338 | 1,688 |
1 The balance of the loan of £0.284 million made to LHA London Ltd was repaid during 2013-14. For information on loan commitments, see Notes 16 and 29. The Department’s share of the assets and results of the Bridges Social Entrepreneurs Fund LP is as summarised below:
| £000 | Bridges Social Entrepreneurs Fund Loan | |------|---------------------------------------| | | | | Net assets at 31 March 2013 | 1,054 | | Turnover | - | | Surplus for the year (before financing) | - | | Net assets at 31 March 2014 | 1,778 | | Turnover | - | | Surplus for the year (before financing) | - |
2 The Department holds a 33.27% share of the total net assets and partnership funds amounting to £1,778,037
**Government Procurement Service**
In accordance with the FReM, the Cabinet Office’s investment in the Government Procurement Service is shown at its historical cost. The published accounts can be found at Government Procurement Service Annual Report and Accounts. A dividend of £2.641 million (2012-13: £2.615 million) is payable for the year ended 31 March 2014; see Notes 7 and 30.
**20. Assets held for sale**
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | | Note | Land and buildings | 9 | 60,000 | 44,145 | | | Disposal | 6 | - | (44,145) | | Total carrying amount | 60,000 | - |
**Admiralty Arch**
The Department has sold Admiralty Arch on a long lease subject to the developer meeting certain conditions and considers it highly probable that the disposal will be completed within 12 months. Admiralty Arch is recognised at fair value as determined within an agreement between the Department and the developer. Further information on estate management strategy may be found within the Director’s Report.
**21. Trade receivables, financial and other assets**
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | | Current – Amounts falling due within one year | VAT | 6,019 | 2,589 | | | Trade receivables | 16,017 | 37,167 | | | Deposits and advances | 911 | 717 | | | Advances to Returning Officers - Elections | 665 | 780 | | | Other receivables | 480 | 263 | | | Prepayments and accrued income | 18,669 | 12,924 | | | Deferred consideration from Capita Business Services Limited | 9,400 | - | | | | 52,161 | 54,440 | | | Non-current – Amounts falling due after more than one year | Deferred consideration from Capita Business Services Limited | 16,450 | - | | | | 16,450 | - | | | Total | 68,611 | 54,440 |
1 Cabinet Office transferred its 51 ‘B’ Ordinary shares in AXELOS Limited to AXELOS’ immediate parent, Capita Business Services Limited (CBSL), in return for consideration of £38.2 million; see Note 7 Income. CBSL has deferred payment of £25.850 million to be paid in 33 equal monthly instalments between April 2014 and December 2016. Trade receivables are non-interest bearing and are generally on 30 days’ terms and are shown net of a provision for impairment. Movements in the provision for impairment of receivables were as follows:
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | At 1 April | | | | Charge for the year | 679 | 1,050 | | Amounts written off | 250 | 246 | | Unused amounts reversed | (290) | (617) | | At 31 March | 639 | 679 |
The analysis of trade receivables that were past due but not impaired is as follows:
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Neither past due nor impaired | 12,454 | 28,077 | | Past due but not impaired | | | | < 30 days | 667 | 925 | | 30 – 60 days | 110 | 543 | | 60 – 90 days | 197 | 2,507 | | 90 – 120 days | 431 | 77 | | > 120 days | 2,797 | 5,717 | | At 31 March | 16,656 | 37,846 |
21.1 Intra-government balances
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | Current – Amounts falling due within one year | | | | Balances with other central government bodies | 28,285 | 31,498 | | Balances with local authorities | 335 | 772 | | Balances with NHS Bodies | - | 96 | | Balances with public corporations and trading funds | 198 | 62 | | Subtotal: intra-government balances | 28,818 | 32,428 | | Balances with bodies external to government | 23,343 | 22,012 | | Total | 52,161 | 54,440 |
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | Non-current – Amounts falling due within one year | | | | Balances with other central government bodies | - | - | | Balances with local authorities | - | - | | Balances with NHS Bodies | - | - | | Balances with public corporations and trading funds | - | - | | Subtotal: intra-government balances | - | - | | Balances with bodies external to government | 16,450 | - | | Total | 16,450 | - |
### 22. Cash and cash equivalents
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | Balance at 1 April | 7,093 | 38,978 | | Net change in cash and cash equivalent balances | 15,553 | (31,885) | | Balance at 31 March | 22,646 | 7,093 |
The following balances at 31 March were held at:
- Government Banking Service - Supply: 21,806 (2012-13: 5,312)
- Government Banking Service - Consolidated Fund Standing Services – UK Parliamentary By-elections: 840 (2012-13: 1,666)
- Commercial banks and cash in hand - Supply: - (2012-13: 115)
The cash balance includes an amount of £840,356 (2012-13: £1,666,296) in respect of the funding advanced from the Consolidated Fund to cover the costs of UK Parliamentary By-elections with the agreement of HM Treasury. This balance is held with the Government Banking Service. It is owned by the Cabinet Office but managed by the Election Claims Unit in the Department for Communities and Local Government.
### 23. Trade payables and other liabilities
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | Current – Amounts falling due within one year | | | | Other taxation and social security | 3,178 | 2,881 | | Trade payables | 9,720 | 37,605 | | Other payables | 2,414 | 2,088 | | Accruals and deferred income | 61,861 | 45,127 | | Accruals relating to Consolidated Fund Standing Services – UK Parliamentary By-elections | 1,505 | 2,360 | | Accruals – termination benefits | - | 27 | | Amounts issued from the Consolidated Fund for supply but not spent at year end | 21,806 | 5,426 | | Non voted receipts surrenderable to the Consolidated Fund - Elections | - | 86 | | Total | 100,484 | 95,600 |
#### 23.1 Intra-government balances
| £000 | As at 31 March 2014 | As at 31 March 2013 | |------|---------------------|---------------------| | | Departmental Group | Departmental Group | | Current – Amounts falling due within one year | | | | Balances with other central government bodies | 49,179 | 52,242 | | Balances with local authorities | 715 | 494 | | Balances with NHS Bodies | 65 | 3 | | Balances with public corporations and trading funds | 31 | 605 | | Subtotal: intra-government balances | 49,990 | 53,344 | | Balances with bodies external to government | 50,494 | 42,256 | | Total | 100,484 | 95,600 |
### 24. Provisions for liabilities and charges
| £000 | Early Departures | Specific Dilapidations | Onerous Contracts | Total | |------|------------------|------------------------|-------------------|-------| | | Departmental Group | Departmental Group | Departmental Group | Departmental Group | | **Balance at 1 April 2012** | | | | | | Provided in the year | 210 | - | 910 | 1,120 | | Provisions not required written back | (171) | (655) | (474) | (1,300) | | Provisions utilised in the year | (1,469) | (600) | (1,993) | (4,062) | | Borrowing costs (unwinding of discounts) | 113 | - | (482) | (369) | | **Total** | 4,803 | 7,215 | 5,306 | 17,324 | | **Balance at 31 March 2013** | | | | | | Provided in the year | 121 | - | 5 | 126 | | Provisions not required written back | (91) | (1,191) | (2,019) | (3,301) | | Provisions utilised in the year | (1,159) | - | (262) | (1,421) | | Borrowing costs (unwinding of discounts) | 74 | - | 332 | 406 | | **Total** | 3,486 | 5,960 | 3,267 | 12,713 | | **Balance at 31 March 2014** | | | | | | Provided in the year | 1,145 | 407 | 332 | 1,884 | | Non current liability | 2,341 | 5,553 | 2,935 | 10,829 | | **Total** | 2,431 | 4,769 | 1,323 | 8,523 |
Of which:
- Current liability
- Non current liability
| £000 | Early Departures | Specific Dilapidations | Onerous Contracts | Total | |------|------------------|------------------------|-------------------|-------| | | Departmental Group | Departmental Group | Departmental Group | Departmental Group | | **Balance at 31 March 2013** | | | | | | Provided in the year | 1,145 | 407 | 332 | 1,884 | | Non current liability | 2,341 | 5,553 | 2,935 | 10,829 | | **Total** | 3,486 | 5,960 | 3,267 | 12,713 |
Analysis of expected timing of discounted flows
| £000 | Early Departures | Specific Dilapidations | Onerous Contracts | Total | |------|------------------|------------------------|-------------------|-------| | | Departmental Group | Departmental Group | Departmental Group | Departmental Group | | **Not later than one year** | | | | | | **Later than one year and not later than five years** | | | | | | **Later than five years** | | | | | | **Balance at 31 March 2014** | | | | |
Analysis of expected timing of discounted flows
| £000 | Early Departures | Specific Dilapidations | Onerous Contracts | Total | |------|------------------|------------------------|-------------------|-------| | | Departmental Group | Departmental Group | Departmental Group | Departmental Group | | **Not later than one year** | | | | | | **Later than one year and not later than five years** | | | | | | **Later than five years** | | | | | | **Balance at 31 March 2013** | | | | | 24. Provisions for liabilities and charges (continued)
24.1 Early departures
The Core Department meets the additional costs of benefits beyond the normal Principal Civil Service Pension Scheme (PCSPS) benefits in respect of employees who retire early by paying the required amounts annually to the PCSPS over the period between early departure and normal retirement date. The Department provides for early departure costs when the early retirement programme becomes binding on the Department. Payments are made monthly and it is anticipated that all payments will have been made against the provision by 2020-21.
During the year 2013-14 there were no new cases of early departures, although top ups of £0.121 million were made to the existing provisions. Those early exit packages whose costs have been accrued in year are disclosed at Note 4.
24.2 Specific dilapidations
A specific dilapidation provision is made where the Department is required to bring a property into a good state of repair at the end of a lease. A provision is made for the estimated costs of these repairs based on a rate per square metre which is updated each year on advice from a facilities management company. A provision is also written back when not required.
During 2013-14 provision of £1,191,410 was written back in respect of Hercules House. The expiry dates of the remaining leases range from 2016-17 to 2026-27.
24.3 Onerous Contracts
The Government Property Unit manages the Government’s property portfolio which includes vacant leasehold properties for which provision has been made for estimated payments discounted by the Treasury’s discount rates for general provisions. Payments include rent, rates, service charges, demolition work and property management charges.
During the financial year £261,668 was utilised. The provision was topped up by £5,322. There was a write back of £2,018,858 being no longer required; £1,660,175 of which related to County Farm. This was due to the change in expectation regarding the timing of the demolition of the buildings on site. The remaining £358,683 written back relates to Birch House, Willow House and Kings Court which generated increased revenues and fewer costs. The lease expiry dates of the remaining contracts range from 2014-15 to 2016-17.
25. Contingent asset - Futurebuilders programme
The Futurebuilders Fund provided loan financing, often combined with grants and professional support, to civil society organisations in England needing investment to help them bid for, win and deliver public service contracts. The Modernisation Fund provided interest-free loans to help organisations be more resilient to the impact of the economic downturn. Both Funds are closed for new applications.
| £000 | 2013-14 | 2012-13 | |---------------------------|---------|---------| | Futurebuilders England Fund | 96,843 | 101,960 | | Modernisation Fund | 5,832 | 5,752 | | Contingent asset as at 31 March | 102,675 | 107,712 | The Cabinet Office has a contingent asset of £102.675 million (2012-13: £107.712 million) which is reported as Restricted Funds in the 2013-14 accounts of Futurebuilders England Limited (FBE). FBE entered into a portfolio holding contract with the Cabinet Office to oversee the investment portfolio of the Futurebuilders and Modernisation Funds. The Cabinet Office contracts with The Social Investment Business Limited to manage the loan book. The contract has been re-awarded for a three year period from April 2013 with a possible six years extension period. At the end of the contracts the Funds will revert to the Cabinet Office or a third party appointed by the Cabinet Office. The service agreement contains a novation clause which applies to the Futurebuilders Restricted Funds and which gives the Cabinet Office the entitlement to assign, novate or otherwise dispose of its rights and obligations under the agreement or novate the agreement itself to any other body.
Further information about Futurebuilders England Limited (Registered company number 05066676) can be found at: www.futurebuilders-england.org.uk
26. Contingent Liabilities
In June 2010 the Office of Government Commerce (OGC) was transferred from HM Treasury to the Cabinet Office under machinery of government (MOG) arrangements whereby terms and conditions of those transferring were protected. OGC had comprised units including the Government Property Unit, oversight of Major Projects and the development of collaborative procurement and procurement policy. An Employment Tribunal claim was brought by three former members of OGC and the PCS Trade Union against the Cabinet Office with regard to expected pay progression, based on a 2008 pay deal negotiated with PCS by HMT. The Employment Tribunal found in favour of the claimants and the Cabinet Office was notified of this on 15th January 2013, and following an appeal lodged by Cabinet Office an Employment Appeal Tribunal upheld the Tribunal decision in favour of the claimants on 13 December 2013.
There are up to 290 former OGC members of staff who are affected by this Employment Tribunal ruling. The ruling relates to the two year pay deal entered into in 2008 which offered pay progression points to OGC staff at two, four, six and eight years’ continuous service in pay band and having the qualifying level of performance. This only affected OGC staff and not the rest of staff within the Cabinet Office. The estimated cost of the initial backdated pay progression payments to date is approximately £160,000. Agreement has been reached with a number of staff that they are due payment, however, the value and timing of these payments has yet to be agreed. In addition to this, there is also a number of staff where consultations with staff have not yet commenced or where agreement of a liability has yet been reached.
27. Contingent liabilities not required to be disclosed under IAS 37 but included for parliamentary reporting and accountability purposes
The Cabinet Office has given the following indemnity whose amount is unquantifiable and which, within the meaning of IAS 37, is not a contingent liability, since the likelihood of a transfer of economic benefit in settlement is too remote.
Indemnity for Returning Officers at the European Parliamentary Elections May 2014
The Cabinet Office has provided an indemnity to Regional and Local Returning Officers for the European Parliamentary Elections which were held on 22 May 2014. The indemnity is for amounts which are not covered under the existing insurance policies which Regional and Local Returning Officers hold. The Department will also certificate the Returning Officers under The Employers’ Liability (Compulsory Insurance) Regulations 1998 in respect of any liability to their employees. The indemnity and certificate will remain in place to provide cover to Regional and Returning Officers for any by-elections which are held prior to the next scheduled European Parliamentary election in 2019. A parliamentary minute was laid on 8 April 2014. 28. Losses and special payments
28.1 Losses statement
The Statement of Comprehensive Net Expenditure includes the following losses, including write-offs of unrecoverable debts and fruitless payments.
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Total | 179 | 16,432 |
Constructive losses 2013-14: £Nil (2012-13: £16.350 million)
In 2012-13 the Cabinet Office made payments in respect of two leases; one for £2.7 million in respect of 67 Tufton Street, London and the other for £13.650 million in respect of 1 Palace Street, London. The payments were made on the basis of value for money cases demonstrating future cost savings.
28.2 Special payments
| £000 | 2013-14 | 2012-13 | |------|---------|---------| | | Departmental Group | Departmental Group | | Total | 597 | 24 |
Number of cases
| 2013-14 | 2012-1 | |---------|--------| | Departmental Group | Departmental Group | | Total | 27 | 13 |
Compensation payments
There was one case relating to a personal injury claim in the amount of £0.600 million; £0.025 million of which was paid in 2011-12. 29. Related party transactions
The Cabinet Office undertakes the majority of its business with other government departments, public corporations, grant giving bodies and associate companies. The following bodies are regarded as related parties with which the Cabinet Office has had various material transactions during the year.
The main recipient of grants-in-aid from the Cabinet Office in 2013-14 was National Citizen Service Trust (NCS Trust). The new independent Trust is a Community Interest Company which was created to lead and manage the National Citizen Service. The programme aims to further establish itself as a key mechanism for encouraging personal and social development and social cohesion at a critical stage in young peoples’ lives.
The main recipients of grants from the Cabinet Office in this category in 2013-14 were Big Lottery Fund, The Challenge Network, Community Development Foundation, The Social Investment Business, Locality and Nesta.
Within government, the main suppliers to the Cabinet Office were Department for Work and Pensions, HM Revenue & Customs, HM Treasury and Home Office.
Within government, the main customers of the Cabinet Office were Department for Work and Pensions, HM Revenue and Customs, Ministry of Defence, Government Procurement Service (now known as Crown Commercial Service from 1 April 2014) an executive agency, with trading fund status (see Note 7 & 30.1), and Ministry of Justice.
The Cabinet Office is a sponsor of the Civil Service Commission, an executive non-departmental public body shown in Note 30. Balances and transactions between the department and its executive non-departmental public body have been eliminated on consolidation and are not disclosed in this note.
The Cabinet Office has four associate companies, MyCSP Limited, Shared Services Connected Limited, AXELOS Limited and Behavioural Insights Team Limited. The Cabinet Office received pension administration and other services from MyCSP Limited which are funded by a charge on Civil Superannuation employer pension contributions. Commencing November 2013, the Cabinet Office received payroll, HR, finance and procurement services from Shared Services Connected Limited. The Cabinet Office transferred its 51 ‘B’ Ordinary shares in AXELOS Limited to Capita Business Services Limited, its immediate parent. The ultimate parent undertaking of AXELOS Limited is Capita plc which holds an indirect interest in Capita Resourcing Limited with whom the Cabinet Office has transacted in year. Programme evaluation services were received from The Behavioural Insights Team Limited (see Other Administration Costs Note 5, Income Note 7 and Investments in Associates Note 17).
The Cabinet Office makes loans and has loan commitments to the Bridges Social Entrepreneurs Fund LP which is managed by Bridges Ventures Limited. The Fund invests in social enterprises that have the potential to generate scaleable and sustainable social impacts. Bridges Social Entrepreneurs Fund LP is outside the departmental boundary and is therefore not classed as an associate (see Notes 16 and 19).
The Cabinet Office has responsibility for setting and reimbursing the fees and expenses of Returning Officers conducting the polls at Parliamentary elections in England and Wales. No members of staff within the Cabinet Office and the Department for Communities and Local Government had undertaken any material transactions with Returning Officers.
The ministerial titles and names of all ministers who had responsibilities for the department during the year are included in the Governance section. No minister, board member, key manager or other related parties had undertaken any material transactions with the Cabinet Office during the year. The remuneration of ministers and board members and senior managers is set out in the Remuneration Report. 30. Entities within the departmental boundary
The departmental boundary in this context relates to the boundary of the Departmental Accounts. The following bodies have been designated for consolidation into the Cabinet Office Estimates and Accounts.
Executive Non-Departmental Public Bodies (eNDPBs)
Executive Non-Departmental Public Bodies are consolidated with the accounts of the core department. eNDPBs can be established in statute. They carry out administrative, regulatory and commercial functions; they employ their own staff, are allocated their own budgets, are self-accounting and produce their own accounts.
The Cabinet Office has one executive non-department public body; the Civil Service Commission.
The annual report and accounts for the Civil Service Commission (which includes the expenditure of the Advisory Committee on Business Appointments, the House of Lords Appointments Commission and the Office of the Commissioner for Public Appointments, for which the Civil Service Commission provides secretariat services) are published separately.
Further information can be found at the links: Civil Service Commission Annual Report and Accounts http://civilservicecommission.independent.gov.uk
Advisory Non-Departmental Public Bodies (ANDPBs)
The Cabinet Office sponsors a number of advisory non-departmental public bodies that have links to the Department but whose work does not contribute directly to the achievement of the Department’s objectives and whose funding arrangements can be separate. These ANDPBs provide independent and expert advice to ministers on particular topics of interest. ANDPBs of the Cabinet Office include:
- Boundary Commission for England
- Boundary Commission for Wales
- Committee on Standards in Public Life
- Security Vetting Appeals Panel
- Senior Salaries Review Body
- Advisory Committee on Business Appointments
- House of Lords Appointments Commission
- Main Honours Advisory Committee (Honours and Appointments Secretariat)
Other
The Office of the Commissioner for Public Appointments is not a Non Departmental Public Body however, its spending falls within the Cabinet Office budget and therefore it is listed in the Designation Order.
30.1 Entities outside the departmental boundary
Executive Agency – Government Procurement Service
Government Procurement Service was an Executive Agency and a Trading Fund (set up under the Government Trading Funds Act 1973) of the Cabinet Office. The overall priority was to provide savings for the UK public sector through centralised procurement agreements. In July 2013, the Minister for the Cabinet Office announced that a new Crown Commercial Service would be created to act on behalf of the Crown to drive savings for the taxpayer and improve the quality of commercial and procurement activity across the public sector. It brings together, into one organisation, Government Procurement Service (GPS), the commercial functions of the Cabinet Office and commercial activity related to common goods and services currently undertaken by departments. The Crown Commercial Service became a legal entity on 2 April 2014 and it is an Executive Agency and Trading Fund of the Cabinet Office.
Services provided by the Crown Commercial Service include direct buying, an advisory service and the UK Government’s procurement policy function.
Further information can be found at Note 19 and at the links: Government Procurement Service Government Procurement Service Annual Report and Accounts
Other
Cabinet Office’s role is to act as the principal point of liaison within government for the Parliamentary and Health Service Ombudsman and it is non-funded.
Cabinet Office Public Bodies
The Cabinet Office produces a comprehensive annual Public Bodies directory providing details of NDPBs and similar public bodies. The directory can be found at the link: Public Bodies directory
31. Events after the reporting period
No events occurred between 31 March 2014 and 25 June 2014, the point at which these accounts were authorised for issue by the Accounting Officer.
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9a0e43c7157cb5e5bdc93b66596b897a98a35116 | Drawings illustrate existing condition as proposed scheme NP/DDD/1114/1209 & NP/DDD/1114/1210, which was granted Planning and Listed Building Consent 15.01.2015. The work associated with these consents is well advanced. Drawings illustrate existing condition as proposed scheme NP/DDD/1114/1209 & NP/DDD/1114/1210, which was granted Planning and Listed Building Consent 15.01.2015. The work associated with these consents is well advanced. Drawings illustrate existing condition as proposed scheme NP/DDD/1114/1209 & NP/DDD/1114/1210, which was granted Planning and Listed Building Consent 15.01.2015. The work associated with these consents is well advanced. Drawings illustrate existing condition as proposed scheme NP/DDD/1114/1209 & NP/DDD/1114/1210, which was granted Planning and Listed Building Consent 15.01.2015. The work associated with these consents is well advanced. Drawings illustrate existing condition as proposed scheme NP/DDD: 1114/1209 & NP/DDD/1114/1210, which was granted Planning and Listed Building Consent 15.01.2015. The work associated with these consents is well advanced. Drawings illustrate existing condition as proposed scheme NP/DDD/1114/1209 & NP/DDD/1114/1210, which was granted Planning and Listed Building Consent 15.01.2015. The work associated with these consents is well advanced. PROJECT: Church House Church Lane, Thorpe Ashbourne Derbyshire DE6 2AW
CLIENT: Mr & Mrs Morgan
SUBJECT: PROPOSED HOUSE - WEST ELEVATION
PLANNING ISSUE
DRAWING NO: 14163/E/1033A
DATE: October 2014
REVISIONS: A-Tender 04.07.2016
SCALE: 1:100 @ A3 Drawings illustrate existing condition as proposed scheme NP/DDD/1114/1209 & NP/DDD/1114/1210, which was granted Planning and Listed Building Consent 15.01.2015. The work associated with these consents is well advanced. Drawings illustrate existing condition as proposed scheme NP/DDD/1114/1209 & NP/DDD/1114/1210, which was granted Planning and Listed Building Consent 15.01.2015. The work associated with these consents is well advanced. 1-20 Elevation Existing Fireplace condition
Damage to jambs Jambs in two pieces Poorly laid slabs as hearth
Drawings illustrate existing condition as proposed scheme NP/DDD: 1114/1209 & NP/DDD/1114/1210, which was granted Planning and Listed Building Consent 15.01.2015. The work associated with these consents is well advanced.
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01dca1d526ed8a811c84b653947d04b506e4dd27 | Cumbria County Council
Welcome to Cumbria County Council Economy and Highways
Serving the people of Cumbria Council priorities
Our vision is: “To be an effective and efficient organisation that delivers the best possible services for the people of Cumbria within its available resources, protects the vulnerable, and works with others in the community to shape services and help find solutions for the future.”
- **Children**: It's a council priority. To safeguard children and support families and schools so that all children in Cumbria can grow up in a safe environment, and can fulfill their potential.
- **Adults**: It's a council priority. To support older, disabled and vulnerable people to live independent and healthy lives.
- **Communities**: It's a council priority. To enable communities to help shape their local services, promote health and wellbeing and support those in poverty.
- **Infrastructure**: It's a council priority. To provide a safe and well managed highways network, secure infrastructure improvements and support local economic growth.
- **Efficiency**: It's a council priority. To be a modern and efficient council.
Serving the people of Cumbria Economy and Highways Current Functions/Structure
| Function | Headcount | FTE | |---------------------------------|-----------|-----------| | CD & Support | 1 | 1 | | Business Support | 88 | 74.278 | | Capital Programmes & Property | 90 | 79.259 | | Economy & Environment | 145 | 130.876 | | Highways, Transport & Fleet | 397 | 374.259 |
Serving the people of Cumbria What we do
Capital Programme and Property
- Health and Safety
- Property Management
- Capital Programme
Highways Transport and Fleet
- Highways Authority
- Highways Maintenance including emergency response
Economy and Environment
- Waste Management
- Trading Standards
- Development Control and Regulation
- Countryside Management
- Economic and Infrastructure Planning
- Coroners
- Flood Risk Management
Serving the people of Cumbria Challenges
- Supply Chain
- Skills and infrastructure
- LEP capacity and funding
- Waste Service
- Flood Risk
- Two tier authority and planning
Serving the people of Cumbria Opportunities
- Local economic growth
- Strengthened Central Government relationships and reputation post floods
- Innovative approach to bridges and structure monitoring
- Cumbria Holdings Ltd
- Expand Better Places for Work Programme
- New Property Asset Management Plan
- Connecting Cumbria – enhanced digital network
- Strategic road and rail connectivity
- Highways revenue spend - more strategic approach
Serving the people of Cumbria Priorities
- Ongoing flood recovery
- £170m Capital Programme delivery
- Deliver significant uplift in highways capital works programme
- New Asset Management Strategy
- Nationally Significant Infrastructure Projects (NSIPs)
- Better Places for Work options for West Cumbria and Kendal
- Waste Contract and working with Districts
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6a2bdaaaf3af2e002256ce4faae1522bc6070162 | WHAT IS DIABETES? What do these people have in common?
Chris Pennell Este Haim Nick Jonas Lucy Davis Steve Redgrave Amelia Lily THEY ALL HAVE DIABETES AND IT HASN’T STOPPED THEM BEING SUCCESSFUL! What is diabetes?
The UK’s fastest growing health threat
Every three minutes someone learns they have diabetes
3.8m What is diabetes?
Diabetes is where the amount of glucose (sugar) in the blood is too high because the body cannot use it properly. This happens when:
- The pancreas does not make any or enough insulin.
- The insulin does not work properly.
- Or sometimes it can be a combination of both. There are two main types of diabetes
**TYPE 1**
- The body is unable to produce any insulin.
- Has to be treated with insulin.
- Most children with diabetes have Type 1.
- You cannot prevent it.
- It develops rapidly. Develops when the body still makes some insulin, or when the insulin that is produced does not work properly.
Risk factors for Type 2 include:
- Family history.
- Age.
- Overweight.
- Waist circumference.
- Very few children have Type 2.
This presentation will focus on Type 1 diabetes. Signs or symptoms of Type 1 diabetes
- Toilet.
- Thirsty.
- Tired.
- Thinner. What do children with Type 1 diabetes have to do?
- Take insulin.
- Test blood glucose level regularly.
- Follow a healthy balanced diet.
- Take regular physical activity.
- Have regular appointments with their doctor and nurse. Taking insulin
By injection: • With each meal. • When blood glucose level is high. • Injections will be needed at school
By pump: • Continuous infusion of insulin. • Extra insulin with food/when blood glucose level is high. Blood glucose levels
- Check blood glucose is at the right level.
- Finger prick test.
- Regularly during the day.
- Continuous blood glucose monitoring. Food
• Healthy balanced diet. • No food is forbidden. • But diabetic foods are not recommended. • May need to eat at certain times, including in class. • May need extra snack before, during and after PE. Physical activity
- Important for all children.
- Can take part in all sports.
- May need extra snack before, during and after PE.
- May need to disconnect pump. Type 1 diabetes in school Can and should join in all school activities including: • PE, games and sports. • School trips. • Exams. Hypoglycaemia (low blood glucose levels)
Signs
- Hunger.
- Shakiness.
- Mood change.
- Clumsiness.
- Pale.
- Sweating.
- Symptoms come on quickly. Causes of a hypo
- Too much insulin.
- A delayed or missed meal or snack.
- Not enough carbohydrate food.
- Unplanned activity.
- Sometimes no obvious cause. Treating a Hypo
• Immediately stop the activity and give something sugary to eat or drink. • May need to follow up with longer-acting carbohydrate, e.g. sandwich or next meal if it’s due. • Rest until they feel better. • And only then resume activity. • If untreated can lead to, fit or collapse. Hyperglycaemia (high blood glucose levels)
Signs
• Needing to pass urine. • Feeling very thirsty. • Feeling very tired. • Tummy ache and headache. Causes of a hyper
- Too little insulin.
- Too much carbohydrate food.
- Insulin pump failure.
- Less activity than usual.
- Illness.
- Stress. Treating a hyper
- Check blood betone level.
- Drink sugar free drinks.
- May need extra insulin.
If untreated, can lead to:
- Vomiting.
- Breathing difficulties.
- Collapse. Why is looking after Type 1 at school so important?
- Immediate safety of child.
- Long-term well being.
- Optimal academic performance.
- Increasing numbers of children with Type 1.
- Now law in England, but best practice in other UK nations. What is needed in schools?
- Medical conditions policy.
- Individual healthcare plan.
- Everybody working together.
- Training and support. What Diabetes UK is doing:
• Change in the law (England). • New legal duty on schools to support children with diabetes. • Type 1 diabetes: Make the Grade will help make that change a reality in all schools. • Resources for schools, families and health care professionals across the whole of the UK. Diabetes UK resources
- Information packs for parents and schools.
- Information about diabetes, what care to expect, tools and templates etc.
- Information for key audiences and nation specific information.
- Advocacy service, for advice on how you should look after a child at school.
- Parents, children, teachers and PDSN’s showing that good care is achievable.
- www.diabetes.org.uk/schools THANK YOU FOR LISTENING
GO TO WWW.DIABETES.ORG.UK FOR FURTHER INFORMATION AND SUPPORT
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1fe4168be6b2999bc42444ebce22fc58ee992053 | WHAT IS DIABETES? Type 1 diabetes
- This is where the amount of glucose (sugar) in the blood is too high because the body cannot use it properly.
- This is because the pancreas does not make any. Insulin
- Insulin is a hormone made by the pancreas. It helps us get energy from food and drink.
- It allows glucose to enter the bodies cells where it is used for energy.
- Glucose comes from digesting carbohydrate. It is also made by the liver.
- People with Type 1 diabetes do not make insulin, so the glucose stays in their blood. Types of diabetes
- There are two main types of diabetes, Type 1 and Type 2.
- 90 per cent of all people with diabetes have Type 2.
- But the vast majority (97 per cent) of children and young people with diabetes have Type 1.
- This presentation will focus on Type 1 diabetes. Signs or symptoms of Type 1 diabetes
- Toilet.
- Thirsty.
- Tired.
- Thinner. Treating Type 1 and Type 2 diabetes
**TYPE 1**
Needs regular insulin, four or five times a day.
**TYPE 2**
This may be managed by a healthy balanced diet and taking more exercise, but it may need tablets, or insulin and tablets. Young people and diabetes
- People who have Type 1 usually get it when they are children or young adults. There is nothing you can do to prevent it, and it is not caused by anything anyone has done.
- It does not mean they are any different, and it does not stop them doing anything anyone else can do.
- But they do need to do certain things to manage their Type 1 diabetes properly. What do young people with diabetes have to do
- Check blood glucose level regularly and note result.
- Take insulin, either by using an ‘injector pen’ or an insulin pump.
- Eat a healthy balanced diet and get regular physical activity.
- Visit their doctor or nurse regularly. Testing blood glucose
- Children and young people with Type 1 diabetes will need to check their blood glucose levels several times a day, including at school.
- Monitoring blood glucose levels is important as it checks blood glucose is at the right level.
- It is important to keep blood glucose levels as close to target as possible to make sure the child or young person stays well in the short and long term. Taking insulin
- Insulin cannot be taken by mouth because it is a protein, and would be destroyed by the stomach acids.
- It needs to be taken by an injection or insulin pump.
- Injections are generally taken at each meal, plus in the evening and/or morning too.
- An insulin pump is attached 24 hours a day and insulin is given for meals and snacks. Eating a healthy diet
- Young people with diabetes should eat a diet that is low in fat, salt and sugar, with at least five portions of fruit and vegetables a day – just like everyone else.
- No food is forbidden.
- Might need to eat at certain times throughout the day. Physical activity
• Young people with diabetes can do any type of sport. • They may need to have a snack before, during and after activity and change their insulin dose or where they inject their insulin. Problems (hypoglycaemia)
When blood glucose drops too low, this is called a hypo. This can be caused by:
- Missed meal.
- Not enough carbohydrate.
- Unplanned exercise.
- Too much insulin.
- Sometimes no obvious cause. Signs of a hypo
- Hunger.
- Shakiness.
- Mood change.
- Clumsiness.
- Pale.
- Sweating. How to help
• Get them to stop activity and sit down. • Get them to check their blood glucose levels if they can. • If it is low, get them to eat/drink something sugary, like lucozade, dextrose sweets or jelly beans. • After 10–15 minutes, check blood glucose levels again. • If it is still low, have some more sugar • After 20–30 minutes, check blood glucose levels again to make sure it is ok. • Some children and young people need a snack after having a hypo, like fruit or biscuits. • Once their blood glucose levels are back to normal, they can resume activity. Problems (hyperglycaemia) This is when blood glucose level is too high, caused by: • Missed insulin. • Too much carbohydrate/sugary food. • Stress or illness. • Sometime no obvious cause. • Signs and symptoms include thirst, needing to pass urine frequently, tiredness, feeling sick.
How to help • Check blood sugar level. • Drink plenty of water. • Take extra insulin. • Rest. Long term health
• It is important to look after diabetes to make sure you stay healthy in the future. • Diabetes can make some health problems more likely when you’re older. • Looking after it well makes that much less likely. TYPE 2 DIABETES Type 2 diabetes
- About 90 percent of people with diabetes have Type 2.
- Usually develops in later life, but worryingly, there are an increasing number of young people with Type 2.
- Symptoms are the same but develop gradually.
- There is an increased risk of developing Type 2 if it is in your family, you are from BAME or you are overweight.
- Type 2 diabetes is treated by keeping physically active, following a healthy balanced diet and keeping to a healthy weight.
- But medication, including insulin, may be needed, too.
- If your parents or grandparents have diabetes, it’s likely to be Type 2 diabetes. Summary
• It is important for people to look after diabetes to make sure they stay well, both in the short and long term. • Treatment helps to keep glucose levels as close to those of people without diabetes as possible. • Having diabetes does not stop people from doing anything their friends do and does not mean you can't be successful! What do these people have in common?
Chris Pennell Este Haim Nick Jonas Lucy Davis Steve Redgrave Amelia Lily THEY ALL HAVE DIABETES AND IT HASN’T STOPPED THEM BEING SUCCESSFUL! And finally…
1. Remember, people with diabetes are just like you, except for one small thing – they cannot produce their own insulin.
2. People with diabetes can do everything you can do, they just might need to prepare a bit more.
3. If you are worried about any aspect of your own health, talk to your doctor.
4. We all need to eat healthy and get plenty of physical exercise. THANK YOU FOR LISTENING
GO TO WWW.DIABETES.ORG.UK FOR FURTHER INFORMATION AND SUPPORT
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53fea053377c8521095733bdb2c33eb564322d21 | Advisory Council recruitment: 2009
Issue
The approval of the Council is sought for the key skills categories for the Advisory Council posts that are to be advertised in summer 2009. New members will join the Council from 1 January 2010, subject to Ministerial approval. Two members whose expertise includes ‘political experience’ retired at the end of 2008. Two members whose expertise includes ‘collections of private archives’ will have completed their second term and will be retiring at the end of 2009. The current and target membership is summarised in the following table:
| Expertise Category Summary | Postholder Numbers | |--------------------------------------------|--------------------| | | Current | Target | | Former Civil Service | 4 | 4 | | History | 2 | 2 | | Archives/Information/Knowledge | 4 | 5 | | Politics | 1 | 2 | | Collections of Private Archives | 2 | 2 | | Family History | 2 | 2 | | Media | 1 | 1 | | Other | 2 | 2 | | **Totals** | **18** | **20** |
Background
In July 2007 the Council agreed, in line with the regulations of the Office of the Commissioner of Public Appointments (OCPA) that future recruitment would focus on key skills in preference to professional background. The Council agreed that recommendations for appointments put to the Lord Chancellor should be based upon successful candidates matching a niche in key skills on the Council or by offering a distinct additional contribution to the range of key skills already present on the Council. It was also agreed that the changing nature of the work carried out by the Council was important when considering the key skills that new candidates should bring. It was further agreed that the roles fulfilled by the Council members would be monitored to ensure the Council maintains an appropriate balance of key skills.
Recommendation
It is recommended that the Council continues to have a ‘political experience’ presence and seeks to fill one ‘political experience’ role accordingly. That would bring the total of members with such an expertise to two. It is recommended that another post is filled by an ‘archives/information/knowledge’ candidate (who has a sound knowledge of digital information). This would allow the Council to keep abreast of the changing nature of the information landscape in government at a time when the Council will soon have to advise on the access and transfer issues surrounding digital information.
It is also recommended that the two vacancies that will arise through the retirement of 2 members at the end of 2009 continue to be filled by individuals with experience of ‘private archives collections.’ This will ensure that the Council continues to have members who have an expertise within the remit of the statutory Advisory Council on Historical Manuscripts that forms one of the three bodies of the Council. Appendix
I attach the key skills requirements for each role that will form part of the 2009 recruitment campaign.
Skills and experience: Archives/Information/Knowledge (1 post)
- An appreciation of the use, organisation and structure of information including an expertise in digital information
- An understanding of the unique access issues with regard to digital information
- Track record of leading and managing innovation in widening access to archives, providing enquiry services, archival accessioning, cataloguing and collection care.
- Proven ability to negotiate and influence in a wider institutional environment.
Skills and experience: Politics (1 post)
- Strong knowledge of British political environment: the workings of Parliament and national assemblies and of British government
- Experience of representing varied groups of stakeholders and the public in a national political environment
- Ability to work with, negotiate with and influence key opinion formers and policy makers
- First rate advocacy and debating skills, both in the verbal and written form
- Knowledge of the workings of central government
Skills and experience: Collections of private archives (2 posts)
- Experience of custodianship of a private collection of national significance.
- Understanding of the needs, requirements and obligations of private archive holders
- A commitment to the maintenance and preservation of collections in the national interest
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af7b88f3c04649281e3151ccf0ed31b75957113f | Pan London Snapshot 06/07
Stephanie Favell London Borough of Havering Participating Boroughs
- Twenty three boroughs participated (67.6%)
- London Borough of Barking and Dagenham
- London Borough of Barnet
- London Borough of Brent
- London Borough of Bromley
- London Borough of Croydon
- London Borough of Ealing
- London Borough of Hackney
- London Borough of Hammersmith and Fulham
- London Borough of Haringey
- London Borough of Hillingdon
- London Borough of Havering
- London Borough of Harrow
- London Borough of Islington
- London Borough of Lambeth
- London Borough of Lewisham
- London Borough of Merton
- London Borough of Redbridge
- London Borough of Richmond-upon-Thames
- London Borough of Sutton
- London Borough of Tower Hamlets
- London Borough of Waltham Forest
- London Borough of Wandsworth
- London Borough of Westminster Non Participating Boroughs
- Eleven London Boroughs did not participate (32.4%)
- Bexley Council
- London Borough of Camden
- Corporation of London
- London Borough of Enfield
- Greater London Authority
- London Borough of Greenwich
- London Borough of Hounslow\*
- London Borough of Newham
- London Borough of Southwark\*
- Royal London Borough of Kensington and Chelsea
- Royal London Borough of Kingston upon Thames Current Picture
- Annual LA spend is assessed at £551,575,138.71
- Average annual savings assessed at £1,193,900.00
- There are at least 10,362 FTEs (Full-Time Equivalents) across 19 boroughs; 5 did not know headcounts
- Can account for up to 55% of FTE workforce
- 50% of the total expenditure is in the realm of social care
- 11 of the 23 authorities did not know the average length of time a worker was in post Current Picture
- 22 of the 23 authorities had managed services in place
- 6 authorities had agency worker policies in place Order Justifications
• Top three agency staff order justifications: – Cover during permanent staff recruitment process – Short term sickness/absence cover – Project Work Length of Service
• Average length of service: – 0-3 months – 28.7% – 3-6 months – 19.2% – 6-9 months – 15.8% – 9-12 months – 10.8% – 12-24 months - 15.9% – More than 24 months – 7.9% Highest spending directorates
• Top three highest spending directorates: – Adult social services – Children’s services – Leisure/Culture/Environment Challenges
- Attitude of managers to change and ensuring they follow the correct procedures
- Quality of agency staff including agencies not matching the CVs with the Job description
- Candidate supply in some areas e.g. catering
- Working to support local regeneration and tackle homelessness
- Managing the implementation of Dom Care workers on Comensura and finding a process that is responsive to the departments needs
- Implementation of e-Invoicing
- Collaboration with other authorities to improve market management and benchmark pay rates (being addressed as part of the EKE) Positives
• More information about agency staff - where and why they are being employed – improved ability to analyse spend • Introduction of consolidated electronic invoicing and on-line timesheet authorisation has introduced significant efficiencies • Accurate management information – allows challenge of agency worker usage/greater control over staff usage • Measurable financial/cashable savings • Reduction in number of temporary staff employed Positives
• A focus on the agency work force - enabling understanding of associated risks which the council were previously unfamiliar with e.g. Ltd co invoicing the council direct, employer/employee implied relationships, workers in high profile roles who have not had the correct checks taken out. • Pay rates have been made uniform • Operational monitoring group which oversees performance • Use if business cases to employ agency staff Reasons for Maverick Spend
• Managers recruiting through their personal preferred agencies when sourcing staff from limited talent pools rather than complying with corporate contracts • Some agencies refused to sign up or the contractor cannot supply and managers are therefore allowed to go outside of the contract to fill these roles. • Relates to domiciliary care packages (which cannot be processed through MSPs due to confidentiality) • MSP unable to find suitable staff in timescales/hard to fill posts/Managed Service Provider sometimes unable to supply professional disciplines to the required standard • Occasional use of self employed consultants Avenues to explore to make further savings
• Utilising our MSP to help with the supply of Consultants and permanent employee services • Reducing the necessity for temps, improving the turnaround time for permanent recruitment, having controls in place such as an agreed level of authorisers to order agency staff in the first place • Benchmarking of pay rates, MSP charges and agency costs against (1) other London boroughs using the LCSG/Matrix contract and (2) other West London Alliance boroughs • The MSP annually reviews supplier margins in order to achieve best value. Soft savings are reviewed regularly i.e. regeneration projects. Avenues to explore to make further savings
- Actively managing and monitoring our maverick spend
- New agency cost reduction policy
- Looking at integrating primary care and mental health teams
- Changing authorisation process to a more senior level
- Investigating high-earning and long term members of agency staff. Each department has an annual target to reduce spend and is required to commit to specific actions to achieve this. Avenues to explore to make further savings
• Improving contract terms, reducing leakage, managing down demand would like to be working with other authorities to collaborate on hourly rates and mark ups • Extending the neutral vendor involvement to other departments. Signing up to the LCSG neutral vendor framework • Sustainable work force strategy moving balance to more permanent staff recruitment and contracting out of services • Introduction of an MSP Stephanie Favell Project Manager London Borough of Havering 01708-433438 [email protected]
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331130bcf0501cbb82300efe3b2cbc52711e7576 | PAYE ONLINE FOR EMPLOYERS
EDI Recognition scheme
INSTRUCTIONS FOR GAINING EDI RECOGNITION
1. INTRODUCTION
Software developers and EDI trading partners developing their own software (known as "vendors" throughout the rest of this document) can apply to HM Revenue & Customs (HMRC) to have their software "recognised" by HMRC.
The testing included in this recognition process will give the HMRC confidence that the vendor’s software is capable of formatting files into a valid EDIFACT or GFF format.
When recognition testing is completed to the HMRC standard, the vendors' software will be included in the list of recognised software on the HMRC website.
2. TO GAIN EDI RECOGNITION
2.1 Credentials
In order to access the EDI recognition test service, EDI vendors must obtain a vendor id from the Software Developers Support Team (SDS Team). Software developers will be given a pseudo PAYE reference they can use to submit tests.
2.2 EDI Recognition and Payroll Accreditation
For further information on the Payroll Accreditation Scheme please visit http://www.hmrc.gov.uk/ebu/payroll_accred.htm
2.3 Communications Link
The recognition test service is accessed via the vendor’s EDI existing link e.g. VAN or AS2 link. If you do not have an existing communication link, contact the SDS team and we can arrange email access to the test service for you.
Software developers who do not have a PAYE reference will be given a pseudo reference to enable them to submit their test files. 2.4 Test scenarios
To gain recognition, certain test scenarios must be submitted to HMRC. These scenarios can be found in the appropriate Internet technical pack http://www.hmrc.gov.uk/ebu/paye_techpack/index.htm These scenarios must be used to generate the test data.
Once you have generated the test files for the scenarios appropriate to your product, and they have been through the test service, you must send them by email to the Software Developers Support Team along with confirmation that the files have been accepted.
You will need to provide the SDS Team with an explanation for any scenarios or data that you do not submit.
The SDS Team will examine the files to ensure that the product is capable of sending the data via EDI to the HMRC.
2.5 Further testing
The data contained in the scenarios only demonstrates a small selection of data that can be submitted via EDI. It is strongly recommended that you carry out thorough product testing over and above the data provided in the scenario documents when developing your EDI enabled software product.
2.6 Use of the scenarios
The recognition data is to be used primarily to ensure that software packages can produce valid files in the correct format (GFF or EDIFACT) using the basic data provided. Successful submission of these recognition cases via EDI will result in HMRC EDI Recognition for your EDI submission product but does not constitute any form of HMRC approval of a Payroll Product itself.
When sending in your files for examination, you must advise the SDS Team of any additional data that you have included in your output, which was not provided or requested in the scenario documents.
Gaining EDI recognition is optional but recommended. However if you do not intend to gain recognition, the scenario data provided can still be used to assist with development of your product.
3. INSTRUCTIONS FOR USING THE RECOGNITION DATA
The recognition scenarios provided should be used to generate test data. Any problems experienced with the use of these scenarios should be reported to the Software Developers Support Team on 03000 518308 or email the SDS Team. If your product enforces or restricts the submission of certain details such as gender or date of birth please inform the SDS Team.
Vendors who are also testing the matching up procedure (consolidation) for P14 parts and the P35 part through TPVS (Third Party Validation Service), need to be aware that the Test Area is cleared out every night and any unmatched test files will be removed.
4. RECOGNITION LIGHT
4.1 EOY and P38A
If you do not already have EOY recognition for the previous tax year, you should include all the scenarios appropriate to your product and successfully submit the files in order to gain Recognition.
If you already have EOY internet recognition for the previous (2010-11) tax year (recognition “lite”), you need only send in scenarios 1 and 7 (plus scenario 8 if you support the ‘CIS-only’ P35 and did not gain recognition for this in 2010-11) to apply for recognition for 2011-12. These will be used to test the annual changes. If your product features newly supported functions, such as students, test-in-live, etc. for 2011-12, you should also send in the appropriate scenario to support this.
4.2 In-year movements
Where you have previously obtained 2009-10 recognition for MOV you can, should you wish, adopt recognition ‘light’ in order to streamline the process to incorporate the 2010-11 changes. Rather than submit all the scenarios relevant to your product you may provide a smaller snapshot of files which should enable you to demonstrate that any changes to the service from the previous year have been implemented successfully within your product. MOV is not a year specific service so once a vendor has recognition they need not re-apply until such a time as there are changes to the validation.
For recognition ‘lite’ please submit the following scenarios only: P45(1) – Include scenario 11.2 only P46 – Include scenario 2.3 only
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575197023e3855ca2e4417181f55da2c160ffe26 | DATED 30th April 2012
THE LONDON BOROUGH OF BARNET
and
NSL LIMITED
______________________________________________________________________
CONTRACT FOR THE PROVISION OF PARKING ENFORCEMENT AND RELATED SERVICES DATED
THE LONDON BOROUGH OF BARNET
and
NSL LIMITED
CONTRACT FOR THE PROVISION OF PARKING ENFORCEMENT AND RELATED SERVICES CONTENTS
SECTION A
Clause 1 PARTIES AND RECITALS Clause 2 DEFINITIONS AND INTERPRETATION Clause 3 REPRESENTATIVES Clause 4 COMMENCEMENT AND DURATION Clause 5 TRANSITION ARRANGEMENTS
SECTION B
Clause 6 THE SERVICES Clause 7 REMUNERATION Clause 8 PAYMENT TERMS Clause 9 CHANGE TO SERVICES AND/OR THE REMUNERATION
SECTION C
Clause 10 PREMISES Clause 11 EQUIPMENT AND MATERIALS Clause 12 INTELLECTUAL PROPERTY Clause 13 TUPE Clause 14 STAFFING
SECTION D
Clause 15 REVIEW MEETINGS Clause 16 PROVISION OF INFORMATION Clause 17 AUDIT Clause 18 MONITORING Clause 19 COMPLAINTS SECTION E
Clause 20 QUALITY MANAGEMENT Clause 21 NOT USED
SECTION F
Clause 22 WARRANTIES AND REPRESENTATIONS Clause 23 INDEMNITY Clause 24 INSURANCE
SECTION G
Clause 25 DISPUTE RESOLUTION PROCEDURE Clause 26 DEFAULT AND TERMINATION Clause 27 CONSEQUENCES OF EXPIRY OR TERMINATION Clause 28 FORCE MAJEURE Clause 29 RELIEF EVENTS
SECTION H
Clause 30 HEALTH AND SAFETY Clause 31 EQUAL OPPORTUNITIES AND HUMAN RIGHTS Clause 32 DATA PROTECTION Clause 33 FREEDOM OF INFORMATION Clause 34 CONFIDENTIALITY Clause 35 ASSIGNMENT AND SUB-CONTRACTING Clause 36 CORRUPT GIFTS AND FRAUD Clause 37 RIGHTS AND DUTIES RESERVED Clause 38 LOCAL GOVERNMENT OMBUDSMAN Clause 39 ENTIRE AGREEMENT Clause 40 NO PARTNERSHIP OR AGENCY Clause 41 NO WAIVER Clause 42 SEVERANCE Clause 43 VARIATION Clause 44 NOTICES Clause 45 EMU CONTINUITY Clause 46 PARENT COMPANY GUARANTEE AND PERFORMANCE BOND Clause 47 CONTRACTS (RIGHTS OF THIRD PARTY) ACT 1999 Clause 48 LAW AND JURISDICTION
SCHEDULES
SCHEDULE 1 Schedule of Variables SCHEDULE 2 Specification SCHEDULE 3 Payment Mechanism SCHEDULE 4 Key Performance Indicators SCHEDULE 5 Change Control Procedures SCHEDULE 6 Transferring Employees SCHEDULE 7 Parking Plan SCHEDULE 8 Adjudicator and Expert SCHEDULE 9 Invitation to Tender SCHEDULE 10 Intellectual Property SCHEDULE 11 Target Cost SCHEDULE 12 Contract Plan SCHEDULE 13 Executed Form of Tender, Certificate of Confidentiality, Non-collusion and Non-cancassing, Insurance Cover Form and Completed Tender Submission Checklist SCHEDULE 14 Form of Licence SCHEDULE 15 Bulk Transfer Terms SCHEDULE 16 Transfer of Employees from the London Borough of Barnet SCHEDULE 17 Formula for calculating contribution to Trade Union Fund CONTRACT FOR THE PROVISION OF PARKING ENFORCEMENT AND RELATED SERVICES
DATE ........................................20...
SECTION A
1. PARTIES AND RECITALS
Parties
(1) The Mayor and Burgesses of the London Borough of Barnet whose address is at North London Business Park, Oakleigh Road South, London N11 1NP (the “Council”); and
(2) NSL Limited whose registered number is 05033060 and whose registered office/principal place of business is at 4th Floor Westgate House, Westgate, London W5 1YY (the “Service Provider”).
Recitals
(A) The Council issued its invitation to Tender and the Service Provider responded on the dates set out in the Schedule of Variables.
(B) The Council has selected the Service Provider to provide the Services and the Service Provider undertakes to provide the Services on the terms and conditions set out in this Contract.
(C) The Parties acknowledge that a major objective of this Contract is to achieve year on year continuous improvement. In providing the Services, the Service Provider shall have regard throughout the Contract Term to making arrangements in consultation with the Council to secure continuous improvement in the way in which the Services are provided.
(D) The Parties accept that a co-operative and open relationship is needed for success and that partnering will achieve this when carrying out their obligations under this Contract. The Parties will act fairly towards each other in a spirit of trust and mutual co-operation for the achievement of this objective. A system of regular review meetings as detailed in Clause 15 (Review Meetings) will be established for this purpose. The Parties shall use these meetings to help to resolve problems which may otherwise prejudice the performance of their respective obligations under this Contract.
(R) The Service Provider's performance will be monitored using KPIs and the Service Provider's achievement or non-achievement of the KPIs will determine the level of remuneration received by the Service Provider each month.
(R) The Council encourages the Service Provider to use innovation in the provision of the Services to reduce costs and to share benefits.
2. DEFINITIONS AND INTERPRETATION
2.1 The terms and expressions used in this Contract (including the recitals and Schedules hereto) will have the meanings set out below (unless the context otherwise requires):
"Adjudicator"
means the adjudicator appointed to resolve disputes in accordance with Clause 25 and Schedule 8:
"Administration Regulations"
means the Local Government Pension Scheme (Administration) Regulations 2008;
"Administering Authority"
means the Council;
"Admission Agreement"
means an admission agreement entered into in accordance with Regulation 6 of the Administration Regulations by the Council and the Service Provider or any sub-contractor;
"Admission Body"
means a transferee admission body for the purposes of regulation 6 of the LGPS Regulations;
"Base Payment"
means the proportion of the Target Cost set out in the Schedule of Variables; "Benefit Regulations"
means the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007;
"Bits"
has the meaning given in paragraph 1.4 of Part B of Schedule 3;
"Budget Change"
means a change required by the Council to the Target Cost as a result of a reduction or increase in the Council's annual budget for the relevant expenditure or the performance of the Service Provider over the preceding year of the Contract Term;
"Budget Change Proposal"
has the meaning given to it in Clause 9.3.6;
"Calendar Day"
means any day including statutory bank holidays;
"Certificate of Costs"
has the meaning given to it in Clause 7.6 (Open Book Accounting);
"Ceasation Date"
means any date on which the Service Provider or any sub-contractor ceases to be an Admission Body other than as a result of the termination of this Contract or because it ceases to employ any Eligible Employees;
"Compensation Regulations"
means the Local Government (Discretionary Payments) Regulations 1996 (as amended) and the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulation 2008;
"Change Control Procedures"
means the change control procedures set out in Schedule 5 (Change Control Procedures);
"Commencement Date"
means the date set out in the Schedule of Variables; "Contract"
means this contract including the Schedules;
"Contract Manager"
means the person appointed and authorised by the Service Provider to represent the Service Provider for the purposes of this Contract, whose details are set out in the Schedule of Variables, the identity of whom will be subject to the prior written approval of the Council (such approval not to be unreasonably withheld or delayed);
"Contract Plan"
means the plan and method statements setting out the methods to be used by the Service Provider to provide the Services under this Contract as set out in Schedule 12 (Contract Plan);
"Contract Term"
means the Initial Contract Term as may be extended in accordance with Clause 4 (Commencement and Duration) or reduced by earlier termination of this Contract for whatever reason;
"Council's Representative"
means the person appointed and authorised by the Council to represent the Council for the purposes of this Contract, whose details are set out in the Schedule of Variables;
"Council Software"
means the software, if any, owned by the Council and licensed to the Service Provider under Clause 12 (Intellectual Property) as set out in Schedule 10 (Intellectual Property);
"Directive"
means the EC Acquired Rights Directive 77/187, as amended;
"Dispute Resolution Procedure"
means the procedure to deal with disputes as set out at Clause 25 (Dispute Resolution Procedure); "Direct Losses" means all damage, losses, liabilities, claims, actions, costs, expenses (including the cost of legal or professional services, legal costs being on an agent/client, client paying basis), proceedings, demands and charges whether arising under statute, contract or at common law.
"Eligible Employees" means the Transferring Employees who are active members of or eligible to join the LGPS on a Relevant Transfer Date for so long as they are employees in connection with the provision of the Services or part of such Services as set out in the Admission Agreement.
"Equipment and Materials" means all plant, equipment, materials and consumables to be used by the Service Provider to provide the Services;
"Exit Period" means the exit period as set out in the Schedule of Variables;
"Expert" means the expert appointed to resolve disputes in accordance with Clause 25 and Schedule 8;
"External Software" means the software, if any, owned by an external provider and licensed to the Council as set out in Schedule 10 (Intellectual Property);
"Force Majeure Event" means any event consisting of any of: acts of God, war, riot, fire, flood, or any disaster affecting either Party which materially affects the performance by a Party of its obligations under this Contract;
"Guarantor" means any person granting a parent company guarantee pursuant to Clause 48 (Parent Company Guarantee and Performance Bond); "Initial Contract Term"
means the period set out in the Schedule of Variables;
"KPIs"
means the key performance indicators as set out in Schedule 4 (Key Performance Indicators) against which the Service Provider's performance will be measured;
"LGPS Regulations"
means The Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 and The Local Government Pension Scheme (Administration) Regulations 2008;
"Legislation"
means any Act of Parliament or subordinate legislation within the meaning of the Interpretation Act 1978, any exercise of the Royal Prerogative, and any enforceable community right within the meaning of section 2 of the European Communities Act 1972, in each case in the United Kingdom;
"Local Government Pension Scheme"
means the Local Government Pension Scheme made by the Secretary of State in exercise of powers under sections 7 and 12 of the Superannuation Act 1972, as amended;
"Locations"
means the locations from where the Services are to be provided as set out in the Specification;
"New Service Provider"
means a contractor selected to provide services, similar to the Services or part thereof, whether upon appointment by the Service Provider or upon termination or expiry of this Contract and for the avoidance of doubt can include the Council;
"Options Proposal"
has the meaning given to it in Clause 9.3.3: "Parent Company Guarantee"
means the parent company guarantee substantially in the form set out in Schedule 1 (2) of the Invitation to Tender (Draft Deed of Guarantee);
"Parking Plan"
means the Council's plan relating to on-street and off-street parking and traffic and parking enforcement, a copy of which is set out in Schedule 7 (Parking Plan);
"Party"
means a party to this Contract and "Parties" shall be construed accordingly;
"Payment period"
means the period as set out in the Schedule of Variables;
"Performance Bond"
means a bond substantially in the form set out in Schedule 1 (1) of the Invitation to Tender (Form of Bond);
"Prohibited Act"
means:
(a) offering, giving or agreeing to give to any servant of the Council any gift or consideration of any kind as an inducement or reward:
(i) for doing or not doing (or for having done or not having done) any act in relation to the obtaining or performance of this Contract or any other contract with the Council; or
(ii) for showing favour or disfavour to any person in relation to this Contract or any other contract with the Council; or
(b) entering into this Contract or any other contract with the Council in connection with which commission has been paid or has been agreed to be paid by the Service Provider or on its behalf, or to its knowledge, unless before the relevant contract is entered into particulars of any such commission and of the terms and conditions of any such contract for the payment thereof have been disclosed in writing to the Council; or
(c) committing any offence: (i) under the Bribery Act 2010;
(ii) under legislation creating offences in respect of fraudulent acts; or
(iii) at common law in respect of fraudulent acts in relation to this Contract or any other contract with the Council; or
(d) defrauding or attempting to defraud or conspiring to defraud the Council;
(e) obtaining or receiving by whatever means any information which gives or is intended or is likely to give an unfair advantage over any other tender (including the Council's own workforce) in relation to this Contract;
"Redundancy Costs"
means: all costs, expenses, losses and any liabilities arising under an Admission Agreement to the extent that such liabilities operate by virtue of Regulation 38(2) of the Administration Regulations or represent strain costs arising under Regulation 19 of the Benefits Regulations or represent terminal/casualty liabilities, ill health or early retirement liabilities (including reasonable legal costs incurred by the Service Provider or sub-contractor save where the Service Provider or any sub-contractor (as relevant) has acted negligently or in breach of its legal or contractual obligations in which case such legal costs shall not be recoverable) which are payable by the Service Provider or any sub-contractor and which arise as a result of the dismissal of any Redundancy Transferring Employees by reason of:
(a) redundancy;
(b) any restructure amounting to "some other substantial reason" under section 98(1) of the Employment Rights Act 1996; or
(c) any other economic technical or organisational reason entailing changes in the workforce pursuant to Regulations 7(2) and 7(3) of TUPE,
where the dismissals take effect within the period of 90 days following the Commencement Date and provided that any redundancy payment is calculated in accordance with the Council's managing organisational change policy in place on the Commencement Date.
"Redundancy Transferring Employees"
means those Transferring Employees identified by the parties as Policy and Projects Manager, Information Manager, Parking Infrastructure Officers, Control Desk Operator, Information Officers (CCTV) Senior Information Officers, Information Officers, (Information) Team Leaders and Post Team and Payment Team as being at risk of redundancy following the Commencement Date.
"Relevant Employees"
means all those employees subject to a Relevant Transfer on a Relevant Transfer Date;
"Relevant Transfer"
means a relevant transfer for the purposes of TUPE;
"Relevant Transfer Date"
means a date on which the provision of the Services changes (save for the Commencement Date);
"Relief Event"
means any of the following events to the extent that the event does not constitute a Force Majeure Event and provided that the event does not arise (directly or indirectly) as a result of any wilful act, default or breach of the Service Provider:
(a) fire, explosion, lightning, storm, tempest, flood, bursting or overfilling of water tanks, apparatus or pipes, ionising radiation, earthquakes, riot and civil commotion;
(b) failure by any statutory undertaker, utility company, local council (excluding the Council) or other body to carry out works or provide services;
(c) any failure or shortage of power, fuel or transport;
(d) any official or unofficial strike, lock-out, go-slow or other dispute generally affecting the parking enforcement sector;
(e) delays in granting any permissions or consents which may be necessary in respect of the provision of the Services;
(f) delays caused by any act or omission of the Council; or
(g) the imposition of restrictions or limits by the Council on parking tariffs or parking fines at the Locations;
"Remuneration"
means the sums to be paid by the Council to the Service Provider pursuant to Clause 7 (Remuneration); "Schedule of Variables"
means Schedule 1 (Schedule of Variables);
"Service Provider Software"
means the software owned by the Service Provider and licensed to the Council under Clause 12 (Intellectual Property) as set out in Schedule 10 (Intellectual Property);
"Service Provider Scheme"
means the retirement benefits scheme or schemes established or to be established under paragraph 13.3.7;
"Services"
means the whole or any part of the services to be provided by the Service Provider to the Council under this Contract as set out in the Specification;
"Specification"
means the specification for the Services as set out in Schedule 2 (Specification);
"Target Cost"
means the target cost to be incurred by the Service Provider as calculated on an annual basis in accordance with Schedule 11 (Target Cost);
"Transferring Employees"
means the employees of the Council who will transfer from the employment of Council to the employment of the Service Provider or any sub-contractor as a result of the application of TUPE in relation to the Contract;
"Transition Period"
means the transition period as set out in the Schedule of Variables;
"TUPE"
means the Transfer of Undertakings (Protection of Employment) Regulations 2006, as amended; "Working Hours"
means the hours during which the Services are to be provided as set out in the Specification; and
"Working Day"
means a day (other than a Saturday or Sunday) on which banks are open for domestic business in the City of London.
2.2 Reference to any statute, enactment, order, regulation or other similar instrument shall be construed as a reference to the statute, enactment, order, regulation or instrument as amended by any subsequent statute, enactment, order, regulation or instrument or as contained in any subsequent re-enactment thereof.
2.3 Headings are included in this Contract for ease of reference only and shall not affect the interpretation or construction of this Contract.
2.4 References to Clauses and Schedules are, unless otherwise provided, references to the Clauses and the Schedules to this Contract.
2.5 In the event of any conflict or inconsistency between any provision of the Clauses and any provisions of the Schedules, the Clauses shall prevail. In the event of any conflict or inconsistency between the Schedules, the provisions of the Specification shall prevail over the provisions of all other Schedules unless and only to the extent that any other Schedule expressly states that a particular requirement of the Specification shall not apply.
2.6 Except as otherwise expressly provided in this contract, all remedies available to the Service Provider or to the Council under this Contract are cumulative and may be exercised concurrently or separately and the exercise of any one remedy shall not exclude the exercise of any other remedy.
3. REPRESENTATIVES
3.1 Council's Representative
The Council's Representative shall liaise with and give instructions to the Service Provider and its officers, employees, agents or sub-contractors in relation to all matters concerning the performance by the Service Provider of its obligations under this Contract and shall determine any matters or issue any notices as may be the function of the Council's Representative under this Contract.
3.2 Contract Manager
The Contract Manager shall have the power to act on behalf of the Service Provider in connection with any matter relating to the performance of the Services and to exercise the rights, functions and obligations of the Service Provider under this Contract. The Service Provider warrants that the Contract Manager has authority to bind the Service Provider.
3.3 Changes to Council's Representative and Contract Manager
Any changes to the identity of the Council's Representative and/or the Contract Manager shall be communicated in writing to the other Party within fourteen (14) Calendar Days of the change.
3.4 Changes to the Contract Manager
The Council may at any time during the Contract Term (by providing the Service Provider with ten (10) Calendar Days written notice) require the Service Provider to appoint a new Contract Manager, to replace the existing Contract Manager.
4. COMMENCEMENT AND DURATION
This Contract and the rights and obligations of the Parties shall take effect on the Commencement Date and shall continue for the Initial Contract Term as may be extended as set out in the Schedule of Variables.
5. TRANSITION ARRANGEMENTS
5.1 During the Transition Period, the Service Provider shall liaise with the Council to ensure an effective and timely handover of the Services, including but without limitation, attending meetings with the Council and any other individuals or organisations of new Service Providers as are reasonably required by the Council. This shall be free of charge to the Council.
5.2 During the Exit Period, the Service Provider shall liaise with the Council to ensure an effective and timely handover of the Services, including but without limitation, attending meetings with the Council and any other individuals or organisations of new Service Providers as are reasonably required by the Council. Such handover shall include details as to work in progress, costs of transferring ownership of assets, Equipment and Materials, data and records. This shall also include information to enable the Council to meet its duties in relation to re-tendering the Contract. This shall be free of charge to the Council. SECTION B
6. THE SERVICES
6.1 The Service Provider shall provide the Services at the Locations during the Working Hours for the Contract Term in accordance with the Council's requirements as set out in the Specification and the terms of this Contract.
