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UK Trade & Investment Annual Report and Accounts 2013-14 UK Trade & Investment 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. Annual Report and Accounts presented to the House of Lords by Command of Her Majesty.
Ordered by the House of Commons to be printed on 26 June 2014
HC 35 This is part of a series of departmental publications which, along with the Main Estimates 2013–14 and the document Public Expenditure: Statistical Analyses 2013, present the Government’s outturn and planned expenditure for 2013–14.
© Crown copyright 2014
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Front cover: UK Trade & Investment 2013-14 in pictures
Top row left to right: UKTI and DEFRA launch the Food and Drink International Action Plan; the Sirius Programme for budding entrepreneurs is announced; the PM leads a trade mission to Kazakhstan and announces £700m of new deals.
Middle row left to right: UKTI’s G8 Innovation Conference showcases the best of British; Minister for Trade and Investment, Lord Livingston takes part in the largest ever trade mission to China; DSEi, the UK’s world-leading defence event, surpasses all visitor records.
Bottom row left to right: UKTI’s Exporting is GREAT campaign is launched; UKTI’s website makes the transition to Gov.uk; Britain Open for Business: The next phase, UKTI’s refreshed strategy document, is published. Contents
1. Overview
Minister’s Foreword 4 Chief Executive’s Foreword 5 Introduction 6
2. How We Have performed
What We Have Done 8 Looking Forward 20 Increasing Our Impact 21 Our People and Business Partners 22 Developing Our People 23 Financial Review 25 Public Interest 32
3. Governance
Departmental Remuneration Report 34 Statement of Accounting Officer’s Responsibilities 42 UKTI Annual Governance Statement 2013-2014 43
4. Financials
The Certificate and Report of the Comptroller and Auditor General to the House of Commons 56 Statement of Parliamentary Supply 58 Notes to the Departmental Resource Accounts 60 Statement of Comprehensive Net Expenditure 63 Statement of Financial Position 64 Statement of Cash Flows 65 Statement of Changes in Taxpayers’ Equity 66 Notes to the 2013-2014 Resource Accounts 67 Memorandum Notes Consolidating Total Resources Used To Deliver UKTI’s Services 82
5. Annexes
Annex A – Performance Framework and Resources 88 Annex B – Technical Note: UKTI’s Monitoring and Evaluation Evidence 92 Annex C – Key Sources of UKTI Data 95 Annex D – Private Sector Sponsorship 96 Annex E – The Business Ambassadors Network 97 Annex F – Sector Advisory Groups and Chairs 99 Annex G – Acronyms 100 4 UK Trade & Investment Annual Report and Accounts 2013–14
Minister’s Foreword Lord Livingston of Parkhead
The work of UKTI is crucial to the We are proud that the UK remained Government’s plans to double the the largest recipient of Foreign amount of exports to £1 trillion Direct Investment in Europe. This by 2020. This is an ambitious target reflects both the attractiveness of but represents the Government’s aim the business environment in the to materially improve our long term UK and the support provided by export performance. UKTI to inward investment. Further measures introduced by UKTI, such The UK is the sixth-largest exporter as the launch of four new specialist in the world and the second largest Investment Organisations and the exporter of services. To build on this, implementation of the Exceptional we have invested in more support Talent visa route for digital for exports to the fast growing entrepreneurs, will enhance further economies of Asia and Latin America, the UK’s attractiveness for investors. and focused on key High Value Opportunities where Government UKTI has made great progress support can help UK companies over the last few years and that is all through the supply chain to gain a reflection of the hard work of its significant export wins. people both in the UK and in more than 100 countries around the UKTI seeks to help more businesses world. My predecessor Lord Green, export more products and services who finished his term as Trade and to more countries. We are on track Investment Minister in December to achieve our target of assisting 2013, worked tirelessly to promote 40,000 businesses this financial year both the UK and its businesses. The and companies tell us that UKTI has new initiatives we have put in place provided significant support for more will build on his excellent work and I than £20 billion of exports – a large look forward to seeing them come to increase on previous years. fruition in the year ahead.
Lord Livingston of Parkhead Minister for Trade & Investment UK Trade & Investment Annual Report and Accounts 2013–14 5
Chief Executive’s Foreword Dominic Jermey CVO OBE
UK Trade and Investment has had an The UK remains the No. 1 European outstanding year supporting the UK investment destination and we economy. This has been achieved continue to develop new programmes through a partnership between UKTI to help us retain this position – the teams in the UK, at posts overseas and location of choice for leading global the many partner organisations which entrepreneurs; high value R&D and form an essential part of UKTI delivery. manufacturing facilities; and European HQs. Recent initiatives include the In the twelve months to September Global Entrepreneur Programme, 2013 UKTI supported more than which attracted investment from 34,000 companies, representing over more than 60 entrepreneur-led £51 billion in additional business, and companies and the introduction of an putting us on track to exceed our Exceptional Talent visa route for digital stretching target of 40,000 companies entrepreneurs. Notable investment assisted for the year to March 2014. successes included helping secure I feel proud to be joining a strong We also saw the benefits of focusing £850 million of Chinese investment and dedicated team at UKTI as the on business wins as a core metric, into the Manchester Airport City incoming Chief Executive. I would seeing substantial growth above project and Wolf Mineral’s £120 million like to thank UKTI’s people in the target in the value added by UKTI investment into what will be one of the UK and across the world, as well as support. And once again, we are world’s largest tungsten mines. our partners in Government and the confident that we will exceed our private sector for their hard work and target of bringing home 750 inward Britain Open for Business: The commitment at home and abroad in investment projects and securing or Next Phase, published in January 2013-14. I would also like to thank creating 50,000 jobs. We have also 2014, provides more detail on our our former Chief Executive, Nick played a key role in winning a number strategic plans and priorities. We are Baird, who led UKTI until December of high-profile overseas contracts in following through on core programs 2013 and Crispin Simon, who then the security and defence sector, not such as the emphasis on High took over as Acting Chief Executive least AugustaWestland’s £1 billion Value Opportunities and developing until June 2014. So much of the deal to supply helicopters to the overseas delivery partners through momentum we are experiencing today Norwegian Air Force. the Chambers of Commerce. We have was developed under their leadership. also begun an initiative to develop new exporters among the UK’s 8,900 UKTI is committed to achieving the medium-sized businesses and have best possible results for the UK set up a joint Reshoring Service tax-payer, UK businesses and our with the Manufacturing Advisory overseas investors. We look forward Service to help businesses bring work to the year ahead. back to the UK. In addition, we are increasingly targeting those investors and investment opportunities with significant export potential. These also form part of UKTI’s response to the Chancellor of the Exchequer’s challenge to double UK exports to Dominic Jermey CVO OBE £1 trillion by 2020. In this respect, it UKTI Chief Executive was encouraging that exports to high growth markets such as China and Brazil were at an all-time high. 6 UK Trade & Investment Annual Report and Accounts 2013–14
Introduction
Who We Are Against this challenging backdrop, the term competitiveness and helps win Government has set out to achieve investment for major UK infrastructure UKTI is the UK’s international trade ambitious trade targets. These include and regeneration projects. Its aim is to and inward investment promotion doubling the value of exports to £1 ensure that the UK remains the leading organisation. In England, it uses a trillion, getting 100,000 more UK FDI location in Europe and becomes network of private sector international companies exporting by 2020 and the leading FDI location in Europe for trade advisors to provide support developing an economic roadmap for high-growth markets. and assistance to new and existing 20 priority markets. exporters of goods and services, UKTI DSO while staff in over 100 markets The Government’s plans to double UKTI DSO works closely with the overseas are available to support exports go hand in hand with a push Ministry of Defence, the Home Office businesses locally. It also leads an to increase inward investment. This and other Government Departments inward investment network including includes export-focused investment to help UK defence and security private sector expertise to help to strengthen our supply chains companies succeed internationally. It overseas-owned firms locate and and support our larger companies, provides the essential government-to build their business in and from the UK. creating a virtuous circle in which government dimension to companies Foreign Direct Investment (FDI) gets in pursuit of maintaining the UK’s UK Trade & Investment (UKTI) is translated into export activity. strong position in the global defence a Government Department which and security export market. reports to the Secretaries of State for UKTI plays a central role in helping Business, Innovation and Skills (BIS) the Government to realise these Marketing Group and the Foreign & Commonwealth goals. To ensure it provides the best Marketing Group helps UKTI to Office (FCO). UKTI has its own possible outcomes for both the UK achieve its targets by focusing objectives and also contributes to the and its businesses, UKTI is organised on priority areas to best leverage objectives of both BIS and the FCO. around the following business units: Trade Group, which includes the High reputation, awareness and return UKTI works with the Devolved Value Opportunities team; Investment on investment. Working with both Administrations in Scotland, Northern Group; UKTI Defence & Security the Trade and Investment Groups, Ireland and Wales to promote Organisation (UKTI DSO); Marketing; it provides the necessary insight international trade and inward and the Chief Operating Officer’s and expertise to inform and shape investment. UKTI and the Devolved Group (COO). strategy. Administrations consult each other Chief Operating Officer’s Group regularly on policy developments Trade Group and activities to avoid duplication of Trade Group helps UK-based COO is responsible for driving effort, double funding of projects and businesses succeed internationally. performance and plays a key contradictory actions. It works across Whitehall, together leadership role in UKTI’s programme with strong regional and overseas of change. It provides the corporate networks and external partners, to functions of finance, IT, procurement, What We Do provide companies with the help strategy, HR, internal communications, and support they need to enter new economics and evaluation, the The UK is operating in a complex and markets and support them once Ministerial and Strategic Engagement challenging economic environment. they are there. To achieve this, it has Unit, the Innovation Hub and securing Global trade has remained weak since developed a comprehensive range the UK’s Olympic legacy. the economic crisis of 2008-2009, of products and services for UK which has affected many of the UK’s businesses. traditional developed market partners. According to the IMF, the annual rate Investment Group of growth of global trade volumes slowed from 6.2 per cent in 2011 to Investment Group attracts, creates 2.8 per cent in 2012, remaining flat in and sustains a pipeline of high- 2013 at 3 per cent. quality inward investment projects in business sectors key to the UK’s long UK Trade & Investment Annual Report and Accounts 2013–14 7
How We Have Performed Key Achievements
Trade OPEN 34,820 £51.8bn Number of companies Total additional supported sales by UK businesses [Taken from latest PIMS data: 12 months to September 2013 results for the full financial year are expected to exceed the 40,000 target]
Inward Investment 52,476 1,322 New jobs Inward Investment 45,091 projects Safeguarded jobs [Data from 2012-13 as final 2013-14 results are not available until late summer 2014]
£11bn UKTI has already reached the 2016 target of £11bn of additional economic benefit to the UK from the London 2012 Olympic Games Further details of the UKTI performance framework and performance measures are included in Annexes A to C. 8 UK Trade & Investment Annual Report and Accounts 2013–14
What We Have Done
Trade Group Medium-Sized Businesses Passport to Export and Gateway Medium-Sized Businesses (MSBs) to Global Growth Exports of goods and services to high play a vital role in the UK economy, The Passport to Export Service growth markets are at an all time high. accounting for 15% of UK private provides new and inexperienced Since 2010, exports have increased sector turnover. UKTI will now be exporters with the training, planning by 52 per cent to China; 24 per offering every MSB tailored trade and support they need to succeed cent to India; 39 per cent to Russia; advice and an intensive programme in overseas markets. Gateway to and 37 per cent to Brazil. Over the of support to help them succeed in Global Growth offers a strategic same period, exports to established export markets. UKTI is making good review and further support to more markets such as the USA and the EU progress towards meeting its original experienced exporters. By the end of have continued to increase. target of assisting 1,500 MSBs by March 2014 UKTI had engaged with UKTI’s contribution has been March 2015. Between April 2013 and 2,698 companies through its Passport significant and it is on track to exceed the end of March 2014, 570 MSBs to Export programme exceeding its targets. UK companies tell us that which were new to UKTI benefitted its target of supporting 2,525 this financial year UKTI has provided from the Mid-Sized Business companies. During the same period, significant support for more than Programme. 1,749 companies had been engaged £20 billion of exports. The most through the Gateway to Global On 8 April 2014, the Chancellor of the Growth scheme, far outstripping its recent independently verified Exchequer announced an additional Performance Impact and Monitoring target of 1,423. Eighty six per cent £4 million a year for an enhanced of companies using the Passport to Survey (PIMS) data for the 12 months UKTI MSB programme. This was to September 2013 shows 34,820 Export programme and 81 per cent followed up by a letter from the of those using Gateway to Global businesses assisted and £51.8 Minister for Trade and Investment, billion of total additional sales by Growth reported significant business Lord Livingston, to all 8,900 MSBs to benefits as a result. UK businesses. UKTI’s customer inform them of the enhanced package numbers have dramatically increased of support. The package includes in the second half of 2013-14 and the dedicated account management target of 40,000 business assisted will and support from experienced UKTI be comfortably exceeded. International Trade Advisors, including guidance on routes to market, participation in MSB trade missions, access to UKTI’s global network and trade finance advice from UK Export Finance. UK Trade & Investment Annual Report and Accounts 2013–14 9
High Value Opportunities The markets recording the highest In its first full year of operation it has The High Value Opportunities (HVO) value of wins were Saudi Arabia, helped UK companies and healthcare programme provides intensive Brazil and Kazakhstan, while the organisations from both the public support for those larger companies sectors recording the highest value and private sectors win £306 million seeking to win overseas contracts of wins were oil & gas, chemicals and of business and developed a register worth £250 million upwards, while infrastructure. of qualified leads and opportunities also identifying major supply chain with a combined potential value of UKTI Education was formally £7.6 billion. projects which provide opportunities launched in July 2013 as part for small companies across a of the International Education Overseas Business wide range of sectors. The HVO Strategy. It supports companies and Network Initiative programme has been expanded organisations in the UK education from 50 to 100 projects giving UKTI The Overseas Business Network and training sector to win business initiative (OBNi) is creating a global a much broader base of markets and overseas, particularly in relation to sectors. A Private Sector Supervisory network of business-led partner HVOs. To date, it has helped the UK organisations. This will enable UKTI Board, chaired by Sir Michael Bear education and training sector win was introduced to help manage the teams based overseas to focus on £433 million of new business overseas areas where government can add increased activity, together with and aims to help secure £1 billion by additional industry specialists and most value, such as government-to 2015, with a longer-term goal of £3 government influencing, High Value private sector project managers. billion by 2020. Business wins for 2013-14 were worth Opportunities, Industrial Strategy £5.9 billion. Thirty-two markets have Launched in January 2013, Healthcare sectors and contract management. recorded HVO business wins. UK is jointly funded by UKTI, the Department of Health and NHS England.
Case Study
Angloco exports up to 75% of production Yorkshire - based Angloco has been designing and tender is issued and we submit a proposal, it helps building firefighting and rescue vehicles for 40 to be associated with the local UKTI team who years. Today, between 50 and 75 per cent of their are able to represent our interests with the local production is exported, largely in the Middle East, decision makers.” Africa, Far East and the Caribbean. UKTI is also actively supporting Angloco in UKTI has supported Angloco’ s business in the other markets. An OMIS carried out in 2011 for Caribbean since 2000. “The UKTI teams and High Oman helped the company to identify a suitable Commissions in the Caribbean islands have always distributor. The local UKTI team continues to been very supportive of us,” says Chairman and advocate for the company with potential clients, Managing Director Bill Brown. “Our sales and and there are currently five tender bids live and service teams visit the island countries regularly, awaiting a decision. but it is very beneficial to be updated by UKTI through the Overseas Market Introduction Service (OMIS) about developments in each market. When a 10 UK Trade & Investment Annual Report and Accounts 2013–14
OBNi agreements have been put Events and Missions in place in 30 markets and studies In August 2013 UKTI began working undertaken in a further five. Through with one major events partner rather Case Study the British Chamber of Commerce, than the more than 300 suppliers nine regional coordinators have been it had previously used. GTi – a appointed to work alongside the UK consortium of Grant Thornton and Mid-sized business Chambers and connect the overseas events agency, Innovision – will be Really Useful Boxes networks with their UK counterparts. responsible for providing the majority British Business Centres have opened of HQ-led events and missions. The exports half of all in India, China, Poland, Turkey, Events & Missions programme was output Thailand, Slovakia, Hungary and further enhanced by the introduction Founded in 1999, Yorkshire - Mexico. The British Business Centres of the Events Alliance (EA), a new based Really Useful Boxes provide launch pad and business partnership between UKTI and produces the world ’s largest support services to UK companies, world-leading exhibition organisers. range of transparent stacking acting as a home base for those Designed to strengthen UKTI’s storage boxes. International considering entry to new markets. presence at key events and increase sales represent half of the the number of companies it deals company ’s total business, with with, EA was piloted in September half of that again in America 2013 and went on to provide services alone. to 18,500 UK small and mid-sized businesses in 2013-14. Exporting is fundamental to the company ’s business plans Tradeshow Access Programme explained owner Mike Pickles: The Tradeshow Access Programme “When you break it down (TAP) provides grant support for there is very little difference eligible small and medium-sized in sending products from businesses to attend overseas Wakefield to Manchester than exhibitions. It continued to perform there is sending products from strongly in 2013-14, supporting Wakefield to Massachusetts 9,400 businesses compared with other than obvious additional 6,000 in the previous year. This year costs. The model is exactly it supported UK business groups at the same, and you can use around 407 overseas exhibitions. shipping companies and the like to take away the hassle.”
The company has attended a number of exhibitions and events in tandem with UKTI, and is also using the Overseas Market Introduction Service (OMIS) to forge deeper US links. “I have been hugely impressed with the support UKTI has provided. I have a fantastic relationship with our dedicated International Trade Advisor, and I look forward to seeing what the future holds as we continue to work together,” added Pickles. UK Trade & Investment Annual Report and Accounts 2013–14 11
Key Trade Group Successes
Trade Total additional sales by UK businesses 34,820 Number of OPEN £51.8bn companies supported
[Taken from latest PIMS data: 12 months to September 2013] High Value Opportunities Programme 2013/14 Markets UK organisations £5.9bn 32 with HVO 179 2.9k engaged by HVO wins business HVO contracts won HVO teams wins
Passport to Export Gateway to Global Growth
2,525 1,423 2,698 target 1,749 target companies benefitted companies benefitted
Events Alliance Services provided to An HQ-led initiative designed 351,222 18,500 UK small and to strengthen UKTI’s presence UK small and mid-sized mid-size at key events businesses targeted in businesses pilot programme
Tradeshow Access Programme 2013/14
407 Overseas exhibitions 9,400 Businesses supported
Further details of the UKTI performance framework and performance measures are included in Annexes A to C. 12 UK Trade & Investment Annual Report and Accounts 2013–14
UKTI Defence & Security Exports’ sets out the scale almost 200 small and medium-sized and impor tance of the global security businesses, over 50 per cent of which Security Organisation market, detailing the UK’s strengths were new to UKTI DSO. UKTI DSO In 2013-14, UKTI DSO continued together with the market drivers and also supported the Defence and to help UK defence and security challenges. It focuses on seven key Security Equipment International companies achieve success capability areas, coupled with an (DSEI) event in London, which internationally. Highlights included understanding of what makes the attracted over 30,000 delegates AgustaWestland’s £1 billion contract UK unique and how the UK security and for which UKTI DSO arranged to supply 16 search and rescue offer can be best promoted in current bespoke visit programmes for a helicopters to the Royal Norwegian Air priority markets. record breaking 96 official delegations Force; Ultra Electronic’s £50 million from 56 countries. In March 2014, in UKTI DSO’s strategy to increase partnership with the Home Office, contract to upgrade Indonesia’s UK cyber security exports aims Fatahillah Class frigates; Digital UKTI DSO invited and hosted 270 to position the UK as the partner delegates from 62 countries at the Barriers’ £1 million contract for the of choice for those seeking cyber sale of next generation surveillance Security and Policing exhibition in security solutions. It sets out the Farnborough. technology to the Republic of Korea; UK’s strengths and capabilities and Cobham Technology’s £1 million describes how the Government will contract to equip Brazilian state police provide immediate and practical helicopters with high-definition video support to UK exporters and to surveillance downlinks; and Thales’s overseas customers. £100 million contract to supply its ForceSHIELD Integrated Air Defence UKTI DSO’s 2013-14 activity also included System and Starstreak Missiles to the 30 defence and security events in 18 Indonesian Ministry of Defence. countries. Highlights were a symposium in London in May 2013 which attracted UKTI DSO worked with the Home Office and other Government departments to publish two strategies to increase UK security exports. ‘Increasing our
Case Study
UK wins £1 billion AgustaWestland helicopter deal UKTI DSO and the British Embassy in Oslo played The helicopters will be assembled at an instrumental role in AgustaWestland signing a AgustaWestland ’s Yeovil facility in the UK, with the £1 billion contract to supply 16 helicopters, plus involvement of many of the company ’s other plants. support and training, to the Norwegian government. The contract will help safeguard over 3,000 jobs at AgustaWestland and in the supply chain, which The contract for the All Weather Search and includes many small and mid-sized businesses in Rescue (SAR) helicopters was signed at the end of the South West and throughout the UK. a meticulous selection process. Aircraft deliveries to the Royal Norwegian Air Force, which will fly Prime Minister David Cameron said: “This £1 billion and operate the helicopters, will start in 2017 and deal between AgustaWestland and the Norwegian continue to 2020. Government is testament to the first class engineering skills we have right across the UK, while highlighting that this Government ’-s long term economic plan is working.” UK Trade & Investment Annual Report and Accounts 2013–14 13
Investment Group Investment Organisations Exceptional Talent UKTI has created five new Investment In support of efforts to position Final results for 2013-14 are not Organisations – Automotive, the UK as the location of choice available until July 2014. However Regeneration, Financial Services, for European HQs, elite global initial results show an improved Offshore Wind and Agri-tech – to sit entrepreneurs and exceptional talent, performance from 2012-13 and so alongside the existing Life Sciences UKTI worked closely with the Home UKTI is confident that it will exceed Organisation. These will provide a Office and Tech City to open up the targets of attracting 750 inward platform for Government to enhance the Exceptional Talent visa route to investment projects into the UK in the way it supports inward investment world-leading individuals in the digital 2013-14, and creating or safeguarding in a focused, targeted way, translating technology sector. Opened in April 50,000 jobs. Investment Group opportunities identified in the 2014, it will provide an immigration continues to innovate, introducing Industrial and Sector Strategies into route for individuals with a proven new initiatives and services to projects landed for the UK. track record in developing successful make the UK an attractive business businesses or creating new environment for foreign investors and Global Accounts innovations in the technology sector. enabling higher value investments. Reinforcing the capability to manage High Growth Markets global accounts that enable high value investment to the UK has been one of UKTI has developed and rolled out Investment Group’s main objectives four private sector-led, vertically- and achievements in 2013-14. One integrated inward investment delivery hundred and fifty global accounts models in the key high growth are now being actively managed by markets of Russia, the Gulf, Central the Global Account Teams, providing & Eastern Europe and Latin America. real benefits to both the client and These fully funded pilots will explore the economy. There have been a the effectiveness of various delivery number of notable successes this options in markets that have the year, including Wolf Minerals, which potential to be a major source of launched its investment in one of the FDI into the UK. The initiative goes largest tungsten mines in the world. directly to UKTI’s target of becoming This will create over 200 jobs and the location of choice for investments amount to £120 million of investment from high growth markets. in the UK. 14 UK Trade & Investment Annual Report and Accounts 2013–14
Supporting Entrepreneurs Siemens’ £310 million investment The Global Entrepreneur Programme in offshore wind manufacturing (GEP), an FDI vehicle to attract the in Hull is a good example of what Case Study world’s best founder entrepreneur-led, the strategic approach can deliver. early stage technology companies This involved close work across a to the UK has produced over 65 FDI number of Government Departments, Chinese investment and with Siemens. We used SRM successes in 2013-14, exceeding into Manchester its annual target. Twenty five per structures and processes, led by BIS cent of successes came from and DECC, to develop our collective Airport City knowledge of how Siemens operates. existing investors, demonstrating UKTI played a key role in This was crucial to how Government the benefits of UKTI’s increased securing £850 million of influenced, and partnered, with the account management activity. UKTI’s Chinese investment into company. The wider SRM network Sirius Programme is helping to the Manchester Airport City spent four years on this investment to attract the most talented graduate project. By working closely win it for the UK over other European entrepreneurs from around the world with the British Embassy in competitors, creating 1,000 direct and is encouraging them to set up Beijing it was able to develop jobs in an area of low employment. and grow their business in the UK. contacts across both the Approximately 50 teams were awarded A total of £3.3 billion of capital Chinese government and places on the programme in 2013-14. investment was captured into the business in support of one of the bidders. As a result, a Strategic Relationship UK, exceeding the £1.5 billion Chinese delegation visited the Management target. Success has included the development of a new commercial UK to learn more about the The UKTI Strategic Relationship park around Manchester Airport opportunity. Management (SRM) programme aims together with Canadian investment in In the UK, UKTI was able to to improve the coherence and focus the London Array offshore wind farm use its cross - governmental of Government’s relationship with and in other major investments in influence to set up meetings the companies that are crucial to the infrastructure assets. UK economy – its major investors between the delegation and and exporters. The SRM approach key officials and ministers, recognises the complex and diffuse ultimately helping to secure relationships large companies have a letter of support from Sir with Government and, for the first Michael Bear, as head of the time, has brought together teams of UK- China CEO forum, to the officials across Government into Chancellor, George Osborne. one network to consider the interests As the tender for the project and priorities of these companies, reached an advanced stage, and agree long term strategies for Manchester Airports brokered generating continued economic the final consortium that benefit from the UK’s major combined UK capabilities and wealth creators. expertise with Chinese capital.
