1.1 Accounting convention
These accounts have been prepared in accordance with an Accounts
Direction issued by the Secretary of State for Constitutional
Affairs, with the approval of the Treasury in accordance
with paragraph (10) (1) (b) of schedule 5 to the Data Protection
Act 1998.
These accounts shall give
a true and fair view of the income and expenditure and cashflows
for the financial
year, and
state of affairs at the year-end. The accounts are prepared
in accordance with Executive Non-Departmental Public Bodies
Annual Reports and Accounts Guidance and other guidance which
the Treasury has issued in respect of accounts which are
required to give a true and fair view, except where agreed
otherwise with the Treasury, in which case the exception
is described in the notes to the accounts.
These accounts
have been prepared under the historical cost convention,
as modified by the inclusion of fixed assets
at current cost. The accounts meet the accounting and disclosure
requirements of the Companies Act 1985 and the accounting
standards issues or adopted by the Accounting Standards Board
to the extent that those requirements are appropriate.
These
accounts have been prepared on a going concern basis.
1.2
Grant-in-aid
Grant-in-aid received for
revenue expenditure is credited to income in the year to
which it relates.
A proportion of the grant-in-aid
received, equal to expenditure on fixed asset acquisitions
in the period
is taken to the
Deferred Government Grant Reserve at the end of the financial
year. The amount deferred is released back to the Income
and Expenditure Account in line with depreciation charged.
Losses on disposal of fixed assets are not debited to the
Income and Expenditure Account, but are debited directly
to the Deferred Government Grant Reserve.
1.3 Tangible
fixed assets
Assets are capitalised as fixed assets if they
are intended for use on a continuous basis, and their original
purchase
cost, on an individual basis, is £2,000 or more.
Fixed assets (excluding assets under construction) are
valued at
net current replacement cost by using the Price Index Numbers
for Current Cost Accounting published by the Office for
National Statistics when the effect of revaluing assets
is material.
1.4 Depreciation
Depreciation
is provided on all fixed assets on a straight-line basis
to write off the cost or valuation evenly over the
asset’s anticipated life.
The principal rates adopted
are:
Office fixtures
10 years
Office equipment
5 – 10 years
IT equipment and software
5 years
Assets under construction
nil
1.5 Stock
Stocks of stationery
and other consumable stores are not considered material and
are written off to the Income and
Expenditure account as they are purchased.
1.6 Income recognition
Fee
income comprises notification fees in respect of notifications
by data controllers, under the Data Protection Act 1998.
The notification fee is paid in advance for a period of
one year, and a proportion of this income is therefore
deferred
and released back to the Income and Expenditure Account
over the fee period.
Fee income is remitted regularly
to the Secretary of State for Constitutional Affairs, and
thus a prepayment is included
in respect of income appropriated in advance of recognition
of the income in the Income and Expenditure Account.
1.7
Notional charges
A notional charge reflecting the cost of
capital employed in the year is included in the Income and
Expenditure Account
along with an equivalent reversing notional income to finance
the charge. The charge is calculated using the Treasury’s
discount rate of 3.5% (2002-2003 – 6%) applied
to the mean value of capital employed during the year.
1.8
Pension costs
Pension contributions are charged to the Income
and Expenditure Account in the year of payment.
1.9 Operating
leases
Payments under operating leases are charged to the
Income and Expenditure Account on a straight-line basis over
the
lease term, even if the payments are not made on such a
basis.
1.10 Value added tax
Most of the activities of the Information Commissioner
are outside of the scope of VAT. 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 tax is recoverable the amounts are
stated net of VAT.
2 Grant-in-aid
3 Fee income
4 Appropriations
All data protection
notification fees and other sums received by the Information
Commissioner
in the exercise of his functions are paid by him to the Secretary
of State for Constitutional Affairs, in accordance with sub-paragraph
9(1) of Schedule 5 to the Data Protection Act 1998.
Sub-paragraph
9(3) of Schedule 5 to the Data Protection Act 1998 requires
any sums received by the Secretary of State
under sub-paragraph (1) shall be paid into the Consolidated
Fund. However on 9th May 2003 HM Treasury laid before Parliament
a Minute under the Government Resources and Accounts Act
2000 directing that such sums may be applied by the Department
of Constitutional Affairs as appropriations in aid authorised
by Parliament to resource the Department’s Supply services,
including amongst others, the Information Commissioner’s
grant-in-aid for the year ending 31 March 2004.
The income
paid over by the Information Commissioner to the Secretary
of State for Constitutional Affairs for these purposes
was as follows:
Appropriations due to the
Secretary of State for Constitutional Affairs were
5
Staff numbers and costs
5a. Staff costs
The aggregate staff costs were as follows:
The salary and
pension entitlements of the Information Commissioner are
paid directly from the Consolidated Fund and thus are
not included above.
The Principal Civil Service Pension Scheme (PCSPS) is an
unfunded multi-employer defined benefit scheme but the Information
Commissioner is unable to identify
its share of the underlying assets and liabilities. A full actuarial valuation
was carried out at 31st March 2003. Details can be found in the resource
accounts of the Cabinet Office: Civil Superannuation (www.civilservice-pensions.gov.uk).