6.2 In providing the Services, the Service Provider shall comply with the Parking Plan.
6.3 In providing the Services, the Service Provider shall comply with and take into account all applicable laws, bye laws, traffic regulation orders, enactments, regulations and other similar instruments, the requirements of any court with relevant jurisdiction and any local, national or supranational agency, inspectorate, minister, ministry, official or public or statutory person of the government of the United Kingdom or of the European Union including but without limitation any bodies specified in the Schedule of Variables.
7. REMUNERATION
7.1 The Remuneration will be paid to the Service Provider in accordance with Clause 8 (Payment Terms) and Schedule 3 (Payment Mechanism).
7.2 The Base Payment
In consideration for the provision of the Services, the Council shall pay to the Service Provider the Base Payment as adjusted in accordance with Clause 7.3.
7.3 Adjustment to the Base Payment
The Base Payment shall be adjusted by way of a deduction or an addition dependent on the Service Provider's achievement or non-achievement of the KPIs calculated in accordance with Schedule 4 (Key Performance Indicators), provided that no deduction shall be made to the Base Payment for the Service Provider's non-achievement of a KPI to the extent that such non-achievement results from:
7.3.1 a breach by the Council of any of its obligations under this Contract; 7.3.2 a Force Majeure Event; or
7.3.3 a Relief Event.
7.4 Share of savings
Where the Service Provider has proposed a change to the Services which results in a reduction of the Target Cost and that change has been accepted by the Council under the Change Control Procedures, the Council will pay to the Service Provider a proportion of the savings achieved directly as a result of the change calculated in accordance with the Schedule of Variables.
7.5 Value Added Tax ("VAT")
7.5.1 The Council shall pay any VAT on the Remuneration at the rate and in the manner prescribed by law from time to time.
7.5.2 The Service Provider shall provide the Council with any information reasonably requested by the Council in relation to the amount of VAT chargeable in accordance with this Clause 7.5.
7.5.3 Where any amount is calculated by reference to any sum that has or may be incurred under this Contract, the amount shall include any VAT to the extent that such VAT is not recoverable as input tax by that person (or a member of the same VAT group), whether by set-off or repayment.
7.6 Open Book Accounting
7.6.1 Without prejudice to the rest of this Clause 7.6, the Service Provider shall, at the request of the Council, provide to the Council a certificate of costs (the "Certificate of Costs") within twenty one (21) Calendar Days of such request, provided that the Council will not request a Certificate of Costs more than once in any year of the Contract Term, or with such other frequency as the Council may reasonably request.
7.6.2 The Certificate of Costs shall set out the Service Provider's direct costs, and overheads in providing the Services over the preceding year of the Contract Term, including details of the following:
(a) the Target Cost;
(b) actual capital expenditure, including capital replacement costs;
(c) actual operating expenditure relating to the provision of the Services, with an analysis showing the costs of staff, consumables, sub-contracted and bought-in services;
(d) all interest, expenses and other third party financing costs incurred in relation to the Services; and (e) details of the overhead recoveries that have been made in relation to the Services.
7.6.3 Following receipt of the Certificate of Costs, the Service Provider shall provide to the Council such additional information as it may reasonably request (within twenty one (21) Calendar Days of such request having been made (or such other time frame as may be reasonably agreed between the parties)) so that the Council can verify the accuracy of the Certificate of Costs.
8. PAYMENT TERMS
8.1 The Council shall pay the Remuneration to the Service Provider in accordance with the procedure set out in the rest of this Clause 8.
8.2 The Service Provider shall submit an application for payment of the Remuneration to the Council's Representative within seven (7) Calendar Days of the end of each Payment Period.
8.3 The application for payment of the Remuneration shall be in the form of a pro-forma invoice (the form of which shall be agreed in advance with the Council's Representative) in three (3) distinct parts covering:
8.3.1 the Base Payment;
8.3.2 any adjustment to the Base Payment in accordance with Clause 7.3 (Adjustment to the Base Payment) and/or as a result of a change introduced under Clause 9;
8.3.3 any share of savings in accordance with Clause 7.4 (Share of Savings).
8.4 The Council's Representative shall consider and (subject to Clauses 8.5 and 8.6) certify an application for payment made under Clause 8.2 within fourteen (14) Calendar Days of receipt of the application.
8.5 Should the Council's Representative require an adjustment to any part of the Remuneration set out in the application for payment, the Council's Representative shall inform the Service Provider in writing of the reason for and effect of any such adjustment at the same time as certifying the application (in accordance with Clause 8.6).
8.6 Notwithstanding any adjustment made to the Remuneration as outlined in Clause 8.5 the part of the Remuneration unaffected by the adjustment will be certified in accordance with Clause 8.4.
8.7 The Council shall pay the Remuneration to the Service Provider within fourteen (14) Calendar Days of certification of the application. 8.8 Interest is payable on late payment of the Remuneration at the rate set out in the Schedule of Variables.
8.9 In the event that the Service Provider enters into a sub-contract in connection with this Contract, the Service Provider shall ensure that a term is included in the sub-contract that requires the Service Provider to pay all sums due under the sub-contract to the relevant sub-contractor within a specified period, not exceeding thirty (30) Calendar Days, from the date of receipt of a valid invoice as defined by the terms of the sub-contract.
8.10 Any dispute relating to the calculation or payment of the Remuneration under Clause 7 (Remuneration) or this Clause 8 (Payment Terms) shall be resolved in accordance with the Dispute Resolution Procedure.
9. CHANGE TO THE SERVICES AND/OR THE REMUNERATION
9.1 Either Party may request a change to the Services and/or the Remuneration in accordance with the Change Control Procedures.
9.2 Where a change in law occurs which directly affects the provision of the Services under this Contract, either Party may request any necessary change to the Services and/or the Remuneration to deal with the change in law in accordance with the Change Control Procedures.
9.3 Budget control
9.3.1 If the Council requires a Budget Change it will notify the Service Provider in writing no later than 1st April of the year of the Contract Term from which the Budget Change is to apply (or such later date as the Parties may otherwise agree), setting out the level of the reduction or increase to the Base Payment payable to the Service Provider and identifying the affected Services.
9.3.2 The Council may not propose a Budget Change before 1st April 2013.
9.3.3 The Service Provider shall provide the Council within fifteen (15) Working Days of receipt of a notice from the Council pursuant to Clause 9.3.1 an outline proposal setting out the Council's options in order to achieve the reduction or increase to the Base Payment payable to the Service Provider and the estimated change in costs for each option (the "Options Proposal").
9.3.4 In preparing the Options Proposal the Service Provider shall consider (without limitation) in the following order of precedence: (a) changes to improve the efficiency of the provision, performance or delivery of the Services or particular part of the Services;
(b) adjustments to KPIs;
(c) relief from compliance with its obligations under this Contract,
as may be proportionate to the required reduction or increase to the sums payable to the Service Provider.
9.3.5 The Options Proposal shall include:
(a) a comprehensive range of options which address different aspects of the Services with the adoption of one or more options enabling the Services to be delivered to the proposed Budget Change; and
(b) in relation to each option, the reasonable professional opinion of the Service Provider as to the impact of such option on the provision of the Services.
9.3.6 No later than thirty (30) Working Days after the Council receives the Options Proposal, the Council shall notify the Service Provider as to the Council's preferred option and the Service Provider shall within ten (10) Working Days provide a detailed proposal for that option which shall include:
(a) the change in Target Cost and Base Payment;
(b) any amendments required to this Contract (including without limitation the Specification),
(the "Budget Change Proposal").
9.3.7 As soon as practicable after the Council receives the Budget Change Proposal the Parties shall discuss and agree the issues set out in the Budget Change Proposal.
9.3.8 If the Parties cannot agree on the contents of the Budget Change Proposal then the dispute will be determined in accordance with Clause 25 provided that such determination shall not require the Council to increase the sum payable to the Service Provider.
9.3.9 After a Budget Change Proposal has been agreed or otherwise determined the Parties shall promptly seek to agree how any consequential changes should be documented to ensure that they are legally binding on both Parties (and in the absence of agreement the form of such documentation shall be determined in accordance with Clause 25) and thereafter the Parties shall promptly sign or execute (as appropriate) such documentation. SECTION C
10. PREMISES
10.1 No premises owned by the Council will be utilised by the Service Provider.
10.2 Access to Council premises
10.2.1 The Council shall give access to its premises for the purpose of attending monthly and other meetings arranged by the Council, to any person employed or engaged by the Service Provider or any sub-contractor required to attend the meetings, provided that the Council may refuse admission to such a person if such admission would present a security risk.
10.2.2 Any person employed or engaged by the Service Provider or any sub-contractor who requires access to any premises occupied by or on behalf of the Council shall comply with such rules, regulations and requirements (including those relating to security arrangements) as may be in force from time to time for the conduct of personnel when at or outside those premises.
10.3 Premises owned by the Service Provider
Where the Council requires access to premises owned by the Service Provider in order to receive the Services, the Parties shall agree suitable licensing, financial and servicing arrangements.
11. EQUIPMENT AND MATERIALS
11.1 The Service Provider shall provide all Equipment and Materials necessary for the provision of the Services and shall be responsible for the costs of providing such Equipment and Materials.
11.2 The Service Provider shall ensure that all Equipment and Materials are:
11.2.1 suitable for the purposes for which they are intended;
11.2.2 maintained in a safe, serviceable and clean condition and replaced as necessary, and
11.2.3 adequately insured. 11.3 On expiry of the Contract Term, the Council may purchase the Equipment and Materials or any part of the Equipment and Materials which are used exclusively in the provision of the Services at the price calculated in accordance with the Schedule of Variables.
12. INTELLECTUAL PROPERTY
12.1 Council Software
12.1.1 The Council hereby grants to the Service Provider from the Commencement Date a non-exclusive, non-transferable licence to use and maintain the Council Software (and related technical, user and other documentation) as detailed in Schedule 10 (Intellectual Property) for the sole purpose of providing the Services.
12.1.2 The Council will use reasonable endeavours to request that the provider of any External Software grants to the Service Provider from the Commencement Date a non-exclusive, non-transferable licence to use and maintain the External Software as detailed in Schedule 10 (Intellectual Property) for the sole purpose of providing the Services. All costs associated with such a licence shall be payable by the Service Provider.
12.2 Service Provider Software
The Service Provider hereby grants to the Council from the Commencement Date a non-exclusive, non-transferable licence to use the Service Provider Software (and related technical, user and other documentation) as detailed in Schedule 10 (Intellectual Property) for the purpose set out in the Schedule of Variables.
12.3 Termination of software licences
The licence(s) granted under this Clause 12 shall terminate immediately on expiry of the Contract Term.
12.4 Intellectual Property Rights
12.4.1 All intellectual property rights in any material produced during the Contract Term and in all reports submitted under this Contract shall vest in the Council unless otherwise expressly agreed.
12.4.2 Such materials shall not be used, reproduced or disseminated for any other purposes without the prior written permission of the Council's Representative. 13. TUPE
13.1 Application of TUPE
13.1.1 The Parties agree that the provisions of TUPE may apply to this Contract as indicated in the Schedule of Variables.
13.1.2 In the event that TUPE does apply, the Parties agree that, where the identity of a provider (including the Council) of any of the Services is changed pursuant to this Contract (including on expiry of the Contract Term), the change shall constitute a Relevant Transfer.
13.1.3 On the occasion of a Relevant Transfer (other than a Relevant Transfer on expiry of the Contract Term), the Service Provider shall and shall procure that any replacement service provider shall comply with its obligations under TUPE and the Directive in respect of the Transferring Employees.
13.2 Emoluments and Outgoings
13.2.1 The Council shall be responsible for all emoluments and outgoings in respect of the Transferring Employees, including without limitation all wages, holiday pay, bonuses, commissions, payments of PAYE, national insurance contributions, pension contributions and otherwise, up to the date of any Relevant Transfer.
13.2.2 Notwithstanding clause 13.2A below, the Service Provider shall be or shall procure that any sub-contractor shall be responsible for all emoluments and outgoings in respect of the Transferring Employees, including without limitation all wages, holiday pay, bonuses, commission, payment of PAYE, national insurance contributions, pension contributions and otherwise, from and including the date of any Relevant Transfer.
13.2A Subject to clause 13.2C below, the Council shall reimburse the Service Provider or any relevant sub-contractor for any Redundancy Costs provided that the Service Provider provides or procures that any relevant sub-contractor provides to the Council such evidence of the Redundancy Costs as the Council shall reasonably require.
13.2B The Service Provider shall and shall procure that any sub-contractor shall use all reasonable endeavours to minimise the Redundancy Costs including conducting a full and fair consultation process in accordance with any obligation under the Employment Rights Act 1996, section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, and TUPE (as amended from time to time). 13.2C The Council will not reimburse the Service Provider or any relevant sub-contractor for any costs, expenses, losses or liabilities arising out of:
a) any discriminatory act or omission of the Service Provider or sub-contractor as applicable; and/or
b) any late or non-payment of amounts due to the Transferring Employees by the Service Provider or sub-contractor as applicable; and/or
c) any additional or enhanced payments agreed between the Service Provider or the sub-contractor as applicable and any Recurring Transferring Employee pursuant to any compromise agreement or COT3, without the prior written agreement of the Council.
13.3 Pensions
13.3.1 Service Provider to Become an Admission Body
Where the Service Provider or any sub-contractor (which for the purposes of this Clause 13 shall include any subsequent or replacement sub-contractor) employs any Eligible Employees on the occasion of a Relevant Transfer and wishes to offer those Eligible Employees membership of the Local Government Pension Scheme, the Service Provider shall procure and shall procure that any sub-contractor shall procure that it shall become an Admission Body. The Service Provider shall before the Relevant Transfer execute and shall procure that any sub-contractor shall execute an Admission Agreement which will have effect from and including the occasion of a Relevant Transfer.
13.3.2 Service Provider Admission Agreement
The Council shall before the occasion of a Relevant Transfer execute the Admission Agreement referred to in Clause 13.3.1 (Service Provider to Become an Admission Body).
13.3.3 Indemnity for a Breach of the Service Provider Admission Agreement
Without prejudice to the generality of this Clause 13, the Service Provider hereby indemnifies and shall procure that any sub-contractor hereby indemnifies the Council and/or any future service provider on demand from and against all Direct Losses suffered or incurred by it or them which arise from any breach by the Service Provider or any sub-contractor of the terms of the Admission Agreement to the extent that such liability arises before or as a result of the termination or expiry of this Contract (howsoever caused).
13.3.4 Indemnity or Bond
Without prejudice to the generality of the requirements of this Clause 13, the Service Provider shall procure that it and each relevant sub-contractor shall as soon as reasonably practicable obtain any indemnity or bond required in accordance with the Admission Agreement.
13.3.5 Right of Set-Off
The Council shall have a right to set off against any payments due to the Service Provider or any sub-contractor under this Contract an amount equal to any overdue employer and employee contributions and other payments (and interest payable under the LGPS Regulations) due from the Service Provider or any sub-contractor under the Admission Agreement.
13.3.6 Service Provider Ceases to be an Admission Body
If the Service Provider or any sub-contractor employs any Eligible Employees on the occasion of a Relevant Transfer and the Council and the Service Provider or any sub-contractor (as appropriate) are both of the opinion that it is not possible to operate the provisions of Clauses 13.3.1 (Service Provider to Become an Admission Body) to 13.3.5 (Right of Set Off) inclusive than the provisions of Clauses 13.3.1 (Service Provider to Become an Admission Body) to 13.3.5 (Right of Set Off) inclusive shall not apply (without prejudice to any rights of the Council under those Clauses) and the provisions of Clause 13.3.7 (Service Provider Scheme) shall apply.
13.3.7 Service Provider Scheme
Where this Clause 13.3.7 (Service Provider Scheme) applies pursuant to Clause 13.3.6 (Service Provider Ceases to be an Admission Body), the following shall apply:
(a) The Service Provider shall and shall procure that any sub-contractor shall not later than on the occasion of the Relevant Transfer or the Cessation Date (as the case may be) nominate to the Council in writing the occupational pension scheme or schemes which it or any sub-contractor proposes shall be the Service Provider Scheme for the purposes of this Clause 13.3.7 (Service Provider Scheme). Such pension scheme or schemes must be:
i established within three (3) months of the Relevant Transfer or Cessation Date (as the case may be) and maintained until any payment to be made under Schedule 15 (Bulk Transfer Terms) is made;
ii reasonably acceptable to the Council (such acceptance not to be unreasonably withheld or delayed);
iii registered under section 153 of the Finance Act 2004; and
iv certified by an actuary nominated by the Council in accordance with relevant guidance produced by the Government Actuary's Department as providing benefits which are broadly comparable to those provided by the LGPS,
(b) The Service Provider undertakes and shall procure that any sub-contractor undertakes to the Council (for the benefit of the Council itself and for the Council as agent and trustee for the benefit of the Eligible Employees) that it or any sub-contractor shall procure that:
i the Eligible Employees shall by three (3) months before the occasion of the Relevant Transfer or such other date as the Council may propose or the Cessation Date (as the case may be) be offered membership of the Service Provider Scheme with effect from and including the Relevant Transfer or Cessation Date (as the case may be);
ii the Service Provider Scheme shall provide benefits in respect of the Eligible Employees' periods of service on and after the occasion of the Relevant Transfer or Cessation Date (as the case may be) which the actuary nominated by the Council in accordance with relevant guidance produced by the Government Actuary's Department shall certify to be broadly comparable to the benefits which the Eligible Employees would have been entitled to under the Local Government Pension Scheme had they continued in membership of the Local Government Pension Scheme;
iii if the Service Provider Scheme is terminated or the Service Provider's or any sub-contractor's participation in the Service Provider Scheme terminates, a replacement pension scheme shall be provided with immediate effect for those Eligible Employees who are still employed by the Service Provider or any sub-contractor. The replacement scheme must comply with this Clause 13.3.7 (Service Provider Scheme) as if it were the Service Provider Scheme;
iv before the occasion of the Relevant Transfer or Cessation Date (as the case may be) the trustees of the Service Provider Scheme shall undertake by deed to the Council that they shall comply with the provisions of Clauses 13.3.7(a) to (a)iv (Service Provider Scheme), 13.3.8(a), 13.3.8(a)ii and 13.3.8(a)iv (Undertaking from the Service Provider) and Schedule 15 (Bulk Transfer Terms); and
v where the Service Provider Scheme has not been established at the occasion of the Relevant Transfer or Cessation Date (as the case may be), the Eligible Employees shall be provided with benefits in respect of death-in-service benefits provided by the Local Government Pension Scheme immediately before the occasion of the Relevant Transfer or Cessation Date (as the case may be). Such benefits will continue to be provided until death-in-service benefits are provided by the Service Provider Scheme.
(c) The parties shall use best endeavours to agree the terms of Schedule 15 (Bulk Transfer Terms) which shall apply in relation to the terms for bulk transfers from the Local Government Pension Scheme to the Service Provider's Scheme following the Relevant Transfer and any subsequent bulk transfers on termination or expiry of this Contract.
13.3.8 Undertaking from the Service Provider
(a) The Service Provider undertakes and shall procure that any sub-contractor undertakes to the Council (for the benefit of the Council itself and for the Council as agent and trustee for the benefit of the Eligible Employees) that:
i all information which the Council or their respective professional advisers may reasonably request from the Service Provider or any sub-contractor for the administration of the Local Government Pension Scheme or concerning any other matters raised in Clause 13.3.7 (Service Provider Scheme), Clause 13.3.8 (Undertaking from the Service Provider) or Schedule 15 (Bulk Transfer Terms) shall be supplied to them as expeditiously as possible;
ii the Service Provider or any sub-contractor shall not, without the consent in writing of the Council (which shall only be given subject to the payment by the Service Provider or any sub-contractor of such reasonable costs as the Council may require) consent to instigate, encourage or assist any event which could impose on the Local Government Pension Scheme or on the Council a cost in respect of any Eligible Employee greater than the cost which would have been payable in respect of that Eligible Employee had that consent, instigation, encouragement or assistance not been given;
iii until the occasion of the Relevant Transfer, the Service Provider or any sub-contractor shall not issue any announcements (whether in writing or not) to the Eligible Employees concerning the matters stated in Clauses 13.3.1 (Service Provider to Become an Admission Body) to 13.3.6 (Service Provider ceases to be an Admission Body) inclusive without the consent in writing of the Council (not to be unreasonably withheld or delayed); iv the Service Provider or any sub-contractor shall not take or omit to take any action which would materially affect the benefits under the Local Government Pension Scheme or under the Service Provider Scheme of any Eligible Employees who are or will be employed wholly or partially in connection with the Services without the prior written agreement of the Council (not to be unreasonably withheld or delayed) provided that the Service Provider or any sub-contractor will be so entitled without the requirement of consent to give effect to any pre-existing contractual obligations to any Eligible Employees.
13.3.9 Discretionary Benefits
(a) Where the Service Provider or any sub-contractor is an Admission Body, the Service Provider shall and shall procure that any sub-contractor shall award benefits (where permitted) to the Eligible Employees under the Compensation Regulations and/or the Local Government Pension Scheme in circumstances where the Eligible Employees would have received such benefits had they still been employed by the Council.
(b) Where the award of benefits in Clause 13.3.9(a) (Discretionary Benefits) is not permitted under the Compensation Regulations and/or the Local Government Pension Scheme or the Service Provider or any sub-contractor is not an Admission Body, the Service Provider shall and shall procure that any sub-contractor shall award benefits to the Eligible Employees which are identical to the benefits the Eligible Employees would have received under the Compensation Regulations and/or the Local Government Pension Scheme in circumstances where the Eligible Employees would have received such benefits had they still been employed by the Council.
(c) Under Clause 13.3.9 (a) and (c) (Discretionary Benefits), where such benefits are of a discretionary nature, they shall be awarded on the basis of the Council's written policy in relation to such benefits at the time of the Relevant Transfer (which the Council shall provide upon request). Where the payment of such benefits is not, for whatever reason, possible, the Service Provider shall and shall procure that any relevant sub-contractor shall compensate the Eligible Employees in a manner which is broadly comparable or equivalent in cash terms.
13.3.10 Claims from Eligible Employees or Trade Unions
(a) The Service Provider hereby indemnifies and shall procure that any sub-contractor shall indemnify the Council and/or any future service provider and, where relevant, their sub-contractors from and against all Direct Losses suffered or incurred by it or them which arise from claims by Eligible Employees of the Service Provider or any sub-contractor or by any trade unions, elected employee representatives or staff associations in respect of all or any such Eligible Employees which losses:
i relate to pension rights in respect of periods of employment on and after the Relevant Transfer until the date of termination or expiry of this Contract; or
ii arise out of the failure of the Service Provider or as appropriate any sub-contractor's failure to comply with the provisions of this Clause 13 before the date of termination or expiry of this Contract,
and the Council and the Service Provider or any sub-contractor agree that Clause 47 (Contracts (Rights Third Party)) of this Contract shall not apply to this Clause 13.3.10
13.3.11 Liability for Costs
The costs of the Council necessarily and reasonably incurred in connection with the Admission Agreement and/or of obtaining the necessary certification of comparability in accordance with Clause 13.3.7 (a) [Service Provider Scheme] shall be borne by the Service Provider or any sub-contractor.
13.3.12 Transfer to Another Employer
(a) Save on expiry or termination of this Contract, if the employment of any Eligible Employee transfers to another employer (by way of a transfer under TUPE) the Service Provider shall and shall procure that any sub-contractor shall: i consult with and inform those Eligible Employees of the pension provisions relating to that transfer; and
ii procure that the employer to which the Eligible Employees are transferred (the New Employer) complies with the provisions of this Clause 13 (Pensions) provided that references to the Service Provider or any sub-contractor will become references to the New Employer, references to Relevant Transfer will become references to the date of the transfer to the New Employer and references to Eligible Employees will become references to the Eligible Employees so transferred to the New Employer.
13.3.13 Pension Issues on Expiry or Termination
The Service Provider shall and shall procure that any sub-contractor shall:
(a) maintain such documents and information as will be reasonably required to manage the pension rights of and aspects of any onward transfer of any person engaged or employed by the Service Provider or any sub-contractor in the provision of the Services on the expiry or termination of this Contract (including without limitation identification of the Eligible Employees);
(b) promptly provide to the Council such documents and information mentioned in Clause (a) (Pension Issues on Expiry or Termination) which the Council may reasonably request in advance of the expiry or termination of this Contract; and
(c) fully co-operate (and procure that the trustees of the Service Provider Scheme shall fully co-operate) with the reasonable requests of the Council relating to any administrative tasks necessary to deal with the pension rights of and aspects of any onward transfer of any person engaged or employed by the Service Provider or any sub-contractor in the provision of the Services on the expiry or termination of this Contract.
13.4 Provision of information The Council warrants that the information set out in Schedule 6 (Transferring Employees) is accurate and complete as at the date of this Contract and that the Transferring Employees were employed by the Council immediately prior to the Transfer Date.
13.5 Service Provider to inform Council of any measures
The Service Provider shall or shall procure that any sub-contractor shall within fourteen (14) Calendar Days of receiving a request from the Council, provide the Council with any information which is reasonably necessary concerning any measures (within the meaning of TUPE and the Directive) that the Service Provider intends to take in relation to any Transferring Employee and shall indemnify the Council against all losses, costs, claims, demands, actions, fines, penalties, liabilities and expenses (including legal expenses) in relation to any breach of this Clause 13.5.
13.6 Indemnities
13.6.1 The Council shall indemnify and keep indemnified the Service Provider from and against all losses, costs, claims, demands, actions, fines, penalties, liabilities and expenses (including legal expenses) in connection with or as a result of any claim or demand by any Transferring Employee arising out of the employment of any such employee provided that this arises from any act, fault or omission of the Council prior to the date of the Relevant Transfer.
13.6.2 The Service Provider shall indemnify and keep indemnified the Council from and against all losses, costs, demands, actions, fines, penalties, awards, liabilities and expenses (including legal expenses) in connection with or as a result of any claim or demand by any Transferring Employee arising out of the employment of such employee provided that this arises from any act, fault or omission of the Service Provider or any sub-contractor on or after the date of the Relevant Transfer.
13.6.3 The Service Provider shall indemnify and keep indemnified the Council from and against all losses, costs, claims, demands, actions, fines, penalties, awards, liabilities and expenses (including legal expenses) in connection with or as a result of:
(a) any claim by any trade union or staff association or employee representative (whether or not recognised by the Service Provider in respect of all or any of the Transferring Employees) arising from or connected with any failure by the Service Provider or any sub-contractor to comply with any legal obligation to such trade union, staff association or other employee representative under TUPE or the Directive and, whether any such claim arises or has its origin before or after the date of the Relevant Transfer;
(b) any step or measure envisaged by the Service Provider and/or any sub-contractor in relation to employees affected by this Contract; and
(c) the change of identity of the employer.
13.7 TUPE Compliance on Termination
13.7.1 During the twelve (12) months prior to the expiry of the Contract Term or after the Council has given notice to terminate this Contract and within twenty one (21) Calendar Days of being so requested to do so, the Service Provider shall fully and accurately disclose to the Council any and all information in relation to all persons engaged in providing the Services including:
(a) a list of employees employed by the Service Provider or any sub-contractor in the provision of the Services;
(b) a list of agency workers, agents and independent contractors engaged by the Service Provider or any sub-contractor in the provision of the Services;
(c) the total payroll bill (i.e. total taxable pay and allowances including employer’s contributions to pension schemes) of those persons; and
(c) the terms and conditions of employment or other contract with such persons.
13.7.2 The Service Provider shall notify the Council as soon as reasonably practicable of any variation in the information provided under Clause 13.7.1 above and shall provide the Council with the revised and accurate information.
13.7.3 During the twelve (12) months prior to expiry of the Contract Term or where notice to terminate this Contract for whatever reason has been given, the Service Provider shall not and shall procure that any sub-contractor shall not without the prior written consent of the Council unless bona fide in the ordinary course of business:
(e) vary or purport or promise to vary the terms and conditions of employment of any employee employed in connection with the Services;
(b) materially increase or decrease the number of employees employed in connection with the Services; or (c) assign or re-deploy any employee employed in connection with the Services to other duties unconnected with the Services or assign or re-deploy any employee employed to carry out duties unconnected with the Services to the duties connected with the Services.
13.8 Obligations on Termination
13.8.1 The Service Provider shall discharge all obligations and liabilities in respect of the Relevant Employees up to and including the Relevant Transfer Date.
13.8.2 The Service Provider shall indemnify and keep indemnified the Council against any loss caused to the Council or any New Service Provider by any inaccuracy or incompleteness in such information as is provided under 13.7.1 above or by any changes in the information which have not been communicated to the Council (whether relating to the number, identity or details of the Relevant Employees or otherwise) which occur prior to the Relevant Transfer Date.
13.8.3 The Service Provider shall indemnify the Council in full from and against all costs, claims, liabilities, expenses or demands (including legal costs) whether direct, indirect or consequential which the Council and/or any New Service Provider incurs arising from:
(a) any act or omission of the Service Provider or any sub-contractor in relation to the Relevant Employees.
(b) any claim by an employee or former employee of the Service Provider or any sub-contractor, and
(c) any representations made by the Service Provider or any sub-contractor in relation to employment by the Council and/or any New Service Provider.
13.8.4 The Council shall indemnify the Service Provider in full from and against all costs, claims, liabilities, expenses or demands (including legal costs) whether direct, indirect or consequential which the Service Provider incurs arising from any act or omission of the Council in relation to the Relevant Employees.
13A TUPE Plus
13A.1 The Service Provider agrees that it will not vary the terms and conditions of employment of any Transferring Employee for the first 12 months immediately following the Commencement Date. If the Service Provider seeks to vary the terms and conditions of employment of any Transferring Employee after the expiry of 12 months following the Commencement Date, it shall comply with its consultation obligations as the employer of the Transferring Employees and conduct all reasonable negotiations with any recognised trade unions. The Parties agree that the Service Provider may make such changes to the Transferring Employees' terms and conditions of employment as are reasonably necessary to effectively manage the organisational structure of its workforce.
13 A.2 During the first 12 months following Commencement Date, the Service Provider shall apply job evaluation schemes to Transferring Employees similar to those applied by the Council as at the Commencement Date. If the Service Provider seeks to apply different job evaluation schemes to those applied by the Council as at the Commencement Date, it shall comply with its consultation obligations as the employer of the Transferring Employees and conduct all reasonable negotiations with any recognised trade unions.
13 A.3 The Parties agree that the Council shall provide the Service Provider with HR policies and procedures, including but not limited to those relating to equality, health and safety and whistle blowing, and a Trade Union and Employee Relations Framework, that apply to the Transferring Employees and are in force as at the Commencement Date.
13 A.4 The Service Provider shall apply to the Transferring Employees such workplace policies as are broadly similar to those provided by the Council in accordance with clause 13A.3 above.
13 A.5 The Authority will provide the Service Provider with details of the Trade Union and Employee Relations Framework and the Service Provider agrees to consider those details and discuss how the details provided can be utilised in setting up a comparable framework between any recognised trade unions and the Service Provider. The Service Provider agrees to provide access and facilities, where practicable, to recognised trade unions at the Service Provider's premises. The Service Provider will contribute an amount to the Authority's fund for trade union release time calculated in accordance with the formula in Schedule 17 (Formula for calculating contributions to Trade Union Fund). The Authority agrees to allow the Service Provider to claim the reasonable costs calculated in accordance with Schedule 17 (Formula for calculating contributions to Trade Union Fund) incurred by agreed trade union release time from normal duties from the Authority's central fund. The Service Provider agrees and acknowledges that there will be no mark up, enhancement or other increase to the amount calculated in accordance with the formula set out in Schedule 17 (Formula for calculating contributions to Trade Union Fund). 13 A.5.2 To the extent that the Service Provider recognises any trade unions, it shall provide a facility for the deduction of trade union subscriptions from the salaries of any applicable Transferring Employees.
13 A.5.3 The Service Provider agrees to recognise any Trade Union which the Authority recognises in respect of the Transferring Employees to the same extent as the Authority does at the point immediately before the Commencement Date. The Service Provider's obligation under this clause shall continue for as long as the Transferring Employees continue to work exclusively on the Services provided under this Agreement.
13 A.6 The Parties agree, that they shall use their reasonable endeavors to act in accordance with the principles set out in schedule 18 (save for those that relate to pensions), as applicable to each party.
14. STAFFING
14.1 Staff Training
14.1.1 The Service Provider shall ensure that there are at all times employed in and about the provision of the Services sufficient staff who are properly and sufficiently trained, qualified, competent, careful, skilled, honest and experienced to ensure that the Services are provided at all times and shall ensure that adequate training is provided and maintained to all such staff to ensure that they are comprehensively trained to perform to the standard required especially in regard to:
(a) the task or tasks to be performed; (b) all relevant Council guidelines; (c) all relevant provisions of this Contract; (d) all statutory requirements relevant to the Services; and (e) the need to maintain the highest standards of courtesy and consideration.
14.1.2 The Service Provider shall ensure that within the period set out in the Schedule of Variables all civil enforcement officers engaged in the provision of the Services shall hold a current certificate as a result of passing the nationally accredited VFQ for civil enforcement officers (level 2) or hold the NVQ for civil enforcement officers (level 2).
14.1.3 The Service Provider agrees that: (a) where any staffing or skill levels have been agreed as part of the Specification, those levels will be maintained throughout the Contract Term;
(b) where any named staff have been agreed to be provided as part the Specification, those staff will be assigned to work on this Contract;
(c) it has sufficient reserves of trained and competent staff within each skill level to provide the Services including sufficient reserves to provide cover for staff holidays, staff sickness, emergencies or any other absence; and
(d) it will replace promptly any staff who are assigned to this Contract and who cease to be in its employment or under its control for whatever reasons and that such replacements shall have the broadly equivalent skill levels and shall in every way be suitable for the performance of the Services.
14.1.4 The Service Provider shall employ and/or train staff in accordance with all relevant Legislation and industry best practice, and where applicable, shall ensure that staff are members of the Institute of Parking Professionals (IPP) or European equivalent and are trained in accordance with the recommendations of the BPA Skills and IPP Board.
14.2 Removal of Staff
14.2.1 Where the Council becomes aware of a complaint against a member of the Service Provider’s staff, agents or sub-contractors who is involved in the provision of the Services, the Council’s Representative shall notify the Contract Manager of the nature of the complaint and provide supporting documentation where possible.
14.2.2 Within ten (10) Calendar Days of receipt of a notification under Clause 14.2.1, the Contract Manager shall meet with the Council’s Representative to discuss measures to resolve the complaint and to avoid future complaints.
14.2.3 Where the Contract Manager and the Council’s Representative agree that the complaint justifies the removal of a member of the Service Provider’s or sub-contractor’s staff from the provision of the Services, the Service Provider shall immediately remove or procure the removal of that person from the provision of the Services and shall provide or procure the provision of a suitable replacement. 14.2.4 Any dispute in relation to this Clause 14.2 shall be resolved in accordance with the Dispute Resolution Procedure.
14.3 Checks on Staff
14.3.1 If the circumstances under which the Services are provided are such that the Service Provider's officers, employees, agents or sub-contractors are exempt from the provisions of Section 4(2) of the Rehabilitation of Offenders Act 1974 (for the purposes of this sub-Clause the "Act"), by virtue of the Rehabilitation of Offenders Act 1974 (Exemptions) Order 1975 (for the purposes of this sub-Clause the "Order"), then the Service Provider shall use reasonable endeavours to ensure that the Service Provider's officers, employees, agents or sub-contractors shall provide information in accordance with the Act and Order about convictions which would otherwise be spent under the provisions of the Act and shall undertake checks of the appropriate level with the Criminal Records Bureau, in respect of all such individuals ("CRB Checks").
14.3.2 The Service Provider shall disclose to the Council's Representative the details of all convictions and CRB Checks of the Service Provider's officers, employees, agents or sub-contractors and in the event that such checks reveal that members of the Service Provider's officers, employees, agents or sub-contractors have relevant convictions or other relevant Criminal Record(s), the Council may direct that such persons should be removed from the provision of the Services.
14.4 Abuse of Staff
The Service Provider and the Council shall liaise with the police in relation to the prosecution of any person for abuse of a member of the Service Provider's staff, agents or sub-contractors who is involved in the provision of the Services. SECTION D
15. REVIEW MEETINGS
15.1 The Council's Representative and the Contract Manager shall hold review meetings at monthly intervals and at any other times as required by the Council.
15.2 The purpose of the monthly review meetings are to:
15.2.1 review the Service Provider's achievement or non-achievement of the KPIs;
15.2.2 address the Service Provider's non-achievement of KPIs and formulate a plan for improving performance;
15.2.3 resolve problems which may otherwise prejudice the performance of the Parties' obligations under this Contract or the Council's obligations under the Contract;
15.2.4 explore and agree methods of improving service quality, reducing costs and achieving continuous improvement; and
15.2.5 provide an opportunity for either Party to raise issues which could cause disruption to the provision of the Services or otherwise prejudice this Contract.
15.3 In the event that the performance of the Service Provider falls below the zero level as described in Schedule 3 (Payment Mechanism) or where either Party requests a meeting, senior executives of each Party shall within ten (10) Calendar Days of such occurrence/request hold a special review meeting to agree an action plan to bring performance to acceptable levels.
15.4 In addition to the review meetings held under Clauses 15.1 and 15.3, senior executives of each Party shall hold reviews at mutually agreed intervals but in any event within six (6) months of the Commencement Date and subsequently at least once within each twelve (12) month period thereafter to review the Services provided, the KPIs, the Target Cost, the Remuneration, the terms of this Contract and any other relevant matters with a view to deciding whether any improvements can be made and implemented during the Contract Term. Minutes of such meetings shall be taken by the Service Provider and approved by the Council's Representative. 15.5 Any changes resulting from the meetings described in this Clause 15 shall be affected through the Change Control Procedures.
16. PROVISION OF INFORMATION
16.1 The Council shall provide the Service Provider with the information set out in the Specification.
16.2 The Council shall use reasonable endeavours to notify the Service Provider of any proposed changes to bye-laws, policies or traffic regulation orders which in its reasonable opinion may affect the provision of the Services.
16.3 The Service Provider shall keep and maintain such necessary data and information and shall complete or provide (within ten (10) Calendar Days of any Council Request) such assistance as the Council may reasonably require by written notice to the Service Provider to enable the Council to complete all official returns, including, but without limitation the following:
16.3.1 returns to any central government body or properly authorised agency of central government; and
16.3.2 information required by any statutory body or compliance with any statute or statutory instrument.
16.4 The Service Provider shall at all times maintain separate records of the following:
16.4.1 full particulars of the costs of performing the Services, including those related to finance, investment and maintenance;
16.4.2 a full record of all incidents relating to health, safety and security which occur during the Contract Term;
16.4.3 a full record of all maintenance procedures carried out during the Contract Term; and
16.4.4 such other records as the Council may reasonably require having regard to the cost to the Service Provider of maintaining and providing such records.
16.5 The records referred to in this Clause 16 shall be retained for a period of at least six (6) years (or such longer period as may be specified by the Council from time to time) after the Service Provider's obligations under this Contract have come to an end. 16.6 All information referred to in this Clause 16 is subject to the obligations set out in Clause 34 (Confidentiality).
16.7 Upon the expiry or termination of this Contract, or in the event that the Council wishes to enter into another contract for the provision of the Services and irrespective of the identity of any replacement provider of the Services, the Service Provider shall comply with all reasonable requests by the Council to provide information relating to this Contract.
17. AUDIT
The Service Provider shall at all reasonable times (including following termination for whatever reason of this Contract) afford to or procure for any auditor (including any auditor carrying out functions under the Audit Commission Act 1998 or the Local Government Act 1999) conducting an internal audit or an external audit, or to or for the Council's Representative access to any records, information and data in the possession or control of the Service Provider which in any way relate to or are or have been used in connection with the performance of the Services including (but without limitation) Council data and information stored on a computer system operated by the Service Provider and shall include permission to copy and remove any copies and remove the originals of such documents. The Service Provider shall allow auditor access to the Service Provider's premises for the purposes of carrying out the above audit.
18. MONITORING
The Service Provider shall provide assistance to the Council for the purposes of monitoring the provision of the Services at no additional charge to the Council.
19. COMPLAINTS
19.1 Prior to the Commencement Date, the Service Provider shall agree with the Council a complaints procedure in respect of the provision of the Services which enables the Council to respond to complaints by members of the public.
19.2 As a minimum, the complaints procedure referred to in Clause 19.1 shall include the following requirements: 19.2.1 that the Service Provider shall not enter into any correspondence directly with members of the public relating to the Services;
19.2.2 that any complaint received by the Service Provider from a member of the public shall be logged and passed on to the Council within three (3) Calendar Days;
19.2.3 that the Service Provider shall assist the Council in responding to complaints from members of the public by providing all information requested by the Council in the timescales set out in the complaints procedure; and
19.2.4 that the Service Provider shall keep a record in a form agreed between the Parties of any complaints received by it and of the action taken by the Service Provider to remedy or fully investigate each such complaint.
19.3 If a complaint is deemed to be caused by any default in the actions or systems operated by the Service Provider, the Service Provider shall take appropriate measures to remedy the default.
19.4 The Service Provider shall, at the request of the Council's Representative, arrange for notices to be permanently displayed at the Locations giving information as to how complaints about the provision of the Services may be made. SECTION E
20. QUALITY MANAGEMENT
20.1 If the Service Provider is qualified to BS EN ISO 9001 2008 then this Contract shall be performed in accordance with the procedures set out in its Quality Manual.
20.2 In the event that the Service Provider is not qualified to BS EN ISO 9001 2008 then the Service Provider shall at the Commencement Date have in place and, throughout the Contract Term, maintain in relation to its performance of the Services a system of quality assurance and improvement to be agreed with the Council.
21. NOT USED
SECTION F
22. WARRANTIES AND REPRESENTATIONS
22.1 The Parties each warrant and represent that they have full capacity and have taken all steps and obtained all approvals to enable them to lawfully enter into and to perform each of their obligations under this Contract.
22.2 The Service Provider warrants and represents that:
22.2.1 in entering this Contract it has not committed any Prohibited Act, and
22.2.2 it has satisfied itself as to the nature and extent of the risks assumed by it under this Contract.
22.3 The Service Provider warrants and represents that it has provided full, accurate and up to date information to the Council in relation to the Services to be provided under this Contract.
22.4 Except as expressly stated in this Contract, all warranties, terms and conditions, whether express or implied by statute, common law or otherwise are hereby excluded to the extent permitted by law. 23. INDEMNITY
23.1 The Service Provider shall indemnify and keep indemnified the Council against all actions, proceedings, costs, claims, demands, liabilities, losses and expenses whatsoever arising out of, in respect of or in connection with this Contract during the Contract Term save to the extent that the same is caused by or arises from the negligence, breach of this Contract, breach of statutory duty, or breach of Legislation of the Council.
23.2 Subject to the provisions of Clauses 13 and 23.5, the aggregate liability of the Service Provider, whether for damages, payments of compensation or by way of indemnity or of any nature whatsoever arising under or in relation to this Contract or the Services (including as a result of negligence) shall in relation to:
23.2.1 any claim for which the Service Provider has insurance cover or should have insurance cover available under the policies of insurance which it is required to maintain pursuant to Clause 24 (Insurance), be limited to the maximum sum insured (or which should have been insured) under the relevant policy of insurance;
23.2.2 all breaches of this Contract resulting in direct loss of or damage to any kind of property, be limited to five million pounds (£5,000,000); and
23.2.3 all other liability for all breaches or non-performance of this Contract whether in contract, tort or otherwise be limited to the percentage of the Remuneration payable (or in the event of early termination, would have been payable had the Contract not been terminated) during the twelve (12) months in which the breach occurs as set out in the Schedule of Variables.
23.3 In no event shall either Party be liable to the other for loss of profits, business revenue, goodwill or anticipated savings.
23.4 The Service Provider shall notify and keep the Council fully informed and consult with it about the conduct of any claim and shall have due regard to the Council’s interests at all times.
23.5 The Service Provider shall not settle or pay any claim without the prior consent of the Council.
23.6 Nothing in this Clause 23 shall limit or exclude the liability of the Service Provider for death, personal injury, fraud or fraudulent misrepresentation. 24. INSURANCE
24.1 The Service Provider shall take out and maintain the following insurance policies:
24.1.1 employer's liability insurance of not less than ten million pounds (£10,000,000) in respect of any one claim or series of claims arising out of one incident;
24.1.2 public liability insurance to provide an indemnity of not less than five million pounds (£5,000,000) in respect of any one claim or series of claims arising out of one incident;
24.1.3 third party liability motor insurance of not less than five million pounds (£5,000,000) in respect of any one claim or series of claims arising out of one incident; and
24.1.4 any other insurance that may be required by law.
24.2 The Council may require the Service Provider to name the Council as co-insured (other than employer liability and professional indemnity insurance) with any other party maintaining the insurance and any other matter that the Council considers reasonable in the circumstances.
24.3 The Service Provider shall on request provide to the Council evidence and copies of all insurance policies required under this Clause 24 within twenty one (21) Calendar Days of such request.
24.4 If the Service Provider is in breach of this Clause 24, the Council may pay any premium required to keep such insurance in force or itself procure such insurance and shall in either case recover such amounts (together with any administrative expenses reasonably incurred) from the Service Provider on written demand.
24.5 The Service Provider shall give the Council notification within thirty (30) Calendar Days after any claim on any of the insurance policies referred to in this Clause 24 accompanied by full details of the incident giving rise to the claim.
24.6 The Service Provider shall inform the Council of any material changes in the insurances required under this Clause 24.
24.7 The Service Provider shall not take any action or fail to take any reasonable action, or insofar as it is reasonably within its power permit anything to occur in relation to it, which would entitle any insurer to refuse to pay any claim under any insurance policy under which it is insured. SECTION G
25. DISPUTE RESOLUTION PROCEDURE
25.1 All disputes and differences arising out of or in connection with this Contract (a "Dispute") (whether such disputes are in contract, tort or arise out of or under any rule of the common law or equity or under any statute) shall be resolved pursuant to the terms and conditions of this Clause 25.
25.2 The Parties shall each use reasonable endeavours to resolve a Dispute by means of prompt, bona fide discussion between the Contract Manager and the Council's Representative at the review meetings held under Clause 15 (Review Meetings).
25.3 In the event that a Dispute is not resolved within seven (7) Calendar Days of it having been referred to a review meeting, then either Party may refer it to the Council's nominated officer as set out in the Schedule of Variables and the Service Provider's Chief Executive for resolution and the same shall meet for discussion within seven (7) Calendar Days thereafter or such longer period as the Parties may agree.
25.4 If the Dispute is not resolved as a result of the meetings referred to in Clause 25.3 either Party may propose to the other Party that mediation be entered into with the assistance of the Expert appointed in accordance with Schedule 8 (Adjudicator and Expert). The costs of referral of the Dispute to the Expert shall be apportioned equally between the Parties, or as otherwise directed by the Expert.
25.5 Within fourteen (14) Calendar Days of the appointment of an Expert, the Parties shall meet with the Expert in order to agree in good faith a programme for the exchange of information and the structure to be adopted for the mediation process.
25.6 If the Parties accept the Expert's recommendations or otherwise reach agreement on the resolution of the Dispute, such agreement shall be put into writing and, once signed by the Council's Representative and the Contract Manager, shall be binding on the Parties.
25.7 Failing agreement, either Party may refer the Dispute to an Adjudicator appointed in accordance with Schedule 8 (Adjudicator and Expert).
25.8 Within twenty eight (28) Calendar Days of appointment, the Adjudicator shall communicate his decision in writing to the Parties and the Parties shall comply with the Adjudicator's decision, including any direction for payment of sums of money and the payment or apportionment of the Adjudicator's fees.
25.9 All negotiations and meetings connected with the Dispute shall be conducted in confidence and without prejudice to the rights of the Parties in any future proceedings.
25.10 No reference of any Dispute to an Expert or an Adjudicator pursuant to this Clause 25 shall relieve either Party from any liability for the due and punctual performance of its obligations under this Contract.
25.11 Notwithstanding the foregoing provision of this Clause 25, either Party shall have the right to seek appropriate injunctive relief against the other in an appropriate court having jurisdiction in England and Wales and, provided such court is satisfied that the proceedings have not been brought frivolously or vexatiously, all aspects of the Dispute shall be dealt with by such court and not under this Clause 25.
26. DEFAULT AND TERMINATION
26.1 The Council may terminate this Contract on written notice to the Service Provider if:
26.1.1 a court makes an order that the Service Provider be wound up or a resolution for a voluntary winding-up of the Service Provider is passed;
26.1.2 any receiver or manager in respect of the Service Provider is appointed or possession is taken by or on behalf of any creditor of all or a material part of any property of the Service Provider;
26.1.3 the Service Provider enters into any voluntary arrangement for a composition of debts or a scheme of arrangement is approved under the Insolvency Act 1986, the Companies Act 2006 or the Enterprise Act 2002;
26.1.4 an administration order is made or administrator is appointed in respect of the Service Provider;
26.1.5 a breach by the Service Provider of its obligation to take out and maintain the required Insurances under Clause 24 (Insurance);
26.1.6 the Service Provider commits any Prohibited Act that is not capable of remedy; 28.1.7 the Service Provider commits a breach of the health and safety requirements under Clause 30 (Health and Safety); or
28.1.8 the Service Provider's performance falls below the zero level described in Clause 15.3 (above) and paragraph 1.11 of the Payment Mechanism, and following such occurrence, the Service Provider's performance level continues to fall for a further three (3) consecutive months.
28.2 If either Party has committed a fundamental breach of this Contract which is capable of remedy, the other Party may serve a written notice on the Party in specifying:
28.2.1 the type of breach that has occurred giving reasonable details; and
28.2.2 that this Contract will terminate on the day falling forty two (42) Calendar Days after receipt of the notice, unless the Party in breach puts forward an acceptable rectification programme or rectifies the breach within twenty one (21) Calendar Days of receipt of the notice.
and, if the Party in breach fails to rectify the breach within the time period specified in the notice or to provide an acceptable rectification programme, the Contract will terminate with immediate effect and without notice.
28.3 The Service Provider may terminate this Contract on written notice if the Council has instructed the Service Provider to temporarily stop provision of the Services or any substantial aspect of the Services and has not instructed the Service Provider to re-commence full provision of the Services for a period of ninety (90) Calendar Days from receipt of the instruction.
27. CONSEQUENCES OF EXPIRY OR TERMINATION
27.1 The Service Provider and the Council shall each carry out their respective responsibilities in accordance with this Contract until expiry or termination of the Contract.
27.2 The Service Provider shall, at its own cost, use its best endeavours to give assistance to the Council to effect an orderly continuation of the Services after termination or expiry of this Contract in such a manner as the Council may reasonably require. 27.3 The Council may recover from the Service Provider the amount of any direct and/or indirect losses suffered by the Council resulting from termination.
27.4 The expiry or termination of this Contract shall not prejudice or affect any claim, right, action or remedy that shall have accrued or shall thereafter accrue to either Party.
27.5 On expiry or termination of this Contract, neither Party shall have any further obligations or rights with respect to the other Party provided that termination of this Contract shall not affect the continuing rights and obligations of the Parties under Clauses 1, 2, 5, 12, 13, 16, 22, 23, 25, 27, 32, 46 and 48 or under any other provision of this Contract that is expressed to survive expiry or termination or is required to give effect to expiry or termination or the consequences of such expiry or termination.
28. FORCE MAJEURE
28.1 On the occurrence of a Force Majeure Event, the affected Party shall notify the other Party as soon as practicable. The notification shall include details of the Force Majeure Event, including evidence of its effect on the obligations of the affected Party and any action proposed to mitigate its effect.
28.2 As soon as practicable following such notification, the Parties shall consult with each other in good faith and use all reasonable endeavours to agree appropriate terms to mitigate the effects of the Force Majeure Event and facilitate the continued performance of this Contract.
28.3 If no such terms are agreed on or before the date falling one hundred and twenty (120) Calendar Days after the date of the commencement of the Force Majeure Event and such Force Majeure Event is continuing or its consequence remains such that the affected Party is unable to comply with its obligations under this Contract for a period of more than one hundred and eighty (180) Calendar Days, then, either Party may terminate this Contract by giving thirty (30) Calendar Days written notice to the other Party.
28.4 The affected Party shall notify the other Party as soon as practicable after the Force Majeure Event ceases or no longer causes the affected Party to be unable to comply with its obligations under this Contract. Following such notification this Contract shall continue to be performed on the terms existing immediately prior to the occurrence of the Force Majeure Event. 28.5 Neither Party shall be entitled to bring a claim for a breach of obligations under this Contract by the other Party, or incur any liability to the other Party for any losses or damages incurred by that other Party to the extent that a Force Majeure Event occurs and the Party is prevented from carrying out its obligations as a direct result of the Force Majeure Event.
29. RELIEF EVENTS
29.1 If and to the extent that a Relief Event adversely affects the ability of the Service Provider to provide the Services in accordance with the KPIs and the terms of this Contract, the Service Provider is entitled to apply for relief in accordance with Clause 29.2 from any rights the Council may assert under this Contract.
29.2 To obtain relief, the Service Provider must as soon as practicable, and in any event within fourteen (14) Calendar Days after it became aware that the Relief Event has caused or is likely to cause delay and/or adversely affect the ability of the Service Provider to perform its obligations, give to the Council a notice of its claim for relief from its obligations under this Contract, including details of the nature of the Relief Event, the date of occurrence and its likely duration.
29.3 Within fourteen (14) Calendar Days of receipt by the Council of the notice referred to in Clause 29.2 above, the Service Provider shall give full details of the relief claimed and demonstrate to the reasonable satisfaction of the Council that:
29.3.1 it could not reasonably have foreseen the occurrence or consequences of the relevant Relief Event and could not have avoided such occurrence or consequences by steps which it might reasonably be expected to have taken, without incurring additional expenditure;
29.3.2 the Relief Event directly caused or substantially contributed to the need for relief from obligations under this Contract;
29.3.3 the relief from the obligations under this Contract claimed could not reasonably be expected to be mitigated or recovered by the Service Provider acting in accordance with good industry practice, without incurring additional expenditure; and
29.3.4 the Service Provider is using reasonable endeavours to perform its obligations under this Contract. 29.4 Where the Service Provider has complied with its obligations under Clause 29.1 and 29.2, the Council shall not be entitled to exercise its rights to terminate this Contract under Clause 26 (Default and Termination) and, subject to Clause 29.6 below, shall give such other relief as has been requested by the Service Provider.
29.5 In respect of any unconnected event nothing in Clause 29 shall affect any entitlement of the Council to make deductions under Clause 7 (Remuneration) during the period in which the Relief Event is subsisting.
29.6 In the event that information required by Clause 29.2 and/or 29.3 above is not provided by the dates referred to in that Clause, then the Service Provider shall not be entitled to any relief in respect of the period for which the information is delayed.
29.7 The Service Provider shall notify the Council if at any time it receives or becomes aware of any relevant further information relating to the Relief Event, giving details of that information to the extent that such information is new or renders information previously submitted materially inaccurate or misleading.
29.8 If the Parties cannot agree the extent of the relief required, or the Council disagrees that a Relief Event has occurred or that the Service Provider is entitled to relief from its obligations under this Contract, the Parties or either of them shall refer the matter to the Dispute Resolution Procedure. SECTION H
30. HEALTH AND SAFETY
30.1 The Service Provider shall comply with and shall procure that all staff, agents and sub-contractors engaged in the provision of the Services comply with the requirements of the Health and Safety at Work Etc. Act 1974, and any other Legislation, regulations and approved codes of practice relating to the health and safety of staff and others who may be affected by the Service Provider’s work activities.
30.2 The Service Provider shall provide to the Council’s Representative any information relating to the Service Provider’s compliance with Clause 30.1 that the Council may reasonably request at any time from the Commencement Date.
30.3 The Council’s Representative shall be permitted to access at any reasonable time any site where the Service Provider is undertaking any Services under this Contract for the purpose of carrying out an inspection of health, safety and welfare standards.
30.4 The Service Provider shall fully co-operate with the reasonable requests of the Council’s health and safety adviser and shall provide access to all areas of the Services, health and safety documentation, welfare facilities, accident records, training records and certificates, equipment inspection records, statutory registers and notices, plant and equipment for the purposes of inspection.
30.5 The Service Provider shall provide to the Council’s Representative, within seven (7) Calendar Days of receipt, copies of any communication concerning the health, safety, welfare, environmental or fire safety standards of the Services, which he receives from any statutory body.
31. EQUALITIES
31.1 The Service Provider (including its agents and employees) shall and shall procure that any sub-contractor shall in the provision of the Services.
31.1.1 not discriminate directly or indirectly, by way of victimisation or harassment against any person on grounds of race, age, disability, gender reassignment, pregnancy and maternity, religion or belief, sex or sexual orientation contrary to part 5 of the Equality Act 2010; 31.1.2 not discriminate directly or indirectly, by way of victimisation or harassment against any person on grounds of race, age, disability, gender reassignment, pregnancy and maternity, religion or belief, sex or sexual orientation contrary to any of the applicable provisions of the Equality Act 2010 which are or may come in to force and any codes of practice issued thereunder.
31.1.3 take appropriate and lawful steps to advance equality of opportunity between persons who share a relevant protected characteristic (as defined in section 149(7) of the Equality Act 2010) and persons who do not share it, as directed by the Council from time to time;
31.1.2 take appropriate and lawful steps to foster good relations between persons who share a relevant characteristic (as defined in section 149(7) of the Equality Act 2010) and persons who do not share it, as directed by the Council from time to time; and
31.1.4 notify the Council if it becomes aware of any action which the Council could take to comply with or further its duties under section 149 of the Equality Act 2010 and/or the Council’s equality objectives as notified to the Service Provider from time to time.
31.2 Where, in connection with this Contract, the Service Provider (including its agents and employees) or any sub-contractor is required to carry out work on the Council’s premises or alongside the Council’s employees on any other premises they shall comply with the Council’s own employment policy and codes of practice relating to equality.
31.3 The Service Provider shall, and/or shall procure that any sub-contractor shall, notify the appropriate representative at the Council in writing as soon as it becomes aware of any investigation or proceedings brought against the Service Provider and/or any sub-contractor under the Equality Act 2010.
31.4 Where any investigation is undertaken by a person or body empowered to conduct such investigation and/or proceedings are instituted in connection with any matter relating to the Service Providers performance of its obligations under this Contract being in contravention of the Equality Act 2010, the Service Provider shall, and shall procure that any sub-contractor shall, free of charge:
31.4.1 provide any information reasonably requested by the Council, as soon as reasonably practicable;
31.4.2 attend any meetings as required and permit any of the Council’s staff to attend; 31.4.3 promptly allow the Council and/or any person conducting an investigation access to any documents or data deemed by the Council to be relevant;
31.4.4 allow itself or any of its staff to appear as witnesses in any ensuing proceedings; and
31.4.5 cooperate fully and promptly in every way required by the person or body conducting such investigation during the course of that investigation.
31.5 The Service Provider (including its agents and employees) shall, and shall procure that any sub-contractor shall, have due regard to the Council's equality objectives as notified to the Service Provider from time to time.
31.6 The Service Provider (including its agents and employees) shall, and shall procure that any sub-contractor shall, ensure that none of its employees or applicants receive less favourable treatment because of a protected characteristic (as defined in the Equality Act 2010) and that wherever reasonable, the employee/applicant is given any help they need to obtain their full potential for the benefit of themselves or the Service Provider or the Council.
31.7 The Service Provider shall provide such information as the Council may reasonably request, for the purpose of assessing the Service Provider's compliance with this Clause 31.
31.8 The Service Provider shall monitor the representation among its employees engaged in the provision of the Services of persons of different protected characteristics, having regard to the Council's procedures for monitoring representation among its own employees.
31.9 Where it appears to the Service Provider that there are groups of persons with a particular protected characteristic who are underrepresented in the Service Provider's workforce engaged in the provision of the Services in comparison with the population as a whole, the Service Provider shall take such steps as are lawful under the Equality Act 2010 to improve the relevant representation.
31.10 The Service Provider shall, twelve months from the Commencement Date and annually thereafter, provide a written report to the Council detailing its compliance with this Clause 31. 32. DATA PROTECTION
32.1 The Service Provider shall comply with its obligations under the Data Protection Act 1998 (the "1998 Act") and the Computer Misuse Act 1990 insofar as performance of this Contract gives rise to obligations under those Acts.
32.2 Notwithstanding the general obligation in Clause 32.1, where it is processing personal data (as defined by the 1998 Act) as a data processor for the Council (as defined by the 1998 Act) the Service Provider shall:
32.2.1 ensure that it has in place appropriate technical and organisational measure to ensure the security of the personal data (and to guard against unauthorised or unlawful processing of the personal data and against accidental loss or destruction of, or damage to, the personal data including that obtained during the operation of Closed Circuit Television), as required under the Seventh Data Protection Principle in Schedule 1 to the 1998 Act;
32.2.2 adhere to any instructions or policies of the Council in relation to the processing of personal data as are communicated to the Service Provider from time to time during the term of this Contract.
32.3 The Service Provider shall:
32.3.1 provide the Council with such information as the Council may require to satisfy itself that the Service Provider is complying with its obligations under the 1998 Act and this Clause 32;
32.3.2 promptly notify the Council of any breach of the security measures required to be put in place pursuant to Clause 32.2.1;
32.3.3 notify the Council (within 5 working days) if it receives:
(a) a request from a Data Subject to have access to that person's Personal Data; or
(b) a complaint or request relating to the Council's obligations under the Data Protection Act 1998
32.3.4 provide full cooperation and assistance to the Council in relation to any complaint or request made; and
32.3.5 ensure that it does nothing knowingly or negligently which places the Council in breach of the Council's obligations under the 1998 Act. 32.4 The Service Provider shall ensure that from the date it is acquired all information held on behalf of the Council is retained for disclosure for the duration of the term of this Contract and shall permit the Council to inspect such information as requested from time to time. All such information shall be transferred by the Service Provider to the Council upon expiry of the term.
33. FREEDOM OF INFORMATION
33.1 The Service Provider acknowledges that the Council is subject to the provisions of the Freedom of Information Act 2000 ("FOIA") and the Environmental Information Regulations 2004 ("EIR"), and from time to time the Council may receive requests for information relating to the Contract and the Services which but for any right to claim commercial confidentiality the Council will be obliged to disclose pursuant to the FOIA or the EIR, as the case may be.
33.2 The Service Provider shall ensure that it does and shall procure that its sub-contractors shall do all manner of things necessary to assist the Council in meeting the requirements of the FOIA or the EIR within the timescales set out therein.
33.3 The Service Provider shall:
(a) transfer a request for information to the Council as soon as practicable after receipt and in any event within three (3) Calendar Days of receiving a request for information;
(b) provide the Council with a copy of all information in its possession or power in the form that the Council requires within seven (7) Calendar Days (or such other period as the Council may specify) of the Council requesting that information; and
(c) provide all necessary assistance as reasonable requested by the Council to enable the Council to respond to a request for information within the time for compliance set out in section 10 of the FOIA or Regulation 5 of the EIR.
33.4 The Council shall be responsible for determining at its absolute discretion whether information:
(a) is exempt from disclosure in accordance with the provisions of the FOIA or the EIR, as the case may be; (b) is to be disclosed in response to a request for information, and in no event shall the Service Provider respond directly to a request for information unless expressly authorised to do so by the Council.
33.5 In this Clause 33 "information" has the meaning given to it under section 84 of the FOIA.
33.6 No additional payment shall be made to the Service Provider for performing the requirements set out in this Clause 33.
34. CONFIDENTIALITY
34.1 Subject to Clause 34.2 and Clause 34.5 the Parties shall keep confidential all matters relating to this Contract and shall use all reasonable endeavours to prevent their employees and agents from making any disclosure to any person of any matter relating to this Contract.
34.2 Clause 34.1 shall not apply to:
34.2.1 any information which the disclosing Party can demonstrate is already generally available and in the public domain otherwise than as a result of a breach of this clause;
34.2.2 any disclosure which is required by any law (including any order of a court of competent jurisdiction) or the rules of any stock exchange or governmental or regulatory authority having the force of law;
34.2.3 any disclosure of Information which is already lawfully in the possession of the receiving Party, prior to its disclosure by the disclosing Party;
34.2.4 any disclosure by the Council of information relating to the provision of the Services and such other information as may be reasonably required for the purpose of conducting a due diligence exercise to any proposed replacement service provider, should the Council decide to re-tender this Contract;
34.2.5 any disclosure of information by the Council to any other department, office or agency of the government or their respective advisers or to any person engaged in providing services to the Council for any purpose related to or ancillary to the Contract; or
34.2.5 any disclosure for the purpose of:
(a) the examination and certification of the Council's accounts; (b) any examination pursuant to the Audit Commission Act 1998 of the economy, efficiency and effectiveness with which the Council has used its resources; or
(c) the Local Government Finance Act 1982 or the Local Government Act 1999.
34.3 Where disclosure is permitted under Clause 34.2 the disclosing Party shall ensure that the recipient of the information shall be subject to the same obligation of confidentiality as that contained in this Contract.
34.4 Subject to Clause 34.5 neither Party shall make use of this Contract or any information issued or provided by or on behalf of the other party in connection with this Contract otherwise than for the purpose of performing its obligations under this Contract, except with the written consent of the other Party.
34.5 Notwithstanding any other provision of this Clause 34 the Council may publish details of any payment made to the Service Provider pursuant to this Contract including but not limited to: the Service Provider's full name, the Service Provider's company house or charity registration number (if any), the Contract identification number, the date of payment, the net amount paid to the Service Provider, the transaction number and a description confirming the nature of the transaction.
35. ASSIGNMENT AND SUB-CONTRACTING
35.1 Subject to any express provision of the Contract, the Service Provider shall not without the prior written consent of the Council, assign all or any benefit, right or interest under this Contract or sub-contract any of the Services.
35.2 Notwithstanding any sub-contracting permitted under this Contract, the Service Provider shall remain responsible for the acts and omissions of its sub-contractors as though they were its own. 35.3 The Council shall be entitled to;
35.3.1 assign, novate or otherwise dispose of its rights and obligations under this Contract either in whole or part to any contracting authority (as defined in Regulation 3(1) of the Public Contracts Regulations 2006); or
35.3.2 transfer, assign or novate its rights and obligations where required by law and only to a body assuming the whole or part of the Council's business.
36. CORRUPT GIFTS AND FRAUD
36.1 As soon as either Party becomes aware of or suspects the commission of any Prohibited Act in the performance of the Services or otherwise, that Party shall notify the other Party.
36.2 The Council's Representative shall have the right to require that the Service Provider suspend from any further work on this Contract any person reasonably suspected of a Prohibited Act, fraudulent action or malpractice.
37. RIGHTS AND DUTIES RESERVED
All rights, duties and powers which the Council has as a local authority or which the Council's officers have as local authority officers are expressly reserved.