Manchester Airport City is one of the first UK projects to have benefitted from Chinese investment under the UKTI - brokered Infrastructure Investment Partnership Agreement signed in 2011. UK Trade & Investment Annual Report and Accounts 2013–14 15
Key Investment Group Successes
Investment Jobs 1,322 52,476 created Investment projects into UK 45,091 safeguarded [Figures taken from 2012-13 as final 2013-14 results are not available until late summer 2014] New Investment Organisations
Automotive Financial Services Offshore Wind Agri-tech Regeneration
Global Entrepreneur Programme
65 £1bn Equity FDI successes 25% investment raised (2013-14) by GEP companies since 2004
350 Successes coming Successes High from existing 2,000 since 2004 value jobs created investors Strategic Relationship Management Unit
Value of capital investment into £3.3bn the UK exceeding the £1.5bn target Further details of the UKTI performance framework and performance measures are included in Annexes A to C. 16 UK Trade & Investment Annual Report and Accounts 2013–14
Marketing Group
During 2013-14, UKTI stepped up the Awareness and understanding On 14 April 2014, the digital team marketing and campaign leadership tracking showed that awareness of managed the smooth transition of activity for the GREAT campaign. The UKTI had risen among small and UKTI’s website to the Government GREAT Britain campaign showcases mid-sized businesses from 20 per digital platform, gov.uk. The move the very best of what Britain has to cent to 29 per cent, and, of these, coincided with a refresh of content, offer, encouraging the world to visit, understanding of the role of UKTI had including new guidance on exporting; study and do business with the UK. risen from 72 per cent to 77 per cent. enhanced country guides; new Overseas, the GREAT campaign UKTI services information; and core has been part of generating five The 2013 Global Investment information messages. In addition, confirmed Inward Investment projects Conference (GIC) built on the positive marketing exceeded the social so far, together with over 1,000 new perception of the UK generated media target of 10,000 additional investment enquiries and leads. More during the 2012 Olympic Programme. Twitter followers and 5,000 LinkedIn than 6,000 export service deliveries The event was held prior to the followers. to companies have been generated, G7 finance ministers’ meeting to supporting over 2,500 UK companies maximise exposure and enabled in priority markets across a variety of UKTI to engage with 250 senior global sectors, including healthcare, energy, chairs, chief executives, business technology, retail, food & drink and leaders and major international advanced engineering. Trade support organisations. It was attended by included significant assists, business companies and institutions with the to business event attendance and potential to invest billions of pounds the commissioning of Overseas worth of investment in the UK. Market Introduction Services. UKTI continued to work in partnership Overseas activity from GREAT with the Prime Minister’s Office, funding is on track to deliver the managing the accompanying target of £449 million benefit to the business delegations for his overseas UK economy over the next five years. visits to Kazakhstan, India, China, Launched in March 2013, Germany, Israel and the Palestinian the Exporting is GREAT pilot Territories. UKTI is responsible for the proved effective, generating identification of suitable companies; 1,012 appointments with UKTI’s arranging a business-focused International Trade Advisors (ITAs) programme of activities in-market; against a target of 500. This paved and providing partnering and trade the way for a national campaign and investment opportunities. With which is currently in its third wave. over 120 British companies, the China To May 2014, a total of 2,821 ITA delegation was the UK’s largest ever appointments have been generated. business delegation and generated The campaign aims to help more more than £5.6 billion of deals, than 3,000 additional businesses creating over 1,500 UK jobs. and provide an economic benefit of £1.2 billion in incremental sales. UK Trade & Investment Annual Report and Accounts 2013–14 17
Key Marketing Group Successes
GREAT Campaign 5 1,000 6,000 2,500 Inward Investment Investment Service deliveries UK companies wins supported enquiries and leads supported
China Delegation 120+ £5.6bn 1,500 British Deals Jobs companies created
Social Media coverage
48.5k 26k 47.5k Twitter LinkedIn Facebook followers members subscribers
Further details of the UKTI performance framework and performance measures are included in Annexes A to C. 18 UK Trade & Investment Annual Report and Accounts 2013–14
Chief Operating Officer’s Group
In 2013-14, COO worked with A mobile office solution was rolled The Innovation Hub was established colleagues in FCO, BIS and HM out to enable better access to at the end of 2013 and is tasked to Treasury to secure a single budget information, improved customer think creatively, test ideas and take for UKTI. By 2015-16 UKTI will have interaction, increased productivity risks. The Innovation Hub takes on up one vote from Parliament covering while on the road and greater to three ideas at a time – some will the complete costs of its operations, collaboration across the worldwide go on to become viable projects and increasing operational flexibility, network. The IT team also enabled the will be planted in the business, while transparency and accountability. Customer Data Management System others will not. This has included (CDMS), UKTI’s primary system looking at the pilot UK-Israel Tech Business planning was reformed for recording information about its Hub and the potential to take a similar to reduce bureaucracy, streamline transactions with customers. approach in other markets globally. the number of targets at post The Prime Minister announced a roll and give earlier certainty around The UKTI Internal Communications out of this model in selected markets budgets, targets and activities. The Team facilitated consistent, timely, during his visit to Israel in March 2014. Commercial Unit was established to two-way communications across provide enhanced professionalism UKTI and its partners. During 2013 Ministerial & Strategic in the management of UKTI services 14, it implemented a new version of Engagement Unit by private sector partners. It has the UKTI Connect extranet, providing MSEU’s engagement with 30 produced revised guidance and a single channel of communication Ministers’ Private Offices across training for contract managers, and gateway to information, including Whitehall and with individual Ministers developed a central contracts access to CDMS for all UKTI staff. for 33 separate events helped database and created a contracts The Economics and Evaluation Team strengthen the UK’s case in a number dashboard to allow centralised of high profile trade deals. John Hayes monitoring. has helped facilitate improvement through robust measurement of MP, Minister without Portfolio, led a performance against UKTI’s strategic mission to Columbia in November objectives and by drawing out 2013 where he successfully lobbied insights to help managers and teams on behalf of UK company Holdtrade understand the drivers underpinning against a Government draft resolution the results. The prime vehicle for that would have made standard gauge this is the Performance Impact and compulsory for the Colombian railway Monitoring Survey (PIMS). system. During a subsequent visit by the Deputy Prime Minister in February 2014, Holtrade announced they had won a £47 million rail contract in Colombia. UK Trade & Investment Annual Report and Accounts 2013–14 19
Trade Envoys Olympic Legacy Successes Trade Envoys have been equally productive, not least through the work of Lord Risby. The Algerian Prime Minister appointed the Energy £2.44bn Minister as Lord Risby’s counterpart HVO wins and key point of contact. Together they are working on addressing challenges to companies seeking to enter and expand in Algeria, notably in the energy sector, as well as £2.72bn pursuing opportunities in education, Investment (58% outside London) skills and healthcare.
Business Ambassadors Business Ambassadors continued to promote a diverse range of £5.9bn companies across all sectors. At the Additional sales by UK second Technology Innovation Forum companies as a result in London in October 2013, Lord of UKTI activity Marland worked closely with Business Ambassadors Lucian Grainge, CEO of Universal Music, and Brent Hoberman of MADE.com, to make the two-day £11bn event a success. As a direct result of Overall target over four years achieved the event, £1 billion of investment into in fourteen months after the Games the UK was influenced and £14 million of trade enabled.
MSEU’s achievements in numbers Olympic Legacy Ministers’ Private Offices The Olympic Legacy Unit has worked to ensure that the 30 across Whitehall that have London 2012 games leaves a lasting economic legacy been engaged for the UK through a programme of activity involving Ministers secured for headquarters teams, posts and regions. 33 UKTI priority events Our Olympic Legacy Programme helped UK companies Trade secure contracts for the Sochi 2014 Olympics, 2014 FIFA 14 Envoys World Cup, and 2016 Olympics, while our Host2Host programme continued to build partnerships with other Business hosting nations, including Vietnam, host of the 2019 52 Ambassadors Asian Games. Catalyst UK members In July 2013, we launched a new tool to map the lifecycle involved in UKTI events 86 of sports events to support UK companies looking to target sports opportunities and help us in planning strategic trade campaigns to support those companies. A Brazil toolkit to help UK companies comply with pre- qualification documentation requests when responding to Brazilian public sector tenders was also developed. 20 UK Trade & Investment Annual Report and Accounts 2013–14
Looking Forward
In January 2014 UKTI published New Priorities making the detail available to them in a ‘Britain Open for Business – the Next targeted way and in straightforward terms. Phase’, an update of its five year Medium-Sized Business strategy launched in 2011. The revised Export Orientated Foreign Direct UKTI is substantially increasing the Investment strategy continues to be underpinned support provided to MSBs. The by the four pathways to growth contribution of MSBs to the UK UKTI is increasingly targeting established in 2011. economy could grow to be worth those investors and investment up to £50 billion by 2020. UKTI will opportunities with significant export High Growth and Innovative Small potential, focusing on the sectors of Companies expand and improve support for MSBs providing a tailored service greatest importance to the UK. UKTI To encourage significantly more small to all those who want our assistance. is already offering investment services companies to export to high growth No MSB should fail to grasp the export in over 50 global markets and will markets, and take steps to link high- opportunity because it is not aware continue to attract investment from potential firms to trade finance, credit of how Government can assist. sovereign wealth funds and other insurance and venture capital. institutional investors. UKTI remains Enhanced Support for Small committed to strengthening supply High Value Opportunities Companies chains to support large companies. To help bring HVOs home through In addition UKTI will enhance its UKTI and the Manufacturing Advisory intensive support for those larger support for small companies wishing Service will work together through a companies seeking to win overseas to export and will raise awareness of new joint Re-shoring Service to help contracts ranging from £250 million UKTI, BIS and UKEF services through bring business back to the UK. upwards, while also identifying major integrated and targeted marketing. supply chain projects which provide Industrial Strategy opportunities for small companies High Growth Markets UKTI will focus on where Government across a wide range of sectors. UKTI is continuing to pursue support can most effectively and efficiently make a difference. This Targeted Inward Investment opportunities in developed markets while strengthening its efforts in high includes boosted sector teams where To maintain the UK’s position among growth markets. It will focus on China, senior figures from industry with deep the top three destinations in the India and other high growth markets and wide networks of contacts in the UK world and the best in Europe for while increasing its focus on parts of and internationally are brought in to sell inward investment; deliver bespoke Africa and Central America. UK capability in target markets. UKTI services for foreign direct investors; will launch an Innovation Investment and attract institutional investors, Free Trade Agreements Organisation to attract big investors into the UK and identify international including sovereign wealth funds, to The estimated annual combined value opportunities for innovation-led UK invest in large-scale infrastructure and of European Free Trade Agreements (EU companies. regeneration projects in the UK. FTAs) to UK GDP is £16.3 billion (including Building Strategic Relationships the EU-Canada FTA, the EU-US Transatlantic Trade and Investment To introduce key account management Partnership and the EU-Japan of the most significant inward investors Economic Partnership Agreement). and the UK’s top exporters through a UKTI, working with the wider UK cross-Government Strategic Relations Government, will ensure that UK Unit, giving key inward investors and businesses are able to gain maximum exporters a seamless, one stop service benefit from both existing and and speedy resolution of bureaucratic future European Union Free Trade obstacles to doing business. Agreements (FTAs). UKTI will enhance its efforts to increase UK companies’ awareness of these opportunities by UK Trade & Investment Annual Report and Accounts 2013–14 21
Increasing Our Impact
Whole Government Partners A significant proportion of our service delivery has already been outsourced approach to trade and UKTI’s partnerships extend beyond to private sector partners. UKTI is also investment Government and UKTI is committed working with trusted intermediaries to increasing our impact by working such as banks, lawyers and accounting UKTI is working ever more closely with more partners than ever before, firms, and business organisations such with a range of other Government building strategic relationships with as the Confederation of British Industry, departments including, Department business and industry to provide the Federation of Small Businesses and for Culture, Media & Sport; support business needs to export, Chambers of Commerce, through the Department of Energy & Climate and to create the environment for National Export Challenge, in order to Change; Ministry of Defence; international success. Transforming reach more small companies with the Department for Food & Rural business-to-business trade support message that exporting is good for Affairs; Department for International is integral to our ambitions. UKTI business. In addition UKTI is developing Development; Ministry of Justice; is working with British business local strategies with Local Enterprise Home Office; Department of Health; groups and Chambers of Commerce Partnerships and working together with UK Export Finance and Department overseas to help them develop their BIS to provide more joined up services for Transport. networks and capabilities, to help through Growth Hubs. provide a one-stop shop of services to UK companies. By 2020, the UKTI will continue to develop, support available to small companies grow and deepen relations with our from Government and Business to partners in the UK and around the Business Networks will have been world. Together, we will provide the transformed in both range and support that exporters and investors quality. This will enable UKTI to re need to thrive and prosper, in a Britain focus resources to support business that is open for business. in areas where UKTI can make the greatest difference.
22 UK Trade & Investment Annual Report and Accounts 2013–14
Our People and Business Partners
Our Values Our People English Regions Working alongside our people in the Committed to our customers – UKTI achieves its objectives through English Regions are approximately we listen to our customers’ needs a combination of civil servant and 400 private-sector partners, and focus on real outcomes. private sector expertise. UKTI is not supporting the provision of trade an employer in its own right and for Empowered to deliver – and inward investment services. the majority of its human resource it The private-sector specialists bring we trust each other to innovate draws on Civil Service staff employed and get results. with them expertise and invaluable by one or other of its two parent industry knowledge, to help UKTI Departments. In the UK, most of Working together – better meet its aims. our staff are drawn from BIS, while we work as one team and build overseas the majority of its staff are partnerships to add value. Foreign Direct Investment from the FCO. A total of approximately Approximately 110 individuals from 1,880 of UKTI’s staff are drawn from the private-sector are working as part BIS, FCO and MOD. Of these, 580 are Our People Strategy of our inward investment service. based in the UK, including Glasgow They are responsible for coordinating Our People Strategy is designed to and the English Regions, with a and managing delivery of FDI strengthen performance, both as further 1,300 working overseas. support for the UK with prospective individuals and as an organisation, foreign direct investors, working it has four priority areas: UKTI Private Sector with strategic and local partners UKTI is supported by a highly expert Understanding business – really across England, the three Devolved cadre of approximately 200 private getting to know our customers to Administrations and the Greater sector specialists who combine enhance our credibility and ability London Authority and providing commercial acumen, with technology, to build effective relationships direct relationship management and sector and market experience. This investor development, in association Focus on delivery – improving skills mix is vital to ensuring that with international, national and local our individual and team skills and inward investors or exporting firms stakeholders, to nominated existing performance to ensure we deliver are directly engaged and supported investors in the UK. consistently to the highest standards effectively.
Changing our culture – creating an enterprising culture where we put customers first and strive for continuous improvement
Best people, best team – getting the most from our people by recruiting the best, developing our talents, and making UKTI a great place to work
We work closely with the FCO and BIS to ensure that the people, policies, practices and guidance of both Departments work smoothly within UKTI. UK Trade & Investment Annual Report and Accounts 2013–14 23
Developing Our People
Interchange Programme These twin approaches – leadership Corporate priorities for 2013-14 were and management – build on UKTI’s to continue to provide the knowledge UKTI operates an interchange Investors in People (IiP) global and skills required to improve our programme which supports the accreditation. UKTI also runs staff professionalism in delivering the organisation by bringing in expertise surveys across the global network to strategy, chiefly: from the private sector and seconding enable employees to have their say staff out. These specialists work with, and gauge staff engagement, and we • Knowledge-based courses and alongside, our UK and overseas participate in the annual Civil Service • Induction-level training provided by network, to raise the profile and People Survey. the in-house team for all staff in the enhance the growing capabilities of UK and overseas who are new to the UK’s expertise in a given sector UKTI, supported by an e-learning (e.g. construction, oil & gas, water) in Learning and welcome programme and pre- the worldwide market. Capitalising Development course work on such key industry expertise goes some way to adding real value to The Learning and Development team • Induction-level International Trade our work. In 2013-14, UKTI seconded ensures that people working for Advisors (ITAs) training provided 12 individuals from the private sector, UKTI are able to meet the needs of by the in-house team for English while five UKTI people were their clients through up-skilling and Regional staff in the UK who are seconded out. professional development. When new new to UKTI, supported by an people join, we provide a tailored e-learning welcome programme corporate induction programme to • Induction programme and skills- ensure staff develop the knowledge Excellent Leadership based training on confidence with and skills required to perform and Management clients for UKTI DSO effectively in their roles and to help UKTI’s best practice in leadership is UKTI to achieve its objectives. • Induction programme to support the based on developing excellence in FCO Commercial Diplomacy and team leadership and performance To ensure that all UKTI staff can Prosperity agenda management, to achieve create their own learning journey, • Skills-based training for the outstanding results. Guidelines on the Learning and Development team overseas network on leadership and management excellence aim to introduced a Learning Passport. delivery, based on the four strands drive up management performance The passport brings together a of the People Strategy. and effectiveness. These provide range of learning options in one managers across the network place, enabling staff to access the with an easy reference point on a learning and development which is range of issues and procedures best for them throughout the course directly affecting their people, of their career. including recruitment, induction and performance management. Management excellence also features in two workshops – ‘Leading UKTI Teams to Deliver Business Excellence’ and ‘Delivering Business Excellence for UKTI’ – which are designed for staff, to support our programme of professional development. 24 UK Trade & Investment Annual Report and Accounts 2013–14
Skills Programmes Diversity With staff in London, Glasgow, the English Regions and 110 countries Our Delivering Business Excellence UKTI’s status means that it can call around the world, it is by its nature, a for UKTI induction programme on the expertise of the Diversity and very diverse organisation. To ensure supports essential skills for Equality Units of both BIS and the that UKTI can benefit fully from the developing and managing client FCO. While the two Departments talents of its staff, it works closely relationships. The programme develop and promote diversity and with both parent Departments, to also supports staff with key UKTI equal opportunities policies affecting ensure that diversity is embedded knowledge and skills. In 2013-14, UKTI, the organisation supplements in all aspects of UKTI’s work, both 12 workshops presented to these where necessary with its internally and externally. 240 delegates. own policies. In the UK, UKTI participates in The UKTI ITA Induction Programme UKTI has its own Diversity Statement the work being undertaken by BIS was launched in May 2013 and which recognises the importance of under the Single Equality Act. UKTI was developed to support ITAs’ creating an organisational culture contributes to the equality plans understanding of UKTI, its structures, in which people can reach their full of both parent Departments and products and services. In 2013-14, potential and provide the highest participates in the diversity training there were four bespoke workshops quality of service to customers and development opportunities presented to 72 delegates. and stakeholders. available through BIS and the FCO.