For
2003-2004, employers’ contributions of £476,619
were payable to the PCSPS (2002/2003 - £381,749) at
one of four rates in the range of 12% - 18.5% of pensionable
pay, based on salary bands. The scheme’s
Actuary reviews employer contributions every four years following a full
scheme valuation.
Rates will remain the same next year, subject to revalorisation of the
salary bands The contribution rates reflect benefits as they are accrued,
not when
the costs are actually incurred, and reflect past experience of the scheme.
Employees
joining after 1 October 2002 could opt to open a partnership
pension account, a stakeholder pension with an employer contribution. Employers’ contributions
of £3,543 were paid to one or more of a panel of four appointed stakeholder
pension providers. Employer contributions are age related and range from
3 to 12.5 per cent of pensionable pay. Employers also match employee contributions
up to 3 per cent of pensionable pay. In addition, employer contributions
of £1,183,
0.8 per cent of pensionable pay, were payable to the PCSPS to cover the
cost on death in service and ill health retirement of these employees.
No
persons retired early on ill-health grounds; the total additional accrued
pension liabilities in the year amounted to £nil.
5b. Staff numbers
The average number of full time equivalent persons employed
by the Information Commissioner during the year was as
follows:
5c. Senior management
The salary and pension entitlements of the most senior managers
were as follows:
‘Salary’ comprises
gross salary and any other allowance to the extent that it
is subject to UK taxation.
Pension benefits are provided
through the Civil Service pension arrangements. From 1 October
2002,
civil servants may be in one of three statutory
based ‘final
salary’ defined benefit schemes (classic, premium and classic plus).
The Schemes are unfunded with the cost of benefits met by monies voted
by Parliament
each year. Pensions payable under classic, premium, and classic plus
are increased annually in line with changes in the Retail Prices Index.
New entrants after
1 October 2002 may choose between membership of premium or joining a
good quality ‘money
purchase’ stakeholder arrangement with a significant employer contribution
(partnership pension account).
Employee contributions are
set at the rate 1.5% of pensionable earnings for classic
and 3.5% for premium and classic
plus. Benefits in classic
accrue
at the rate
of 1/80th of pensionable salary for each year of service. In addition,
a lump sum equivalent to three year’s pension is payable on retirement.
For premium, benefits accrue at the rate of 1/60th of final pensionable
earnings for each
year of service. Unlike classic, there is no automatic lump sum (but
members may give up (commute) some of their pension to provide a lump
sum). Classic
plus is essentially a variation of premium, but with benefits in respect
of service
before 1 October 2002 calculated broadly as per classic.
The partnership
pension account is a stakeholder pension arrangement. The employer
makes a basic contribution of between 3% and 12.5% (depending
on the age of
the member) into a stakeholder pension product chosen by the employee.
The employee
does not have to contribute but where they do make contributions,
the employer
will match these up to a limit of 3% of pensionable salary (in addition
to the employer’s basic contribution). Employers also contribute
a further 0.8% of pensionable salary to cover the cost of centrally-provided
risk benefit
cover
(death in service and ill health retirement).
Columns
5 & 6 of the above table show the member’s cash
equivalent transfer value (CETV) accrued at the beginning
and the end of the reporting
period.
Column 7 reflects the increase
in CETV effectively funded by the employer. It
takes account of the increase in accrued pension due to inflation,
contributions paid by the employee (including the value of
any benefits transferred
from another pension scheme or arrangement) and uses common market
valuation factors for the
start and end of the period.
A Cash Equivalent Transfer
Value (CETV) is the actuarially assessed capitalised value
of the pension
scheme benefits accrued by a member
at a particular
point in time. The benefits valued are the member’s accrued
benefits and any contingent spouse’s pension payable from
the scheme. A CETV is a payment made by a pension scheme or arrangement
to secure pension benefits
in another
pension scheme or arrangement when the member leaves a scheme and
chooses to transfer the benefits accrued in their former scheme.
The pension
figures
shown
relate to the benefits that the individual has accrued as a consequence
of their total membership of the pension scheme, not just their
service in a
senior capacity
to which disclosure applies. The CETV figures, and from 2003-04
the other pension details, include the value of any pension benefit
in another
scheme or arrangement
which the individual has transferred to the CSP arrangements and
for which the CS Vote has received a transfer payment commensurate
to the
additional
pension
liabilities being assumed. The also include any additional pension
benefit accrued to the member as a result of their purchasing additional
years
of pension service
in the scheme at their own cost. CETVs are calculated within the
guidelines and framework prescribed by the Institute and Faculty
of Actuaries.
6 Other income
7 Other operating costs
Included above are operating
lease payments for land & buildings
of £545,240 (2002/2003 £511,883).
8 Tangible fixed
assets
Tangible fixed
assets totalling £49,986
(2002/2003 - £69,537) have not been capitalised and
are included within ‘Other
operating costs’, as the individual costs were below
the capitalisation threshold of £2,000.
Assets have
not been re-valued in the year as the effect of revaluing
assets would be to reduce the cost of assets
in use
by £82,191
and makes no material difference to the results for the year
or the financial position
at the year
end.