38. LOCAL GOVERNMENT OMBUDSMAN
38.1 Where any investigation by a Local Government Ombudsman (the "Ombudsman") takes place the Service Provider shall:
38.1.1 provide any information requested in the timescale required by the Ombudsman;
38.1.2 attend any meetings as required by the Ombudsman and permit its personnel to so attend;
38.1.3 promptly allow access to and investigation of any documents deemed by the Ombudsman to be relevant;
38.1.4 allow itself and any employee deemed to be relevant to be interviewed by the Ombudsman; 38.1.5 allow itself and any employee to appear as witness in any ensuing proceedings; and
38.1.6 co-operate fully and promptly in every way required by the Ombudsman during the course of that investigation.
38.2 No additional payment shall be made to the Service Provider for performing the requirements set out in Clause 38.1.
38.3 Where any financial redress or other compensation is ordered by the Ombudsman in any investigation arising directly or indirectly out of the default or neglect by the Service Provider in connection with provision of the Services or any other action by the Service Provider the Council shall be entitled to recover the cost of that financial redress or other compensation from the Service Provider.
39. ENTIRE AGREEMENT
39.1 Parties acknowledge that this Contract sets forth the entire agreement between them with respect to provision of the Services and supersedes and replaces all prior communications, drafts, representations, warranties, stipulations, undertakings and agreements of whatsoever nature, whether oral or written, between the Parties.
40. NO PARTNERSHIP OR AGENCY
40.1 Nothing in this Contract shall be construed as a legal partnership (within the meaning of the Partnership Act 1890) or as a contract of employment between the Council and the Service Provider.
40.2 The Service Provider shall not be, and shall not be deemed to be, an agent of the Council and the Service Provider shall not hold itself out as having authority or power to bind the Council in any way.
41. NO WAIVER
41.1 Failure by either Party at any time or for any period to enforce any one or more of the provisions of this Contract or to require performance by the other Party of any of the provisions of this Contract shall not: 41.1.1 constitute or be construed as a waiver of any such provision or of the right at any time subsequently to enforce all terms and conditions of this Contract; nor
41.1.2 affect the validity of the Contract or any part thereof or the right of the Parties to enforce any provision in accordance with its terms.
41.2 No waiver of any of the provisions of this Contract shall be effective unless it is expressed to be a waiver in writing and communicated in accordance with Clause 44 (Notices).
42. SEVERANCE
42.1 Each provision of this Contract is severable and distinct from the others and the Parties intend that every such provision shall be and remain valid and enforceable to the fullest extent permitted by law.
42.2 If any provision of this Contract is or at any time becomes to any extent invalid, illegal or unenforceable under any enactment or rule of law, it shall to that extent be deemed not to form part of the Contract but (except to the extent in the case of that provision) it and all other provisions of this Contract shall continue in full force and effect and their validity, legality and enforceability shall not be thereby affected or impaired, provided that the operation of this Contract would not negate the commercial intent and purpose of the Parties under this Contract.
42.3 If any provision of this Contract is illegal or unenforceable as a result of any time period being stated to endure for a period in excess of that permitted by a regulatory authority, that provision shall take effect within a time period that is acceptable to the relevant regulatory authorities subject to it not negating the commercial intent of the Parties under this Contract.
43. VARIATION
Subject to Clause 9 (Change to Services and/or the Remuneration), this Contract can only be varied if any such variation is agreed in writing by both Parties.
44. NOTICES
44.1 Any notice required by this Contract to be given by either Party to the other shall be in writing and shall be served personally, by fax or by sanding the same by registered post or recorded delivery to the address detailed in the Schedule of Variables or such address or fax number as notified to each other.
44.2 Any notice served personally will be deemed to have been served on the day of delivery, any notice sent by post will be deemed to have been served forty eight (48) hours after it was posted and any notice sent by fax will be deemed to have been served twenty four (24) hours after it was despatched.
45. EUROPEAN MONETARY UNION
45.1 The Parties to this Contract confirm that the occurrence or non- ocurrence of an event associated with economic and monetary union in the European Union will not have the effect of altering any term of, or discharging or excusing performance under this Contract or any transaction, or give a Party the right unilaterally to alter or terminate this Contract or any transaction.
45.2 The words “an event associated with economic and monetary union in the European Union” shall include without limitation each and any combination of the following:
45.2.1 the introduction of, changeover to or operation of a single or unified European currency (whether known as the Euro or otherwise) in the United Kingdom;
45.2.2 the fixing of conversion rates between an European Union (EU) member state’s currency and the new currency or between the currencies of member states;
45.2.3 the substitution of that new currency for the Euro as the unit of account of the EU;
45.2.4 the introduction of that new currency as lawful currency in a member state;
45.2.5 the withdrawal from legal tender of any currency which, before the introduction of the new currency, was lawful currency in one of the member states;
45.2.6 the disappearance or replacement of a relevant rate option or other price source for the Euro or the national currency of any member state, or the failure of the agreed sponsor (or successor sponsor) to publish or display a relevant rate, index, price, page or screen; or 45.2.7 the withdrawal of any member state from a single or unified European currency.
46. PARENT COMPANY GUARANTEE AND PERFORMANCE BOND
46.1 The Service Provider shall procure the execution and delivery to the Council on or before the Commencement Date of a Parent Company Guarantee by the Guarantor in favour of the Council in the form set out in Schedule I (2) of the Invitation to Tender (Draft Deed of Guarantee) to secure the due performance of the Service Provider of its obligations to the Council.
46.2 Unless and until otherwise agreed by the parties, the form of guarantee set out in Schedule I (2) of the Invitation to Tender (Draft Deed of Guarantee) shall be the relevant specified form for the purposes of this Contract.
46.2.1 The Council may annually review the sum of the guarantee set out in Schedule I (2) of the Invitation to Tender (Draft Deed of Guarantee) to ensure that it provides for an adequate level of protection and the Council in its sole discretion may require the sum of the bond to be varied.
46.3 In the event that the Service Provider does not have a parent company and cannot procure a Parent Company Guarantee pursuant to Clause 46.1, the Service Provider shall procure the execution and delivery to the Council on or before the Commencement Date of a Performance Bond in favour of the Council.
46.4 The Performance Bond shall operate according to the principles specified in Schedule I (1) of the Invitation to Tender (Form of Bond).
47. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
The Parties agree that this Contract shall not be enforceable by any third party pursuant to the Contracts (Rights of Third Parties) Act 1999 and any rights contained therein are excluded.
48. LAW AND JURISDICTION
This Contract and any non-contractual obligations arising out of or in connection with it shall be governed by the laws of England and Wales and the Parties submit to the exclusive jurisdiction of the courts of England and Wales. IN WITNESS whereof the Parties have executed this Contract as a deed and delivered it on the date first written.
Signed as a deed by
acting by
Director
Director/Secretary
The common seal of
The Mayor and Burgesses of the London Borough of Barnet was affixed in the presence of
Authorised Signatory
Acting Head of Legal
Head of Governance
## SCHEDULE 1
### SCHEDULE OF VARIABLES
| Clause reference | Variable | Details | |------------------|----------|---------| | Recital A | Date of issue of ITT: | 28th July 2011 | | | Date of return of Tender: | 6th September 2011, 12.00 noon | | 3.1 | Council's Representative | Name: [Redacted] | | | Address: | North London Business Park, Building 4, Oakleigh Road South, London N11 1NP | | | Tel: | [Redacted] | | | Fax: | [Redacted] | | | Email: | [Redacted] | | 3.2 | Contract Manager | Job Title: Manager – Network Manager | | | Address: | North London Business Park, Building 4, Oakleigh Road South, London N11 1NP | | | Tel: | [Redacted] | | | Fax: | [Redacted] | | | Email: | [Redacted] | | 4. | Commencement Date | 1st May 2012 | | | Initial Contract Term | 5 years | | | Fixed extension period: | 2 years | | | Notice required to extend for fixed extension period: | 6 (six) months | | 5.1 | Transition Period | 4 months prior to the Commencement Date. | | 5.2 | Exit Period | 3 months prior to, and 3 months after, the expiry or termination of the Contract. | | Clause reference | Variable | Value | |------------------|--------------------------------------------------------------------------|----------------------------------------------------------------------| | 6.3 | Bodies or agencies whose requirements must be complied with: | Driver and Vehicle Licensing Agency, Parking and Traffic Appeals Service, London Councils, Traffic Enforcement Centre | | 7.2 | Base Payment (i.e., percentage of Target Cost to be paid to Service Provider): | 1/12 each calendar month | | 7.4 | Share of savings to be paid to Service Provider: | 50% | | 8.1 | Payment Period: | monthly | | 8.8 | Rate of interest for late payment of Remuneration: | 1% above Bank of England base rate | | 10.1 | Address of Council Premises to be licensed to Service Provider: | N/A | | 11.3 | Price for purchase of Equipment and Materials on expiry: | Price to be agreed | | 12.2 | Purpose of use of Service Provider Software: | Provision of services in scope as defined in the specification document. | | 13.1 | Application of TUPE: | Yes | | 14.1 | Date for civil enforcement officers to achieve VRQ (level 2) or NVQ (level 2): | 0 months (must be fully trained prior to commencing enforcement duties) | | 23.2 | Liability cap: | 100% | | 25.3 | Council's nominated officer for dispute resolution: | Pam Wharfe, Director of Environment, Planning and Regeneration | SCHEDULE 2 SPECIFICATION SPECIFICATION (SCHEDULE B)
For the Provision of
PARKING ENFORCEMENT AND RELATED SERVICES
For the
LONDON BOROUGH OF BARNET
Prepared by Parking Associates Ltd July 2011 COPYRIGHT
The copyright in this work is vested in the Copyright Holder and the document is issued in confidence for the purpose only for which it is supplied. It must not be reproduced in whole or in part except under an agreement or with the consent in writing of the Copyright Holder and then only on condition that this notice is included in any such reproduction. No information as to the contents or subject matter of this document or any part thereof arising directly or indirectly therefrom shall be given orally or in writing or communicated in any manner whatsoever to any third party being an individual firm or company or any employee thereof without the prior consent in writing of the Copyright Holder.
The Copyright Holder for this work is defined jointly as Parking Associates Limited and the London Borough of Barnet.
© Parking Associates Limited/London Borough of Barnet (2011) The Parking Specification is joint copyright of the Parking Associates Limited and London Borough of Barnet. Parking Associates do not agree to the release of the Parking Specification as the company believes that to do so would prejudice their commercial interests. Parking Associates claim that the document is commercially sensitive and believe that its release, and therefore potential reproduction, would seriously undermine their ability to successfully participate and compete fairly in the market. Further, they believe that release would present a significant risk to their consultancy activities by presenting advantages to rival companies in the market. To this end, London Borough of Barnet is withholding this section of the contract excluding the appendices.
## APPENDIX 2: CONTRAVENTION CODES AND OBSERVATION PERIODS
| Contravention Code | Short Description | Observation period | |--------------------|-----------------------------------------------------------------------------------|--------------------| | 80 | Parked for longer than the maximum period permitted | 5 mins | | 81 | Parked in a restricted area in a car park | r/a | | 82 | Parked after the expiry of paid for time | 5 mins | | 85 | Parked in a permit bay without clearly displaying a valid permit | 5 mins | | 86 | Parked beyond the bay markings | r/a | | 87 | Parked in a designated disabled person's parking place without displaying a valid disabled person's badge in the prescribed manner | r/a | | 91 | Parked in a car park or area not designated for that class of vehicle | r/a | | 99 | Stopped on a pedestrian crossing or crossing area marked by zigzags | r/a | | | Description | Duration/Condition | |---|-----------------------------------------------------------------------------|---------------------------------------------------------| | 1 | Parked in a restricted street during prescribed hours | Only if a commercial vehicle is observed loading | | 2 | Parked or loading/unloading in a restricted street where waiting and loading/unloading restrictions are in force | n/a | | 5 | Parked after the expiry of paid for time | 5 mins | | 11| Parked without payment of the parking charge | 3 mins | | 12| Parked in a residents' or shared use parking place or zone without clearly displaying either a permit or voucher or pay and display ticket issued for that place | Observed for period taken to issue PCN | | 15| Parked in a permit space without displaying a valid permit | Observed for period taken to issue PCN | | 18| Using a vehicle in a parking place in connection with the sale or offering or exposing for sale of goods when prohibited | n/a | | 19| Parked in a residents' or shared use parking place or zone displaying an invalid permit, an invalid voucher or an invalid pay & display ticket | 3 mins | | 21| Parked in a suspended bay or space or part of bay or space | n/a | | | Description | Duration/Action | |---|-----------------------------------------------------------------------------|-----------------| | 23 | Parked in a parking place or area not designated for that class of vehicle | n/a | | 24 | Not parked correctly within the markings of the bay or space | n/a | | 25 | Parked in a loading place during restricted hours without loading | 5 minutes | | 26 | Parked in a special enforcement area more than 50cm (or other specified distance) from the edge of the carriageway and not within a designated parking place | n/a | | 27 | Parked in a special enforcement area adjacent to a dropped footway | n/a | | 30 | Parked for longer than permitted | 5 mins | | 34 | being in a bus lane | n/a | | 40 | Parked in a designated disabled person's parking place without displaying a valid disabled person's badge in the prescribed manner | n/a | | 45 | Parked on a taxi rank | n/a | | | Description | Time | |---|-----------------------------------------------------------------------------|--------| | 47 | Stopped on a restricted bus stop or stand | n/a | | 48 | Stopped in a restricted area outside a school when prohibited | n/a | | 55 | A commercial vehicle parked in a restricted street in contravention of the Overnight Waiting Ban | n/a | | 61 | A heavy commercial vehicle wholly or partly parked on a footway, verge or land between two carriageways | n/a | | 62 | Parked with one or more wheels on or over a footpath or any part of a road other than a carriageway | n/a | | 73 | Parked without payment of the parking charge | n/a | | 74 | Using a vehicle in a parking place in connection with the sale or offering or exposing for sale of goods when prohibited | 3 mins |
## APPENDIX 3: CAMERA LOCATIONS
| CAMERA NUMBER | LOCATION | |---------------|---------| | U1 (601) | A5 Cricklewood Broadway / JunoW Depot Approach NW2 | | U2 (613) | A5 Edgware Road / Cricklewood Broadway O/S no. 400 | | U3 (603) | West Hendon Broadway J/W Milton Road / 40m Nth of Stanely Rd NW9 | | U4 (604) | West Hendon Broadway Opposite Telford Road NW9 | | U5 (610) | The Hyde West Hendon Broadway | | U6 (612) | A5 The Hyde / 20m North of J/W Hyde Estate Road NW9 | | U7 (611) | A5 The Hyde / Southside of J/W Rushgrove Avenue | | U8 (608) | A5 The Hyde / 40m Nth of Colindale Avenue NW9 | | U9 (609) | A5 Burnt Oak Broadway / Southside of J/W Barnfield Road HA8 |
## APPENDIX 4: CAR PARK INFORMATION
| London Borough of Barnet Car Parks | Status | Duration of restricted parking | Is this car park restricted by entrance barriers? | No. of F&D spaces | No. of free parking spaces | No. of Disabled bays | Motorcycle bay | Resident bays | Business bays | Ward bays | Reserved | Totals | |-----------------------------------|--------|--------------------------------|-----------------------------------------------|------------------|---------------------------|---------------------|----------------|--------------|--------------|------------|----------|---------| | Walling Car Park & Market, Barnfield Road, Edg | P&D | Long Stay | NO | 221 | 5 | 1 | 227 | | Lodge Lane car park, Finchley N12 | P&D | Long Stay | NO | 221 | 9 | 2 | 232 | | Burns Lane Car Park NW7 | P&D | Long Stay | NO | 173 | 4 | 2 | 184 | | Dawes Lane car park NW7 | Free | Free | NO | 93 | 5 | 4 | 102 | | Perryfield Way (Car Park) NW8 | P&D | Up to 3 hours max | NO | 66 | 2 | 1 | 69 | | Perryfield Way (Car Park) NW8 | Permit holders | Permit holders only | NO | 2 | 19 | 21 | | Fitzjohn Avenue car park ENS | P&D | Long Stay | NO | 87 | 2 | 89 |
© Parking Associates Limited and the London Borough of Barnet | Location | Type | Duration | Charge | Notes | Code | |--------------------------------|-------|-----------|--------|--------|------| | Stalyton Road car park | P&D | Long Stay | NO | | 61 | | Barnet EN5 | P&D | Long Stay | NO | | 62 | | Manor Street car park EN5 | P&D | Long Stay | NO | | 63 | | Church Hill Car Park | Free | Free | NO | | 64 | | Church Hill Road: EN4 | Free | Free | NO | | 65 | | Stanhope Road Car Park (2-10) | P&D | Long Stay | NO | | 66 | | N12: MAIN | P&D | Long Stay | NO | | 67 | | Castle Road Car park N12 | P&D | Long Stay | NO | | 68 | | The Burroughs Car Park (17-23) | P&D | Short Stay| NO | | 69 | | Hendon NW4 | P&D | Short Stay| NO | | 70 | | Osidge Lane car park N14 | Free | Free | NO | | 71 | | Quakers Court car park NW5 | Free | Free | NO | | 72 | | East Barnet Road Car Park North| P&D | Long Stay | NO | | 73 | | EN4 | P&D | Long Stay | NO | | 74 | | Egerton Gardens | Free | Free | YES | Manage | 75 |
© Parking Associates Limited and the London Borough of Barnet APPENDIX 5: HEALTH AND SAFETY CLAUSES FOR STANDARD TERMS AND CONDITIONS OF CONTRACT FOR SUPPLIERS OF SERVICES
General Health and Safety clauses:
01. The Service Provider shall ensure the health and safety of its employees and any other person who may come into contact with, or be affected by, its activities and ensure the provision of welfare and first aid facilities for its employees.
02. The Service Provider shall comply with the requirements of all Legislation and codes of practice relating to health, safety and fire, which may apply to staff and other persons in the performance of its obligations under the Contract.
03. The Service Provider shall carry out all necessary statutory tests and inspections and shall provide the Council's Representative with details on request.
04. The Service Provider shall employ, or have arrangements for access to, 'Competent' health and safety advice and shall notify the Council's Representative of these arrangements. The Service Provider will also be required to nominate a representative to liaise with the Authorised Officer on all Health and Safety matters.
05. The Service Provider shall have a written Health and Safety Policy which must be at least equivalent to the Council's Policy in scope and effectiveness and shall ensure that employees are aware of and comply with this Health and Safety Policy.
06. The Service Provider shall have in place health and safety management systems that comply with the guidance contained in HSG 65, or equivalent, to include assessing and controlling risk for any activity that may affect staff or any other person who may come into contact with those activities. The Service Provider shall also produce Method Statements for high risk activities, as requested by the Council's Representative, and provide that information on request.
07. The Service Provider shall have in place procedures and arrangements for emergencies and notify the Council's Representative of these on request.
08. The Service Provider will inform the Council's Representative of any subcontractors employed to carry out any functions in the performance of its obligations under the contract. The Service Provider shall be responsible for managing and reporting on these sub-contractual arrangements and any changes to those arrangements.
09. The Service Provider shall keep its health and safety policies, procedures and risk assessments under review and comply with any changes, amendments or further lawful instructions reasonably requested or issued by the Council in connection with the Service Provider's health and safety policies, procedures or working methods. The Service Provider shall notify the Council of any changes made.
10. The Service Provider shall ensure that all equipment installed, used and maintained to meet statutory requirements, appropriate standards and manufacturers recommendations.
11. The Service Provider must ensure that any equipment supplied or loaned to them by the Council is properly maintained and that their employees are competent to use this equipment.
12. The Service Provider shall promptly notify the Council of any health and safety hazards which may arise in connection with the performance of its obligations under the Contract. The Council shall notify the Service Provider of any health and safety hazards which may exist or arise and which may affect the Service Provider in the performance of its obligations under the Contract.
13. The Service Provider shall ensure that all its employees are notified and adhere to all health and safety rules, including emergency procedures and means of escape, when working on Council premises.
14. The Service Provider shall inform the Council's Representative, within 24 hours, of any Major Injury, Reportable Disease or Reportable Dangerous Occurrence that occurs in the performance of its obligations under the Contract.
15. In all instances, the Service Provider shall ensure the Council's Representative has reasonable access to the Service Provider's premises, sites and activities and co-operate and provide such reasonable assistance as may be necessary to facilitate monitoring. Failure to provide such reasonable assistance shall be deemed a "Serious Breach" of the conditions of this contract.
16. The Council's Representative shall be empowered to suspend the provision of the services in the event of non-compliance by the Contractor with the health and safety requirements of the contract or for breaches of health and safety legislation or Council policy. The Service Provider shall not resume provision of the services until the Council's Representative is satisfied that the non-compliance has been satisfied.
17. No payment will be made for any part of the Services omitted as a result of a cessation of the Services required by the Council due to breach of any health and safety requirement and neither will any additional payment be made for steps which the Council's Representative requires the Service Provider to take to remedy the breaches of the health and safety requirements. H&S Performance
18. The Service Provider will provide the Council's Representative with an annual report on the previous year's health and safety performance and health and safety performance targets for the subsequent twelve (12) months to include indicators agreed with the Council's Representative.
19. The Council may require the Service Provider to provide the Council's Representative with more regular health and safety performance reports or additional health and safety performance indicators dependant on the nature and level of risk.
20. The Council's Representative may periodically undertake spot checks to ensure that the Service Provider is complying with its health and safety obligations under this Contract and the Service Provider shall co-operate fully, at its own cost, with the Council.
## APPENDIX 6: REPRESENTATIONS AND APPEALS PROCESS
| Correspondence Type | Responsibility for Investigation | Responsibility to draft Response or Case Summary | Evidence collated by | Who can sign off | Signature Required | Post Responsibility | |---------------------|---------------------------------|-----------------------------------------------|---------------------|-----------------|-------------------|---------------------| | Informal Correspondence | Service Provider | Service Provider | Service Provider | Service Provider | Service Provider | Service Provider | | Formal Representations | Service Provider | Service Provider | Service Provider | Service Provider | Service Provider | Service Provider | | Change of Keeper | Service Provider | Service Provider | Service Provider | Council Representative | Council Representative | Service Provider | | Other | Service Provider | Service Provider | Service Provider | Council Representative | Council Representative | Service Provider | | Appeals | Service Provider | Service Provider | Service Provider | Council Representative | Council Representative | Service Provider | | Charge Certificate | Service Provider | Service Provider | Service Provider | Service Provider | Service Provider | Service Provider | | After Charge Certificate | Service Provider | Service Provider | Service Provider | Service Provider | Service Provider | Service Provider | APPENDIX 7 SAMPLE DOCUMENTS
PENALTY CHARGE NOTICE (PCN) ROAD TRAFFIC REGULATION ACT 1994 (as amended) LONDON LOCAL AUTHORITIES ACT 1996 (as amended)
«KEEPER_COMPANYADDRESS» «KEEPER_OWNERNAME» «KEEPER_COMPANYNAME» «KEEPER_FLATFLOORNUMBER» «KEEPER_BUILDINGNUMBER» «KEEPER_STREET» «KEEPER_LOCALITY»
Penalty Charge Notice Number: «NOTICES_PCNID» Vehicle Registration Number: «VEHICLE_REG» Date of this Notice: «NOTICES_PRTDATE»
This Notice is issued by the London Borough of Barnet ("the Council") under the above Acts.
The Council believes that a Penalty Charge is payable with respect to the above vehicle for the following alleged traffic contravention: «NOTICES_OFFENCECODE» Being in a Bus Lane in «NOTICES_STREETADDRESS» «NOTICES_POSTCODE» on «NOTICES_ISSUEDATE» at «NOTICES_ISSUETIME»
This alleged contravention was seen and recorded by a camera operator who was observing real time pictures from a road side camera at the time stated.
DO NOT IGNORE THIS NOTICE
The full amount of the penalty charge is £«NOTICES_BUSLANEFULLCHGAMT» The Penalty Charge of £«NOTICES_BUSLANEFULLCHGAMT» must be paid before the end of the period of 28 days beginning with the date of this notice.
A reduced charge of £«NOTICES_BALOS» is payable If the penalty charge is paid before the end of the period of 14 days beginning with the date of this notice a reduced amount of £«NOTICES_BALOS» is payable. Payment should be sent to the payment address detailed in the "How to Pay" section of this document.
If the Penalty Charge is not paid before the end of the 28 day period, an Enforcement Notice may be served by the Council on the person appearing to be the owner of the vehicle. The Enforcement Notice will allow formal representations on the following grounds:
That the recipient never was the owner of the vehicle in question;
© Parking Associates Limited and the London Borough of Barnet That the recipient had ceased to be the owner of the vehicle before the date on which the penalty charge was alleged to have become payable;
That the recipient became the owner of the vehicle after that date;
That at the time that the alleged breach of the bus lane regulations took place, the person who was in control of the vehicle was in control of the vehicle without the consent of the owner;
That there was no breach of the bus lane regulations.
Please see the relevant sections for more details of how to pay ("How to Pay") and what to do if you think that this PCN should not have been issued ("How to Challenge").
Data Protection statement
The London Borough of Barnet will use any data collected through the issuing of this Penalty Charge Notice for the enforcement of traffic contraventions and other associated purposes. This data may also be disclosed to London Councils and other enforcement agencies. All processing of this data will be in accordance with the Data Protection Act 1998.
HOW TO CHALLENGE
If you do not think this penalty charge notice should have been issued, you should write to us at: London Borough of Barnet, Parking Team, PO Box 27284, London, N11 1YB, e-mail us at [email protected] or fax us on 0870 889 6796. Please quote your penalty charge notice number and include any available supporting evidence.
If you write to us within 14 days and we do not accept your challenge, we will give you the chance to pay the reduced rate £«NOTICES, BALOS» for another 14 days from when we write back to you.
If the penalty charge remains unpaid, an Enforcement Notice will be sent to the owner of the vehicle, who will then have 28 days to make formal representations against liability for payment of the penalty charge.
If you wish to arrange to view a recording of this alleged contravention, obtain still images from the recording, or if you have any other query about this penalty charge notice, please telephone our helpline on 020 8359 7446. Please note that we can only provide advice on the telephone. If you want to challenge the Penalty Charge Notice, then you must write to us at the address provided above. HOW TO PAY
**Telephone payment:** Call our 24 hour automated payment line on 08453 010 206, on any day and follow the instructions. Our system will confirm the amount payable.
**Online payment:** [http://www.barnet.gov.uk/online-services/online-payments.htm](http://www.barnet.gov.uk/online-services/online-payments.htm) the system will prompt the amount payable.
**By post:** Cheques and postal orders can be sent by post. All cheques and postal orders must be payable to “London Borough of Barnet”. Ensure cheques are correctly signed and dated. We will not accept post-dated cheques. Ensure postal orders are stamped by the Post Office. Write the PCN number (the “AG number” on the notice) and the vehicle registration number on the back of the cheque or postal order. Ensure the amount in figures is the same as the amount in words.
Postal credit or debit card payments can no longer be made. Please use the automated payment line or the online payment facility to make a payment using your credit or debit card. We accept Visa, Mastercard, Switch, Maestro, Delta, & Solo card payments.
All postal payments should be sent to: London Borough of Barnet, Parking Process, P.O. Box 27284, London N11 1YB. Payment cannot be made by instalments. If insufficient payment is made the balance will be pursued as if the penalty was not paid.
**Do not send cash in the post.** Please do not send any payment if you want to challenge this penalty charge notice. CHARGE CERTIFICATE ROAD TRAFFIC REGULATION ACT 1984 (as amended) LONDON LOCAL AUTHORITIES ACT 1996 (as amended)
\<KEEPER_COMPANYADDRESS> E \<KEEPER_OWNERNAME> \<KEEPER_COMPANYNAME> \<KEEPER_FLATFLOORNUMBER> \<KEEPER_BUILDINGNUMBERNA ME> \<KEEPER_STREET> \<KEEPER_LOCALITY>
Date: «NOTICES_PRTDATE»
Penalty Charge Notice Number: «NOTICES_PCNID» Date of Contravention: «NOTICES_ISSUEDATE» Location of Contravention: «NOTICES_STREETADDRESS» «NOTICES_POSTCODE»
We issued an Enforcement Notice on «EN_PRINTEDDATE» which explained that as the person we believe is the owner of the vehicle, registration number «VEHICLE_REG», you had to pay a penalty charge, or write to us explaining why you believed you did not have to pay it.
We are now sending you this Charge Certificate because the penalty charge has not been paid and one of the following applies:
1. You did not make representations as specified on the Enforcement Notice
2. You made representations as specified on the Enforcement Notice and the Council served a notice of rejection, but no appeal was made against the notice of rejection
3. Your appeal against a notice of rejection to the adjudicator was unsuccessful
4. You appealed against a notice of rejection but it was withdrawn before the decision of the adjudicator was made
As a result, the penalty charge has now increased by 50% to £ «NOTICES_BALOS» You must pay this increased amount before the end of the period of 14 days, beginning with the date this certificate was served. Please refer to the "How to Pay" section. If we do not receive payment before the end of the 14 day period, we may register the charge as a debt at the county court (which incurs a further charge of £7.00) and ultimately we may pass the case to bailiffs to recover the debt.
We strongly advise that you deal with this matter now as if it is passed to bailiffs they will add their costs, which may significantly increase the amount that will need to be paid.
If you have any questions about this Charge Certificate, please telephone our helpline on 020 8359 7446
HOW TO PAY
Telephone payment: Call our 24 hour automated payment line on 08453 010 208, on any day and follow the instructions. Our system will confirm the amount payable.
Online payment: http://www.barnet.gov.uk/online-services/online-payments.htm the system will prompt the amount payable.
By post: Cheques and postal orders can be sent by post. All cheques and postal orders must be payable to “London Borough of Barnet”. Ensure cheques are correctly signed and dated. We will not accept post-dated cheques. Ensure postal orders are stamped by the Post Office. Write the PCN number (the “AG number” on the notice) and the vehicle registration number on the back of the cheque or postal order. Ensure the amount in figures is the same as the amount in words.
Postal credit or debit card payments can no longer be made. Please use the automated payment line or the online payment facility to make a payment using your credit or debit card. We accept Visa, Mastercard, Switch, Maestro, Delta, & Solo card payments.
All postal payments should be sent to: London Borough of Barnet, Parking Process, P.O. Box 27284, London N11 1YB. Payment cannot be made by instalments. If insufficient payment is made the balance will be pursued as if the penalty was not paid.
Do not send cash in the post. Please do not send any payment if you want to challenge this penalty charge notice (see over).
## APPENDIX B: ENVIRONMENTAL RESPONSIBILITY
| Strategic objective | Initiated by | Initiative (Work streams) | Key milestones | Deadline | Outcomes or targets achieved for in 2011/12 | Monitored by | |---------------------|-------------|---------------------------|---------------|----------|------------------------------------------|-------------| | Work with residents to reduce CO2 emissions in Barnet | Planning, Environment & Regeneration Assistant Director | Initiative: Work with partners to identify ways in which the council can reduce carbon emissions across the Borough | All Planning, Environment & Regeneration Contractors namely GLL, Volker Highways, Greenspaces | 31st March 2012 | Performance target: Reducing our own emissions by 1% for LBB fleet usage and ensure similar compliance from suppliers through our contracts | SMB | SCHEDULE 3
PAYMENT MECHANISM
A1. Payment Mechanism
Payment will be made against the certified amount approved by the Council's Representative each month. The certified amount will consist of three parts:
- Monthly proportion of the annual Target Cost as defined in Schedule 11.
- Any changes authorised by the Council's Representative due to variations or Special Events undertaken by the Service Provider.
- Performance Related Payment against Key Performance Indicators as described in paragraph B below.
If agreement has been reached on the revision to the Target Cost as a result of the innovation or efficiency then the certificate may be amended to recompense the Service Provider for identifying such savings.
A2. Target Costs
2.1 The Target Cost of the Services will be shown against individual items in Schedule 11. The following shall be included: 2.2 Labour and staff, including all direct costs in connection with these. 2.3 Supply and administration of materials, goods, storage and costs in connection with the Services. 2.4 Accommodation costs including all cost of utilities and insurance for each of the premises as outlined in the Specification. 2.5 All equipment and transport costs in connection with the Services provided. 2.6 I.T. Systems costs (where applicable), consumables, telecommunications costs and staff costs associated and provided by the Service Provider.
B. Performance Related Payment
1.1 Payment will be dependent on the Service Provider meeting the key performance indicators (KPIs) as detailed in Schedule 4. The mechanism is designed to measure the service delivery items that the Council considers essential to the Services. The performance related element of payment will be calculated in accordance with and subject to the provisions of this Schedule. and, where payable, shall be not exceed the maximum percentage set out in the Target Cost Schedule ("Maximum Performance Payment").
1.2 Overheads will be deemed to cover all costs incurred by the Service Provider in carrying out the Service and include but not be limited to the following:
- Headquarters and corporate charge
- General insurance including Employers Liability, Public Liability and all risks
- Training, recruitment, HR and all Financial Charges
- General obligations, liabilities and risks involved in the provision of the Services
1.3 During the duration of the contract the sum calculated for the Maximum Performance Payment shall be paid or deducted in whole or in part as set out below.
1.4 The annual Maximum Performance Payment will be divided into twelve equal parts to produce a maximum amount payable each calendar month. This amount shall be divided by six to produce a Bit. Each month, one Bit (or in some circumstances as set out below, two Bits) will be added or deducted from the amount paid to the Service Provider, depending on whether or not the KPIs have been met. The operation of the payment mechanism is illustrated in Table 1 overleaf. The Maximum Performance Payment is subject to any adjustment as outlined in item A1 above and Table 2 below.
1.5 All KPIs will be measured on the basis of whether they have been met or not met.
1.6 The Service Provider will provide the Council with monthly KPI performance reports, in the format agreed.
1.7 For the first two months from the Commencement Date, due to the unavailability of performance data, the initial performance payment will be set as two Bits. After the second month from the Commencement Date, performance over each month will be reviewed as per Clause 15 of the Contract and if the Service Provider has achieved the four KPIs, then a bit will be added. If the Service Provider has not achieved the four KPIs, a Bit will be deducted. Bits will be added or deducted in subsequent months, depending on performance.
1.8 If the Service Provider achieves four months of good performance from the Commencement Date (not counting the first 2 months from the Commencement Date) he will achieve the maximum set at six Bits. To continue to achieve the maximum the Service Provider must maintain its performance at the specified level.
1.9. If Performance targets are not met, there will be a reduction in the Performance Payment. Given that the initial payment is set at two Bits for the first two months only, if there are two months of decline from the start of the measurement process, the Performance Payment will fall to zero. If performance continues to decline; once below the zero point deduction of Bits will be doubled, so that a maximum deduction of Bits can be reached in only three months of continual decline resulting in a payment significantly below cost.
1.10. This process is intended to allow the Service Provider to show its staff how performance directly affects contract payments. As the targets may increase over time, the Service Provider will be required to manage its staff more effectively to achieve or retain the performance payment.
1.11. If performance falls for three consecutive months (the "zero level"), the Council's Representative will require appropriate intervention from the Service Provider. This will be discussed at a Special Review Meeting in accordance with the provisions of Clause 15.3.
### Table 1
### Table 2
| Months | 3-12 | 13-25 | 25 on | |--------|------|-------|-------| | Target number of indicators to be met. | 6 must include: KPI 2, KPI 3, KPI 8, KPI 10, KPI 11, KPI 15 | 11 must include: Target KPIs for months 3 – 12 and KPI 1, KPI 4, KPI 5, KPI 6, KPI 7 | 15 must include: All 15 KPIs | SCHEDULE 4
KEY PERFORMANCE INDICATORS
1. Measurement, Records and Monitoring
1.1 The Service Provider will submit monthly reports of performance against KPIs in the format specified by otherwise agreed with the Council from time to time.
1.2 The Council reserves the right to check records as is considered appropriate in order to ascertain the Service Provider’s performance is to the required standards. In addition, it is anticipated the Council will conduct more detailed checks on a quarterly basis including ‘reality spot checks’ at regular intervals. Irrespective of actual performance a deduction of three ‘Bite’ will be made for that particular month in the event these checks prove the Service Provider has misrepresented its performance against the KPIs.
1.3 Such a matter would be considered a serious breach within the relationship of trust this Contract is intended to foster between the Council and Service Provider. In such a case, the Council may consider that the Service Provider is unable to continue fulfilling his contractual obligations and it would therefore be necessary to consider termination unless the Council can be satisfied that performance can be recovered and raised to an acceptable standard within an agreed period of time.
2. KPI Introduction
2.1 The following section outlines each KPI in detail and highlights the areas that the Council will expect to be incorporated within any measurement whether the KPI has been met or not.
2.2 It is the Council’s intention to achieve realistic and workable KPI’s, all of which can be measured properly and accurately. The Service Provider will be expected to outline as to how the KPI is to be achieved together with any levels of tolerance within which it will operate for each KPI except where levels have been specified or where there can be no tolerance.
2.3 It is acknowledged that the Services may undergo a series of changes during the life of this Contract Term due to the potential change of parking patterns and as other factors materialise which may affect the Council's Parking Plan and/or the enforcement operation. There may be performance measures which will require variation as the enforcement operation matures. The Change Control Procedures outlined in Schedule 5 will be applicable in any such event. Additionally, the Council may review the tolerance levels in the KPIs throughout the Contract Term, in discussion with the Service Provider, and these may be amended as considered appropriate.
3. Changes to KPIs
The Council and the Service Provider may at any time request a change to any part or all of the Key Performance Indicators set out in this schedule. Any such amendments to the Key Performance Indicators shall be implemented in accordance with Schedule 5 (Change Control Request Procedure). 4. **KPI's**
**Effective Parking Enforcement**
| Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **KPI 1** Coverage of Patrol requirements and responsiveness to enforcement requests | The Schedule of Enforcement Patrols will be agreed between the Service Provider and the Council. The Service Provider will be expected to meet at least 90% of the scheduled patrols for each individual road or car park, unless previously agreed with the Council. The Service Provider will carry out all patrols according to the Specification (Schedule 2) and check all vehicles in the road, identifying contraventions and issuing PCNs according to Council Guidelines. The Service Provider will self-assess their performance and report to the Council who will then inspect and verify the information. Note – visits to streets that are broken by detours into adjoining streets count as one visit. There must be a distinct time difference between visits. In cases where two or more CEOs are present in one street, this will count as one visit. It is acknowledged that CEOs may walk through part of beats that are not allocated to them when travelling to their allocated beats and they must enforce on those. | The Service Provider will self-monitor and provide the Council with a report of the patrols met. The Council may access information from the I.T. system to verify the Service Provider's report. GPS tracking facilities will collate information and confirm that the logged patrols agree with the actual patrols performed. | | Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **KPI2** The volume and effectiveness of input resources | The minimum number of effectively deployed CEOs and the percentage of deployed/employed hours will be as set out in the Contract Plan included in the Service Provider's tender submission. To satisfy the KPI, the ratio between the deployed and employed hours must be as set out in the Contract Plan. The Service Provider will self-assess their performance and report to the Council who will then verify the information. Effectiveness will be assessed by activity levels to include:
- Street Visits
- Vehicles logs
- PCNs issued
- Fault reports
- Abandoned vehicle reports | The Service Provider will self-monitor and provide the Council with a report of the number of CEOs deployed and their effectiveness. This must also include the percentage of deployed hours against employed hours and the amount of overtime worked by individual CEOs, showing a breakdown of effectiveness. The number of deployed CEOs will be obtained from the I.T. system based on the number of CEOs who have logged into a hand held computer and completed a full shift. This information will be used to verify the Service Provider's report, in addition to details recorded in CEOs hand written pocket-books (if applicable). |
The Service Provider should note that the Council may limit any perceived levels of over-deployment, e.g. to compensate for under-deployment.
There is a tolerance level of 5% which is likely to be adjusted during the life of the Contract.
### Good Quality, Motivated and Informed Staff
| Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **KPI 3 Initial CEO training and accreditation (BPA/City & Guilds certificate)** | This element of the KPI is considered achieved when all CEOs meet the training requirements (as per the specification, including training in local modules). The Service Provider shall provide copies of all training related certificates to the Council. | The Service Provider shall provide copies of all training related certificates to the Council and a monthly update of which CEOs have been accredited. No CEO shall commence work duties until the training has been certified and agreed with the Council's Representative. | | **Initial processing staff training and accreditation (BPA/City & Guilds certificate)** | The Service Provider shall confirm that a module has been completed in providing information on the Council's policies. No CEO shall commence work duties until the training has been certified. | | | | This element of the KPI is considered achieved when all processing staff meet the training requirements (as per the specification, including training in local modules). | The Service Provider shall confirm that a module has been completed in providing information on the Council's policies. | | **KPI 4 Regular assessments and delivery of on-going training** | A performance management plan will need to be set at the beginning of each year and the Service Provider will be required to demonstrate how this is achieved. An individual assessment format shall be agreed between the Service Provider and | The Service Provider shall provide copies of all training related certificates and assessments to the Council at monthly meetings. The assessments shall be evaluated against the agreed format and all certificates shall be checked to substantiate | | | | | | Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **KPI 5 Staff Retention** | The Service Provider will be required to ensure that staff turnover shall not exceed an annual mean of 10%. This will include all staff employed on the contract including CEOs, processing and administrative staff and the Contract Manager. | The Service Provider will submit reports showing the employees in post at the end of each month and the level of staff turnover. | | **KPI 6 The level of complaints & complaints handling** | Any written complaints received by the Service Provider about a member of staff must be investigated and the Service Provider is expected to respond to at least 95% of these within ten (10) working days. A copy of the complaint and the reply must be sent to the Council's Representative. Any written complaint about a CEO received by the Council will be copied to the Service Provider. An acceptable level of complaints will be agreed between the Service Provider and the Council's Representative and the Council will expect this level to remain within an agreed percentage tolerance during the life of the contract. The Council | The Service Provider must keep records of all complaints. The Service Provider may be required to produce information to assist in monitoring this indicator. Resolution will be defined as achieved if no further correspondence relating to the complaint is received by either the Service Provider or the Council directly. |
The KPI will be considered met once all staff in post have received their assessments in the agreed format and timescale and have received the required ongoing training.
At the request of the Council details of staff assessments and training shall be provided by the Service Provider.
### Issue of Good Quality PCNs
The definition of a good quality PCN is one which has not been cancelled for any one of the reasons listed below (Details column).
| Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **PCN7 PCNs cancelled due to CEO Error**<br>The Service Provider will be required to ensure that PCNs cancelled as a result of a CEO error are minimised and actively work towards decreasing this value annually. | The Service Provider will be expected to meet a standard such that no more than 3% of all PCNs issued are cancelled due to a CEO error as a result of:<br>- Incorrect factual information (e.g. street name/location error, no record of VRM or VEL).<br>- Input error on handheld computer (HHC) or | The Service Provider will provide the Council with performance information. This information will be compared with data sourced from the I.T. system. | | Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | There is a tolerance level of 1% which is likely to be adjusted during the life of the Contract. | pocket book
- Failure to provide appropriate diagrams (where applicable)
- Negligible or poor quality supplementary evidence
- PCN cancelled as a result of misconduct or a result of proven/upheld complaint against a member of the Service Providers staff (does not include benefit of doubt cases).
- Incorrect issue of PCN, i.e. failure to issue according to Council guidelines. | See above |
**KPI 4 Void Tickets**
The Service Provider will be required to ensure that voided PCNs are minimised and actively work towards decreasing this value annually.
There is a tolerance level of 1% which is likely to be adjusted during the life of the Contract.
The Service Provider will be expected to meet a standard such that no more than 5% of all PCNs issued are voided due to CEO action or request after printing.
- A PCN will not be classified as a void if the CEO issues a substitute PCN. Other Services.
The measurements listed below relate to the provision of efficient and effective services.
| Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **KPI 9 Processing Services** | - Failures to log, scan, process or correctly allocate any correspondence within the required timescales.
- Failure to issue/re-issue a bus lane PCN
- Failure to despatch any other statutory/recovery documentation within the required timescales; including Orders for Recovery and Warrants of Execution.
- Failure to issue Bus Lane Penalty Charge Notices within the required timescales.
- The conversion of captured contraventions from the automated incident capture system must be maintained at current capture rates of approximately 90%. If the Service Provider determines that compliance has resulted in a decrease in incident capture and the resulting PCNs, this must be flagged at the monthly meetings so that the conversion rate could be adjusted or the Council may seek to relocate the relevant camera.
- Failure to take the required action to update the IT system as required, or to record case details correctly, within the appropriate timescales.\
The question of whether a Penalty Charge cancellation is due to "Service Provider Error" shall be determined by reference to a list of reason codes. | Performance information will be provided by the Service Provider.\
The Council will input into the assessment of this indicator based on the responses to challenges where it receives complaints, representations, appeals and witness statements.\
The Council will also use the IT system to identify cases where the Service Provider fails to scan relevant documentation onto the associated case or has failed to follow the statutory process.\
Performance information will be provided by Service Provider.\
The Council will input into the assessment of this indicator based on the responses to challenges where it receives complaints, representations, appeals and witness statements. | | **KPI 10 Response Services** | There is a tolerance level of 1% which is likely to be adjusted during the life of the Contract. | |
The Council's Representative may assess individual instances of failure based on the effect on the PCN processing operation, e.g. whether or not the failure to reply properly to a challenge has resulted in the loss of a PCN at appeal or cancellation at the representations stage. for Penalty Charge cancellation corresponding to the reasons set out but not be limited to below, and as may be further determined by the Council from time to time.
- Failure to respond to both statutory and non-statutory correspondence within specified timescales.
- Failure to respond accurately and fully to challenges and other non-statutory correspondence within the required timescales.
- Failure to process Representations and Appeals within required timescales or accurately
- Appeals non-contested or refused due to poor or incorrect Representation response; or
- Failure on the Service Provider and their subcontractors to deliver a compliant statutory and customer service to the PCN recipient.
The Service Provider will be expected to meet a standard such that no more than 1% of all PCNs issued are cancelled as a result of an error made by the Service Provider.
| KPI 11 Banking and Financial | The Service Provider will maintain the weekly collection rate in line with budget expectations as well as maintain the industry average for the recovery of a PCN at £45 and work to increase the value of this recovery rate for the duration of this contract. This element of the KPI will be considered met if monthly revenue summary information demonstrates that agreed activity levels are being met across all work streams. | Performance information will be provided by Service Provider. The Council will also agree activity levels with the Service Provider at the monthly meetings and monitor information using the IT and SAP systems. Note – notwithstanding the requirements of this KPI, where any errors in banking have | | KPI 12 Lines and Signs Maintenance | |-----------------------------------| | This indicator relates to the maintenance of lines and signs as outlined in the specification. | | • Failure to account for monies taken on behalf of the Council. Failure to provide the necessary level of facilities for cashless payment as outlined in the specification. | | • Late/delayed banking of monies unless otherwise agreed with the Council's Representative. | | • Failure to carry out adequate reconciliation of monies and/or errors in banking and accounting processes. (Tenders are invited to suggest a tolerance level for this item). | | • Failure to report defects or to attend to any reported defect and effect the necessary repair within the required timescales. | | • Cases where a PCN has been cancelled as a result of a defect with either line or sign must have an associated works order to rectify the defect. | | Performance information will be provided by Service Provider. | | The Council may verify this information from its own observations, representations and appeals data. | | The Council will also use information provided at the monthly meetings to confirm whether remedial work has taken place against all instances of repair requests and/or identification. |
| KPI 13 Abandoned Vehicles | |---------------------------| | • The Service Provider is to report all suspected abandoned or nuisance vehicles observed during enforcement patrols. A description of an "abandoned or nuisance vehicle" is to be agreed between the Council and the Service Provider. | | • The Service Provider is to report how many vehicles have been removed after investigation. | | The Service Provider will self-monitor and provide the Council with a report of the number of abandoned or nuisance vehicles that they have reported and removed. | | The Council may use information relating to complaints about this service to assess this KPI. |
| KPI 14 Other | |--------------| | • Failure to provide information required to deal with FOI requests within an agreed timescale. | | This indicator will be monitored by the Service Provider through quality checks and | SCHEDULE 5
CHANGE CONTROL PROCEDURES
1. PRINCIPLES
1.1 Where the Council or the Service Provider see a need for a change to the Services or the Contract, then either Party may at any time request a change and propose an amendment to this Contract in accordance with the procedure set out in paragraph 2 below.
1.2 Neither the Council nor the Service Provider shall unreasonably withhold its agreement to any change.
1.3 The obligations of the Parties to this Contract shall not be effected until a change control note in the form attached to this Schedule 5 (a “Change Control Note”) has been signed by the authorised signatory of both Parties.
1.4 The Council shall not be responsible for the cost of any services provided, work undertaken or goods or materials ordered by the Service Provider or its subcontractors which has not been authorised in advance by a change control note.
2. PROCEDURE
2.1 The Council and the Service Provider shall discuss changes proposed by either Party to this Contract and such discussion shall result in:
a) A decision not to proceed further; or b) A written request for a change by the Council; or c) A recommendation for a change by the Service Provider.
2.2 Where a written request for a change is received from the Council, the Service Provider shall submit two signed copies of a Change Control Note to the Council within seven (7) Days of such request.
2.3 A recommendation to amend this Contract by the Service Provider shall be submitted direct to the Council in the form of two copies of a Change Control Note signed by the Service Provider.
2.4 Each Change Control Note shall contain details of the change including, where applicable:
a) The title of the change; b) The originator and the date of the request or recommendation for the change;
c) The reason for the change;
d) Full details of the change including any specifications;
e) Details of additions / savings to the Target Cost if any, as a consequence of the change;
f) A timetable for implementation together with any proposals for acceptance of the change;
g) A schedule of payments, if applicable;
h) The impact, if any, of the change on other aspects of the Contract;
i) The date of expiry of validity of the Change Control Note;
j) Provision for signature by the Council if the change is agreed.
k) The timescales within which the change is required
2.5 For each Change Control Note submitted to the Council, the Council Representative shall, within the period of the validity of the Change Control Note evaluate the Change Control Note and, as appropriate:
a) request further information from the Service Provider in which case the Service Provider shall provide such information as soon as reasonably practicable and in any event within seven Days or such other period as may be agreed, the request for information and the information once provided shall be deemed to be part of the Change Control Note, and the Council may approve or reject the Change Control Note upon receipt of the new information; or
b) notify the Service Provider of the rejection of the Change Control Note.
2.6 A Change Control Note signed by both Parties shall constitute a variation to this Contract in accordance with the terms of the Contract.
2.7 Authorised Signatories
2.7.1 Where the change incurs no additional charges for the Council the authorised representatives for both Parties will act as authorised signatories.
2.7.2 The authorised signatory for the Council will be the Council’s Representative for changes up to the value set out in the Schedule of Variables and such person as set out in the Council’s own constitution and any contract standing orders for changes above this value; 27.3 The authorised signatory for the Service Provider shall deem to be the Contract Manager in the absence of any written notification to the contrary from the Service Provider to the Council. Change Control Note
Ref No:
Date:
Title of Change:
Details of Change:
Reasons for Change:
Impact of Change:
Timetable:
Addition or deduction from the Target Cost:
Service Provider: Signed:
Council Response: Accept/Reject Signed:
Valid Until Date:
Note: The format of the Change Control Note may vary from time to time in circumstances where additional information is deemed necessary by the Council of the Service Provider in order to accurately reflect the nature of the change. SCHEDULE 6
TRANSFERRING EMPLOYEES
The Council provided this information to the Service Provider on Monday 16th April 2012 at 11.28 am.
| | | |---|---| | 1. | Personnel No. | | 2. | New Employer | | 3. | Project Name | | 4. | Code Identifier | | 5. | Personnel Number | | 6. | Salutation | | 7. | Forename | | 8. | Personnel Subarea | | 9. | Organisational Unit | | 10. | FTE | | 11. | Position No | | 12. | Position Name | | 13. | Contract type | | 14. | Fixed Term Contract End Date | | 15. | Term-Time Only Working | | 16. | Normal Place Of Work | | 17. | Min SCP | | 18. | Max SCP | | 19. | Actual SCP | | 20. | Bar Point | | 21. | Salary Range From | | 22. | Salary Range To | | 23. | Annual salary | | 24. | Work Pattern | | 25. | Contractual Weekly Hours | | 26. | Number of days worked per week | | 27. | Shift allowance | | 28. | Contractual Night Work T/S | | 29. | Contractual Sat Work | | 30. | Contractual Sat Work Hours Per Month | | 31. | Off Scale Payment T/S | | 32. | Contractual bonus arrangement | | 33. | Contractual Overtime 1.5 T/S | | 34. | Hours Per Month | | 35. | Contractual Overtime Rate | | 36. | Call Out Allowance (Annual) | | 37. | Standby Allowance T/S | | 38. | First Aid Allowance (monthly) | | 39. | Essential Car Allowance (Annual) | | 40. | Birth date | | 41. | London Borough of Barnet Start Date | | 42. | LBB Length of Service to Date 05.04.2012 | | 43. | LBB Length of Service at Point of Transfer (01.05.2012) | 93. Bank Account 94. Working Time Directive Opt Out (Yes-give Details) 95. Outstanding Claims for Work-Related Injuries 96. Conduct/Capability/Grievance in Progress 97. Unspent Warning 98. Disciplinary Action Taken Against Employee in Last 2 Years 99. Grievance Action Raised by Employee in The Last 2 Years 100. Legal Action Brought Against LBB By the Employee in Last 2 Years 101. Potential Legal Action To Be Brought Against LBB By the Employee 102. DDA Adjustments in Place 103. Comments 104. Right to Work in UK (Yes/No) to Work in UK 105. Work Permit Expires SCHEDULE 7
PARKING PLAN Planning, Environment & Regeneration
Parking Service
Team Plan 2011 -12 Parking Service Team Plan, 2011/12
1. Introduction
1.1 Purpose / Mission of Team
Efficient transport provision within the borough is vital to the local economy and quality of life of both residents and visitors and the Parking Service has an essential role to play in the maintenance of order on the highway. Within Barnet, effective control of parking is essential in combating the negative impact of parking on traffic movement, road safety, and essential servicing.
The Parking Service is responsible for providing and managing on and off-street parking services, enforcing on-street parking controls throughout Barnet. The on-street service comprises installation and maintenance of lines, signs, and pay and display machines, patrolling the streets and enforcing the parking regulations through the issue of penalty charge notices (PCNs). In addition it is responsible for managing permissions and suspensions of its on-street space. Off-street, Barnet operates car parks across the borough, managing their marketing, pricing, maintenance and development. There is also a significant administration function which deals with the processing of over 150,000 PCNs per year.
1.2 Setting the Scene
2010/11 saw completion of the implementation of the Civica CE system which extended the digital platform. The main challenge during this period has been organisational as a structure introduced in April was changed again before it had been fully implemented.
Changes in both the economic and political climate have also had an influence as the service has struggled to reach the required income levels. Ambitious targets have been set for 2011/12 and the focus will be on delivering these and completing the Parking Option project. 2. **Team Priorities – 2011/12**
The table below outlines the key activity that the team will deliver in 2010/11 under each of the Council's three new corporate priorities.
**Corporate Priority – Better services with less money**
| Strategic Objective | Owner | Initiative, project and work stream (YTD Description) | Key partners | Timeline | Outcomes in service delivery (YTD) | Responsible Area | |---------------------|-------|------------------------------------------------------|--------------|----------|-----------------------------------|-----------------| | Focus services around the customer to achieve a better customer experience and better value for money through bundling and commissioning services differently and through service transformation. (VFM) | Maintenance Manager | Parking Recovery Plan (1) Collection of fees for permitted casual parking both on the street and in car parks (Pay and Display and Pay by Phone) Ensuring continuing revenue stream whilst removing machines | Versus PayPoint Parkcon Metric Cale BriParc Traffic & development | All machines to be taken out of service by September 2011 | Q1 Cale machines to be removed (40) Maintenance arrangements to be put in place for Parkcon (160) and Metric (250) machines to hold availability at 80% PayPoint arrangements for cash payments to be put in place Work to commence on rewriting TMOs Schedule and plan to be prepared for replacing all timeplates and signs Equalities Impact Assessment to be completed | Parking Service Management Team (PSMT) |
**SCS Links:**
No obvious links | Strategic Objective | Owner | Initiative | Key Partner | Deadline | Performance or Key Action for 2011/12 | Monitoring/Reporting | |---------------------|-------|------------|-------------|----------|--------------------------------------|---------------------| | | | Parking Recovery Plan (2) | | All within service | Project to be closed by May 2011 | | | | | Investment in repairs to signs and lines to generate additional income by enabling the issue of more Penalty Charge Notices (PCNs) | | | | | | | | Project to be closed down as unproductive but an ongoing maintenance level to be set | | | | | | | | Parking Recovery Plan (3) | | All within service | To continue throughout the year | | | | | Civil Enforcement Officer activity levels | | | | | | | | Ensuring that sufficient enforcement hours are deployed, that productivity | | | | | | | | Q1 | Report to be prepared showing outcomes of 2010 pilot at an selected sites | Parking Service Management Team (PSMT) | | | | | Mechanism to be developed for Enforcement to report faulty signs or lines that prevent a PCN being issued | | | | | Mechanism to be developed for reporting on PCNs cancelled because of defective signs or lines | | | | | System to be developed for reviewing reports and ensuring an appropriate level of maintenance | | | | | Investment project to be closed down | | | | | Q2, 3, 4 | Reporting on signs and lines issues to be incorporated into BAU | Parking Service Management Team (PSMT) | | | | | Q3 | Machine removal to be completed Monitoring of impact on revenue to continue and be reported | | | | | Maintenance Team to be wound up | | | | | Q4 | Cashless payment methods now Business as Usual (BAU) Monitoring of impact on revenue to continue and be reported | |
London Borough of Barnet – Parking Service Team Plan 2011-12 | Strategic objective | Owned by | Initiative, project and workstream | Key partners | Deadline | Outcomes or targets aimed for in 2011/12 | Monitored via | |---------------------|----------|-----------------------------------|-------------|----------|------------------------------------------|--------------| | | | levels are maintained, and that PCNs are of sufficient quality to ensure an acceptable payment level | | | return on investment remains favourable | | | | | | | | Use of agency CEOs to continue whilst report is prepared on the impact of legislative changes regarding agency workers | | | | | | | | PCN quality to be maintained so that the proportion cancelled due to CEO errors is less than 3% | | | | | | | | PCN quality to be maintained so that the proportion paid at discount is greater than 3% | | | | | | | | Performance management of CEOs to be undertaken to ensure that the above levels are maintained | | | Q2 | | Recommendations from report on agency staff to be implemented | | | Review to be undertaken of the appropriateness on resource levels, organisation, and deployment of enforcement staff | | | | | BAU activities to continue as in Q1 | | | | | | Q3 | | Recommendations from report on resource levels, organisation, and deployment to be implemented | | | BAU activities to continue as in Q1 | | | Q4 | | BAU activities to continue as in Q1 | | | | | | Strategic Objective | Owner | Activities, Projects and Work Stream (Short Description) | Key Partners | Deadline | Outcomes or Benefits Aligned to 2011/12 | Monitoring | |---------------------|-------|--------------------------------------------------------|--------------|----------|----------------------------------------|------------| | | | Parking Recovery Plan (4) Introduction of controls on free bays within Controlled Parking Zones and the introduction of charges in free car parks | Traffic & Development | All work to be completed by March 2012 | Q1, Q2, Q3, Q4 To monitor progress and report on impacts | Parking Service Management Team (PSMT) | | | | Parking Recovery Plan (5) Fees and Charges Review Although the revised fees and charges are being introduced on 21 March 2011 (within 2010/12) no modelling was done and there will be a need to monitor impacts and make in-year adjustments | All within service | To continue throughout the year | Q1, 2, 3, 4 Activity levels and income on each revenue stream to be monitored weekly Mitigating action to be taken as necessary | Parking Service Management Team (PSMT) | | | | Parking Recovery Plan (6) Reorganisation Project The introduction of lean processes into the parking back office, deletion of the Quality and Customer Service Team, and discontinuance of active CCTV enforcement was largely undertaken in 2010/11 Some final implementation together with monitoring and review will be carried over into 2011/12 | J W and Highways Correspondence CV Lia Possible third party provider | May 2011 | Q1 Arrangements to be put in place for all incoming CCU / FOI for parking to be combined with core directorate activity Systems for processing of ANPR captured PCNs in Bus Lanes to be finalised and bedded in Review to be undertaken and implemented for handling of incoming and outgoing mail Q2 Review to be undertaken at the first quarter on the new structure and any necessary changes made Q3, 4 Ongoing operation of new structure to be monitored | Parking Service Management Team (PSMT) | | Strategic objective | Owner | Initiative, project and work stream | Key partners | Deadline | Outcomes or targets timed for in 2011/12 | Monitored by | |--------------------|-------|------------------------------------|--------------|----------|----------------------------------------|-------------| | Parking Manager | Parking Recovery Plan (?) Parking Options Outsourcing of the parking operation | Major Projects Finance Procurement | April 2012 | Q1 Issue OJEU Notice Issue ITT | Parking Options Project Board | | | | | | Q2 Receive bids | | | | | | | Q3 Select delivery partner | | | | | | | Q4 Mobilise for April 2012 | | | Information Manager| Improving the Back Office Making the administration of the service more efficient and effective | Civica Bellis (U5W, CS6 Enforcement, Equitor, Jacobs) | April 2012 | Q1 Complete upgrade of Civica system from PES to CE for all newly issued PCNS Review systems for processing Resident Permit applications and implement recommendations Develop systems to ensure that the back office can keep pace with enforcement activity | Parking Service Management Team (PSMT) | | | | | | Q2 Implement process to allow motorists to view Bus Lane evidence packs online | | | | | | | Q3 Migrate all data from PES to CE and close down PES | | | Strategic Objective | Owner | Initiative, projects and work streams | Key partners | Deadline | Outcomes or targets identified for 2011/12 | Monitor | |--------------------|-------|--------------------------------------|--------------|----------|------------------------------------------|---------| | Make sure we get best value from resources across the public sector including our people and assets (VFM) SCS Links: No obvious links | Enforcement Manager | Performance Management (Productivity) Ensure that the productivity of Civil Enforcement Officers is maintained at the necessary levels through rigorous performance management and the application of the Council's policies and procedures | HR | Ongoing | Q1, 2, 3, 4 Overall activity levels to be matched at an issue rate of 2 per hour PCN quality to be maintained to so that the proportion cancelled due to CEO errors is less than 1% PCN quality to be maintained to so that the proportion paid at discount is greater than 48% | Parking Service Management Team (PSMT) | | | Information Manager | Performance Management (Productivity) Ensure that the productivity of Information Officers is maintained at the necessary levels through rigorous performance management and the application of the Council's policies and procedures | HR | Ongoing | Q1 Systems of individual targets to be developed and implemented so that overall activity levels match enforcement levels System to be developed and implemented to ensure quality of output is maintained without reliance on exhaustive checking | Parking Service Management Team (PSMT) | | | Parking Manager | Performance Management (Attendance) Ensure that the attendance of all parking staff is raised to and maintained at the necessary levels through rigorous performance | HR | Ongoing | Q2, 3, 4 Target activity levels to be maintained | SMB |
### Corporate Priority – A Successful London Suburb
| Strategic Objective | Owner | Initiatives, projects and key streams (with description) | Key partners | Deadline | Outcomes or targets aimed for in 2011/12 | Monitored by | |---------------------|-------|--------------------------------------------------------|--------------|----------|----------------------------------------|-------------| | Ensure that our town centres are vibrant places where business can thrive | | | | | | | | Work with all strategic partners (particularly the Police) to ensure Barnet is a safe place | | | | | | | | SCS Links: Supporting Enterprise (including Town Centres) | | | | | | |
| | | | | | | | | | | | | | | |
**Enforcement Manager**
**Target Parking Enforcement**
- Undertake enforcement activities in town centres to ensure that loading and unloading can take place and that parking bays are used properly
**PayPoint**
**Ongoing**
**Q1**
- Undertake research to match streets / patrol beats to town centres
- Establish appropriate input levels for each town centre
- Initiate monitoring
- Ensure provision of at least one PayPoint option in each town centre
**Q2, 3**
- Review monitoring to establish suitability and effectiveness
______________________________________________________________________
London Borough of Barnet – Parking Service Team Plan 2011-12 3. **Use of Resources – 2011/12**
| Description | Expenditure | |-------------------|-------------| | Employee Expenses | 3,189,050 | | Premises Expenses | 205,660 | | Vehicle Expenses | 49,710 | | Other Services | 1,105,280 | | Recharges | 2,199,370 | | **Total Expenditure** | **6,749,070** |
4. **Key Legislation**
There are a range of legislative and statutory obligations that impact on the running of the service. These are outlined below:
| Legislation Impacting on Service | Impact on Service | |----------------------------------|-------------------| | Traffic Management Act 2004 (TMA) | The issue, enforcement and recovery of payment in relation to Penalty Charge Notices is subject to stringent guidelines. Certain restrictions are placed on recovery which limits externalisation of certain functions within the processing of appeals against penalty charge notices. Additionally, tight timeframes on response times and regulations related | to the content of documentation, reporting and transparency means that the section needs to ensure that resources are allocated to meet legislative demands. There are requirements under this act for the LA to publish figures on income, expenditure and the number of contraventions issued.
Before enforcement of any Civil Enforcement Area can take place, the design team need to ensure that all Traffic Management Orders are approved and are in place.
| London Local Authorities Act | The recovery of bus lane contraventions falls under this legislation whereas the approval of the devices used to undertake such enforcement falls under the realm of the TMA. Changes in this are forthcoming from London Councils and need to be fed back to staff regularly – especially changes to Codes of Practice. | |----------------------------|--------------------------------------------------------------------------------------------------| | Road Traffic Regulations Act | As above | | Any Initiatives coming from the DfT that impact on transport and related services | The service needs to anticipate changes and implement accordingly in line with changes to statutory requirements, legislation etc. |
5. National/Regional Issues
A number of national and regional issues also have an impact on the service. These are outlined below
| National/Regional Issues | Impact on Service | |--------------------------|-------------------| | Carbon Emissions Reduction | The removal of pay and display machines will lead to reductions in emissions as there will be no need for vehicle travel associated with cash collection or maintenance. | | Economic climate | A decrease in economic activity has led to a consequential decrease in traffic volumes and a downturn in parking income. | 6. Key Strategies/Policies
The service has a range of key policies and strategies in place that guide operations.
| Name of Key Strategy/Policy | Brief Description | Date Published/Valid | Officer Responsible | |-----------------------------|-------------------|----------------------|---------------------| | Permit Policy | A policy underlying the rules underlying the types of permits issued by the parking section, the costs, terms & conditions and legislative requirements | Review to be complete by May 2011 | Information Manager | | Parking Enforcement Policy | Manual which outlines and specifies all regulations governed by legislation and internal policy relating to the enforcement and issue of penalty charge notices issued by Civil Enforcement Officers using HHOs. | Review completed and publication due end of August 2011 | Enforcement Manager | | PCN Cancellation Procedure | Guidelines for process staff on the decision making process involved to cancel a penalty charge notice at any stage of the recovery process. Specific reasons are included for the various contravention codes. Additionally, the procedure looks at mitigation and how it should be qualified and quantified in terms of making the decision to cancel a PCN. | October 2008 to March 2010 Review and publication by August 2011 | Information Manager |
7. Customer Profile – including any Equality and Diversity Considerations
Out of all of the different boroughs in England, Barnet has the 20th most ethnically varied population and the 2nd most religiously varied population.