‘Delivering Business Excellence’ for UKTI is committed to treating all staff UKTI supports the development and and eligible job applicants fairly and management of client relationships without discrimination. It supports and key accounts. It also supports arrangements for flexible working teams to change behaviours to patterns and is committed to creating operate more strategically through a culture where individual differences working with business partners. In are valued and respected. It does not 2013-14 there were nine bespoke tolerate any form of discrimination, workshops given to approximately harassment or victimisation. It is 117 delegates. This included UK and committed to providing a working overseas locations such as London, environment where no one is Lima, Thailand, Bangkok, Peru, Libya, disadvantaged. Jakarta and Hong Kong. UKTI seeks to ensure that its policies, practices and procedures in relation to staff and customers are compliant with current legislation, and reflect best practice. UK Trade & Investment Annual Report and Accounts 2013–14 25
Financial Review
Introduction Resources (Estimates) There was an increase in the total resource available of £60.9m. This This financial review records Estimates are the means by which was largely the result of an additional information on the use of resources the Government seeks and obtains £70m of resource awarded through voted by Parliament directly to UKTI authority from Parliament for its the 2012 Autumn Statement. UKTI via the Supply Estimates process. spending each year. This covers also received additional resource It does not include other resources expenditure on specified services of £12m through a budget transfer provided by BIS and the FCO, which for which the Accounting Officer from Cabinet Office to fund GREAT are required to provide a full picture of is accountable to Parliament. The campaign activities. This additional the resources consumed. These are Accounts report Outturn figures income was offset by £2.7m of set out in the Memorandum Notes on against Estimate, as well as other efficiency savings across both 2011 pages 82 to 87. The resources voted key control figures. (Fig 2). and 2012 Autumn Statements, and to BIS (HC 39) and the FCO (HC 17) the 2013 Budget. There was also a are shown in their respective Annual In 2013-14, UKTI’s Net Resource decrease in available funding due to Report and Accounts. Outturn, which is equal to UKTI’s a one off transfer of £13m from BIS Net Operating Cost, was £157.2m in 2012-13 to support SMEs and the The Autumn Statement in 2012 set out (£92.5m). This was a net resource High Value Opportunities programme. a substantial package of additional underspend of £6.2m (Fig 1). The In addition, UKTI used the Budget measures that came into effect in underspend was largely due to an Exchange mechanism to transfer 2013-14, combining immediate action underspend of £4.6m in Resource £3.3m from 2013-14 Resource DEL to get more small and medium-sized AME. UKTI had an AME budget Budgets to 2014-15 to cover the businesses exporting with the of £5.0m in 2013-14 to cover the timing of financial pressures now due medium term targeting of the highest potential provisions relating to in 2014-15. value trade and inward investment incentivised contract payments opportunities. This ambitious to private sector contractors. The UKTI had an administration programme of activity was supported AME underspend was due to these expenditure budget for the first time by an additional £70 million of funding payments being recorded as accruals in 2013-14 to cover the costs of the in 2013-14. rather than provisions, therefore Ministerial Visits Unit and additional scoring in Resource DEL budgets, administration pressures arising from rather than Resource AME. the increased programme activity funded by the 2012 Autumn Statement. 26 UK Trade & Investment Annual Report and Accounts 2013–14
Fig 1: Summary of Outturn Against Key Control Totals
Actual Voted total Variance Variance £m £m £m % Resource DEL 156.8 158.4 1.6 1.0 Resource AME 0.4 5.0 4.6 92.0 Total Net Resource Outturn 157.2 163.4 6.2 3.8 Capital 2.5 3.0 0.5 16.7 Net Cash Requirement 147.1 159.9 12.8 8.0 Income (16.3) (17.5) (1.2) 6.9
Fig 2: Reconciliation of Resource Expenditure between Estimates, Accounts and Budgets
2013-14 2012-13 £m £m Net Resource Outturn (Estimates) 157.2 92.5 Total Resource Budget Outturn (Budget) 157.2 92.5 Of which: Departmental Expenditure Limits (DEL) 156.8 92.5 Annually Managed Expenditure (AME) 0.4 – Net Operating Cost (Accounts) 157.2 92.5 UK Trade & Investment Annual Report and Accounts 2013–14 27
Resource Spend Against Budget • £17.3m (£9.3m) was spent on Inward Investment sector-specific activities in markets Resources consumed by major • £18.1m (£18.1m) was spent on and sectors with strong potential programmes in enhancing the contracted delivery of Foreign Direct for UK business. The budget for the competitiveness of companies in Investment services. The budget for year was £17.1m. the UK through overseas trade the year was £15.5m. support and inward investments • £16.2m (£8.7m) was spent to • £27.6m (£17.1m) was spent on other during 2013-14 are compared against support new and inexperienced inward investment programmes. The the original budget allocation below exporters through overseas budget for the year was £35.9m. The (with the previous year’s expenditure exhibitions. The budget for the year underspend against this increased in brackets). was £16.1m. budget was caused by delays in The changes in spend and variances • £2.1m (£1.5m) was spent on the recruitment and a slow initial uptake to original budget recorded largely Passport to Export programme, against some programmes. relate to: aimed at providing practical advice and support to small and medium- Income Received Against Budget • Increased spend due to the sized enterprises, which are new to (2013-14) additional funds made available or inexperienced in exporting. The £16.3m (£16.1m) of income was through the Autumn Statement 2012. budget was £2.4m. received against a budget of £17.5m. • Decreased Investment budgets due • £19.3m (£5.4m) was spent on trade The income for 2013-14 consists of to the mid-year re-allocation of an promotion. This included additional OMIS income of £6.5m, £6m received identified under spend caused by funding of £12m for GREAT from BIS to support additional delays in the procurement process Campaign activities. The budget for trade activities, £1.6m funding for for new contracts. This included the year was £16.1m. Healthcare UK and £2.2m generated the specialist framework, which by defence, marketing and other cost • £2.0m (£1.8m) was spent on major was postponed from September recovery activities. defence and security events. The 2013 to May 2014. The resource budget for the year was £3.0m. The was re-prioritised to in-year Trade The following tables (Figs 3-7) record reduced spend against budget is programmes. UKTI’s resource expenditure for the mainly due to the cancellation of period 2009-10 to 2013-14, together campaigns in-year. Trade Support with 2014-15 plans, in accordance • £8.7m (£4.4m) was spent on with HM Treasury reporting • £23.6m (£22.6m) was spent on the High Value Opportunities requirements. funding private-sector delivered, Programme, which helps UK customer-facing activity (International companies access the highest value Trade Teams) delivering international overseas opportunities. The budget trade support in the English Regions. for the year was £11.5m. The budget for the year was £22.5m. • £11.3m (£7.7m) was spent on private-sector business specialists who help deliver our key programmes. The budget for the year was £7.3m. • £4.7m (nil) was spent working to create a global network of business- led partner organisations. The budget for the year was £3.2m. 28 UK Trade & Investment Annual Report and Accounts 2013–14
Fig 3: Summary Table of UKTI DEL Programme Expenditure on Trade and Investment (2009-10 to 2014-15)
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Outturn Outturn Outturn Outturn Outturn Plans £m £m £m £m £m £m Programme 100.5 92.0 90.8 108.6 171.9 266.7 Expenditure Programme Income (6.0) (6.9) (9.1) (16.1) (16.3) (19.0) Net 94.5 85.1 81.7 92.5 155.6 247.7 General notes: 1. The increase in expenditure in 2014-15 relates to the direct overheads currently included in the Main Estimates of BIS and the FCO that will be voted directly to UKTI from 2014-15. This includes £36.5m and £75.7m formerly included in the respective budgets of BIS and the FCO.
Fig 4: Summary Table of UKTI DEL Administration Expenditure on Trade and Investment (2009-10 to 2014-15)
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Outturn Outturn Outturn Outturn Outturn Plans £m £m £m £m £m £m Admin Expenditure – – – – 1.3 16.9 Admin Income – – – – – – Net – – – – 1.3 16.9 General notes: 1. The increase in the administration expenditure budget in 2014-15 relates to the direct overheads currently included in the BIS and FCO Estimates that will be voted directly to UKTI from 2014-15.
Fig 5: Summary Table of UKTI AME Expenditure on Trade and Investment (2009-10 to 2014-15)
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Outturn Outturn Outturn Outturn Outturn Plans £m £m £m £m £m £m AME Expenditure – – – – 0.4 5.0 Net – – – – 0.4 5.0 General notes: 1. The increase in the AME expenditure budget in 2013-14 and 2014-15 relates to possible provisions for incentivised payments to private sector contractors. UK Trade & Investment Annual Report and Accounts 2013–14 29
Fig 6: Table of UKTI Major Programme Expenditure (2009-10 to 2014-15)
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Outturn Outturn Outturn Outturn Outturn Plans £m £m £m £m £m £m Trade Development, which includes: 62.1 58.9 52.3 60.3 110.2 190.1 International Trade Advisors 18.3 18.3 19.6 22.6 23.6 23.2 Sector-Specific Support 11.2 11.0 8.8 9.3 17.3 31.1 Tradeshow Access Programme 8.4 8.4 6.7 8.7 16.2 8.8 Passport to Export 2.8 2.1 1.9 1.5 2.1 1.1 Trade promotion 7.2 5.8 6.5 5.4 19.3 24.4 Defence & Security export services 2.3 2.1 2.0 1.8 2.0 2.4 High Value Opportunities 2.4 2.7 2.9 4.4 8.7 10.8 Chambers – – – – 4.7 9.8 Business Specialists 4.2 4.5 4.6 7.7 11.3 4.3 Income (6.0) (6.9) (9.1) (13.0) (16.3) (6.9) Inward Investment, which includes: 32.3 26.2 29.4 32.2 45.7 57.6 Grants to RDAs 16.4 14.0 – – – – Delivery of Foreign Direct Investment – 0.1 13.9 18.1 18.1 15.9 Other Foreign Direct Investment Expenditure 15.9 12.1 15.5 17.1 27.6 41.7 Income – – – (3.1) – – General notes: 1. This is not a comprehensive list of all UKTI funded programmes. 30 UK Trade & Investment Annual Report and Accounts 2013–14
Fig 7: Breakdown of UKTI Major Programme Expenditure against Budget
Budget Actual Variance 2013-14 2013-14 2013-14 Programme Expenditure £m £m £m International Trade Advisors 22.5 23.6 (1.1) Sector-Specific Activities 17.1 17.3 (0.2) Tradeshow Access Programme 16.1 16.2 (0.1) Passport to Export 2.4 2.1 0.3 Trade promotion 16.1 19.3 (3.2) Defence & Security Events 3.0 2.0 1.0 High-Value Opportunities 11.5 8.7 2.8 Business Specialists 7.3 11.3 (4.0) Investment Delivery Contract 15.5 18.1 (2.6) Other Foreign Direct Investment Expenditure 35.9 27.6 8.3 Chambers 3.2 4.7 (1.5) Other Programmes 23.2 21.3 1.9 Gross Programme Expenditure 173.8 172.2 1.6 Income (17.5) (16.3) (1.2) Net Programme Expenditure 156.3 155.9 0.4
Capital Spend Against Budget (2013-14) UKTI’s capital budget for the year was £3.0m as per the Spending Review 2010.
Outturn was £2.5m (£1.6m), compared to a final budget of £3.0m. This was spent on developing replacement business critical systems, both customer-facing and internal knowledge-sharing and upgrades to UKTI UK headquarters. The unutilised budget is a result of delays due to CRM system replacements (Fig 8).
Taxpayers Equity (Capital) The Statement of Financial Position as at 31 March 2014, shows negative taxpayers’ equity of £18.9m (£8.8m). This is the net sum of total assets less total liabilities. The negative figure reflects the inclusion of liabilities falling due in future years, which are to be financed by drawings from the UK Consolidated Fund (the Fund). Such drawings will be from grants of Supply approved annually by Parliament to meet UKTI’s net cash requirement (NCR). Under the Government Resources and Accounts Act 2000, no funds may be drawn from the Exchequer ahead of need. UK Trade & Investment Annual Report and Accounts 2013–14 31
Fig 8: Table of UKTI’s Capital Expenditure (2009-10 to 2014-15)
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Outturn Outturn Outturn Outturn Outturn Plans £m £m £m £m £m £m Total Capital Expenditure 3.9 1.0 2.6 1.6 2.5 1.2
Fig 9: Summary of Total Resources Consumed and Outputs / Outcomes The table below summarises the total resources used during 2013-14, with comparators and key outputs/outcomes. Due to the evaluation work completed on UKTI’s performance data, the outputs reported below relate to the twelve months to September 2013 for Trade and to 2012-13 for Inward Investment. Details of the total resources used by UKTI can be found in the Memorandum Notes on pages 82 to 87.
2013-14 2012-13 Objective Resource £m Outputs/Outcomes Resource £m Outputs/Outcomes To enhance the UKTI £111.6 34,820 business assists1 UKTI £58.2 29,230 business assists competitiveness of BIS £28.2 £51.8bn additional sales for BIS £37.5 £49.6bn additional sales for companies in the UK UK business1,2 UK business through overseas trade and investments FCO £139.6 £16.3m income FCO £139.9 £16.1m income £279.4 £235.6 To attract a continuing UKTI £45.6 1,322 inward investment UKTI £34.3 1,229 inward investment high level of quality decisions3 decisions foreign direct BIS £11.5 52,476 new jobs created3 BIS £14.0 50,962 new jobs created investment FCO £30.4 45,091 jobs safeguarded3 FCO £32.8 39,975 jobs safeguarded £87.5 £81.2 Total £366.9 £316.8 1. Trade figures are taken from the latest available PIMS data, which is the twelve months to September 2013. The expectation for the full financial year is that UKTI will exceed its target of 40,000. 2. As per our ongoing strategy, UKTI measures the export sales recorded by businesses that attribute UKTI’s support to their success. 3. Inward Investment figures are not available until late Summer 2014, and as such final 2012-13 figures have been reported on. 32 UK Trade & Investment Annual Report and Accounts 2013–14
Public Interest
Basis of Accounts and Resources Going Concern Transparency Reporting Deployed In common with other Government In accordance with Government The accounts on pages 58 to 81 show Departments, the future financing policy. UKTI publishes all payment UKTI’s voted resource only. They of UKTI’s liabilities is to be met by transactions. UKTI publishes its have been prepared in accordance future grants of supply, and the Programme Expenditure and its with directions given by HM Treasury application of future income, both of Administration Expenditure on in pursuance of Section 5(2) of the which are approved by Parliament on GOV.UK website. Government Resources and Accounts an annual basis. There is no reason Act 2000 (2012-13 figures are shown to believe that future approvals will Whistleblowing Policy in brackets). not be forthcoming and therefore The Civil Service Code (CSC) requires it is considered appropriate to Government Departments to set out To arrive at the total resources used, adopt a going concern basis for arrangements for staff to be able to the resources expended by UKTI’s the preparation of these financial raise any concern where they believe parent Departments – BIS and the statements. they (or others) are being asked to FCO – must also be added to UKTI’s do something that contravenes the voted resource. This reflects the Payment of Suppliers CSC or is inappropriate in some way. shared governance arrangements UKTI’s policy is to comply with the Please see the Civil Service website between BIS, FCO and UKTI for Better Payment Practice Code, for further details of the code (www. the delivery of their objectives for which includes the Late Payments of gov.uk /government/publications/civil trade promotion and foreign direct Commercial Debts (Interest) Act 1988. service-code). investment. The total resources used have been included by way of In accordance with Government UKTI has a clear whistleblowing Memorandum Notes providing an policy, UKTI endeavours to pay all policy which is regularly reviewed estimate of the total resources used invoices within five days. The five and updated. The policy supports the by UKTI to deliver its activity – see days allows for three days to process need to operate in an environment pages 82 to 87 for further details. the invoice and a further two days for of openness to enable our people From 2014-15, all direct overheads the payment to be received by the to speak freely and raise legitimate currently included in the Estimates of supplier. During 2013-14, 77% (89% and serious concerns without fear BIS and FCO will be voted directly to 2012-13) of invoices were paid within of reprisal or victimisation, provided UKTI and will be included in UKTI’s five days. This decrease is a result that they do so lawfully, without accounts. of the transition to a new finance malice and in the public interest. system in 2013-14, which led to a The policy is reviewed regularly by In 2013-14, UKTI’s net spend has period of ‘downtime’ of the system. the Audit Committee. In addition, increased by £50m or 16%. This The proportion of trade creditors when UKTI receives anonymous can be disaggregated into a UKTI compared to amounts invoiced letters of concern or information from Administration and Programme expressed in days is six (three days the public, UKTI applies the same increase of £64.7m, a BIS Admin in 2012-13). principles of the whistleblowing policy decrease of £11.8m and a FCO in reviewing the subject raised. Administration and Programme decrease of £2.7m. The decreases are due to the ongoing drive to increase efficiency and value for money. The increase in UKTI Administration and Programme is explained in the Financial Review. UK Trade & Investment Annual Report and Accounts 2013–14 33
The policy has been placed on UKTI’s Complaints to the Departments Intranet. This guidance is in addition and Parliamentary Ombudsman to that of our parent Departments During the year, UKTI received (BIS and the FCO) and reflects the no complaints that went to the fact that UKTI is not an employer in its Parliamentary Ombudsman. UKTI is own right (staff are drawn from both committed to providing a high-quality, Departments). accessible and responsive service to Auditors businesses and the community, and takes all of its few complaints very These financial statements have seriously. UKTI gives all staff advice been audited, under the Government on how to deal with complaints, in Resources and Accounts Act 2000, line with Cabinet Office guidance by the Comptroller & Auditor General and the Freedom of Information Act. (C& AG), who is appointed under Complaints are handled by our parent statute and reports to Parliament. Departments, BIS and the FCO. For The Audit Opinion is on pages 56 to further details please contact the: 57. The notional cost to UKTI of the external audit of its resource account • BIS Enquiry Unit on by the NAO for the C& AG was £66k +44 (0)20 7215 5000 or email (£54k), which was split between the [email protected] administration costs of BIS and the • FCO at King Charles Street, FCO. See Memorandum Notes for London SW1A 2AH further details. Sustainability Disclosure of Audit Information UKTI does not have its own As far as the Accounting Officer sustainability strategy, but is aware, there is no relevant audit rather follows those of its parent information of which the entity’s Departments, BIS and the FCO. auditors are unaware. The Accounting UKTI is committed to meeting Officer has taken all the steps that and contributing to these targets. he ought to have taken to make Further details can be found in himself aware of any relevant audit their respective reports. information and to establish that the entity’s auditors are aware of that information.
Dominic Jermey CVO OBE CVO Accounting Officer 19 June 2014 34 UK Trade & Investment Annual Report and Accounts 2013–14
Departmental Remuneration Report
Introduction Remuneration Policy The Review Body takes account of As UKTI is not an employer in The remuneration of Senior Civil the evidence it receives about wider its own right, we do not have a Servants is set by the Prime Minister, economic considerations and the Remuneration Committee. The following independent advice from the affordability of its recommendations. remuneration of BIS and FCO staff Senior Salaries Review Body (SSRB). Further information about the work working for UKTI is met from the of the Review Body can be found at administration resource controlled by In reaching its recommendations, the www.ome.uk.com. Review Body was required to have these sponsoring Departments, and Senior Official Appointments both have Remuneration Committees. regard to the following considerations: Staff costs are reported under The Chief Executive of UKTI is • the need to recruit, retain and Memorandum Note 3 on page 84. appointed by the Prime Minister on motivate suitably able and qualified the recommendation of the Head of Disclosure of Salary Multiples people to exercise their different the Home Civil Service and with the responsibilities, As part of the 2013-14 Remuneration agreement of the Ministerial Heads of Report, the Financial Reporting • regional/local variations in labour the two parent Departments. markets and their effects on the Manual (FReM) requires UKTI to The Constitutional Reform and recruitment and retention of staff, disclose the top to median staff pay Governance Act 2010 requires Civil multiples, including the following: • Government policies for improving Service appointments to be made • the mid-point of the banded public services, including the on merit, on the basis of fair and remuneration of the highest-paid requirement on Departments to open competition. The Recruitment director and meet the output targets for the Principles published by the Civil delivery of Departmental services, Service Commission specify the • the ratio between this and the circumstances when appointments • the funds available to Departments median remuneration of the may be made otherwise. reporting entity’s staff. as set out in the Government’s Departmental expenditure limits, Unless otherwise stated below, the It is not appropriate for UKTI to and officials covered by this report hold provide the above disclosure as it is • the Government’s inflation target. appointments which are open-ended. not an employer in its own right. BIS Appropriate succession planning and the FCO provide full disclosure is undertaken as a matter of best in their respective Departmental practice. Early termination, other than Remuneration Reports. for misconduct, would result in the individual receiving compensation, as set out in the Civil Service Compensation Scheme. UK Trade & Investment Annual Report and Accounts 2013–14 35
Further information about the work of • Jon Harding was appointed on a the Civil Service Commission can be three-year contract commencing 1 found at www.civilservicecommission. September 2012. The notice period org.uk for the employee is three months. For the employer, the notice period • Richard Paniguian CBE was is six months or a period, if less, appointed on a three-year contract equal to the unexpired part of the commencing 11 August 2008. His fixed-term contract. appointment was extended by three further years. The notice period for • Sandra Rogers was appointed on the employee is three months. For a three-year contract commencing the employer, the notice period is 18 June 2012. The notice period for six months or a period, if less, equal the employee is three months. For to the unexpired part of the fixed- the employer, the notice period is term contract. six months or a period, if less, equal to the unexpired part of the fixed- • Crispin Simon was appointed on a term contract. three-year contract commencing 27 February 2012. The notice period for the employee is three months. For the employer, the notice period is six months or a period, if less, equal to the unexpired part of the fixed- term contract. • Michael Boyd was appointed on a three-year contract commencing 1 July 2012. The notice period for the employee is three months. For the employer, the notice period is six months or a period, if less, equal to the unexpired part of the fixed- term contract. 36 UK Trade & Investment Annual Report and Accounts 2013–14
Remuneration Report
The following sections provide details Salary Bonuses of the remuneration and pension ‘Salary’ includes gross salary, Bonuses are based on performance interests of the Ministers and most overtime, reserved rights to London levels attained, and are made as part senior management (i.e. Board weighting or London allowances, of the appraisal process. Bonuses Members) of the Department. recruitment and retention allowances, relate to the performance in the year private office allowances, and any in which they become payable to other allowance, to the extent that it is the individual. The bonuses reported subject to UK taxation. in 2013-14 relate to performance in 2012-13, and the comparative This report is based on accrued bonuses reported for 2012-13 relate to payments made by the Department, performance in 2011-12. The Ministers and thus recorded in these accounts. did not receive any bonus during the year. Benefits in Kind
The monetary value of benefits in Ministerial Pensions kind covers any benefits provided by The Ministers did not receive any the Department and treated by HM pension benefits. Revenue and Customs as a taxable emolument. The Ministers did not receive any benefits in kind during the year. UK Trade & Investment Annual Report and Accounts 2013–14 37
Ministers’ salaries, allowances and taxable benefits in kind in 2013-14 were as follows:
2013-14 2012-13 Benefits in Benefits in kind kind Salary (to nearest Salary (to nearest Ministers £000 £100) £000 £100) Lord Green* of Hurstpierpoint – – – – Lord Livingston* of Parkhead – – – – This table has been subject to audit. *Received no salary or benefit.