Assets under construction
represent Information Technology projects not yet brought
into service, comprising a casework
management
system £4,433,014 and upgraded
notification platform £408,288 and IT infrastructure £62,784.
As
described in note 15, Information Services are provided by
a managed service agreement. The title of hardware and
software procured
under
this agreement
is owned by Fujitsu Services Limited. The Commissioner is
entitled to purchase the
title of such assets for a nominal sum in the event the agreement
is terminated. Payments made for IT hardware purchase and
software development
are capitalised
and the net book value of such assets at 31 March 2004 was £6,422,195
(31 March 2003 - £5,801,704).
9 Debtors
10 Creditors; amounts falling
due within one year
11 Reserves
12 Reconciliation of operating
surplus to net cash inflow from operations
13 Cash
at bank and in hand
14
Commitments under operating leases At 31 March 2004 the Information Commissioner was
committed to make the following annual payments in respect
of operating
leases expiring:
The leases of land and buildings
are subject to rent reviews.
15 Contingent liabilities
The Information Commissioner has entered into a managed service
agreement with Fujitsu Services Limited for the provision
of Information Services (note 8).
The contract term is ten years expiring in July 2007. Expenditure under the
contract in the year was:
16 Capital commitments
No capital commitments were outstanding at 31 March 2004
(31 March 2003 – nil).
17 Related party transactions
The Information Commissioner confirms that he had no personal
or business interests which conflict with his responsibilities
as Commissioner.
The Department for Constitutional
Affairs is a related party to the Information Commissioner.
During
the year no related party transactions were entered
into, with the exception of providing the Information Commissioner with grant-in-aid
and the appropriation of notification fee income and sundry receipts.
In addition,
the Information Commissioner has had various material transactions
with other central Government bodies. These transactions have been with the
Central Office of Information (COI) and the Home Office Pay and Superannuation
Service.
None of the key managerial
staff or other related parties has undertaken any material
transactions with the Information Commissioner during the
year.
18 Financial instruments
Financial Reporting Standard 13, Derivatives and other Financial
Instruments: Disclosures requires disclosure of the role
which financial instruments
have had during the year in creating or changing the risks an entity faces
in
undertaking its activities. Because of the non-trading nature of its activities
and the
way in which central government sector entities are financed, the Information
Commissioner is not exposed to the degree of financial risk faced by business
entities.
Moreover, financial instruments
play a much more limited role in creating or changing risk
that would be typical of the
listed companies to which
Financial Reporting Standard 13 mainly applies. The Information Commissioner
has no
powers
to invest surplus funds and may only borrow with the prior approval of
the Secretary of State for Constitutional Affairs.
Financial assets and
liabilities are generated by day-to-day operational activities
and are not held to change the risks facing the Information
Commissioner in
undertaking his activities.
As permitted by FRS13, debtors
and creditors which mature or become payable within 12 months
from the balance sheet
date have been omitted from the
currency profile.
Liquidity risk
The Information Commissioner’s funding is provided by grant-in-aid,
voted annually by Parliament within the Supply Estimate of the Department
for Constitutional
Affairs. It is not, therefore, exposed to significant liquidity risks.
Interest
rate risk
The Information Commissioner’s financial assets and liabilities
carry nil or fixed rates of interest. The Information Commissioner
is not, therefore,
exposed to significant interest rate risk.
Foreign currency risk
The Information Commissioner’s foreign currency transactions are not
significant.
19 Statement of resources
by function
The Secretary of State for Constitutional Affairs provides
grant-in-aid to the Commissioner for data protection and
freedom of information
statutory functions annually.
Staff costs and other running
costs are apportioned between the data protection and freedom
of information
functions on the basis of costs
recorded in
the Information Commissioner’s management accounts system. This
system allocates expenditure to various value centres across the organisation.
A
financial model
is then used to apportion expenditure between the functions on an actual
basis where possible, or by way of a reasoned estimate where costs
are shared between
functions.
The data protection
notification fee is set by the Secretary of State for Constitutional
Affairs, and in making
any fee regulations under Para. 26 of the Data Protection Act 1998,
as amended by Para. 26 of Section 17 of Schedule 2 to the Freedom of
Information
Act
2000, the Secretary of State shall have regard to the desirability of
securing that
the fees payable to the Commissioner are sufficient to offset the expenses
incurred by the Information Commissioner, the Information Tribunal
and any expenses of the Secretary of State in respect of the Commissioner
or
the
Tribunal, and any prior deficits incurred, so far as attributable to
the functions under
the Data Protection Act 1998.
These accounts do not include
the expenses incurred by the Information Tribunal, or the
expenses incurred
by the Secretary of State in respect
of the Commissioner,
other than for the grant-in-aid payments made to the Commissioner,
and therefore the accounts cannot be used to demonstrate that the
data protection
fees
match expenditure on data protection activities.
The segmental information
above has not been disclosed for the purpose of Standard
Statement of Accounting Practice 25: Segmental Reporting,
or for compliance with the Treasury Fees and Charges Guide.