The parking service recognises that discrimination and inequalities affect people in many different ways and as such aim to continue to provide equal service levels and outcomes to residents by engaging with customers at all levels, other members of the public and staff as a whole. This commitment can be summarised as follows: • Regular review and publication of procedures to provide guidelines to staff on how to consider appeals against penalty charge notices, especially the consideration of mitigation. • Due care to ensure that all templates, paragraphs and responses to correspondence are in line with the Council’s plain English standards. • The extension of on-line facilities to provide greater access to members of the public to pay for services. • The introduction of community permits which are available to religious heads who make home visits to provide services (to the infirm and elderly) has been a success in terms of the service’s E&D considerations and the review of the permit and footway parking policies will involve customer engagement and input. • The parking service continues to boast a diverse workforce which meets equality standards in the workplace.
3. Forthcoming Consultation
An EIA is to be carried out into Cashless Parking early in the year. Consultation will be undertaken in relation to any proposed changes to Traffic Management Orders.
9. Key Partnership Arrangements / Contracts
a) Partnerships
| Partnership | Brief description of purpose | Organisations involved | |------------------------------------|---------------------------------------------------------------------------------------------|---------------------------------------------| | British Parking Association (BPA) | To keep abreast of changes in regulations, new IT systems and technology and other newsworthy events etc | Other LAs, contractors and suppliers | | Department for Transport (DfT) | Provide support on sign and line requirements and queries. | | | London Councils | Support and guidelines for all LAs on parking related matters including legislation. | London Councils and all LAs | | Metropolitan Police Service | In conjunction with information from the bailiffs regarding persistent evaders, untaxed and abandoned vehicles, the service assists in eradicating cars from the borough thereby providing a safer environment. | | | Highways | Implementation of anc extension of CPZs in addition to Parking Design | | CAFT
Working closely to promote and improve community safety by sharing information and implementing a co-ordinated communications plan to report on unlicensed/unregistered vehicles, persistent evaders, permit and disabled badge misuse.
Parking and the Corporate Anti-Fraud Team
b) Contracts
| Contract | Brief description of purpose | Contract Length | Contract Value | SCA in place? | Officer Responsible | |----------|-----------------------------|----------------|----------------|---------------|---------------------| | Framework contract with 4 bailiff companies (Equita, CCS, Jacobs and JBV) | To assist with the recovery of unpaid penalty charge notices after all avenues of appeal have been exhausted by the motorist. | 2 years (until 2012) | N/A contractors are paid by the debtors rather than the Council. | Y | Information Manager | | Civica | Old PES system and new GE system which is a managed service | Extension of original contract until 31/03/2014 | £2,023,500 | Y | Information Manager | | Cash Collection from P&D machines | Use of Council cash collection team to collect cash from P&D machines | Ongoing arrangement | £220,000 per annum | N | Maintenance Manager | | Verrus (Pay by Phone) | Service to allow payment of parking fees by mobile phone | Being extended until April 2012 | £173,865 | Y | Parking Manager | | Neo-post | Parking payments envelope | Rolling contract | £4,308 per annum | N | Information Manager | | Contract | Brief description of purpose | Contract length | Contract value | SLA in place? | Office Responsible | |----------|-----------------------------|----------------|---------------|---------------|-------------------| | Fleet Comm | Two way radio system | Rolling contract | £23,115 | Y | Maintenance Manager | | GPL | Enforcement motorcycles | Two years | £12,143 | Y | Maintenance Manager |
10. Audits / outstanding action plans
| Workstream | Description | Date Due | |------------|-------------|----------| | Review of the Directorate Arrangements for contract management. | | Quarter 3 | | On-going follow up work to ensure identified weaknesses from previous reviews have been followed up and actioned. | | Quarter 2 | | Planning, Environment and Regeneration | Risk that the Council will not take full advantage of the new home bonus; risks that contracts will not be managed appropriately; risk that the parking service will not deliver on recovery plan. | Total Annual Planned days 45 |
Outstanding Audit Action Plans
None
## Appendices
### Appendix A: Performance Indicators
| Description | Baseline 2010/11 | Year End 2011/12 | |-----------------------------------------------------------------------------|------------------|------------------| | To meet the financial targets in the Parking Recovery Plan | N/A | £12.4 million | | Increase in the recovery rate for Penalty Charge Notices | 72% | 75% | | Respond to all correspondence received by the parking section in relation to Penalty Charge Notices within 10 working days (Legislative timescales allow for responses to formal representations to be within 56 days of receipt of the correspondence which represents our longest timescale) | 65% | 70% | | To respond to all permit related enquiries within 5 days of receipt | 85% | 90% | | To reduce levels of sickness in line with corporate targets | 12 days per person/annum | 6 days per person/annum | Appendix B: Risks
a) Risk Register
The risks associated with delivery against objectives and priority improvement initiatives are managed via the directorate Risk Register and the underpinning teams' risk registers. The high risks associated with the delivery of the teams objectives, local performance indicators and priority improvement projects have been identified as:
## Risk Assessment Form
**Organization/Department/Function/Project:** Parking
**Objective:** Full Staff and Structure in Place
**Manager:** John McArts
**Date:** 13 June, 2011
| Risk | Assessment of Underpinning Risk | Risk Rating | Assigned To | Target Date | Assessment of Control Risk (Plan and Actions in Place) | |------|---------------------------------|------------|-------------|-------------|------------------------------------------------------| | PRM101 - Parking & Culture | Lack of Procedures preventing Damage to Parking | Major 4 | Low 4 | John McArts | 10/09/2011 | Information Manager appointed, started 14 September 2011 |
**Impact** | **Probability** | **Risk Rating** | **Risk Rating** | |-----------|----------------|----------------|----------------| | Major 4 | Low 4 | 10 | |
______________________________________________________________________
London Borough of Barnet – Parking Service Team Plan 2011-12 b) Internal Control Checklist (ICC)
The aim of the ICC is to test and prove the Internal Control Environment of the Council. Internal controls are managed via the directorate Internal Control Checklist and the underpinning team’s ICCs. The high risks of non-compliance within the team have been identified as:
| QUESTION | AGREED ACTION/COMMENT | |-------------------------------------------------------------------------|------------------------| | 2.01 Have all nominated managers who attended CAFT Fraud Awareness Training (which also covers Whistleblowing Policy) disseminated the information to their staff. | Training still to be arranged. | | 2.04 Have relevant staff from your service been nominated to receive specialised training in the prevention & detection of Money Laundering and the Council’s Anti Money Laundering Framework, which includes the reporting procedures and applicable offences. | Training still to be arranged. | | 7.02 A current Scheme of Delegation is in place, published on the intranet and all staff are aware of the responsibility within it. | Still in development. |
______________________________________________________________________
1. See Planning term definitions
2. Enter name of lead members and lead officials
3. Please prefix content in the following way – Initiative: xxxxxxxx, Project: xxxxxxxx and Work stream: xxxxxxxx. See Planning term definitions for the distinctions between the three.
4. Include all bodies structurally independent of the council, including suppliers, voluntary organisations and public sector agencies.
5. Many projects will not complete within 2011-12 so the ultimate deadlines should be included alongside any 2011-12 delivery deadlines.
6. See Planning term definitions
7. It may be mentioned by one or more management teams board. Enter the one or two highest ranking bodies – for example, the Children’s Trust Board and the One Barnet Programme Board. All outcomes in the One Barnet Forward Plan that are shared between partners will ultimately be reported at a summary level to the One Barnet Partnership Board. SCHEDULE 8
ADJUDICATOR AND EXPERT
1 The Adjudicator and/or Expert nominated to consider a dispute referred to him shall be jointly selected by both Parties.
2 Where the Council and the Service Provider are unable to agree on the identity of the Adjudicator and/or Expert to be appointed, the President for the time being of the Chartered Institute of Arbitrators shall make such appointment as he sees fit bearing in mind the nature and scope of this Contract within twenty (20) Calendar Days of any application for such appointment by either Party. SCHEDULE 9
INVITATION TO TENDER LONDON BOROUGH OF BARNET
INVITATION TO TENDER
TENDER FOR THE PROVISION OF PARKING ENFORCEMENT AND RELATED SERVICES
CONTRACT REFERENCE NO 50352 CONTENTS
01. DEFINITIONS ........................................................................................................... 3
02. GENERAL .................................................................................................................. 5
03. PROCUREMENT TIMETABLE .................................................................................. 6
04. TENDER REQUIREMENTS ...................................................................................... 7
05. TENDER SUBMISSION ............................................................................................ 12
06. EVALUATION .......................................................................................................... 14
07. NOTIFICATION ........................................................................................................ 17
08. WARRANTIES AND DISCLAIMERS ......................................................................... 18
09. CLARIFICATION AND QUERIES ......................................................................... 19
10. CONFIDENTIALITY ................................................................................................. 20
11. COSTS .................................................................................................................... 21
12. FREEDOM OF INFORMATION ACT 2000 (FOIA) .................................................. 22
13. PARENT COMPANY GUARANTEE / PERFORMANCE BOND ................................. 23
14. TENDER SUBMISSION CHECKLIST ..................................................................... 24 SCHEDULE A – FORM OF TENDER ........................................................................... 25 SCHEDULE B – THE SPECIFICATION ....................................................................... 27 SCHEDULE C – TARGET COST SCHEDULE ................................................................. 28 SCHEDULE D – CERTIFICATE OF CONFIDENTIALITY, NON-COLLUSION AND NON-CANVASSING ........................................................................................................... 29 SCHEDULE E – THE CONTRACT .................................................................................. 30 SCHEDULE F – ITT QUESTIONNAIRE ......................................................................... 31 SCHEDULE G – CONTRACT PLAN ............................................................................... 36 SCHEDULE H – INSURANCE COVER FORM ................................................................. 37 SCHEDULE I (1) – FORM OF BOND .......................................................................... 38 SCHEDULE I (2) – DRAFT DEED OF GUARANTEE ..................................................... 40 SCHEDULE J – TUPE SCHEDULE AND ORGANISATION CHART ............................... 42 SCHEDULE K – PENSION FUND ACTUARIAL REPORT .............................................. 43
15. DEFINITIONS
"Certificate of Confidentiality, Non-Collusion and Non-Canvassing" means a certificate to be signed by the Tenderer in the form set out in Schedule D (Certificate of Confidentiality, Non-Collusion and Non-Canvassing) of this ITT;
"Code" means the Code of Practice on Workforce Matters in Local Authority Service Contracts as currently contained in ODPM Circular 9/03 Annex D;
"Commencement Date" means the date set out in the Schedule of Variables;
"Contract" means the contract including the Schedules for the provision of parking services to be awarded by the Council to the successful Tenderer in the form set out in Schedule E (Contract) of this ITT;
"Contract Plan" means the plan setting out the methods proposed by the Service Provider to provide the Services under the Contract contained in Schedule G of this ITT;
"Council" means The Mayor and Burgesses of the London Borough of Barnet;
"Council's Representative" means the person appointed and authorised by the Council to represent the Council for the purposes of this Contract whose details are set out in the Schedule of Variables;
"Form of Tender" means the tender in the form set out in Schedule A (Form of Tender) of this ITT;
"ITT" means this Invitation to Tender;
"PQQ" means the pre-qualification questionnaire issued by the Council on 6th April 2011;
"Services" means the services required by the Council as set out in the Specification;
"Specification" means the specification for the Services as set out in Schedule B (Specification) of this ITT;
"Target Cost Schedule" means the Target Cost Schedule to be completed by the Tenderer and submitted as part of its Tender in the form set out in Schedule C (Target Cost Schedule) of this ITT; "Tender" means the completed and signed Form of Tender, together with all accompanying documents and information requested by the Council to be submitted by the Tenderer;
"Tender Documents" means the Form of Tender, the Contract, the Specification and Schedules A to K to the Invitation to Tender;
"Tenderer" means the person, firm, company or organisation who has been invited by the Council to submit a Tender; and
"TUPE" means the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) 2. GENERAL
2.1 This ITT is being issued by the Council to Tenderers who have been selected following assessment at PQQ stage.
2.2 The Council invites Tenderers to submit Tenders for the provision of the Services in accordance with this ITT and on the terms and conditions set out in the Contract.
2.3 The Tenderer will be required to comply with the principles of the Data Protection Act 1998 in relation to the employee information provided and not to use the information for any purpose other than in respect of this tender. 3. PROCUREMENT TIMETABLE
3.1 The Council intends to award the Contract on 1st April 2012 (subject to Council approval) and reserves the right to award the Contract at a later date or not at all.
3.2 The intended duration of the Contract is 5 years with a possible extension of a further 2 years (subject to Council approval).
3.3 The Council proposes the following timetable for the award of the Contract:
| Activity | Date | |----------------------------------------------------|------------| | Short-list and dispatch of Invitation to Tender | 26.07.11 | | Last date for raising points of clarification on the ITT (date and time) | 17.00 hrs 31.08.11 | | Return of Tenders | 12.00 noon 06.09.11 | | Commence Evaluation of Tenders | 07.09.11 | | Clarification meetings with Tenderers | WC 03.10.11 | | Selection of successful Tenderer | 12.10.11 | | Report Recommendation to Council Committee | 06.11.11 | | Award of Contract | 09.01.12 | | Implementation / Transition phase begins | 10.01.12 | | Service commencement | 01.04.12 |
3.4 The Council reserves the right to alter the above timetable and Tenderers will be notified accordingly where any changes are made. 4. TENDER REQUIREMENTS
4.1 The Services
4.1.1 The Council wishes to ensure that the Service Provider is committed to quality and to achieving the key performance indicators, as well as securing continuous improvement to the enforcement operation. The Council's objective is to secure the most economically advantageous solution for the provision of the Services.
4.1.2 The successful Tenderer will be required to provide the Services in accordance with the Specification and on the terms and conditions set out in the Contract.
4.1.3 The Services must meet the standards and key performance indicators as set out in the Specification and Tenderers are required to consider the standards required and set out proposals in their Tenders as to how a high quality of service provision can be achieved and also to enhance service delivery.
4.1.4 Monitoring of performance shall be carried out in accordance with the key performance indicators set out in the Contract.
4.1.5 Tenderers are required to respond to the detailed requests for information specified in Schedule F.
4.2 TUPE
4.2.1 At the date of issue of this ITT, the Council has formed the view that TUPE will apply to the Contract in respect of current Council employees.
4.2.2 Tenderers are advised to seek independent professional advice on the effect of TUPE.
4.2.3 Tenderers must be prepared to accept all liabilities which may arise as a consequence of the application of TUPE.
4.2.4 When submitting a Tender, Tenderers are requested to indicate in the Form of Tender whether the Tender is based on TUPE applying or not.
4.2.5 On data currently available, it is expected that the members of staff as detailed in Schedule J (1) would transfer to the successful Tenderer. 4.2A PENSIONS
4.2A.1 Pensions – Transferring Employees
4.2A.1.1 Staff of the Council who are transferred under TUPE and are either active members of, or eligible to be active members of, the Local Government Pension Scheme (LGPS) are the relevant employees (Relevant Employees).
4.2A.1.2 The Council requires that the Tenderer shall comply with the requirements of the Best Value Authorities Staff Transfers (Pensions) Direction 2007 and HM Treasury guidance "A Fair Deal for Staff Pensions" (as updated) (Fair Deal) currently in force and provide Relevant Employees with:
a) the opportunity to join, or remain in, the LGPS by means of the Tenderer seeking to become a transferee admission body within the LGPS; or
b) membership of an alternative pension scheme which is actuarially certified as providing pension benefits that are broadly comparable to, the same as or better than those benefits provided by the LGPS.
4.2A.1.3 The Council wishes to emphasise that it has no expressed preference as to whether the Tenderer offers Relevant Employees pension provision through continued access to the LGPS through attaining admission body status to the LGPS or through a "broadly comparable" pension arrangement.
4.2A.1.4 For the avoidance of doubt, if a Tenderer intends to offer Relevant Employees an actuarially certified broadly comparable scheme, it must be clearly stated in the bid submission to be broadly comparable to the LGPS and to have incorporated amendments made to that scheme from 1 April 2008. The Council encourages Tenderers who intend to offer Relevant Employees from the existing Service Provider access to a broadly comparable scheme, to liaise with the GAD as soon as possible in order to ensure that it is able to obtain the necessary certificate with reference to the changes made to the LGPS from 1 April 2008. For the avoidance of doubt, the cost of obtaining a certificate of broad comparability is to be borne by the Tenderer.
4.2A.2 Admission Body requirements
4.2A.2.1 Where the option of becoming a transferee admission body within the LGPS is to be followed: a) the Tenderer shall where requested by the Council be required to obtain an indemnity or bond in compliance with Regulation 6 of the Administration Regulations 2008.
b) the Tenderer shall be required to tender their bid on the basis that upon the expiry of the contract, or the determination of the Tenderer's admission agreement with the Council, to ensure that it is responsible for meeting any deficit funding arising in accordance with the LGPS Regulations in the first instance.
c) where benefits arising upon the early termination of employment or through redundancy are awarded, the Tenderer shall confirm in its bid that it will comply with LGPS Regulations as appropriate. Where such benefits are of a discretionary nature, the discretion shall be exercised in keeping with the written policy of the Council.
d) The Tenderer shall be required to confirm in its bid that it will be responsible for the payment of employer contributions in compliance with the LGPS Regulations.
e) Tenderers are required to confirm in their bid that the following pension costs set out in (f) to (k) will remain their responsibility and cost.
f) Granting early retirement requests from Relevant Employees or deferred members of the LGPS.
g) Augmentation of benefits in relation to a Relevant Employee.
h) Reducing or waiving any contributions due from a Relevant Employee.
i) Terminating the employment of a Relevant Employee aged 55 or over on the grounds of redundancy or efficiency of the service.
j) Terminating the employment of a Relevant Employee on the grounds of ill-health.
k) Bringing the deferred benefit of a Relevant Employee into payment on the grounds of ill-health.
4.2A.3 Broadly Comparable Scheme requirements
4.2A.3.1 Where a broadly comparable pension scheme is to be provided the Tenderer's bid submission will be required to demonstrate:
a) Relevant Employees will be given the option to transfer any accrued benefits in the LGPS to the new broadly comparable scheme by means of a bulk transfer. The terms of the bulk transfer agreement shall be in line with requirements relating to bulk transfer terms contained in Fair Deal.
b) if Relevant Employees are later compulsorily transferred to another employer with another pension scheme because of the termination and re-tendering of the Contract, then subject of the Council’s tender document, or because of sub-contracting which is integral to the contract, such Relevant Employees will be given the option to move any accrued benefits in the broadly comparable scheme to the new employer’s pension scheme by means of a bulk transfer on terms which are no less favourable than the original bulk transfer terms from the LGPS.
c) any Relevant Employees will be offered the same levels of pension benefit (or, where this is not possible, broadly comparable or equivalent in cash terms) as available under the LGPS following dismissal by reason of redundancy, termination of employment on the grounds of business efficiency, or termination of employment on the ground of ill-health or infirmity of mind or body.
4.2A.3.2 Where such benefits are of a discretionary nature, the discretion shall be exercised in keeping with the written policy of the Council, such written policy to be the policy in place at the time the decision to exercise the discretion is taken.
4.2A.4 Pensions – new starters
4.2A.4.1 The Council requires that the Tenderer confirm that in respect to new employees who are recruited to work alongside Relevant Employees it shall adhere to the Principles of Good Employment Practice issued by the Cabinet Office in December 2010.
4.2A.5 Changes of employer and subsequent contracts
4.2A.5.1 The Tenderer shall be required to confirm that staff of the Council who are transferred under TUPE to the Tenderer and are then transferred under TUPE (either by means of an intervening subsequent contract with the Council or otherwise) to a subsequent contractor, shall be provided with the right to acquire pension benefits as set out in this tender. The Tenderer shall be required to confirm that any subsequent contractor shall comply with the requirements of this Tender.
4.2A.6 Pensions – general
4.2A.6.1 Tenderers will be required to provide a statement indicating which pension option they have chosen, as to both (a) Relevant Employees and (b) new starters, at the time of submitting their tender.
4.2A.6.2 Please see Schedule K, pensions report. 4.3 Tenderer Structure
4.3.1 Where the Tenderer is a consortium, the Tenderer must include within its Tender details of the structure and composition of the consortium and indicate whether there have been any changes in the structure or composition of the consortium since the PQQ response.
4.3.2 Where the composition of a Tenderer's consortium changes, the continued participation of that Tenderer in the procurement process shall be at the discretion of the Council and, where the Council exercises its discretion in favour of continued participation, all other Tenderers shall be deemed to have consented to the change. The Council reserves the right to accept changes proposed by any of the Tenderers to the composition of their consortia, subject to such changes resulting in satisfactory arrangements for their continued participation in the procurement process and for the delivery of the Services.
4.3.3 Where a Tenderer which is a consortium intends to change its composition, this must be notified immediately in writing to the Council and the Council reserves the right to vet the new member in respect of financial and economic standing and technical capacity and ability in accordance with the PQQ. 5. TENDER SUBMISSION
5.1 Tenders must be submitted for the whole of the Services. Tenders for only part of the Services will be rejected.
5.2 The Tenderer must provide the documents and information listed below written in English:
5.2.1 The Form of Tender;
5.2.2 The Target Cost Schedule;
5.2.3 The Contract Plan - Schedule G
5.2.4 Response to the information requested in Schedule F and any other information detailed in the Contract and Specification;
5.2.5 Certificate of Confidentiality, Non-Collusion and Non-Corvassing;
5.2.6 An undertaking to provide a Parent Company Guarantee and (if applicable) a performance bond; and
5.2.7 A completed Insurance Cover Form (see Schedule H).
5.3 ITT submissions are to be emailed only to the following email box, [email protected], no later than 12.00 noon 6th September 2011. Submissions received after this deadline will NOT be considered. The last date for raising points of clarification on the tender will be 17.00 hrs 31st August 2011.
5.4 Bidders will be provided with a unique reference number prior to the submission of their tenders.
5.5 The Council may in its absolute discretion refrain from considering any Tender if:
5.5.1 it is not in accordance with the ITT and any provisions of the Tender Documents or it is in breach of any condition contained in the Contract; or
5.5.2 the Tenderer makes or attempts to make any qualification or variation to the terms of the Contract, the Specification or the other Tender Documents save where a variation or alteration is invited or permitted by the Council; or
5.5.3 the Tender contains material gaps or omissions.
5.6 Should any additions or deletions to the Tender Documents be considered necessary prior to the date for submission of Tenders, these will be issued by the Council to Tenderers and will be deemed to form part of the Tender Documents. The Council reserves the right to extend any date for submission of the Tenders accordingly. 5.7 A Tenderer shall be deemed to have satisfied itself before submitting a Tender as to the accuracy and sufficiency of the prices and rates as stated in the Target Cost Schedule which shall (except in so far as it is otherwise provided in the Contract) cover all obligations under the Contract. A Tenderer will also be deemed to have obtained for itself all necessary information as to risks, contingencies and any other circumstances which might reasonably influence or affect its Tender.
5.8 Any Tender in respect of which the Tenderer:
5.8.1 has directly or indirectly canvassed any official of the Council or obtained information from any other person who has been contracted to supply goods or provide services or works to the Council concerning the award of the Contract or who has directly or indirectly obtained or attempted to obtain information from any such member or official concerning any other Tenderer; or
5.8.2 fixes or adjusts the prices shown in the Target Cost Schedule by or in accordance with any agreement or arrangement with any other person other than a member of its consortium for the purposes of the Tender; or
5.8.3 communicates to any person other than the Council the amount or approximate amount of the prices shown in the Target Cost Schedule except where such disclosure is made in confidence in order to obtain quotations necessary for the preparation of the Tender or for the purposes of insurance or financing; or
5.8.4 enters into any agreement with any other person that such other person shall refrain from submitting a Tender or shall limit or restrict the prices to be shown or referred to by another Tenderer; or
5.8.5 offers to agree to pay to any person having direct connection with the procurement process or does pay or give any sum of money, inducement or valuable consideration, directly or indirectly, for doing or having done or causing or having caused to be done in relation to any other Tenderer or any other person's proposed Tender, any act or omission; or
5.8.6 in connection with the award of the Contract commits an offence under the Bribery Act 2010 or gives any fee or reward the receipt of which is an offence under Section 117(2) of the Local Government Act 1972.
shall not be considered and shall accordingly be rejected by the Council provided always that such non-acceptance or rejection shall be without prejudice to any other civil remedies available to the Council or any criminal liability which such conduct by a Tenderer may attract. 6. EVALUATION
6.1 The Contract shall be awarded on the basis of the most economically advantageous tender according to the criteria and corresponding weightings set out in the tables below. Evaluation criteria will be based on a combination of Quality and Price. The ratio of the Quality/Price evaluation criteria is 60/40. Table 1 details the quality evaluation criteria along with the corresponding sub weightings.
| | Ability to deliver an effective enforcement service | Weighting | |---|---------------------------------------------------|------------| | 1.1 | The quality of the implementation plan | 2 | | 1.2 | The quality and sustainability of the proposed enforcement plan | 10 | | 1.3 | Understanding of the local environment | 4 | | 1.4 | Management of the public interface | 1 | | 1.5 | Management of the administrative support services | 8 | | | | 25 |
| | Performance management and monitoring arrangements | | |---|-----------------------------------------------------|---| | 2.1 | Financial management and monitoring | 4 | | 2.2 | Staff supervision and monitoring | 4 | | 2.3 | Reporting structures and reports | 2 | | 2.4 | Liaison with client | 2 | | 2.5 | Liaison with third parties | 1 | | 2.6 | KPIs, quality measures and monitoring arrangements | 4 | | | | 17|
| | Effective HR practices & professional development and location issues | | |---|-----------------------------------------------------------------------|---| | 3.1 | A strong commitment to compliance with current and future employment law, regulations, codes of practice and good HR practice going forward e.g. TUPE and mobilisation arrangements | 2 | | 3.2 | Any HR performance data provided is in line with best practice, for example, CIPD | 1 | | 3.3 | A description of effective recruitment, reward, training, development, retention and performance management processes, including identifying internal talent and future leaders | 2 | | 3.4 | An effective individual and collective employee communication and engagement approach throughout the organisation, including collective Industrial Relations. | 2 | | 3.5 | Able to provide a suitable pension and gives assurances for all necessary payments | 1 | | 3.6 | Proposals for operational base and any other premises | 1 | | 3.7 | Skills and knowledge of Contract Manager, senior staff and support structures | 1 |
| 4 | Service Change and Development | | 4.1 | Proposals for maximising service and financial performance | 1 | | 4.2 | Understanding and evidence of partnership working | 1 | | 4.3 | Recognition of Council objectives and ability to align with these | 1 | | 4.4 | Commitment to continuous improvement and change implementation process | 1 | | 4.5 | Commitment to service flexibility, development and diversification | 1 | | 4.6 | Understanding of parking policies, legislation and ethos of Council enforcement | 2 | | 4.7 | Community engagement | 1 |
| Total | 60 |
6.1.1 Each of the above quality criteria will be scored out of 0 to 5 points prior to applying each weighting. The following section details the scoring mechanism.
**TOTAL FAILURE = 0 POINTS:** No response provided or totally fails to address the requirement.
**VERY POOR RESPONSE = 1 POINT:** In most key areas there is a failure by the bidders to demonstrate an understanding of the requirement. POOR RESPONSE = 2 POINTS: In key areas the evidence is limited. The overall response casts doubt on the bidder's ability to deliver the requirement.
SATISFACTORY RESPONSE = 3 POINTS: The bidder has demonstrated a satisfactory understanding of the requirement. The evidence is clear and convincing with minor reservations in key areas.
GOOD RESPONSE = 4 POINTS: The bidder has demonstrated a good understanding of the requirement. The evidence is clear and convincing with minor reservation(s).
VERY GOOD RESPONSE = 5 POINTS: The bidder's response is comprehensive and demonstrates full understanding of the requirement. It has supplied clear, detailed information and the evidence is unequivocal. The evaluation team is fully satisfied about the bidder's ability to meet the detailed
6.1.2 Evaluation scores for price will be awarded a maximum score of 40 points. The lowest tender price will be awarded 40 points and each tendered price above the lowest will be awarded points on a reducing scale from 40. An example of the calculation for price scoring follows:
Example
Lowest Tendered Price (Tenderer 1) £1,000,000
Tenderer 2 Price £1,100,000
% increase in price compared to Tenderer 1 = 10%
Tenderer 2 Score = ( \\frac{10 \\times 40}{100} = 4 )
40 - 4 = 36
Tenderer 2 Score = 36
6.2 Tenderers may be required to demonstrate their ability to carry out the Services and it may be necessary for officers of the Council to visit the Tenderer's offices and/or interview the Tenderer during the tender evaluation process and the Tenderer may therefore be required to:
6.2.1 attend meetings with the Council to clarify details of its Tender and/or to provide a presentation of its Tender submission to officers/members/stakeholders;
6.2.2 provide any other information reasonably required by the Council to enable a detailed evaluation of the Tender; and
6.2.3 arrange visits to other clients of the Tenderer or provide references.
6.3 The Tender shall remain open for acceptance for a period of 150 calendar days from the closing date for the receipt of Tenders set out in paragraph 5.3. 7. NOTIFICATION
7.1 Following evaluation of Tenders the Council will make a decision as to which, if any, Tender shall be accepted.
7.2 The successful Tenderer will be notified by the Council in writing.
7.3 The unsuccessful Tenderers will be notified by the Council in writing and the Council may, on request, grant a debrief meeting to the unsuccessful Tenderers to give feedback on their Tenders.
7.4 Upon formal written acceptance of a Tender by the Council, the successful Tenderer shall, on request by the Council, execute a formal contract in the form of the Contract. 8. WARRANTIES AND DISCLAIMERS
8.1 TENDERER’S WARRANTIES
In submitting a Tender the Tenderer warrants, represents and undertakes to the Council that:
8.1.1 it has complied in all respects with this ITT;
8.1.2 it has not done any of the acts or matters referred to in paragraph 5.8;
8.1.3 all information, representations and other matters of fact communicated (whether in writing or otherwise) to the Council by the Tenderer or its employees, officers, agents or advisers in connection with or arising out of the Tender are true, complete and accurate in all respects;
8.1.4 it has made its own investigations and research and has satisfied itself in all matters relating to this ITT and the Tender Documents;
8.1.5 it has full power and authority to enter into the Contract and provide the Services and will, if requested, produce evidence of such to the Council;
8.1.6 it is of sound financial standing and the Tenderer and its directors, officers and employees are not aware of any circumstances (other than such circumstances that may be disclosed in the audited accounts or other financial statements of the Tenderer submitted to the Authority) that may adversely affect such financial standing in the future; and
8.1.7 it has, and has made arrangements to ensure that it will continue to have, sufficient working capital, skilled staff, equipment, machinery and other resources available to carry out the Services in accordance with the Contract from the Commencement Date and thereafter for the Contract Term.
8.2 COUNCIL’S DISCLAIMER
8.2.1 The Tenderer shall have no claim whatsoever against the Council in respect of its Tender whether or not it is successful. In particular but without limitation, save as expressly provided for in the Contract, the Council shall not make any payments to the successful Tenderer and no compensation or remuneration shall be payable by the Council to the successful Tenderer in respect of the Services by reason of the scope of the Services being different to that envisaged by the successful Tenderer or otherwise. 9. CLARIFICATION AND QUERIES
9.1 There will not be any negotiation of the substantive terms of the Tender Documents. Only points of clarification relating to the Tender Documents will be answered.
9.2 All points of clarification relating to the Tender Documents should be addressed by email to the Council's Procurement Representative: [REDACTED] TELEPHONE ENQUIRIES WILL NOT BE ACCEPTED.
9.3 All points of clarification must be made no later than 17.00 hours on 31st August 2011.
9.4 All requests for clarification received, together with the answers given, shall be circulated on an anonymous basis to all Tenderers.
9.5 Except in so far as may be authorised in writing by the Council's Representative, no other person or agent has any authority to make any representation or explanation to Tenderers as to this ITT or any of the Tender Documents or as to any other matter so as to bind the Council. 10. CONFIDENTIALITY
10.1 This ITT and all information supplied by the Council in connection with this ITT shall be treated as confidential by Tenderer except that such information may be disclosed, subject to obligations of confidentiality corresponding to those which bind the Tenderer and only so far as is necessary for the purpose of obtaining sureties, guarantees, quotations and professional advice necessary for the preparation and submission of a Tender.
10.2 All materials, specifications and data supplied by the Council to the Tenderers shall, at all times, be and remains the exclusive property of the Council, but shall be held by the Tenderer in safe custody. They shall not be disposed of or used other than for the preparation and submission of a Tender or in accordance with the Council's written instructions or authorisation. 11. COSTS
11.1 The Tenderer acknowledges that it (and not the Council) is wholly responsible for any costs it may incur in connection with its Tender, whether the Tender is successful or not. 12. FREEDOM OF INFORMATION ACT 2000 (FOIA)
12.1 Tenderers should note that the Council is under a legal obligation under the FOIA to disclose information relating to this tender process and any resultant contract upon request, unless an exemption listed in the FOIA applies.
12.2 Exemptions under the FOIA include, but are not limited to, confidentiality, trade secrets and prejudice to commercial interests ("Exempt Information").
12.3 Tenderers should state clearly any information contained in, or portions of, their submission that they believe to be exempt from disclosure under the FOIA together with the exemption within the FOIA upon which this belief is based. It is not acceptable to treat an entire submission as Exempt Information, simply for reasons of convenience. Tenderers should note that the Council will not treat as confidential any such information if it believes that it is bound by the FOIA to disclose it.
12.4 In the event that the Council receives a request for information under the FOIA (or any other applicable legislation governing access to information), the Council shall be entitled to disclose all such information and documentation (in whatever form) as is necessary to comply with the FOIA (or other applicable legislation). The Council shall use all reasonable endeavours to consult with Tenderers as soon as reasonably practicable after receipt of such a request where it considers that the requested information may include information considered Exempt Information by the Tenderer.
12.5 Where the Council consults with Tenderers in accordance with paragraph 12.4 above, Tenderers are required to make their written representations as to whether they believe the information is Exempt Information within 14 days of the Council's request for consultation.
12.6 The decision on what is, or is not, Exempt Information shall be determined by the Council having considered the representations and any detriment, however caused, and arising from any disclosure of information under the FOIA or other applicable legislation governing access to information. 13. PARENT COMPANY GUARANTEE / PERFORMANCE BOND
13.1 Tenderers shall undertake to provide, at their own expense, on signature of the Contract a parent company guarantee (from the Contractor's ultimate parent company) and/or a performance bond substantially in the form shown in Schedule I. The Council will not be obliged to make any payments under the Contract until the requested parent company guarantee and/or performance bond has been provided in a form satisfactory to the Authority. If requested, the Contractor shall also provide a legal opinion, in a form acceptable to the Council, signed by a qualified lawyer from the country in which the parent company/bank is resident and certifying the valid execution of the guarantee/bond. 14. TENDER SUBMISSION CHECKLIST
Name of Tenderer:
The Tenderer has submitted the following information with its Tender:
| Document | Please tick if enclosed | |--------------------------------------------------------------------------|-------------------------| | Form of Tender (Schedule A) | | | Target Cost Schedule (Schedule C) | | | Certificate of Confidentiality, Non-Collusion and Non-Canvassing (Schedule D) | | | Contract Plan (Schedule G in response to questions in Schedule F) | | | Insurance Cover Form (Schedule H) | | SCHEDULE A – FORM OF TENDER
LONDON BOROUGH OF BARNET
1. For the provision of parking services (the “Services”).
To: The Mayor and Burgesses the London Borough of Barnet (the “Council”)\
[ ] whose registered office is at\
[ ] and whose registered number is\
[ ] (the “Tenderer”), having received an Invitation to Tender from the Council wishes to tender to provide the Services subject to the terms and conditions set out in the Invitation to Tender, the Contract, the Specification and the Target Cost Schedule.
1. CONSIDERATION OF THE TENDER
1.1 The Tenderer confirms that it understands that the Council is not bound to accept the lowest Tender, this Tender or any Tender it may receive, and understands that the Council reserves the right to invite fresh Tenders should it be considered necessary.
1.2 The Tenderer confirms that the insertion of any conditions qualifying this Tender or any unauthorised alteration to any of the Tender Documents may cause the Tender to be rejected and confirms that the Tenderer has not inserted any conditions qualifying this Tender or made any unauthorised alteration to any of the Tender Documents.
1.3 The Tenderer confirms that the terms of this Tender have not been adjusted in accordance with any agreement or arrangement with any other person or company.
1.4 The Tenderer agrees that this Tender shall remain open to be accepted or rejected by the Council and shall not be withdrawn for a period of 150 days from the date for return of Tenders as set out in the Invitation to Tender.
1.5 The Tenderer confirms that to the best of its knowledge and belief it has complied with all the relevant provisions of the Health and Safety at Work Act 1974 and any Regulations made under it.
1.6 The Tenderer confirms that it will comply with all current, relevant British Standard Specification or Code of Practice or equivalent European Union or international standards offering guarantees of safety, reliability and fitness for purpose.
1.7 The Tenderer confirms that it will not try to obtain or receive by whatever means any information which gives or is intended or likely to give the Tenderer or another party any unfair advantage over any other Tenderer (including the Council’s own workforce) in relation to the tendering for and award of the Contract.
1 Insert the Tenderer’s name. 2 Insert the Tenderer’s address. 3 Insert the Tenderer’s registered number. 2. TUPE
2.1 The Tenderer confirms that it has taken legal advice on the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
2.2 The Tenderer further confirms that, in its view, TUPE is/is not [delete as appropriate] likely to apply to the Contract and that this is reflected in the Target Cost Schedule.
3. THE CONTRACT
In the event that the Tender is successful, the Tenderer undertakes to execute the Contract as soon as possible.
4. CONFIDENTIALITY
The Tenderer confirms that the details of this Tender have not been passed on to any person, except as authorised in the Invitation to Tender.
5. COSTS
The Tenderer acknowledges that the Council will not pay or be liable for any expenses or costs incurred by the Tenderer in connection with the preparation and submission of this Tender.
6. PARENT COMPANY GUARANTEE / PERFORMANCE BOND
The Tenderer acknowledges that an undertaking to provide a Parent Company Guarantee (if applicable) and/or a performance bond will be required.
Signed by the Tenderer's authorised representative
...........................................
Name:
Position:
Address:
Telephone number:
Email address:
Date:
JFT Parking Enforcement and related Services, July 2011 SCHEDULE B – THE SPECIFICATION
SEE ATTACHED DOCUMENT
(London Borough of Barnet – Parking Specification.doc) SCHEDULE C - TARGET COST SCHEDULE
SEE ATTACHED DOCUMENT
Please note that the Service Provider, in their tender sum, shall include a % (up to 20%) applied to the annual sum of costs.
(London Borough of Barnet - Target Cost Schedule.xls) **Note to Tenderers** - This Target Cost Schedule forms Schedule 11 to the Contract.
### Schedule 11 Target Cost Schedule
| Item | Type | Description | Quantity | Rate | Annual Target Cost | |------|------|-------------|----------|------|--------------------| | 1 | | Contract Manager | | | | | 2 | | Assistant Contract Manager | | | | | 3 | | Supervisor | | | | | 4 | | GECs - Senior | | | | | 5 | | GECs - Basic | | | | | 6 | | GECs - Mobile | | | | | 7 | | Radio Controller | | | | | 8 | | Correspondence Staff | | | | | 9 | | Administrative staff including Quality and monitoring | | | | | 10 | | Payment Processing Staff | | | | | 11 | | Enforcement Support Staff | | | | | 12 | | Other - specify | | | |
**Labour and Staff** Rates to cover all on-costs including but not limited to benefits, NI, fares, accommodation where necessary etc.
**Premises** Including all associated costs
| Item | Type | Description | Quantity | Rate | Annual Target Cost | |------|------|-------------|----------|------|--------------------| | 1 | | Premises/Bases | | | | | 2 | | Telecommunications | | | | | 3 | | Data Communication | | | | | 4 | | Other specify | | | |
**Equipment** To include all costs leasing, repair, maintenance, consumables, losses, replacements
| Item | Type | Description | Quantity | Rate | Annual Target Cost | |------|------|-------------|----------|------|--------------------| | 1 | | IT - Hand Held Equipment | | | | | 2 | | Radios/Telecoms, cameras | | | | | 3 | | General office equipment | | | | | 4 | | Uniforms and associated equipment | | | | | 5 | | Vehicles - Trucks | | | | | 6 | | Vehicles - Vans | | | | | 7 | | Vehicles - Cars | | | | | 8 | | Vehicles - Two wheelers | | | | | | | |---|---| | 9 | IT system - Initial costs should include comms lines for access to the IT system from the Managed Service site to the Service Provider sites and a back up internet facility. IT system - Costs for full provision from April 2014 and should include servers, comms lines for access to the IT system from the Managed Service site to the Service Provider sites and a back up internet facility. The Service Provider will need to consider the cost of access for other relevant third party users including the Council and other Council contractors. | | 10 | |
**Materials including delivery, distribution and removal as necessary**
| | | |---|---| | 1 | Stationery, Postage and Documentation | | 2 | Fuels/Oils/Greases | | 3 | Cleaning |
**Services**
| | | |---|---| | 1 | Provision of a cashless parking service by telephone | | 2 | Provision of a cashless parking service by other means |
**Miscellaneous Provisional items**
| | | |---|---| | 1 | Provision of a Bond | | 2 | Start up costs |
**Annual Target Cost**
| | | |---|---| | | 0.00 |
**Maximum (up to 20%) addition for Performance related Payment**
| | | |---|---| | | |
**CONTRACT SUM**
| | | |---|---| | | 0.00 | SCHEDULE D - CERTIFICATE OF CONFIDENTIALITY, NON-COLLUSION AND NON-CANVASSING
LONDON BOROUGH OF BARNET
1. UNDERTAKINGS
In consideration of the Council having invited the Tenderer to tender for the provision of parking services, the Tenderer undertakes as follows:
1.1 to accept the restrictions concerning the confidentiality of information provided to the Tenderer set out in paragraph 10 of the Invitation to Tender;
1.2 to accept the warranties and disclaimers set out paragraph 8 of the Invitation to Tender; and
1.3 to comply with the conditions of non-collusion and non-canvasing as set out in paragraph 5.8 of the Invitation to Tender.
2. APPLICATION
2.1 The Tenderer accepts that the undertakings set out in paragraph 1 above apply to all parties within its consortium and its constituent companies, advisers, potential sub-service providers and any other person or body to which it may pass all or part of any information relating to the procurement process.
2.2 The Tenderer undertakes to ensure that all of the persons and bodies mentioned in paragraph 2.1 are made aware of the restrictions set out in paragraph 1 and to comply with them.
3. BREACH
The Tenderer understands that a breach of the conditions set out in paragraph 1 and paragraph 2 above may result in the Council excluding it from further consideration in the procurement process.
Signed by the Tenderer's authorised representative
..................................................
Name:
Position:
Date: SCHEDULE E -- THE CONTRACT
SEE ATTACHED DOCUMENT
(London Borough of Barnet – Parking Contract.doc) DATED
THE LONDON BOROUGH OF BARNET
and
CONTRACT FOR THE PROVISION OF PARKING ENFORCEMENT AND RELATED SERVICES CONTENTS
SECTION A
Clause 1 PARTIES AND RECITALS Clause 2 DEFINITIONS AND INTERPRETATION Clause 3 REPRESENTATIVES Clause 4 COMMENCEMENT AND DURATION Clause 5 TRANSITION ARRANGEMENTS
SECTION B
Clause 6 THE SERVICES Clause 7 REMUNERATION Clause 8 PAYMENT TERMS Clause 9 CHANGE TO SERVICES AND/OR THE REMUNERATION
SECTION C
Clause 10 PREMISES Clause 11 EQUIPMENT AND MATERIALS Clause 12 INTELLECTUAL PROPERTY Clause 13 TUPE Clause 14 STAFFING
SECTION D
Clause 15 REVIEW MEETINGS Clause 16 PROVISION OF INFORMATION Clause 17 AUDIT Clause 16 MONITORING Clause 19 COMPLAINTS SECTION E
Clause 20 QUALITY MANAGEMENT Clause 21 NOT USED
SECTION F
Clause 22 WARRANTIES AND REPRESENTATIONS Clause 23 INDEMNITY Clause 24 INSURANCE
SECTION G
Clause 25 DISPUTE RESOLUTION PROCEDURE Clause 26 DEFAULT AND TERMINATION Clause 27 CONSEQUENCES OF EXPIRY OR TERMINATION Clause 28 FORCE MAJEURE Clause 29 RELIEF EVENTS
SECTION H
Clause 30 HEALTH AND SAFETY Clause 31 EQUAL OPPORTUNITIES AND HUMAN RIGHTS Clause 32 DATA PROTECTION Clause 33 FREEDOM OF INFORMATION Clause 34 CONFIDENTIALITY Clause 35 ASSIGNMENT AND SUB-CONTRACTING Clause 36 CORRUPT GIFTS AND FRAUD Clause 37 RIGHTS AND DUTIES RESERVED Clause 38 LOCAL GOVERNMENT OMBUDSMAN Clause 39 ENTIRE AGREEMENT Clause 40 NO PARTNERSHIP OR AGENCY Clause 41 NO WAIVER Clause 42 SEVERANCE Clause 43 VARIATION Clause 44 NOTICES Clause 45 EMU CONTINUITY Clause 46 PARENT COMPANY GUARANTEE AND PERFORMANCE BOND Clause 47 CONTRACTS (RIGHTS OF THIRD PARTY) ACT 1999 Clause 48 LAW AND JURISDICTION
SCHEDULES SCHEDULE 1 Schedule of Variables SCHEDULE 2 Specification SCHEDULE 3 Payment Mechanism SCHEDULE 4 Key Performance Indicators SCHEDULE 5 Change Control Procedures SCHEDULE 6 Transferring Employees SCHEDULE 7 Parking Plan SCHEDULE 8 Adjudicator and Expert SCHEDULE 9 Not Used SCHEDULE 10 Intellectual Property SCHEDULE 11 Target Cost SCHEDULE 12 Contract Plan SCHEDULE 13 Not Used SCHEDULE 14 Form of Licence SCHEDULE 15 Bulk Transfer Terms CONTRACT FOR THE PROVISION OF PARKING ENFORCEMENT AND RELATED SERVICES
DATE ........................................20...
SECTION A
1. PARTIES AND RECITALS
Parties
(1) The Mayor and Burgesses of the London Borough of Barnet
whose address is at North London Business Park, Oakleigh Road South, London N11 1NP
(the “Council”); and
(2)
whose registered number is (if a registered company)
and whose registered office/principal place of business is at
(the “Service Provider”).
Recitals
(A) The Council issued its Invitation to Tender and the Service Provider responded on the dates set out in the Schedule of Variables.
(B) The Council has selected the Service Provider to provide the Services and the Service Provider undertakes to provide the Services on the terms and conditions set out in this Contract.
(C) The Parties acknowledge that a major objective of this Contract is to achieve year on year continuous improvement. In providing the Services, the Service Provider shall have regard throughout the Contract Term to making arrangements in consultation with the Council to secure continuous improvement in the way in which the Services are provided. (D) The Parties accept that a co-operative and open relationship is needed for success and that partnering will achieve this when carrying out their obligations under this Contract. The Parties will act fairly towards each other in a spirit of trust and mutual co-operation for the achievement of this objective. A system of regular review meetings as detailed in Clause 15 (Review Meetings) will be established for this purpose. The Parties shall use these meetings to help to resolve problems which may otherwise prejudice the performance of their respective obligations under this Contract.
(E) The Service Provider’s performance will be monitored using KPIs and the Service Provider’s achievement or non-achievement of the KPIs will determine the level of remuneration received by the Service Provider each month.
(F) The Council encourages the Service Provider to use innovation in the provision of the Services to reduce costs and to share benefits.
2. DEFINITIONS AND INTERPRETATION
2.1 The terms and expressions used in this Contract (including the recitals and Schedules hereto) will have the meanings set out below (unless the context otherwise requires):
"Adjudicator"
means the adjudicator appointed to resolve disputes in accordance with Clause 25 and Schedule 8;
"Administration Regulations"
means the Local Government Pension Scheme (Administration) Regulations 2008;
"Administering Authority"
means the Authority;
"Admission Agreement"
means an admission agreement entered into in accordance with Regulation 6 of the Administration Regulations by the Council and the Service Provider; “Admission Body” means a transferee admission body for the purposes of regulation 6 of the LGPS Regulations;
“Base Payment” means the proportion of the Target Cost set out in the Schedule of Variables;
“Benefit Regulations” means the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007;
“Bits” has the meaning given in paragraph 1.4 of Part B of Schedule 3;
“Budget Change” means a change required by the Council to the Target Cost as a result of a reduction or increase in the Council’s annual budget for the relevant expenditure or the performance of the Service Provider over the preceding year of the Contract Term;
“Budget Change Proposal” has the meaning given to it in Clause 9.3.8;
“Calendar Day” means any day including statutory bank holidays;
“Certificate of Costs” has the meaning given to it in Clause 7.6 (Open Book Accounting);
“Cessation Date” means any date on which the Service Provider ceases to be an Admission Body other than as a result of the termination of this Contract or because it ceases to employ any Eligible Employees;
“Compensation Regulations” means the Local Government (Discretionary Payments) Regulations 1996 (as amended) and the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulation 2006;
"Change Control Procedures"
means the change control procedures set out in Schedule 5 (Change Control Procedures);
"Commencement Date"
means the date set out in the Schedule of Variables;
"Contract"
means this contract including the Schedules;
"Contract Manager"
means the person appointed and authorised by the Service Provider to represent the Service Provider for the purposes of this Contract, whose details are set out in the Schedule of Variables, the identity of whom will be subject to the prior written approval of the Council (such approval not to be unreasonably withheld or delayed);
"Contract Plan"
means the plan and method statements setting out the methods to be used by the Service Provider to provide the Services under this Contract as set out in Schedule 12 (Contract Plan);
"Contract Term"
means the Initial Contract Term as may be extended in accordance with Clause 4 (Commencement and Duration) or reduced by earlier termination of this Contract for whatever reason;
"Council's Representative"
means the person appointed and authorised by the Council to represent the Council for the purposes of this Contract, whose details are set out in the Schedule of Variables;
"Council Software"
means the software, if any, owned by the Council and licensed to the Service Provider under Clause 12 (Intellectual Property) as set out in Schedule 10 (Intellectual Property); “Directive”
means the EC Acquired Rights Directive 77/187, as amended;
“Dispute Resolution Procedure”
means the procedure to deal with disputes as set out at Clause 25 (Dispute Resolution Procedure);
“Direct Losses”
means all damage, losses, liabilities, claims, actions, costs, expenses (including the cost of legal or professional services, legal costs being on an agent/client, client paying basis), proceedings, demands and charges whether arising under statute, contract or at common law.
“Eligible Employees”
means the Transferring Employees who are active members of or eligible to join the LGPS on a Relevant Transfer Date for so long as they are employees in connection with the provision of the Services or part of such Services as set out in the Admission Agreement.
“Equipment and Materials”
means all plant, equipment, materials and consumables to be used by the Service Provider to provide the Services;
“Exit Period”
means the exit period as set out in the Schedule of Variables;
“Expert”
means the expert appointed to resolve disputes in accordance with Clause 25 and Schedule 9;
“External Software”
means the software, if any, owned by an external provider and licensed to the Council as set out in Schedule 10 (Intellectual Property);
“Force Majeure Event”
means any event consisting of any of: acts of God, war, riot, fire, flood, or any disaster affecting either Party which materially affects the performance by a Party of its obligations under this Contract; "Guarantor"
means any person granting a parent company guarantee pursuant to Clause 46 (Parent Company Guarantee and Performance Bond);
"Initial Contract Term"
means the period set out in the Schedule of Variables;
"KPIs"
means the key performance indicators as set out in Schedule 4 (Key Performance Indicators) against which the Service Provider’s performance will be measured;
"LGPS Regulations"
means The Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 and The Local Government Pension Scheme (Administration) Regulations 2008;
"Legislation"
means any Act of Parliament or subordinate legislation within the meaning of the Interpretation Act 1978, any exercise of the Royal Prerogative, and any enforceable community right within the meaning of section 2 of the European Communities Act 1972, in each case in the United Kingdom;
"Local Government Pension Scheme"
means the Local Government Pension Scheme made by the Secretary of State in exercise of powers under sections 7 and 12 of the Superannuation Act 1972, as amended;
"Locations"
means the locations from where the Services are to be provided as set out in the Specification;
"New Service Provider"
means a contractor selected to provide services, similar to the Services or part thereof, whether upon appointment by the Service Provider or upon termination or expiry of this Contract and for the avoidance of doubt can include the Council; "Options Proposal"
has the meaning given to it in Clause 9.3.3;
"Parent Company Guarantee"
means the parent company guarantee substantially in the form set out in Schedule I (2) of the Invitation to Tender (Draft Deed of Guarantee);
"Parking Plan"
means the Council's plan relating to on-street and off-street parking and traffic and parking enforcement, a copy of which is set out in Schedule 7 (Parking Plan);
"Party"
means a party to this Contract and "Parties" shall be construed accordingly;
"Payment period"
means the periods as set out in the Schedule of Variables;
"Performance Bond"
means a bond substantially in the form set out in Schedule I (1) of the Invitation to Tender (Form of Bond);
"Prohibited Act"
means:
(a) offering, giving or agreeing to give to any servant of the Council any gift or consideration of any kind as an inducement or reward:
(i) for doing or not doing (or for having done or not having done) any act in relation to the obtaining or performance of this Contract or any other contract with the Council; or
(ii) for showing favour or disfavour to any person in relation to this Contract or any other contract with the Council; or
(b) entering into this Contract or any other contract with the Council in connection with which commission has been paid or has been agreed to be paid by the Service Provider or on its behalf, or to its knowledge, unless before the relevant contract is entered into particulars of any such commission and or the terms and conditions of any such contract for the payment thereof have been disclosed in writing to the Council; or
(c) committing any offence:
(i) under the Bribery Act 2010;
(ii) under legislation creating offences in respect of fraudulent acts; or
(iii) at common law in respect of fraudulent acts in relation to this Contract or any other contract with the Council; or
(d) defrauding or attempting to defraud or conspiring to defraud the Council;
(e) obtaining or receiving by whatever means any information which gives or is intended or is likely to give an unfair advantage over any other tender (including the Council's own workforce) in relation to this Contract;
"Relevant Employees"
means all those employees subject to a Relevant Transfer on a Relevant Transfer Date;
"Relevant Transfer"
means a relevant transfer for the purposes of TUPE;
"Relevant Transfer Date"
means a date on which the provision of the Services changes (save for the Commencement Date);
"Relief Event"
means any of the following events to the extent that the event does not constitute a Force Majeure Event and provided that the event does not arise (directly or indirectly) as a result of any wilful act, default or breach of the Service Provider:
(a) fire, explosion, lightning, storm, tempest, flood, bursting or overflowing of water tanks, apparatus or pipes, ionising radiation, earthquakes, riot and civil commotion;
(b) failure by any statutory undertaker, utility company, local council (excluding the Council) or other body to carry out works or provide services; (c) any failure or shortage of power, fuel or transport; (d) any official or unofficial strike, lock-out, go-slow or other dispute generally affecting the parking enforcement sector; (e) delays in granting any permissions or consents which may be necessary in respect of the provision of the Services; (f) delays caused by any act or omission of the Council; or (g) the imposition of restrictions or limits by the Council on parking tariffs or parking times at the Locations;
"Remuneration"
means the sums to be paid by the Council to the Service Provider pursuant to Clause 7 (Remuneration);
"Schedule of Variables"
means Schedule 1 (Schedule of Variables);
"Service Provider Software"
means the software owned by the Service Provider and licensed to the Council under Clause 12 (Intellectual Property) as set out in Schedule 10 (Intellectual Property);
"Service Provider Scheme"
means the retirement benefits scheme or schemes established or to be established under paragraph 13.3.7;
"Services"
means the whole or any part of the services to be provided by the Service Provider to the Council under this Contract as set out in the Specification;
"Specification"
means the specification for the Services as set out in Schedule 2 (Specification);
"Target Cost"
means the target cost to be incurred by the Service Provider as calculated on an annual basis in accordance with Schedule 11 (Target Cost); "Transferring Employees"
means the employees of the Council who will transfer from the employment of Council to the employment of the Service Provider as a result of the application of TUPE in relation to the Contract;
"Transition Period"
means the transition period as set out in the Schedule of Variables;
"TUPE"
means the Transfer of Undertakings (Protection of Employment) Regulations 2006, as amended;
"Working Hours"
means the hours during which the Services are to be provided as set out in the Specification; and
"Working Day"
means a day (other than a Saturday or Sunday) on which banks are open for domestic business in the City of London.
2.2. Reference to any statute, enactment, order, regulation or other similar instrument shall be construed as a reference to the statute, enactment, order, regulation or instrument as amended by any subsequent statute, enactment, order, regulation or instrument or as contained in any subsequent re-enactment thereof.
2.3. Headings are included in this Contract for ease of reference only and shall not affect the interpretation or construction of this Contract.
2.4. References to Clauses and Schedules are, unless otherwise provided, references to the Clauses and the Schedules to this Contract.
2.5. In the event of any conflict or inconsistency between any provision of the Clauses and any provisions of the Schedules, the Clauses shall prevail. In the event of any conflict or inconsistency between the Schedules, the provisions of the Specification shall prevail over the provisions of all other Schedules unless and only to the extent that any other Schedule expressly states that a particular requirement of the Specification shall not apply. 2.6 Except as otherwise expressly provided in this contract, all remedies available to the Service Provider or to the Council under this Contract are cumulative and may be exercised concurrently or separately and the exercise of any one remedy shall not exclude the exercise of any other remedy.
3. REPRESENTATIVES
3.1 Council’s Representative
The Council’s Representative shall liaise with and give instructions to the Service Provider and its officers, employees, agents or sub-contractors in relation to all matters concerning the performance by the Service Provider of its obligations under this Contract and shall determine any matters or issue any notices as may be the function of the Council’s Representative under this Contract.
3.2 Contract Manager
The Contract Manager shall have the power to act on behalf of the Service Provider in connection with any matter relating to the performance of the Services and to exercise the rights, functions and obligations of the Service Provider under this Contract. The Service Provider warrants that the Contract Manager has authority to bind the Service Provider.
3.3 Changes to Council’s Representative and Contract Manager
Any changes to the identity of the Council’s Representative and/or the Contract Manager shall be communicated in writing to the other Party within fourteen (14) Calendar Days of the change.
3.4 Changes to the Contract Manager
The Council may at any time during the Contract Term (by providing the Service Provider with ten (10) Calendar Days written notice) require the Service Provider to appoint a new Contract Manager, to replace the existing Contract Manager. 4. COMMENCEMENT AND DURATION
This Contract and the rights and obligations of the Parties shall take effect on the Commencement Date and shall continue for the Initial Contract Term as may be extended as set out in the Schedule of Variables.
5. TRANSITION ARRANGEMENTS
5.1 During the Transition Period, the Service Provider shall liaise with the Council to ensure an effective and timely handover of the Services, including but without limitation, attending meetings with the Council and any other individuals or organisations of new Service Providers as are reasonably required by the Council. This shall be free of charge to the Council.
5.2 During the Exit Period, the Service Provider shall liaise with the Council to ensure an effective and timely handover of the Services, including but without limitation, attending meetings with the Council and any other individuals or organisations of new Service Providers as are reasonably required by the Council. Such handover shall include details as to work in progress, costs of transferring ownership of assets, Equipment and Materials, data and records. This shall also include information to enable the Council to meet its duties in relation to re-tendering the Contract. This shall be free of charge to the Council. SECTION B
6. THE SERVICES
6.1 The Service Provider shall provide the Services at the Locations during the Working Hours for the Contract Term in accordance with the Council's requirements as set out in the Specification and the terms of this Contract.
6.2 In providing the Services, the Service Provider shall comply with the Parking Plan.
6.3 In providing the Services, the Service Provider shall comply with and take into account all applicable laws, bye laws, traffic regulation orders, enactments, regulations and other similar instruments, the requirements of any court with relevant jurisdiction and any local, national or supranational agency, inspectorate, minister, ministry, official or public or statutory person of the government of the United Kingdom or of the European Union including but without limitation any bodies specified in the Schedule of Variables.
7. REMUNERATION
7.1 The Remuneration will be paid to the Service Provider in accordance with Clause 8 (Payment Terms) and Schedule 3 (Payment Mechanism).
7.2 The Base Payment
In consideration for the provision of the Services, the Council shall pay to the Service Provider the Base Payment as adjusted in accordance with Clause 7.3.
7.3 Adjustment to the Base Payment
The Base Payment shall be adjusted by way of a deduction or an addition dependent on the Service Provider's achievement or non-achievement of the KPIs calculated in accordance with Schedule 4 (Key Performance Indicators), provided that no deduction shall be made to the Base Payment for the Service Provider's non-achievement of a KPI to the extent that such non-achievement results from:
7.3.1 a breach by the Council of any of its obligations under this Contract; 7.3.2 a Force Majeure Event; or
7.3.3 a Relief Event.
7.4 **Share of savings**
Where the Service Provider has proposed a change to the Services which results in a reduction of the Target Cost and that change has been accepted by the Council under the Change Control Procedures, the Council will pay to the Service Provider a proportion of the savings achieved directly as a result of the change calculated in accordance with the Schedule of Variables.
7.5 **Value Added Tax ("VAT")**
7.5.1 The Council shall pay any VAT on the Remuneration at the rate and in the manner prescribed by law from time to time.
7.5.2 The Service Provider shall provide the Council with any information reasonably requested by the Council in relation to the amount of VAT chargeable in accordance with this Clause 7.5.
7.5.3 Where any amount is calculated by reference to any sum that has or may be incurred under this Contract, the amount shall include any VAT to the extent that such VAT is not recoverable as input tax by that person (or a member of the same VAT group), whether by set-off or repayment.
7.6 **Open Book Accounting**
7.6.1 Without prejudice to the rest of this Clause 7.6, the Service Provider shall, at the request of the Council, provide to the Council a certificate of costs (the "Certificate of Costs") within twenty one (21) Calendar Days of such request, provided that the Council will not request a Certificate of Costs more than once in any year of the Contract Term, or with such other frequency as the Council may reasonably request.
7.6.2 The Certificate of Costs shall set out the Service Provider's direct costs, and overheads in providing the Services over the preceding year of the Contract Term, including details of the following:
(a) the Target Cost;
(b) actual capital expenditure, including capital replacement costs;
(c) actual operating expenditure relating to the provision of the Services, with an analysis showing the costs of staff, consumables, sub-contracted and bought-in services;
(d) all interest, expenses and other third party financing costs incurred in relation to the Services, and (e) details of the overhead recoveries that have been made in relation to the Services.
7.6.3 Following receipt of the Certificate of Costs, the Service Provider shall provide to the Council such additional information as it may reasonably request (within twenty one (21) Calendar Days of such request having been made (or such other time frame as may be reasonably agreed between the parties)) so that the Council can verify the accuracy of the Certificate of Costs.
8. PAYMENT TERMS
8.1 The Council shall pay the Remuneration to the Service Provider in accordance with the procedure set out in the rest of this Clause 8.
8.2 The Service Provider shall submit an application for payment of the Remuneration to the Council’s Representative within seven (7) Calendar Days of the end of each Payment Period.
8.3 The application for payment of the Remuneration shall be in the form of a pro-forma invoice (the form of which shall be agreed in advance with the Council’s Representative) in three (3) distinct parts covering:
8.3.1 the Base Payment;
8.3.2 any adjustment to the Base Payment in accordance with Clause 7.3 (Adjustment to the Base Payment) and/or as a result of a change introduced under Clause 9;
8.3.3 any share of savings in accordance with Clause 7.4 (Share of Savings).
8.4 The Council’s Representative shall consider and (subject to Clauses 8.5 and 8.6) certify an application for payment made under Clause 8.2 within fourteen (14) Calendar Days of receipt of the application.
8.5 Should the Council’s Representative require an adjustment to any part of the Remuneration set out in the application for payment, the Council’s Representative shall inform the Service Provider in writing of the reason for and effect of any such adjustment at the same time as certifying the application (in accordance with Clause 2.6).
8.6 Notwithstanding any adjustment made to the Remuneration as outlined in Clause 8.5 the part of the Remuneration unaffected by the adjustment will be certified in accordance with Clause 8.4.
8.7 The Council shall pay the Remuneration to the Service Provider within fourteen (14) Calendar Days of certification of the application. 8.8 Interest is payable on late payment of the Remuneration at the rate set out in the Schedule of Variables.
9.9 In the event that the Service Provider enters into a sub-contract in connection with this Contract, the Service Provider shall ensure that a term is included in the sub-contract that requires the Service Provider to pay all sums due under the sub-contract to the relevant sub-contractor within a specified period, not exceeding thirty (30) Calendar Days, from the date of receipt of a valid invoice as defined by the terms of the sub-contract.
9.10 Any dispute relating to the calculation or payment of the Remuneration under Clause 7 (Remuneration) or this Clause 8 (Payment Terms) shall be resolved in accordance with the Dispute Resolution Procedure.
9. CHANGE TO THE SERVICES AND/OR THE REMUNERATION
9.1 Either Party may request a change to the Services and/or the Remuneration in accordance with the Change Control Procedures.
9.2 Where a change in law occurs which directly affects the provision of the Services under this Contract, either Party may request any necessary change to the Services and/or the Remuneration to deal with the change in law in accordance with the Change Control Procedures.
9.3 Budget control
9.3.1 If the Council requires a Budget Change it will notify the Service Provider in writing no later than 1st April of the year of the Contract Term from which the Budget Change is to apply (or such later date as the Parties may otherwise agree), setting out the level of the reduction or increase to the Base Payment payable to the Service Provider and identifying the affected Services.
9.3.2 The Council may not propose a Budget Change before 1st April 2013.
9.3.3 The Service Provider shall provide the Council within fifteen (15) Working Days of receipt of a notice from the Council pursuant to Clause 9.3.1 an outline proposal setting out the Council's options in order to achieve the reduction or increase to the Base Payment payable to the Service Provider and the estimated change in costs for each option (the "Options Proposal").
9.3.4 In preparing the Options Proposal the Service Provider shall consider (without limitation) in the following order of precedence: (a) changes to improve the efficiency of the provision, performance or delivery of the Services or particular part of the Services;
(b) adjustments to KPIs;
(c) relief from compliance with its obligations under this Contract,
as may be proportionate to the required reduction or increase to the sums payable to the Service Provider.
9.3.5 The Options Proposal shall include:
(a) a comprehensive range of options which address different aspects of the Services with the adoption of one or more options enabling the Services to be delivered to the proposed Budget Change; and
(b) in relation to each option, the reasonable professional opinion of the Service Provider as to the impact of such option on the provision of the Services.