Ministers’ pension and benefits entitlements in 2013-14 were as follows:
Accrued pension at Real increase Real age 65 as at in pension at CETV at CETV at increase in 31/03/14 age 65 31/03/14 31/03/13 CETV Ministers £000 £000 £000 £000 £000 Lord Green* of Hurstpierpoint – – – – – Lord Livingston* of Parkhead – – – – – This table has been subject to audit. *Received no pension benefits.
Remuneration Report – Senior Officials Senior Officials’ (the Executive Team) salaries, allowances and taxable benefits in kind in 2013-14 were as follows (for those officials who only worked for part of the year, full time equivalent figures can be found in brackets): 38 UK Trade & Investment Annual Report and Accounts 2013–14
Single Total Figure of Remuneration 2013-14 2012-13 Bonus Pension Total Bonus Pension Total Salary Payments Benefits6 Remuneration Salary Payments Benefits6 Remuneration £000 £000 £000 £000 £000 £000 £000 £000 Nick Baird 100-105 – – 100-105 135-140 – 27 160-165 CMG OBE1,2 (135 (To 140) 20/12/2013) Crispin 135-140 10-15 – 145-150 135-140 – – 135-140 Simon3,4
Richard 170-175 10-15 62 245-250 170-175 10-15 77 260-265 Paniguian CBE3 Edward 35-40 – – 35-40 110-115 – 6 115-120 Oakden CMG2 (105 (To 110) 31/07/2013) Michael Boyd3,5 135-140 – – 135-140 100-105 – – 100-105 (135-140) Jon Harding3 140-145 – 20 160-165 70-75 – 37 105-110 (140-145) Sandra 135-140 – 20 150-155 105-110 – 43 145-150 Rogers3 (135-140) Charu Gorasia3 70-75 5-10 20 100-105 20-25 – – 20-25 (70-75) Nick Archer2 15-20 – – 15-20 N/A N/A N/A N/A (From (85-90) 27/01/2014) This table has been subject to audit. No Senior officials received any benefits in kind in 2013-14 (nil 2012-13). 1. Nick Baird ceased to be UKTI Chief Executive on 13 December 2013. 2. Salaries and bonuses are paid by the FCO. Those paid in relation to periods prior to joining UKTI are disclosed within the FCO’s accounts. 3. Salary paid by BIS. 4. Acting Chief Executive from 14 December 2013. 5. Michael Boyd was supplied through our contract with PA Consulting until becoming a permanent member of staff from 1 July 2012. 6. The value of the pension benefit 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 contribution made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to atransfer of pension rights. UK Trade & Investment Annual Report and Accounts 2013–14 39
Senior Officials’ pension and benefits entitlements in 2013-14 were as follows:
Accrued pension at Real increase Employer pension age as in pension contribution at 31/03/14 and and related Real to partnership related lump lump sum at CETV at CETV at increase in pension sum pension age 31/03/14 31/03/13 CETV account5 Officials £000 £000 £000 £000 £000 Nearest £000 Nick Baird CMG OBE1 50-55 0-2.5 909 857 5 – (To 20/12/2013) plus lump sum plus lump of 150-155 sum of 0-2.5 Crispin Simon2,3,4,5 N/A N/A N/A N/A N/A 23 Richard Paniguian 25-30 2.5-5 445 359 53 – CBE2 no lump sum no lump sum Edward Oakden 40-45 0-2.5 768 758 2 – CMG1,6 plus lump sum plus lump (To 31/07/2013) of 120-125 sum of 0-2.5 Michael Boyd2,4 N/A N/A N/A N/A N/A N/A Jon Harding2 40-45 37.5-40 420 19 19 – no lump sum no lump sum Charu Gorasia2 10-15 0-2.5 164 137 5 – no lump sum no lump sum Sandra Rogers2 25-30 22.5-25 400 35 50 – (from 18/06/2012) no lump sum no lump sum Nick Archer1 25-30 0-2.5 553 549 – – (From 27/01/2014) plus lump sum plus lump of 85-90 sum of 0-2.5 This table has been subject to audit. 1. Salaries and bonuses are paid by the FCO. Those paid in relation to periods prior to joining UKTI are disclosed within the FCO’s accounts. 2. Salary paid by BIS. 3. Acting Chief Executive from 14 December 2013. 4. Not a member of PCSPS. 5. Opted for a partnership pension account. 6. For Edward Oakden the numbers reported above are based on data covering the period to 23 July 2013. Therefore, they slightly under-estimate some of the benefits disclosed. UKTI has reviewed the impact of this and concluded that the values quoted above are substantially correct and therefore represent a fair reflection of the individual’s pension entitlements.
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; 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). 40 UK Trade & Investment Annual Report and Accounts 2013–14
Employee contributions are set at The employee does not have to The figures include the value of any the rate of between 1.5% and 6.25% contribute, but where they do make pension benefit in another scheme or of pensionable earnings for Classic contributions, the employer will arrangement, which the member has and between 3.5% and 8.25% of match these up to a limit of 3% of transferred to the Civil Service pension pensionable earnings for Classic pensionable salary (in addition to arrangements. They also include any Plus, Premium and Nuvos. Increases the employer’s basic contribution). additional pension benefit accrued to to employee contributions will apply Employers also contribute a further the member as a result of their buying from 1 April 2014. Benefits in Classic 0.8% of pensionable salary to cover additional pension benefits at their accrue at the rate of 1/80th of final the cost of centrally provided risk own cost. CETVs are worked out in pensionable earnings for each year benefit cover (death in service and ill- Accordance with The Occupational of service. In addition, a lump sum health retirement). Pension Schemes (Transfer Values) equivalent to three years’ initial (Amendment) regulations 2008, and pension is payable on retirement. The accrued pension quoted is the do not take account of any actual or For Premium, benefits accrue at the pension the member is entitled to potential reduction to benefits resulting rate of 1/60th of final pensionable receive when they reach pension age, from Lifetime Allowance Tax, which earnings for each year of service. or immediately on ceasing to be an may be due when pension benefits Unlike Classic, there is no automatic active member of the scheme if they are taken. lump sum. Classic Plus is essentially are already at or over the pension a hybrid, with benefits for service age. Pension age is 60 for members Real Increase in CETV before 1 October 2002 calculated of Classic, Premium and Classic Plus, This reflects the increase in CETV broadly as per Classic and benefits and 65 for members of Nuvos. that is funded by the employer. It for service from October 2002 Further details about the Civil Service does not include the increase in worked out as in Premium. In Nuvos pension arrangements can be found accrued pension due to inflation, or a member builds up a pension based at the website www.civilservice.gov. contributions paid by the employee on their pensionable earnings during uk/pensions. (including the value of any benefits their period of scheme membership. transferred from another pension At the end of the scheme year (31 Cash Equivalent Transfer Values scheme or arrangement), and uses March), the member’s earned pension common market valuation factors for A Cash Equivalent Transfer Value account is credited with 2.3% of their the start and end of the period. (CETV) is the actuarially assessed, pensionable earnings in that scheme capitalised value of the pension scheme year and the accrued pension is Compensation for Loss benefits, accrued by a member at a uprated in line with Pensions Increase of Office particular point in time. The benefits legislation. In all cases, members may valued are the member’s accrued No compensation for loss of office opt to give up (commute) pension for benefits and any contingent spouse’s was paid to any senior manager in a lump sum up to the limits set by the pension payable from the scheme. A 2013-14 (Nil 2012-13). Finance Act 2004. CETV is a payment made by a pension The partnership pension account is scheme or arrangement, to secure a stakeholder pension arrangement. pension benefits in another pension The employer makes a basic scheme or arrangement, when the contribution of between 3% and member leaves a scheme and chooses 12.5% (depending on the age of the to transfer the benefits accrued in member) into a stakeholder pension their former scheme. The pension product chosen by the employee from figures shown relate to the benefits a panel of three providers. 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. UK Trade & Investment Annual Report and Accounts 2013–14 41
Fees Paid by UKTI to Non-Executive Board Members Below are the annual fees plus expenses paid to the Non-Executive Board Members of UKTI. The total payments for the year to each person were in the following ranges:
2013-14 2012-13 Name £000 £000 Note Sir Eric Peacock CMG DL 0-5 0-5 From 1 October 2009 Alan Jenkins 0-5 5-10 From 1 October 2009 Nil expenses (£0-5k) are included Chris Fitzpatrick 5-101 5-10 From 1 October 2009 Expenses of £0-5k (£0-5k) are included Mark Gostick 0-5 0-5 From 1 October 2009 Alex Dorrian CBE 0-5 0-5 From 1 October 2012 Dale Murray 0-5 0-5 From 1 October 2012 Nil expenses (£0-5k) are included Jan Ward 5-10 0-5 From 1 October 2012 Expenses of £0-5k are included This table has been subject to audit. 1. A duplicate payment of £501 was made to Chris Fitzpatrick. This will be recovered in 2014-15.
Dominic Jermey CVO OBE Accounting Officer 19 June 2014 42 UK Trade & Investment Annual Report and Accounts 2013–14
Statement of Accounting Officer’s Responsibilities
Under the Government Resources In preparing the accounts, the HM Treasury has appointed the and Accounts Act 2000, HM Treasury Accounting Officer is required to Chief Executive as Accounting has directed UKTI to prepare for each comply with the requirements of the Officer of UKTI. The responsibilities financial year resource accounts Government Financial Reporting of an Accounting Officer, including detailing the resources acquired, Manual, and in particular to: responsibility for the propriety and used, held or disposed of by the regularity of the public finances • observe the Accounts Direction Department during the year and the for which the Accounting Officer issued by HM Treasury, including use of resource by the department is answerable, for keeping proper the relevant accounting and during the year. The accounts are records and for safeguarding UKTI’s disclosure requirements, and apply prepared on an accruals basis, and assets, are set out in Managing Public suitable accounting policies on a must give a true and fair view of the Money published by HM Treasury. consistent basis; state of affairs of UKTI, and of its net resource outturn, application of • make judgements and estimates on resources, changes in taxpayers’ a reasonable basis; equity, and cash flows for the financial • state whether applicable accounting year. standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material Dominic Jermey CVO OBE departures in the Accounts; and Accounting Officer 19 June 2014 • prepare the Accounts on a going concern basis. UK Trade & Investment Annual Report and Accounts 2013–14 43
UKTI Annual Governance Statement 2013-14
1. Purpose of the 2. Governance Structure
Governance Statement UKTI’s Corporate Governance The aim of the Governance Statement Structure is to explain how we have followed the principles of the Corporate Governance Code for Central UKTI Government Departments. UKTI, as Executive Board a Non-Ministerial Public Department, is not bound by the code, but follows the principles as best practice.
This statement will supplement the accounts by setting out the governance structure, internal controls and risk management processes that have been operating within UKTI during the financial year. Audit & Risk Executive It also reviews the effectiveness of Assurance Committee these arrangements, in supporting Committee UKTI to achieve its aims and objectives.
People Operating ICT Committee Committee Board 44 UK Trade & Investment Annual Report and Accounts 2013–14
3. Ministers 4. The UKTI Board Non-Executive Board Members
During 2013-14, joint ministerial This section sets out the membership, Sir Eric Peacock CMG DL responsibilities were as follows: role and structure of UKTI’s Board as Eric Peacock is a serial entrepreneur at 31 March 2014. with wide experience of growing Secretary of State for Foreign and businesses by internationalising their Commonwealth Affairs The role of the UKTI Board is to trade and attracting growth capital The Rt Hon. William Hague MP provide strategic and operational investment. He currently chairs leadership to UKTI. The Board is Buckley Jewellery Ltd, Stevenage Secretary of State for Business, led by the Chief Executive Officer Packaging Ltd, Just Loans Plc, Innovation and Skills and comprises seven Executive Cosgrove Hall Fitzpatrick (film The Rt Hon. Dr Vince Cable MP Board Members, seven Non- animation), Sheraton Systems Ltd Executive Board Members and five (specialist insurance software) and Portfolio Responsibility Representative Board Members. Boxford Holdings (leisure, golf, farming Minister of State for Trade and and fruit distribution). He currently sits Investment Executive Board Members as a Non-Executive Director on the Chair board of UK Export Finance and is Lord Green of Hurstpierpoint a past member of the DTI and BERR (to 09 December 2013) Nick Baird CMG CVO Enterprise Boards. He is President of Chief Executive Officer the Institute of Sales and Marketing Lord Livingston of Parkhead (to 13 December 2013) (from 10 December 2013) Management, Chairman of the Institute Crispin Simon of Export and chairs The Peacock Accounting Officer Acting Chief Executive Officer Foundation, Uniqueness and the Nick Baird CMG CVO (from 14 December 2013 AB Trust (charities operating in the (to 13 December 2013) 8 June 2014) children’s field). Executive Members Crispin Simon Alan Jenkins (from 14 December 2013 Jon Harding Alan Jenkins sits on the boards of, to 8 June 2014) Chief Operating Officer and advises, various companies and organisations in the private and public Richard Paniguian CBE Dominic Jermey CVO OBE sectors. He also serves on the boards Head, UKTI Defence & Security (from 9 June 2014) of various charities and not for profit Organisation companies, and is a member of the Crispin Simon Council of the Institute of Directors. Managing Director, Trade He is a former solicitor and was until April 2011 a Partner and until Sandra Rogers May 2010 Chairman of the Board at Managing Director, Marketing Eversheds LLP. Michael Boyd Managing Director, Investment Nick Archer Managing Director, Policy and Network Development (from 27 January 2014) Charu Gorasia Director of Finance & Information Technology UK Trade & Investment Annual Report and Accounts 2013–14 45
Chris Fitzpatrick Jan Ward Department for Business, Innovation Chris Fitzpatrick is a materials Jan Ward is the Founder and CEO and Skills and Sussex Place Ventures scientist who developed a series of of specialist heat and corrosion and acts as a Board Advisor for many novel high-performance adhesives resistant alloys company, Corrotherm entrepreneurial start-ups. exported globally though his own International Ltd, which she grew SME. Chris’s speciality is technology from a one woman organisation to a Alex Dorrian CBE commercialisation, marketing and company with offices in 10 countries. Alex Dorrian is Non-Executive developing organisations both Jan is a Director of Solent Local Chairman of Thales UK and has strategically and operationally within Enterprise Partnership and a Non- extensive international experience in the SME and social enterprise Executive Director of the Hampshire the defence, space, civil aerospace, context. He is currently Chief Chamber of Commerce. She is a transportation and security markets. Executive of Elements Of Sherwood founder investor of the Saudi British In his previous roles at Thales Group, Ltd, Vice Chair of the Rural Development Investment Company Alex was Executive Vice President Community Action Nottinghamshire, and sits on the Saudi British Joint responsible for operations in the Chair of Audit of the North Business Council, an advisory and UK, USA, Australia, Canada, the Nottinghamshire College Governing liaison committee to HM Government Netherlands, Northern Europe and Board and a member of The Export and the Saudi Arabian government. Northern Asia. Prior to joining Thales Guarantees Advisory Council of UK Jan is also a Fellow of the IOD and in 1999, Alex was Deputy Group Export Finance. RSA, a graduate member of the Managing Director, Defence Systems Institute of Export and Trustee of for British Aerospace. In addition to Mark Gostick Southampton Cultural Development his role as a Non-Executive Board Mark Gostick is an entrepreneur Trust and the Ben Voller G4 Fund. Member for UKTI, Alex is also Co- with extensive experience in the Jan was awarded the NatWest Chair of the Defence Advisory Group commercialisation, marketing Everywoman of the Year award in of UKTI DSO. In 1970, Alex graduated and development of early stage 2009 and a finalist in IOD Director with an honours degree in mechanical technologies, managing exits in of Year 2010. She was International engineering from Strathclyde venture backed environments and Businesswoman of the Year in 2001. University which also awarded him developing working relationships an Honorary Doctor of Science across a variety of cultures. Until Dale Murray degree in 2009. He is a Fellow of the April 2009, he was CEO of Liquavista, Dale Murray has been an angel Royal Academy of Engineering, the a Philips spin-out acquired by investor since 2004, and has a Institution of Engineering Technology, Samsung, and prior to that of portfolio of investments across the the Institute of Marine Engineering, KinderTec Ltd. He was first employed technology, mobile, leisure, cleantech Science and Technology and the at Cambridge Display Technology, and publishing sectors. She won Royal Aeronautical Society. He was which was ultimately NASDAQ listed. British Angel Investor of the Year made Commander of the Order of Mark is currently working with the in 2011. Dale is also a successful The British Empire in 2002 and was Camcon Federation of companies to entrepreneur, having co-founded the appointed as an Officier de la Légion introduce their unique actuators into a pioneering mobile top-up business d’Honneur of France in 2010. He is a variety of industries, including oil, gas Omega Logic, which she built to Freeman of the City of London and and automotive, and is also a non- £450m of top-ups and £25m of Chairman of the Supervisory Board of executive director of TSSI Systems. revenue within five years. She was Manoir Aerospace. He recently helped establish Adiposet the youngest ever person on the Ltd, which is introducing an adipose Price Waterhouse NZ school leaver tissue banking service to the UK and programme, has been a founder aims to produce better outcomes member of the management team that for breast reconstruction patients commercially launched Vodafone NZ, following cancer treatment. held the position of Chief Operating Officer, then CEO, of Eposs Ltd and Managing Director and Co-Founder of Omega Logic Ltd. Dale is currently a Non-Executive Director of the 46 UK Trade & Investment Annual Report and Accounts 2013–14
Representative Board Members 5. Board Operation 6. Audit and Risk BIS and the FCO are represented Assurance Committee on the UKTI Board, as parent The composition of the Board provides Departments of the organisation. UKTI with a balanced mix of skills and The Audit and Risk Assurance UKTI overseas posts and UKEF are perspectives. As top business leaders, Committee (ARAC) is a sub also represented. they may work with or for some of the committee of the Board. Its role is companies that UKTI aims to assist. to advise the Chief Executive as • Rachel Sandby-Thomas, Director However, all Non-Executive Board Accounting Officer and the Board General, Business and Skills, for Members are independent in character on the adequacy of UKTI’s risk BIS (until 10 February 2014) and judgement and there are currently management, governance and internal (as at 31 March 2014) no relationships • Philippa Lloyd, Director General, controls. Amongst other things, this which could affect a member’s People, Communications and is performed through the review of judgement when participating in Corporate Effectiveness, for the work of Internal Audit and also the Board decisions. The Board meets BIS (from 10 February 2014) National Audit Office (NAO). regularly and is supported by the UKTI • Andrew Mitchell, Director General, Secretariat. The ARAC is comprised entirely of Prosperity, FCO independent members, two of whom The Board operates within written are Non-Executive Board Members, • Danny Lopez, Consul-General terms of reference (ToR). These are which provides independent scrutiny New York, representing the UKTI kept under review and are due to be of the reliability and integrity of these overseas network updated in 2014-15. assurances. • Caroline Wilson Consul-General The role of the UKTI Board is to provide The committee operates under Hong Kong, representing the strategic and operational leadership. The UKTI overseas network terms of reference which Board contributes to the achievement follow best practice as defined in the • David Havelock (to 9 September of the organisation’s objectives through: revised HM Treasury Audit & Risk 2013) Acting Chief Executive, • providing leadership and strategic Assurance Committee Handbook. UK Export Finance direction; The Committee’s ToR were reviewed • David Godfrey (from 9 September in November 2013. • advising on the allocation of 2013) Chief Executive, UK Export resources against priorities for the Finance delivery of objectives; • managing Departmental resources and monitoring the achievement of performance objectives; • setting the organisation’s standards and values; • assessing and managing the principal risks facing UKTI; • helping to strengthen planning, performance and change management in UKTI and encouraging innovation; • ensuring the operation of a transparent system of prudent and effective controls (including internal controls), and • advising on and contributing towards stakeholder management. UK Trade & Investment Annual Report and Accounts 2013–14 47
During 2013-14, the composition of 7. Executive Committee 8. Sub-Committees the UKTI ARAC was as follows: This is chaired by the Chief In the last year there have been three Alan Jenkins (Chair) Executive Officer. sub-committees of the Executive Non-Executive Board Member Committee. They are the: The Executive Committee takes Mark Gostick advice from the UKTI Board. The • Operating Committee, Non-Executive Board Member committee operates within terms of • ICT Board, established in November reference which define its role as Robert Hull 2013, and detailed below. These were updated Independent Member and Managing in 2013-14. It is responsible for • People Committee, established in Director, Commercial, OFGEM supporting the Accounting Officer October 2013. Nigel Addison Smith to deliver UKTI’s strategy and take (to February 2014) principal decisions and, with its Independent Member and Finance delegated subcommittees, ensuring Director for UK Export Finance the effective management of UKTI through: The following are also present at meetings: • approving the annual business plan and monitoring performance against Chief Operating Officer (UKTI) this plan; Directors of Finance (UKTI, BIS and • agreeing the reallocation of resource the FCO) at fixed points during the year, and approving UKTI advice to Ministers Representative from Internal Audit for each Autumn Statement, Budget (BIS and the FCO) and Spending Review; Representatives from the NAO • overseeing UKTI’s capability and skills to deliver its objectives; and • overseeing and approving operation strategies, including Estates and ICT, as advised by its operational committees. 48 UK Trade & Investment Annual Report and Accounts 2013–14
9. Operating Committee 10. ICT Board 11. People Committee
This is chaired by the Chief Operating This is chaired by the Chief Operating This is chaired by Crispin Simon Officer. The membership consists of Officer. The membership includes and the membership is formed of Directors from the Business Groups, representation from across the representatives from across UKTI, the Finance Director and the Director organisation, BIS, the FCO, overseas HR and the diversity champion. of Economics and Evaluation. and two Non-Executive Board Members. The People Committee was The Operating Committee reports to established in October 2013 and the Executive Committee of UKTI. The ICT Board was established in reports to the Executive Committee The committee operates within terms September 2013 and reports to the of UKTI. It is responsible for providing of reference which define its role as Executive Committee. It is responsible a review and challenge function detailed below. These were updated for overseeing UKTI’s ICT strategy in relation to promoting people in February 2014 and the membership and ensuring compliance and best management excellence across was changed to draw Directors into practice throughout UKTI. The ICT UKTI. The role is to: the decision making process. Board operates within terms of reference which define its role as: • develop leadership and It is responsible for supporting the management, implementation of UKTI’s strategy, • driving compliance with central • drive effective performance, business plan and targets through initiatives and developing the embedding high quality appraisal the allocation of human and financial ICT Strategy; and support, resource by taking responsibility for: • approving ICT procurement within • focus on talent management and an agreed tolerance and approving • Business Planning and Reporting development, monitoring impact and business cases; – providing challenge and advice embedding a culture of continuous ahead of formal approval by • overseeing all ICT systems for UKTI improvement, executive committee users in London HQ, the English • engage staff below the executive Regions and the overseas network, • Risk and Performance Management team more actively into wider and – monitoring and reviewing policy development and decision- performance. Where necessary • monitoring the performance of making, and escalating key concerns to the UKTI’s ICT infrastructure and • promote excellent people Executive Committee applications. management throughout UKTI • Financial Management and escalate areas of concern • Estate and Network Management. to the Executive Committee as appropriate. UK Trade & Investment Annual Report and Accounts 2013–14 49