9.3.6 No later than thirty (30) Working Days after the Council receives the Options Proposal, the Council shall notify the Service Provider as to the Council's preferred option and the Service Provider shall within ten (10) Working Days provide a detailed proposal for that option which shall include:
(a) the change in Target Cost and Base Payment;
(b) any amendments required to this Contract (including without limitation the Specification).
(the "Budget Change Proposal").
9.3.7 As soon as practicable after the Council receives the Budget Change Proposal the Parties shall discuss and agree the issues set out in the Budget Change Proposal.
9.3.8 If the Parties cannot agree on the contents of the Budget Change Proposal then the dispute will be determined in accordance with Clause 25 provided that such determination shall not require the Council to increase the sum payable to the Service Provider.
9.3.9 After a Budget Change Proposal has been agreed or otherwise determined the Parties shall promptly seek to agree how any consequential changes should be documented to ensure that they are legally binding on both Parties (and in the absence of agreement the form of such documentation shall be determined in accordance with Clause 25) and thereafter the Parties shall promptly sign or execute (as appropriate) such documentation. SECTION C
10. PREMISES
10.1 No premises owned by the Council will be utilised by the Service Provider.
10.2 Access to Council premises
10.2.1 The Council shall give access to its premises for the purpose of attending monthly and other meetings arranged by the Council, to any person employed or engaged by the Service Provider or any subcontractor required to attend the meetings, provided that the Council may refuse admission to such a person if such admission would present a security risk.
10.2.2 Any person employed or engaged by the Service Provider or any subcontractor who requires access to any premises occupied by or on behalf of the Council shall comply with such rules, regulations and requirements (including those relating to security arrangements) as may be in force from time to time for the conduct of personnel when at or outside those premises.
10.3 Premises owned by the Service Provider
Where the Council requires access to premises owned by the Service Provider in order to receive the Services, the Parties shall agree suitable licensing, financial and servicing arrangements.
11. EQUIPMENT AND MATERIALS
11.1 The Service Provider shall provide all Equipment and Materials necessary for the provision of the Services and shall be responsible for the costs of providing such Equipment and Materials.
11.2 The Service Provider shall ensure that all Equipment and Materials are:
11.2.1 suitable for the purposes for which they are intended;
11.2.2 maintained in a safe, serviceable and clean condition and replaced as necessary; and
11.2.3 adequately insured. 11.3 On expiry of the Contract Term, the Council may purchase the Equipment and Materials or any part of the Equipment and Materials which are used exclusively in the provision of the Services at the price calculated in accordance with the Schedule of Variables.
12. INTELLECTUAL PROPERTY
12.1 Council Software
12.1.1 The Council hereby grants to the Service Provider from the Commencement Date a non-exclusive, non-transferable licence to use and maintain the Council Software (and related technical, user and other documentation) as detailed in Schedule 10 (Intellectual Property) for the sole purpose of providing the Services.
12.1.2 The Council will use reasonable endeavours to request that the provider of any External Software grants to the Service Provider from the Commencement Date a non-exclusive, non-transferable licence to use and maintain the External Software as detailed in Schedule 10 (Intellectual Property) for the sole purpose of providing the Services. All costs associated with such a licence shall be payable by the Service Provider.
12.2 Service Provider Software
The Service Provider hereby grants to the Council from the Commencement Date a non-exclusive, non-transferable licence to use the Service Provider Software (and related technical, user and other documentation) as detailed in Schedule 10 (Intellectual Property) for the purpose set out in the Schedule of Variables.
12.3 Termination of software licences
The licence(s) granted under this Clause 12 shall terminate immediately on expiry of the Contract Term.
12.4 Intellectual Property Rights
12.4.1 All intellectual property rights in any material produced during the Contract Term and in all reports submitted under this Contract shall vest in the Council unless otherwise expressly agreed. 12.4.2 Such materials shall not be used, reproduced or disseminated for any other purposes without the prior written permission of the Council's Representative.
13. TUPE
13.1 Application of TUPE
13.1.1 The Parties agree that the provisions of TUPE may apply to this Contract as indicated in the Schedule of Variables.
13.1.2 In the event that TUPE does apply, the Parties agree that, where the identity of a provider (including the Council) of any of the Services is changed pursuant to this Contract (including on expiry of the Contract Term), the change shall constitute a Relevant Transfer.
13.1.2 On the occasion of a Relevant Transfer (other than a Relevant Transfer on expiry of the Contract Term), the Service Provider shall and shall procure that any replacement service provider shall comply with its obligations under TUPE and the Directive in respect of the Transferring Employees.
13.2 Emoluments and Outgoings
13.2.1 The Council shall be responsible for all emoluments and outgoings in respect of the Transferring Employees, including without limitation all wages, holiday pay, bonuses, commissions, payments of PAYE, national insurance contributions, pension contributions and otherwise, up to the date of any Relevant Transfer.
13.2.2 The Service Provider shall be or shall procure that any sub-contractor shall be responsible for all emoluments and outgoings in respect of the Transferring Employees, including without limitation all wages, holiday pay, bonuses, commission, payment of PAYE, national insurance contributions, pension contributions and otherwise, from and including the date of any Relevant Transfer.
13.3 Pensions
13.3.1 Service Provider to Become an Admission Body
Where the Service Provider employs any Eligible Employees on the occasion of a Relevant Transfer and wishes to offer those Eligible Employees membership of the Local Government Pension Scheme, the Service Provider shall procure that it shall become an Admission Body. The Service Provider shall before the Relevant Transfer execute an Admission Agreement which will have effect from and including the occasion of a Relevant Transfer.
13.3.2 Service Provider Admission Agreement
The Council shall before the occasion of a Relevant Transfer execute the Admission Agreement referred to in Clause 13.3.1 (Service Provider to Become an Admission Body).
13.3.3 Indemnity for a Breach of the Service Provider Admission Agreement
Without prejudice to the generality of this Clause 13, the Service Provider hereby indemnifies the Council and/or any future service provider on demand from and against all Direct Losses suffered or incurred by it or them which arise from any breach by the Service Provider of the terms of the Admission Agreement to the extent that such liability arises before or as a result of the termination or expiry of this Contract (howsoever caused).
13.3.4 Indemnity or Bond
Without prejudice to the generality of the requirements of this Clause 13, the Service Provider shall procure that it shall as soon as reasonably practicable obtain any indemnity or bond required in accordance with the Admission Agreement.
13.3.5 Right of Set-Off
The Council shall have a right to set off against any payments due to the Service Provider under this Contract an amount equal to any overdue employer and employee contributions and other payments (and interest payable under the LGPS Regulations) due from the Service Provider under the Admission Agreement.
13.3.6 Service Provider Ceases to be an Admission Body
If the Service Provider employs any Eligible Employees on the occasion of a Relevant Transfer and:
(a) the Service Provider does not wish to offer those Eligible Employees membership of the Local Government Pension Scheme; or (b) the Council and the Service Provider are both of the opinion that it is not possible to operate the provisions of Clauses 13.3.1 (Service Provider to Become an Admission Body) to 13.3.5 (Right of Set Off) inclusive, or
(c) if for any reason after the Relevant Transfer the Service Provider ceases to be an Admission Body other than on the date of termination or expiry of this Contract or because it ceases to employ any Eligible Employees,
then the provisions of Clauses 13.3.1 (Service Provider to Become an Admission Body) to 13.3.5 (Right of Set Off) inclusive shall not apply (without prejudice to any rights of the Council under those Clauses) and the provisions of Clause 13.3.7 (Service Provider Scheme) shall apply.
13.3.7 Service Provider Scheme
Where this Clause 13.3.7 (Service Provider Scheme) applies pursuant to Clause 13.3.6 (Service Provider Ceases to be an Admission Body), the following shall apply:
(a) The Service Provider shall not later than on the occasion of the Relevant Transfer or the Cessation Date (as the case may be) nominate to the Council in writing the occupational pension scheme or schemes which it proposes shall be the Service Provider Scheme for the purposes of this Clause 13.3.7 (Service Provider Scheme). Such pension scheme or schemes must be:
i established within three (3) months of the Relevant Transfer or Cessation Date (as the case may be) and maintained until any payment to be made under Schedule 15 (Bulk Transfer Terms) is made;
ii reasonably acceptable to the Council (such acceptance not to be unreasonably withheld or delayed);
iii registered under section 153 of the Finance Act 2004; and
iv certified by an actuary nominated by the Council in accordance with relevant guidance produced by the Government Actuary's Department as providing benefits which are broadly comparable to those provided by the LGPS,
(b) The Service Provider undertakes to the Council (for the benefit of the Council itself and for the Council as agent and trustee for the benefit of the Eligible Employees) that it shall procure that:
i the Eligible Employees shall by three (3) months before the occasion of the Relevant Transfer or such other date as the Council may propose or the Cessation Date (as the case may be) be offered membership of the Service Provider Scheme with effect from and including the Relevant Transfer or Cessation Date (as the case may be);
ii the Service Provider Scheme shall provide benefits in respect of the Eligible Employees' periods of service on and after the occasion of the Relevant Transfer or Cessation Date (as the case may be) which the actuary nominated by the Council in accordance with relevant guidance produced by the Government Actuary's Department shall certify to be broadly comparable to the benefits which the Eligible Employees would have been entitled to under the Local Government Pension Scheme had they continued in membership of the Local Government Pension Scheme;
iii if the Service Provider Scheme is terminated or the Service Provider's participation in the Service Provider Scheme terminates, a replacement pension scheme shall be provided with immediate effect for those Eligible Employees who are still employed by the Service Provider. The replacement scheme must comply with this Clause 13.3.7 (Service Provider Scheme) as if it were the Service Provider Scheme;
iv before the occasion of the Relevant Transfer or Cessation Date (as the case may be) the trustees of the Service Provider Scheme shall undertake by deed to the Council that they shall comply with the provisions of Clauses 13.3.7(a) to (e)iv (Service Provider Scheme), 13.3.8(a), 13.3.8(a)i and 13.3.8(a)iv (Undertaking from the Service Provider) and Schedule 15 (Bulk Transfer Terms); and
where the Service Provider Scheme has not been established at the occasion of the Relevant Transfer or Cessation Date (as the case may be), the Eligible Employees shall be provided with benefits in respect of death-in-service benefits provided by the Local Government Pension Scheme immediately before the occasion of the Relevant Transfer or Cessation Date (as the case may be). Such benefits will continue to be provided until death-in-service benefits are provided by the Service Provider Scheme.
(c) The parties shall use best endeavours to agree the terms of Schedule 15 (Bulk Transfer Terms) which shall apply in relation to the terms for bulk transfers from the Local Government Pension Scheme to the Service Provider's Scheme following the Relevant Transfer and any subsequent bulk transfers on termination or expiry of this Contract.
13.3.8 Undertaking from the Service Provider
(a) The Service Provider undertakes to the Council (for the benefit of the Council itself and for the Council as agent and trustee for the benefit of the Eligible Employees) that:
i all information which the Council or their respective professional advisers may reasonably request from the Service Provider for the administration of the Local Government Pension Scheme or concerning any other matters raised in Clause 13.3.7 (Service Provider Scheme), Clause 13.3.8 (Undertaking from the Service Provider) or Schedule 15 (Bulk Transfer Terms) shall be supplied to them as expeditiously as possible;
ii it shall not, without the consent in writing of the Council (which shall only be given subject to the payment by the Service Provider of such reasonable costs as the Council may require) consent to instigate, encourage or assist any event which could impose on the Local Government Pension Scheme or on the Council a cost in respect of any Eligible Employee greater than the cost which would have been payable in respect of that Eligible Employee had that consent, instigation, encouragement or assistance not been given;
iii until the occasion of the Relevant Transfer, it shall not issue any announcements (whether in writing or not) to the Eligible Employees concerning the matters stated in Clauses 13.3.1 (Service Provider to Become an Admission Body) to 13.3.6 (Service Provider ceases to be an Admission Body) inclusive without the consent in writing of the Council (not to be unreasonably withheld or delayed);
iv it shall not take or omit to take any action which would materially affect the benefits under the Local Government Pension Scheme or under the Service Provider Scheme of any Eligible Employees who are or will be employed wholly or partially in connection with the Services without the prior written agreement of the Council (not to be unreasonably withheld or delayed) provided that the Service Provider will be so entitled without the requirement of consent to give effect to any pre-existing contractual obligations to any Eligible Employees.
13.3.9 Discretionary Benefits
(a) Where the Service Provider is an Admission Body, the Service Provider shall award benefits (where permitted) to the Eligible Employees under the Compensation Regulations and/or the Local Government Pension Scheme in circumstances where the Eligible Employees would have received such benefits had they still been employed by the Council.
(b) Where the award of benefits in Clause 13.3.9(a) (Discretionary Benefits) is not permitted under the Compensation Regulations and/or the Local Government Pension Scheme or the Service Provider is not an Admission Body, the Service Provider shall award benefits to the Eligible Employees which are identical to the benefits the Eligible Employees would have received under the Compensation Regulations and/or the Local Government Pension Scheme in circumstances where the Eligible Employees would have received such benefits had they still been employed by the Council.
(c) Under Clause 13.3.9 (a) and (b) (Discretionary Benefits), where such benefits are of a discretionary nature, they shall be awarded on the basis of the Council's written policy in relation to such benefits at the time of the Relevant Transfer (which the Council shall provide upon request). Where the payment of such benefits is not, for whatever reason, possible, the Service Provider shall and/or shall procure that any relevant sub-Service Provider shall compensate the Eligible Employees in a manner which is broadly comparable or equivalent in cash terms.
13.3.10 Claims from Eligible Employees or Trade Unions
(a) The Service Provider hereby indemnifies the Council and/or any future service provider and, where relevant, their sub-Service Providers from and against all Direct Losses suffered or incurred by it or them which arise from claims by Eligible Employees of the Service Provider or by any trade unions, elected employee representatives or staff associations in respect of all or any such Eligible Employees which losses:
i relate to pension rights in respect of periods of employment on and after the Relevant Transfer until the date of termination or expiry of this Contract; or
ii arise out of the failure of the Service Provider to comply with the provisions of this Clause 13 before the date of termination or expiry of this Contract,
and the Council and the Service Provider agree that Clause 47 (Contracts (Rights Third Party)) of this Contract shall not apply to this Clause 13.3.10 13.3.11 Liability for Costs
The costs of the Council necessarily and reasonably incurred in connection with the Admission Agreement and/or of obtaining the necessary certification of comparability in accordance with Clause 13.3.7 (a) (Service Provider Scheme) shall be borne by the Service Provider.
13.3.12 Transfer to Another Employer
(a) Save on expiry or termination of this Contract, if the employment of any Eligible Employee transfers to another employer (by way of a transfer under TUPE) the Service Provider shall:
i consult with and inform those Eligible Employees of the pension provisions relating to that transfer, and
ii procure that the employer to which the Eligible Employees are transferred (the New Employer) complies with the provisions of this Clause 13 (Pensions) provided that references to the sub-Service Provider will become references to the New Employer, references to Relevant Transfer will become references to the date of the transfer to the New Employer and references to Eligible Employees will become references to the Eligible Employees so transferred to the New Employer.
13.3.13 Pension issues on Expiry or Termination
The Service Provider shall:
(a) maintain such documents and information as will be reasonably required to manage the pension rights of and aspects of any onward transfer of any person engaged or employed by the Service Provider in the provision of the Services on the expiry or termination of this Contract (including without limitation identification of the Eligible Employees);
(b) promptly provide to the Council such documents and information mentioned in Clause (a) (Pension issues on Expiry or Termination) which the Council may reasonably request in advance of the expiry or termination of this Contract; and
(c) fully co-operate (and procure that the trustees of the Service Provider Scheme shall fully co-operate) with the reasonable requests of the Council relating to any administrative tasks necessary to deal with the pension rights of and aspects of any onward transfer of any person engaged or employed by the Service Provider in the provision of the Services on the expiry or termination of this Contract.
13.4 Provision of Information
The Council warrants that the information set out in Schedule 6 (Transferring Employees) is accurate and complete as at the date of this Contract and that the Transferring Employees were employed by the Council immediately prior to the Transfer Date.
13.5 Service Provider to inform Council of any measures
The Service Provider shall or shall procure that any sub-contractor shall within fourteen (14) Calendar Days of receiving a request from the Council, provide the Council with any information which is reasonably necessary concerning any measures (within the meaning of TUPE and the Directive) that the Service Provider intends to take in relation to any Transferring Employee and shall indemnify the Council against all losses, costs, claims, demands, actions, fines, penalties, liabilities and expenses (including legal expenses) in relation to any breach of this Clause 13.5.
13.6 Indemnities
13.6.1 The Council shall indemnify and keep indemnified the Service Provider from and against all losses, costs, claims, demands, actions, fines, penalties, liabilities and expenses (including legal expenses) in connection with or as a result of any claim or demand by any Transferring Employee arising out of the employment of any such employee provided that this arises from any act, fault or omission of the Council prior to the date of the Relevant Transfer.
13.6.2 The Service Provider shall indemnify and keep indemnified the Council from and against all losses, costs, demands, actions, fines, penalties, awards, liabilities and expenses (including legal expenses) in connection with or as a result of any claim or demand by any Transferring Employee arising out of the employment of such employee. provided that this arises from any act, fault or omission of the Service Provider or any sub-contractor on or after the date of the Relevant Transfer.
13.6.3 The Service Provider shall indemnify and keep indemnified the Council from and against all losses, costs, claims, demands, actions, fines, penalties, awards, liabilities and expenses (including legal expenses) in connection with or as a result of:
(a) any claim by any trade union or staff association or employee representative (whether or not recognised by the Service Provider in respect of all or any of the Transferring Employees) arising from or connected with any failure by the Service Provider or any sub-contractor to comply with any legal obligation to such trade union, staff association or other employee representative under TUPE or the Directive and, whether any such claim arises or has its origin before or after the date of the Relevant Transfer;
(b) any step or measure envisaged by the Service Provider and/or any sub-contractor in relation to employees affected by this Contract; and
(c) the change of identity of the employer.
13.7 TUPE Compliance on Termination
13.7.1 During the twelve (12) months prior to the expiry of the Contract Term or after the Council has given notice to terminate this Contract and within twenty one (21) Calendar Days of being so requested to do so, the Service Provider shall fully and accurately disclose to the Council any and all information in relation to all persons engaged in providing the Services including:
(a) a list of employees employed by the Service Provider or any sub-contractor in the provision of the Services;
(b) a list of agency workers, agents and independent contractors engaged by the Service Provider or any sub-contractor in the provision of the Services;
(c) the total payroll bill (i.e. total taxable pay and allowances including employer's contributions to pension schemes) of those persons; and
(d) the terms and conditions of employment or other contract with such persons.
13.7.2 The Service Provider shall notify the Council as soon as reasonably practicable of any variation in the information provided under Clause 13.7.1 above and shall provide the Council with the revised and accurate information.
13.7.3 During the twelve (12) months prior to expiry of the Contract Term or where notice to terminate this Contract for whatever reason has been given, the Service Provider shall not and shall procure that any sub-contractor shall not without the prior written consent of the Council unless bona fide in the ordinary course of business:
(a) vary or purport or promise to vary the terms and conditions of employment of any employee employed in connection with the Services;
(b) materially increase or decrease the number of employees employed in connection with the Services; or
(c) assign or re-deploy any employee employed in connection with the Services to other duties unconnected with the Services or assign or re-deploy any employee employed to carry out duties unconnected with the Services to the duties connected with the Services.
13.8 Obligations on Termination
13.8.1 The Service Provider shall discharge all obligations and liabilities in respect of the Relevant Employees up to and including the Relevant Transfer Date.
13.8.2 The Service Provider shall indemnify and keep indemnified the Council against any loss caused to the Council or any New Service Provider by any inaccuracy or incompleteness in such information as is provided under 13.7.1 above or by any changes in the information which have not been communicated to the Council (whether relating to the number, identity or details of the Relevant Employees or otherwise) which occur prior to the Relevant Transfer Date.
13.8.3 The Service Provider shall indemnify the Council in full from and against all costs, claims, liabilities, expenses or demands (including legal costs) whether direct, indirect or consequential which the Council and/or any New Service Provider incurs arising from:
(a) any act or omission of the Service Provider or any sub-contractor in relation to the Relevant Employees,
(b) any claim by an employee or former employee of the Service Provider or any sub-contractor, and
(c) any representations made by the Service Provider or any sub-contractor in relation to employment by the Council and/or any New Service Provider. 13.3.4 The Council shall indemnify the Service Provider in full from and against all costs, claims, liabilities, expenses or demands (including legal costs) whether direct, indirect or consequential which the Service Provider incurs arising from any act or omission of the Council in relation to the Relevant Employees.
14. STAFFING
14.1 Staff Training
14.1.1 The Service Provider shall ensure that there are at all times employed in and about the provision of the Services sufficient staff who are properly and sufficiently trained, qualified, competent, careful, skilled, honest and experienced to ensure that the Services are provided at all times and shall ensure that adequate training is provided and maintained to all such staff to ensure that they are comprehensively trained to perform to the standard required especially in regard to:
(a) the task or tasks to be performed; (b) all relevant Council guidelines; (c) all relevant provisions of this Contract; (d) all statutory requirements relevant to the Services; and (e) the need to maintain the highest standards of courtesy and consideration.
14.1.2 The Service Provider shall ensure that within the period set out in the Schedule of Variables all civil enforcement officers engaged in the provision of the Services shall hold a current certificate as a result of passing the nationally accredited VRQ for civil enforcement officers (level 2) or hold the NVQ for civil enforcement officers (level 2).
14.1.3 The Service Provider agrees that:
(a) where any staffing or skill levels have been agreed as part of the Specification, those levels will be maintained throughout the Contract Term; (b) where any named staff have been agreed to be provided as part the Specification, those staff will be assigned to work on this Contract; (c) it has sufficient reserves of trained and competent staff within each skill level to provide the Services including sufficient reserves to provide cover for staff holidays, staff sickness, emergencies or any other absence; and (d) it will replace promptly any staff who are assigned to this Contract and who cease to be in its employment or under its control for whatever reasons and that such replacements shall have the broadly equivalent skill levels and shall in every way be suitable for the performance of the Services.
14.1.4 The Service Provider shall employ and/or train staff in accordance with all relevant Legislation and industry best practice, and where applicable, shall ensure that staff are members of the Institute of Parking Professionals (IPP) or European equivalent and are trained in accordance with the recommendations of the BPA Skills and IPP Board.
14.2 Removal of Staff
14.2.1 Where the Council becomes aware of a complaint against a member of the Service Provider's staff, agents or sub-contractors who is involved in the provision of the Services, the Council's Representative shall notify the Contract Manager of the nature of the complaint and provide supporting documentation where possible.
14.2.2 Within ten (10) Calendar Days of receipt of a notification under Clause 14.2.1, the Contract Manager shall meet with the Council's Representative to discuss measures to resolve the complaint and to avoid future complaints.
14.2.3 Where the Contract Manager and the Council's Representative agree that the complaint justifies the removal of a member of the Service Provider's or sub-contractor's staff from the provision of the Services, the Service Provider shall immediately remove or procure the removal of that person from the provision of the Services and shall provide or procure the provision of a suitable replacement.
14.2.4 Any dispute in relation to this Clause 14.2 shall be resolved in accordance with the Dispute Resolution Procedure.
14.3 Checks on Staff
14.3.1 If the circumstances under which the Services are provided are such that the Service Provider's officers, employees, agents or sub-contractors are exempt from the provisions of Section 4(2) of the Rehabilitation of Offenders Act 1974 (for the purposes of this sub-Clause the "Act"), by virtue of the Rehabilitation of Offenders Act 1974 (Exemptions) Order 1975 (for the purposes of this sub-Clause the "Order"), then the Service Provider shall use reasonable endeavours to ensure that the Service Provider's officers, employees, agents or sub-contractors shall provide information in accordance with the Act and Order about convictions which would otherwise be spent under the provisions of the Act and shall undertake checks of the appropriate level with the Criminal Records Bureau, in respect of all such individuals ("CRB Checks").
14.3.2 The Service Provider shall disclose to the Council's Representative the details of all convictions and CRB Checks of the Service Provider's officers, employees, agents or sub-contractors and in the event that such checks reveal that members of the Service Provider's officers, employees, agents or sub-contractors have relevant convictions or other relevant Criminal Record(s), the Council may direct that such persons should be removed from the provision of the Services.
14.4 Abuse of Staff
The Service Provider and the Council shall liaise with the police in relation to the prosecution of any person for abuse of a member of the Service Provider's staff, agents or sub-contractors who is involved in the provision of the Services. SECTION D
15. REVIEW MEETINGS
15.1 The Council's Representative and the Contract Manager shall hold review meetings at monthly intervals and at any other times as required by the Council.
15.2 The purpose of the monthly review meetings are to:
15.2.1 review the Service Provider's achievement or non-achievement of the KPIs;
15.2.2 address the Service Provider's non-achievement of KPIs and formulate a plan for improving performance;
15.2.3 resolve problems which may otherwise prejudice the performance of the Parties' obligations under this Contract or the Council's obligations under the Contract;
15.2.4 explore and agree methods of improving service quality, reducing costs and achieving continuous improvement; and
15.2.5 provide an opportunity for either Party to raise issues which could cause disruption to the provision of the Services or otherwise prejudice this Contract.
15.3 In the event that the performance of the Service Provider falls below the zero level as described in Schedule 3 (Payment Mechanism) or where either Party requests a meeting, senior executives of each Party shall within ten (10) Calendar Days of such occurrence/request hold a special review meeting to agree an action plan to bring performance to acceptable levels.
15.4 In addition to the review meetings held under Clauses 15.1 and 15.3, senior executives of each Party shall hold reviews at mutually agreed intervals but in any event within six (6) months of the Commencement Date and subsequently at least once within each twelve (12) month period thereafter to review the Services provided, the KPIs, the Target Cost, the Remuneration, the terms of this Contract and any other relevant matters with a view to deciding whether any improvements can be made and implemented during the Contract Term. Minutes of such meetings shall be taken by the Service Provider and approved by the Council's Representative. 15.5 Any changes resulting from the meetings described in this Clause 15 shall be effected through the Change Control Procedures.
16. PROVISION OF INFORMATION
16.1 The Council shall provide the Service Provider with the information set out in the Specification.
16.2 The Council shall use reasonable endeavours to notify the Service Provider of any proposed changes to bye-laws, policies or traffic regulation orders which in its reasonable opinion may affect the provision of the Services.
16.3 The Service Provider shall keep and maintain such necessary data and information and shall complete or provide (within ten (10) Calendar Days of any Council Request) such assistance as the Council may reasonably require by written notice to the Service Provider to enable the Council to complete all official returns, including, but without limitation the following:
16.3.1 returns to any central government body or properly authorised agency of central government; and
16.3.2 information required by any statutory body or compliance with any statute or statutory instrument.
16.4 The Service Provider shall at all times maintain separate records of the following:
16.4.1 full particulars of the costs of performing the Services, including those related to finance, investment and maintenance;
16.4.2 a full record of all incidents relating to health, safety and security which occur during the Contract Term;
16.4.3 a full record of all maintenance procedures carried out during the Contract Term; and
16.4.4 such other records as the Council may reasonably require having regard to the cost to the Service Provider of maintaining and providing such records.
16.5 The records referred to in this Clause 16 shall be retained for a period of at least six (6) years (or such longer period as may be specified by the Council from time to time) after the Service Provider's obligations under this Contract have come to an end. 16.6 All information referred to in this Clause 16 is subject to the obligations set out in Clause 34 (Confidentiality).
16.7 Upon the expiry or termination of this Contract, or in the event that the Council wishes to enter into another contract for the provision of the Services and irrespective of the identity of any replacement provider of the Services, the Service Provider shall comply with all reasonable requests by the Council to provide information relating to this Contract.
17. AUDIT
The Service Provider shall at all reasonable times (including following termination for whatever reason of this Contract) afford to or procure for any auditor (including any auditor carrying out functions under the Audit Commission Act 1998 or the Local Government Act 1999) conducting an internal audit or an external audit, or to or for the Council's Representative access to any records, information and data in the possession or control of the Service Provider which in any way relate to or are or have been used in connection with the performance of the Services including (but without limitation) Council data and information stored on a computer system operated by the Service Provider and shall include permission to copy and remove any copies and remove the originals of such documents. The Service Provider shall allow auditor access to the Service Provider's premises for the purposes of carrying out the above audit.
18. MONITORING
The Service Provider shall provide assistance to the Council for the purposes of monitoring the provision of the Services at no additional charge to the Council.
19. COMPLAINTS
19.1 Prior to the Commencement Date, the Service Provider shall agree with the Council a complaints procedure in respect of the provision of the Services which enables the Council to respond to complaints by members of the public.
19.2 As a minimum, the complaints procedure referred to in Clause 19.1 shall include the following requirements: 19.2.1 that the Service Provider shall not enter into any correspondence directly with members of the public relating to the Services;
19.2.2 that any complaint received by the Service Provider from a member of the public shall be logged and passed on to the Council within three (3) Calendar Days;
19.2.3 that the Service Provider shall assist the Council in responding to complaints from members of the public by providing all information requested by the Council in the timescales set out in the complaints procedure; and
19.2.4 that the Service Provider shall keep a record in a form agreed between the Parties of any complaints received by it and of the action taken by the Service Provider to remedy or fully investigate each such complaint.
19.3 If a complaint is deemed to be caused by any default in the actions or systems operated by the Service Provider, the Service Provider shall take appropriate measures to remedy the default.
19.4 The Service Provider shall, at the request of the Council's Representative, arrange for notices to be permanently displayed at the Locations giving information as to how complaints about the provision of the Services may be made. SECTION E
20. QUALITY MANAGEMENT
20.1 If the Service Provider is qualified to BS EN ISO 9001 2008 then this Contract shall be performed in accordance with the procedures set out in its Quality Manual.
20.2 In the event that the Service Provider is not qualified to BS EN ISO 9001 2008 then the Service Provider shall at the Commencement Date have in place and, throughout the Contract Term, maintain in relation to its performance of the Services a system of quality assurance and improvement to be agreed with the Council.
21. NOT USED
SECTION F
22. WARRANTIES AND REPRESENTATIONS
22.1 The Parties each warrant and represent that they have full capacity and have taken all steps and obtained all approvals to enable them to lawfully enter into and to perform each of their obligations under this Contract.
22.2 The Service Provider warrants and represents that:
22.2.1 in entering this Contract it has not committed any Prohibited Act; and
22.2.2 it has satisfied itself as to the nature and extent of the risks assumed by it under this Contract.
22.3 The Service Provider warrants and represents that it has provided full, accurate and up to date information to the Council in relation to the Services to be provided under this Contract.
22.4 Except as expressly stated in this Contract, all warranties, terms and conditions, whether express or implied by statute, common law or otherwise are hereby excluded to the extent permitted by law. 23. INDEMNITY
23.1 The Service Provider shall indemnify and keep indemnified the Council against all actions, proceedings, costs, claims, demands, liabilities, losses and expenses whatsoever arising out of, in respect of or in connection with this Contract during the Contract Term save to the extent that the same is caused by or arises from the negligence, breach of this Contract, breach of statutory duty, or breach of Legislation of the Council.
23.2 Subject to the provisions of Clauses 13 and 23.6, the aggregate liability of the Service Provider, whether for damages, payments of compensation or by way of indemnity or of any nature whatsoever arising under or in relation to this Contract or the Services (including as a result of negligence) shall in relation to:
23.2.1 any claim for which the Service Provider has insurance cover or should have insurance cover available under the policies of insurance which it is required to maintain pursuant to Clause 24 (Insurance), be limited to the maximum sum insured (or which should have been insured) under the relevant policy of insurance;
23.2.2 all breaches of this Contract resulting in direct loss of or damage to any kind of property, be limited to five million pounds (£5,000,000); and
23.2.3 all other liability for all breaches or non-performance of this Contract whether in contract, tort or otherwise be limited to the percentage of the Remuneration payable (or in the event of early termination, would have been payable had the Contract not been terminated) during the twelve (12) months in which the breach occurs as set out in the Schedule of Variables.
23.3 In no event shall either Party be liable to the other for loss of profits, business revenue, goodwill or anticipated savings.
23.4 The Service Provider shall notify and keep the Council fully informed and consult with it about the conduct of any claim and shall have due regard to the Council’s interests at all times.
23.5 The Service Provider shall not settle or pay any claim without the prior consent of the Council.
23.6 Nothing in this Clause 23 shall limit or exclude the liability of the Service Provider for death, personal injury, fraud or fraudulent misrepresentation. 24. INSURANCE
24.1 The Service Provider shall take out and maintain the following insurance policies:
24.1.1 employer's liability insurance of no less than ten million pounds (£10,000,000) in respect of any one claim or series of claims arising out of one incident;
24.1.2 public liability insurance to provide an indemnity of not less than five million pounds (£5,000,000) in respect of any one claim or series of claims arising out of one incident;
24.1.3 third party liability motor insurance of not less than five million pounds (£5,000,000) in respect of any one claim or series of claims arising out of one incident; and
24.1.4 any other insurance that may be required by law.
24.2 The Council may require the Service Provider to name the Council as co-insured (other than employer liability and professional indemnity insurance) with any other party maintaining the insurance and any other matter that the Council considers reasonable in the circumstances.
24.3 The Service Provider shall on request provide to the Council evidence and copies of all insurance policies required under this Clause 24 within twenty one (21) Calendar Days of such request.
24.4 If the Service Provider is in breach of this Clause 24, the Council may pay any premia required to keep such insurance in force or itself procure such insurance and shall in either case recover such amounts (together with any administrative expenses reasonably incurred) from the Service Provider on written demand.
24.5 The Service Provider shall give the Council notification within thirty (30) Calendar Days after any claim on any of the insurance policies referred to in this Clause 24 accompanied by full details of the incident giving rise to the claim.
24.6 The Service Provider shall inform the Council of any material changes in the insurances required under this Clause 24.
24.7 The Service Provider shall not take any action or fail to take any reasonable action, or insofar as its is reasonably within its power permit anything to occur in relation to it, which would entitle any insurer to refuse to pay any claim under any insurance policy under which it is insured. SECTION G
25. DISPUTE RESOLUTION PROCEDURE
25.1 All disputes and differences arising out of or in connection with this Contract (a "Dispute") (whether such disputes are in contract, tort or arise out of or under any rule of the common law or equity or under any statute) shall be resolved pursuant to the terms and conditions of this Clause 25.
25.2 The Parties shall each use reasonable endeavours to resolve a Dispute by means of prompt, bona fide discussion between the Contract Manager and the Council's Representative at the review meetings held under Clause 15 (Review Meetings).
25.3 In the event that a Dispute is not resolved within seven (7) Calendar Days of it having been referred to a review meeting, then either Party may refer it to the Council's nominated officer as set out in the Schedule of Variables and the Service Provider's Chief Executive for resolution and the same shall meet for discussion within seven (7) Calendar Days thereafter or such longer period as the Parties may agree.
25.4 If the Dispute is not resolved as a result of the meetings referred to in Clause 25.3 either Party may propose to the other Party that mediation be entered into with the assistance of the Expert appointed in accordance with Schedule 8 (Adjudicator and Expert). The costs of referral of the Dispute to the Expert shall be apportioned equally between the Parties, or as otherwise directed by the Expert.
25.5 Within fourteen (14) Calendar Days of the appointment of an Expert, the Parties shall meet with the Expert in order to agree in good faith a programme for the exchange of information and the structure to be adopted for the mediation process.
25.6 If the Parties accept the Expert's recommendations or otherwise reach agreement on the resolution of the Dispute, such agreement shall be put into writing and, once signed by the Council's Representative and the Contract Manager, shall be binding on the Parties.
25.7 Failing agreement, either Party may refer the Dispute to an Adjudicator appointed in accordance with Schedule 8 (Adjudicator and Expert).
25.8 Within twenty eight (28) Calendar Days of appointment, the Adjudicator shall communicate his decision in writing to the Parties and the Parties shall comply with the Adjudicator’s decision, including any direction for payment of sums of money and the payment or apportionment of the Adjudicator’s fees.
25.9 All negotiations and meetings connected with the Dispute shall be conducted in confidence and without prejudice to the rights of the Parties in any future proceedings.
25.10 No reference of any Dispute to an Expert or an Adjudicator pursuant to this Clause 25 shall relieve either Party from any liability for the due and punctual performance of its obligations under this Contract.
25.11 Notwithstanding the foregoing provision of this Clause 25, either Party shall have the right to seek appropriate injunctive relief against the other in an appropriate court having jurisdiction in England and Wales and, provided such court is satisfied that the proceedings have not been brought frivolously or vexatiously, all aspects of the Dispute shall be dealt with by such court and not under this Clause 25.
26. DEFAULT AND TERMINATION
26.1 The Council may terminate this Contract on written notice to the Service Provider if:
26.1.1 a court makes an order that the Service Provider be wound up or a resolution for a voluntary winding-up of the Service Provider is passed;
26.1.2 any receiver or manager in respect of the Service Provider is appointed or possession is taken by or on behalf of any creditor of all or a material part of any property of the Service Provider;
26.1.3 the Service Provider enters into any voluntary arrangement for a composition of debts or a scheme of arrangement is approved under the Insolvency Act 1986, the Companies Act 2006 or the Enterprise Act 2002;
26.1.4 an administration order is made or administrator is appointed in respect of the Service Provider;
26.1.5 a breach by the Service Provider of its obligation to take out and maintain the required insurances under Clause 24 (Insurance);
26.1.6 the Service Provider commits any Prohibited Act that is not capable of remedy. 26.1.7 the Service Provider commits a breach of the health and safety requirements under Clause 30 (Health and Safety); or
26.1.8 the Service Provider's performance falls below the zero level described in Clause 15.3 (above) and paragraph 1.11 of the Payment Mechanism, and following such occurrence, the Service Provider's performance level continues to fall for a further three (3) consecutive months.
26.2 If either Party has committed a fundamental breach of this Contract which is capable of remedy, the other Party may serve a written notice on the Party in specifying:
26.2.1 the type of breach that has occurred giving reasonable details; and
26.2.2 that this Contract will terminate on the day falling forty two (42) Calendar Days after receipt of the notice, unless the Party in breach puts forward an acceptable rectification programme or rectifies the breach within twenty one (21) Calendar Days of receipt of the notice.
and, if the Party in breach fails to rectify the breach within the time period specified in the notice or to provide an acceptable rectification programme, the Contract will terminate with immediate effect and without notice.
26.3 The Service Provider may terminate this Contract on written notice if the Council has instructed the Service Provider to temporarily stop provision of the Services or any substantial aspect of the Services and has not instructed the Service Provider to re-commence full provision of the Services for a period of ninety (90) Calendar Days from receipt of the instruction.
27. CONSEQUENCES OF EXPIRY OR TERMINATION
27.1 The Service Provider and the Council shall each carry out their respective responsibilities in accordance with this Contract until expiry or termination of the Contract.
27.2 The Service Provider shall, at its own cost, use its best endeavours to give assistance to the Council to effect an orderly continuation of the Services after termination or expiry of this Contract in such a manner as the Council may reasonably require. 27.3 The Council may recover from the Service Provider the amount of any direct and/or indirect losses suffered by the Council resulting from termination.
27.4 The expiry or termination of this Contract shall not prejudice or affect any claim, right, action or remedy that shall have accrued or shall thereafter accrue to either Party.
27.5 On expiry or termination of this Contract, neither Party shall have any further obligations or rights with respect to the other Party provided that termination of this Contract shall not affect the continuing rights and obligations of the Parties under Clauses 1, 2, 5, 12, 13, 16, 22, 23, 25, 27, 32, 48 and 48 or under any other provision of this Contract that is expressed to survive expiry or termination or is required to give effect to expiry or termination or the consequences of such expiry or termination.
28. FORCE MAJEURE
28.1 On the occurrence of a Force Majeure Event, the affected Party shall notify the other Party as soon as practicable. The notification shall include details of the Force Majeure Event, including evidence of its effect on the obligations of the affected Party and any action proposed to mitigate its effect.
28.2 As soon as practicable following such notification, the Parties shall consult with each other in good faith and use all reasonable endeavours to agree appropriate terms to mitigate the effects of the Force Majeure Event and facilitate the continued performance of this Contract.
28.3 If no such terms are agreed on or before the date falling one hundred and twenty (120) Calendar Days after the date of the commencement of the Force Majeure Event and such Force Majeure Event is continuing or its consequence remains such that the affected Party is unable to comply with its obligations under this Contract for a period of more than one hundred and eighty (180) Calendar Days, then, either Party may terminate this Contract by giving thirty (30) Calendar Days written notice to the other Party.
28.4 The affected Party shall notify the other Party as soon as practicable after the Force Majeure Event ceases or no longer causes the affected Party to be unable to comply with its obligations under this Contract. Following such notification this Contract shall continue to be performed on the terms existing immediately prior to the occurrence of the Force Majeure Event. 28.5 Neither Party shall be entitled to bring a claim for a breach of obligations under this Contract by the other Party, or incur any liability to the other Party for any losses or damages incurred by that other Party to the extent that a Force Majeure Event occurs and the Party is prevented from carrying out its obligations as a direct result of the Force Majeure Event.
29. RELIEF EVENTS
29.1 If and to the extent that a Relief Event adversely affects the ability of the Service Provider to provide the Services in accordance with the KPIs and the terms of this Contract, the Service Provider is entitled to apply for relief in accordance with Clause 29.2 from any rights the Council may assert under this Contract.
29.2 To obtain relief, the Service Provider must as soon as practicable, and in any event within fourteen (14) Calendar Days after it became aware that the Relief Event has caused or is likely to cause delay and/or adversely affect the ability of the Service Provider to perform its obligations, give to the Council a notice of its claim for relief from its obligations under this Contract, including details of the nature of the Relief Event, the date of occurrence and its likely duration.
29.3 Within fourteen (14) Calendar Days of receipt by the Council of the notice referred to in Clause 29.2 above, the Service Provider shall give full details of the relief claimed and demonstrate to the reasonable satisfaction of the Council that:
29.3.1 it could not reasonably have foreseen the occurrence or consequences of the relevant Relief Event and could not have avoided such occurrence or consequences by steps which it might reasonably be expected to have taken, without incurring additional expenditure;
29.3.2 the Relief Event directly caused or substantially contributed to the need for relief from obligations under this Contract;
29.3.3 the relief from the obligations under this Contract claimed could not reasonably be expected to be mitigated or recovered by the Service Provider acting in accordance with good industry practice, without incurring additional expenditure; and
29.3.4 the Service Provider is using reasonable endeavours to perform its obligations under this Contract. 29.4 Where the Service Provider has complied with its obligations under Clauses 29.1 and 29.2, the Council shall not be entitled to exercise its rights to terminate this Contract under Clause 26 (Default and Termination) and, subject to Clause 29.6 below, shall give such other relief as has been requested by the Service Provider.
29.5 In respect of any unconnected event nothing in Clause 29 shall affect any entitlement of the Council to make deductions under Clause 7 (Remuneration) during the period in which the Relief Event is subsisting.
29.6 In the event that information required by Clause 29.2 and/or 29.3 above is not provided by the dates referred to in that Clause, then the Service Provider shall not be entitled to any relief in respect of the period for which the information is delayed.
29.7 The Service Provider shall notify the Council if at any time it receives or becomes aware of any relevant further information relating to the Relief Event, giving details of that information to the extent that such information is new or renders information previously submitted materially inaccurate or misleading.
29.8 If the Parties cannot agree the extent of the relief required, or the Council disagrees that a Relief Event has occurred or that the Service Provider is entitled to relief from its obligations under this Contract, the Parties or either of them shall refer the matter to the Dispute Resolution Procedure. SECTION II
30. HEALTH AND SAFETY
30.1 The Service Provider shall comply with and shall procure that all staff, agents and sub-contractors engaged in the provision of the Services comply with the requirements of the Health and Safety at Work Etc. Act 1974, and any other Legislation, regulations and approved codes of practice relating to the health and safety of staff and others who may be affected by the Service Provider’s work activities.
30.2 The Service Provider shall provide to the Council’s Representative any information relating to the Service Provider’s compliance with Clause 30.1 that the Council may reasonably request at any time from the Commencement Date.
30.3 The Council’s Representative shall be permitted to access at any reasonable time any site where the Service Provider is undertaking any Services under this Contract for the purpose of carrying out an inspection of health, safety and welfare standards.
30.4 The Service Provider shall fully co-operate with the reasonable requests of the Council’s health and safety adviser and shall provide access to all areas of the Services, health and safety documentation, welfare facilities, accident records, training records and certificates, equipment inspection records, statutory registers and notices, plant and equipment for the purposes of inspection.
30.5 The Service Provider shall provide to the Council’s Representative, within seven (7) Calendar Days of receipt, copies of any communication concerning the health, safety, welfare, environmental or fire safety standards of the Services, which he receives from any statutory body.
31. EQUALITIES
31.1 The Service Provider (including its agents and employees) shall and shall procure that any sub-contractor shall in the provision of the Services:
31.1.1 not discriminate directly or indirectly, by way of victimisation or harassment against any person on grounds of race, age, disability, gender reassignment, pregnancy and maternity, religion or belief, sex or sexual orientation contrary to part 5 of the Equality Act 2010, 31.1.2 not discriminate directly or indirectly, by way of victimisation or harassment against any person on grounds of race, age, disability, gender reassignment, pregnancy and maternity, religion or belief, sex or sexual orientation contrary to any of the applicable provisions of the Equality Act 2010 which are or may come into force and any codes of practice issued thereunder.
31.1.3 take appropriate and lawful steps to advance equality of opportunity between persons who share a relevant protected characteristic (as defined in section 149(7) of the Equality Act 2010) and persons who do not share it, as directed by the Council from time to time;
31.1.2 take appropriate and lawful steps to foster good relations between persons who share a relevant characteristic (as defined in section 149(7) of the Equality Act 2010) and persons who do not share it, as directed by the Council from time to time; and
31.1.4 notify the Council if it becomes aware of any action which the Council could take to comply with or further its duties under section 149 of the Equality Act 2010 and/or the Council’s equality objectives as notified to the Service Provider from time to time.
31.2 Where, in connection with this Contract, the Service Provider (including its agents and employees) or any sub-contractor is required to carry out work on the Council’s premises or alongside the Council’s employees on any other premises they shall comply with the Council’s own employment policy and codes of practice relating to equality.
31.3 The Service Provider shall, and/or shall procure that any sub-contractor shall, notify the appropriate representative at the Council in writing as soon as it becomes aware of any investigation or proceedings brought against the Service Provider and/or any sub-contractor under the Equality Act 2010.
31.4 Where any investigation is undertaken by a person or body empowered to conduct such investigation and/or proceedings are instituted in connection with any matter relating to the Service Provider’s performance of its obligations under this Contract being in contravention of the Equality Act 2010, the Service Provider shall, and shall procure that any sub-contractor shall, free of charge:
31.4.1 provide any information reasonably requested by the Council, as soon as reasonably practicable;
31.4.2 attend any meetings as required and permit any of the Council’s staff to attend; 31.4.3 promptly allow the Council and/or any person conducting an investigation access to any documents or data deemed by the Council to be relevant;
31.4.4 allow itself or any of its staff to appear as witnesses in any ensuing proceedings; and
31.4.5 cooperate fully and promptly in every way required by the person or body conducting such investigation during the course of that investigation.
31.5 The Service Provider (including its agents and employees) shall, and shall procure that any sub-contractor shall, have due regard to the Council’s equality objectives as notified to the Service Provider from time to time.
31.6 The Service Provider (including its agents and employees) shall, and shall procure that any sub-contractor shall, ensure that none of its employees or applicants receive less favourable treatment because of a protected characteristic (as defined in the Equality Act 2010) and that wherever reasonable, the employee/applicant is given any help they need to obtain their full potential for the benefit of themselves or the Service Provider or the Council.
31.7 The Service Provider shall provide such information as the Council may reasonably request, for the purpose of assessing the Service Provider’s compliance with this Clause 31.
31.8 The Service Provider shall monitor the representation among its employees engaged in the provision of the Services of persons of different protected characteristics, having regard to the Council’s procedures for monitoring representation among its own employees.
31.9 Where it appears to the Service Provider that there are groups of persons with a particular protected characteristic who are underrepresented in the Service Provider’s workforce engaged in the provision of the Services in comparison with the population as a whole, the Service Provider shall take such steps as are lawful under the Equality Act 2010 to improve the relevant representation.
31.10 The Service Provider shall twelve months from the Commencement Date and annually thereafter provide a written report to the Council detailing its compliance with this Clause 31. 32. DATA PROTECTION
32.1 The Service Provider shall comply with its obligations under the Data Protection Act 1998 (the "1998 Act") and the Computer Misuse Act 1990 insofar as performance of this Contract gives rise to obligations under those Acts.
32.2 Notwithstanding the general obligation in Clause 32.1, where it is processing personal data (as defined by the 1998 Act) as a data processor for the Council (as defined by the 1998 Act) the Service Provider shall:
32.2.1 ensure that it has in place appropriate technical and organisational measure to ensure the security of the personal data (and to guard against unauthorised or unlawful processing of the personal data and against accidental loss or destruction of, or damage to, the personal data including that obtained during the operation of Closed Circuit Television), as required under the Seventh Data Protection Principle in Schedule 1 to the 1998 Act;
32.2.2 adhere to any instructions or policies of the Council in relation to the processing of personal data as are communicated to the Service Provider from time to time during the term of this Contract.
32.3 The Service Provider shall:
32.3.1 provide the Council with such information as the Council may require to satisfy itself that the Service Provider is complying with its obligations under the 1998 Act and this Clause 32;
32.3.2 promptly notify the Council of any breach of the security measures required to be put in place pursuant to Clause 32.2.1;
32.3.3 notify the Council (within 5 working days) if it receives:
(a) a request from a Data Subject to have access to that person's Personal Data, or
(b) a complaint or request relating to the Council's obligations under the Data Protection Act 1998
32.3.4 provide full cooperation and assistance to the Council in relation to any complaint or request made; and
32.3.5 ensure that it does nothing knowingly or negligently which places the Council in breach of the Council's obligations under the 1998 Act. 32.4 The Service Provider shall ensure that from the date it is acquired all information held on behalf of the Council is retained for disclosure for the duration of the term of this Contract and shall permit the Council to inspect such information as requested from time to time. All such information shall be transferred by the Service Provider to the Council upon expiry of the term.
33. FREEDOM OF INFORMATION
33.1 The Service Provider acknowledges that the Council is subject to the provisions of the Freedom of Information Act 2000 ("FOIA") and the Environmental Information Regulations 2004 ("EIR"), and from time to time the Council may receive requests for information relating to the Contract and the Services which but for any right to claim commercial confidentiality the Council will be obliged to disclose pursuant to the FOIA or the EIR, as the case may be.
33.2 The Service Provider shall ensure that it does and shall procure that its sub-contractors shall do all manner of things necessary to assist the Council in meeting the requirements of the FOIA or the EIR within the timescales set out therein.
33.3 The Service Provider shall:
(a) transfer a request for information to the Council as soon as practicable after receipt and in any event within three (3) Calendar Days of receiving a request for information;
(b) provide the Council with a copy of all information in its possession or power in the form that the Council requires within seven (7) Calendar Days (or such other period as the Council may specify) of the Council requesting that information; and
(c) provide all necessary assistance as reasonable requested by the Council to enable the Council to respond to a request for information within the time for compliance set out in section 10 of the FOIA or Regulation 5 of the EIR.
33.4 The Council shall be responsible for determining at its absolute discretion whether information:
(a) is exempt from disclosure in accordance with the provisions of the FOIA or the EIR, as the case may be; (b) is to be disclosed in response to a request for information, and in no event shall the Service Provider respond directly to a request for information unless expressly authorised to do so by the Council.
33.5 In this Clause 33 “information” has the meaning given to it under section 84 of the FOIA.
33.6 No additional payment shall be made to the Service Provider for performing the requirements set out in this Clause 33.
34. CONFIDENTIALITY
34.1 Subject to Clause 34.2 and Clause 34.5 the Parties shall keep confidential all matters relating to this Contract and shall use all reasonable endeavours to prevent their employees and agents from making any disclosure to any person of any matter relating to this Contract.
34.2 Clause 34.1 shall not apply to:
34.2.1 any information which the disclosing Party can demonstrate is already generally available and in the public domain otherwise than as a result of a breach of this clause;
34.2.2 any disclosure which is required by any law (including any order of a court of competent jurisdiction) or the rules of any stock exchange or governmental or regulatory authority having the force of law;
34.2.3 any disclosure of information which is already lawfully in the possession of the receiving Party, prior to its disclosure by the disclosing Party;
34.2.4 any disclosure by the Council of information relating to the provision of the Services and such other information as may be reasonably required for the purpose of conducting a due diligence exercise to any proposed replacement service provider, should the Council decide to re-tender this Contract;
34.2.5 any disclosure of information by the Council to any other department, office or agency of the government or their respective advisers or to any person engaged in providing services to the Council for any purpose related to or ancillary to the Contract; or
34.2.6 any disclosure for the purpose of:
(a) the examination and certification of the Council’s accounts; (b) any examination pursuant to the Audit Commission Act 1998 of the economy, efficiency and effectiveness with which the Council has used its resources; or
(c) the Local Government Finance Act 1982 or the Local Government Act 1999.
34.3 Where disclosure is permitted under Clause 34.2 the disclosing Party shall ensure that the recipient of the information shall be subject to the same obligation of confidentiality as that contained in this Contract.
34.4 Subject to Clause 34.5 neither Party shall make use of this Contract or any information issued or provided by or on behalf of the other party in connection with this Contract otherwise than for the purpose of performing its obligations under this Contract, except with the written consent of the other Party.
34.5 Notwithstanding any other provision of this Clause 34 the Council may publish details of any payment made to the Service Provider pursuant to this Contract including but not limited to: the Service Provider’s full name, the Service Provider’s company house or charity registration number (if any), the Contract identification number, the date of payment, the net amount paid to the Service Provider, the transaction number and a description confirming the nature of the transaction.
35. ASSIGNMENT AND SUB-CONTRACTING
35.1 Subject to any express provision of this Contract, the Service Provider shall not without the prior written consent of the Council, assign all or any benefit, right or interest under this Contract or sub-contract any of the Services.
35.2 Notwithstanding any sub-contracting permitted under this Contract, the Service Provider shall remain responsible for the acts and omissions of its sub-contractors as though they were its own. 35.3 The Council shall be entitled to:
35.3.1 assign, novate or otherwise dispose of its rights and obligations under this Contract either in whole or part to any contracting authority (as defined in Regulation 3(1) of the Public Contracts Regulations 2006); or
35.3.2 transfer, assign or novate its rights and obligations where required by law and only to a body assuming the whole or part of the Council’s business.
36. CORRUPT GIFTS AND FRAUD
36.1 As soon as either Party becomes aware of or suspects the commission of any Prohibited Act in the performance of the Services or otherwise, that Party shall notify the other Party.
36.2 The Council’s Representative shall have the right to require that the Service Provider suspend from any further work on this Contract any person reasonably suspected of a Prohibited Act, fraudulent action or malpractice.
37. RIGHTS AND DUTIES RESERVED
All rights, duties and powers which the Council has as a local authority or which the Council’s officers have as local authority officers are expressly reserved.
38. LOCAL GOVERNMENT OMBUDSMAN
38.1 Where any investigation by a Local Government Ombudsman (the “Ombudsman”) takes place the Service Provider shall:
38.1.1 provide any information requested in the timescale required by the Ombudsman;
38.1.2 attend any meetings as required by the Ombudsman and permit its personnel to so attend;
38.1.3 promptly allow access to and investigation of any documents deemed by the Ombudsman to be relevant;
38.1.4 allow itself and any employee deemed to be relevant to be interviewed by the Ombudsman; 38.1.5 allow itself and any employee to appear as witness in any ensuing proceedings, and
38.1.6 co-operate fully and promptly in every way required by the Ombudsman during the course of that investigation.
38.2 No additional payment shall be made to the Service Provider for performing the requirements set out in Clause 38.1.
38.3 Where any financial redress or other compensation is ordered by the Ombudsman in any investigation arising directly or indirectly out of the default or neglect by the Service Provider in connection with provision of the Services or any other action by the Service Provider the Council shall be entitled to recover the cost of that financial redress or other compensation from the Service Provider.
39. ENTIRE AGREEMENT
The Parties acknowledge that this Contract sets forth the entire agreement between them with respect to provision of the Services and supercedes and replaces all prior communications, drafts, representations, warranties, stipulations, undertakings and agreements of whatsoever nature, whether oral or written, between the Parties.
40. NO PARTNERSHIP OR AGENCY
40.1 Nothing in this Contract shall be construed as a legal partnership (within the meaning of the Partnership Act 1890) or as a contract of employment between the Council and the Service Provider.
40.2 The Service Provider shall not be, and shall not be deemed to be, an agent of the Council and the Service Provider shall not hold itself out as having authority or power to bind the Council in any way.
41. NO WAIVER
41.1 Failure by either Party at any time or for any period to enforce any one or more of the provisions of this Contract or to require performance by the other Party of any of the provisions of this Contract shall not: 41.1.1 constitute or be construed as a waiver of any such provision or of the right at any time subsequently to enforce all terms and conditions of this Contract; nor
41.1.2 affect the validity of the Contract or any part thereof or the right of the Parties to enforce any provision in accordance with its terms.
41.2 No waiver of any of the provisions of this Contract shall be effective unless it is expressed to be a waiver in writing and communicated in accordance with Clause 44 (Notices).
42. SEVERANCE
42.1 Each provision of this Contract is severable and distinct from the others and the Parties intend that every such provision shall be and remain valid and enforceable to the fullest extent permitted by law.
42.2 If any provision of this Contract is or at any time becomes to any extent invalid, illegal or unenforceable under any enactment or rule of law, it shall to that extent be deemed not to form part of the Contract but (except to the extent in the case of that provision) it and all other provisions of this Contract shall continue in full force and effect and their validity, legality and enforceability shall not be thereby affected or impaired, provided that the operation of this Contract would not negate the commercial intent and purpose of the Parties under this Contract.
42.3 If any provision of this Contract is illegal or unenforceable as a result of any time period being stated to endure for a period in excess of that permitted by a regulatory authority, that provision shall take effect within a time period that is acceptable to the relevant regulatory authorities subject to it not negating the commercial intent of the Parties under this Contract.
43. VARIATION
Subject to Clause 9 (Change to Services and/or the Remuneration), this Contract can only be varied if any such variation is agreed in writing by both Parties.
44. NOTICES
44.1 Any notice required by this Contract to be given by either Party to the other shall be in writing and shall be served personally, by fax or by sending the same by registered post or recorded delivery to the address detailed in the Schedule of Variables or such address or fax number as notified to each other.
44.2 Any notice served personally will be deemed to have been served on the day of delivery, any notice sent by post will be deemed to have been served forty eight (48) hours after it was posted and any notice sent by fax will be deemed to have been served twenty four (24) hours after it was despatched.
45. EUROPEAN MONETARY UNION
45.1 The Parties to this Contract confirm that the occurrence or non- ocurrence of an event associated with economic and monetary union in the European Union will not have the effect of altering any term of, or discharging or excusing performance under this Contract or any transaction, or give a Party the right unilaterally to alter or terminate this Contract or any transaction.
45.2 The words “an event associated with economic and monetary union in the European Union” shall include without limitation each and any combination of the following:
45.2.1 the introduction of, changeover to or operation of a single or unified European currency (whether known as the Euro or otherwise) in the United Kingdom;
45.2.2 the fixing of conversion rates between an European Union (EU) member state’s currency and the new currency or between the currencies of member states;
45.2.3 the substitution of that new currency for the Euro as the unit of account of the EU;
45.2.4 the introduction of that new currency as lawful currency in a member state;
45.2.5 the withdrawal from legal tender of any currency which, before the introduction of the new currency, was lawful currency in one of the member states;
45.2.6 the disappearance or replacement of a relevant rate option or other price source for the Euro or the national currency of any member state, or the failure of the agreed sponsor (or successor sponsor) to publish or display a relevant rate, index, price, page or screen; or 45.2.7 the withdrawal of any member state from a single or unified European currency.
46. PARENT COMPANY GUARANTEE AND PERFORMANCE BOND
46.1 The Service Provider shall procure the execution and delivery to the Council on or before the Commencement Date of a Parent Company Guarantee by the Guarantor in favour of the Council in the form set out in Schedule I (2) of the Invitation to Tender (Draft Deed of Guarantee) to secure the due performance of the Service Provider of its obligations to the Council.
46.2 Unless and until otherwise agreed by the parties, the form of guarantee set out in Schedule I (2) of the Invitation to Tender (Draft Deed of Guarantee) shall be the relevant specified form for the purposes of this Contract.
46.3 In the event that the Service Provider does not have a parent company and cannot procure a Parent Company Guarantee pursuant to Clause 46.1, the Service Provider shall procure the execution and delivery to the Council on or before the Commencement Date of a Performance Bond in favour of the Council.
46.4 The Performance Bond shall operate according to the principles specified in Schedule I (1) of the Invitation to Tender (Form of Bond).
47. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
The Parties agree that this Contract shall not be enforceable by any third party pursuant to the Contracts (Rights of Third Parties) Act 1999 and any rights contained therein are excluded.
48. LAW AND JURISDICTION
This Contract and any non-contractual obligations arising out of or in connection with it shall be governed by the laws of England and Wales and the Parties submit to the exclusive jurisdiction of the courts of England and Wales. IN WITNESS whereof the Parties have executed this Contract as a deed and delivered it on the date first written.
Signed as a deed by
acting by
Director
Director/Secretary
The common seal of
The Mayor and Burgesses of the London Borough of Barnet was affixed in the presence of
Authorised Signatory
### SCHEDULE 1:
#### SCHEDULE OF VARIABLES
| Clause reference | Variable | Details | |------------------|-----------------------------------------------|----------------------------------------------| | Recital A | Date of issue of ITT: | 28th July 2011 | | | Date of return of Tender: | 6th September 2011, 12.00 noon | | 3.1 | Council's Representative | | | | Name: | John McArdle | | | Address: | North London Business Park, Building 4, Oakleigh Road South, London N11 1NP | | | Tel: | 0208 359 7576 | | | Fax: | | | | Email: | [email protected] | | 3.2 | Contract Manager | | | | Name: | | | | Address: | | | | Tel: | | | | Fax: | | | | Email: | | | 4 | Commencement Date | 1st April 2012 | | | Initial Contract Term | 5 years | | | Fixed extension period: | 2 years | | | Notice required to extend for fixed extension period: | 6 (six)months | | 5.1 | Transition Period: | 3 months prior to the Commencement Date | | 5.2 | Exit Period | 3 months prior to, and 3 months after, the expiry or termination of the Contract. | | 6.3 | Bodies or agencies whose requirements must be | Driver and Vehicle Licensing | | Clause reference | Variable | Agency, Parking and Traffic Appeals Service, London Councils, Traffic Enforcement Centre | |------------------|--------------------------------------------------------------------------|----------------------------------------------------------------------------------------| | 7.2 | Base Payment (i.e., percentage of Target Cost to be paid to Service Provider): | 1/12 each calendar month | | 7.4 | Share of savings to be paid to Service Provider: | 50 % | | 8.1 | Payment Period: | monthly | | 8.6 | Rate of interest for late payment of Remuneration: | 1% above Bank of England base rate | | 10.1 | Address of Council Premises to be licensed to Service Provider: | N/A | | 11.3 | Price for purchase of Equipment and Materials on expiry: | Price to be agreed | | 12.2 | Purpose of use of Service Provider Software: | Provision of services in scope as defined in the specification document. | | 13.1 | Application of TUPE | Yes | | 14.1 | Date for civil enforcement officers to achieve VRQ (level 2) or NVQ (level 2): | 0 months (must be fully trained prior to commencing enforcement duties) | | 23.2 | Liability cap: | 100 % | | 25.3 | Council's nominated officer for dispute resolution: | Pam Wharfe, Director of Environment, Planning and Regeneration | SCHEDULE 2 SPECIFICATION
[DN: Please see specification attached to Schedule B of the ITT] SCHEDULE 3
PAYMENT MECHANISM
A1. Payment Mechanism
Payment will be made against the certified amount approved by the Council's Representative each month. The certified amount will consist of three parts:
- Monthly proportion of the annual Target Cost as defined in Schedule 11.
- Any changes authorised by the Council's Representative due to variations or Special Events undertaken by the Service Provider.
- Performance Related Payment against Key Performance Indicators as described in paragraph B below.
If agreement has been reached on the revision to the Target Cost as a result of the innovation or efficiency then the certificate may be amended to recompense the Service Provider for identifying such savings.
A2. Target Costs
2.1 The Target Cost of the Services will be shown against individual items in Schedule 11. The following shall be included:
2.2 Labour and staff, including all direct costs in connection with these. 2.3 Supply and administration of materials, goods, storage and costs in connection with the Services. 2.4 Accommodation costs including all cost of utilities and insurance for each of the premises as outlined in the Specification. 2.5 All equipment and transport costs in connection with the Services provided. 2.6 I.T. Systems costs (where applicable), consumables, telecommunications costs and staff costs associated and provided by the Service Provider.
B. Performance Related Payment
1.1 Payment will be dependent on the Service Provider meeting the key performance indicators (KPIs) as detailed in Schedule 4. The mechanism is designed to measure the service delivery items that the Council considers essential to the Services. The performance related element of payment will be calculated in accordance with and subject to the provisions of this Schedule. and, where payable, shall be not exceed the maximum percentage set out in the Target Cost Schedule ("Maximum Performance Payment").
1.2 Overheads will be deemed to cover all costs incurred by the Service Provider in carrying out the Service and include but not be limited to the following:
- Headquarters and corporate charge
- General Insurance including Employers Liability, Public Liability and all risks
- Training, recruitment, HR and all Financial Charges
- General obligations, liabilities and risks involved in the provision of the Services
1.3 During the duration of the contract the sum calculated for the Maximum Performance Payment shall be paid or deducted in whole or in part as set out below.
1.4 The annual Maximum Performance Payment will be divided into twelve equal parts to produce a maximum amount payable each calendar month. This amount shall be divided by six to produce a Bit. Each month, one Bit (or in some circumstances as set out below, two Bits) will be added or deducted from the amount paid to the Service Provider, depending on whether or not the KPIs have been met. The operation of the payment mechanism is illustrated in Table 1 overleaf. The Maximum Performance Payment is subject to any adjustment as outlined in item A1 above and Table 2 below.
1.5 All KPIs will be measured on the basis of whether they have been met or not met.
1.6 The Service Provider will provide the Council with monthly KPI performance reports, in the format agreed.
1.7 For the first two months from the Commencement Date, due to the unavailability of performance data, the initial performance payment will be set as two Bits. After the second month from the Commencement Date, performance over each month will be reviewed as per Clause 15 of the Contract and if the Service Provider has achieved the four KPIs, then a bit will be added. If the Service Provider has not achieved the four KPIs, a Bit will be deducted. Bits will be added or deducted in subsequent months, depending on performance.
1.8 If the Service Provider achieves four months of good performance from the Commencement Date (not counting the first 2 months from the Commencement Date) he will achieve the maximum set at six Bits. To continue to achieve the maximum the Service Provider must maintain its performance at the specified level.
1.9. If Performance targets are not met, there will be a reduction in the Performance Payment. Given that the initial payment is set at two Bits for the first two months only, if there are two months of decline from the start of the measurement process, the Performance Payment will fall to zero. If performance continues to decline; once below the zero point deduction of Bits will be doubled, so that a maximum deduction of Bits can be reached in only three months of continual decline resulting in a payment significantly below cost.
1.10. This process is intended to allow the Service Provider to show its staff how performance directly affects contract payments. As the targets may increase over time, the Service Provider will be required to manage its staff more effectively to achieve or retain the performance payment.
1.11. If performance falls for three consecutive months (the "zero level"), the Council's Representative will require appropriate intervention from the Service Provider. This will be discussed at a Special Review Meeting in accordance with the provisions of Clause 15.3.
### Table 1
![Graph showing data points and trend lines.]
### Table 2
| Months | 3-12 | 13-25 | 26 on | |--------|------|-------|-------| | Target number of indicators to be met. | 6 | 11 | 15 | | must include: | must include: | must include: | | KPI 2 | Target KPIs for months 3 – 12 and KPI 1 | All 15 KPIs | | KPI 3 | KPI 4 | | | KPI 9 | KPI 5 | | | KPI 10 | KPI 6 | | | KPI 11 | KPI 7 | | | KPI 15 | | | SCHEDULE 4
KEY PERFORMANCE INDICATORS
1. Measurement, Records and Monitoring
1.1 The Service Provider will submit monthly reports of performance against KPIs in the format specified by otherwise agreed with the Council from time to time.
1.2 The Council reserves the right to check records as is considered appropriate in order to ascertain the Service Provider's performance is to the required standards. In addition, it is anticipated the Council will conduct more detailed checks on a quarterly basis including 'reality spot checks' at regular intervals. Irrespective of actual performance a deduction of three 'Bite' will be made for that particular month in the event these checks prove the Service Provider has misrepresented its performance against the KPI's.
1.3 Such a matter would be considered a serious breach within the relationship of trust this Contract is intended to foster between the Council and Service Provider. In such a case, the Council may consider that the Service Provider is unable to continue fulfilling his contractual obligations and it would therefore be necessary to consider termination unless the Council can be satisfied that performance can be recovered and raised to an acceptable standard within an agreed period of time.
2. KPI Introduction
2.1 The following section outlines each KPI in detail and highlights the areas that the Council will expect to be incorporated within any measurement whether the KPI has been met or not.
2.2 It is the Council's intention to achieve realistic and workable KPIs, all of which can be measured properly and accurately. The Service Provider will be expected to outline as to how the KPI is to be achieved together with any levels of tolerance within which it will operate for each KPI except where levels have been specified or where there can be no tolerance.
2.3 It is acknowledged that the Services may undergo a series of changes during the life of this Contract Term due to the potential change of parking patterns and as other factors materialise which may affect the Council's Parking Plan and/or the enforcement operation. There may be performance measures which will require variation as the enforcement operation matures. The Change Control Procedures outlined in Schedule 5 will be applicable in any such event. Additionally, the Council may review the tolerance levels in the KPIs throughout the Contract Term, in discussion with the Service Provider, and these may be amended as considered appropriate.
3. Changes to KPIs
The Council and the Service Provider may at any time request a change to any part or all of the Key Performance Indicators set out in this schedule. Any such amendments to the Key Performance indicators shall be implemented in accordance with Schedule 5 (Change Control Request Procedure). 4. **KPI's**
**Effective Parking Enforcement**
| Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | KPI 1: Coverage of Patrol requirements and responsiveness to enforcement requests | The Schedule of Enforcement Patrols will be agreed between the Service Provider and the Council. The Service Provider will be expected to meet at least 90% of the scheduled patrols for each individual road or car park, unless previously agreed with the Council. The Service Provider will carry out all patrols according to the Specification (Schedule 2) and check all vehicles in the road, identifying contraventions and issuing PCNs according to Council Guidelines. The Service Provider will self-assess their performance and report to the Council who will then inspect and verify the information. Note – visits to streets that are broken by detours into adjoining streets count as one visit. There must be a distinct time difference between visits. In cases where two or more CEOs are present in one street, this will count as one visit. It is acknowledged that CEOs may walk through part of beats that are not allocated to them when traveling to their allocated beats and they must enforce on those. | The Service Provider will self-monitor and provide the Council with a report of the patrols met. The Council may access information from the I.T. system to verify the Service Provider's report. GPS tracking facilities will collate information and confirm that the logged patrols agree with the actual patrols performed. | | Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | The volume and effectiveness of input resources | The minimum number of effectively deployed CEOs and the percentage of deployed/employed hours will be as set out in the Contract Plan included in the Service Provider's tender submission. To satisfy the KPI, the ratio between the deployed and employed hours must be as set out in the Contract Plan. The Service Provider will self-assess their performance and report to the Council who will then verify the information. Effectiveness will be assessed by activity levels to include:
- Street Visits
- Vehicles logs
- PCNs issued
- Fault reports
- Abandoned vehicle reports | The Service Provider will self-monitor and provide the Council with a report of the number of CEOs deployed and their effectiveness. This must also include the percentage of deployed hours against employed hours and the amount of overtime worked by individual CEOs, showing a breakdown of effectiveness. The number of deployed CEOs will be obtained from the IT system based on the number of CEOs who have logged into a hand held computer and completed a full shift. This information will be used to verify the Service Provider's report, in addition to details recorded in CEOs hand written pocket-books (if applicable). |
The Service Provider should note that the Council may limit any perceived levels of over-deployment, e.g. to compensate for under-deployment. There is a tolerance level of 5% which is likely to be adjusted during the life of the Contract.
### Good Quality, Motivated and Informed Staff
| Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **KPI1** Initial CEO training and accreditation (BPA/City & Guilds certificate) | This element of the KPI is considered achieved when all CEOs meet the training requirements (as per the specification, including training in local modules). The Service Provider shall provide copies of all training related certificates to the Council. No CEO shall commence work duties until the training has been certified. | The Service Provider shall provide copies of all training related certificates to the Council and a monthly update of which CECs have been accredited. No CEO shall commence work duties until the training has been certified and agreed with the Council's Representative. | | Initial processing staff training and accreditation (BPA/City & Guilds certificate) | The Service Provider shall confirm that a module has been completed in providing information on the Council's policies. | | | There is a zero tolerance level associated with this KPI. | | | | **KPI2** Regular assessments and delivery of on-going training | A performance management plan will need to be set at the beginning of each year and the Service Provider will be required to demonstrate how this is achieved. An individual assessment format shall be agreed between the Service Provider and | The Service Provider shall provide copies of all training related certificates and assessments to the Council at monthly meetings. The assessments shall be evaluated against the agreed format and all certificates shall be checked to substantiate | | Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **KPI 1: Staff Retention** | The Service Provider will be required to ensure that staff turnover shall not exceed an annual mean of 10%. This will include all staff employed on the contract including CEOs, processing and administrative staff and the Contract Manager. | The Service Provider will submit reports showing the employees in post at the end of each month and the level of staff turnover. | | **KPI 2: The level of complaints & complaints handling** | Any written complaints received by the Service Provider about a member of staff must be investigated and the Service Provider is expected to respond to at least 95% of these within ten (10) working days. A copy of the complaint and the reply must be sent to the Council's Representative. Any written complaint about a CEO received by the Council will be copied to the Service Provider. An acceptable level of complaints will be agreed between the Service Provider and the Council's Representative and the Council will expect this level to remain within an agreed percentage tolerance during the life of the contract. The Council | The Service Provider must keep records of all complaints. The Service Provider may be required to produce information to assist in monitoring this indicator. Resolution will be defined as achieved if no further correspondence relating to the complaint is received by either the Service Provider or the Council directly. |
### Issue of Good Quality PCNs
The definition of a good quality PCN is one which has not been cancelled for any one of the reasons listed below (Details column).
| Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **2017 PCNs cancelled due to CEO Error**<br>The Service Provider will be required to ensure that PCNs cancelled as a result of a CEO error are minimised and actively work towards decreasing this value annually. | The Service Provider will be expected to meet a standard such that no more than 3% of all PCNs issued are cancelled due to a CEO error as a result of:<br>- Incorrect factual information (e.g. street name/location error, no record of VRM or VEL),<br>- Input error on handheld computer (HHC) or | The Service Provider will provide the Council with performance information. This information will be compared with data sourced from the I.T. system. | | Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | There is a tolerance level of 1% which is likely to be adjusted during the life of the Contract. | pocket book
- Failure to provide appropriate diagrams (where applicable)
- Illegible or poor quality supplementary evidence
- PCN cancelled as a result of misconduct or a result of proven/upheld complaint against a member of the Service Providers staff (does not include benefit of doubt cases).
- Incorrect issue of PCN, i.e. failure to issue according to Council guidelines. | See above |
**KPI 4 Void Tickets**
The Service Provider will be required to ensure that voided PCNs are minimised and actively work towards decreasing this value annually.
There is a tolerance level of 1% which is likely to be adjusted during the life of the Contract.
The Service Provider will be expected to meet a standard such that no more than 3% of all PCNs issued are voided due to CEO action or request after printing.
- A PCN will not be classified as a void if the CEO issues a substitute PCN. Other Services.
The measurements listed below relate to the provision of efficient and effective services.
| Measurement Summary | Details | Information Sources | |---------------------|---------|---------------------| | **KPI 1: Processing Services** | - Failures to log, scan, process or correctly allocate any correspondence within the required timescales.
- Failure to issue/re-issue a bus lane PCN.
- Failure to despatch any other statutory/recovery documentation within the required timescales, including Orders for Recovery and Warrants of Execution.
- Failure to issue Bus Lane Penalty Charge Notices within the required timescales.
- The conversion of captured contraventions from the automated incident capture system must be maintained at current capture rates of approximately 90%. If the Service Provider determines that compliance has resulted in a decrease in incident capture and the resulting PCNs, this must be flagged at the monthly meetings so that the conversion rate could be adjusted or the Council may seek to relocate the relevant camera.
- Failure to take the required action to update the IT system as required, or to record case details correctly within the appropriate timescales.
- The question of whether a Penalty Charge cancellation is due to "Service Provider Error" shall be determined by reference to a list of reason codes. | Performance information will be provided by the Service Provider.\
The Council will input into the assessment of this indicator based on the responses to challenges where it receives complaints, representations, appeals and witness statements.\
The Council will also use the IT system to identify cases where the Service Provider fails to scan relevant documentation onto the associated case or has failed to follow the statutory process.\
Performance information will be provided by Service Provider.\
The Council will input into the assessment of this indicator based on the responses to challenges where it receives complaints, representations, appeals and witness statements. | | **KPI 2: Response Services** | There is a tolerance level of 1% which is likely to be adjusted during the life of the Contract. | |
The Council's Representative may assess individual instances of failure based on the effect on the PCN processing operation, e.g. whether or not the failure to reply properly to a challenge has resulted in the loss of a PCN at appeal or cancellation at the representations stage. | KPI 1: Banking and Financial | |-----------------------------| | There is a zero tolerance level for this indicator (except the last item where a tolerance level may be agreed) although individual failures may be considered on their own merits. |
| The Service Provider will maintain the weekly collection rate in line with budget expectations as well as maintain the industry average for the recovery of a PCN at £45 and work to increase the value of this recovery rate for the duration of the contract. This element of the KPI will be considered met if monthly revenue summary information demonstrates that agreed activity levels are being met across all work streams. |
| Performance information will be provided by Service Provider. | | The Council will also agree activity levels with the Service Provider at the monthly meetings and monitor information using the IT and SAF systems. | | Note – notwithstanding the requirements of this KPI, where any errors in banking have... | | KPI 12 Lines and Signs Maintenance | • Failure to account for monies taken on behalf of the Council. Failure to provide the necessary level of facilities for cashless payment as outlined in the specification.\
• Late/delayed banking of monies unless otherwise agreed with the Council's Representative.\
• Failure to carry out adequate reconciliation of monies and/or errors in banking and accounting processes. (Tenders are invited to suggest a tolerance level for this item).
| KPI 13 Abandoned Vehicles | • Failure to report defects or to attend to any reported defect and effect the necessary repair within the required timescales.\
• Cases where a PCN has been cancelled as a result of a defect with either line or signs must have an associated works order to rectify the defect.
| KPI 14 Other | • The Service Provider is to report all suspected abandoned or nuisance vehicles, observed during enforcement patrols. A description of an "abandoned or nuisance vehicle" is to be agreed between the Council and the Service Provider.\
• The Service Provider is to report how many vehicles have been removed after investigation.
| | • Performance information will be provided by Service Provider.\
• The Council may verify this information from its own observations, representations and appeals data.\
• The Council will also use information provided at the monthly meetings to confirm whether remedial work has taken place against all instances of repair requests and/or identification.
| | • The Service Provider will self-monitor and provide the Council with a report of the number of abandoned or nuisance vehicles that they have reported and removed.\
• The Council may use information relating to complaints about this service to assess this KPI.
| | • Failure to provide information required to deal with FOI requests within an agreed timescale.
| | • This indicator will be monitored by the Service Provider through quality checks and | KPI 15: Cashless Service | |--------------------------| | There is a tolerance of 5% on elements of this service not associated with financial management and service availability. |
| The Service Provider will be required to provide a cashless parking system for on and off street parking. | | As it is the intention of the Council to remove all Pay and Display machines, the Service Provider will also be required to offer an alternative payment mechanism. | | Payments taken on behalf of the Council must be banked within 48 hours in a format agreed with the Council. | | The Service Provider will provide reports to the Council on a weekly basis in a format agreed with the Council. This will include but is not limited to the number of transactions, charges related to additional services, VAT (including VAT on services) and service availability. | | The Service Provider will ensure that service information is available to service users in a manner that complies with relevant legislation, the Council's priorities and the design principles of the One Barnet Programme. |
by the Council through monitoring of complaints.
The Service provider will also be required to provide such relevant information that may be required at the monthly meetings as agreed with the Council.
This indicator will be monitored by the Service Provider through quality checks and by the Council through weekly monitoring of reports provided by the Service Provider.
The Council will require access to any relevant reporting system to verify such reports from the Service Provider and to undertake any additional reporting that may be required to monitor this contract.
The Council will also undertake associated risk audit activity to verify transaction data. SCHEDULE 5
CHANGE CONTROL PROCEDURES
1. PRINCIPLES
1.1 Where the Council or the Service Provider see a need for a change to the Services or the Contract, then either Party may at any time request a change and propose an amendment to this Contract in accordance with the procedure set out in paragraph 2 below.
1.2 Neither the Council nor the Service Provider shall unreasonably withhold its agreement to any change.
1.3 The obligations of the Parties to this Contract shall not be effected until a change control note in the form attached to this Schedule 5 (a “Change Control Note”) has been signed by the authorised signatory of both Parties.
1.4 The Council shall not be responsible for the cost of any services provided, work undertaken or goods or materials ordered by the Service Provider or its subcontractors which has not been authorised in advance by a change control note.
2. PROCEDURE
2.1 The Council and the Service Provider shall discuss changes proposed by either Party to this Contract and such discussion shall result in:
a) A decision not to proceed further; or b) A written request for a change by the Council; or c) A recommendation for a change by the Service Provider.
2.2 Where a written request for a change is received from the Council, the Service Provider shall submit two signed copies of a Change Control Note to the Council within seven (7) Days of such request.
2.3 A recommendation to amend this Contract by the Service Provider shall be submitted direct to the Council in the form of two copies of a Change Control Note signed by the Service Provider.
2.4 Each Change Control Note shall contain details of the change including, where applicable:
a) The title of the change; b) The originator and the date of the request or recommendation for the change;
c) The reason for the change;
d) Full details of the change including any specifications;
e) Details of additions / savings to the Target Cost if any, as a consequence of the change;
f) A timetable for implementation together with any proposals for acceptance of the change;
g) A schedule of payments, if applicable;
h) The impact, if any, of the change on other aspects of the Contract;
i) The date of expiry of validity of the Change Control Note;
j) Provision for signature by the Council if the change is agreed.
k) The timescales within which the change is required
2.5 For each Change Control Note submitted to the Council, the Council Representative shall, within the period of the validity of the Change Control Note evaluate the Change Control Note and, as appropriate:
a) request further information from the Service Provider in which case the Service Provider shall provide such information as soon as reasonably practicable and in any event within seven Days or such other period as may be agreed, the request for information and the information once provided shall be deemed to be part of the Change Control Note, and the Council may approve or reject the Change Control Note upon receipt of the new information; or
b) notify the Service Provider of the rejection of the Change Control Note.
2.6 A Change Control Note signed by both Parties shall constitute a variation to this Contract in accordance with the terms of the Contract.
2.7 Authorised Signatories
2.7.1 Where the change incurs no additional charges for the Council the authorised representatives for both Parties will act as authorised signatories.
2.7.2 The authorised signatory for the Council will be the Council's Representative for changes up to the value set out in the Schedule of Variables and such person as set out in the Council's own constitution and any contract standing orders for changes above this value; 2.7.3 The authorised signatory for the Service Provider shall deem to be the Contract Manager in the absence of any written notification to the contrary from the Service Provider to the Council. Change Control Note
Ref No:
Date:
Title of Change:
Details of Change:
Reasons for Change:
Impact of Change:
Timetable:
Addition or deduction from the Target Cost:
Service Provider: Signed:
Council Response: Accept/Reject Signed:
Valid Until Date:
Note: The format of the Change Control Note may vary from time to time in circumstances where additional information is deemed necessary by the Council of the Service Provider in order to accurately reflect the nature of the change. SCHEDULE 6
TRANSFERRING EMPLOYEES (To be completed following employee transfer) SCHEDULE 7
PARKING PLAN
See separate document (Schedule 7 - Parking Plan.doc) SCHEDULE 8
ADJUDICATOR AND EXPERT
1 The Adjudicator and/or Expert nominated to consider a dispute referred to him shall be jointly selected by both Parties.
2 Where the Council and the Service Provider are unable to agree on the identity of the Adjudicator and/or Expert to be appointed, the President for the time being of the Chartered Institute of Arbitrators shall make such appointment as he sees fit bearing in mind the nature and scope of this Contract within twenty (20) Calendar Days of any application for such appointment by either Party. SCHEDULE 9
Not Used SCHEDULE 10
INTELLECTUAL PROPERTY
Council Software
External Software Contact with Civica plc as detailed in paragraph 1.9 of Schedule 2 (Specification).
Service Provider Software SCHEDULE 11
TARGET COST
The main principle of Target Cost Contracts is that the Service Provider receives a share of any savings and pays any excess when the final cost is compared to the Target Cost. The provision is designed to motivate the Service Provider to investigate and propose changes in the way the Services are provided that will reduce the Actual Cost while maintaining or improving the service levels defined by the Key Performance Indicators.
- If the Service Provider proposes a change to the Services by way of innovation or efficiency that the Council's Representative accepts as a proposal for a change to the Services in accordance with Schedule 4 the Target Cost is altered to reflect the Change Control Note.
- Any saving resulting from the above is shared by the Council and the Service Provider as set out in the Schedule of Variables.
- The amount resulting from the agreed share will be included by the Service Provider in the next application for payment.
- Payment will be made in accordance with Clause 3.
- The new Target Cost resulting from the Change becomes effective from the next payment period as defined in Schedule 3.
- Performance Related Payments are not affected by these provisions.
Target Cost
2.1 The Target Cost of the Services will be shown against individual items in Schedule 11. The following shall be included:
2.1.1 Labour and staff, including all costs in connection therewith;
2.1.2 Supply and administration of materials, goods, storage, and costs in connection therewith;
2.1.3 Accommodation including all rates, Rents, cost of Utilities and Insurance for each location;
2.1.4 Equipment and transport costs in connection therewith
2.1.5 I.T. System costs and all installation and maintenance charges, telecommunications costs and staffing costs associated therewith;
2.1.6 All banking charges and arrangements for credit/debit card facilities related to the Service, where supplied by the Service Provider. A sample of a Target Cost Schedule is set out below. This may be varied by alteration or expansion depending on the Services required.
| Item | Type | Description | Quantity | Rate | Annual Target Cost | |------|------|-------------|----------|------|--------------------| | 1 | | Contract Manager | | | | | 2 | | Assistant Contract Manager | | | | | 3 | | Supervisor | | | | | 4 | | CEOs - Senior | | | | | 5 | | CEOs - Basic | | | | | 6 | | CEOs - Mobile | | | | | 7 | | Radio Controller | | | | | 8 | | Correspondence Staff | | | | | 9 | | Labour and Staff including Quality and monitoring | | | | | 10 | | Rates to cover all on-costs including but not limited to benefits, NI, fares, accommodation where necessary etc. | | | | | 11 | | Payment Processing Staff | | | | | 12 | | Enforcement Support Staff | | | | | | | Other - specify | | | | | | | Premises/Bases | | | | | 1 | | Telecommunications | | | | | 2 | | Data Communication | | | | | 3 | | Other specify | | | | | | | Equipment | | | | | 1 | | IT - Hand Held Equipment | | | | | 2 | | Radios/Telecoms, cameras | | | | | 3 | | General office equipment | | | | | 4 | | Uniforms and associated equipment | | | | | 5 | | Vehicles - Trucks | | | | | 6 | | Vehicles - Vans | | | | | 7 | | Vehicles - Cars | | | | | 8 | | Vehicles - Two wheelers | | | | | 9 | | IT system - initial costs should include comm lines for access to the IT system from the Managed Service site to the Service Provider sites and a back up internet facility | | | | | | | |---|---| | 10 | IT system - Costs for full provision from April 2014 and should include servers, comms lines for access to the IT system from the Managed Service site to the Service Provider sites and a back up internet facility. The Service Provider will need to consider the cost of access for other relevant third party users including the Council and other Council contractors. |
| Materials including | | |--------------------|---| | 1 | Stationery, Postage and Documentation | | 2 | Fuels/Oils/Greases | | 3 | Cleaning |
| Services | | |----------|---| | 1 | Provision of a cashless parking service by telephone | | 2 | Provision of a cashless parking service by other means |
| Miscellaneous | | |---------------|---| | 1 | Provision of a Bond | | Provisional items | | | 2 | Start up costs |
| Annual Target Cost | | |--------------------|---| | Maximum (up to 20%) addition for Performance related Payment | % |
| CONTRACT SUM | 0.00 | SCHEDULE 12
CONTRACT PLAN
SEE ATTACHED DOCUMENT
(London Borough of Barnet - Contract Plan.doc) SCHEDULE 13
Not Used SCHEDULE 14
FORM OF LICENCE
Not Required SCHEDULE 15
BULK TRANSFER TERMS
1 Interpretation and definitions
In this Schedule, unless the context otherwise requires, the following terms shall have the meanings given to them below:
Actuary's Letter means the letter from the Authority's Actuary, a copy of which has been attached to this Schedule;
Authority's Actuary means Barnett Waddingham LLP of 163 West George Street, Glasgow G2 2JJ, appointed by the Authority for the purposes of this Schedule;
AVCs means AVCs or SCAVCs as defined in the LGPS Regulations;
Due Date means the date agreed between the Fund and the Service Provider's Scheme once the last of the conditions in paragraph 3.6 of this Appendix has been satisfied;
Fund means The London Borough of Barnet Local Government Pension Scheme Fund within the LGPS;
Service Provider's Actuary means [name of actuary] of [name of firm], or another actuary appointed by the Service Provider for the purposes of this Schedule;
Service Provider's Scheme means the pension scheme or schemes nominated by the Service Provider in accordance with paragraph 13.3.7 of Schedule 15;
Transfer Amount means the amount or amounts referred to in paragraph 3.1 of this Schedule;
Transferring Member means an Eligible Employee who agrees to a transfer of benefits being made for him or her from the Fund to the Service Provider's Scheme under paragraph 2 of this Schedule.
2 The Service Provider's Scheme
The Service Provider shall invite each Eligible Employee who joins the Service Provider's Scheme in accordance with Clause 13.3.7 of this Contract to consent to a transfer of benefits being made for him from the Fund to the Service Provider's Scheme. The Service Provider and/or relevant Sub-Service Provider must issue this invitation no later than one (1) month after the Relevant Transfer. The invitation must be in a form acceptable to the Authority (such acceptance not to be unreasonably withheld or delayed by the Authority) and which complies with any requirements of the LGPS Regulations. Any Eligible Employee wishing to consent to a transfer of benefits must notify the Service Provider of this consent in writing no later than three (3) months after the date of the invitation. The Service Provider shall provide the Authority with the names of the Transferring Members no later than four (4) months after the Relevant Transfer Date.
3 Transfer payment from the Fund
3.1 The Authority shall use reasonable endeavours to ensure that it transfers from the Fund to the Service Provider’s Scheme on the Due Date an amount in respect of the relevant Transferring Members’ service in the Fund before the Relevant Transfer calculated in accordance with the Actuary’s Letter and the LGPS Regulations.
3.2 As soon as reasonably practicable following the Relevant Transfer, the Service Provider shall promptly provide all data within its possession or under its control which the Authority’s Actuary may require for the calculation of the Transfer Amount and shall warrant that this data is in all material respects true, complete and accurate.
3.3 As soon as reasonably practicable following the Relevant Transfer, the Authority shall promptly provide all data within their possession or under their control which the Authority’s Actuary may require for the calculation of the Transfer Amount and shall warrant that this data is in all material respects true, complete and accurate.
3.4 The Authority shall use their reasonable endeavours to procure that:
3.4.1 as soon as reasonably practicable after the Authority’s Actuary has been provided with the necessary data and information, the Authority’s Actuary shall calculate the Transfer Amount in accordance with the Actuary’s Letter and the LGPS Regulations; and
3.4.2 within one (1) week of completing this calculation, the Authority’s Actuary shall notify the Service Provider’s Actuary in writing of the particulars of the calculation and the data on which the calculation is based.
3.4.3 The Service Provider’s Actuary will then have one (1) month (or such longer period as the parties may agree) from the date on which those particulars and data have been supplied to him in which to object in writing that the calculation is incorrect or not in accordance with the Actuary’s Letter. The calculation shall be final and binding on the 3.5 If the Service Provider's Actuary objects in writing under paragraph 3.4 of this Schedule and the Authority's Actuary and the Service Provider's Actuary cannot subsequently agree the Transfer Amount within one (1) month (or such longer period as shall be agreed between the parties) of the objection, then the amount shall be determined by an independent actuary to be nominated by the Authority and the Service Provider jointly or, if they cannot agree, by the President of the Institute of Actuaries on application by either party. The independent actuary shall act as an expert and not as an arbitrator, and his decision shall be final and binding on the parties. The independent actuary's costs shall be payable equally by the Authority and the Service Provider.
3.6 Payment to the Service Provider's Scheme of the Transfer Amount shall only be made on the following conditions:
3.6.1 the Transfer Amount has been agreed or determined under paragraph 3.4 or 3.5 of this Schedule and in accordance with the LGPS Regulations;
3.6.2 HM Revenue & Customs has consented to the making of the payment (which consent the Authority and the Service Provider and/or relevant Sub-Service Provider shall use reasonable endeavours to obtain);
3.6.3 the Service Provider and/or relevant Sub-Service Provider has complied with all its obligations under this Schedule; and
3.6.4 the trustees of the Service Provider's Scheme have confirmed in writing that:
(a) a payment should be made in accordance with the LGPS Regulations and that they shall accept payment on the terms set out in paragraph 4 of this Schedule;
(b) they shall accept liability for each Transferring Member's accrued contracted out rights under the Fund; and
(c) they shall accept the Transfer Amount in full and final settlement of all claims against the Fund in respect of each Transferring Member. 4 Past service benefits
The Service Provider shall (and shall procure that each relevant Sub-Service Provider shall) ensure that the Service Provider’s Scheme provides in respect of each Transferring Member such benefits as the Authority’s Actuary certifies to be of actuarially equivalent value (in accordance with the Actuary’s Letter) to the benefits which would have been payable under the LGPS in respect of the Transferring Member’s service before the Relevant Transfer if he had remained a member of the LGPS.
5 Additional voluntary contributions
Nothing in this Schedule shall apply to AVCs or to benefits secured by them. However, the Authority shall use reasonable endeavours to ensure that the assets representing each Transferring Member’s AVCs in the Fund (if any) shall be transferred to the Service Provider’s Scheme. The Service Provider shall (and shall procure that each relevant Sub-Service Provider shall) ensure that the Service Provider’s Scheme provides benefits for each relevant Transferring Member which are equivalent to the assets transferred.
6 No assistance
The Service Provider shall not encourage or initiate or assist or facilitate any action or provide any financial assistance for the purpose of requiring the Fund to pay an amount larger than the Transfer Amount to the Service Provider’s Scheme in respect of the Transferring Members.
7 Exit Provisions
7.1 The Service Provider undertakes to the Authority (for the benefit of the Authority themselves and for the Authority as agent and trustee for the benefit of the Eligible Employees) that on:
7.1.1 the expiry or termination of this Contract; or
7.1.2 the employment of any Eligible Employee transferring to a New Employer in accordance with Clause 13.3.12(a) of this Contract (or otherwise),
7.1.3 the Service Provider shall procure that the trustees of the Service Provider’s Scheme offer bulk transfer terms in respect of the relevant Eligible Employees’ service in the Service Provider’s Scheme to the pension schemes of the Authority, any future service provider, or any New Employer (as applicable) which are no less favourable (in the opinion of the Authority’s Actuary or an actuary appointed by the Authority) than the bulk transfer terms set out in the Actuary’s Letter. 7.2 If the transfer payment paid by the trustees of the Service Provider's Scheme is less (in the opinion of the Authority's Actuary or an actuary appointed by the Authority) than the transfer payment which would have been paid had paragraph 7.1 of this Schedule been complied with, the Service Provider shall pay to the Authority, any future service provider or any New Employer (as appropriate) (or as such person shall direct) the amount of the difference.
8 Authority's Costs
Any costs of the Authority necessarily and reasonably incurred in connection with this Schedule shall be borne by the Service Provider. SCHEDULE F – ITT QUESTIONNAIRE
1. The Specification
Tenderers are requested to complete a Contract Plan specifying how the Tenderer intends to meet each of the requirements in the Specification and in particular:
1.1 specify how the Tenderer will meet the requirements for the IT Provision and Equipment needs for the contract (section 1.9);
1.2 specify how the Tenderer intends to meet the requirements relating to patrol areas (section 2);
1.3 specify how the Tenderer intends to meet the requirements in relation to core service hours (section 3);
1.4 specify how the Tenderer intends to meet the requirements in relation to patrol requirements including special events and school restrictions (section 4);
1.5 specify how the Tenderer intends to meet the requirements in relation to cashless parking (section 5) and/or develop a cashless option which would be easy for users to park without the use of cash;
1.6 specify how the Tenderer intends to meet the requirements in relation to accommodation (section 6);
1.7 specify how the Tenderer intends to meet the requirements outlined in relation to staffing and personnel (section 8);
1.8 specify how the Tenderer intends to meet the requirements in relation to training and development (section 9);
1.9 specify how the Tenderer intends to meet the requirements in relation to Uniforms, CCTV and CEO Equipment (section 10);
1.10 specify how the Tenderer intends to meet the requirements in relation to the general conduct requirements for Civil Enforcement Officers and other employees (section 11);
1.11 specify how the Tenderer intends to meet the requirements in relation to patrols (section 12);
1.12 specify how the Tenderer intends to meet the requirements in relation to the issue of PCNs, including evidence and requirements in relation to Challenges, Representations and Appeals (section 13);
1.13 specify how the Tenderer intends to meet the requirements in relation to lines and signs maintenance and replacement (section 14);
1.14 specify how the Tenderer intends to meet the requirements in relation to monitoring and reporting (section 15); 1.15 specify how the Tenderer intends to meet the requirements in relation to PCN processing and administration (section 16), in accordance with the provisions of appendix 8 of the Specification so as to comply with the process required for representations and appeals. Tenderers should note that the Council and its advisors do not seek to provide appendix 8 as a definitive statement of the legal position on this issue. Tenderers are therefore advised to seek their own legal advice in relation to their proposals;
1.16 specify how the Tenderer intends to meet the requirements in relation to payment processing (section 17);
1.17 specify how the Tenderer intends to meet the requirements in relation to car park maintenance (section 18);
1.19 specify how the Tenderer intends to measure each KPI and specify what information will be provided in the monthly report to enable the Council to establish whether the KPI has been met or not for that month (Schedule 4 to the Contract);
1.19 The tenderer is invited to review the performance measurements of the KPIs and propose alternative mechanisms or additional means of measurements for each of them (Schedule 4 to the Contract);
2. Health and Safety
2.1 In relation to the health and safety requirements set out at appendix 5 of the Specification, Tenderers are requested to provide proposals to demonstrate how they will comply with the health and safety requirements. In doing so, they may wish to provide examples of contracts which are not office-based operations specifying the particular health and safety risk management challenges posed.
3. Approach to Employment
Tenderers are requested to provide proposals as to how they will deal with the following employment themes. In doing so they should answer the specific questions set out below on no more than one side of A4 per employment theme in Arial font 11. You may provide documents to support your responses in an Appendix.
3.1 Theme: Employee Engagement, Communication and Industrial Relations
3.1.1 In relation to the LBB contract, what will be your industrial relations framework and internal communication strategy?
3.1.2 How will you demonstrate that you will put the LBB staff at the heart of your organisation?
3.1.3 What are your intentions during mobilisation and transformation?
(a) How will this strategy best induct transferring employees into your organisation? (b) How will you gain an understanding of their individual skills and in what way will these best benefit the service provision to the Council?
3.1.4 How do you intend to introduce this Contract into your organisation as a whole, where will it sit and how will relationships be forged between this and other contracts?
3.1.5 How do you intend to encourage relationships between your central functions and the staff and management on this Contract?
3.1.6 What does your year 1 transformation plan look like?
3.2 Theme: Employment Policies, Processes and Equalities
3.2.1 How will you discharge your Equality Act duties and how will you ensure that the Council is able to discharge its non-delegable Equality Act duties?
3.2.2 How likely are you to use sub-contractors? How will you monitor how your sub-contractors treat the Council’s staff?
3.2.3 What people issues do you envisage (by yourselves or any sub-contractors), e.g. location, changes to other contractual terms and conditions?
3.2.4 Where do you foresee this contract being delivered from? Please explain your relocation strategy, if appropriate for this contract, and any potential difficulties you foresee?
3.2.5 Please provide the detail of any potential reorganisation you intend to initiate as part of your tender including where this contract will sit in your organisational structure and any restructures as mentioned above.
3.2.6 Please detail how you envisage redeployment will work for this Contract.
3.3 Theme: Recruitment, Retention, Reward & Development
3.3.1 How will you identify talent and motivate and develop staff? How will this fit into your organisational framework?
3.3.2 How will you retain key individuals?
3.3.3 How will you monitor pay and protectec characteristics?
3.4 Theme: Performance Data
3.4.1 As part of the contract monitoring by the Council, what Management Information would you be expecting to report back to the Council on a quarterly basis about employees on this Contract? 3.4.2 Will you follow any best practice guidelines e.g. CIPD calculations/benchmarking?
3.5 Theme: Employee Well-being
3.5.1 What approaches will you adopt to ensure the well-being of the staff?
3.6 Theme: Pensions
3.6.1 In order to enable the Council to obtain an initial indicative employer contribution rate from the LGPS actuary, where relevant, bidders should indicate whether the pension scheme offered will be open or closed to new employees.
4. Optional Requirements and Added Value
4.1 General Statement
4.1.1 The Council has identified some additional services that may add value to the Contract. The Council will be free to choose to accept any, all or none of the proposals submitted under this section.
4.1.2 The provision of each itemised service must be treated as a stand-alone item. It will not be acceptable for any costs involved to be offset against the prices shown for the provision of the mandatory services defined earlier in this Specification.
4.1.3 Indicative costs and details of how these services would be provided must be included.
4.1.4 These services must be compatible with the mandatory services required in the Specification and must not operate to the detriment of such services.
4.2 Independent Audit
4.2.1 As part of its monitoring process, the Council wishes that audits of the service are carried out periodically. These audits must be performed by an independent body, i.e. not the Council or the Service Provider.
4.2.2 The audits will include an element of compliance survey work (compliance with the parking restrictions) as well as Mystery Shopping, to check the performance of the Service Provider’s staff and the performance of services such as notice processing.
4.2.3 The Council would be keen to receive proposals from the Service Provider to fund and provide such independent audits, to include their frequency, scope and suggestions of independent bodies or companies who could be employed to perform them.
4.3 Blue Badge and/or Permit Fraud Enforcement 4.3.1 The Service Provider may be asked to assist the Council in the detection and prevention of Blue Badge or Permit fraud.
4.3.2 Proposals are invited for providing this service on an ad-hoc basis.
4.4 Consultancy Services
4.4.1 Proposals are invited for the provision of consultancy services, which will include all or some of the following:
- The implementation of minor changes to CPZs;
- Minor revisions to Traffic Management Orders;
- Investigation of locations in the borough where pavement parking may be permitted.
4.5 CCTV Enforcement
4.5.1 The Council may choose to implement CCTV enforcement for parking and moving traffic contraventions through the use of CCTV Smart cars.
4.5.2 Proposals are invited for the provision of vehicles and for carrying out this service, either on an ad-hoc basis, or a permanent basis.
4.6 Permits
4.6.1 The Council invites proposals for the provision of a virtual permits and vouchers to replace the existing paper permits, which will be available through on-line and personal or postal applications.
4.6.2 Proposals are also invited for the provision of a permit fraud detection service.
The Tenderer is invited to provide proposal(s) to demonstrate how they can meet the requirements or any requirement set out in this section. SCHEDULE G - CONTRACT PLAN
SEE ATTACHED DOCUMENT, TO BE COMPLETED BY THE TENDERER
(London Borough of Barnet - Contract Plan.doc) [ insert your organisation name here ]
CONTRACT PLAN
METHOD STATEMENTS FOR THE PROVISION OF PARKING ENFORCEMENT AND RELATED SERVICES CONTENTS
[SAMPLE HEADING 1] ................................................................. 3 [SAMPLE HEADING 2] ................................................................. 3 [SAMPLE HEADING 3] ................................................................. 3 [SAMPLE HEADING 1]
[SAMPLE HEADING 2]
[SAMPLE HEADING 3]
[Sample normal text]
[Attach appendices as necessary] SCHEDULE H - INSURANCE COVER FORM
I/We hereby certify that:-
The under-mentioned insurance policies are held by
(Name of Insured) ........................................................................................................
of ..............................................................................................................................
Employer's Liability Policy No .................................................................
With .........................................................................................................................
Public Liability Policy No ..............................................................................
The policies contain a Principal's Clause that will indemnify the Authority in respect of any claims that may arise in connection with the insured carrying out Services under a Contract with the Council.
The indemnity provided by the Public Liability Policy is not less than five million pounds (£5,000,000) for any one incident or any one claim and unlimited in total.
The Policy Premiums have been paid and the policies are in force until the dates shown below:-
Employers Liability ............................................................................................
Public Liability ....................................................................................................
Signed ....................................................................................................................
Name ......................................................................................................................
Position ..................................................................................................................
Name of Organisation ...........................................................................................
Date .......................................................................................................................
THE FORM MUST BE SIGNED BY AN INSURANCE COMPANY OR BROKER SCHEDULE I (1) - FORM OF BOND
London Borough of Barnet
BY THIS BOND WE (Contractors name):
whose registered office is situated at:
Address
(herinafter called "the Contractor") and: (Bondsman's name)
whose registered office is situated at:
Address
(hereinafter called "the Surety") are jointly and severally bound to the Mayor and Burgesses of the London Borough of Barnet, Town Hall, North London Business Park, Oakleigh Road South, London N11 1NP (hereinafter called "the Authority") in the sum of 10% of the contract value in pounds sterling for the payment of which sums the Contractor and the Surety bind themselves their successors and assigns jointly and severally by these presents.
WHEREAS by a certain Contract bearing even date with the above written Bond and made between the Authority of the one part and the Contractor of the other part the Contractor has contracted with the Authority to provide the Service mentioned therein in conformity with the provisions of the said Contract.
NOW THE CONDITION of the above written Bond is such that if the Contractor shall duly perform and observe all the terms provisions conditions and stipulations of the said Contract on the Contractor's part to be performed and observed according to the true purport intent and meaning thereof and if on default by the Contractor the Surety shall satisfy and discharge the damages sustained by the Authority thereby up to the amount of the above written Bond then this obligation shall be null and void but otherwise shall be and remain in full force and effect but no alteration of the terms of the said Contract made by agreement between the Authority and the Contractor or in the extent or nature of the Service to be performed thereunder and no allowance of time by the Authority or the Authorised Officer under the said Contract nor any forbearance or forgiveness in or in respect of any matter or thing concerning the said Contract on the part of the Authority of the Authorised shall in any way release the Surety from any liability under the above written Bond.
Sealed with our respective seals and dated this
........................ day of .................................. 2011
THE COMMON SEAL of the above bounden Contractor was hereunto affixed in the presence of:
Director
Secretary SCHEDULE I (2) - DRAFT DEED OF GUARANTEE
LONDON BOROUGH OF BARNET
THIS AGREEMENT is made the................day of.........................2011
BETWEEN:
whose registered office is situated at
(hereafter called "the Guarantor") of the one part and THE MAYOR AND BURGESSES OF THE LONDON BOROUGH OF BARNET acting by the Council of the said North London Business Park, Oakleigh Road South, London N11 1NP (hereinafter called "The Authority") of the other part
WHEREAS
(1) This Agreement is supplemental to a contract (hereinafter called "the Contract") bearing even date herewith and made between
(hereinafter called "the Contractor") of the one part and the Authority of the other part whereby the Contractor has agreed and undertaken to provide Goods and Services for the Authority upon the terms and conditions more particularly described therein.
(2) The Contractor is a subsidiary company of the Guarantor.
(3) The Guarantor has agreed to guarantee the due performance of the Contract in a manner hereinafter appearing now the Guarantor hereby agrees with the Authority as follows:-
1. If the Contractor (unless relieved from the performance by any clause of the Contract or by the decision of a tribunal of competent jurisdiction) shall in any respect fail to execute the Contract or commit any breach of its obligations thereunder or shall cease to exist then the Guarantor will indemnify the Authority against all losses damages costs and expenses which may be incurred by it by reason of any default on the part of the Contractor in performing and observing the agreements and provisions on its part contained in the Contract.
2. The Guarantor shall not be discharged or released from this guarantee by any agreement, conduct, omission, breach or repudiation by the Contractor or by any forbearance whatsoever on the part of the Authority.
IN WITNESS WHEREOF .......................................................... SCHEDULE J – TUPE SCHEDULE
SEE ATTACHED DOCUMENTS
(Schedule J (1) - TUPE Schedule 8 Jul 11 - Parking data FINAL.xls, password protected. Password to be emailed separately Schedule J (2) - Org Chart - Parking - 8 July 11 doc) Schedule J (2)
Parking Organisation Chart by post As recorded on SAP on 8 July 2011
--- Environment & Operations
|-- Director of Environment and Operations (out of scope)
|-- Assistant Director - E&O (out of scope)
|-- Parking Management (part of AD's remit)
|-- Parking Manager (out of scope as he is on a fixed term contract)
|-- Information Team
|-- Manager
|-- Post Team
|-- Administrative Officer
|-- 3 Administrative Assistants
|-- Information Team 1
|-- Team Leader
|-- 2 Information Officers (CCTV)
|-- 6 Information Officers
|-- Information Team 2
|-- Team Leader
|-- 9 Information Officers
|-- Policy & Projects
|-- Manager
|-- Parking Enforcement
|-- Manager
|-- 2 Control Desk Operators
|-- Maintenance Team
|-- Site Investigations Officer
|-- Assistant Site Investigations Officer
|-- Parking Maintenance Engineer
|-- CEO Team 1
|-- Civil Enforcement Supervisor
|-- 9 Civil Enforcement Officers
|-- CEO Team 2
|-- Civil Enforcement Supervisor
|-- 8 Civil Enforcement Officers
|-- CEO Team 3
- Civil Enforcement Supervisor
- 10 Civil Enforcement Officers
--- CEO Team 4
- Civil Enforcement Supervisor
- 8 Civil Enforcement Officers
--- CEO Team 5
- Civil Enforcement Supervisor
- 5 Civil Enforcement Officers
--- Payments
- Finance Officer
- 2 Finance Assistants SCHEDULE 9 – APPENDIX 1
REISSUED INVITATION TO TENDER AND COVERING EMAIL Dear Tenderers,
Further to ongoing discussions between the Council, relevant employees and unions, the Council has agreed to implement the attached enhanced terms and conditions in relation to pensions and employment matters. The relevant employment and pensions provisions of the ITT document and contract have been amended to take account of these requirements, as shown in the attached documents.
In addition, the Council has amended the evaluation criteria (weightings) contained in paragraph 6 of the ITT document by:
1. deleting the 1 mark given for the tenderer’s ability to “provide a suitable pension and assurances for all necessary payments” (entry 3.5 in table 1);
2. adding an additional 1 mark (making it in total 3 marks) for “effective recruitment, reward, training, development, retention and performance management processes, including identifying internal talent and future leaders” (entry 3.3 in table 1). The attached shows the amendments for this section of the evaluation table.
Please consider these requirements in your tender submission.
This information has been released to each tenderer at the same time.
As a result of these changes, the date for submission of tenders will be amended to 16th September 2011 at 12.00 hrs.
Yours sincerely,
[Signature]
Corporate Procurement Team London Borough of Barnet, North London Business Park, Oakleigh Road South, London N11 1NP Tel: [Redacted]
Barnet Online: www.barnet.gov.uk
Please consider the environment - do you really need to print this email? | | Effective HR practices & professional development and location issues | Weighting | |---|---------------------------------------------------------------------|-----------| | 3.1 | A strong commitment to compliance with current and future employment law, regulations, codes of practice and good HR practice going forward e.g. TUPE and mobilisation arrangements | 2 | | 3.2 | Any HR performance data provided is in line with best practice, for example, CIPD | 1 | | 3.3 | A description of effective recruitment, reward, training, development, retention and performance management processes, including identifying internal talent and future leaders | 3 | | 3.4 | An effective individual and collective employee communication and engagement approach throughout the organisation, including collective Industrial Relations. | 2 | | 3.5 | Proposals for operational base and any other premises | 1 | | 3.6 | Skills and knowledge of Contract Manager, senior staff and support structures | 1 | Transfer of Employees from the London Borough of Barnet
22nd August 2011
1. The London Borough of Barnet in support of the delivery of its Corporate Priorities has committed to a programme of Organisational Change, which includes outsourcing some of its activities to commissioned partners. This commissioning process includes a robust procurement process in which workforce matters are included within the award categories.
The process of outsourcing will involve the Transfer of Undertaking and Protection of Employment [TUPE] Regulations and the London Borough of Barnet and its partners will comply with all of their TUPE obligations, plus any other obligations which are extant at that time. The London Borough of Barnet has also committed to enhancing the TUPE terms as set out below.
2. Pensions 2.1 The London Borough of Barnet will ensure that employees transferred from the Council to a new employer will be able to continue in membership of the Local Government Pension Scheme [LGPS] by requiring that the new employer obtains Admitted Body Status [ABS] within LGPS. ABS permits employees to participate in LGPS should they choose to do so although they will no longer be employed by the Council.
2.2 The London Borough of Barnet will consider on a case by case basis, in conjunction with the new employer, whether new employees (that is employees of the new provider who were not transferred from the London Borough of Barnet) employed on work transferred from the Council will have the opportunity to join LGPS. This is a complex matter and there is no underpinning plan as to the proportion of new employees who may or may not become eligible to join LGPS where ABS has been agreed.
3. Terms and Conditions of Employment 3.1 The London Borough of Barnet will require that employees transferred from the Council to a new employer will not have their terms and conditions of employment varied by the new employer until after the first anniversary of the transfer from the Council to the new employer. Any changes to be made after the first anniversary of the transfer to the new employer will be the subject of consultation and negotiation, as appropriate, by the new employer with its recognised trade unions. In practical terms, a new employer will be able to make such changes as necessary to processes and procedures so as to reflect the new organisational structure immediately following transfer. 3.2 The cessation of the Code of Practice on Workforce Matters in Local Authority Service Contracts has removed the requirement on successful contractors to offer terms and conditions of employment to new employees who will work alongside former Council employees which are “no less favourable overall”. However, the attention of contractors is drawn to the requirements arising from equal pay and equal value matters that will need to be considered where this may be envisaged.
3.3 As a general principle, where employees move to an employer that is not a member of the National Joint Council for Local Government Services, then pay awards decided by that body will cease to apply. However, a recent case, Parkwood Leisure Ltd. vs. Alento-Heron and others, is considering this matter. The London Borough of Barnet will expect future employers to follow the outcome of this case and implement any necessary changes to their arrangements.
3.4 The London Borough of Barnet currently applies GLPC/ Hay job evaluation schemes and will expect new employers, where there is planned to be changes in job gradings, to utilise these methods up to and including the first anniversary of the transfer. Should the new employer plan to change the job evaluation systems applied, this will be subject, as appropriate, to consultation and negotiation with its recognised trade unions.
3.5 The London Borough of Barnet will discuss, prior to transfer to a new employer, on a contract by contract basis, with its recognised trade unions, the plans for relocation of employees and work to identify practicable and cost-effective solutions where these relocations affect current employees.
3.6 Where a former Council employee agrees, after transfer to a new employer, to a change in his or her terms of conditions, for example a promotion, this will be a matter for the individual. However, where collective changes are planned, the London Borough of Barnet expects that the new employer will conduct consultation and negotiation as appropriate with its recognised trade unions. 4 Organisational Culture
4.1 The London Borough of Barnet recognises the importance of a workplace that is safe, free from discrimination and where employees feel able to express their reasonable concerns without fear of recrimination. To support this, the London Borough of Barnet has produced policies that cover, amongst other areas,:
- Equalities Policy
- Health and Safety
- Whistle Blowing
Where employees are transferred from the London Borough of Barnet, new employers are expected to provide processes that are broadly equivalent to these.
4.2 It is expected that new employers will have available a Workforce Development, Education and Training Plan that will be accessible to the London Borough of Barnet and recognised trade unions prior to transfer.
4.3 The London Borough of Barnet has in place arrangements to provide support to employees experiencing difficulties in their personal or business life, it is expected that the new employer has similar arrangements in place and will be able to demonstrate these to the Council and recognised trade unions prior to transfer.
4.4 Where the London Borough of Barnet has transferred employees to a new employer, the new employer will be provided with the HR policies and procedures applicable to that group of employees that are current at the time of transfer. It is recognised that the new employer may need to make pragmatic changes to reflect its particular organisational structure. Any significant changes in the future will be the subject of consultation or negotiation with the new employer's recognised trade unions, as appropriate, by the new employer. 5 Trade Union and Employee Relations
5.1 The London Borough of Barnet has in place, with recognised trade unions, a Trade Union and Employee Relations Framework. This document sets out a number of processes which govern collective matters at the Council. The Council envisages that the new employer will utilise this Framework whilst dealing with collective matters, subject to pragmatic changes which reflect the organisational structure of the new employer, however, these matters will be a matter for the new employer to discuss with recognised trade unions.
5.2 The London Borough of Barnet provides a facility for the deduction of trade union subscriptions from salary for which the trade unions pay a fee. It is expected that potential new employers will continue this facility for the requisite fee for employees transferred from the London Borough of Barnet.
5.3 To ensure that the costs of agreed trade union release time from normal duties do not fall inequitably on one particular employer, a central fund will be created by the Council that employers will be required to contribute to. Employers will be able to access this fund under agreed terms to meet any costs jointly identified and incurred, by the Council and the new employer as appropriate.
5.4 It is expected that where reasonable notice is given and access does not cause operational difficulties, then trade union officials may normally be granted access to the premises of the new employer. It is recognised by all parties that this may mean that access to premises may need to be given to people who are not employees and suitable arrangements will need to be made.
22nd August 2011 DATED 30th April 2012
THE LONDON BOROUGH OF BARNET
and
NSL LIMITED
CONTRACT FOR THE PROVISION OF PARKING ENFORCEMENT AND RELATED SERVICES
SCHEDULES 10 TO 17 SCHEDULE 10
INTELLECTUAL PROPERTY
Council Software
External Software Contact with Civica plc as detailed in paragraph 1.9 of Schedule 2 (Specification).
Service Provider Software The Target Cost Schedule and the Contract Plan contains details of the prices and the method of delivery for the provision of Parking Services from NSL Ltd. NSL do not agree to the release of this information as it regarded the information as commercially sensitive and claims that the release would seriously undermine their competitive advantage and could seriously impact their commercial interests. SCHEDULE 11
TARGET COST
The main principle of Target Cost Contracts is that the Service Provider receives a share of any savings and pays any excess when the final cost is compared to the Target Cost. The provision is designed to motivate the Service Provider to investigate and propose changes in the way the Services are provided that will reduce the Actual Cost while maintaining or improving the service levels defined by the Key Performance Indicators.
- If the Service Provider proposes a change to the Services by way of innovation or efficiency that the Council's Representative accepts as a proposal for a change to the Services in accordance with Schedule 4 the Target Cost is altered to reflect the Change Control Note.
- Any saving resulting from the above is shared by the Council and the Service Provider as set out in the Schedule of Variables.
- The amount resulting from the agreed share will be included by the Service Provider in the next application for payment.
- Payment will be made in accordance with Clause 8.
- The new Target Cost resulting from the Change becomes effective from the next payment period as defined in Schedule 3.
- Performance Related Payments are not affected by these provisions.
Target Cost
2.1 The Target Cost of the Services will be shown against individual items in Schedule 11. The following shall be included:
2.1.1 Labour and staff, including all costs in connection therewith;
2.1.2 Supply and administration of materials, goods, storage, and costs in connection therewith;
2.1.3 Accommodation including all rates, Rents, cost of Utilities and Insurance for each location;
2.1.4 Equipment and transport costs in connection therewith
2.1.5 I.T. System costs and all installation and maintenance charges, telecommunications costs and staffing costs associated therewith;
2.1.6 All banking charges and arrangements for credit/debit card facilities related to the Service, where supplied by the Service Provider. A sample of a Target Cost Schedule is set out below. This may be varied by alteration or expansion depending on the Services required.
| Item | Type | Description | Quantity | Rate | Annual Target Cost | |------|------|-------------|----------|------|--------------------| | 1 | | Contract Manager | | | | | 2 | | Assistant Contract Manager | | | | | 3 | | Supervisor | | | | | 4 | | CEOs - Senior | | | | | 5 | | CEOs - Basic | | | | | 6 | | CEOs - Mobile | | | | | 7 | | Radio Controller | | | | | 8 | | Correspondence Staff | | | | | 9 | | Administrative staff including Quality and monitoring | | | | | 10 | | Payment Processing Staff | | | | | 11 | | Enforcement Support Staff | | | | | 12 | | Other - specify | | | |
**Labour and Staff**
**Rates to cover all on-costs including but not limited to benefits, NI, fares, accommodation where necessary etc.**
| Item | Type | Description | Quantity | Rate | Annual Target Cost | |------|------|-------------|----------|------|--------------------| | 1 | | Premises/Bases | | | | | 2 | | Telecommunications | | | | | 3 | | Data Communication | | | | | 4 | | Other specify | | | |
**Premises**
**Including all associated costs**
| Item | Type | Description | Quantity | Rate | Annual Target Cost | |------|------|-------------|----------|------|--------------------| | 1 | | IT - Hand Held Equipment | | | | | 2 | | Radios/Telecoms, cameras | | | | | 3 | | General office equipment | | | | | 4 | | Uniforms and associated equipment | | | | | 5 | | Vehicles - Trucks | | | | | 6 | | Vehicles - Vans | | | | | 7 | | Vehicles - Cars | | | | | 8 | | Vehicles - Two wheelers | | | | | 9 | | IT system - Initial costs should include comm lines for access to the IT system from the Managed Service site to the Service Provider sites and a back up internet facility | | | | | | | |---|---| | 10 | IT system - Costs for full provision from April 2014 and should include servers, comms lines for access to the IT system from the Managed Service site to the Service Provider sites and a back up internet facility. The Service Provider will need to consider the cost of access for other relevant third party users including the Council and other Council contractors. |
| Materials including delivery, distribution and removal as necessary | | |---|---| | 1 | Stationery, Postage and Documentation | | 2 | Fuels/Oils/Greases | | 3 | Cleaning |
| Services | | |---|---| | 1 | Provision of a cashless parking service by telephone | | 2 | Provision of a cashless parking service by other means |
| Miscellaneous Provisional items | | |---|---| | 1 | Provision of a Bond | | 2 | Start up costs |
| Annual Target Cost | | |---|---| | | 0 |
| Maximum (up to 20%) addition for Performance related Payment | | |---|---| | | % |
| CONTRACT SUM | | |---|---| | | 0.00 | SCHEDULE 12
CONTRACT PLAN NSL Ltd
CONTRACT PLAN
METHOD STATEMENTS FOR THE PROVISION OF PARKING ENFORCEMENT AND RELATED SERVICES The Target Cost Schedule and the Contract Plan contains details of the prices and the method of delivery for the provision of Parking Services from NSL Ltd. NSL do not agree to the release of this information as it regarded the information as commercially sensitive and claims that the release would seriously undermine their competitive advantage and could seriously impact their commercial interests. SCHEDULE 13
Executed Form of Tender, Certificate of Confidentiality, Non-collusion and Non-collusion, Insurance Cover Form and completed Tender Submission Checklist. SCHEDULE D - CERTIFICATE OF CONFIDENTIALITY, NON-COLLUSION AND NON-CANVASSING
LONDON BOROUGH OF BARNET
1. UNDERTAKINGS
In consideration of the Council having invited the Tenderer to tender for the provision of parking services, the Tenderer undertakes as follows:
1.1 to accept the restrictions concerning the confidentiality of information provided to the Tenderer set out in paragraph 10 of the invitation to Tender;
1.2 to accept the warranties and disclaimers set out paragraph 6 of the invitation to Tender; and
1.3 to comply with the conditions of non-collusion and non-canvassing as set out in paragraph 5.6 of the invitation to Tender.
2. APPLICATION
2.1 The Tenderer accepts that the undertakings set out in paragraph 1 above apply to all parties within its consortium and its constituent companies, advisers, potential sub-service providers and any other person or body to which it may pass all or part of any information relating to the procurement process.
2.2 The Tenderer undertakes to ensure that all of the persons and bodies mentioned in paragraph 2.1 are made aware of the restrictions set out in paragraph 1 and to comply with them.
3. BREACH
The Tenderer understands that a breach of the conditions set out in paragraph 1 and paragraph 2 above may result in the Council excluding it from further consideration in the procurement process.
Signed by the Tenderer's authorised representative
[Signature]
Name: [Redacted]
Position: [Redacted]
Date: 17th January 2021 3. TUPE
2.1 The Tenderer confirms that it has taken legal advice on the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
2.2 The Tenderer further confirms that, in its view, TUPE are not likely to apply to the Contract and that this is reflected in the Target Cost Schedule.
3. THE CONTRACT
In the event that the Tender is successful, the Tenderer undertakes to execute the Contract as soon as possible.
4. CONFIDENTIALITY
The Tenderer confirms that the details of this Tender have not been passed on to any person, except as authorised in the invitation to Tender.
5. COSTS
The Tenderer acknowledges that the Council will not pay or be liable for any expenses or costs incurred by the Tenderer in connection with the preparation and submission of this Tender.
6. PARENT COMPANY GUARANTEE / PERFORMANCE BOND
The Tenderer acknowledges that an undertaking to provide a Parent Company Guarantee (if applicable) and/or a performance bond will be required.
Signed by the Tenderer's authorised representative:
[Redacted]
Name: [Redacted]
Position: [Redacted]
Address: [Redacted]
Telephone number: [Redacted]
Email address: [Redacted]
Date: [Redacted] SCHEDULE H - INSURANCE COVER FORM
We hereby certify that:
The undermentioned insurance policies are held by
(Name of Insured) NSL Limited
of 4th Floor, Westgate House, Westgate, London, W15 1YY
Employer's Liability Policy No
With
Public Liability Policy No
The policies contain a Principle's Clause that will indemnify the Authority in respect of any claims that may arise in connection with the insured carrying out Services under a Contract with the Council.
The indemnity provided by the Public Liability Policy is not less than five million pounds (£5,000,000) for any one incident or any one claim and unlimited in total.
The Policy Premiums have been paid and the policies are in force until the dates shown below:
Employers Liability 1st March 2012
Public Liability 1st March 2012
Signed
Name
Position Client Manager
Name of Organisation
Date 8th August 2011
THE FORM MUST BE SIGNED BY AN INSURANCE COMPANY OR BROKER 14. TENDER SUBMISSION CHECKLIST
Name of Tenderer: NSL Ltd.
The Tenderer has submitted the following information with its Tender:
| Document | Please tick if enclosed | |--------------------------------------------------------------------------|-------------------------| | Form of Tender (Schedule A) | ✓ | | Target Cost Schedule (Schedule C) | ✓ | | Certificate of Confidentiality, Non-Collusion and Non-Convassing (Schedule D) | ✓ | | Contract Plan (Schedule E in response to questions in Schedule F) | ✓ | | Insurance Cover Form (Schedule H) | ✓ | SCHEDULE 14
FORM OF LICENCE
Not Required SCHEDULE 15
BULK TRANSFER TERMS
1 Interpretation and definitions
In this Schedule, unless the context otherwise requires, the following terms shall have the meanings given to them below:
Actuary's Letter means the letter from the Authority's Actuary, a copy of which has been attached to this Schedule;
Authority's Actuary means Barnett Waddingham LLP of 163 West George Street, Glasgow G2 2JJ, appointed by the Authority for the purposes of this Schedule;
AVCs means AVCs or SCAVCs as defined in the LGPS Regulations;
Due Date means the date agreed between the Fund and the Service Provider's Scheme once the last of the conditions in paragraph 3.6 of this Appendix has been satisfied;
Fund means The London Borough of Barnet Local Government Pension Scheme Fund within the LGPS;
Service Provider's Actuary means [name of actuary] of [name of firm], or another actuary appointed by the Service Provider for the purposes of this Schedule;
Service Provider's Scheme means the pension scheme or schemes nominated by the Service Provider in accordance with paragraph 13.3.7 of Schedule 15;
Transfer Amount means the amount or amounts referred to in paragraph 3.1 of this Schedule;
Transferring Member means an Eligible Employee who agrees to a transfer of benefits being made for him or her from the Fund to the Service Provider's Scheme under paragraph 2 of this Schedule.
2 The Service Provider's Scheme
The Service Provider shall invite each Eligible Employee who joins the Service Provider's Scheme in accordance with Clause 13.3.7 of this Contract to consent to a transfer of benefits being made for him from the Fund to the Service Provider's Scheme. The Service Provider and/or relevant Sub-Service Provider must issue this invitation no later than one (1) month after the Relevant Transfer. The invitation must be in a form acceptable to the Authority (such acceptance not to be unreasonably withheld or delayed by the Authority) and which complies with any requirements of the LGPS Regulations. Any Eligible Employee wishing to consent to a transfer of benefits must notify the Service Provider of this consent in writing no later than three (3) months after the date of the invitation. The Service Provider shall provide the Authority with the names of the Transferring Members no later than four (4) months after the Relevant Transfer Date.
3 Transfer payment from the Fund
3.1 The Authority shall use reasonable endeavours to ensure that it transfers from the Fund to the Service Provider’s Scheme on the Due Date an amount in respect of the relevant Transferring Members’ service in the Fund before the Relevant Transfer calculated in accordance with the Actuary’s Letter and the LGPS Regulations.
3.2 As soon as reasonably practicable following the Relevant Transfer, the Service Provider shall promptly provide all data within its possession or under its control which the Authority’s Actuary may require for the calculation of the Transfer Amount and shall warrant that this data is in all material respects true, complete and accurate.
3.3 As soon as reasonably practicable following the Relevant Transfer, the Authority shall promptly provide all data within their possession or under their control which the Authority’s Actuary may require for the calculation of the Transfer Amount and shall warrant that this data is in all material respects true, complete and accurate.
3.4 The Authority shall use their reasonable endeavours to procure that:
3.4.1 as soon as reasonably practicable after the Authority’s Actuary has been provided with the necessary data and information, the Authority’s Actuary shall calculate the Transfer Amount in accordance with the Actuary’s Letter and the LGPS Regulations; and
3.4.2 within one (1) week of completing this calculation, the Authority’s Actuary shall notify the Service Provider’s Actuary in writing of the particulars of the calculation and the data on which the calculation is based.
3.4.3 The Service Provider’s Actuary will then have one (1) month (or such longer period as the parties may agree) from the date on which those particulars and data have been supplied to him in which to object in writing that the calculation is incorrect or not in accordance with the Actuary’s Letter. The calculation shall be final and binding on the parties if the Service Provider's Actuary raises no objection within this stated period.
3.5 If the Service Provider's Actuary objects in writing under paragraph 3.4 of this Schedule and the Authority's Actuary and the Service Provider's Actuary cannot subsequently agree the Transfer Amount within one (1) month (or such longer period as shall be agreed between the parties) of the objection, then the amount shall be determined by an independent actuary to be nominated by the Authority and the Service Provider jointly or, if they cannot agree, by the President of the Institute of Actuaries on application by either party. The independent actuary shall act as an expert and not as an arbitrator, and his decision shall be final and binding on the parties. The independent actuary's costs shall be payable equally by the Authority and the Service Provider.
3.6 Payment to the Service Provider's Scheme of the Transfer Amount shall only be made on the following conditions:
3.6.1 the Transfer Amount has been agreed or determined under paragraph 3.4 or 3.5 of this Schedule and in accordance with the LGPS Regulations;
3.6.2 HM Revenue & Customs has consented to the making of the payment (which consent the Authority and the Service Provider and/or relevant Sub-Service Provider shall use reasonable endeavours to obtain);
3.6.3 the Service Provider and/or relevant Sub-Service Provider has complied with all its obligations under this Schedule; and
3.6.4 the trustees of the Service Provider's Scheme have confirmed in writing that:
(a) a payment should be made in accordance with the LGPS Regulations and that they shall accept payment on the terms set out in paragraph 4 of this Schedule;
(b) they shall accept liability for each Transferring Member's accrued contracted out rights under the Fund; and
(c) they shall accept the Transfer Amount in full and final settlement of all claims against the Fund in respect of each Transferring Member. Past service benefits
The Service Provider shall (and shall procure that each relevant Sub-Service Provider shall) ensure that the Service Provider’s Scheme provides in respect of each Transferring Member such benefits as the Authority’s Actuary certifies to be of actuarially equivalent value (in accordance with the Actuary’s Letter) to the benefits which would have been payable under the LGPS in respect of the Transferring Member’s service before the Relevant Transfer if he had remained a member of the LGPS.