12. Attendance at Board, Audit and Risk Assurance Committee and Executive Committee meetings
The following were in attendance at Board, Audit and Risk Assurance Committee and Executive Committee meetings:
Executive Attendance Position Board ARAC Committee Number of meetings in year 4 4 13
Executives Nick Baird CMG CVO Chief Executive Officer 3 9 (to 13 December 2013) Crispin Simon (Acting Chief Executive Acting Chief Executive Officer 3 12 from 14 December 2013) and MD Trade Jon Harding Chief Operating Officer 4 4 10 Richard Paniguian CBE Head – Defence & Security 3 7 Organisation Michael Boyd MD – Investment 4 10 Sandra Rogers MD – Marketing 4 11 Charu Gorasia Director of Finance and IT 4 3 11 Edward Oakden (until 31 July 2013) MD – Trade Strategy 1 4 Nick Archer (from 27 January 2014) MD – Policy and Network Development 1 2
Non Executives Sir Eric Peacock CMG DL 4 Alan Jenkins 4 4 Mark Gostick 4 3 Chris Fitzpatrick 4 Robert Hull 4 Nigel Addison Smith 4 (until 28 February 2014) Jan Ward 4 Dale Murray 3 Alex Dorrian CBE 2 David Havelock (to 9 September 2013) UK Export Finance 1 David Godfrey (from 9 September 2013) UK Export Finance 2 Rachael Sandy-Thomas Dept Business, Innovation & Skills 2 (to 10 February 2014) Philippa Lloyd (since 10 February 2014) Dept Business, Innovation & Skills 0 Andrew Mitchell Foreign & Commonwealth Office 1 Danny Lopez Overseas Post (New York) 2 Caroline Wilson Overseas Post (Hong Kong) 1 50 UK Trade & Investment Annual Report and Accounts 2013–14
There were four Board meetings and UKTI management has welcomed the 14. Key Developments four ARAC meetings held during the reports into these high risk activities year, with 79% and 92% attendance and has committed to action plans to During the Year by members respectively. The total address all areas where improvement During the year there were a number cost of hosting these meetings, was needed. Much progress has of changes to UKTI senior leadership. excluding Non-Executive Board already been made. In contract In December 2013, Lord Livingston Members’ fees, was £6,443 (£3,436). management, a new commercial took over from Lord Green as Minister This includes room hire, refreshments unit has been established in UKTI of State for Trade and Investment. and travel expenses. Central Finance to identify and embed Also in December 2013, Nick Baird best practice. This unit has carried stepped down as Chief Executive and out a skills audit, produced detailed 13. Internal Audit Crispin Simon replaced him as Acting guidance and rolled out a contract Chief Executive. As Managing Director management workshop covering roles During the year, the ARAC of Trade Group and a member of and responsibilities, the end to end considered 21 internal audit reports; the UKTI Executive Board, Crispin process and management of risk. 15 overseas and 6 UK based. These Simon brought to the role an existing reports covered a wide range of A contract management understanding of the key operational risk management and governance dashboard has been developed and strategic issues for UKTI. This issues including annual reviews for all major contracts and will was supplemented through handover of core financial systems and risk be summarised on the new UKTI meetings with Nick Baird. management processes. The Internal corporate dashboard, giving visibility Dominic Jermey became Chief Audit opinion given on the overall of contract performance to the Executive and Accounting Officer of adequacy and effectiveness of UKTI’s Executive Team, Audit Committee UKTI on 9 June 2014. The induction framework of risk management, control and Board. In addition a rolling process included meetings with the and governance was “satisfactory”. programme of deep-dive reviews of Acting Chief Executive, the Managing major contracts has been introduced. The Audit Programme this year Directors of the UKTI business groups was specifically directed at areas The IT audits have resulted in a and the Permanent Secretaries of which management identified as the substantial redesign of the team BIS and the FCO. A first day briefing highest risk activities, which were in COO to give greater distinction pack was provided outlining the key likely to require some improvement. between strategic engagement with operational and strategic issues, and Significant control issues were the main contractor and operational the UKTI governance framework. In highlighted in the following UK delivery to customers in UKTI. order to sign off the 2013-14 Annual based audits: In addition, project management Report and Accounts, the Accounting discipline is being tightened within Officer was able to take assurance • Contract Management the team. This is to be supported by from the UKTI Annual Corporate • Procurement procedures for the imminent recruitment of a new Governance review, as well as the GREAT Campaign Chief Technology Officer and other work undertaken by Internal Audit specialist staff. and the management letter from the • The Customer Data Management External Auditors. A briefing on the System (CDMS) Finally, following the GREAT 2013-14 Annual Report and Accounts • IT Capability and Capacity procurement procedures was provided. audit, Marketing Group has begun a rolling programme of detailed evaluation of processes in each of the GREAT markets. The US and Turkey have been completed and have helped shape renewed guidance on budget management and procurement. UK Trade & Investment Annual Report and Accounts 2013–14 51
Edward Oakden left on 23 of July In response, UKTI agreed, among and Risk Management Team. 2013 and the post of Managing other things, to develop a joint Thereafter, Groups’ risks have been Director for Strategic Trade was roadmap setting out how UKTI, the formally reviewed and updated on at combined with Trade Development. FCO and BIS could work together least a monthly basis, with returns In January 2014, Nick Archer was in pursuit of the Government’s £1 being submitted to the centre. appointed as the new Managing trillion export target. This work has Director for Policy and Network included consideration of what might These group-level returns have, in Development, with responsibility for be achieved through the prospective turn, informed the corporate level risk ensuring UKTI has a strong policy contribution of: individual markets, register which reflects all higher level voice across Whitehall and the the Industrial Strategy Sectors, and a risks. A traffic light system is used to development of overseas business small number of key policy initiatives. assess the status of each risk based networks. This work is being coordinated by the upon its probability and impact and BIS, the FCO and the UKTI Trilateral the assessment of risk appetite. The refreshed UKTI Five Year Strategy Board, and UKTI will report back to The top level risks are escalated “Britain Open for Business: The Next the PAC on activity in response to to the UKTI Dashboard, which is Phase” was published in January their report towards by early 2016. 2014. This seeks to sustain the good reviewed each month at the UKTI initiatives of the last three years, In December 2013, UKTI outsourced Executive Committee as well as at transform the contribution of medium- procurement to UK SBS, UKTI’s each meeting of the UKTI Executive sized businesses, enhance UKTI’s shared service provider for HR Board. Both of these bodies identify marketing to small companies, and Finance. An Annual Assurance top-down strategic risks. The UKTI secure more export-focused foreign Statement for 2013-14 was provided ARAC reviews the risk register direct investment, deliver overseas by the Chief Executive of UK SBS to regularly and provides challenge to and leverage the Government’s UKTI’s Accounting Officer. Whilst this UKTI management in order to advise Industrial Strategy. highlighted areas for improvement, the UKTI Accounting Officer and these do not represent significant Board on whether risks are correctly On the basis of the NAO report weaknesses in UKTI’s overall control identified and mitigated. ‘Supporting UKTI Exporters environment. UKTI management Group-level operational risk Overseas,’ the Public Accounts will continue to monitor progress in registers are also captured on Committee (PAC) took evidence these areas. on 6 November 2013 from the Group dashboards and are reviewed FCO and UKTI on their work regularly to ensure the risks of to support UK exporters. The 15. Risk Management not delivering business objectives Committee subsequently published are adequately addressed. Where its report on 17 January 2014. Key UKTI is committed to high standards necessary, these risks are aggregated recommendations included the need of governance, ensuring that a upwards to the strategic risk register. to: understand the reasons behind robust system of risk management In addition to this, key activities such the stronger overall export growth is implemented throughout as projects or procurements maintain rates of other countries; using this the organisation. UKTI’s Risk their own risk registers and use these to inform future business planning; Management Framework sets out the to feed in at Group level. improving the evaluation of impact of means by which risks are identified, UKTI has established a formal FCO activity, and for FCO and UKTI to managed and mitigated, including an Programme Management Office work together more effectively. assessment of risk appetite. to track the organisation’s top Risks are identified and managed programmes and projects and the at the operational level in the first risks against them. In 2014-15, this instance and appropriate mitigation will introduce a further level of rigour strategies identified. During 2013-14, in the review of risks, and their each UKTI Group has undertaken a interdependencies. ‘clean-sheet’ exercise of assessing their bottom-up risks afresh, facilitated by the UKTI Performance 52 UK Trade & Investment Annual Report and Accounts 2013–14
In addition, the recently established 2014 restated UKTI’s priorities and UKTI has also worked to encourage UKTI Commercial Unit advises the rationale behind them in, ensuring private sector partners to deliver on contract risks and has created they fit within the wider context of services to UKTI exporters. This contract management guidance to Government support to business. carries the risk of a service being ensure consistent management of undermined in the event of partners contracts, to reduce the risks across Marketing being unable or unwilling to continue UKTI. A programme of contract UKTI is a marketing led organisation to support it. Having established the deep dives will be undertaken and needs to maintain a high profile Open to Export service, whereby UK which will look at how contract risks for its products and services so as to exporters share experience and good are reflected and managed and deliver high value support to British practice via a web platform, UKTI recommend actions accordingly. businesses. These services need to outsourced its ongoing delivery to be properly targeted, in order to reach a private sector partner. When this The chart, on page 53, sets out the those customers that will best benefit partner indicated that it was intending process by which UKTI assesses and from them and so achieve the greatest to withdraw its funding, UKTI invoked manages risk, incorporating the UKTI impact. This creates a potential its contingency plan and worked Operating Committee. conflict with Government austerity to establish a Community Interest restrictions regarding marketing. The Company to ensure the continued 16. UKTI’s Significant risk is that UKTI is unable to make the viability of the service. case for its marketing activities which, Risks 2013-14 and Key under the formal definition, includes People Mitigating Factors events and missions. To mitigate this, The outsourcing of services also UKTI has submitted a rationale for carries the risk of UKTI staff The Global Marketplace its activities and has developed an becoming unsettled or demotivated Events in the global marketplace are evidence based marketing strategy in the event that they perceive their outside UKTI’s control, the annual to obtain Cabinet Office approval jobs to be under-threat or under rate of global growth remains flat. to enable it to work within the valued. This, in turn, carries risks The UKTI Strategy, “Britain Open for Government requirements. of underperformance, difficulties Business: The Next Phase” focuses with staff retention and data or Outsourcing on seven themes that UKTI believes information breaches by disgruntled will help to deliver the Government’s UKTI has increasingly moved towards staff. UKTI has mitigated this risk ambitious 2020 targets. UKTI are the delivery of its front line services through change management and continuing to vigorously pursue through a number of large contracts regular communications, centred opportunities in developed markets with the private sector, drawing upon an honest and open discussion while strengthening our efforts in high upon the marketplace to secure the at its Leadership Conference to help growth markets. expertise necessary to achieve its bring issues to the surface and drive objectives. This carries the risk that clear messages to its people. Thus Stakeholder Engagement UKTI staff may lack the crucial skills equipped with clear and consistent As UKTI’s reputation for achieving required for the tendering, contracting information, UKTI leaders have been success grows, particularly following and monitoring of such services and empowered to have open dialogues the London 2012 Olympics, a thus fail to deliver value for money with their teams. commensurate risk has emerged to the taxpayer. UKTI has mitigated that the organisation commits to this risk by the establishment of a too many initiatives beyond those Commercial Unit, embedding the set out in the Strategy, becomes necessary professional skill set in overstretched as a result, is unable the organisation and applying it to deliver on all its commitments and consistently. In addition, in renewing its reputation suffers. UKTI has to the contract for one of the services be responsive to fresh imperatives, (Specialists Contract), the procurement reprioritising its resources to match. was divided into separate lots, so as The refreshed strategy in January not to place too great a reliance upon a single contractor. UK Trade & Investment Annual Report and Accounts 2013–14 53
More broadly, UKTI has faced the Application of UKTI’s Risk Management Policy risk of being unable to attract and retain the right people with the right skills. This is partly due to the UKTI Audit UKTI Executive UKTI Executive inflexibility of recruiting processes Committee Board Board reviews with which UKTI has been obliged and discusses to conform; this would have the top risks on result of impacting upon operational Dashboard and capability and effectiveness. This Reviews adequacy carries out its has been mitigated in a number of of Risk Management own risk ways. UKTI has secured greater identification. flexibility over the deployment of its budgets, allowing it to make the best value- for-money choices between Operating public and private sector people. A Dashboard – Top 10 Committee move to e-recruitment has served to Risks Summary reviews streamline the recruitment process. Dashboard and UKTI has launched a People Strategy Risk Register based upon staff survey feedback, Summary UKTI Operating monthly and which includes a greater emphasis Dashboard Committee confirms top upon succession planning and talent and full Risk ten risks. management. Register Operational Delivery provided to Audit Risk Register In order to achieve its objectives UKTI Risk Register Committee consolidated of supporting 40,000 businesses monthly (except this year and 50,000 businesses in in exceptional 2014-15, UKTI is dependent upon circumstances). lead generation – reaching out to new customers and targeting them with the appropriate UKTI service offering. Risk Owners The risk has been that UKTI does Group Dashboards identify, assess, not generate enough new leads, and Risk Registers address and fails to reach out to enough new record risks and customers and thus fails to meet risk appetite its objectives. UKTI’s Trade Group on an ongoing has successfully mitigated this risk basis via Group through an advertising campaign, a Risk Registers, telemarketing campaign, and rigorous in conjunction monthly monitoring of performance with monitoring and forecasts to ensure that UKTI is progress against on track to meet its targets. the objectives of business plans. 54 UK Trade & Investment Annual Report and Accounts 2013–14
17. Review of • Two new operational committees 18. Data Handling were set up in the year, the ICT Effectiveness Board and the People Committee, UKTI had no reportable data losses in Each year, the effectiveness of recognising the importance of 2013-14. However, two data security the systems of governance, risk these two issues and the value of breaches occurred in April 2014. management and internal control providing them with a dedicated Investigations into the incidents are reviewed, informed by work forum. These report to the Executive have recently concluded and UKTI undertaken by the Executive Committee and assist the Executive is working with BIS and the FCO on Management team, Internal Audit Team in providing review, challenge measures to reduce the likelihood of and the management letter received and oversight of ICT and People a recurrence. from the External Auditors. An Annual Strategy respectively. Governance Panel Interview was held The effectiveness of the Audit and 19. Communications with each of the Managing Directors Risk Assurance Committee was to review and gain assurance over assessed during 2013-14 with the use to Staff those parts of the governance of a questionnaire sent to Committee UKTI has a range of channels for structures, risk management and Members. The overall conclusion was communicating with staff, including internal control framework for which that the Committee was effective. a regular email bulletin, extranet, they have responsibility. The Audit Suggestions were made for small magazine and team briefings. and Risk Assurance Committee improvements and these have been These are regularly reviewed to see reviews the assurances that support implemented. that they meet staff and management the Governance Statement and needs and are aligned with industry advises the UKTI Accounting Officer Monthly Financial Management best practice. and the Executive Board on their reports are presented at Executive adequacy. Committee meetings, alongside a The refreshed UKTI Strategy was corporate Dashboard which provides communicated by the Executive UKTI undertook a review of its an overview of finance, performance Team through a presentation open corporate governance arrangements and risk within UKTI. These are to all staff. This allowed staff to in 2013-14, through comparison closely scrutinised and questioned understand the vision, business plans against best practice and consultation to ensure that the information being and activities of the organisation, and with the Executive Team and received is adequate and timely. provided opportunity to feedback to Directors. The overall conclusion senior management. was that governance was effective, however, areas of improvement were identified and the following actions were implemented:
• The Executive Committee and its sub-committees all had their Terms of Reference reviewed to draw them into a common format and ensure clarity of how they fit together. The membership of the Operating Committee was adjusted to draw Directors more systematically into decision making and the Terms of Reference were redrafted to reflect a more focused role. UK Trade & Investment Annual Report and Accounts 2013–14 55
20. Ministerial Directions
During 2013-14, no ministerial directions were given to UKTI.
I have considered the evidence provided which formed the basis of the Annual Governance Statement along with the independent advice received from the Audit and Risk Assurance Committee and can conclude that UKTI has adequate governance and risk management systems, which include an appetite to ensure these remain compliant with best practice. I also believe that UKTI has complied with all material aspects of the Corporate Governance Code.
Dominic Jermey CVO OBE Accounting Officer 19 June 2014 56 UK Trade & Investment Annual Report and Accounts 2013–14
The Certificate and Report of the Comptroller and Auditor General to the House Of Commons
I certify that I have audited the Scope of the audit of the financial I am required to obtain evidence financial statements of the UK Trade statements sufficient to give reasonable and Investment for the year ended 31 An audit involves obtaining evidence assurance that the Statement of March 2014 under the Government about the amounts and disclosures Parliamentary Supply properly Resources and Accounts Act 2000. in the financial statements sufficient presents the outturn against voted The financial statements comprise: to give reasonable assurance Parliamentary control totals and that the Statements of Comprehensive that the financial statements are those totals have not been exceeded. Net Expenditure, Financial Position, free from material misstatement, The voted Parliamentary control totals Cash Flows, Changes in Taxpayers’ whether caused by fraud or error. are Departmental Expenditure Limits Equity; and the related notes. I This includes an assessment of: (Resource and Capital), Annually have also audited the Statement whether the accounting policies are Managed Expenditure (Resource and of Parliamentary Supply and the appropriate to the Department’s Capital), Non-Budget (Resource) and related notes. These financial circumstances and have been Net Cash Requirement. I am also statements have been prepared consistently applied and adequately required to obtain evidence sufficient under the accounting policies set disclosed; the reasonableness of to give reasonable assurance that the out within them. I have also audited significant accounting estimates expenditure and income recorded in the information in the Remuneration made by the Accounting Officer; the financial statements have been Report that is described in that report and the overall presentation of the applied to the purposes intended as having been audited. financial statements. In addition I by Parliament and the financial read all the financial and non-financial transactions recorded in the financial Respective responsibilities of the statements conform to the authorities Accounting Officer and auditor information in the Annual Report to identify material inconsistencies which govern them. As explained more fully in the with the audited financial statements Opinion on regularity Statement of Accounting Officer’s and to identify any information that Responsibilities, the Accounting is apparently materially incorrect In my opinion, in all material Officer is responsible for the based on, or materially inconsistent respects: preparation of the financial statements with, the knowledge acquired by • the Statement of Parliamentary and for being satisfied that they give me in the course of performing Supply properly presents the outturn a true and fair view. My responsibility the audit. If I become aware of any against voted Parliamentary control is to audit, certify and report on the apparent material misstatements totals for the year ended 31 March financial statements in accordance or inconsistencies I consider the 2014 and shows that those totals with the Government Resources and implications for my certificate. have not been exceeded; and Accounts Act 2000. I conducted my audit in accordance with International • the expenditure and income Standards on Auditing (UK and recorded in the financial statements Ireland). Those standards require have been applied to the purposes me and my staff to comply with the intended by Parliament and the Auditing Practices Board’s Ethical financial transactions recorded in Standards for Auditors. the financial statements conform to the authorities which govern them. UK Trade & Investment Annual Report and Accounts 2013–14 57
Opinion on financial statements Matters on which I report by In my opinion: exception • the financial statements give a true I have nothing to report in respect and fair view of the state of the of the following matters which I Department’s affairs as at 31 March report to you if, in my opinion: 2014 and of its net operating cost • adequate accounting records have for the year then ended; and not been kept or returns adequate for my audit have not been received • the financial statements have been from branches not visited by my properly prepared in accordance staff; or with the Government Resources and Accounts Act 2000 and HM Treasury • the financial statements and the part directions issued thereunder. of the Remuneration Report to be audited are not in agreement with the Opinion on other matters accounting records and returns; or In my opinion: • I have not received all of the • the part of the Remuneration Report information and explanations I to be audited has been properly require for my audit; or prepared in accordance with HM Treasury directions made under • the Governance Statement does the Government Resources and not reflect compliance with HM Accounts Act 2000; and Treasury’s guidance. • the information given in section Report entitled How we have performed I have no observations to make on for the financial year for which the these financial statements. financial statements are prepared is consistent with the financial statements.