Additional voluntary contributions
Nothing in this Schedule shall apply to AVCs or to benefits secured by them. However, the Authority shall use reasonable endeavours to ensure that the assets representing each Transferring Member’s AVCs in the Fund (if any) shall be transferred to the Service Provider’s Scheme. The Service Provider shall (and shall procure that each relevant Sub-Service Provider shall) ensure that the Service Provider’s Scheme provides benefits for each relevant Transferring Member which are equivalent to the assets transferred.
No assistance
The Service Provider shall not encourage or initiate or assist or facilitate any action or provide any financial assistance for the purpose of requiring the Fund to pay an amount larger than the Transfer Amount to the Service Provider’s Scheme in respect of the Transferring Members.
Exit Provisions
7.1 The Service Provider undertakes to the Authority (for the benefit of the Authority themselves and for the Authority as agent and trustee for the benefit of the Eligible Employees) that on:
7.1.1 the expiry or termination of this Contract; or
7.1.2 the employment of any Eligible Employee transferring to a New Employer in accordance with Clause 13.3.12(a) of this Contract (or otherwise).
7.1.3 the Service Provider shall procure that the trustees of the Service Provider’s Scheme offer bulk transfer terms in respect of the relevant Eligible Employees’ service in the Service Provider’s Scheme to the pension schemes of the Authority, any future service provider, or any New Employer (as applicable) which are no less favourable (in the opinion of the Authority’s Actuary or an actuary appointed by the Authority) than the bulk transfer terms set out in the Actuary’s Letter. 7.2 If the transfer payment paid by the trustees of the Service Provider's Scheme is less (in the opinion of the Authority's Actuary or an actuary appointed by the Authority) than the transfer payment which would have been paid had paragraph 7.1 of this Schedule been complied with, the Service Provider shall pay to the Authority, any future service provider or any New Employer (as appropriate) (or as such person shall direct) the amount of the difference.
3 Authority's Costs
Any costs of the Authority necessarily and reasonably incurred in connection with this Schedule shall be borne by the Service Provider. SCHEDULE 16
Transfer of Employees from the London Borough of Barnet
22nd August 2011
1. The London Borough of Barnet in support of the delivery of its Corporate Priorities has committed to a programme of Organisational Change, which includes outsourcing some of its activities to commissioned partners. This commissioning process includes a robust procurement process in which workforce matters are included within the award categories.
The process of outsourcing will involve the Transfer of Undertaking and Protection of Employment (TUPE) Regulations and the London Borough of Barnet and its partners will comply with all of their TUPE obligations, plus any other obligations which are extant at that time. The London Borough of Barnet has also committed to enhancing the TUPE terms as set out below.
2. Pensions
2.1 The London Borough of Barnet will ensure that employees transferred from the Council to a new employer will be able to continue in membership of the Local Government Pension Scheme (LGPS) by requiring that the new employer obtains Admitted Body Status (ABS) within LGPS. ABS permits employees to participate in LGPS should they choose to do so although they will no longer be employed by the Council.
2.2 The London Borough of Barnet will consider on a case by case basis, in conjunction with the new employer, whether new employees [that is employees of the new provider who were not transferred from the London Borough of Barnet] employed on work transferred from the Council will have the opportunity to join LGPS. This is a complex matter and there is no underpinning plan as to the proportion of new employees who may or may not become eligible to join LGPS where ABS has been agreed.
3 Terms and Conditions of Employment
3.1 The London Borough of Barnet will require that employees transferred from the Council to a new employer will not have their terms and conditions of employment varied by the new employer until after the first anniversary of the transfer from the Council to the new employer. Any changes to be made after the first anniversary of the transfer to the new employer will be the subject of consultation and negotiation, as appropriate, by the new employer with its recognised trade unions. In practical terms, a new employer will be able to make such changes as necessary to processes and procedures so as to reflect the new organisational structure immediately following transfer.
3.2 The cessation of the Code of Practice on Workforce Matters in Local Authority Service Contracts has removed the requirement on successful contractors to offer terms and conditions of employment to new employees who will work alongside former Council employees which are "no less favourable overall". However, the attention of contractors is drawn to the requirements arising from equal pay and equal value matters that will need to be considered where this may be envisaged.
3.3 As a general principle, where employees move to an employer that is not a member of the National Joint Council for Local Government Services, then pay awards decided by that body will cease to apply. However, a recent case, Parkwood Leisure Ltd. vs. Aemo-Herron and others, is considering this matter. The London Borough of Barnet will expect future employers to follow the outcome of this case and implement any necessary changes to their arrangements.
3.4 The London Borough of Barnet currently applies GLPC/ Hay job evaluation schemes and will expect new employers, where there is planned to be changes in job gradings, to utilise these methods up to and including the first anniversary of the transfer. Should the new employer plan to change the job evaluation systems applied, this will be subject, as appropriate, to consultation and negotiation with its recognised trade unions.
3.5 The London Borough of Barnet will discuss, prior to transfer to a new employer, on a contract by contract basis, with its recognised trade unions, the plans for relocation of employees and work to identify practicable and cost-effective solutions where these relocations affect current employees.
3.6 Where a former Council employee agrees, after transfer to a new employer, to a change in his or her terms of conditions, for example a promotion, this will be a matter for the individual. However, where collective changes are planned, the London Borough of Barnet expects that the new employer will conduct consultation and negotiation as appropriate with its recognised trade unions.
4 Organisational Culture 4.1 The London Borough of Barnet recognises the importance of a workplace that is safe, free from discrimination and where employees feel able to express their reasonable concerns without fear of recrimination. To support this, the London Borough of Barnet has produced policies that cover, amongst other areas:
- Equalities Policy
- Health and Safety
- Whistle Blowing
Where employees are transferred from the London Borough of Barnet, new employers are expected to provide processes that are broadly equivalent to these.
4.2 It is expected that new employers will have available a Workforce Development, Education and Training Plan that will be accessible to the London Borough of Barnet and recognised trade unions prior to transfer.
4.3 The London Borough of Barnet has in place arrangements to provide support to employees experiencing difficulties in their personal or business life, it is expected that the new employer has similar arrangements in place and will be able to demonstrate these to the Council and recognised trade unions prior to transfer.
4.4 Where the London Borough of Barnet has transferred employees to a new employer, the new employer will be provided with the HR policies and procedures applicable to that group of employees that are current at the time of transfer. It is recognised that the new employer may need to make pragmatic changes to reflect its particular organisational structure. Any significant changes in the future will be the subject of consultation or negotiation with the new employer's recognised trade unions, as appropriate, by the new employer.
5 Trade Union and Employee Relations
5.1 The London Borough of Barnet has in place, with recognised trade unions, a Trade Union and Employee Relations Framework. This document sets out a number of processes which govern collective matters at the Council. The Council envisages that the new employer will utilise this Framework whilst dealing with collective matters, subject to pragmatic changes which reflect the organisational structure of the new employer, however, these matters will be a matter for the new employer to discuss with recognised trade unions. 5.2 The London Borough of Barnet provides a facility for the deduction of trade union subscriptions from salary for which the trade unions pay a fee. It is expected that potential new employers will continue this facility for the requisite fee for employees transferred from the London Borough of Barnet.
5.3 To ensure that the costs of agreed trade union release time from normal duties do not fall inequitably on one particular employer, a central fund will be created by the Council that employers will be required to contribute to. Employers will be able to access this fund under agreed terms to meet any costs jointly identified and incurred, by the Council and the new employer as appropriate.
5.4 It is expected that where reasonable notice is given and access does not cause operational difficulties, then trade union officials may normally be granted access to the premises of the new employer. It is recognised by all parties that this may mean that access to premises may need to be given to people who are not employees and suitable arrangements will need to be made.
22nd August 2011 SCHEDULE 17
Formula for calculating contribution to Trade Union Fund
Trade Union Facility Time Charging Mechanism
Withheld Dated 30th April 2011
The Mayor and Burgesses of the London Borough of Barnet
- and -
NSL Limited
Contract for the Provision of Parking Enforcement and Related Services
Sheila Saunders LL.B (Hons.) Acting Head of Legal London Borough of Barnet North London Business Park Oakleigh Road South London N11 1NP
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fda9a5406201d5a5d7d23dc067f10ba387e5348f | Contents Introduction ........................................................................................................................................... 3 Loss of meaning .................................................................................................................................... 3 Likely level of public interest .............................................................................................................. 4 Effort required to redact .................................................................................................................... 4 Risk of error .......................................................................................................................................... 4 Introduction
Redaction is the separation of disclosable from non-disclosable information by the blanking out individual words, sentences or paragraphs or the removal of whole pages or documents prior to the release of the record. In the paper environment some organisations will know redaction as extracts, when whole pages are removed, or deletions, where only a section of text is affected. Information that is redacted but transferred to The National Archives closed forms an extract that is entered onto Discovery, The National Archives’ catalogue, and so may be the subject of an Freedom of Information (FOI) request to review its ‘closed’ status.
Part 2 of the code of practice on the management of records under section 46 of the Freedom of Information (FOIA) advises departments to consider the redaction of public records on transfer if this means parts of records can be released. Separate guidance on redacting records (the ‘redaction toolkit’) is available.
Time spent on the redaction of a record should be proportionate to its historical value and the resources available for transfer preparation as a whole. When considering redaction for transfer to archives (as opposed to in response to FOI requests) there is no definitive policy on when redaction is necessary. Departments should be aware that devoting large amounts of resource to heavy redaction in one series of records may significantly delay the transfer of other open records for public use and compliance with the Public Records Act 1958 (PRA).
When redaction is being considered several factors should be taken into account. The department must consider at what point the level of redaction required and the nature of the information justify individual word deletions, whole-page extraction, or closure of the whole record. Departments may need to reconsider the balance if redaction of individual records takes more than two hours. Factors include:
Loss of meaning
The ultimate test is whether or not redaction will result in a record that still has meaning. It is difficult to quantify this in terms of percentages as it will depend on the nature of the information. If more than a third of information needs removing from a document then the department should check that the releasable information is likely to make sense to a researcher. Likely level of public interest
When a high-profile subject appears on Discovery, The National Archives’ catalogue, whole record closure or retention is likely to prompt FOI requests from the public, leading to possible redaction soon after transfer if the whole record is not exempt. It would be more manageable to do such extractions/redactions before transfer, without the statutory deadlines of processing an FOI request, so a record on a major historical event might justify considerably more than 2 hours' effort on redaction before transfer if the content is of high public interest, whereas it may be difficult to justify spending considerable time redacting files if they are likely hardly ever to be consulted.
Effort required to redact
What is the quantity of information that requires redaction? If it is a significant proportion then the whole record can be closed. This must to some extent be considered proportionately to the size of the piece – one hour spent on a slim report may be excessive, whereas on a 400-page file it may not. Removing pages as extracts would be quicker than making individual deletions on pages. Departments should also consider how much meaning would be left in a file after the deletions have been made.
Risk of error
Redaction always carries the risk of something sensitive being overlooked, and therefore inadvertently released. High volumes of redaction within a single piece increase the risk of a slip in concentration, especially where it is repetitive, for example, the deletion of all references to a list of people or places. A high volume of scattered but repetitive sensitivities should be considered a high risk. It may be safer to extract whole pages. Departments should consider how experienced staff are at carrying out redaction and what the possible consequences of human error will be if mistakes are made.
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bcf04b10485881100ecf2d024c08453c97bbd42e | Redaction toolkit
Editing exempt information from paper and electronic documents prior to release
Last updated: April 2016
© Crown copyright 2012
You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence or email [email protected].
Where we have identified any third-party copyright information, you will need to obtain permission from the copyright holders concerned.
This publication is available for download at nationalarchives.gov.uk. Contents
01. Purpose of this toolkit ................................................................. 4
02. Who is this guidance for? ............................................................. 5
03. What is redaction? ........................................................................ 5
04. Principles of redaction ................................................................. 5
05. Identifying material for redaction .................................................. 6
06. Keeping records of redaction work ............................................... 7
07. Redaction for transfer to The National Archives ............................. 8 Paper records ............................................................................. 9 Electronic records ...................................................................... 10
08. Transfer of closed extracts to The National Archives or places of deposit (unredacted originals) ................................................................. 10
09. Storage of retained extracts .......................................................... 10
10. Tracking of retained redactions .................................................... 11
11. Further information .................................................................... 12 Appendix 1 ..................................................................................... 14 Redaction of documents in hard copy ........................................... 14 Methods of redaction ............................................................... 14 Appendix 2 ..................................................................................... 16 Redaction of electronic records ....................................................... 16 Issues in redacting electronic records ......................................... 16 Approaches to redaction ............................................................ 17 Traditional redaction ................................................................. 17 Conversion ................................................................................ 18 Roundtrip redaction .................................................................. 18 Current best practice ....................................................................... 18 Electronically redacting documents .......................................... 18 Redacting PDF documents ..................................................... 19 Roundtripping ...................................................................... 19 Redaction toolkit for paper and electronic documents
Redacting word-processed documents ................................................................. 20 Redacting spreadsheets ...................................................................................... 20 Conventional redaction methods ........................................................................ 21 Appendix 3 ........................................................................................................... 23 Sample of simple form for recording redaction decisions .................................... 23 Example of form to record decisions and pass on information to document editors carrying out redaction ........................................................................................................ 23
1. **Purpose of this toolkit**
1.1 This toolkit has been produced to provide guidance on editing exempt material from information held by public bodies. Its purpose is to promote good records management practice across the public sector and to assist in the implementation of the Freedom of Information Act. Under the Act, authorities are required to supply information to anyone that requests it unless an exemption applies, and even then, there is a further requirement, in most cases, to consider whether the public interest lies in providing the information or maintaining the exemption.
The guidance also covers the release of records for reasons other than Freedom of Information, for example under Parliamentary business. In some of these cases redaction may be necessary.
1.2 The Code of Practice on Records Management, issued under S 46 of the Freedom of Information (FOI) Act, states that where a complete document cannot be made available on transfer ‘Authorities should consider whether parts of records might be released if the sensitive information were redacted’ (Para 18.5).
While this applies only to public records being transferred to record offices, it nonetheless serves as a general reminder of one of the basic features of the Act, namely the right of access is to information not records or documents.
1.3 The guidance covers a number of redaction methods for presenting information in hard copy (see Appendix 1). It examines several processes, but does not recommend any overall, as it is for each authority to decide which best applies to its organisational demands and the resources it has available.
1.4 It also provides general advice and guidance on technical issues related to the preservation and management of electronic records. It provides detailed guidance on methods for securely redacting electronic records of all types (see Appendix 2). 2. **Who is this guidance for?**
2.1 This toolkit is aimed at all authorities subject to the Freedom of Information Act (FOIA), Data Protection Act (DPA) and Environmental Information Regulations (EIRs), from central Government departments to local, police, health and education authorities.
2.2 If you are unsure whether your organisation is affected by FOI, there is a list in Schedule I to the Act at [www.legislation.gov.uk/ukpga/2000/36](http://www.legislation.gov.uk/ukpga/2000/36).
3. **What is redaction?**
3.1 Redaction is the separation of disclosable from non-disclosable information by blocking out individual words, sentences or paragraphs or the removal of whole pages or sections prior to the release of the document. In the paper environment some organisations will know redaction as extracts when whole pages are removed, or deletions where only a section of text is affected.
4. **Principles of redaction**
4.1 Always carry out redaction on a copy of the original record, whether paper or electronic, never on the record itself. This ensures that while the redacted information is permanently removed from the copy of the record (which can then be made accessible) the original text remains in the original record. Redaction should never result in the complete removal of text or information from a record.
4.2 Redaction is carried out in order to edit exempt details from a document. Use it when one or two individual words, a sentence or paragraph, a name, address or signature needs to be removed.
4.3 If so much information has to be withheld that a document becomes nonsensical, the entire document should be withheld. In the case of paper documents the same principle should apply to individual pages.
4.4 When undertaking redaction, reviewers should consider whether any other factors are important for the understanding of the material. For example, if colour makes meaning clear in a paper document, a redacted colour copy should be released. 4.5 Redaction should be performed or overseen by staff that are knowledgeable about the records and can determine what material is exempt. If those identifying such material do not carry out the redaction themselves, their instructions must be specific - so for example: ‘Memo dated …, paragraph no…, line starting… and ending…’ and so on.
4.6 Under FOI, applicants may request information presented in electronic form. For paper documents, this will usually mean scanning the redacted version of the material. If, however, the level of resources required to do the scanning would make this unduly onerous, the FOIA allows the organisation to set aside the applicant’s stated preference on the grounds of practicability (S 11).
The Act also permits that a summary of the document can be prepared. If a large percentage of the document needs to be redacted, this option may be worth considering as a more viable alternative to redaction.
4.7 Organisations should bear in mind that exemption decisions will be subject to appeal. For more information, see Section VI of the Code of Practice under Section 45 of the FOI Act www.justice.gov.uk/downloads/guidance/freedom-and-rights/foi-section45-code-of-practice.pdf
5. Identifying material for redaction
5.1 All organisations should have staff able to identify information that may be exempt under the Freedom of Information Act and the Environmental Information Regulations. Ideally they should have a good knowledge of the records being reviewed for release.
5.2 All staff should be aware of the categories of information that should not be released under the Data Protection Act.
Guidance on exemptions is available in the FOI section of the Ministry of Justice website www.justice.gov.uk/guidance/freedom-and-rights/freedom-of-information/exemptions-guidance.htm and on the website of the Office of the Information Commissioner www.ico.gov.uk/for_organisations/freedom_of_information.aspx
5.3 To comply fully with requests for information, redact exempt material only. A whole sentence or paragraph should not be removed if only one or two words are non- disclosable, unless release would place the missing words in context and make their content or meaning clear.
In the case of electronic records close examination of the internal bit stream of the file can reveal the length of the redacted content. Take great care to ensure that the non-disclosable material cannot be deduced. This may mean disguising the size and shape of the redacted content. This is especially the case where the non-disclosable information appears in several locations within the file, and where there is an increased chance of deciphering such redacted content using a combination of location pattern, bit length and the associated unredacted text.
5.4 Reviewers should consider that earlier statements in a document might suggest the content of removed material. For example, if a paragraph refers to reports from overt sources, and the following paragraph refers to reports from covert sources, as well as removing the words ‘covert sources’, ‘overt sources’ would also need to be removed or the meaning of the missing words from the second paragraph could be inferred.
5.5 Reviewers should also check records for other copies of the same documents so that they carry out redaction consistently. They should check indexes to ensure that they do not contain details of the redacted material.
6. Keeping records of redaction work
6.1 Once reviewers have identified redactions, agreed with any other interested parties, decisions need to be recorded. For some organisations, simply keeping a copy of the released copy of a document may be enough, with a note explaining the reasons for redaction.
6.2 If multiple requests are made for the same information, this will also show what decisions have been made in prior requests. If more detailed records of decisions are required, this can be done on a standard form recording as much of the following information as is relevant:
- An identifying reference, registered file number, case file number or electronic document reference. This identifier can be anything that suits the organisation concerned, but must enable easy identification and retrieval of the document. The format chosen should be used consistently
- Precise details of the material removed. This need not describe the content, but should show which section of the document has been withheld - for example, ‘paragraph 2 of page 4’. However, if only one or two words are being withheld, these details must be exact to enable precise identification. This might be achieved by keeping a copy of the original document, with the details to be redacted highlighted, as well as the redacted version
- The reason for non-disclosure of the information. If one or more FOI exemptions apply, these should all be noted, along with the particular reasons that apply in each case
- Any comments made by reviewers and other organisations or individuals consulted
There are sample forms for recording decisions at Appendix 3 of this toolkit.
Once this has been done, the document can be redacted.
7. **Redaction for transfer to The National Archives**
7.1 Public record bodies transferring records to The National Archives or a place of deposit (another archives office authorised to hold public records), whilst using the same redaction processes as for any organisation, must nevertheless bear other factors in mind.
7.2 Record decisions in detail - the transferring department needs to be able to track and retrieve any material withheld from The National Archives under Section 3(4) of the Public Records Act 1958. The fact that material has been extracted will be shown on The National Archives online catalogue in the form of items giving the identifying reference (but not details of the material itself) and in most cases the justification for redaction. This may increase the likelihood of an FOI request being made against it. It is therefore all the more essential that such material can be identified and retrieved. 7.3 Once reviewers have identified material for redaction, a record of decisions should be kept showing:
- an identifying reference such as a National Archives reference, registered file number, case file number or electronic document reference
- precise details of the material removed (this need not describe the content, but should clarify which section of the document has been withheld – for example ‘paragraph 2 of page 4’. However, if only one or two words are being withheld, these details must be exact to enable precise identification)
- the reason for non-disclosure of the information. If one or more FOI exemptions apply, they should all be noted, along with the particular reasons they apply in this case
- the reason for withholding the information from The National Archives, if applicable (retention under S 3(4) of the Public Records Act); in other words, the criterion and the reason it applies
- any comments made by reviewers and other organisations or individuals consulted, bearing in mind that records may be the subject of further requests
7.4 If the reviewer passes the record on for redaction, this form can also serve as a method of conveying redaction instructions. Retain the record of decisions until the full record is transferred to The National Archives or released.
**Paper records**
7.5 Once redaction is complete, mark the redacted copy placed on the file showing under what authority the redaction has been effected – for example ‘Retained under S 3(4) of the Public Records Act’ or ‘Closed under FOI Exemption S 42’.
Departments redacting a significant volume of material may find it beneficial to procure stamps for this purpose. Alternatively, providing they cannot easily be removed, attach good quality labels, showing the same information. 7.6 Redacted sheets within a larger document can be more readily identified if photocopied onto brightly coloured paper (green or blue for instance). Although not mandatory, it will make it clear to departmental staff using the record for administrative purposes in future that further redacted information had been withheld at the time of transfer and will be available elsewhere. It also makes it easier to locate the relevant page at The National Archives when the full version is released and replaced in the original file.
7.7 The closed extract should be tagged into an acid-free folder with its The National Archives item reference clearly marked on the front – DEFE 19/143/1 and so on.
Store it in a secure cabinet or room.
**Electronic records**
7.8 The Information Management and Practice department coordinate the transfer of electronic records to The National Archives, assisted by the Digital Preservation department. For up to date information and guidance on digital record transfers, see: nationalarchives.gov.uk/documents/information-management/digital-transfer-guidance.pdf
8. **Transfer of closed extracts to The National Archives or places of deposit (unredacted originals)**
8.1 Redactions closed under FOI exemptions should be transferred to The National Archives once the Advisory Council on National Records and Archives has agreed the exemptions.
In the case of paper records, this should be done ideally at the same time as the transfer of the parent piece; the extract file should be boxed separately. If this is not possible due to pending consideration by the Advisory Council, the extract may remain with the department until the Advisory Council has completed this task.
9. **Storage of retained extracts**
9.1 Place retained paper extracts in an acid-free folder marked with their catalogue item reference as required for transfer to The National Archives. It might be useful to attach a copy of the redacted access version for future reference. This will particularly aid FOI requests, as it will allow reviewers to see at a glance the redacted material being applied for.
9.2 Keep these extract folders in an organised system to enable easy recovery in the event of an FOI request. For example, file records from each National Archives class together, ordering by year and either The National Archives or departmental reference within that, or noting a shelf location on an extract tracking system.
9.3 Keep retained electronic (unredacted) documents in a secure area of the electronic file plan or local area network. They should be accessible only to designated staff (for example the Freedom of Information Officer and Departmental Record Officer).
10. Tracking of retained redactions
10.1 Public record bodies need to know what information they hold, including what has been retained under S 3(4) of the Public Records Act, and they need to be able to retrieve it easily to ensure compliance with FOI and EIRs.
10.2 Ideally departments and agencies should have some method of recording their retained paper and electronic extracts, showing some or all of the following information:
- The National Archives reference of the parent piece from which the extract has been removed, FO 371/148909 and so on. The extract itself should be given an item number that corresponds to The National Archives’ catalogue entry for the extract (such as FO 371/148909/1)
- the former departmental file reference
- the reason for retention
- the date for re-review
10.3 Create a brief description of the extract’s subject matter for use in keyword searches. This will be an effective aid in answering requests for information efficiently. Records managers should be aware that records of redaction decisions are likely to be the subject of FOI requests themselves, and as such, should word these descriptions carefully. However, the essential aspect of this is that the details must allow the information to be located and retrieved. If a request for these records is made, exemptions can be applied to them if necessary.
10.4 Databases and spreadsheets are an obvious method for storing, tracking and interrogating such information. They also provide easy methods for monitoring re-review dates.
However, remember that when selecting a particular format or software for this purpose, they should pay particular consideration to the potentially long time span such information may be required.
Simpler methods of recording, and simpler formats (csv, for instance), are likely to have a longer life span than more complex software solutions, and therefore may be a more cost effective means of managing this information over time. There is further guidance in this area in the Digital Continuity project pages on The National Archives website:
nationalarchives.gov.uk/information-management/our-services/digital-continuity.htm
10.5 Whichever format or software is chosen to manage this information, it must have a facility to show all re-review dates as they become current. This type of tracking system can also serve as a reminder for departmental re-review of closed material held by The National Archives. When setting re-review dates, departments should bear in mind that some exemptions are time limited.
11. Further information
11.1 More information is available from the Information Management and Practice department at The National Archives. The links in this guidance also provide further suggestions.
You may find the following helpful:
Preparation of records for transfer to The National Archives and approved places of deposit
nationalarchives.gov.uk/documents/information-management/preparation-of-records.pdf Editorial guidelines - March 2009 nationalarchives.gov.uk/documents/information-management/editorial-guidelines-final-version-1.1.pdf
Retention scheduling - Complaints records nationalarchives.gov.uk/documents/information-management/sched_complaints.pdf
Code of Practice on the management of records issued under section 46 of the Freedom of Information Act 2000 www.justice.gov.uk/guidance/docs/foi-section-46-code-of-practice.pdf
PD ISO/TR 15489-2:2001 Information and documentation: Records management: Guidelines shop.bsigroup.com/ProductDetail/?pid=000000000030048103
BIP 3080:2007 Records management collection shop.bsigroup.com/ProductDetail/?pid=000000000030168213 Appendix 1
Redaction of documents in hard copy
1. Always carry out redaction on a copy, leaving all the information contained in the original document intact.
2. There is a range of redaction methods, and any may be used effectively according to what best suits the organisation concerned. This may depend on issues such as the structure and content of the document, the degree of confidentiality, and the cost and time available.
Whichever method is employed, the end result must ensure that the redacted material cannot be seen or guessed due to incomplete redaction. This means checking to make certain that words cannot be made out when the document is held up to light or that the ends, top or bottom of text are not visible.
Methods of redaction
3. **Cover-up tape** The simplest form of redaction is to use a high quality cover-up tape that can be placed on the original documents over the areas to be redacted, taking care that no parts of words are showing. By making a photocopy of the redacted text, an access version is produced ready for presentation.
The tape is white, and acts in much the same way as if using correction fluid, but can be reused several times. It is available in 1/6 inch for a 10-12 font typewritten line, 1/3 inch for two typewritten lines and 1 inch for general corrections.
4. **Blacking/whiting out** Another simple solution is to photocopy the original document and use a black marker pen to block out the sensitive material. The redacted version should then be photocopied again to produce an access version. The further photocopy is necessary as information redacted using marker pen can be read when held up to light.
The same process can be employed substituting a good quality correction fluid for marker pen. Ensure that no redacted text is visible before making the second photocopy, which again is necessary as correction fluid can be easily removed.
5. **Scalpel** This is perhaps the most precise and secure method of redaction as the exempt material is physically removed, leaving no risk of text being visible in the released version. Make a photocopy of the original. Then cut the material to be redacted from this photocopy using an artist's scalpel or similar tool, leaving a ‘doily’, which is then photocopied again to provide the redacted document.
6. **Photocopier with redaction facilities** Photocopiers are available which, in addition to normal copying functions, also have facilities to automatically remove marked out areas on a document. They provide a secure method of redaction, as there is no possibility of the removed text being visible after copying. However, they are limited in their effectiveness as the programmes can, at present, only remove paragraphs and stand-alone areas of text such as addresses or signatures. They cannot reliably detect small areas of data such as sentences or individual words.
A photocopier of this nature would probably be cost-effective only for organisations carrying out a large volume of redaction, where savings on more conventional materials would outweigh the cost of investing in such a copier. Appendix 2
Redaction of electronic records
1. This section discusses the technical aspects of redacting electronic records. Remember that when dealing with electronic records the general principles of redaction are the same as those described in section 4 Principles of redaction.
Issues in redacting electronic records
2. The redaction of born-digital records is an area of records management practice which raises unique issues and potential risks.
3. The simplest type of electronic record to redact is a plain text file, in which there is a one to one correspondence between bytes and displayable characters. Because of this direct correspondence, redacting these formats is simply a matter of deleting the displayed information - once the file is saved, the deleted information cannot be recovered.
4. However, the majority of electronic records created using office systems, such as Microsoft Office, are stored in proprietary, binary-encoded formats. Binary formats do not have this simple and direct correlation, and may contain significant information which is not displayed to the user, and the presence of which may therefore not be apparent. They may incorporate change histories, audit trails, or embedded metadata, by means of which deleted information can be recovered or simple redaction processes otherwise circumvented.
These formats are also usually the property of the software house which develops them, and these companies have typically regarded providing public documentation of these formats as against their commercial interests. As such, the mechanisms by which information is stored within these formats are often poorly understood. In addition, cryptographic and semantic analysis techniques can potentially be used to identify redacted information.
5. It is therefore essential that any redaction technique is secured to eliminate the possibility of redacted information being recovered. Approaches to redaction
6. The redaction of electronic records should always be carried out in accordance with the following principles:
6.1 Never redact the original or master version of an electronic record - redaction must always be carried out on a new copy of the record, either in paper or electronic format.
6.2 Redaction must irreversibly remove the required information from the redacted copy of the record. The information must be completely removed from the bit stream, not simply from the displayable record.
6.3 The National Archives is unaware of any other methods or tools for the redaction of electronic records which have undergone open and transparent testing, beyond those described in this document. As a result, The National Archives can only recommend the methods of redaction as described below.
6.4 Carry out electronic redaction in a controlled and secure environment that provides access only to those trained and authorised to carry out redaction.
6.5 Delete all intermediary stages of the redaction process. Only the original record and the appropriately redacted copy should be retained.
7. A number of different approaches to electronic redaction are possible:
Traditional redaction
7.1 For electronic records, which can be printed as a hardcopy, traditional redaction techniques, as described in Appendix 1, can be applied. Either the record may be printed and redaction carried out on the printed copy, or the information may be redacted from an electronic copy, which is then printed. If the redacted copy is required in electronic format, this can be created by scanning the redacted paper copy into an appropriate format, such as Adobe Portable Document Format.
This approach is currently recommended by The National Archives, if it meets the business requirements of the organisation. Conversion
7.2 An electronic record may be redacted through a combination of information deletion and conversion to a different format. Certain formats, such as plain ASCII text files, contain displayable information only. Conversion to this format will therefore eliminate any information that may be hidden in non-displayable portions of a bit stream.
Roundtrip redaction
7.3 The redacted record may be required to be made available in its original format, for example, to preserve complex formatting. In such cases, an extension of the conversion approach may be applicable. Roundtripping entails the conversion of the record to another format, followed by conversion back to the original format, such that the conversion process removes all evidence of the redacted information. Information deletion may be carried out either prior to conversion, or in the intermediary format.
This approach requires a thorough understanding of the formats and conversion processes involved, and the mechanisms by which information is transferred during conversion.
This is approach is currently recommended by The National Archives.
Current best practice
8.1 This section describes the redaction methods, which have been tested by The National Archives and are currently recommended for use with specific types of electronic record.
Electronically redacting documents
9.1 When redacting electronically, take great care over the choice of target format. It is crucial that no evidence of redacted information is retained in a redacted copy. Some binary formats may allow changes to be rolled back; consequently these formats should not be used for creating redacted copies.
The National Archives recommends using PDF as a format for redacted copies, but PDF files should be roundtripped via a simple image format to ensure removal of all evidence of previously redacted information. The recommended image format, Windows Bitmap Redaction toolkit for paper and electronic documents
(BMP), has been chosen because it contains no provision for storing metadata. There is therefore no means by which hidden information could be inserted into the image file. This format has been preferred over other image formats such as TIFF for this reason, since the TIFF format contains metadata not visible on screen.
**NOTE:** The National Archives does not recommend BMP as a long-term preservation format.
**Redacting PDF documents**
9.2 Redact documents already in PDF format using the following steps:
- Make an electronic copy and open it in Adobe Acrobat (the full version, not Adobe Acrobat Reader). For PDF documents where the text is stored as text, use the Text Touch-UP tool in Adobe Acrobat to replace the redacted text with a redaction marker (such as `[redacted]`). However, for PDF documents where the text is stored as an image, the Text Touch-Up tool can’t be used. In these cases, and for graphics and images, use The Square Tool to redact this PDF by drawing black rectangles over text and images.
- Roundtrip the resulting PDF file via the BMP image format as described below. If the redacted document is no more than a single page, users may prefer to leave the document as a bitmap image.
**Roundtripping**
9.3 Take the following steps:
- Convert the PDF file into a set of bitmap images (BMP files), one for each page of the document. Widely available graphics software (Adobe Photoshop Elements, or similar) can be used to perform this step.
- Convert each of these image files back into a PDF file. Widely available graphics software (for example Adobe Photoshop Elements) can be used to perform this step. • Recombine the individual page PDF files to form a PDF containing all of the pages of the original document. Specialised software may be required to concatenate the individual PDF files – for example, Ghostscript, a PDF-manipulation tool that is free to download
Redacting word-processed documents
9.4 This guidance applies to word-processed documents, including documents created using all versions of Microsoft Word, WordPerfect and OpenOffice Writer.
Electronically redact Office documents using the following steps:
• Make an electronic copy and delete all restricted information, replacing it with the text string [redacted], so that redaction is apparent but the space cannot be used to identify the missing information
• The redacted document is then ‘printed to PDF’ using PDF creation software such as Adobe Acrobat
• Roundtrip the resulting PDF file via the BMP image format as described above. If the redacted document is no more than a single page, users may prefer to leave the document as a bitmap image
Redacting spreadsheets
9.5 This guidance applies to electronic spreadsheets, including documents created using all versions of Microsoft Excel, Lotus 1-2-3, and OpenOffice Calc.
• Make an electronic copy and delete all restricted information, replacing it with the text string [redacted], so that redaction is apparent but the space cannot be used to identify the missing information. The most appropriate method of making an electronic copy of a spreadsheet file is to export the data to csv format. The redacted csv version can then be reimported into a new spreadsheet file, which satisfies the roundtripping procedure outlined above For spreadsheets containing multiple sheets, export each individual sheet as a separate csv file and then redact it. Once the required data has been redacted, recombine the individual csv files into a single spreadsheet if required.
It is important to note that if the spreadsheet to be redacted contains macros, equations, graphs or other similar added content, such items are not supported in csv files. In this event, the manual redaction method described below may be more suitable.
**Conventional redaction methods**
10. In some circumstances, it may be preferable to redact an electronic office document by traditional methods, rather than electronically.
This guidance applies to word-processed documents and spreadsheet files as described above.
Redact documents using the following steps:
Either:
1. print the document to paper
2. redact the paper copy (using conventional methods for redacting paper records)
3. if an electronic version of the redacted document is required, create this by scanning the redacted paper copy into an appropriate format, such as Adobe Portable Document Format
Or
1. make an electronic copy, redact it by deleting all restricted information and replacing it with the text string [redacted], so that redaction is apparent but the space cannot be used to identify the missing information
2. print the redacted document to paper
3. if an electronic version of the redacted document is required, create this by scanning the redacted paper copy into an appropriate format, such as Adobe Portable Document Format 11 When redacting electronic formats, keep a record of decisions in the same way as with paper formats. See section 6 Keeping records of redaction work.
12 Save the redacted version of the record into an electronic records management system (ERMS) at the time of creation. This will automatically record the identity of the individual saving the document as well as the time and date. Recording the reason for redaction needs to be input manually.
13 Some ERMS solutions offer additional functionality whereby it is possible to create a rendition, which is a related instance of the original document. The rendition can be redacted and saved within the ERMS and its relationship to the original document will be recorded by the ERMS. Appendix 3
Sample of simple form for recording redaction decisions
| Date of redaction | Document reference | Details of exempt material | Exemption applied | Justification for exemption | Reviewer’s comments | Any other comment | |-------------------|--------------------|----------------------------|-------------------|-----------------------------|---------------------|------------------| | | | | | | | | | | | | | | | | | | | | | | | |
Example of form to record decisions and pass on information to document editors carrying out redaction
Editing requirements: Series\_\_\_\_\_\_ Piece\_\_\_\_\_\_
| Folio | Paragraph | Line | From (inclusive) | To (inclusive) | |-------|-----------|------|------------------|----------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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4f53528614ea9c42b56210b76a44f0ede8aab6b6 | Redaction toolkit
Editing exempt information from paper and electronic documents prior to release
Last updated: April 2016
© Crown copyright 2012
You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence or email [email protected].
Where we have identified any third-party copyright information, you will need to obtain permission from the copyright holders concerned.
This publication is available for download at nationalarchives.gov.uk. Contents
01. Purpose of this toolkit ........................................................................................................... 4
02. Who is this guidance for? ...................................................................................................... 5
03. What is redaction? .................................................................................................................. 5
04. Principles of redaction .......................................................................................................... 5
05. Identifying material for redaction .......................................................................................... 6
06. Keeping records of redaction work ....................................................................................... 7
07. Redaction for transfer to The National Archives ................................................................. 8 Paper records .......................................................................................................................... 9 Electronic records .................................................................................................................. 10
08. Transfer of closed extracts to The National Archives or places of deposit (unredacted originals) ............................................................................................................................... 10
09. Storage of retained extracts .................................................................................................. 10
10. Tracking of retained redactions ............................................................................................ 11
11. Further information .............................................................................................................. 12 Appendix 1 .................................................................................................................................. 14 Redaction of documents in hard copy .................................................................................... 14 Methods of redaction ........................................................................................................... 14 Appendix 2 .................................................................................................................................. 16 Redaction of electronic records .................................................................................................. 16 Issues in redacting electronic records .................................................................................... 16 Approaches to redaction ......................................................................................................... 17 Traditional redaction ............................................................................................................. 17 Conversion ............................................................................................................................... 18 Roundtrip redaction ............................................................................................................... 18 Current best practice .................................................................................................................... 18 Electronically redacting documents ....................................................................................... 18 Redacting PDF documents .................................................................................................. 19 Roundtripping ..................................................................................................................... 19 Redaction toolkit for paper and electronic documents
Redacting word-processed documents ................................................................. 20 Redacting spreadsheets ...................................................................................... 20 Conventional redaction methods ........................................................................ 21
Appendix 3 ........................................................................................................... 23 Sample of simple form for recording redaction decisions .................................... 23 Example of form to record decisions and pass on information to document editors carrying out redaction ........................................................................................................ 23
1. **Purpose of this toolkit**
1.1 This toolkit has been produced to provide guidance on editing exempt material from information held by public bodies. Its purpose is to promote good records management practice across the public sector and to assist in the implementation of the Freedom of Information Act. Under the Act, authorities are required to supply information to anyone that requests it unless an exemption applies, and even then, there is a further requirement, in most cases, to consider whether the public interest lies in providing the information or maintaining the exemption.
The guidance also covers the release of records for reasons other than Freedom of Information, for example under Parliamentary business. In some of these cases redaction may be necessary.
1.2 The Code of Practice on Records Management, issued under S 46 of the Freedom of Information (FOI) Act, states that where a complete document cannot be made available on transfer ‘Authorities should consider whether parts of records might be released if the sensitive information were redacted’ (Para 18.5).
While this applies only to public records being transferred to record offices, it nonetheless serves as a general reminder of one of the basic features of the Act, namely the right of access is to information not records or documents.
1.3 The guidance covers a number of redaction methods for presenting information in hard copy (see Appendix 1). It examines several processes, but does not recommend any overall, as it is for each authority to decide which best applies to its organisational demands and the resources it has available.
1.4 It also provides general advice and guidance on technical issues related to the preservation and management of electronic records. It provides detailed guidance on methods for securely redacting electronic records of all types (see Appendix 2). 2. **Who is this guidance for?**
2.1 This toolkit is aimed at all authorities subject to the Freedom of Information Act (FOIA), Data Protection Act (DPA) and Environmental Information Regulations (EIRs), from central Government departments to local, police, health and education authorities.
2.2 If you are unsure whether your organisation is affected by FOI, there is a list in Schedule I to the Act at [www.legislation.gov.uk/ukpga/2000/36](http://www.legislation.gov.uk/ukpga/2000/36).
3. **What is redaction?**
3.1 Redaction is the separation of disclosable from non-disclosable information by blocking out individual words, sentences or paragraphs or the removal of whole pages or sections prior to the release of the document. In the paper environment some organisations will know redaction as extracts when whole pages are removed, or deletions where only a section of text is affected.
4. **Principles of redaction**
4.1 Always carry out redaction on a copy of the original record, whether paper or electronic, never on the record itself. This ensures that while the redacted information is permanently removed from the copy of the record (which can then be made accessible) the original text remains in the original record. Redaction should never result in the complete removal of text or information from a record.
4.2 Redaction is carried out in order to edit exempt details from a document. Use it when one or two individual words, a sentence or paragraph, a name, address or signature needs to be removed.
4.3 If so much information has to be withheld that a document becomes nonsensical, the entire document should be withheld. In the case of paper documents the same principle should apply to individual pages.
4.4 When undertaking redaction, reviewers should consider whether any other factors are important for the understanding of the material. For example, if colour makes meaning clear in a paper document, a redacted colour copy should be released. 4.5 Redaction should be performed or overseen by staff that are knowledgeable about the records and can determine what material is exempt. If those identifying such material do not carry out the redaction themselves, their instructions must be specific - so for example: ‘Memo dated …, paragraph no…, line starting… and ending…’ and so on.
4.6 Under FOI, applicants may request information presented in electronic form. For paper documents, this will usually mean scanning the redacted version of the material. If, however, the level of resources required to do the scanning would make this unduly onerous, the FOIA allows the organisation to set aside the applicant’s stated preference on the grounds of practicability (S 11).
The Act also permits that a summary of the document can be prepared. If a large percentage of the document needs to be redacted, this option may be worth considering as a more viable alternative to redaction.
4.7 Organisations should bear in mind that exemption decisions will be subject to appeal. For more information, see Section VI of the Code of Practice under Section 45 of the FOI Act www.justice.gov.uk/downloads/guidance/freedom-and-rights/foi-section45-code-of-practice.pdf
5. Identifying material for redaction
5.1 All organisations should have staff able to identify information that may be exempt under the Freedom of Information Act and the Environmental Information Regulations. Ideally they should have a good knowledge of the records being reviewed for release.
5.2 All staff should be aware of the categories of information that should not be released under the Data Protection Act.
Guidance on exemptions is available in the FOI section of the Ministry of Justice website www.justice.gov.uk/guidance/freedom-and-rights/freedom-of-information/exemptions-guidance.htm and on the website of the Office of the Information Commissioner www.ico.gov.uk/for_organisations/freedom_of_information.aspx
5.3 To comply fully with requests for information, redact exempt material only. A whole sentence or paragraph should not be removed if only one or two words are non- disclosable, unless release would place the missing words in context and make their content or meaning clear.
In the case of electronic records close examination of the internal bit stream of the file can reveal the length of the redacted content. Take great care to ensure that the non-disclosable material cannot be deduced. This may mean disguising the size and shape of the redacted content. This is especially the case where the non-disclosable information appears in several locations within the file, and where there is an increased chance of deciphering such redacted content using a combination of location pattern, bit length and the associated unredacted text.
5.4 Reviewers should consider that earlier statements in a document might suggest the content of removed material. For example, if a paragraph refers to reports from overt sources, and the following paragraph refers to reports from covert sources, as well as removing the words ‘covert sources’, ‘overt sources’ would also need to be removed or the meaning of the missing words from the second paragraph could be inferred.
5.5 Reviewers should also check records for other copies of the same documents so that they carry out redaction consistently. They should check indexes to ensure that they do not contain details of the redacted material.
6. **Keeping records of redaction work**
6.1 Once reviewers have identified redactions, agreed with any other interested parties, decisions need to be recorded. For some organisations, simply keeping a copy of the released copy of a document may be enough, with a note explaining the reasons for redaction.
6.2 If multiple requests are made for the same information, this will also show what decisions have been made in prior requests. If more detailed records of decisions are required, this can be done on a standard form recording as much of the following information as is relevant:
- An identifying reference, registered file number, case file number or electronic document reference. This identifier can be anything that suits the organisation concerned, but must enable easy identification and retrieval of the document. The format chosen should be used consistently
- Precise details of the material removed. This need not describe the content, but should show which section of the document has been withheld - for example, ‘paragraph 2 of page 4’. However, if only one or two words are being withheld, these details must be exact to enable precise identification. This might be achieved by keeping a copy of the original document, with the details to be redacted highlighted, as well as the redacted version
- The reason for non-disclosure of the information. If one or more FOI exemptions apply, these should all be noted, along with the particular reasons that apply in each case
- Any comments made by reviewers and other organisations or individuals consulted
There are sample forms for recording decisions at Appendix 3 of this toolkit.
Once this has been done, the document can be redacted.
7. **Redaction for transfer to The National Archives**
7.1 Public record bodies transferring records to The National Archives or a place of deposit (another archives office authorised to hold public records), whilst using the same redaction processes as for any organisation, must nevertheless bear other factors in mind.
7.2 Record decisions in detail - the transferring department needs to be able to track and retrieve any material withheld from The National Archives under Section 3(4) of the Public Records Act 1958. The fact that material has been extracted will be shown on The National Archives online catalogue in the form of items giving the identifying reference (but not details of the material itself) and in most cases the justification for redaction. This may increase the likelihood of an FOI request being made against it. It is therefore all the more essential that such material can be identified and retrieved. 7.3 Once reviewers have identified material for redaction, a record of decisions should be kept showing:
- an identifying reference such as a National Archives reference, registered file number, case file number or electronic document reference
- precise details of the material removed (this need not describe the content, but should clarify which section of the document has been withheld – for example ‘paragraph 2 of page 4’. However, if only one or two words are being withheld, these details must be exact to enable precise identification)
- the reason for non-disclosure of the information. If one or more FOI exemptions apply, they should all be noted, along with the particular reasons they apply in this case
- the reason for withholding the information from The National Archives, if applicable (retention under S 3(4) of the Public Records Act); in other words, the criterion and the reason it applies
- any comments made by reviewers and other organisations or individuals consulted, bearing in mind that records may be the subject of further requests
7.4 If the reviewer passes the record on for redaction, this form can also serve as a method of conveying redaction instructions. Retain the record of decisions until the full record is transferred to The National Archives or released.
**Paper records**
7.5 Once redaction is complete, mark the redacted copy placed on the file showing under what authority the redaction has been effected – for example ‘Retained under S 3(4) of the Public Records Act’ or ‘Closed under FOI Exemption S 42’.
Departments redacting a significant volume of material may find it beneficial to procure stamps for this purpose. Alternatively, providing they cannot easily be removed, attach good quality labels, showing the same information. 7.6 Redacted sheets within a larger document can be more readily identified if photocopied onto brightly coloured paper (green or blue for instance). Although not mandatory, it will make it clear to departmental staff using the record for administrative purposes in future that further redacted information had been withheld at the time of transfer and will be available elsewhere. It also makes it easier to locate the relevant page at The National Archives when the full version is released and replaced in the original file.
7.7 The closed extract should be tagged into an acid-free folder with its The National Archives item reference clearly marked on the front – DEFE 19/143/1 and so on.
Store it in a secure cabinet or room.
**Electronic records**
7.8 The Information Management and Practice department coordinate the transfer of electronic records to The National Archives, assisted by the Digital Preservation department. For up to date information and guidance on digital record transfers, see: nationalarchives.gov.uk/documents/information-management/digital-transfer-guidance.pdf
8. **Transfer of closed extracts to The National Archives or places of deposit (unredacted originals)**
8.1 Redactions closed under FOI exemptions should be transferred to The National Archives once the Advisory Council on National Records and Archives has agreed the exemptions.
In the case of paper records, this should be done ideally at the same time as the transfer of the parent piece; the extract file should be boxed separately. If this is not possible due to pending consideration by the Advisory Council, the extract may remain with the department until the Advisory Council has completed this task.
9. **Storage of retained extracts**
9.1 Place retained paper extracts in an acid-free folder marked with their catalogue item reference as required for transfer to The National Archives. It might be useful to attach a copy of the redacted access version for future reference. This will particularly aid FOI requests, as it will allow reviewers to see at a glance the redacted material being applied for.
9.2 Keep these extract folders in an organised system to enable easy recovery in the event of an FOI request. For example, file records from each National Archives class together, ordering by year and either The National Archives or departmental reference within that, or noting a shelf location on an extract tracking system.
9.3 Keep retained electronic (unredacted) documents in a secure area of the electronic file plan or local area network. They should be accessible only to designated staff (for example the Freedom of Information Officer and Departmental Record Officer).
10. Tracking of retained redactions
10.1 Public record bodies need to know what information they hold, including what has been retained under S 3(4) of the Public Records Act, and they need to be able to retrieve it easily to ensure compliance with FOI and EIRs.
10.2 Ideally departments and agencies should have some method of recording their retained paper and electronic extracts, showing some or all of the following information:
- The National Archives reference of the parent piece from which the extract has been removed, FO 371/148909 and so on. The extract itself should be given an item number that corresponds to The National Archives’ catalogue entry for the extract (such as FO 371/148909/1)
- the former departmental file reference
- the reason for retention
- the date for re-review
10.3 Create a brief description of the extract’s subject matter for use in keyword searches. This will be an effective aid in answering requests for information efficiently. Records managers should be aware that records of redaction decisions are likely to be the subject of FOI requests themselves, and as such, should word these descriptions carefully. However, the essential aspect of this is that the details must allow the information to be located and retrieved. If a request for these records is made, exemptions can be applied to them if necessary.
10.4 Databases and spreadsheets are an obvious method for storing, tracking and interrogating such information. They also provide easy methods for monitoring re-review dates.
However, remember that when selecting a particular format or software for this purpose, they should pay particular consideration to the potentially long time span such information may be required.
Simpler methods of recording, and simpler formats (csv, for instance), are likely to have a longer life span than more complex software solutions, and therefore may be a more cost effective means of managing this information over time. There is further guidance in this area in the Digital Continuity project pages on The National Archives website:
nationalarchives.gov.uk/information-management/our-services/digital-continuity.htm
10.5 Whichever format or software is chosen to manage this information, it must have a facility to show all re-review dates as they become current. This type of tracking system can also serve as a reminder for departmental re-review of closed material held by The National Archives. When setting re-review dates, departments should bear in mind that some exemptions are time limited.
11. Further information
11.1 More information is available from the Information Management and Practice department at The National Archives. The links in this guidance also provide further suggestions.
You may find the following helpful:
Preparation of records for transfer to The National Archives and approved places of deposit
nationalarchives.gov.uk/documents/information-management/preparation-of-records.pdf Editorial guidelines - March 2009 nationalarchives.gov.uk/documents/information-management/editorial-guidelines-final-version-1.1.pdf
Retention scheduling - Complaints records nationalarchives.gov.uk/documents/information-management/sched_complaints.pdf
Code of Practice on the management of records issued under section 46 of the Freedom of Information Act 2000 www.justice.gov.uk/guidance/docs/foi-section-46-code-of-practice.pdf
PD ISO/TR 15489-2:2001 Information and documentation: Records management: Guidelines shop.bsigroup.com/ProductDetail/?pid=000000000030048103
BIP 3080:2007 Records management collection shop.bsigroup.com/ProductDetail/?pid=000000000030168213 Appendix 1
Redaction of documents in hard copy
1. Always carry out redaction on a copy, leaving all the information contained in the original document intact.
2. There is a range of redaction methods, and any may be used effectively according to what best suits the organisation concerned. This may depend on issues such as the structure and content of the document, the degree of confidentiality, and the cost and time available.
Whichever method is employed, the end result must ensure that the redacted material cannot be seen or guessed due to incomplete redaction. This means checking to make certain that words cannot be made out when the document is held up to light or that the ends, top or bottom of text are not visible.
Methods of redaction
3. **Cover-up tape** The simplest form of redaction is to use a high quality cover-up tape that can be placed on the original documents over the areas to be redacted, taking care that no parts of words are showing. By making a photocopy of the redacted text, an access version is produced ready for presentation.
The tape is white, and acts in much the same way as if using correction fluid, but can be reused several times. It is available in 1/6 inch for a 10-12 font typewritten line, 1/3 inch for two typewritten lines and 1 inch for general corrections.
4. **Blacking/whiting out** Another simple solution is to photocopy the original document and use a black marker pen to block out the sensitive material. The redacted version should then be photocopied again to produce an access version. The further photocopy is necessary as information redacted using marker pen can be read when held up to light.
The same process can be employed substituting a good quality correction fluid for marker pen. Ensure that no redacted text is visible before making the second photocopy, which again is necessary as correction fluid can be easily removed.
5. **Scalpel** This is perhaps the most precise and secure method of redaction as the exempt material is physically removed, leaving no risk of text being visible in the released version. Make a photocopy of the original. Then cut the material to be redacted from this photocopy using an artist's scalpel or similar tool, leaving a ‘doily’, which is then photocopied again to provide the redacted document.
6. **Photocopy with redaction facilities** Photocopiers are available which, in addition to normal copying functions, also have facilities to automatically remove marked out areas on a document. They provide a secure method of redaction, as there is no possibility of the removed text being visible after copying. However, they are limited in their effectiveness as the programmes can, at present, only remove paragraphs and stand-alone areas of text such as addresses or signatures. They cannot reliably detect small areas of data such as sentences or individual words.
A photocopier of this nature would probably be cost-effective only for organisations carrying out a large volume of redaction, where savings on more conventional materials would outweigh the cost of investing in such a copier. Appendix 2
Redaction of electronic records
1. This section discusses the technical aspects of redacting electronic records. Remember that when dealing with electronic records the general principles of redaction are the same as those described in section 4 Principles of redaction.
Issues in redacting electronic records
2. The redaction of born-digital records is an area of records management practice which raises unique issues and potential risks.
3. The simplest type of electronic record to redact is a plain text file, in which there is a one to one correspondence between bytes and displayable characters. Because of this direct correspondence, redacting these formats is simply a matter of deleting the displayed information - once the file is saved, the deleted information cannot be recovered.
4. However, the majority of electronic records created using office systems, such as Microsoft Office, are stored in proprietary, binary-encoded formats. Binary formats do not have this simple and direct correlation, and may contain significant information which is not displayed to the user, and the presence of which may therefore not be apparent. They may incorporate change histories, audit trails, or embedded metadata, by means of which deleted information can be recovered or simple redaction processes otherwise circumvented.
These formats are also usually the property of the software house which develops them, and these companies have typically regarded providing public documentation of these formats as against their commercial interests. As such, the mechanisms by which information is stored within these formats are often poorly understood. In addition, cryptographic and semantic analysis techniques can potentially be used to identify redacted information.
5. It is therefore essential that any redaction technique is secured to eliminate the possibility of redacted information being recovered. Approaches to redaction
6. The redaction of electronic records should always be carried out in accordance with the following principles:
6.1 Never redact the original or master version of an electronic record - redaction must always be carried out on a new copy of the record, either in paper or electronic format.
6.2 Redaction must irreversibly remove the required information from the redacted copy of the record. The information must be completely removed from the bit stream, not simply from the displayable record.
6.3 The National Archives is unaware of any other methods or tools for the redaction of electronic records which have undergone open and transparent testing, beyond those described in this document. As a result, The National Archives can only recommend the methods of redaction as described below.
6.4 Carry out electronic redaction in a controlled and secure environment that provides access only to those trained and authorised to carry out redaction.
6.5 Delete all intermediary stages of the redaction process. Only the original record and the appropriately redacted copy should be retained.
7. A number of different approaches to electronic redaction are possible:
Traditional redaction
7.1 For electronic records, which can be printed as a hardcopy, traditional redaction techniques, as described in Appendix 1, can be applied. Either the record may be printed and redaction carried out on the printed copy, or the information may be redacted from an electronic copy, which is then printed. If the redacted copy is required in electronic format, this can be created by scanning the redacted paper copy into an appropriate format, such as Adobe Portable Document Format.
This approach is currently recommended by The National Archives, if it meets the business requirements of the organisation. Conversion
7.2 An electronic record may be redacted through a combination of information deletion and conversion to a different format. Certain formats, such as plain ASCII text files, contain displayable information only. Conversion to this format will therefore eliminate any information that may be hidden in non-displayable portions of a bit stream.
Roundtrip redaction
7.3 The redacted record may be required to be made available in its original format, for example, to preserve complex formatting. In such cases, an extension of the conversion approach may be applicable. Roundtripping entails the conversion of the record to another format, followed by conversion back to the original format, such that the conversion process removes all evidence of the redacted information. Information deletion may be carried out either prior to conversion, or in the intermediary format.
This approach requires a thorough understanding of the formats and conversion processes involved, and the mechanisms by which information is transferred during conversion.
This is approach is currently recommended by The National Archives.
Current best practice
8.1 This section describes the redaction methods, which have been tested by The National Archives and are currently recommended for use with specific types of electronic record.
Electronically redacting documents
9.1 When redacting electronically, take great care over the choice of target format. It is crucial that no evidence of redacted information is retained in a redacted copy. Some binary formats may allow changes to be rolled back; consequently these formats should not be used for creating redacted copies.
The National Archives recommends using PDF as a format for redacted copies, but PDF files should be roundtripped via a simple image format to ensure removal of all evidence of previously redacted information. The recommended image format, Windows Bitmap Redaction toolkit for paper and electronic documents
(BMP), has been chosen because it contains no provision for storing metadata. There is therefore no means by which hidden information could be inserted into the image file. This format has been preferred over other image formats such as TIFF for this reason, since the TIFF format contains metadata not visible on screen.
**NOTE:** The National Archives does not recommend BMP as a long-term preservation format.
**Redacting PDF documents**
9.2 Redact documents already in PDF format using the following steps:
- Make an electronic copy and open it in Adobe Acrobat (the full version, not Adobe Acrobat Reader). For PDF documents where the text is stored as text, use the Text Touch-UP tool in Adobe Acrobat to replace the redacted text with a redaction marker (such as `[redacted]`). However, for PDF documents where the text is stored as an image, the Text Touch-Up tool can’t be used. In these cases, and for graphics and images, use The Square Tool to redact this PDF by drawing black rectangles over text and images.
- Roundtrip the resulting PDF file via the BMP image format as described below. If the redacted document is no more than a single page, users may prefer to leave the document as a bitmap image.
**Roundtripping**
9.3 Take the following steps:
- Convert the PDF file into a set of bitmap images (BMP files), one for each page of the document. Widely available graphics software (Adobe Photoshop Elements, or similar) can be used to perform this step.
- Convert each of these image files back into a PDF file. Widely available graphics software (for example Adobe Photoshop Elements) can be used to perform this step. Redaction toolkit for paper and electronic documents
- Recombine the individual page PDF files to form a PDF containing all of the pages of the original document. Specialised software may be required to concatenate the individual PDF files – for example, Ghostscript, a PDF-manipulation tool that is free to download
**Redacting word-processed documents**
9.4 This guidance applies to word-processed documents, including documents created using all versions of Microsoft Word, WordPerfect and OpenOffice Writer.
Electronically redact Office documents using the following steps:
- Make an electronic copy and delete all restricted information, replacing it with the text string `[redacted]`, so that redaction is apparent but the space cannot be used to identify the missing information
- The redacted document is then ‘printed to PDF’ using PDF creation software such as Adobe Acrobat
- Roundtrip the resulting PDF file via the BMP image format as described above. If the redacted document is no more than a single page, users may prefer to leave the document as a bitmap image
**Redacting spreadsheets**
9.5 This guidance applies to electronic spreadsheets, including documents created using all versions of Microsoft Excel, Lotus 1-2-3, and OpenOffice Calc.
- Make an electronic copy and delete all restricted information, replacing it with the text string `[redacted]`, so that redaction is apparent but the space cannot be used to identify the missing information. The most appropriate method of making an electronic copy of a spreadsheet file is to export the data to csv format. The redacted csv version can then be reimported into a new spreadsheet file, which satisfies the roundtripping procedure outlined above For spreadsheets containing multiple sheets, export each individual sheet as a separate csv file and then redact it. Once the required data has been redacted, recombine the individual csv files into a single spreadsheet if required.
It is important to note that if the spreadsheet to be redacted contains macros, equations, graphs or other similar added content, such items are not supported in csv files. In this event, the manual redaction method described below may be more suitable.
**Conventional redaction methods**
10. In some circumstances, it may be preferable to redact an electronic office document by traditional methods, rather than electronically.
This guidance applies to word-processed documents and spreadsheet files as described above.
Redact documents using the following steps:
Either:
1. print the document to paper
2. redact the paper copy (using conventional methods for redacting paper records)
3. if an electronic version of the redacted document is required, create this by scanning the redacted paper copy into an appropriate format, such as Adobe Portable Document Format
Or
1. make an electronic copy, redact it by deleting all restricted information and replacing it with the text string [redacted], so that redaction is apparent but the space cannot be used to identify the missing information
2. print the redacted document to paper
3. if an electronic version of the redacted document is required, create this by scanning the redacted paper copy into an appropriate format, such as Adobe Portable Document Format 11 When redacting electronic formats, keep a record of decisions in the same way as with paper formats. See section 6 Keeping records of redaction work.
12 Save the redacted version of the record into an electronic records management system (ERMS) at the time of creation. This will automatically record the identity of the individual saving the document as well as the time and date. Recording the reason for redaction needs to be input manually.
13 Some ERMS solutions offer additional functionality whereby it is possible to create a rendition, which is a related instance of the original document. The rendition can be redacted and saved within the ERMS and its relationship to the original document will be recorded by the ERMS. Appendix 3
Sample of simple form for recording redaction decisions
| Date of redaction | Document reference | Details of exempt material | Exemption applied | Justification for exemption | Reviewer’s comments | Any other comment | |-------------------|--------------------|---------------------------|-------------------|-----------------------------|---------------------|------------------| | | | | | | | | | | | | | | | | | | | | | | | |
Example of form to record decisions and pass on information to document editors carrying out redaction
Editing requirements: Series\_\_\_\_\_\_ Piece\_\_\_\_\_\_
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02973a6b65d6f470ad22371ab3ed2016e9a90a49 | Disciplinary Policy, Procedure and Guidelines Contents
Disciplinary Policy .................................................................................................................. 1
1. Introduction .......................................................................................................................... 2
2. Scope ..................................................................................................................................... 2
3. General Policy Principles ..................................................................................................... 3
4. Criminal offences inside and outside of work ....................................................................... 3
5. Raising grievances in the course of disciplinary action and proceedings .......................... 4
6. Employees who go on sick leave in the course of disciplinary proceedings ....................... 5
7. Allegations concerning a Trade Union Representative ......................................................... 6
8. Allegations concerning the abuse of children or vulnerable adults ..................................... 6
Disciplinary Procedure ........................................................................................................... 7
1. Informal stage ....................................................................................................................... 7
2. Formal stage ........................................................................................................................ 7
2.1 Investigation ...................................................................................................................... 7 2.2 Suspension ........................................................................................................................ 9 2.3 The Suspension Process .................................................................................................... 9 2.4 Disciplinary Hearing and Chair ....................................................................................... 13 2.5 Notification of a formal hearing ....................................................................................... 14 2.6 Attendance at a formal hearing ......................................................................................... 14 2.7 Postponement of a hearing ............................................................................................... 15 2.8 Conducting the disciplinary hearing ............................................................................... 15 2.9 Deciding the outcome of a disciplinary hearing ............................................................... 15 2.10 No further action ............................................................................................................. 16 2.11 Written warning .............................................................................................................. 16 2.12 Final written warning ..................................................................................................... 16 2.13 Dismissal ........................................................................................................................ 17 2.14 Dismissal following a final written warning .................................................................... 17 2.15 Appeals against disciplinary action ............................................................................... 17
Overview of Disciplinary Process .......................................................................................... 19
Disciplinary Rules .................................................................................................................. 20
Guidelines on Informal Disciplinary Action ......................................................................... 24
Undertaking a Disciplinary Investigation: Guidance for Investigating Officers ....................... 26
Guidelines on timescales for an investigation ....................................................................... 31
INVESTIGATION REPORT .................................................................................................... 32
Data Protection in Relation to Disciplinary Records ................................................................. 37
Note: Please be aware that any printed copies of this document may not be the most recent version. You should check on the Intranet to ensure that you are using the current version.
| Version Control | |------------------| | Date Implemented | v.2 January 2014 | | Supersedes | v.1 June 2008 | | Next review date | 2016 | | Policy Owner | HR Workforce Development | Disciplinary Policy
1. Introduction
1.1 The purpose of the disciplinary policy and procedure and disciplinary rules is to help and encourage employees to achieve and maintain acceptable standards of conduct, efficient and safe performance of work and to maintain satisfactory relationships between employees and the Council.
1.2 The policy and procedure has been drafted in line with the ACAS Code of Practice on Disciplinary and Grievance procedures (April 2009), adhering to the basic principles of fairness, reasonableness and transparency.
1.3 Template letters are available on the Council’s Intranet site to complement the procedure. These letters will need to be adapted to individual circumstances and managers should seek advice from the Human Resources Employment Relations Team.
1.4 The Council has a responsibility to maintain the highest standards of employee conduct. All employees are expected to comply with the Code of Conduct for Employees, Council policies, their conditions of service, and appropriate legislation.
1.5 Managers have the prime responsibility for the day-to-day management and discipline within their teams.
1.6 Managers are advised that in order to avoid possible cases of unfair treatment or discrimination, they should seek advice and assistance from HR Employment Relations if they have not been previously involved.
2. Scope
2.1 This policy applies to employees at all levels of the Council, up to and including Chief Officers/Directors. It excludes employees engaged at or based at Schools, who may wish to adapt the policy for their own use.
2.2 This policy and procedure does not cover issues of poor performance, which should be dealt with using the Council’s Capability Procedure.
2.3 This policy and procedure should not be used where employment is terminated in circumstances other than serious indiscipline such as:
At the end of a predetermined limited or fixed term contract for which an employee has been specifically engaged;
- On the grounds of redundancy;
- Where following a period of probationary service, dismissal arises from unsuitability for confirmation of appointment;
- On the grounds of capability due to ill-health.
3. **General Policy Principles**
3.1 Wherever possible, potential disciplinary issues and minor breaches of discipline will be resolved informally, as part of the day to day management of employees, without recourse to formal action. This should be the normal approach taken, except in cases of serious or gross misconduct or where a series of minor breaches of discipline have occurred, warranting formal action.
3.2 Informal discussion and/or counselling may be used to finding solutions to identified problems, so that any shortcomings in conduct can be remedied. A brief note of any meetings should be kept by the manager for reference purposes and a copy given to the employee.
3.3 At every stage in the procedure the employee will be advised of the nature of the complaint and given the opportunity to prepare and present his or her case before any decision is made.
3.4 At all formal stages of the procedure the employee will have the right to be assisted by a representative of a Trade Union or work colleague. There is no right to be accompanied during informal discussions.