Sir Amyas C E Morse Comptroller and Auditor General
24 June 2014
National Audit Office 157-197 Buckingham Palace Road Victoria London SW1W 9SP 58 UK Trade & Investment Annual Report and Accounts 2013–14
Statement of Parliamentary Supply
In addition to the primary statements prepared under IFRS, the Government Financial Reporting Manual (FReM) requires UKTI to prepare a Statement of Parliamentary Supply (SoPS) 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
2012-13 2013-14 £000 Estimate Outturn £000 Outturn Voted Outturn compared with Estimate Non- Non- saving/ Note Voted Voted Total Voted Voted Total (excess) Total Departmental Expenditure Limit – Resource SOPS 158,382 – 158,382 156,844 – 156,844 1,538 92,548 2.1 – Capital SOPS 2,998 – 2,998 2,511 – 2,511 487 1,557 2.2 Annually Managed Expenditure – Resource SOPS 5,021 – 5,021 355 – 355 4,666 – 2.1 – Capital SOPS – – – – – – – 2.2 Total Budget 166,401 - 166,401 159,710 - 159,710 6,691 94,105 Non-Budget – Resource – – – – – – – – Total Non-Budget – – – – – – – – Total Resource SOPS 163,403 – 163,403 157,199 – 157,199 6,204 92,548 2.1 Total Capital SOPS 2,998 – 2,998 2,511 – 2,511 487 1,557 2.2 Total 166,401 – 166,401 159,710 – 159,710 6,691 94,105
The notes on pages 60-62 form part of these accounts. UK Trade & Investment Annual Report and Accounts 2013–14 59
Net Cash Requirement 2013–14 2012-13 2013-14 £000 Estimate Outturn £000 Outturn Outturn compared with Estimate saving/ Note (excess) Total Net Cash Requirement SOPS3 159,890 147,145 12,745 89,254
Administration Costs 2013-14 2012-13 2013-14 £000 Estimate Outturn £000 Outturn Outturn compared with Estimate saving/ Note excess Total Administration Costs SOPS2.1 2,000 1,280 720 –
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.
The notes on pages 60-62 form part of these accounts. 60 UK Trade & Investment Annual Report and Accounts 2013–14
Notes to the Departmental Resource Accounts (Statement of Parliamentary Supply)
SOPS1. Statement of The budgeting system and the SOPS1.2 IFRS-Based Accounts accounting policies consequential presentation of Supply There are no differences between Estimates and the Statement of the administration and programme The Statement of Parliamentary Parliamentary Supply and related expenditure in the statement of Supply and supporting notes have notes, have different objectives to Parliamentary supply and the been prepared in accordance with IFRS-based accounts. The system IFRS-based accounts. the 2013-14 Government Financial supports the achievement of macro Reporting Manual (FReM) issued economic stability by ensuring that by HM Treasury. The Statement of public expenditure is controlled, with Parliamentary Supply accounting relevant Parliamentary authority, in policies contained in the FReM are support of the Government’s fiscal consistent with the requirements framework. The system provides set out in the 2013-14 Consolidated incentives to departments to manage Budgeting Guidance and Supply spending well so as to provide high Estimates Guidance Manual. quality public services that offer value for money to the taxpayer. SOPS1.1 Accounting convention The Government’s objectives for fiscal The Statement of Parliamentary policy are set out in the Charter for Supply and related notes are Budget Responsibility. These are to: presented consistently with Treasury budget control and Supply Estimates. • ensure sustainable public finances The aggregates across government are that support confidence in the measured using National Accounts, economy, promote intergenerational prepared in accordance with the fairness, and ensure the internationally agreed framework effectiveness of wider government ‘European System of Accounts’ policy; and (ESA95). ESA95 is in turn consistent • support and improve the with the System of National Accounts effectiveness of monetary policy in (SNA93), which is prepared under the stabilising economic fluctuations. auspices of the United Nations. UK Trade & Investment Annual Report and Accounts 2013–14 61
SOPS2 Net Outturn
SOPS2.1 Analysis of Net Resource Outturn by Section
2013-14 2012-13 £000 £000 Outturn Estimate Outturn Administration Programme Net total Net compared Gross Income Net Gross Income Net Total total to Estimate Total Spending in Departmental Expenditure Limit Voted: A. Trade development and promotion and inward investment: 1,280 – 1,280 171,891 (16,327) 155,564 156,844 158,382 1,538 92,548 Annually Managed Expenditure Voted: B. Trade development and promotion and inward investment: – – – 355 – 355 355 5,021 4,666 – Total 1,280 – 1,280 172,246 (16,327) 155,919 157,199 163,403 6,204 92,548
SOPS2.2 Analysis of Net Capital Outturn by Section 2013-14 2012-13 £000 £000 Outturn Estimate Outturn Net total compared Gross Income Net total Net to Estimate Total Spending in Departmental Expenditure Limit Voted: A. Trade development and promotion and inward investment: 2,511 – 2,511 2,998 487 1,557 Total 2,511 – 2,511 2,998 487 1,557
Explanations of variances between Estimate and Outturn are given in the Financial Review. 62 UK Trade & Investment Annual Report and Accounts 2013–14
SOPS3 Reconciliation of Net Resource Outturn to Net Cash Requirement
Net total Outturn compared with Estimate: savings Note Estimate Outturn (excess) Resource Outturn SOPS 2.1 163,403 157,199 6,204 Capital Outturn SOPS 2.2 2,998 2,511 487 Accruals to cash adjustments Adjustments to remove non-cash items: Depreciation and amortisation 7,8 (2,011) (2,144) 133 Impairments 7 – (40) 40 New provisions 13 (5,000) (355) (4,645) Adjustments to reflect movements in working balances: Increase/(decrease) in debtors 10 – 5,628 (5,628) (Increase)/decrease in creditors CF,12 500 (15,654) 16,154 Net cash requirements 159,890 147,145 12,745 UK Trade & Investment Annual Report and Accounts 2013–14 63
Statement of Comprehensive Net Expenditure For the Year Ended 31 March 2014
2013-14 2012–13 Administration Costs: Note £000 £000 Staff costs 3.1 692 – Other costs 4 588 – Income – – 1,280 – Programme Expenditure: Staff costs 3.2 1,732 1,369 Other costs 5 170,514 107,281 Income 6 (16,327) (16,102) 155,919 92,548 Net Operating Cost 157,199 92,548 Net gain / (loss) on revaluation – – Total Comprehensive Expenditure 157,199 92,548
All income and expenditure are derived from continuing operations.
The notes on pages 67-81 form part of these accounts. 64 UK Trade & Investment Annual Report and Accounts 2013–14
Statement of Financial Position As at 31 March 2014
2014 2013 Note £000 £000 Non-current Asset Property, plant and equipment 7 732 146 Intangible assets 8 4,219 4,477 Total non-current assets 4,951 4,623
Current assets Trade and other receivables 10 9,726 4,098 Cash and cash equivalents 11 12,709 4,254 Total current assets 22,435 8,352 Total assets 27,386 12,975
Current liabilities Provision 13 (355) – Trade and other payables 12 (45,893) (21,783) Total current liabilities (46,248) (21,783)
Total assets less current liabilities (18,862) (8,808)
Taxpayers Equity and Other Reserves General fund (18,862) (8,808) Total equity (18,862) (8,808)
Dominic Jermey CVO OBE Accounting Officer 19 June 2014
The notes on pages 67-81 form part of these accounts. UK Trade & Investment Annual Report and Accounts 2013–14 65
Statement of Cash Flows For the Year Ended 31 March 2014
2014 2013 Note £000 £000 Cash flows from operating activities Net operating cost (157,199) (92,548) Adjustments for non-cash transactions 5 2,184 2,095 (Increase)/Decrease in trade and other receivables 10 (5,628) 329 Increase/(Decrease) in trade payables 12 24,110 4,577 Increase in provisions 13 355 – Less movements in payables relating to items not passing through the Statement of Comprehensive Net Expenditure (8,456) (2,150) Net cash outflows from operating activities (144,634) (87,697)
Cash flows from investing activities Purchases of property, plant and equipment 7 (759) – Purchases of intangible assets 8 (1,752) (1,557) Net cash outflows from investing activities (2,511) (1,557)
Cash flows from financing activities From the Consolidated Fund (Supply) – Current year 155,600 91,404 Advances from the Contingencies Fund – – Repayments to the Contingencies Fund – – Capital element of payments in respect of finance leases and on-balance sheet (SoFP) PFI contracts – – Net financing 155,600 91,404
Net increase/(decrease) in cash and cash equivalents in the period before adjustment for receipts and payments to the Consolidated Fund – – Payments of amounts due to the Consolidated Fund – – Net increase/(decrease) in cash and cash equivalents in the period after adjustment for receipts and payments to the Consolidated Fund 8,455 2,150
Cash and cash equivalents at the beginning of the period 11 4,254 2,104 Cash and cash equivalents at the end of the period 11 12,709 4,254
The notes on pages 67-81 form part of these accounts. 66 UK Trade & Investment Annual Report and Accounts 2013–14
Statement of Changes in Taxpayers’ Equity For the Year Ended 31 March 2014
General Fund Note £000 Balance at 31 March 2012 (5,514)
Net Parliamentary Funding – drawn down 91,404 Net Parliamentary Funding – deemed 11 2,104 Supply payable/(receivable) adjustment 11,12.1 (4,254) Comprehensive Expenditure for Year (92,548) Balance at 31 March 2013 (8,808)
Net Parliamentary Funding – drawn down 155,600 Net Parliamentary Funding – deemed 11 4,254 Supply payable/(receivable) adjustment 11,12.1 (12,709) Comprehensive Expenditure for Year (157,199) Balance as at 31 March 2014 (18,862)
The notes on pages 67-81 form part of these accounts. UK Trade & Investment Annual Report and Accounts 2013–14 67
Notes to the 2013-14 Resource Accounts
1. Statement of 1.2 Basis of Accounting UKTI has a number of external Accounting Policies These accounts cover all activities contracts to provide the delivery of for which the Chief Executive of UKTI trade services to nine English Regions. These financial statements have has principal Accounting Officer (AO) Each of these contracts is incentivised, been prepared in accordance with responsibility. They cover all income, with 15% of the value of the regional the 2013-14 Government Financial expenditure, gains, losses, assets, contract being payable on the basis of Reporting Manual (FReM), issued liabilities and cash flows which do performance. The treatment of these by HM Treasury. The accounting not appear in the annual report payments represents a significant policies contained in the FReM apply and accounts of either of the two judgement area. International Financial Reporting parent Departments, the Foreign & The performance targets are based on Standards (IFRS) as adapted or Commonwealth Office (FCO) and the stretch targets for quantity (measured interpreted, for the public-sector Department for Business, Innovation through the UKTI Customer Data context. Where the FReM permits & Skills (BIS). Management System and verified a choice of accounting policy, the The primary statements and related through the PIMS independent accounting policy which is judged to survey) and stretch targets for quality be most appropriate to the particular notes report only on the programme activities and resources directly voted (measured through PIMS). In addition, circumstances of UKTI, for the purpose there are minimum thresholds that must of giving a true and fair view has to UKTI. Indicative administration and programme expenditure incurred by be met to trigger any incentivisation been selected. The particular policies payment. CDMS data is available at adopted by UKTI are described below. our two parent Departments and the cost of the associated assets used are the year-end, but PIMS data is only They have been applied consistently in available six months in arrears. Quantity dealing with items that are considered included by way of memoranda notes to the accounts (pages 82 to 87). payments can be assessed at year material to the accounts. end, but the final decision on whether In addition to the primary statements 1.3 Estimates and Judgements incentivisation payments should be made is not possible until six months prepared under IFRS, the FReM also The preparation of UKTI’s financial into the new financial year when requires UKTI to prepare additional statements requires management corresponding PIMS scores primary statements, the Statement of to make judgements, estimates and are available. Parliamentary Supply and supporting assumptions that affect the reported notes which show Outturn against amounts of assets and liabilities, A forecast of performance is used at Estimate in terms of the Net Resource income and expenditure. The estimates year end to assess both the likelihood Requirement and the Net Cash and associated assumptions are of payment and value of the incentive Requirement. based on historical experience and payments. The forecast is based on the other factors, including expectations 1.1 Accounting Convention actual CDMS data for the year adjusted or future events that are believed to be for the historical dropout rate following These accounts have been prepared reasonable under the circumstances. verification through PIMS. The average on a going concern basis under the The results of these form the basis of dropout rate is calculated using the last historical cost convention modified to making judgements about carrying 12 months of available PIMS data. account for the fair value revaluation values of assets and liabilities that of property, plant and equipment, are not readily apparent from other The total value of the potential payment and intangible assets as described in sources. Uncertainty about these is £4.07 million of which £3.98 million is paragraphs 1.9 to 1.12. assumptions and estimates could result accrued for. in outcomes that require an adjustment to the carrying value of the asset In accordance with IAS 8, revisions or liability. Where applicable, these to the accounting estimates are uncertainties are disclosed in the Notes recognised in the period in which to the Accounts. the estimate is revised. 68 UK Trade & Investment Annual Report and Accounts 2013–14
1.4 Operating Income 1.7 Pensions 1.9 Property, Plant and Equipment Operating income is income which Staff working for UKTI are employees In accordance with the FReM, UKTI relates directly to the operating of either BIS or the FCO. Past and has opted to value property, plant and activities of UKTI and is measured present employees are covered by equipment on a depreciated historical at the fair value of consideration the provisions of the Civil Service cost basis, as a proxy for fair value. received or receivable. Income is Pension Schemes. The defined This method of valuation has been only recognised once the work or benefit schemes are unfunded and chosen because UKTI has a large service has been provided and non-contributory except in respect number of relatively small-value items, principally comprises fees and of dependents’ benefits. BIS and the with short useful lives. charges for services provided to FCO recognise the expected costs external customers. of these elements on a systematic UKTI’s capitalisation threshold for and rational basis over the period property, plant and equipment is 1.5 Administration and Programme during which they benefit from an £1,000, except for furniture assets, Income and Expenditure employee’s services by payment to where all expenditure in one financial The Consolidated Statement of the Civil Service Pension Scheme of year is pooled and capitalised, and IT Comprehensive Net Expenditure is amounts calculated on an accruing hardware, where computer equipment analysed between administration and basis. Liability for payment of future with a cost in excess of £1,000 is programme income and expenditure. benefits is a charge on the Civil capitalised as one asset. Service Pension Scheme. In respect Administration costs reflect the Much of the business of UKTI is of defined contribution schemes, support costs of the Ministerial Visits conducted through the offices of BIS and the FCO recognise the Unit and the additional running costs BIS and the FCO. The use of these contributions payable for the year. arising from increased programme Departments’ assets is reflected in funding in 2013-14, as defined under A small number of UKTI staff appropriate cost allocations, which the Administration-Cost Control appear as Memorandum Notes Regime. The rest of the running costs employed by BIS are paid from UKTI’s administration budget. These costs are to these accounts. Control and of UKTI are included in the accounts beneficial interest in this property, of the FCO and BIS. Programme recharged from BIS and further details are included in Note 3 Staff Costs. plant and equipment are vested in costs are non-administration costs BIS and the FCO. Their total asset that relate directly to frontline 1.8 Value Added Tax (VAT) values are reflected in their respective service delivery. VAT is accounted for in the Accounts. Statements of Financial Positions. 1.6 Research and Development Amounts are shown net of VAT except:
Expenditure on research and • Irrecoverable VAT is charged to the development is treated as an Statement of Comprehensive Net operating cost in the year in which it Expenditure, and included under the is incurred, unless it meets the criteria relevant expenditure category. set out in IAS 38 Intangible Assets, in which case it is capitalised. • Irrecoverable VAT on the purchase of an asset is included in Additions. The net amount due to or from HM Revenue and Customs in respect of VAT is included within the Statement of Financial Position. UK Trade & Investment Annual Report and Accounts 2013–14 69
1.10 Depreciation 1.12 Impairments 1.16 Foreign Exchange Property, plant and equipment are The carrying value of UKTI’s assets is Transactions which are undertaken depreciated at rates calculated to reviewed each Statement of Financial in the UK and are denominated in a write them down to their estimated Position date to determine whether foreign currency are translated into residual value on a straight-line there is any indication of impairment. sterling at the exchange rate ruling on basis over their estimated useful If any such indication exists, the the date of the transaction. Current lives. Tangible assets are normally assets’ recoverable amount is assets and liabilities denominated depreciated over the following periods: estimated in accordance with IAS 36. in foreign currency are translated into sterling at the date on which Assets under Not depreciated until An impairment loss is recognised they are recorded in the accounts, construction assets are in use whenever the carrying amount of an on average no more than 30 days asset or its cash-generating unit is IT assets Three to five years prior to the Statement of Financial less than the recoverable amount. Position date. UKTI does not have Plant and Five years Impairment losses are recognised in the authority to undertake exchange machinery the Statement of Comprehensive Net rate risk management (hedging) Expenditure. and as a consequence all gains or 1.11 Intangible Assets losses on exchange differences are 1.13 Trade and Other Receivables Intangible assets are stated at the charged direct to the Operating Cost amortised historic cost as a proxy for Trade and other receivables are Statement during the period in which fair value and are reviewed annually recognised initially at fair value, they occur. for impairment. The minimum level of less any provision for impairment. capitalisation of an intangible asset is A provision for impairment of trade 1.17 Impending Application £1,000. This method of valuation has receivables is established when of Newly Issued Accounting been chosen because the assets have there is evidence that UKTI will not Standard Not Yet Effective no value in use. be able to recover all amounts due in UKTI provides disclosure that it has accordance with contracts. not yet applied a new accounting Software licences are amortised on standard, and known of reasonably a straight-line basis over the shorter 1.14 Trade and Other Payables estimable information relevant to of the term of the licence and the Trade and other payables are assessing the possible impact that the useful economic life (three to five recognised at fair value, which initial application of the new standard years). Intangible assets are normally represent liabilities for goods and will have on the resource accounts. depreciated over the following periods: services provided to UKTI prior to the There were no new standards issued financial year end that are unpaid. Trade for 2013-14 and not applied, which Development Not depreciated and other payables are non-interest would materially affect the resource costs until assets are bearing and are usually paid within 10 accounts. UKTI has also not adopted in use working days, thus their carrying value any standards early. Software licences Three to five years approximates their fair value.
Website Four to five years 1.15 Cash and Cash Equivalents IT assets Three to five years Cash and cash equivalents comprise cash at bank and in hand. The carrying amount of these assets approximates their fair value. 70 UK Trade & Investment Annual Report and Accounts 2013–14
2 Statement of Operating Cost by Business Group
2013-14 2012-13 £000 £000 Gross Income Net Gross Income Net Trade 102,730 (15,262) 87,468 62,678 (12,215) 50,463 Investment 40,337 – 40,337 27,401 – 27,401 Marketing 20,139 (180) 19,959 7,975 (2,031) 5,944 Chief Operating Office 6,445 – 6,445 6,794 (1,097) 5,697 Defence & Security Organisation 3,875 (885) 2,990 3,802 (759) 3,043 Total Comprehensive Net Expenditure 173,526 (16,327) 157,199 108,650 (16,102) 92,548
Resources that have been consumed by both the FCO and BIS in meeting UKTI’s objectives are detailed in Memorandum Notes to these accounts.
Departments are required to apply IFRS 8 Operating Segments. This requires Departments to identify their operating segments based on their main areas of activity reported to the Chief Operating Decision Maker (CODM).
UKTI’s CODM is the Accounting Officer. He receives financial information at aggregate level as well as information on outcomes relating to five business groups: Trade, Investment, Marketing, Chief Operating Office and Defence & Security Organisation.
The segmental analysis provided covers all UKTI Programme Expenditure. There are no reconciling items between the Net Operating Cost in the Statement of Comprehensive Net Expenditure.
No segmental analysis of the Statement of Financial Position is disclosed as UKTI’s CODM recieves information at aggregate level.
3 Numbers and Costs of People Engaged in Delivering UKTI’s Objectives
Most personnel engaged on UKTI business are employees of either BIS or the FCO and details are shown in the Memorandum Notes on pages 82 to 87.
3.1 Administration Staff Costs In 2013-14, UKTI had an admin budget to fund the costs of the cross Whitehall Ministerial Visits Unit and administration costs relating to increased programme activity announced in the Autumn Statement 2012. The staff costs funded by this budget are shown below.
2013–14 2012–13 £000 £000 Wages and Salaries 499 – Social Security Costs 62 – Other Pension Costs 131 – Total 692 – UK Trade & Investment Annual Report and Accounts 2013–14 71
Average Numbers Employed Permanently Employed BIS 2013-14 2012-13 Average full-time equivalent 14 –
3.2 Programme Staff Costs Contributions to the costs of employing international business specialists – seconded from private-sector organisations for periods of up to five years – are made to the seconding organisations. UKTI also uses other short-term contracted staff for specialist tasks.
These are not charged under consultancy in accordance with the financial reporting guidelines. Details are:
Average Numbers Private Sector Staff 2013-14 2012-13 Average full-time equivalent 28 20
Staff Costs 2013-14 2012-13 Private Sector Staff £000 £000 Total 1,732 1,369
There were no exit costs in 2013–14.
4 Non-Staff Administration Costs
2013–14 2012–13 £000 £000 Outsourced Activity 263 – Travel and Subsistence 200 – Other Costs 125 – Non-staff Administration Expenditure 588 – 72 UK Trade & Investment Annual Report and Accounts 2013–14
5 Non-Staff Programme Costs
2013–14 2012–13 £000 £000 Outsourced Programme Activity* 87,308 59,631 Events 30,068 15,861 Customer grants 25,186 12,682 Promotions and publications 12,698 7,524 Travel and subsistence 4,888 3,778 Market research and evaluation 1,974 1,372 IT PFI service charges – 638 IT service charges 2,102 1,275 IT finance charge 5 4 Other costs 4,101 2,421 Non-cash items Depreciation 133 120 Amortisation 2,011 1,668 Impairment 40 306 Loss on disposal of assets – 1 2,184 2,095 170,514 107,281 Non-staff programme expenditure 170,514 107,281
*Outsourced Programme Activity consists of £56.2m for FDI activities (2012-13 £47.0m), £9.9m for Regional Trade Services (2012-13 £1.3m), £19.5m for Trade specialists (2012-13 £4.9m) and £1.7m in relation to other Trade services (2012-13 £6.4m).
The impairment in 2013-14 and 2012-13 relates to the British Embassy Pavilion, which has been subject to an impairment review as at 31 March 2014. UK Trade & Investment Annual Report and Accounts 2013–14 73
6 Income
2013-14 2012-13 £000 £000 Fees and charges to external customers for market information reports 6,497 7,708 Income from other Government Departments 7,590 6,000 Other charges 2,240 2,394 16,327 16,102
An analysis of income from services provided to external customers is as follows:
2013-14 2012-13 £000 £000 Income Full cost Deficit Income Full cost Deficit Provision of overseas market information to (6,497) 11,074 4,577 (7,708) 11,035 3,327 UK exporters
The level of fees and charges to external customers for market information reports are not full cost recovery. The charges are set at a level that best supports UKTI’s overall target of assisting 40,000 businesses in 2013–14.
This information is provided for fees and charges purposes and not for IFRS 8 purposes. 74 UK Trade & Investment Annual Report and Accounts 2013–14
7 Property, Plant and Equipment
2013-14 Furniture, Assets Information Office Fixtures under Technology Machinery and Fittings Construction Total £000 £000 £000 £000 £000 Cost or valuation At 1 April 2013 815 51 80 – 946 Additions 6 – 753 – 759 Disposals (74) – – – (74) Impairment – – (80) – (80) Transfers – – – – – At 31 March 2014 747 51 753 – 1,551
Depreciation At 1 April 2013 (757) (43) – – (800) Charge in year (51) (6) (76) – (133) Disposals 74 – – – 74 Impairment – – 40 – 40 At 31 March 2014 (734) (49) (36) – (819)
Carrying amount at 31 March 2014 13 2 717 – 732
Asset financing Owned 13 2 717 – 732 Carrying amount at 31 March 2014 13 2 717 – 732 UK Trade & Investment Annual Report and Accounts 2013–14 75
2 012-13 Furniture, Information Office Fixtures and Assets under Technology Machinery Fittings Construction Total £000 £000 £000 £000 £000 Cost or valuation At 1 April 2012 956 51 – 445 1,452 Additions – – – – – Disposals (141) – – – (141) Impairment – – (365) – (365) Transfers – – 445 (445) – At 31 March 2013 815 51 80 – 946
Depreciation At 1 April 2012 (842) (37) – – (879) Charge in year (55) (6) (59) – (120) Disposals 140 – – – 140 Impairment – – 59 – 59 At 31 March 2013 (757) (43) – – (800)
Carrying amount at 31 March 2013 58 8 80 – 146
Asset financing Owned 58 8 80 – 146 Carrying amount at 31 March 2013 58 8 80 – 146 76 UK Trade & Investment Annual Report and Accounts 2013–14
8 Intangible Assets
2013 –14 Development Software Information costs licence Website technology Total £000 £000 £000 £000 £000 Cost or valuation At 1 April 2013 77 3,607 4,379 4,774 12,837 Additions 663 – – 1,089 1,752 Disposals – (9) – – (9) Transfers (403) – – 403 – At 31 March 2014 337 3,598 4,379 6,266 14,580
Amortisation At 1 April 2013 – (2,742) (2,756) (2,861) (8,359) Charge in year – (297) (1,087) (627) (2,011) Disposals – 9 – – 9 Transfers – – – – – At 31 March 2014 – (3,030) (3,843) (3,488) (10,361)
Carrying amount at 31 March 2014 337 568 536 2,778 4,219
Asset financing Owned 337 568 536 2,778 4,219 Carrying amount at 31 March 2014 337 568 536 2,778 4,219 UK Trade & Investment Annual Report and Accounts 2013–14 77
2012–13 Development Software Information costs licence Website technology Total £000 £000 £000 £000 £000 Cost or valuation At 1 April 2012 492 3,603 4,183 3,002 11,280 Additions 1,529 4 24 – 1,557 Disposals – – – – – Transfers (1,944) – 172 1,772 – At 31 March 2013 77 3,607 4,379 4,774 12,837
Amortisation At 1 April 2012 – (2,440) (1,679) (2,572) (6,691) Charge in year – (302) (1,077) (289) (1,668) Disposals – – – – – Transfers – – – – – At 31 March 2013 – (2,742) (2,756) (2,861) (8,359)
Carrying amount at 31 March 2013 77 865 1,623 1,913 4,478
Asset financing Owned 77 865 1,623 1,913 4,478 Carrying amount at 31 March 2013 77 865 1,623 1,913 4,478
9 Financial Instruments
As the cash requirements of the Departments are met through the Estimates process, financial instruments play a more limited role in creating risk than would apply to a non-public sector body of a similar size. The majority of financial instruments relate to contracts for non-financial items in line with the Departments’ expected purchase and usage requirements, and UKTI is therefore exposed to very little credit, liquidity or market risk.
Due to the largely non-trading nature of UKTI’s activities and the way in which Government Departments are financed, UKTI is not exposed to the degree of financial risk faced by business entities. Financial assets and liabilities are generated by day-to-day operational activities and are not held to change the risks facing UKTI in undertaking its activities. 78 UK Trade & Investment Annual Report and Accounts 2013–14
10 Trade Receivables and Other Current Assets
10.1 Analysis by type 31 March 2014 31 March 2013 £000 £000 Amounts falling due within one year Trade receivables 2,464 667 VAT 6,005 3,085 Prepayments and accrued income 1,257 346 9,726 4,098
10.2 Intra-Government balances Amounts falling due within one year £000 £000 31 March 2014 31 March 2013 Balances with other central Government bodies 6,391 3,200 Balances with bodies external to Government 3,335 898 9,726 4,098
11 Cash and Cash Equivalents
31 March 2014 31 March 2013 £000 £000 Balance at 1 April 4,254 2,104 Net change in cash and cash equivalents 8,455 2,150 Balance at 31 March 12,709 4,254
The following balances at 31 March were held at: Government banking service 12,709 4,254 Balance at 31 March 12,709 4,254 UK Trade & Investment Annual Report and Accounts 2013–14 79
12 Trade Payables and Other Current Liabilities
12.1 Analysis by type 31 March 2014 31 March 2013 £000 £000 Amounts falling due within one year Trade payables 2,820 1,049 Accruals and deferred income 30,364 16,480 Amounts issued from the Consolidated Fund for Supply 12,709 4,254 but not spent at year end 45,893 21,783
12.2 Intra-Government balances Amounts falling due within one year £000 £000 31 March 2014 31 March 2013 Balances with other Government bodies 19,715 6,766 Balances with local authorities 7 – Balances with bodies external to Government 26,171 15,017 45,893 21,783 80 UK Trade & Investment Annual Report and Accounts 2013–14
13 Provisions
31 March 2014 31 March 2013 £000 £000 Balance as at 1 April – – Provided in the year 355 – Provisions utilised in the year – – Borrowing Cost (Unwinding Discounts) – – Total 355 –
Analysis of expected timing of cashflows
31 March 2014 31 March 2013 £000 £000 Not later than one year – – Later than one year and not later than five years 355 – Later than five years – – Total 355 –
UKTI has an external contract for the delivery of foreign direct investment services. This contract is incentivised with 25% of the management fee based on stretch targets for quality (measured through PIMS).
This data is available 18 months in arrears. Based on historical performance and an assessment of current performance, management believes that it is probable this target will be met and have therefore provided for this fee. UK Trade & Investment Annual Report and Accounts 2013–14 81
14 Capital and other Commitments
14.1 Capital Commitments 31 March 2014 31 March 2013 £000 £000 Contracted capital commitments not otherwise included in these financial statements Intangible assets 864 1,342 Total 864 1,342
The Capital Commitments relate to contracts for the development of the new Customer Data Management System and the Regeneration Investment Organisation Digital Platform.
15 Contingent Liabilities
UKTI has no contingent liabilities (2012-13 £1.86m).
16 Losses and Special Payments
During 2013–14, UKTI made no special payments and had no reportable losses (2012-13 Nil).
17 Related Party Transactions
UKTI is a joint operation between BIS and the FCO. These bodies are regarded as related parties with which UKTI has had various material transactions during the year.
In addition, UKTI has had a small number of transactions with other Government Departments, central Government bodies or trading funds. Most of these transactions have been with Visit Britain, the Ministry of Defence, Skills Funding Agency, Nuclear Decommissioning Authority, Natural Environment Research Council, HMRC, DECC, Cabinet Office, Design Council, the Department of Health and the Biotechnology and Biological Sciences Research Council.
No Minister, Board Member of UKTI, key manager or other related party has undertaken any material transactions with UKTI during the year.
18 Events After the Reporting Period
There have been no events after the reporting period and up to the date the accounts were authorised for issue requiring an adjustment to the financial statements. The date the accounts were authorised for issue is interpreted as the date of the Certificate and Report of the Comptroller and Auditor General. 82 UK Trade & Investment Annual Report and Accounts 2013–14
Memorandum Notes Aggregating Total Resources Used To Deliver UKTI’s Services
These Memorandum Notes are not within the scope of the Comptroller and Auditor General’s opinion.
In addition to the resources voted to UKTI set out in the Primary Statements, these Memorandum Notes also include an estimate of the resources allocated to UKTI activity by BIS and the FCO. This reflects the shared governance arrangements between BIS, the FCO and UKTI for the delivery of their shared Departmental strategic objectives for trade promotion and foreign direct investment.
With respect to the FCO, the amounts stated are based on the latest information provided from the FCO Expenditure Allocation Report (EAR), on 5 June 2014. UKTI considers that the costs stated are reasonable estimates and are in line with management’s expectations.
BIS Admin costs consist of direct costs and notional allocations of accommodation and overhead costs. These figures form part of BIS’s Accounts.
UKTI Programme amounts are taken directly from the audited accounts, which can be seen on pages 58 to 81.
1 Statement of Comprehensive Net Expenditure
The Statements of Comprehensive Net Expenditure below provide a breakdown by organisation of the total estimated resources consumed in the meeting of UKTI’s objectives.
UKTI Administration BIS FCO Administration and Programme Administration and Programme Total 2013–14 2012–13 2013–14 2012–13 2013–14 2012–13 2013–14 2012–13 Note £000 £000 £000 £000 £000 £000 £000 £000 Staff cost 3 2,424 1,369 28,176 34,881 51,581 53,010 82,181 89,260 Other costs 4 171,102 107,281 12,303 17,452 118,352 119,706 301,757 244,439 Income (16,327) (16,102) (804) (819) – – (17,131) (16,921) Net Comprehensive 157,199 92,548 39,675 51,514 169,933 172,716 366,807 316,778 Expenditure UK Trade & Investment Annual Report and Accounts 2013–14 83
2 Statement of Total Resources Deployed by Sub-Objective
The segmental analysis below sets out the total estimated resources deployed by performance activity.
UKTI Administration BIS and Programme Administration Total 2013–14 2012–13 2013–14 2012–13 2013–14 2012–13 £000 £000 £000 £000 £000 £000 Trade 87,468 50,463 12,402 13,185 99,870 63,648 Investment 40,337 27,401 5,115 5,088 45,452 32,489 Marketing 19,959 5,944 2,293 2,891 22,252 8,835 Chief Operating Office 6,445 5,697 7,090 11,256 13,535 16,953 Defence & Security Organisation 2,990 3,043 7,996 8,927 10,986 11,970 Net Comprehensive 157,199 92,548 34,896 41,347 192,095 133,895 Expenditure BIS Apportioned Overheads 4,779 10,167 FCO Programme and Administration 169,933 172,716 Total Resources Deployed 366,807 316,778 84 UK Trade & Investment Annual Report and Accounts 2013–14
3 Staff Numbers and Related Costs
Staff working for UKTI are either employees of BIS or the FCO – or are from the private sector. Staff costs consisted of:
UKTI Administration and FCO Administration and Programme BIS Administration Programme Total 2012 2012 2012 2013 2012 2013-14 13 2013-14 13 2013-14 13 14 13 £000 £000 £000 £000 £000 £000 £000 £000 Perm Perm Perm staff Other Total Total staff Other Total Total staff Other Total Total Total Total Wages and 499 1,732 2,231 1,369 22,085 381 22,466 24,383 8,458 – 8,458 9,316 33,155 35,068 salaries Social 62 – 62 – 2,045 – 2,045 2,128 402 – 402 327 2,509 2,455 security costs Other pension 131 – 131 – 4,486 – 4,486 4,885 1,601 – 1,601 1,764 6,218 6,649 costs Exit package – – – – (569) – (569) 3,773 – – – – (569) 3,773 cost1 Locally – – – – – – – – 41,120 – 41,120 41,603 41,120 41,603 employed staff costs
Less – – – – (252) – (252) (288) – – – – (252) (288) recoveries for outward secondments Total net cost 692 1,732 2,424 1,369 27,795 381 28,176 34,881 51,581 51,581 53,010 82,181 89,260 1. The negative exit package costs of £569k relates to the reversal of an over accrual in 2012-13.
The average numbers of full-time equivalent persons employed during the year are shown in the table below. These are based on figures supplied by BIS and the FCO to the Office for National Statistics (ONS) in accordance with ONS guidance.
Staff numbers consisted of:
UKTI Programme and FCO Administration and Administration BIS Administration Programme Total 2012 2012 2012 2013 2012 2013-14 13 2013-14 13 2013-14 13 14 13 Perm Perm Perm staff Other Total Total staff Other Total Total staff Other Total Total Total Total Total 14 28 42 20 500 17 517 579 1,352 – 1,352 1,283 1,911 1,882 UK Trade & Investment Annual Report and Accounts 2013–14 85
3.1 Reporting of Civil Service compensation schemes – exit packages Exit package cost band Number of exit packages by cost band 2013–14 2012–13 Less than £10,000 – – £10,000 – £25,000 – 13 £25,000 – £50,000 – 34 £50,000 – £100,000 – 22 £100,000 – £150,000 – 3 £150,000 – £200,000 – 2 £200,00 – £250,000 – – More than £250,000 – – Total number of exit packages – 74 Total cost (£) – 3,773,114
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 early retirements have been agreed, the additional costs are met by BIS. All exit packages were voluntary. 86 UK Trade & Investment Annual Report and Accounts 2013–14
4 Other Costs
UKTI Admin and FCO Admin and Programme BIS Administration Programme Total 2013–14 2012–13 2013–14 2012–13 2013–14 2012–13 2013–14 2012–13 £000 £000 £000 £000 £000 £000 £000 £000 Expenditure PFI service charges – 638 1,832 1,800 – – 1,832 2,438 Finance charge 5 4 – – – – 5 4 Outsourced programme 87,571 59,631 – – 4,303 4,443 91,874 64,074 activity Customer grants 25,186 12,682 – – – – 25,186 12,682 Promotions and publications 12,698 7,524 103 245 – – 12,801 7,769 IT service charge 2,102 1,275 518 152 794 601 3,414 2,028 Market research & evaluation 1,974 1,372 – – – – 1,974 1,372 Events 30,068 15,861 78 79 – – 30,146 15,940 Travel and subsistence 5,088 3,778 2,190 2,196 6,411 6,875 13,689 12,849 Rentals under operating – – – – – – – – leases Accommodation – – 2,262 2,232 23,587 24,966 25,849 27,198 Programme – – – 98 1,672 98 1,672 Other costs 4,226 2,421 2,803 2,814 4,473 5,552 11,502 10,787
Non-cash items Depreciation 133 120 – – 5,535 6,542 5,668 6,662 Amortisation 2,011 1,668 – – – – 2,011 1,668 Impairment 40 306 – – – – 40 306 Loss on disposal of assets – 1 – – – – – 1 Apportionment of central – – 2,484 7,907 73,118 69,028 75,602 76,935 overheads attributable to UKTI activities Auditor’s remuneration – – 33 27 33 27 66 54 Non-staff expenditure 171,102 107,281 12,303 17,452 118,352 119,706 301,757 244,439 UK Trade & Investment Annual Report and Accounts 2013–14 87
5 Income
The amounts included in the FCO’s financial statements which underpin the figures shown in these Memorandum Notes include apportioned income that is not directly attributable to UKTI’s activities. FCO income is therefore not identified separately, but is included as part of the net figures disclosed in Memorandum Notes 1 and 3.
6 Capital Employed
Property, Plant and Equipment and Intangible Assets used in the delivery of UKTI’s objectives were as follows:
UKTI BIS FCO Total £000 £000 £000 £000 Carrying amount at 31 March 2014 4,951 – – 4,951 Carrying amount at 31 March 2013 4,623 – – 4,623
BIS and the FCO have not purchased property, plant and equipment or intangible assets for the sole purpose of delivering UKTI’s objectives. The increase in UKTI’s Carrying Amount is as a result of the need to capitalise IT systems developed or in the course of being developed (see Property, Plant and Equipment and Intangible Assets notes). 88 UK Trade & Investment Annual Report and Accounts 2013–14
Annex A Performance Framework and Resources
The new performance framework is set out below – it will measure the impact of what UKTI does on the business performance of the exporters and investors we serve. The goals set out below are our aspirations for 2014-15.
UKTI Performance Measurement Framework Trade Inward investment UK Economy (policy aim) Productivity and GDP Growth; Productivity and GDP Growth; Innovation Innovation Business Outcomes £additional sales: Total and per £Turnover – current and anticipated (reported £spend; NOT targeted): Jobs: (reported upon, NOT targeted) Jobs: – current and anticipated(reported upon, NOT targeted) Intermediate Business 50% improve medium-term 70% significant influence Impacts productivity and profit (hard business (on location in UK or scale/scope of project) performance); 75% for intensive support; 60% other tailored support; 40% outreach events; 2,500 increase R&D Outputs (Business Benefit) 70% report ‘significant business 60% overcoming barriers benefit’ (shows how UKTI achieves influence) – e.g. from barriers to new business overcome; changed behaviour to improve strategy; increased skills Activity – volume 50,000 Businesses Assisted of which: 750 involved successes; (Productivity Measures) – 20,000 innovative businesses (See below for definitions) – 12,000 expect substantial growth – 4,500 new to exporting Activity – quality 80% Quality 80% Quality (90% for high-intensity support) 80% Satisfaction 80% Satisfaction (90% for high-intensity support) UK Trade & Investment Annual Report and Accounts 2013–14 89
An indicative framework for measuring Proportion reporting significant % reporting significant business UKTI performance was approved by influence: 79% Proportion benefit: 70% Ministers for 2011-12. This set out overcoming barriers: 58% measures covering trade support, Quality: inward investment and operational Quality of service: 81% • All trade services: 78% performance. The measurement Satisfaction: 81% framework was structured using • Intensive support only: 88% Results for Trade Services a policy logic model to show how (2012-2013)2 Satisfaction: the activity delivered will contribute to the high-level UK policy aims of Number of businesses assisted: • All trade services: 77% increasing UK productivity, innovation, 34,820 and GDP growth. • Intensive support only: 84% Of which: Revenue: The requirements were for UKTI to • Number innovative: 29,770 prioritise resources carefully to ensure • Total UKTI revenues of £16.3m delivery of our high-level outcomes, • Number expecting substantial while at the same time delivering real growth: 14,960 Definitions of Measures Used in efficiency savings of 2.6%. UKTI’s the Performance Framework: • Number new to exporting: 5,990 Strategic Objective: to assist more Trade Support: innovative SMEs to export; to attract £ Additional sales: £51.8bn All UKTI’s performance measures are high-quality FDI; to deliver trade high- reported on the basis of results from value opportunities; and to secure Total jobs created or safeguarded: 177,910 the independent Performance and increasing amounts of FDI-type Impact Monitoring Survey (PIMS). Full investment from international Of which: results of these surveys, and detailed financial bodies. discussion of the methodology, • Additional jobs created: 66,340 Results for Inward Investment including the questions used to derive • Jobs safeguarded: 111,570 (2012-13)1 the measures, are published on the UKTI website at: www.ukti.gov.uk/ Number of Inward Investment Involved % improve medium-term productivity Successes: 13 2 2 and profit:
Of which: • All UKTI trade services 52% • Intensive support: 69% • Proportion which are High Quality or Good Quality: 79% • Other tailored support: 53% • Proportion which are High • Outreach events: 40% Number Quality: 47% increasing R&D: 4,250 • Proportion which are Good Quality: 33%
1 The policy logic model forUKTI is set out in detail in BIS Economics Paper No 13: International Trade and Investment – the Economic Rationale for Government Support (May 2011), Chapter 7. This paper provides the economic evidence underpinning the new UKTI strategy published in May 2011. All results relate to inward investment projects reported for 2012-13. This is because 2013-14 figures are not available at the time of 2 Results for trade services relate to activity preparing this report. Figures derived from PIMS delivered between October 2012-September are available with a year lag because interviews 2013, as measured through PIMS interviews for PIMS are carried out between 6-12 months carried out between April 2013-March 2014. after the project was recorded as an involved PIMS results for activity delivered during f/y 2013 success. 14 will be available at end of September 2014. 90 UK Trade & Investment Annual Report and Accounts 2013–14
Businesses Assisted (c) Number of businesses (g) Jobs created and safeguarded: (a) Number of Businesses Assisted: expecting substantial growth: Definition: PIMS respondents are Definition: Businesses are counted Definition: PIMS respondents are asked separately about jobs created against the measure only once in asked about their expectations and safeguarded, in each case asking the year, even if they have received for business growth over the next only about jobs specifically attributed support relating to more than one five years, distinguishing between to the help provided. As for the overseas market during the year. substantial growth, moderate growth, ‘significant business benefit’ measure, A business is defined as a separate no change and becoming smaller. respondents who say they would have legal entity. Businesses are only The proportion reporting substantial achieved similar results anyway are counted against the target if the growth (43%) is then grossed excluded from these figures. up to provide an estimate of the relevant details of support have been (h) Quality: provided to the independent market total number. research specialist for inclusion in Definition: PIMS respondents are (d) % improving medium-term asked to give ratings for a number of PIMS. All such businesses are eligible productivity and profit: for interview, and are selected for specific aspects of service quality, in interview at random. Definition: Medium-term refers to each case using a scale of 1-5, where five years from the time of the PIMS 1 = very poor, and 5 = very good. (b) Number of innovative interview. Respondents are asked The measure reports the average % businesses helped to exploit separately about productivity and respondents giving ratings of 4 or 5. overseas business opportunities: profit, and only those who say yes (i) Satisfaction: Definition: PIMS respondents are to both are counted in this measure. asked about characteristics of their Definition: PIMS respondents are (e) % reporting significant asked to rate their overall satisfation business, including R&D activity and business benefit: other key indicators of innovation, with the service provided, using a and are classified as innovative if Definition: PIMS respondents are 1-5 scale, where 1 = very dissatisfied they report such characteristics. The asked a number of specific questions and 5 = very satisfied. The measure indicators used for this classification about ways in which their business reports the % of respondents giving are based on relevant questions may have benefited from the service. ratings of 4 or 5. The dissatisfied from the Community Innovation For each benefit reported, they are fraction is reported in the published Survey, and are defined to capture asked to rate the extent to which the PIMS results, which show that 2% innovation in service sectors as well business had benefited using a 1-5 were ‘very dissatisfied’ and 5% as in manufacturing. Full details scale, where 1 = no benefit and 5 ‘fairly dissatisfied’. The remaining are published in the annual reports = benefited to a critical extent. The respondents gave a rating of 3. on PIMS on the UKTI website at measure reports the proportion, www.ukti.gov.uk. The fraction of giving ratings of 4 or 5 for at least respondents classified as innovative one benefit, excluding any who say is grossed up to provide an that they would have achieved similar estimate of the number of innovative results without UKTI help. businesses helped. (f) Additional sales: Further details are provided on the Technical note on Measurement on Financial Benefits Generated by UKTI Trade Services in Annex B. UK Trade & Investment Annual Report and Accounts 2013–14 91
Inward Investment (c) Jobs: FDI Involved Successes Definition: Figures are estimated by OMB Research on the basis of (a) Number of involved inward responses to PIMS questions about investment successes: the total current number of jobs in the Definition: Criteria defining an involved projects, and the expected number inward investment success have in three years’ time. In each case, a been agreed by the International mean across the sample interviewed Business Development Forum is used to calculate a total by grossing (IBDF), comprising the Devolved up, using the total number of involved Administrations, London & Partners, successes. and UKTI. (d) % influenced: (b) Number of “high value” and Definition: PIMS respondents are “good quality” projects: asked about the extent to which the Definition: The project characteristics support provided had influenced a which are used to classify the number of different decisions relating projects as “high value”, or “good to the project. The questions are quality” capture features of projects designed to capture influence on the which have been identified by aspects of the scale or scope of the academic research as likely to be project which are likely to benefit the associated with positive impact UK, as well as capturing influence on on UK productivity, in particular, the decision to locate in the UK. In through knowledge spillovers and each case, influence is rated on a 1-5 increases in knowledge-intensive scale, where 1 = no influence, and 5 = economic activity in the UK. Project influenced the decision to a significant characteristics are classified as high, extent. The measure reports the medium, or low indicators of value, proportion giving ratings of 3-5. and projects are then classified according to the number and quality (e) Quality: As for Trade. of these indicators which are present. (f) Satisfaction: As for Trade. Indicators include having R&D as the main focus of a project, having new to the world, new to the sector or new to the UK business models, or technical processes at the site.