3.5 An employee will have the right to appeal against any formal disciplinary sanction taken.
3.6 The procedure may be implemented at any stage if the employee’s alleged misconduct warrants such action.
3.7 An employee will only be suspended if absolutely necessary (e.g. where the allegations are so serious as to warrant suspension or for the protection of the employee and/or others). Suspension will always be on contractual pay. A suspension should be reviewed at least every two weeks with a view to ending it as soon as possible.
3.8 No formal disciplinary action, including investigation, will be taken against a union or employee representative until the circumstances of the case have been discussed with a full-time official of that union.
3.9 No parties involved in a disciplinary process should disclose any confidential information in relation to the disciplinary case, except as required or permitted in accordance with this procedure. Any person who does so may themselves be subject to disciplinary action.
4. **Criminal offences inside and outside of work**
4.1 Criminal charges or convictions for offences inside or outside of employment are not automatic reasons for disciplinary action or dismissal. ER advice should be sought before any investigation is carried out.
4.2 Misconduct should not be referred to the police without the most careful consideration and a genuine and reasonable belief that the allegation, if established, could properly be regarded as criminal. It is important to consider the strength of the allegations. The manager must contact the Employment Relations Manager before proceeding with a referral to the police.
4.3 The employee should be written to and given an opportunity to respond to the allegations. Managers will need to consider whether it is necessary to suspend the employee pending the investigation of the allegations. 4.4 Court proceedings are separate to the internal disciplinary process. It does not automatically follow that employees found guilty of an offence in court will be subject to disciplinary action. Similarly, employees found not guilty of an offence in court may still be subject to disciplinary action.
4.5 It is important to remember that there is a different standard of proof required at court. In court, the matter must be proved beyond reasonable doubt whereas in a disciplinary case, the matter is determined on the facts presented and the balance of probabilities.
**Disciplinary cases relating to potential criminal offences including fraud, theft and financial irregularities**
4.6 Where an employee is suspected of committing a financial irregularity or theft in contravention of the Council’s Disciplinary procedure and Financial Standing Orders, the manager should refer to the Council’s Crime Response Plan for specific guidance on the procedure to be followed. This is to ensure that any subsequent criminal prosecution is not compromised.
4.7 Whenever possible, before taking any action, the manager should consult with the relevant Service Areas, particularly Internal Audit, Human Resources and the Borough Solicitor & Secretary so as not to breach the relevant legislation or compromise the investigation.
4.8 In the event that the person being interviewed confesses or begins to confess to a criminal offence then a caution should be given. Please refer to the Council’s Crime Response Plan for specific guidance on the procedure to be followed, including how and when to give a caution.
**Disciplinary cases where ICT irregularities are suspected**
4.9 If there are concerns that there has been a serious misuse of ICT facilities, in breach of the Council’s E-mail and Internet Policy, the same principles in relation to any potential investigative work apply but there is also a specific procedure to follow. This procedure is part of the Authority’s overall Crime Response Plan.
5. **Raising grievances in the course of disciplinary action and proceedings**
5.1 Employees cannot raise a grievance to complain about or object to the fact that the Council may take disciplinary action, including the fact that the Council is commencing, or contemplating commencing the investigation stage of the procedure.
5.2 Where a grievance is raised during the disciplinary procedure, the relevant Chief Officer (if necessary in consultation with the Chief Human Resources Officer) will take a view of the grievance and determine how it should be dealt with.
5.3 In exceptional circumstances the disciplinary procedure may be suspended for a short time to investigate a grievance concerning issues that are directly relevant to the disciplinary procedure. This will only occur where there is sufficient information to support a complaint of serious concerns about a fundamental part of the disciplinary process.
5.4 A suspension of the process is to allow a preliminary consideration of the grievance by an independent manager i.e. one not involved in either the complaint or the disciplinary case. This manager should consider all inter-related issues before deciding whether the disciplinary process or a full investigation of the complaint should take precedence. If the grievance and disciplinary are inter-related a single manager may hear them concurrently.
6. **Employees who go on sick leave in the course of disciplinary proceedings**
6.1 The Council recognises that it can be stressful to be notified of a disciplinary investigation or to be called to a disciplinary hearing and that an employee may go off sick with stress and obtain a Fit Note from their GP. However, the Council has an obligation to conduct a thorough investigation into alleged misconduct and to proceed with investigations and disciplinary hearings promptly and without undue delay.
6.2 During the disciplinary process, the Council will look at the timing of any absence and the stated reason. Support is available for employees who are subject to disciplinary proceedings and it will therefore not be considered acceptable for an employee to go off with ‘stress’ or any other related medical condition as soon as they are aware that they have been made subject to disciplinary proceedings.
6.3 An employee who is off sick will still be required to co-operate fully in respect of the Council’s Disciplinary Procedures, which includes attendance at investigation meetings and disciplinary hearings whilst they are off sick.
6.4 Employees who are off sick are not being asked or required to return to work and therefore a letter or Fit Note from their GP may not be acceptable evidence of unfitness to attend an investigation meeting or a disciplinary hearing.
6.5 If an employee’s illness is physical then a reasonable time for postponement of an investigation meeting or disciplinary hearing will be given, but unless the illness is very severe, normally a postponement of 5 working days will be permitted.
6.6 In the absence of medical opinion that an employee is mentally unfit to attend a hearing (i.e. cannot understand what is going on or is unable to discuss the matters in hand with their representative) then they will be expected, after one postponement, to attend an investigation meeting and/or disciplinary hearing.
6.7 Everything will be done to accommodate any reasonable requests for breaks etc. in the course of investigation meetings and disciplinary hearings.
6.8 Employees who are off sick may also be given one or more of the following options, as appropriate:
- sending a representative in their place
- sending written submissions
- attending at a neutral location (not on Council premises)
6.9 If an employee is unable or unwilling to attend an investigation meeting or disciplinary hearing after one postponement, the Council will proceed in the employee’s absence and make a decision on the evidence available at that time.
6.10 If an employee is advised of a disciplinary investigation or hearing and subsequently goes off sick with stress or any psychological condition (which is not pre-existing), the employee’s manager should notify their Chief Officer and Employment Relations Advisor. If an employee subsequently fails to attend disciplinary investigation meetings and/or disciplinary hearings, (after one postponement) or fails to give reasonable co-operation with the disciplinary process, the Chief Officer will have the discretion to withdraw occupational sick pay.
7. **Allegations concerning a Trade Union Representative**
7.1 Where allegations concern a Trade Union representative, the case must be discussed at the earliest opportunity with the Branch Secretary/Convenor or full time official, who should be invited to accompany the individual to any meetings under the procedure. Advice must be sought from the Employment Relations Manager before commencing any investigation or action under the procedure.
8. **Allegations concerning the abuse of children or vulnerable adults**
8.1 Where employees undertake ‘regulated activity’ as part of their job, as defined by the Disclosure and Barring Service (DBS) the Council has an obligation to notify the DBS of any cases of alleged abuse of children or vulnerable adults.
8.2 A referral will not be made until an investigation and evidence gathering has been undertaken by the manager and/or an Employment relations Adviser. This is in order to establish if the allegation has foundation. Disciplinary Procedure
1. Informal stage
1.1 An initial informal discussion is often more effective in dealing with minor conduct issues than a formal disciplinary investigation and hearing. If the employee’s manager has concerns about conduct they should meet with the employee to discuss their concerns.
1.2 A prompt, informal discussion can often prevent the repetition of minor misconduct and stop it from escalating into more serious misconduct.
1.3 The employee will be told of the expected standards of conduct required, and given an opportunity to explain their conduct and any mitigating circumstances. They should be advised when the matter will be reviewed again, which should generally be within three months. Should further problems arise before the review date, the manager may take further action before the timescale has elapsed. The employee should be made aware that this could happen.
1.4 Notes of the discussion should be written for reference purposes and retained by the manager and a copy given to the employee. The notes should detail:
- The nature of misconduct discussed;
- The required standard of conduct;
- The employee’s comments made at the meeting;
- Any training, support or additional supervision that is to be provided;
- The likely consequence of further breaches of conduct.
1.5 Informal discussions may not always be the most appropriate action. Where a manager is uncertain as to whether or not informal action is appropriate they should seek advice from their HR Employment Relations Adviser.
1.6 Any case involving fraud, a criminal act, corruption and/or deliberate misuse of Council equipment will not be considered minor for the purposes of this procedure.
2. Formal stage
2.1 Investigation
2.1.1 A full and impartial investigation must be undertaken if the manager considers:
- Informal discussion is inappropriate in view of the potential severity of the allegation/incident
- Informal discussion has already taken place but the misconduct has been repeated or has persisted
Note: Where a repeated pattern of misconduct has been clearly established, an investigation may not be required; in this case the manager should seek advice from their HR Employment Relations Adviser.
2.1.2 It is critical that investigations are carried out promptly. It is particularly important to interview witnesses promptly, before memories fade.
2.1.3 The investigation will normally be conducted by a senior member of staff, supported by an HR Employment Relations Adviser if necessary. 2.1.4 The employee under investigation must be informed, verbally and then in writing:
- That an investigation is being carried out.
- The nature of the complaint or allegation under investigation.
- The name of the person leading the investigation.
- Their right to be accompanied and/or represented at investigatory meetings by a recognised Trade Union Representative or a work colleague.
- That notes will be kept of the meeting and if needed will be used at a later stage.
They must also be given a copy of the Council’s disciplinary procedure and disciplinary rules.
2.1.5 The employee will be given 5 working days notice of any investigatory meetings. However with the consent of all parties this period of notice may be reduced as it is desirable that such meetings should take place as soon as possible.
2.1.6 The aim of the investigation is to establish the facts. The investigating officer will present the management case in the event that a case proceeds to a disciplinary hearing.
2.1.7 The employee and any witnesses will be interviewed separately in the course of investigatory meetings.
2.1.8 An investigation meeting may be postponed at the discretion of the investigating officer if the chosen representative is unavailable. The investigating officer shall generally agree such a postponement where a reasonable alternative date and time within 5 working days is proposed by the employee/representative.
2.1.9 Any witnesses to be called should be written to in advance to be advised that they may be required to attend an investigatory meeting.
2.1.10 Witnesses will not normally need to be accompanied to an investigation meeting. They may however request to be accompanied by a Trade Union representative or a work colleague where there are special circumstances in which they feel that they require such support. For example, this might be where the witness is alleged to have experienced bullying, harassment or discrimination.
2.1.11 Where a witness is accompanied at an investigation meeting, it should be made clear that the role of the person accompanying them is to provide support and not to speak on behalf of the witness.
2.1.12 Notes of the meeting should be taken by a designated note-taker. A copy of the notes should be provided to the employee, as soon as is reasonably practicable and the employee should be invited to note on a separate sheet if they feel there are any inaccuracies or omissions, or if they wish to add their own comments.
2.1.13 Notes of the meeting, witness statements and any supporting documents should be signed and dated and retained as possible evidence at any future disciplinary hearing, if appropriate.
2.1.14 The investigating manager will prepare a report of their investigation indicating their findings to the manager who will determine whether or not a disciplinary hearing is required. If it is decided that it is not appropriate to convene a disciplinary hearing the employee will be informed in writing that no disciplinary action is being taken. 2.2 **Suspension**
2.2.1 In the case of alleged serious misconduct or gross misconduct a preliminary investigation should be carried out without delay to ascertain whether there is any substance to the allegations.
2.2.2 If there appears to be substance to the allegations then it may be necessary to suspend the employee. This should only be used in exceptional circumstances, for example:
- Where the severity/nature of the misconduct means that the employee’s presence in the workplace cannot be tolerated;
- Where their continuing presence could hinder investigations (e.g. they may influence witnesses or interfere with relevant evidence);
- Where the employee is being charged with a serious criminal offence that is potentially inconsistent with their position;
- Where there is a clear and real concern that the employee or others may be placed at risk by them remaining in the workplace.
The examples above are neither exclusive nor exhaustive.
2.2.3 An employee can only be suspended by an officer with the necessary delegated authority within a relevant service area in consultation with the Chief Human Resources Officer (or his/her representative).
2.2.4 The suspension may be invoked at any stage of the investigation, should new evidence come to light.
2.2.5 Wherever possible, alternatives to suspension such as temporary redeployment/relocation or working from home should be carefully considered.
2.2.6 In cases of personal harassment or bullying, if suspension or temporary relocation is deemed appropriate, it may be the alleged harasser who is suspended or moved to a different work location or asked to work from home on a temporary basis. This must not be done before consultation with the relevant Chief Officer and an Employment Relations Adviser.
2.2.7 Suspension should not be treated or viewed as a form of discipline or penalty for the employee.
2.3 **The Suspension Process**
**The decision to suspend**
2.3.1 When deciding whether to suspend an employee, the manager should consider all the circumstances and in particular should address the following issues:
- Are there reasonable grounds for the suspension?
- What are the implications of suspension for the employee?
- What is the risk to the Council, service users/clients, or other employees?
- Is suspension necessary for a proper investigation of the allegations?
- How long will the suspension last?
- Would moving the employee to other duties remove the need for suspension?
*Note:* In all contracts of employment, there is an implied term that the employer will act in a way that will maintain trust and confidence. If an employer has not properly considered whether suspension is appropriate, or the manner in which the suspension is imposed is unreasonable, the term could be breached. 2.3.2 The manager should contact an Employment Relations Adviser for advice on whether suspension is appropriate, giving full details of the alleged misconduct.
**Practical arrangements**
2.3.3 If it has been agreed to proceed with suspension and following a preliminary investigation, the manager should agree with the ER Adviser the practical arrangements for implementing the suspension, to include:
- Notifying the employee to attend a suspension meeting;
- Safeguarding of relevant documents, records and other items of Council property;
- Handing over keys and other equipment, which may include a work mobile or IT equipment;
- Accompanying the employee back to the workplace to collect personal belongings if required;
- Limiting or removing access to IT systems – please see further guidance below;
- Guidance about contact with other employees whilst on suspension e.g. it may be necessary in some circumstances for a suspended employee to be prohibited from contact with particular named employees;
- Escorting the employee from the premises;
- How the employee’s absence from work will be communicated to colleagues, external contacts and service users;
- Agreeing what the others in the employee’s team may be told
**Note:** At all times, managers must be mindful of the dignity of the employee and the stress that can be caused by a suspension. For example, if an employee is to be escorted from the premises this should be done with the minimum of fuss and at a time and in a way that does not draw unnecessary attention.
**Access to IT systems and networks**
2.3.4 When a decision to suspend has been taken, the manager should also consider the implications of maintaining the individual’s access to their e-mail account and the Council’s IT systems and networks. There may be instances where it is advisable to restrict or remove access to these IT systems. For example:
- Employees who have administration rights to Council IT systems;
- Instances of child\\vulnerable adult abuse where employees have access to client information systems;
- Where soft copy evidential documents may be deleted or tampered with;
- Instances of harassment\\bullying where cyber bullying may continue or witness intimidation may take place;
- Where an employee works from home and therefore may have the access to continue to work from home.
**Preparing a suspension letter**
2.3.5 The manager may prepare a suspension letter before meeting the employee, with guidance from an Employment Relations Adviser. If this is not possible or practicable, a letter will be issued following the meeting (see Template Letters). The letter must be signed by the Chief Officer or a manager with the necessary delegated authority.
The letter should include:
- A statement confirming that suspension is not a disciplinary action
- The reason for suspension
- The length of the suspension and arrangements for reviewing (this should be done every 2 weeks)
- Actions that will be taken during the suspension
- That suspension will be on full contractual pay
- Details of who the employee may contact within the Council and for what purpose
- Support available
**Advising the employee of suspension**
2.3.6 When the above arrangements are in place, the manager should convene a suspension interview as soon as possible after the alleged misconduct. The employee has the right to be accompanied by a recognised Trade Union representative or a work colleague. However, the unavailability of a representative must not delay convening the suspension interview or the suspension itself.
2.3.7 Under normal circumstances, the manager should ask the employee to attend a suspension meeting, giving a brief outline of the reasons for the meeting, advising the employee that they have the right to have a recognised Trade Union representative or work colleague present at the suspension meeting and also remind the employee that suspension is not a disciplinary action. Where possible this should be confirmed in writing in advance of the meeting (see Template Letters).
**The suspension meeting**
2.3.8 The manager should chair the meeting, and state from the outset that suspension is not a disciplinary action and does not itself imply any presumption of guilt on the part of the employee.
2.3.9 The employee should be advised that brief notes of this meeting will be made by the manager.
2.3.10 Where the meeting takes place without an employee representative present (either because the employee declined this right or because no representative was available), the manager should inform the employee why the suspension is proceeding without such representation. The manager should note these reasons for the record.
2.3.11 The manager should inform the employee:
- Of the reason for the suspension
- Of the likely duration of the suspension and that it will be reviewed every 2 weeks with a view to them returning to work as soon as possible
- That suspension will be on full pay
- Of the conditions of the suspension, which should include:
- No access to Council premises
- No use of Council equipment or resources
- No contact with Council employees (and others where applicable, e.g. service users, contractors etc.)
- The requirement to be contactable and available for work and to attend meetings during normal working times
- The requirement to notify any periods of sickness during the suspension, in the normal way.
- The requirement to return all Council property for the duration of the suspension
2.3.12 The employee should be given a named contact at the Council with whom they may communicate for the purposes of obtaining information in order to prepare his/her case. Such access may be reasonably restricted or denied, but a decision should be given within one working day.
**Note:** Employees will not generally be prevented from using Council facilities as a member of the public, (e.g. libraries) or be prevented from social contact outside of a work context with fellow employees who may be friends or relatives of the suspended employee.
2.3.13 The manager should also discuss with the employee what will be communicated to colleagues and service users/external contacts to explain their absence from work, and how the Council will respond to any enquiries from the media about the employee’s absence from work.
2.3.14 During the suspension interview, the manager should allow the employee the opportunity to comment on the alleged misconduct and the decision to suspend, and any comments made by the employee will be noted for the record.
2.3.15 At the end of the meeting, the manager must give or send the original copy of the suspension letter to the employee and inform them of their right to representation at any further meetings which may occur as a result of the investigation into the alleged offences.
2.3.16 If the employee is a member of a recognised Trade Union, he/she will be responsible for forwarding a copy of the suspension letter to their Trade Union representative.
2.3.17 The manager needs to be sensitive to reactions from the employee including shock, stress or distress and may need to consider offering the employee support either to their home or a place of safety. Even at this stage it may be still be feasible to consider alternatives to suspension. If suspension is not initiated then any pre-prepared documentation not subsequently used should be destroyed.
**Impact on Pay**
2.3.18 Suspension will be on contractual pay. However, the Council reaffirms that suspension is not a disciplinary action, and therefore will seek to avoid the employee suffering any short term unexpected financial loss as a result. An employee’s pension will not be affected by suspension.
**Sickness and Holiday**
2.3.19 If the employee becomes ill during the suspension the normal sickness absence procedure will apply (i.e. notification, monitoring of absence and trigger points etc.) The normal contractual sick pay entitlements will come into force for the period of the illness. However, the suspension rules remain unchanged. Annual leave entitlement, where appropriate will continue to be accrued throughout the suspension and the employee may request annual leave in the normal way.
**Suspension Reviews**
2.3.20 The manager and ER Adviser should review the suspension every 2 weeks whilst the investigation is carried out, keep a written record of each review, and ensure that the Chief Officer is kept up to date.
2.3.21 The review should:
- Assess whether the conditions for suspension are still met Consider whether the suspension can be lifted and the employee allowed to return to work in their substantive post, or whether they could work in a different location or capacity (only after full discussion and agreement with the employee).
2.3.22 The manager will keep the employee informed of each review. Records of suspension should be written by the manager (with a copy forwarded to the Chief Officer) when either the suspension is lifted or a hearing arranged.
Support during Suspension
2.3.23 Throughout all stages of the suspension process the employee will be given as much information as possible about the allegations or issues of concern, subject only to protecting the interests of any other party.
2.3.24 Suspended employees may experience significant levels of stress and sensitivity must be shown throughout the suspension. For example, managers should be sensitive about dispatching letters to suspended employees which will arrive on a Friday or Saturday where employees may have no opportunity to contact anyone within the Council.
2.3.25 The manager should also ensure that a support officer is identified and that this person maintains regular contact with the employee. The employee should be made aware of the availability of the Employee Helpline Service.
2.3.26 Although suspension should not lead to social isolation it may be necessary in some circumstances for a suspended employee to be prohibited from contact with particular named employees (e.g. witnesses).
2.3.27 The manager should ensure that all employment matters relating to an individual employee remain confidential. Should there be a press enquiry or other request for a statement regarding the position of any employee, the manager must first inform HR Employment Relations and then the individual employee of this enquiry. The Council’s Marketing and Communications Service is available to assist with any press enquiries.
Ending the suspension
2.3.28 Suspension can only be ended by the relevant Chief Officer. If the manager wishes to end a suspension, he/she must write to the Chief Officer stating:
- Why they feel it is no longer necessary for the employee to remain on suspension.
- That there are no safeguarding risks if the employee returns to work.
If the Chief Officer agrees to the suspension being lifted, the manager should write to the employee to confirm this.
2.4 Disciplinary Hearing and Chair
2.4.1 Where it is believed that there is a disciplinary case to answer a formal disciplinary hearing will be convened.
2.4.2 The hearing should be chaired by a senior manager at an appropriate grade who has had no previous involvement in the case, to the extent that they can be impartial.
2.4.3 The Chair will convene the hearing and issue correspondence accordingly as set out below. 2.4.4 The Chair will be assisted by an HR representative, who will provide guidance on the procedural aspects of the process.
2.5 Notification of a formal hearing
2.5.1 The manager will notify the employee in writing, of the intention to hold a disciplinary hearing. The letter instructing the employee to attend the disciplinary hearing should:
- Give the employee at least 5 working days notice of the hearing;
- Set out the date, time and place of the hearing and the name/s of the members of the disciplinary hearing panel;
- Confirm the nature of the alleged offence, conduct or complaint. This should be set out as one or more disciplinary charges specifying in each case the allegation and the Disciplinary Rule which it is alleged that the employee has breached;
- Advise the employee of their right to be represented at the hearing by either a recognised Trade Union representative or a workplace colleague;
- Advise of the names of any witnesses intended to be called and copies of any documents or statements which will be produced. This will include the investigation report;
- Advise that the offence, if proven, may result in formal disciplinary sanction being given;
- Where there are allegations of gross misconduct or where the employee already has a live final written warning, the letter should indicate that the outcome could be dismissal;
- Advise of the requirement that the employee advise the manager of the name of their representative and the names of any witnesses to be called, usually at least 3 working days before the hearing;
- Advise of the requirement to provide copies of any documentation material at least 5 working days prior to the hearing. (NB. A disciplinary panel shall have discretion to consider documentation submitted after this deadline where they consider it to be relevant to the disciplinary charge(s).
2.5.2 Where possible, the letter should include as an attachment any documents that the manager will present at the hearing, although these can be sent under separate cover provided they arrive no later than 5 working days before the hearing. These should include any conclusions and recommendations to the panel.
2.6 Attendance at a formal hearing
2.6.1 The following may attend a disciplinary hearing:
- The employee facing disciplinary action;
- The Chair who will hear the case;
- An HR representative who shall act as an impartial adviser to the Chair;
- The employee’s representative;
- The manager or presenting officer;
- The investigating officer;
- A note taker;
- Any witnesses invited to attend, (who shall remain only for the duration of their evidence).
Note: Where there is a requirement for other representatives/employees to attend for training purposes, this may be granted with the consent of the Chair. 2.7 Postponement of a hearing
2.7.1 If it is necessary to postpone a hearing, an alternative date should be set which is no more than 5 working days later than the original date. It will be for the Chair to make the decision to postpone and there should normally be no more than one postponement of a hearing. Following one postponement, the hearing may proceed in the absence of the employee.
2.8 Conducting the disciplinary hearing
2.8.1 The order of business at a disciplinary hearing will normally be as follows:
The Chair of the panel will:
- Introduce those present and explain their role;
- Explain the purpose of the hearing and how it will be conducted;
- State precisely what the complaint or series of complaints is;
- Ask the investigating officer to detail the case by presenting the evidence, calling witnesses if appropriate;
- Giving the employee and/or their representative the opportunity to question the witnesses and any evidence presented;
- Ask any questions of the witnesses and the investigating officer;
- Give the employee and/or their representative the opportunity to state their case, present evidence and call witnesses. The employee should be encouraged to explain any mitigating circumstances which exist;
- Give the presenting officer the opportunity to question witnesses and any evidence presented;
- Ask any further questions necessary to establish the facts and clarify any points of doubt;
- Give the presenting officer the opportunity to sum up their case;
- Give the employee and/or their representative the opportunity to sum up their case;
- Adjourn the hearing to give proper consideration to the matters raised before reaching a decision. In certain circumstances further information may need to be gathered, in which case this should be undertaken as quickly as possible and the hearing reconvened to consider any new evidence before a decision is reached;
- The decision will be communicated to all parties and confirmed in writing, as soon as possible, giving the reasons for the decision;
- If the decision is not made within 10 working days, the employee will be notified in writing and given an expected date for the decision.
2.9 Deciding the outcome of a disciplinary hearing
2.9.1 Having considered everything they have heard at the disciplinary hearing, the disciplinary panel shall consider first of all whether the procedure has been correctly applied and, if so, whether the disciplinary charges have been proven on the balance of probabilities.
2.9.2 Where the disciplinary charges have been found proven the panel shall consider whether or not to apply any disciplinary sanction. In deciding on the appropriate disciplinary sanction, no account should be taken of any lapsed warnings.
2.9.3 The possible outcomes of hearing are:
- No further action
- Written warning
- Final written warning
- Dismissal with notice
- Summary dismissal (i.e. without notice)
**Note:** If the outcome is ‘no further action’ or a written warning this may be supplemented by management advice, guidance and/or recommendations for counselling, development, monitoring as appropriate.
### 2.10 No further action
2.10.1 If no further action is to be taken, this must be clearly indicated in the letter confirming the decision. The panel may feel it is appropriate to set out for the employee expected standards of behaviour in order to avoid further allegations or incidents which may lead to disciplinary action. This does not, however, constitute a written warning.
2.10.2 If the panel recommends development activities, these should include a monitoring period for reviewing progress.
### 2.11 Written warning
2.11.1 A written warning will be issued for serious matters or repetition or continuation of an offence which previous informal discussions have failed to curtail or resolve. A written warning will generally be given for a first offence of misconduct (other than gross misconduct).
2.11.2 The Chief Officer has the authority to determine the appropriate duration of the warning having regard to the seriousness of the offence and any mitigating circumstances. This will normally be from 1 to 2 years, but in any case no more than 3 years.
2.11.3 The letter, signed by the Chief Officer will include the following:
- Details of the complaint and the improvement required (if required) within a given time.
- Details of the warning and its expiry date.
- The likely consequences of further misconduct would be further disciplinary action which could lead to a further sanction, up to and including dismissal.
- The employee’s right of appeal, the procedure for lodging an appeal and the time limit for doing so.
2.11.4 The letter should be sent to the employee within 5 working days and copied to the Employment Relations Adviser. A copy should be retained on the employee’s personal file. The employee is responsible for forwarding a copy to their Trade Union representative.
2.11.5 Once the duration of the warning has expired, it must not be considered as part of any future disciplinary action or referred to for the purposes of employment references. However, where the case involves safeguarding issues the letter will remain on the employees personal file and may be referred to.
### 2.12 Final written warning
2.12.1 A final written warning will be issued if:
- A written warning has already been issued and another offence has occurred, or
- Where the conduct is of such a serious nature that a first written warning is not deemed appropriate, or Where the offence could have warranted dismissal but the Chair decides that this is not appropriate in all the circumstances (including having regard to any mitigating circumstances).
2.12.2 The Chief Officer has the authority to determine the appropriate duration of the warning having regard to the seriousness of the offence and any mitigating circumstances. This will normally not exceed 3 years. However, in exceptional circumstances where the misconduct verges on gross misconduct, the final written warning may be retained indefinitely and any recurrence of similar serious misconduct may lead to dismissal proceedings. The Chief Officer should seek advice on this from their Employment Relations Advisor.
2.12.3 The letter, signed by the Chief Officer will include the following:
- Details of the complaint (and the improvement required) within a given time.
- Details of the warning and its expiry date.
- The likely consequences of further misconduct would be dismissal.
- The employee’s right of appeal, the procedure for lodging an appeal and the time limit for doing so.
2.12.4 The letter should be sent to the employee within 5 working days and copied to the Employment Relations Advisor. A copy should be retained on the employee’s personal file. The employee is responsible for forwarding a copy to their Trade Union representative.
2.12.5 Once the duration of the warning has expired, it must not be considered as part of any future disciplinary action or referred to for the purposes of employment references. However, where the case involves safeguarding issues the letter will remain on the employees personal file and may be referred to.
2.13 Dismissal
2.13.1 Only Chief Officers have the delegated authority to dismiss.
2.13.2 Dismissal will normally be with notice but where gross misconduct is found, it should be summary dismissal (without notice). Gross misconduct is defined as serious enough to constitute a fundamental breach of the contract of employment.
2.14 Dismissal following a final written warning
2.14.1 If during the life of the final written warning, the employee commits any further misconduct, the manager should inform the employee that a further disciplinary Hearing will be convened which could result in their dismissal.
2.14.2 The employee’s manager should then inform the Chief Officer (or other officer who chaired the previous disciplinary Hearing) who will convene a hearing, the aim of which will be to hear the evidence and to enable the employee to put forward any mitigating circumstances.
2.14.3 The Hearing will be conducted in line with procedure as outlined above. Only an officer with delegated authority to dismiss may do so. Dismissal will be with contractual notice.
2.15 Appeals against disciplinary action
2.15.1 Appeals will be heard in accordance with the Council’s Appeals Procedure. 2.15.2 Appeals against a final written warning must be made to the employee’s Chief Officer, in writing, within 7 working days of the employee’s receipt of the final written warning.
2.15.3 Appeals against dismissal must be made to the Chief Human Resources Officer, in writing, within 7 working days of the employee’s receipt of the notice of dismissal. Overview of Disciplinary Process
Trigger incident/s or allegations
Check whether there is any substance to allegations
Minor or non-serious misconduct
Consider suspension – if warranted
Carry out full investigation
Arrange disciplinary hearing – giving required notice
Hold disciplinary hearing – consider evidence and decide on outcome
Notify employee in writing of decision and their right of appeal
Appeal (if employee appeals)
Implementation of any outcome
Informal stage
Meet with employee to discuss misconduct and agree improvements
Monitor and review employee’s conduct – if re-occurrence, consider formal action
No further action
Yes
No Disciplinary Rules
1. Introduction
1.1 The disciplinary rules are set out so that all employees understand the standards of conduct expected of them. The rules also give an indication of action and/or behaviour which is considered unacceptable. The aim is to specify those rules which are necessary for the safe and efficient performance of work and to maintain satisfactory working relationships. The rules required may vary according to particular circumstances.
1.2 The lists below are not exhaustive and the Council reserves the right to take action for matters not listed or alluded to. Employees should also refer to other Council policies and procedures and the relevant national Scheme of Conditions of Service, where other rules and standards are implied. In addition, employees are required to work in accordance with relevant statutory obligations, professional standards, health and safety regulations and other rules governing their profession or working environment.
1.3 Breaches of these rules may lead to disciplinary action being taken in accordance with the Disciplinary procedure. Employees may be suspended from work as part of the Disciplinary procedure. Misconduct may lead to dismissal, although the employee will be entitled to appropriate notice. Gross misconduct, however, may lead to dismissal without notice. The form of disciplinary action taken will vary depending on:-
- The seriousness and nature of the offence;
- The employee’s previous record;
- Mitigating circumstances; and
- In some instances - the nature of the job.
1.4 In considering individual offences, the level and severity of misconduct will be a key element in deciding upon the action to taken. Some misdemeanours, which would normally result in a warning, could in extreme circumstances warrant summary dismissal.
2. Examples of misconduct offences
2.1 Misconduct will not normally warrant dismissal without a previous warning (please also refer to Gross Misconduct, section 3 below).
General Conduct
- Failure to carry out a reasonable management instruction;
- Abuse of authority in relation to a colleague or a member of the public;
- Rudeness towards or conduct likely to cause harm or offence to a parent, colleague, member of the public or a fellow employee;
- Refusal to comply with appropriate standards of appearance and / or personal hygiene acceptable to management;
- Behaviour at work likely to offend decency;
- Failure to wear the appropriate uniform provided by the Council;
- Sleeping on duty;
- Unauthorised absence from duty;
- Failure to notify line manager of absence from duty, and reasons, including non-attendance at an approved course of training;
- Failure to provide appropriate medical certification as required by the appropriate sick leave procedures;
- Improper use of IT, e-mail etc.:
- Breaches of information security and data protection policy;
- Persistent lateness;
- Persistent absenteeism;
- Neglect of Duty;
- Failure to discharge obligations in accordance with a statute or contract of employment;
- Negligent or inadequate standards of work.
- Acceptance of gifts or gratuities (where an employee is offered a gift or gratuity this must be reported to their manager). In this particular area there needs to be a good deal of common sense and reasonableness, and it will be left to the manager’s discretion in each case, having regard to all the circumstances; However, as an example it is not expected that inexpensive promotional tokens (e.g. pencils, calendars etc.) would come within this category;
- Failure to hand lost property to an appropriate employee;
- Conduct prejudicial to the Council’s interest whether committed at work, or committed outside working hours (depending on the nature of the offence, the duties of the employee’s post and any damage to the reputation and integrity of the Council). This includes activities via the internet, on social networking sites and personal blogs.
**Health and Safety**
- Failure to wear the appropriate protective clothing provided by the Council for particular duties;
- Failure to comply with the accident reporting procedure(s);
- Failure to follow safety instructions and codes of practice and safety policy statements issued from to time by the Council and Service establishments;
- Failure to comply with hygiene requirements;
- Failure to obey a lawful and reasonable instruction, including deliberate failure to observe any operational regulations and rules of the Council;
- Dangerous or reckless behaviour involving risk of injury to other persons or oneself;
- Being under the influence of drugs, including alcohol, during working hours, so that performance of duties is detrimentally affected;
**Deliberate Misuse and Falsification of Information**
- Making false and / or deliberately misleading statements, whether verbally or in writing, in respect of official business;
- Failing within a reasonable period of time to report any matter which it is a duty to report;
- Deliberate destruction or damage to any documents required for the purposes of the Council;
- Unauthorised disclosure of confidential information relating to the business of the Council, its employees, or the public with whom it has dealings;
**Unauthorised Private Work**
- Engaging in employment, including self-employment, during off-duty hours when such employment conflicts with, or is detrimental to the interest of the Council or in any way weakens public confidence in the conduct of the Council;
- Private work which might involve any dealings with the Council must be disclosed and can only be undertaken with the Manager’s approval.
3. **Examples of Gross Misconduct Offences**
3.1 Gross misconduct is misconduct that is so serious that it destroys the relationship of trust and confidence that the Council needs to have in an employee and the dismissal of the employee is a reasonable sanction to impose notwithstanding any lack of history or conduct. A dismissal for gross misconduct is justified at the first offence and, depending on the circumstances, the employee may be dismissed without notice (i.e. summary dismissal).
3.2 It is not usually the number of offences, but rather the nature of a single disciplinary offence that determines gross misconduct. However, repeated disciplinary offences which, individually might otherwise have amounted to misconduct might, when aggregated, amount to Gross Misconduct.
3.3 This may include acts committed outside working hours as well as those committed at work, depending on the nature of the offence, the duties of the employee’s post, and any damage to the reputation and integrity of the Council.
3.4 The following are examples of offences which may be deemed gross misconduct and may lead to summary dismissal without any previous written or verbal warnings having been given.
**Dishonesty, fraud and corruption**
- Failure to disclose a conviction for a criminal offence (unless under the terms of the Rehabilitation of Offenders Act 1974 the conviction is “spent”), and the post is exempt;
- Undertaking private work during hours when contracted to work for the Council—this includes unpaid voluntary work, unless it has been approved;
- Falsification of any information used in support of or connected with an application for a post with the Council, including failure to disclose any known relationship with a Council Member or Council employee;
- Improper use of official position for personal and/or financial advantage or for the private advantage of some other person or organisation including soliciting or accepting bribes;
- Misrepresentation as to status, qualification, experience and health;
- Deliberate falsification of time sheets, bonus sheets, claim forms, sickness self-certification forms, invoices, receipts, accounts etc;
- Theft or misappropriation of, or malicious damage to, property of Council, service users/clients or other employees;
- Theft or misappropriation of Council materials or equipment.
**Note:** In case of fraud or financial irregularities Managers are reminded of their particular responsibilities under paragraph G20 of the Accounting Regulations and of the need to consult the Chief Finance Officer.
**Harassment, bullying and discrimination etc.**
- Acts of harassment, victimisation, intimidation, incitement or discrimination against any individual or group (e.g. includes colleagues, visitors, pupils and parents) **Note** this includes misuse of the internet and social media)
**Improper use of equipment etc.**
- Unauthorised use of Council vehicles, whether during or outside the working day;
- Unauthorised use of any Council equipment and / or facilities for private purposes;
- Use of Council labour for private purposes;
- Use of wasted Council materials and/or equipment without express authority;
- Unauthorised interference with a computer (e.g. misuse of a password to gain entry to a computer for the purpose of extracting information to which the employee is not entitled and/or deliberate corruption of computer records).
**Neglect of Duty**
Gross negligence and/or dereliction of duty.
**Other Gross Misconduct**
- Fighting with or physical assault on fellow employees, managers or members of the public, including maltreatment of service users/clients;
- Gross indecency, sexual offences or grossly offensive behaviour or language;
- Misuse of the Internet (including social media, e-mail) such that it is of a sexual, racist or other serious matter, or is potentially a criminal act;
- Non compliance with a safety code such as to endanger life or cause injury;
- Malicious damage to Council property and causing waste, loss or damage to Council property;
- Serious insubordination;
- Serious incapacity at work through the taking/consumption of drugs/alcohol/other substances;
- Serious breach of Health and Safety rules. Guidelines on Informal Disciplinary Action
1. Wherever possible, try to resolve potential disciplinary issues and minor breaches of discipline informally, as part of day to day management and supervision. This should be the normal approach taken, except in cases of serious or gross misconduct.
2. You can use informal discussion and/or counselling to find solutions to identified problems, so that any shortcomings in conduct can be remedied. However, serious breaches of discipline, and particularly those involving alleged gross misconduct, must be dealt with formally.
3. Preparing for an informal discussion
Before meeting with the employee for an informal discussion, you should be as well prepared as possible. The following steps will help:
- Make sure you are clear about the problem/behaviour/misconduct and the changes you expect from the employee. Write this down if necessary.
- Consider the possible outcomes you want from the meeting and how you will state these to the employee.
- Gather all the facts and ensure you have copies of any written standards of conduct/behaviour and/or the disciplinary rules concerned.
- Think about the employee and how they are likely to react and behave. Think of the questions you need to ask to seek their views and to find a solution to the problem.
- Book a suitable venue and make sure you clear your diary of all other commitments at the time of the meeting.
- When notifying the employee of the meeting, make sure that they understand its purpose. Note: as this is informal action, they do not have the right to be accompanied at the meeting and the action will not be recorded on their personal file.
4. The informal discussion
The following will help you to make the discussion more productive:
- Try to put the employee at ease, but come to the point quickly and clearly. Remind them of the purpose of the meeting and that it is an informal discussion at this stage.
- Tell them you will be taking notes, but this is for reference only if you need to follow up any agreed action and that no note will be put on their personal file.
- Describe clearly and simply the behaviour/conduct you have asked to see them about, and state dates/times wherever possible. Then explain why this contravenes the expected standards. If necessary, re-iterate the expected standards and refer to any written examples you have brought to the meeting.
- If the employee states they are/were unaware of the standards, then you will need to state that regardless of this, these are the standards you expect from now on and that everyone is expected to maintain them. Do not get drawn into discussion about other colleagues.
- Invite the employee to state their understanding of the situation and check that they acknowledge the issue. Wherever possible, summarise what they have said to check your understanding.
- Once they have acknowledged the issue, discuss methods of improving. Make suggestions where you can, but encourage the employee to suggest how they can improve. If the employee is unable or unwilling to suggest improvements then clearly state your expectations and seek their agreement. (Note: if the employee refuses to acknowledge there is a problem, make a note of this, but clearly state your views and the improvement/changes you expect.)
- Agree specific actions where you can and a date by which you expect to see an improvement (this may be immediately or over a reasonable length of time).
- Make clear to the employee the consequences if they do not improve or meet the standards, i.e. formal action might be taken.
- Make it clear the date you will review this with them.
- Close the meeting by summarising the discussion and the actions agreed.
5. **Following up the discussion**
- Follow up by making a record of the discussion, highlighting the particular issue, key points of discussion, actions and dates for review. If necessary, confirm this in writing to the employee.
- Keep your own note of the meeting and diarise the dates for reviewing improvements.
- If the employee has met the required standards/improvements, acknowledge this to them.
- Notes of the discussion should be kept by the manager (or his/her nominee for reference purposes and a copy given to the employee.) Undertaking a Disciplinary Investigation: Guidance for Investigating Officers
1. Introduction
Your responsibilities
As investigating officer your responsibilities are to:
- Gather all the relevant facts promptly before employees' memories fade
- Establish the exact nature of the allegations and the evidence to substantiate these
- Summarise your findings in an investigation report
- Recommend whether or not the allegations should be considered at a disciplinary hearing
- Present evidence at any disciplinary hearing and answer questions as required
- Attend any appeal hearing as a witness, where required
- Follow the procedure
- Attend a disciplinary hearing, if required, to report back on your findings
In carrying out an investigation you should:
- Ensure the investigation is carried out as quickly as possible
- Ensure you have adequate time away from the workplace to conduct the investigation (which may reallocation of normal duties)
- Be thorough and fair
- Remain impartial and objective, do not make assumptions
- Consider whether there are any mitigating circumstances
- Maintain confidentiality as appropriate
- Talk to employees and, where appropriate, service users/others concerned with the incident as appropriate to establish the full facts
- Seek supporting evidence, including any that is favourable to the employee
- Obtain statements from witnesses and keep notes of investigation meetings
- Compare statements and notes and attempt to resolve any discrepancies
- Follow the procedure
2. The Process
Step 1 - Preparation
- Plan your investigation before you begin – consider what information you need to gather. Before meeting with the employee and other witnesses, plan the questions you should ask.
- Throughout the investigation you may contact an HR Employment Relations Adviser for advice, for example, in the preparation of questions.
- Decide how best to conduct the investigation. This will depend on the complexity of the case. For example, you may decide, in some circumstances, a witness statement will suffice. In other circumstances, you may decide to meet with witnesses, but ask them to produce a statement before the meeting. Or, you may choose to meet the witness / employee in person in the first instance.
- Decide the order in which you will meet witnesses and the employee. You can meet with them more than once if necessary.
- Plan where to hold investigation meetings - this should be in a private place that will be free from interruptions.
- Witness notes should be signed by both the witness and the person conducting the interview and the date and time should be recorded.
- Try to have another person present to take notes. If this is not possible, you should take notes of key points raised at the meetings. The notes do not need to be verbatim. You should give a copy of the notes to the employee/witness following the meeting and ask them whether he/she would like to add any comments on a separate sheet (e.g. comments, omissions etc.) Where the employee/witness provides alternative notes of the meeting both versions should be included in the evidence supporting your investigation report.
**Step 2 - Meeting the employee/s under investigation**
- If there is more than one employee under investigation, meet each employee separately.
- Where the matter under investigation is particularly sensitive, it is advisable, to have another appropriate person present (e.g. a representative from Human Resources).
- Introduce yourself (and if someone else is taking notes, explain their role) and remind them of the purpose of the meeting – i.e. to ascertain the facts.
- Ensure employee/s under investigation are provided with the correct procedure that is being used.
- Advise the employee that in order for a full and thorough investigation to take place, information will have to be disclosed and shared to appropriate individuals at appropriate times during the process.
- Remind all parties of confidentiality and not to disclose to others, any information about the investigation.
- Ensure all parties are aware that you will only disclose to others, information relating to the investigation, on a “need to know” basis.
- Confirm that all records and notes will be kept secure and viewed only by individuals involved in the current process or later when appropriate action may need to be taken.
- Remind the employee of their right to be accompanied by a Trade Union representative or work colleague. Ensure that the employee understands the allegations that have been made. Ask him/her to respond to these allegations and produce evidence to support his/her response.
- The Trade Union representative/work colleague is not permitted to answer questions on behalf of the employee but may contribute to the discussion.
- Ask questions to find out exactly what happened (include a diagram or drawing if necessary). Use open questions to gain information, clarify the issues e.g. ‘what happened then?’ and to check your understanding of what has been said.
- Find out if there are any witnesses and establish their names and job roles.
- Summarise the content of the discussion (checking with the note-taker, if there is one) and check that the employee understands what is being recorded.
- Send the typed statements to the employee and invite them to add comments on a separate sheet if they wish to do so.
**Remember when interviewing the employee:**
- Be sensitive to their feelings but remain detached and do not get emotionally involved
- Remain neutral and do not be drawn into giving your opinion
- Check the accuracy of your understanding (summarise before moving on to a new point or question)
- Focus on facts
**Step 3 – Meeting witnesses**
**Note:** You may decide it is not necessary to interview every witness, and a written statement will suffice. Witness statements should contain the following:
- The name (and job title if an employee) of the person giving the statement
- Details of the date, place and time of the incident being investigated
- Confirmation of the names and job titles of all those present
- The reason for the witness being able to comment on the incident
- Position in which the witness was able to see the incident
- Full details of what was witnessed, the sequence of events, names of other persons present, facts
- Sketch or plan if appropriate
- Date, time and place the statement was taken
- The signature of the witness
**If you interview witnesses:**
- You may wish to ask witnesses to write a personal statement prior to meeting with them. Where appropriate you could ask them to respond to certain questions.
- Where a witness provides a written statement you need to be happy that you have got all the information that you require from them and that there are no unanswered questions. If you are not satisfied you can re-interview the witness.
- Discuss with HR Employment Relations if a witness is unwilling to get involved.
- Witnesses will not normally need to be accompanied to an investigation meeting. They may however request to be accompanied by a Trade Union representative or a work colleague where there are special circumstances in which they feel that they require such support. For example, this might be where the witness is alleged to have experienced bullying, harassment or discrimination.
- Ask them to explain what happened, or where you have asked for a written statement in advance, to gain clarification and/or further information about points that they have made.
- Use open questions to gain information, clarify the issues e.g. ‘what happened then?’ and to check your understanding of what has been said.
- Don’t lead the witness, but do encourage them to concentrate on the main facts. Advise witnesses that their statements and responses to questions will be made available to the employee and to the management side if the investigation results in a disciplinary hearing. Witnesses also need to be made aware that they may be called to give evidence at a disciplinary hearing.
**Step 4 - Gather other evidence**
- Ask and seek supporting evidence to substantiate information provided by witnesses and/or the employee. Keep copies to use as supporting documentation.
- You may need to look at documents such as:
- work rotas
- attendance reports
- shift/handover notes
- incident reports
- minutes of team meetings
- one to one records
- performance management documentation,
- emails, letters
- training records, development plans.
- procedures
- other appropriate records or data (e.g. swipe card records, CCTV footage)
- legislation related to the case
- You may need to visit other sites or locations if necessary
- Look at the employee’s background and employment record as well as any special circumstances that need to be taken into account.
- Ensure that the information you gather is appropriate, compatible and proportionate.
- Ensure that information is not obtained by deception
- Be mindful of the employee’s right to access records held about them under the Data Protection Act 1998.
- Contact other services such as ICT, Audit etc. for advice where necessary
**Step 5 - Preparing an investigation report:**
Once you have completed the investigation you will need to write a report, which you should give to HR Employment Relations, to be included in the documentation used at any subsequent disciplinary hearing.
The summary and recommendation section of your report should be given to the manager so that he/she can confirm whether the allegations should be heard at a disciplinary hearing. It is important that you do not discuss the full details of the case with the manager as this could prevent them from hearing any subsequent appeal.
Your report should be clear, concise and presented in a logical format. It should:
- Outline the allegations
- Analyse the evidence against the allegations
- Provide full supporting evidence. Make sure you include all the relevant facts so that it would make sense to someone unfamiliar with the case. Include those facts favourable to the employee.
- Contain a summary of events as evidenced by your investigation, referring to supporting evidence in the appendices as appropriate.
- Make recommendations – based on the findings of your investigation you can recommend that the case is:
- Withdrawn
- Handled informally (which may include management guidance)
- Considered at a disciplinary hearing
See Investigation Report Template for a suggested format. Guidelines on timescales for an investigation
To ensure a fair process, the investigation must be carried out promptly. As investigating officer it is important you treat the investigation as a priority.
All cases are different and timescales will vary from case to case depending upon the complexity of the allegations, but the following provides a guide as to the duration of each stage of the investigation. If timescales are slipping, contact HR.
Allegations are made
Day 1
- Employee advised of allegations (by line manager)
- If allegations warrant, employee may be requested to refrain from work (3 days maximum) or suspended on contractual pay
- Preliminary investigation carried out if appropriate and allegations confirmed to employee (by line manager)
- Investigating Officer appointed
By Day 2 or 3
- Witness statements requested by Investigating Officer
- Relevant records accessed
- Statement and records examined by investigating officer
By Day 5
Investigation interviews planned and arranged and employee /witnesses advised of dates
By Day 7
- Interviews undertaken
- Statements collated
- Relevant records copied
- Investigation report written and forwarded to HR, summary report forwarded to Chief Officer
By Day 21 or Day 28 for complex cases
## INVESTIGATION REPORT
### DISCIPLINARY INVESTIGATION
**NAME, JOB TITLE, DEPARTMENT**
| Date investigation started | | |----------------------------|---| | Date investigation completed | | | Date report submitted to Manager | | | Investigator(s) | |
1. **INTRODUCTION**
1.1 Provide brief details of the ‘subject’ of the investigation, their employment history, current role and how long held etc.
1.2 Provide brief outline of how the concerns arose.
1.3 Note if suspended and when, whether redeployed for duration of investigation or if there are any specific changes in place to allow the investigation to take place ie. line management responsibility removed, budget responsibility suspended, taken off usual duties but still within department etc.
1.4 If there are specific allegations record them at this point.
2. **SCOPE AND COVERAGE**
Investigation objectives should be recorded as defined within the investigation brief
All interviews should be minuted - the initials should be inserted after each name as these will be the initials used throughout the report
If the list of interviewees is long consider including it as an appendix
If the investigator has not interviewed all individuals suggested by the ‘subject’ of the investigation the decision should be recorded in this section (including reasons e.g. character reference only)
List of files and documents inspected
If the list is long consider including it as an appendix
2.1 Investigation objectives:
To establish whether: \[summarise from original allegations against the employee\]:
-
-
2.2 Interviews were held as follows:
| Name | Job title | Also in attendance: | Date of interview | |------|-----------|---------------------|-------------------| | | | | | | | | | | | | | | |
2.3 The following records were examined:
- Letter of complaint
- Personal file
- [List other relevant documentation] 2.4 Appendices:
| Appendix 1 | |------------| | Appendix 2 | | Appendix 3 |
3 BACKGROUND
Include brief details of the service area / location / work environment
Key responsibilities of the ‘subject’ of the investigation
Include anything else to ‘set the scene’ for the reader - there is every chance that the reader will not have any knowledge of the service
If the service area uses many acronyms, consider the use of a small glossary at this point or including it as an appendix
Aim to keep this section approximately half a page in length or a full page for more complex cases
3.1
3.2
3.3
3.4
4. FINDINGS
Organise the findings under each main allegation
- Avoid pages and pages of continuous text - break up with headings e.g. ‘Working Relationships’, ‘Service Complaints’, ‘Performance Management’, ‘Shouting Incident - 31 May’, ‘Previous Management Action’, etc… This makes the report easier to read.
- Avoid using vast extracts from statements - only quote directly from the statements where it is necessary, for example, to illustrate the use of language or if the response to a question shows a particular disregard for policy or respect for others. It is the investigator’s responsibility to analyse all the statements and draw out all corroborative evidence. Interviewees are not always articulate during interviews and the investigator should therefore use their own words to concisely convey the findings.
- Investigators are not just fact finders - it is the investigator’s responsibility to explain what the evidence means. Avoid ‘he said, she said’ reports - the reader should not be left trying to establish what all the facts mean.
- If the evidence is inconclusive or there is no evidence to substantiate an allegation - say so. The lead manager wants to know whether there is any evidence to support the allegations - it is also the investigator’s responsibility to explain how significant the evidence is - this should come across throughout the report.
- It is important to note any mitigating factors e.g. lack of procedural guidance, management action or expected documentation and any other actions/behaviours which may have compounded or aggravated the situation.
- Using full names throughout the report can be very repetitive - use initials e.g. Joe Bloggs (JB) - always quote full name and job title the first time they are mentioned within the report - initials thereafter.
- In addition to the specific allegations the report should include any patterns of behaviour that may have some relevance.
- If specific actions demonstrate a breach of Council policy or service procedures - these should be noted throughout the report, where appropriate.
**ALLEGATION 1:**
**SUB HEADING**
4.1
4.2
4.3
**SUB HEADING**
4.4
4.5
**ALLEGATION 2:**
**SUB HEADING**
4.6
4.7
4.8
5. **SUPPLEMENTARY ISSUES**
5.1 There are no supplementary issues to this report OR
Cover issues which you have identified but are not directly related to the allegations or objectives of the investigation (could be system issues, management or policy weaknesses or matters which relate to the individual but were not part of the original brief – e.g. patterns of behaviour)
6. **CONCLUSIONS**
This is where the investigator provides an overall fact based opinion on a) whether there is any evidence to support the allegations and b) the strength of the evidence. Support the conclusions with the strongest evidence without repeating the text in the main body of the report (where possible) - the conclusions should be clear and concise.
Identify to the reader the strengths and weaknesses in the evidence - emphasising the importance of any issues and where evidence can be open to different interpretation / scenarios.
Draw out key facts which demonstrate particular breaches of policy e.g. Code of Conduct, Dignity at Work, Financial Regulations, Council policies & procedures etc.
If there are any mitigating factors ensure that they are clear within the conclusions and it is important to explain their significance.
6.1
6.2
6.3
7. RECOMMENDATIONS
7.1 The report is sent to the Manager and HR representative. A meeting with the Manager, HR representative and investigator should be held to help clarify any points of fact or evidence. The Manager decides, in consultation with HR Representative and Investigating Officer, what the next steps will be. The possible outcomes are:
- No further action
- Counselling / Management Action or
- A formal discipline hearing is required.
7.2 If the investigator believes there is sufficient evidence to warrant consideration by a disciplinary hearing, this should be indicated here.
7.3 Organisational Learning
Any recommendations relating to system, policy, procedural or management weaknesses should be reported separately using the Action Plan Template. It is the lead manager’s responsibility to ensure that these recommendations are discussed, agreed (with the investigating officer or Audit Manager, if necessary) and the Action Plan completed with agreed action, responsible officers and timescales for completion.
The implementation of Action Plans completed by management investigators should be monitored by the relevant Manager.
NB. These Action Plans should not make any reference to the individuals involved in the investigation.
END OF REPORT Data Protection in Relation to Disciplinary Records
Security of Sensitive Data
1. Disciplinary records are subject to the requirements of the Data Protection Act 1998 and because of the nature of their content are deemed to be sensitive data.
- All records relating to the case should be password protected on IT systems and any paper files should always be locked away, when not being used. Such records should never be available to casual scrutiny.
- The Manager should decide which colleagues within the Council really need access to information before discussing details or sharing information on the case.
Access to Records during the Investigation
2. The Subject Access Rights Data Protection Act 1998 gives employees a right of access to information held about them. However, during a disciplinary investigation information should not be provided until it is clear that this will not lead to a criminal investigation.
- If an investigation takes only a couple of weeks, it would be reasonable to wait until it is concluded before sharing the information with the employee.
- If the investigation is not concluded within a couple of months, then by that time it should be possible to judge whether it relates to a criminal offence and therefore non-disclosure is still legitimately available. If the case is still deemed to be non-criminal, then reasonably staged disclosures could be made to the employee.
Access to Records during the Disciplinary Action
3. There are some further restrictions on employees’ access to their records, other than the above-mentioned criminal investigations. However, Managers need to be aware that, in general, even during disciplinary action employees are entitled to copies of the information held about them:
- All documents, letters, reports, emails and notes about the employee held in the Council (whether in one file or grouped by subject e.g. Leave cards, Performance Management Reviews) on paper or electronic format, form part of the employees distributed personal file. These records are available to an employee via a Subject Access Request (SAR).
- Any records created by the Council, or for the Council, as result of the disciplinary action whether retained on file or in an IT system are also available, even during the disciplinary process, to the employee upon receipt of a written SAR (This could be an email request to the Manager or to the Human Resources Service).
- There are three possible exemptions to the disclosure of information to the employee during the disciplinary process:
- If there is a strong possibility that the case will lead to a criminal prosecution. In that event, the manager will be working closely with Internal Audit and they will advise what information can be released and when, so as not to prejudice a criminal investigation.
- The identity of anyone acting as a ‘whistle blower’, possibly employees interviewed during the investigation process, or external parties not employed by the Council. However, the information supplied by ‘whistle blowers’, or external parties and the content of reports must be supplied, whilst retaining the anonymity of these vulnerable employees and third party data.
- The details of the Council’s negotiation position. These details may be withheld to the extent to which access would be likely to prejudice any negotiations between the employer and employee.
- The Council has to comply with a SAR within 40 days. By law, the Council is obliged to supply as complete a record as it can manage. The Act does not require the employee to state which part of their personal file they wish to see, where it is stored or why they want to see it. However, some employees only request to see specific parts of their personal file.
- If the request has come via the HR Service, they will be seeking a swift response, a copy of the specified records or for all records on this employee, as they will be co-ordinating a response from all the areas that hold parts of the employee’s distributed personal record.
- The Manager may not remove or change any data in the personal file at the time of a SAR, in order to make the information acceptable to the employee. It is a criminal offence to change the contents of a record, because of a Subject Access Request.
- Managers are strongly advised to filter all records and remove non-essential notes and files, as soon as the Appeals Period has closed. The details of the Council’s negotiation position will of course, no longer be exempt from disclosure, by this stage. Any paper records must be disposed of via shredding or use of the Council’s confidential waste disposal facility.
- As soon as a Warning Period is complete, the Manager should check with their ER Adviser that the disciplinary record has been removed from the employee’s personal file and destroy all ‘spent’ documentation held within the Council.
- Once the duration of the warning has expired, it must not be considered as part of any future disciplinary action.
- Expired warnings should not be referred to when providing an employment references. However, if the warning relates to a safeguarding issue, the manager must seek advice from HR Employment Relations in the first instance.
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96d215ae0928658dbe88d1f078424d1d28ad1e77 | Planning application reference: NP/GDO/0814/0881 Planning application title: Submission under Part 19 (Class C) of the GPDO 1995. Construction of necessary safety edge protection adjacent to short section of haul route, Burntwood Quarry, Beeley
THE TOWN AND COUNTRY PLANNING (ENVIRONMENTAL IMPACT ASSESSMENT) REGULATIONS 2011
(‘The EIA Regulations’)
Regulations 4 & 5 SCREENING OPINION
This form is to be used for all proposals which fall in Schedule 1 or Schedule 2 of the above Regulations.
PLEASE INDICATE BELOW WHICH SCHEDULE THE PROPOSAL FALLS WITHIN AND FOR SCHEDULE 2 PROJECTS INDICATE WHETHER AN EIA IS REQUIRED GIVING REASONS
1. The proposal falls within Schedule 1 of the EIA Regulations and therefore an EIA IS REQUIRED AND AN ENVIRONMENTAL STATEMENT HAS TO BE PROVIDED.
2. The proposal falls within Schedule 2 and is located within a ‘sensitive area’ as defined in regulation 2(1) of the EIA Regulations. Consideration has been given to the likelihood of significant effects on the environment having regard to the selection criteria for screening set out in Schedule 3 (location, characteristics of the development and potential impacts). The Peak District National Park Authority, as the relevant Mineral Planning Authority (MPA), and in consideration of sufficient information for the purpose, has adopted a screening opinion that the proposed development as described falls within Schedule 2 of the EIA Regulations and an EIA IS REQUIRED AND AN ENVIRONMENTAL STATEMENT HAS TO BE PROVIDED for the following reasons:
3. The proposal falls within Schedule 2 and is located within a ‘sensitive area’ as defined in regulation 2(1) of the EIA Regulations. Consideration has been given to the likelihood of significant effects on the environment having regard to the selection criteria for screening set out in Schedule 3 (location, characteristics of the development and potential impacts). The Peak District National Park Authority, as the relevant Mineral Planning Authority (MPA), and in consideration of sufficient information for the purpose, has adopted a screening opinion that the proposed development as described falls within Schedule 2 (a) [Extractive Industry] of the EIA Regulations 2011 (as amended) AND IS NOT EIA DEVELOPMENT for the following reasons:
Description of proposed works
The proposal is a submission under Part 19 (Class C) of the General Permitted Development Order (1995) for the construction of a safety bund immediately adjacent to a short stretch (approximately 250m) of haul road at Burntwood Quarry, Beeley. The bund will be approximately 1.5 metres in height. The development necessitates some minor excavation works into one section (approximately 75 metres) of bank towards the quarry entrance to accommodate the access road and bund on the opposite side, which will require the removal of a few small self-set silver birch trees and one self-set oak.
Background
Planning permission NP/DDD/0513/0392 for the reopening of Burntwood Quarry for the extraction of stone for the conservation of Chatsworth House, Park and Gardens, with associated landscaping and nature conservation works, was granted on 17 December 2013. Following submission and discharge of several pre-commencement conditions, works commenced under the permission at the beginning of August 2014. Whilst undertaking the enabling works, the quarry manager identified a potential problem with the location and width of the haul road out of the quarry, at the point it meets the bridleway no. 10, and for a distance of approximately 250 m towards the storage shed. The issue is that the width shown on the approved plans does not account for a safety bund on the south side of the haul route, where there is a drop-off down to the small brook. The Quarries Regulations (Regulation 3) deem the access road to form part of the quarry and therefore, under Regulation 13 (Benches and Haul Roads) the operator is required to ensure that, so far as is reasonably practicable:
(i) benches and haul roads are designed, constructed and maintained so as to allow vehicles and plant to be used and moved upon them safely; and
(ii) where necessary, effective precautions are taken, by the installation of barriers or otherwise, to prevent vehicles or plant accidentally leaving any bench or haul road.
The quarry haul road must be suitable for the type and size of machinery and loads used on it and vehicles must be able to move safely and without risk of accidentally leaving the road or from any instability.
In this instance, the extracted stone will be transported by a rubber tyred loading shovel with bucket width of 3.2 metres. The machine will travel at low speed. The haul road will also have to be used in later phases of block extraction and therefore the access road must be able to accommodate the backhoe excavator which will be used to access the quarry face. This machine is 4.2 metres wide.
The quarry regulations require that adequate edge protection is provided wherever there is a drop, lagoon or other hazard which would put the driver, or others, at significant risk if the vehicle left the bench or roadway. The aim is to stop the largest fully loaded vehicle dropping into the valley stream. On benches or roads used by heavy vehicles, the minimum acceptable height of the edge protection is 1.5 metres or the radius of the largest wheel/tyre, whichever is the greater. The edge protection must be designed so as to absorb a vehicle’s momentum with the impact face being as vertical as possible. Either unconsolidated material or rocks are suitable construction materials, provided the construction is sufficiently able to absorb the impact. In this case, loaded vehicles will be travelling uphill from the quarry to the storage shed.
Some bunding work along the eastern end of the haul road near the quarry has already been erected but the scale and extent of the development would not materially affect the area. The proposed works at the western lower area is more extensive and sensitive and would materially affect the area. The Authority has therefore requested the submission of this proposed development under Part 19 (C)(2)(2) of the GPDO (1995) prior notification procedure.
Potential impacts
Traffic The development involving the construction of the bund will require regular movements between the quarry and the haul road of a small loading shovel carrying stone and unconsolidated material to construct the bund. Additional plant will also be required to excavate into the bank and create the 45 degree batter. However, these traffic movements will be of limited duration and will not add significantly to the levels of traffic movement already permitted under the planning consent NP/DDD/0513/0392. There will be no significant traffic impacts arising from the development.
Environmental emissions – noise The construction of the bund involves additional traffic movements over and above the levels permitted by the consent. There will therefore be additional noise emissions from these works. However, since they are very limited in scope and duration, it is considered that they will not give rise to significant impacts. Landscape character and visual impact The bund is required to be present for the duration of the development, as set out by the quarries regulations. At 1.5 metres in height, the bund is an incongruous feature in the immediate landscape. However, following discussions with the operator, it is possible that the top of the bund can be ‘rounded off’ to make the shape more naturalistic and make it blend in better with the immediate contours. Combined with a programme of seeding, it is considered that the bund will blend in to the landscape in the short-term and will have limited landscape and visual impact in the longer term. The development will not have significant landscape or visual impacts.
Ecology The development involves the removal of a select number of trees. A few small self-set silver birch will be removed and one oak, which has self-set in an old spoil heap immediately adjacent to the bridleway. A second oak lying on the other side of the bridleway some 50m further up, will be retained. The Authority’s ecology team has been made aware of these proposals and has raised no objections. They would however like to be consulted on the seed mix to apply to the bund, which the operator has agreed to. In summary, the effects on the ecological interest of the site are not considered to be significant.
Archaeology There are no identified areas of archaeological interest within the proposed location of the safety bunds or the bank excavation works area. It is considered that there are no significant impacts on the areas of archaeological interests in the locality arising from the proposed works.
Hydrology and Hydrogeology The applicant has indicated that the haul roads must be graded regularly to ensure the free drainage of surface water and the removal of loose debris. Consultation has also taken place with both the Authority’s footpaths’ officers and with Derbyshire County Council’s Rights of Way team. Neither party has raised objections to the works, but have commented that intermittent drainage channels should be provided at regular intervals along the affected stretch of haul road, to ensure surface water does not reach a critical volume and velocity where it can start to erode the surface, thereby having potential impacts on sediment loading into the nearby brook. Consequently, it is considered that the development will not give rise to significant hydrological impacts.
Recreational (including residential) amenity The proposal to construct the bund requires that it will be undertaken during the approved hours of working for the quarry and therefore no detriment to local residential amenity will arise.
Other environmental/acknowledged interests. There are none. In reaching the conclusion below the Authority has taken into other aspects including cumulative effects, soils, vibration, light, dust and climate impacts.
Conclusion The development is unlikely to have significant effects on the environment within this part of the National Park such as to adversely affect one or more interests identified in schedule 4 of the EIA Regulations 2011. The conclusion, having considered the potential effects on the environment, is that the development is not EIA development.
Form completed by: Andrew P Barton.......................... Date 19-08-2014.......................... (Senior Minerals Planner)
Authorised by: David G Bent.............................. Date 19-08-2014.......................... (Minerals Team Manager)
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