A new set of definitions and criteria were introduced in 2013-14. This will be reported in detail in next year’s report. 92 UK Trade & Investment Annual Report and Accounts 2013–14
Annex B Technical Note: UKTI’s Monitoring and Evaluation Evidence
Evidence about the financial benefits The PIMS estimates reflect • Additionality: Two separate generated by UKTI trade services businesses’ own judgments about the additionality tests are applied. is gathered quarterly through the value of additional revenues and profits Benefits which are not explicitly Performance and Impact Monitoring which they have achieved, or expect to attributed by the client directly to Survey (PIMS) carried out by OMB achieve, as a direct result of the help the support are excluded. Clients Research, an independent market provided. Figures for additional profits who state that they could have research company specialising in and revenues are obtained from achieved similar results without business surveys. In addition to the UKTI trade clients interviewed for support are classified as having evidence collected through PIMS, PIMS, using a sequence of questions achieved zero additional sales. estimates of the impact of UKTI which has been rigorously tested to • Consistency: Additional profits trade services are obtained through ensure that it elicits well informed and attributed to UKTI by the client are a rolling programme of independent carefully considered judgments about not counted, unless the client has evaluations of particular trade these values, taking account of the also reported significant impact on services. These evaluations use specific ways in which UKTI support one or more qualitative indicators, a range of alternative techniques, had benefited a business. These showing how the service had in order to derive estimates of the judgments are then used by OMB enabled the additional profits to be magnitude of the impact of trade Research to calculate a figure for made. services on business sales and other estimated mean and total additional measures of performance. Further sales. Clients who said they would Details of these adjustments, and of detail on the evaluation programme is have achieved similar results without their effects on the mean reported in Annex C. UKTI support are counted as having additional profit attributable to UKTI received zero additional sales. support, are published quarterly An estimate of total financial benefits in the summary reports by OMB generated by UKTI trade services PIMS interviews are conducted at Research on PIMS results. A more is published annually by UKTI – two stages, the first being between detailed description is provided by PIMS reports by OMB Research 4-7 months after the provision of OMB Research in its full annual report (https://www.gov.uk/government/ the support, and a follow-up, with a on PIMS. Analysis of PIMS data publications/ukti-performance-and smaller sample, a year later. Interviews shows that the significant qualitative impact-monitoring-surveys-q4 are designed to capture a rounded impacts most frequently reported by 201314-summary-results-pims-31 picture of the quality and impact of UKTI clients, who consider that the 34-march-2014). Results published the support, taking into account the support has enabled them to generate at the end of March 2014, based on business context. additional profit and sales revenues are: surveys carried out during the financial year 2013-14, reported estimated total The values of financial benefit given • gained access to customers/ benefits of £51.8 billion measured in by the firms themselves, in the business partners not otherwise terms of additional sales attributed context of PIMS interviews, are available, by UKTI trade clients to the support then adjusted downwards through • gained access to information not provided. application of discounting and a number of robustness checks. These otherwise available, adjustments cover the following: • improved profile or credibility overseas, • Discounting: Expected future profits are discounted at 8% • improved knowledge of the and counted over a limited competitive environment, period, normally up to five years, • improved overseas marketing exceptionally up to a maximum strategy, and of 10 years. After this period, the discount rate is, in effect, increased • gained confidence to explore or to 100%. expand in an overseas market or markets. UK Trade & Investment Annual Report and Accounts 2013–14 93
These findings confirm that the • Evaluation of Trade Advisory A further two quantitative impact reported financial benefit is generated Services delivered by the studies were commissioned in 2013 as a result of UKTI trade services International Trade Teams in the and will report later in 2014. The enabling clients to upgrade their English Regions (London Economics evaluations aimed to: approach to overseas business and 2012): The analysis used data from overcome barriers to accessing a purpose designed survey of 300 • Assess the impact of UKTI trade overseas opportunities. users, and a matched sample of 300 services on UK goods exports non-user businesses. It found that by linking UKTI client reported to The very high financial benefits UKTI support resulted in 11% faster HMRC data and data on the UK reported by UKTI clients have been growth over a 2 year period, and business population. a consistent finding over the 7 years was also associated with a higher • Assess the impact of UKTI trade covered by the PIMS research, and probability of entering new markets. and investment services by linking are also consistent with evidence UKTI client records to data on the from evaluations using other • Economic Impact Evaluation of UK business population. methodologies. Further qualitative UKTI’s Overseas Market Introduction insight into how the services achieve Service (Breinlich, Mion, et al Essex, Other Possible Measures of Benefit LSE, and Warwick University; 2012): such high impact can be gleaned Two other measures of economic The study matched client data from case studies carried out as benefit, which are sometimes used in to data on the wider population part of PIMS follow up qualitative evaluation of trade services or other of UK businesses1. Econometric research. Reports are available at: business support services, are: http://webarchive.nationalarchives. techniques were then used to gov.uk/20131124144306/http:// evaluate the impact of service use • Additional exports: This measure www.ukti.gov.uk/uktihome/ on the performance of the client was commonly used in evaluations aboutukti/ourperformance/ businesses. The study estimated of trade services carried out in the performanceimpactandmonitoring that the mean effect of OMIS on UK prior to 2002, and featured in the survey/qualitativesurveys.html employment and total turnover Public Service Agreement Targets growth, over a two year period, was for British Trade International for the Alternative estimates of the £1.5m additional turnover, and 7 period 1999-20022. For the Spending additional sales resulting from UKTI additional jobs. At the median, the Review period 2002-04, it was trade support are available from impact was £611,000 additional replaced by a measure of improved quantitative evaluations of specific turnover, and 3 additional jobs. business performance of users of the trade services, which are carried These estimates are of a similar order trade services, where performance out by independent contractors as of magnitude to those obtained from was defined in terms of improved part of UKTI’s rolling programme of PIMS. Full reports on these and other productivity and profitability over the depth evaluations. These studies use evaluation research are available at: medium term. This change reflects econometric techniques to compare http://webarchive.nationalarchives. the fact that export activity is not an the performance of supported firms gov.uk/20131124144306/http://www. end in itself, but benefits businesses with that of a matched comparison ukti.gov.uk/uktihome/aboutukti/ and the UK economy through group of non-supported firms. Two ourperformance/evaluation.html enabling companies to improve their quantitative impact evaluations were performance, and achieve stronger completed during 2012: growth than would otherwise be possible. Focus on additional exports can potentially be misaligned with the business development needs of a company, whereas focus on a business performance improvement target ensures clear alignment with 1 The study used the OFLIP database which was these needs. compiled by Christian Helmers and the late Mark Rogers (Oxford), and incorporates data from FAME based on Companies House records, 2 The target was set on “the value of additional together with publicly available data on intellectual exports generated for each £1 DTI/FCO property ownership from IPO and other sources. expenditure”, with the baseline set at £20:£1. 94 UK Trade & Investment Annual Report and Accounts 2013–14
Moreover, focus on exports would Calculation of Total Benefit • Allowance made for actions not substantially understate the impact The method of calculation of the taken as a result of support. This of trade services, both in terms of £51.8bn estimated total additional adjustment takes account of the benefit to the supported firm, and revenues generated by UKTI trade client’s assessment of the costs in terms of impact on net exports. services is summarised below, in and benefit which might have been This is because the improvements three parts: achieved through these foregone to products and services, and to actions. productivity, which result from the • estimation of mean benefit per • Adjustment for non-additionality services, have a favourable impact business supported, Total profit is weighted by proportion on the firm’s competitiveness and • de-duplication to count the number “would have realised anyway”, performance in all its markets, of businesses that received support based on the client’s own judgment. including in the UK domestic market. during the year: de-duplication • Consistency check and further • Gross Value Added (GVA): This is necessary because some additionality check: Adjusted measure is often used in the businesses will have used more to zero if no impact has been context of evaluating other forms of than one service in the course of recorded against at least one of publicly funded business support. a year; and two qualitative impact measures, However, as the measure includes • grossing up from the mean, namely, “change in behaviour (PIMS wages, there is a need to take into The total de-duplicated number measure A83)” or “barriers to market account the likelihood that staff of businesses is multiplied by access overcome” (PIMS measure in the supported business might the mean. A92). Impact is classified as zero be able to earn similar wages in in these qualitative measures if the another company or sector, possibly Calculation of the mean benefit, firm has said it would have achieved in another UK region. The measure in terms of additional profit and similar results in any case. should therefore be reported net of sales attributed specifically to the displaced alternative wage earnings, help provided by UKTI, uses the All outliers are checked by a either at regional or national level, following steps: qualitative call back to the respondent as appropriate in context. If this by one of the OMB Research displacement is not taken into • Firms asked to estimate the directors. (If the respondent is account, estimates of GVA will expected benefit in terms of bottom- not able to provide a credible substantially overstate the impact line profit £, or in terms of additional or consistent explanation, the of business support. However, sales, if easier for the client to observation is reduced to zero). displacement is very difficult estimate. to measure. • Future expectations allowed for (using annual discounting rate of 8%); number of years in the future is normally capped at five years, for example when the respondent says the revenues will continue “indefinitely”. Exceptionally, up to 10 years are counted, where the respondent is specific about the number of years. UK Trade & Investment Annual Report and Accounts 2013–14 95
Annex C Key Sources of UKTI Data
The key source of data for measuring Economic and Evaluation Research – how UKTI is performing against our Evidence from PIMS is complemented targets is UKTI’s Customer Data by evidence from a rolling annual Management System (CDMS), a programme of in-depth evaluation, Microsoft Dynamics CRM system, carried out by independent research which provides the foundation teams, with technical advice and information used within PIMS. The scrutiny also provided by senior system was launched in April 2013 academics that are not part of the lead with PIMS corporate management research team. Reports on PIMS and reports coming on stream in July 2013. on economic evaluation and research projects, commissioned by UKTI, are CDMS – provides UKTI staff published in full on the UKTI website: worldwide with a single view into www.ukti.gov.uk. customer-history transactions, allowing us to share relevant It is vital for measuring our progress, customer information across the as well as for the delivery of high- organisation, and avoid duplication quality, professional services to of effort. In doing this, it enhances our customers, that all customer the quality and professionalism of the interactions, service deliveries, service we provide to customers. and active and successful inward investment projects are recorded fully PIMS – our key performance and accurately on the CRM system measurement tool. It is an throughout the year. To underline the independent survey of our importance of this to UKTI, all CRM performance, carried out on our users are required to meet a 100% behalf by a leading market research accuracy target for entering customer 1 organisation, OMB . data onto the CRM system within 48 hours.
1 PIMS Research Reports, providing quarterly assessments of our performance can be found at www.ukti.gov.uk 96 UK Trade & Investment Annual Report and Accounts 2013–14
Annex D Private-Sector Sponsorship
UKTI continues to follow strictly the recommendations of the Committee on Standards in Public Life and Cabinet Office guidelines on handling sponsorship arrangements with the private sector. It uses detailed guidelines and central advice from its parent Departments.
During 2013–14, UKTI received the following private-sector sponsorship (only sponsorship exceeding £5,000 for a single event is shown here).
Sponsorship table of amounts received during 2013–14 Sponsor Amount (£) Event Note Ernst & Young LLP 90,000 VVIP Visit to China Jaguar Land Rover Automotive 30,000 Walpole Medals Of Excellence Event Trading (Shanghai) Co Ltd Coutts Non-monetary Exporting is GREAT promotional window display estimated value £10,000 HSBC 90,000 Global Investment Conference 2013 Ernst & Young LLP 40,000 Global Investment Conference 2013 Cisco/BT 25,000 G8 Innovation Conference HSBC 25,000 G8 Innovation Reception Ove Arup 5,000 Sponsorship of UK ASEAN Business Council JCB 5,000 Sponsorship of UK ASEAN Business Council Benoy 15,000 Sponsorship of UK ASEAN Business Council Jaguar Land Rover 15,000 Sponsorship of UK ASEAN Business Council Monitise 15,000 Sponsorship of UK ASEAN Business Council Diageo 15,000 Sponsorship of UK ASEAN Business Council Matheson & Co 15,000 Sponsorship of UK ASEAN Business Council Prudential 15,000 Sponsorship of UK ASEAN Business Council Standard Chartered 15,000 Sponsorship of UK ASEAN Business Council Prudential 6,000 GREAT Burma Standard Chartered 6,000 GREAT Burma BG 9,000 GREAT Burma
This table is not subject to audit.
Where necessary, conversion is at the average exchange rate for the year. UK Trade & Investment Annual Report and Accounts 2013–14 97
Annex E The Business Ambassadors Network
In 2013–14, the Business Ambassadors’ expertise and international experience helped to supplement the work of Government Ministers and senior officials, by providing tremendous impetus to the UK’s trade and investment activities, and helping to raise UK plc’s profile globally.
Business Ambassadors represent a unique and valuable resource, reinforcing the important role that top business and academic leaders can play in promoting the UK’s strengths and expertise.
Business Ambassadors in the year included: Name Company Lord Marland of Odstock Prime Ministers Trade Envoy (to December 2013) Sir Anthony Bamford Chairman and Managing Director JCB Danielle Alexandra London Film and Television Group Nick Allott, OBE Managing Director, Cameron Mackintosh Ayman Asfari Group Chief Executive, Petrofac Martin Bean Vice-Chancellor, The Open University Marc Bolland CEO, Marks & Spencer Sir Roger Bone President, Boeing UK Ana Botin CEO, Santander UK Samir Brikho Chief Executive, AMEC Amjad Bseisu CEO, EnQuest plc Sir George Buckley Chairman, Arle Capital Sir William Castell LVO Chairman, Wellcome Trust Ron Dennis CBE Chairman, McLaren Group, McLaren Automotive Rona Fairhead CBE Formerly of Pearson plc, Chairman of HSBC North America Holdings Inc, Harriet Fear Chief Executive, One Nucleus Douglas Flint CBE Group Chairman, HSBC Holdings plc Nick Fry Former CEO, Mercedes GP/Mercedes AMG F1 Lucian Grainge CBE Chairman and CEO, Universal Music Group Sir Malcolm Grant CBE Chairman, NHS England Katherine Garrett-Cox CBE Chief Executive, Alliance Trust Dr Hermann Hauser CBE Co-founder, Amadeus Capital Partners Anya Hindmarch MBE Founder, Anya Hindmarch Brent Hoberman Co-Founder, Made.com and Founders Forum The Professor Lord Ajay Kakkar University College London Saul Klein Partner, Index Ventures Professor Dame Julia King CBE, DBE, FREng Vice-Chancellor, Aston University 98 UK Trade & Investment Annual Report and Accounts 2013–14
Name Company Sir Richard Lambert Chancellor, Warwick University Will Lawes Senior Partner, Freshfields Bruckhaus Deringer Dr Mike Lynch OBE, FREng Founder, Invoke Capital Alastair Lukies CEO and Co-Founder, Monetise Ruby McGregor-Smith CBE Chief Executive, Mitie Carolyn McCall OBE Chief Executive, easyJet Andrew McNaughton Former Chief Executive, Balfour Beatty Tamara Mellon OBE Founder and former CEO, Jimmy Choo Archie Norman Chairman, ITV Sir Richard Olver KBE, FREng Former Chairman, BAE Systems Sir Alan Parker Chairman, Brunswick Group Caroline Plumb CEO, FreshMinds Group Paul Polman CEO, Unilever Lord Charles Powell of Bayswater Board member of several international companies Farah Ramzan-Golant CBE Chief Executive, All3Media Joanna Shields OBE Chair, Tech City Investment Organisation Rupert Soames Chief Executive, Serco Sir John Sorrell CBE Chairman, London Design Festival, and Co-Chair, The Sorrell Foundation Robin Southwell OBE, FRAes CEO, European Aeronautic Defence & Space Company (EADS) UK Anna Stewart Chief Executive, Laing O’Rourke Tidjane Thiam Group Chief Executive, Prudential plc James Townsend CEO, Velcourt Group Steve Varley Sub-Area Manager Partner, EY Paul Walsh Chairman, Compass, Former CEO, Diageo Timothy Wates Director, Wates Group Rt Hon Brian Wilson Chairman, Harris Tweed Hebrides; Former Minister for Trade; and for Energy Sir Andrew Witty Chief Executive Officer, GSK UK Trade & Investment Annual Report and Accounts 2013–14 99
Annex F Sector Advisory Groups and Chairs
UKTI has established a series of Sector Advisory Groups, formed from senior business representatives, to advise it on issues pertaining to their sector. In practice, these groups, of some 200 senior business figures, form an important link to their industries, providing business validation and challenge, as well as credibility to UKTI’s activities. Collectively, they act as an excellent sounding board, as a lead-in to wider groups of businesses, and play a valuable role in the prioritisation of activity across UKTI.
The Groups and their Chairs are:
Group name Chair Creative Industries Sector Advisory Group Tim Davie, Chair, CEO of BBC Worldwide Overseas Promotion Committee Robert Gray: Chairman, Debt Finance and Advisory, HSBC Construction Terry Hill: Chairman, Arup Group Trusts at Arup Group Ltd Airports Peter Budd: Global Business Leader, Aviation Arup, Scotland Environment and Water Mark Lane, Consultant to Pinsent Masons LLP and Chair of British Water Global Sports Projects Jon Tibbs: Jon Tibbs Associates Ltd Rail John Moore CEO, Rail Division, Balfour Beatty PLC Security Michael Clayforth Carr, Executive Direct at Selex ES Ltd and Chairman Selex ES International Ltd Defence Alex Dorrian CBE Non-Executive Chairman, Thales Ltd Professional and Business Services Council Co-chaired by Lord Younger, Parliamentary Under Secretary of State for Intellectual Property and Michael Snyder, Senior Partner at Kingston Smith Agritech Leadership Council Co-Chaired by David Willetts, Minister of State for Universities and Science, Lord de Mauley, DEFRA Minister for Science and Judith Batchelor, Brand Director for Sainsbury’s Financial Services Trade and Investment Board Charles Roxburgh, Chair, HMT Marine Industries Alliance Export Group (MIAEG). Andy Linegar, Babcock International Nuclear Trade And Investment Working Group (Part Tom Jones, Vice President, Clean Energy, Europe, AMEC of the Nuclear Industries Council) Oil and Gas Advisory Group Trevor Garlick, President North Sea and Norway, BP International Education Council Co-chaired by David Willetts, Minister of State for Universities and Science, and Sir Eric Thomas, our International Education Champion Ports Simon Bird, CEO, Port of Bristol 100 UK Trade & Investment Annual Report and Accounts 2013–14
Annex G Acronyms
AME Annually Managed Expenditure IiP Investors in People AO Accounting Officer ITA International Trade Adviser ARAC Audit and Risk Assurance Committee MSEU Ministerial & Strategic Engagement Unit BIS Department for Business, Innovation & Skills MD Managing Director C& AG Comptroller and Auditor General MOD Ministry of Defence CBE Commander of the British Empire MP Member of Parliament CBI Confederation of British Industry NAO National Audit Office CETV Cash Equivalent Transfer Value NHS National Health Service CEO Chief Executive Officer NCR Net Cash Requirement CFER Consolidated Funds Extra Receipts OBE Order of the British Empire CSC Civil Service Code OBNi Overseas Business Network initiative CMG Companion of the Order of St Michael and OMIS Overseas Market Introduction Service St George ONS Office for National Statistics CODM Chief Operating Decision Maker PCPF Parliamentary Contributory Pension Fund CRM Customer Relationship Management PIMS Performance Impact Measurement Survey DECC Department of Energy & Climate Change R&D Research and Development DEL Departmental Expenditure Limit SIC Statement on Internal Control DFID Department for International Development SME Small and Medium-Sized Enterprise EAR Expenditure Allocation report SoPS Statement of Parliamentary Supply EE Economics & Evaluation SSRB Senior Salaries Review Body ESA European System of Accounts ToR Terms of Reference EU European Union UK United Kingdom FCO Foreign & Commonwealth Office UK SBS UK Shared Business Services FDI Foreign Direct Investment UKTI UK Trade & Investment FReM Financial Reporting Manual UKTI DSO UKTI Defence & Security Organisation FTA Free Trade Agreements VAT Value Added Tax FY Financial Year VFM Value For Money GEP Global Entrepreneur Programme GIC Global Investment Conference HM Her Majesty’s HMRC Her Majesty’s Revenue and Customs HMT Her Majesty’s Treasury HQ Headquarters HR Human Resources HVO High Value Opportunities IAS International Accounting Standards IBDF International Business Development Forum ICT Information and Communications Technologies